CAFOD urges mining firm Monterrico to clean up its act

Date of publication: 
20 July 2011

British mining company Monterrico Metals has reached an out-of-court settlement with 33 Peruvian farmers who accused the company of colluding in their detention and torture by Peruvian police, while refusing to admit liability.

CAFOD and campaigners from the Peru Support Group have been working with Peruvian NGOs supporting the farmers since the events at Rio Blanco came to light in 2005. According to the claimants, following a march by thousands of farmers protesting about the mine being built without consultation with the local community, a large group were attacked by police. Witnesses reported that the police were being directed by the managers of the mine, a claim that Monterrico strenuously denied.

The High Court trial, which was scheduled to begin in October this year, was to hear from 80 witnesses giving evidence that the claimants had been variously beaten, threatened, hooded, held captive, shot, sexually assaulted and threatened with rape by the Peruvian police. One protestor was shot and bled to death the following day.

Photographs obtained by campaigners show farmers hooded, bound and beaten unconscious, as well as policemen holding up the underwear of female captives.

As part of the out-of-court settlement, the mining company has imposed a gagging order on the amount of the compensation payouts, which applies both to the farmers and to Leigh Day, the British legal firm representing the protestors. Richard Meeran of Leigh Day said: “My clients suffered deplorable mistreatment and were denied
justice in Peru. This was an extremely costly exercise for Monterrico and constitutes a salutary lesson to multinationals operating in developing countries.”

CAFOD’s senior analyst on the extractives industry, Karen Luyckx said: “Monterrico cannot hide behind gagging orders and out of court settlements. They must not simply buy their way out of this case; they must change the way they operate in future. The truth is that – welcome as it is for the farmers – this settlement does not address
the fact that the criminalisation of protest, and threats and violence against activists are on the increase around the world, and that in more and more cases, we are seeing collusion between the police and military authorities and the multinational mining companies. For every case like this, there are dozens more examples of abuse and violence which are going unnoticed and unpunished, and hundreds more communities whose livelihoods hang in the balance. Even in this case, despite the settlement, Monterrico’s mine is still going ahead without adequate
consultation with the community.”

Leigh Day case briefing

Legal proceedings by 33 Peruvians against UK-based Monterrico Metals PLC have been settled by compensation payments, without admitting liability. The London High Court trial was scheduled for 10 weeks from October with about 80 Claimant witnesses.

Claimants alleged torture by the Peruvian Police after protesting at Monterrico’s Rio Blanco copper mine (near Ecuador) in August 05. The mine is owned by Monterrico Peruvian subsidiary, Rio Blanco Copper SA (“RBC”). RBC is owned (through two Cayman companies) by Monterrico.

Ex mine employees and others gave testimony. The Claimants argued Monterrico was complicit in torture/mistreatment, alleging as follows (all of which Monterrico denies): the mine camp manager, Roman Tirado, calling the protesters terrorist members of “Shining Path”, incited the police to attack and mistreat them; some employees and the mine security contractor, Forza (now owned by Securitas (Sweden), participated in the mistreatment (including capturing, beating and taunting protesters, carrying police munitions, providing sacks and ropes to detain protesters); the company failed to prevent the mistreatment that occurred over two-three days on the mine premises; Mr Tirado instructed employees to move the body of Melanio Garcia (a protester who had been killed) far away.

Rio Blanco was Monterrico’s principal asset. Monterrico founding director and Chief Operating Officer, Ray Angus (Australian engineer), was also General Manager of RBC based in Peru. Witnesses claimed Angus regularly contacted Mr Tirado during the incident. Claimants alleged Monterrico controlled the Peruvian operation and that
RBC was, in effect, the same legal entity as Monterrico.

Contemporaneous photographs show protesters hooded, handcuffed and injured. The Claimants alleged (and Monterrico denies) they were beaten, abused, threatened (including with rape and death), two women were sexually abused, they forcibly ate rotten food and were detained on a wet platform for slaughtering animals. Five Claimants were shot; one lost an eye. Eminent Maudsley Hospital psychiatrists confirmed that most Claimants still suffer from PTSD, some very severely.

Claimant Elizabeth Cunya Novillo stated: “The three days of detention were some of the worst of my life. When I was beaten it changed my whole world…it was as though a tornado had destroyed everything.” Another, Senesio Jimenez, stated: “When we arrived for talks they ejected us with beatings and bullets, they tortured us on our own land. A peasant is sometimes treated like an animal with no right to live, they have no compassion. I thought there was no hope of justice. Every day I remember the beatings and abuse. I cannot forget it. At work those thoughts won’t go. I despair that my land will disappear.”

We have seen no evidence suggesting the company complained about the police conduct or investigated the protesters’ mistreatment. But the Claimants were criminally charged over the protest (and other unrelated matters) allegedly supported by the company.

Claimants also alleged the incident formed part of the company’s strategy designed to suppress opposition including: an attack (April 06) organised by RBC on the peasant community of Segunda Cajas, by about 80 people with sticks and stones resulting in excessive force by police against the villagers; various other provocative and violent incidents organised by the company between January and April 2006 to intimidate opponents of the mine and justify establishing a police presence locally. All this is denied by Monterrico.

In September 2006, RBC wrote to the communities expressing its ‘most deeply felt apologies for attitudes and conflicts that in the past have occurred between certain of its staff and workers, and some families, and organisations and community leaders of the provinces of Huancabamba and Ayabaca. The people associated with these conflicts have been seriously reprimanded and permanently separated from our company, as an expression of the desire among the Directors of [RBC] that such attitudes are never again repeated in the future… As an expression of our good will… from here on [RBC] will initiate no more legal proceedings; this will be the role solely of the public prosecutor’. Monterrico however denies that this apology was related to the August 2005 incident.

The case appears to highlight conflicts in Peru and elsewhere between indigenous communities and multinational mining operations. This protest was triggered by the local communities’ belief that their concerns regarding the mine’s potential environmental impact were being ignored. In 2006 the National Ombudsman (Peru) concluded that the company was occupying the land unlawfully because there was no requisite consent of the communities. Monterrico disputes this. The issue is the subject of ongoing proceedings in Peru.

In February 2009 US-based Environmental Defender Law Center ( contacted Leigh Day & Co (“LDC”) about the case by. LDC then liaised with Lima-based human rights lawyers from Fedepaz ( and the Coordinadora (, who assisted the Claimants to defend the above-mentioned criminal charges. Monterrico was bought by Zijin Consortium (China), in 2008, whence Monterrico corporate HQ shifted to Hong Kong. LDC was concerned that Monterrico would close its UK office rendering any claim in England futile (NB not suggested that this was Monterrico’s objective). So when proceedings began in the London High Court in June 09, Claimants obtained a worldwide freezing injunction over £5 million of Monterrico’s assets, supported by an injunction from the Hong Kong High Court obtained by Gall lawyers (

Background to the Monterrico case

(With kind permission of Business & Human Rights Resource Centre

In early 2009, eight Peruvians commenced legal proceedings in the High Court in London against British mining company Monterrico Metals and its Peruvian subsidiary Rio Blanco Copper (previously known as Minera Majaz). The number of claimants increased during the development of the case. The claimants alleged that in
July-August 2005, police detained 28 people protesting against a proposed development of the Rio Blanco Mine, sprayed noxious substances in their faces, hooded them, beat them with sticks and whipped them. Two of the female detainees allege they were sexually assaulted and threatened with rape. The detainees claim that the abuse and detention went on for three days and that they suffered serious injuries. The claimants were seeking damages for the alleged direct involvement of certain Monterrico and Rio Blanco personnel in the abuse (along with personnel from a private security company employed by Rio Blanco), alleged material support to the police, and the companies’ failure to prevent or react to the abuse. The companies deny any involvement in the alleged abuses.

On 2 June 2009, the claimants obtained a freezing injunction at the High Court prohibiting Monterrico from disposing of assets to an extent that would leave it with less than £7.2 million in the UK. The company had indicated that, for commercial reasons, it planned to de-list from the FTSE Alternative Investment Market (AIM) index. This raised concerns that it might transfer assets out of the jurisdiction and thus prevent the claimants from collecting damages following any successful action. This freezing injunction was made permanent on 16 October 2009 for the sum of £5.015 million.

On 6 June 2008, Peru’s National Coordinator for Human Rights (CNDDHH) and the Fundación Ecuménica para el Desarrollo y la Paz (FEDEPAZ) filed a criminal complaint against senior police officers responsible for the police response to the protest, police officers involved in the alleged abuse, and against Rio Blanco security and
other personnel. The complaint alleges that Rio Blanco’s security personnel were directly involved in the abuses. On 9 March 2009, the prosecutor cleared the mining company and their security personnel of wrongdoing, but allowed proceedings against the police to continue on the charges of torture. On 16 March 2009, FEDEPAZ appealed the prosecutor’s decision. On 2 April 2009, the appeal was accepted by the
prosecutorial authority, which ordered further investigations, including the taking of statements from identified employees and a legal representative of Rio Blanco.

The out-of-court settlement in this case now means that the responsibility for what happened to the protestors will not be known and Monterrico, in settling compensation has not admitted any liability and has gagged recipients and the UK legal team on the issue of payment amounts.

Communities living near the Rio Blanco mine have been denied the right to free, prior and informed consent for indigenous communities on development of the mine – as enshrined in the UN Declaration on the Rights of Indigenous Peoples and International Labour Organisation Convention 169, as well as Peruvian national law. To date there have been few assurances by the mine owners that water, forest and land resources used for farming will not be damaged by the mine.

One of the most significant concerns cited by the farmers near the Rio Blanco mine is water use by the mine that could divert resources from crops. A study by Monash University, Australia, found that the extraction of one kilogram of gold uses up to 691,000 litres of water and that per tonne of copper approximately 250 tonnes of solid waste is produced.

The Peru Support Group, CAFOD, its partners and many other human rights stakeholder organisations across the world report that conflict between mining companies and local communities is increasing. With governments continuing to emphasise natural resource extraction in their economic development strategies, many developing countries want to show they are open for business. In practice this often encourages weak enforcement of environmental and labour regulation, sometimes combined with suppression of opposition to mining and the denial of justice to those whose human rights are violated.

Moreover, escalating mineral prices and the increasing rarity of high-grade easy-to-access mineral deposits are pushing mining companies further into remote areas to mine low-grade deposits. The high-tech mining processes involved carry a severe risk of environmental damage including acid mine drainage, which dramatically increase water acidity and release can release heavy metals into the environment.

Although business can play a positive role in improving the well-being of some of the world’s most disadvantaged people, companies, especially those working in mining, oil and gas, are often very powerful in comparison to the communities where they operate. It is because of this power imbalance that minimum standards are needed to guarantee no harm is done. If the presence of a company does lead to harm, people, however poor or disadvantaged they are, should have access to justice. CAFOD supports partner organisations in advocating for more effective justice systems in their countries.

Source: CAFOD