Case study - Environmental and human contamination Cerro de Pasco lead mine
Cerro de Pasco is a mining town located on the high plateau of central Peru. Numerous Peruvian governmental authorities and NGOs, as well as international organizations, have reported that Cerro de Pasco is exposed to extreme levels of environmental pollution caused by mining which impacts on the health of the town’s inhabitants.
CCCA used its law enforcement expertise to direct and coordinate the information collection of its partners and conducted a thorough analysis of all the available information to ensure that information relied upon is credible and reliable. Based on that information CCCA found as follows:
First, many of Cerro de Pasco’s inhabitants are severely contaminated with heavy metals, including lead, arsenic, chrome, manganese, iron and aluminium—all heavy metals that are related to the mining activities in Cerro de Pasco. This contamination severely impacts on the physical and mental health of many people of Cerro de Pasco, especially the children of the neighbourhood of Paragsha.
Second, the contamination with heavy metals is caused primarily by the ingestion of contaminated soil, water and food and through inhalation or ingestion of contaminated dust. The residential soil of Cerro de Pasco, including in children playgrounds, is contaminated with heavy metals. The water of the rivers around Cerro de Pasco and the city’s drinking water is also contaminated with heavy metals. Some of the food supplies of Cerro de Pasco are directly impacted by contaminated water and soil, through which heavy metals enter the human food chain. In addition, dust particles produced by the mine deposit on the ground, crops, food and houses of the surrounding area, which increases the human intake of heavy metals.
Third, since Volcan Compañía Minera S.A.A. (“Volcan”) acquired the Cerro de Pasco mine in 1999, it repeatedly introduced into the environment heavy metals, such as lead, arsenic, chrome, manganese, iron and aluminium in excess of maximum permissible levels established under Peruvian law. In so doing, it significantly increased previous levels of contamination of the soil, water, food and dust in and around Cerro de Pasco. It also significantly contributed to increasing levels of human heavy metal contamination from 1999 onward.
As a result, Volcan is responsible for the environmental contamination in Cerro de Pasco and for the direct impact that this has on the physical and mental health of many people of Cerro de Pasco.
As a first step, CCCA submitted a report to the Council on Ethics for the Norwegian Pension Fund Global to contribute informing its position on whether the Pension Fund should divest from the corporation that own the absolute majority of Volcan's voting shares. For the full version of the report, see here.
On 27 November 2019, the Canadian company Cerro de Pasco Resources ("CDPR") and Volcan signed a definite share purchase agreement ("SPA") whereby the former will acquire Volcan's mining operations in Cerro de Pasco. CCCA, at the request of the Council on Ethics of the Norwegian Pension Fund Global, assessed how the SPA will affect future risks and responsibilities.
CCCA concluded that, notwithstanding the SPA, there continues to be an unacceptable risk that Glencore/Volcan contributes to, and is responsible for, systematic human rights violations and severe environmental damage in Cerro de Pasco: (a) Glencore/Volcan will continue to exercise substantial influence over CDPR's mining operations in Cerro de Pasco; (b) the SPA does not eliminate Glencore/Volcan's responsibility for future human and environmental harm in Cerro de Pasco; (c) Glencore/Volcan's past conduct continues to cause human harm in Cerro de Pasco; and (d) the SPA does not eliminate future legal, financial and reputational risks related to Glencore/Volcan's past conduct in Cerro de Pasco. For the full version of CCCA's additional report, see here.