Metallurgical Complex of La Oroya: When investor protection threatens human rights

On the occasion of the UN Forum on Business and Human Rights taking place in Geneva on 4 and 5 December, FIDH publishes a report on the case of La Oroya, a much debated case of industrial pollution caused by a metarllugical complex in the Central Andean region of Peru.

For decades and more particularly after the complex was taken over by the company Doe Run Peru in 1997, the people of La Oroya have been exposed to high levels of air contamination, including by lead, cadmium, arsenic and sulphur dioxide. The city was reknowned in the mid-2000’s as one of the ten most polluted places on earth.

Doe Run Peru, a subsidiary of the US holding company Renco started operating the complex after its privatization in 1997. The company committed to implement in a ten year period a series of measures aiming at improving the environmental impact of the complex as part of an environment programme known as PAMA (Programa de Adecuación y Manejo Ambiental), which also comprised measures to be taken by the State of Peru. The Stock Transfer Agreement provided that in the period of implementation of this plan, the State of Peru would assume liability for most third-party claims. At the request of the company, the PAMA was extended and as a result the company had until 2012 to abide by its obligations. In 2009, the complex stopped operating as the company entered into a liquidation process.

People from La Oroya have brought a case against the State of Peru for failing to protect their right to health, before the Inter-American Commission. Parents of children with high blood lead levels have attempted to get redress in the US, where the parent company is located through a class action. In an attempt to stop the proceedings before the US Court of Missouri, at the end of 2010, the Renco Group launched an international artbitration claiming its rigths as a foreign investors, guaranteed by the Free-Trade Agreement between Peru and the United States, had been violated by Peru, and asking for at least 800 million USD as compensation.

This case illustrates the conflict between international human rights law and investors’ protection. It also highlights the legal strategy of companies allegedly involved in human rights abuses, aiming at escaping any liability, and denying victims’ right to a remedy. While States, corporations, NGOs and other stakeholders meet at the UN in Geneva to discuss business and human rights, FIDH calls on the United Nations Working Group on Business and Human Rights to address as a matter of urgency the obstacles faced by victims of corporate-related human rights abuses.

The report includes a series of recommendations to the Peruvian authorities as well as to the company involved.

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