Conservation news

Pope and Peru’s top mining CEO agree and at odds on environment

  • Roque Benavides makes no apologies for Peru’s extraction industry, noting that it employs tens of thousands, and gives much back to the communities in which it works.
  • The CEO fears that the Pope’s encyclical is overly simplistic, putting too much of the blame for the environmental crisis on industry and business.
  • He argues forcefully that government has failed in its role as environmental protector, and that the poor are more destructive to the environment than industry.

Roque Benavides, 60, is president and CEO of BuenaVentura Mining Company (NYS:BVN), Peru’s largest publicly traded mining concern for precious metals. The company was founded by his father in 1953. Benavides has been with the firm most of his career, operating as CFO from 1985 to 2001, before taking the top job. He’s friendly, candid and outspoken, a leading business authority in Peru. He is also a bit of an anomaly, running against the grain of an industry with an international reputation for plundering and polluting — think mountaintop removal in West Virginia or rivers hopelessly polluted by toxic effluent in Chile.

Benavides claims to run a different kind of company — one that respects the environment, treats its workers well, and gives back to the communities where it digs enormous holes in the ground. His company’s SEC filings largely bear this out, though his miners complain about low pay, dangerous working conditions and plenty of polluting of mine sites. But they also say there are far worse companies for which to work.

Roque Benavides, BuenaVentura CEO, in Lima being interviewed by journalist Justin Catanoso. Photos of Mr. Benavides are by Emilia Catanoso. All other photos by Jason Houston.

Benavides authored a book in 2013 on the 60th anniversary of his company titled Responsible Mining and its Contributions to Development of Peru. Not unlike Pope Francis, he writes about social responsibility as “the commitment that the company has with the society in which it operates. All of its actions and processes must embrace environmental respect, health and safety of its workers, as well as the provision of sustainable growth of the surrounding communities.” This is good business, Benavides writes, though he still finds plenty with which to disagree in the Pope’s recent encyclical on climate change and the environment.

In an exclusive 7am interview with mongabay.com in the 21st floor conference room of his headquarters in downtown Lima, Benavides spoke with journalist Justin Catanoso about Pope Francis, the papal encyclical, and how he runs his company. The hour-long interview was edited for length and clarity.

Mongabay: What are your thoughts on Pope Francis’ encyclical Laudato Si, On Care for Our Common Home? Let’s start there.

Benavides: Well, certainly we all are surprised that the Pope in an encyclical talks about environmental issues. Previous ones, as you know, dealt mostly with spiritual matters. That doesn’t mean the church doesn’t have to deal with down-to-earth matters.

He states a number of concepts that I believe are quite reasonable and right in many respects. He speaks about clean water for the poor. He speaks about the economy of consumption — which I wonder if it has anything to do with environmental issues. Can we have a society of non-consumption?

Mongabay: In the United States, if consumption goes away, our economy collapses.

Benavides: We in Peru, we claim that we have lost two or three decades because of bad policies, and that real poverty increased because of that. My first point is that environmental issues have to do with education and poverty. Poor people don’t take care of the environment.

Mongabay: The poor are to blame? Please explain.

Benavides: Look, they simply have to survive. So they will destroy the environment in order to continue surviving. I think environmental issues have more to do with sophisticated matters that people have to think about. We have to know how to take care of the environment, to protect the environment, and still have economic progress without destroying the environment.

Mongabay: Regarding the poor, you are thinking about ranching at high elevations and illegal gold mining that lead to massive deforestation?

Benavides: Obviously. At least in Peru. I am not so global in my mind to talk about the whole world. It would be pretentious for me to do so. But in my country, deforestation and illegal mining is not touched on in the encyclical, and it’s probably because my provincial mind is expecting that the Pope will know to touch on such things that truly worry us in Peru.

Mongabay: Worry executives like you?

Miners and employees of Roque Benavides and the BuenaVentura Mining Company on break at the El Brocal Copper Mine in the Andes. Photo by Jason Houston.

Benavides: The image of the mining industry — the responsible mining industry — gets destroyed because of the informal, illegal mining. That kind of mining, under no control of the state, it has no remediation, no follow-up of the community in taking care of the water.

Mongabay: And you think the government should be as aggressive in regulating informal or illegal mining, just as it regulates companies like yours.

Benavides: I think the Pope in this encyclical specifically — I don’t want to use the word blame — but he blames [the environmental crisis] on business more than on the failures of the state. And he doesn’t take into account that environmental issues have developed over the past years [as the ongoing] relationship between government and business has also developed.

Mongabay: In a good or bad way?

Benavides: Probably it could be better. But it has improved substantially since 1950 when there were no regulations. The government has organized itself not to control, but to follow up on economic activities and take care that business doesn’t harm the environment. Having said that, I think there is too much blame on business by the Pope, and too little blame on the states. That’s my impression.

Ironic welcome sign – Peru’s La Oroya is known internationally as one of the most polluted towns on earth due to its now closed smelting operation, but still it welcomes visitors to “the capital of metals in Peru and South America.” Photo by Jason Houston.

In the extractive industries like ours, environmental issues are probably more relevant than in other industries, because the perception in the world is that extractive industries are impacting the environment more than other activities. Which is wrong.

Mongabay: Really?

Benavides: Obviously.

Mongabay: You have to give me an example.

Benavides: (Voice rising) Wait a second. The most polluting industry in the world is agriculture!

Mongbay: You say agriculture because of chemicals and fertilizers and run off.

Benavides: Oh sure. But it looks green so people don’t think it pollutes. The thing is, if you want to deal with environmental issues, and this is the risk of the encyclical, you have to get into depth, and into technicalities.

The Pope keeps saying we need to avoid economic development. But you don’t stop economic development because of environmental issues. The fact is, we all have to worry about environmental issues, but we also have to worry about economic development. There has to be a balance.

Mongabay: The perception here in Lima, as I talk to journalists, is that in many ways, the business community — you among them — have more authority than the government has, that you are dictating to the government what the regulations should be.

Benavides: That is not true. That is just not true. The thing is, the absence of government regulations, especially in the rural and jungle areas, is a just not acceptable.

Mongabay: I want to go back to something you said earlier. You mentioned that the poor, because they have to survive, are often the ones doing the most environmental destruction. I don’t want to misunderstand you on that. But I also want to be clear: are you blaming the poor for these environmental problems and saying big business is blameless?

Benavides: No. We need to educate people. That is not happening now. But with education, we will have better environmental performance. Poor people don’t care about throwing trash on the street; the more educated will pack it away and throw it in a waste basket.

Mongabay: Whose responsibility is it to educate?

Benavides: Society in general, but specifically the lack of management skills in government is holding this process back. In Peru, this has been the case for many years. Listen, with the [government] economic policies for three decades — ‘60s ‘70s, ‘80s — Peru was destroyed. So then you ask: why is it that we have this level of poverty — 26 percent. It’s because there has not been the economic development that we needed.

Mongabay: During those decades of bad governance, you’re talking about the period of the reign of terror by the Shining Path communist insurgency?

Benavides: Obviously.

Mongabay: I would agree with you that the Pope places more responsibility for environmental problems on business in his encyclical. But he doesn’t let governments off the hook. He complains about them not enforcing their own laws.

Benavides: I think the Pope could be stronger. Democracy has to do with electing authorities. And authority has to perform. The thing is — there are two ways in this. Those that have to be checked by the authority, and the authority doing its job.

A poster announces Pope Francis’ visit to Peru this summer to speak about his encyclical on the environment. He visited the US in September. Photo by Jason Houston.

It is not only Mr. Manual Pulgar-Vidal [Peru’s Minister of the Environment] or the Minister of Mines that is watching us. It is also the stock market. I for example, am required by some major investment funds [in BuenaVentura], to sign a letter every year that says I am going to perform to their environmental standards.

It is when the Pope goes against the society of consumption that I think he has to be more careful. We do need economic growth. I don’t know if I have read it wrongly, but my impression is that he wants to control how much economic growth there will be in order to have a more friendly relationship with the environment. And I don’t know if that can be controlled. I don’t know if the economic forces work like that.

Mongabay: But you have pressure to increase your revenues every quarter.

Benavides: (Laughs) That’s correct. But I must say, we have come to the conclusion that business is more long term. The investors in the market are expecting quarter by quarter. I cannot perform quarter by quarter. I can only work long term.

Mongabay: How long have you been extracting precious metal in Peru?

Benavides: 62 years.

Mongabay: That’s a lot of holes in the ground.

Benavides: And a lot wealth generation! And a lot of infrastructure built in a country that needs infrastructure if you want to bring agriculture products to markets.

Mongabay: And a lot of jobs?

A playground sits directly across the river from La Oroya’s now closed, but heavily polluting smelting plant, that nearly all of the town’s people want re-opened to provide jobs. Photo by Jason Houston.

Benavides: Yes, a lot of jobs. 12,000 people work in this company. And if we add to that the joint ventures that we have, it is in excess of 30,000 people. All in Peru. All of them formal parts of the economy [regulated and paying taxes]. In Peru, 60 percent of the economy is informal [unregulated and untaxed]. When the government speaks of minimum salary, it is only speaking about the formal business sector and those who have a formal job — that’s only 40 percent of the population.

Mongabay: Of your workers, beyond the executive level, what is the average salary?

Benavides: I think it’s in excess of $1,000 a month. The thing is, mining is probably the best paid industry.

Mongabay: Perhaps I was too blunt when I said you put a lot of holes in the ground.

Benavides: There are no indiscreet questions. Only indiscreet answers. You can ask whatever you want and I’ll take it. Don’t worry.

Mongabay: Ok, so you go into a community for 10 years, 20 or more years.

Benavides: 30 years.

Mongabay: Until the mine is dry?

Benavides: It depends. We have been operating a silver mine for 62 years and it’s still productive.

Mongabay: What is your company’s impact on that community?

Benavides: They love us. There are so very few economic activities there. They claim that it is one of the poorest parts of Peru. But we have been there 62 years.

Graffiti in La Oroya. At least one local artist, possibly working under the cloak of darkness to express his thoughts, is displeased with the mining industry’s environmental record. Photo by Jason Houston.

Mongabay: Do you make efforts as a company to improve the communities that you work in — do you contribute to the schools, build roads, clean up the mess that you make?

Benavides: All of the above.

Mongabay: Are you required by law to do that?

Benavides: Sometimes, we are. Sometimes we believe it is a part of our obligation. Let me tell you a story. During the Shining Path time, this company was not strong enough to build up an army of our own to defend ourselves. People very close to me were killed. It was a terrible time. We had to protect our assets and our people. We were in contact with the communities [where we had mines]. The communities were passing the word to us: “There is a strange group of people that are coming to attack.” [They would warn us]. This was our defense. Why would they do that? Because of our [good] relationship with them. Everyone was vulnerable in Peru. We all were in risk. And we were frightened.

Mongabay: The Pope says very clearly that the extraction industry plunders, take riches from poor communities, sends it to rich communities and leaves the poor poorer still when you are finished with them.

Benavides: I think that’s an unfair statement, at least in my experience. The thing is, if you do extraction, and you make a profit and you pay your taxes, the role of government, is to redistribute wealth. Government’s role is to give back to those communities with infrastructure and investment and by generating opportunities for people — in addition to what the companies provide.

But the thing is, in a normal society, if you do business in the U.S., or in other developed countries, you will get something for your taxes. The problem here [in Peru] is lack of management skills — particularly at the regional level. It’s terrible. It is not a question of who is to be blamed more or less. But the system makes it so that those poor people are not getting the benefits [that should come from the taxes they pay].

Mongabay: I spoke with Manuel Pulgar Vidal last week and he told me: “We take the taxes and keep some here, send the rest back to the region and it works great.”

The Maca, Peru’s monument to the potato, in the village of Huayre. Photo by Jason Houston.

Benavides: Why don’t you go see the monument to the “maca” in the town of Huayre — maca is a potato grown in the Andes, and they claim it is good for sexual activity. Huayre’s people need water and sewer in their little town. But the government spent their tax money on a huge monument to the maca instead. The maca! A monument to a potato!

Mr. Pulgar-Vidal is very ideologically oriented. And I think he has his own agenda, and good for him. I am here for a longer term than him. He expects to get an international job after being minister [when he leaves office in 2016]. I am not after a new job in a year or two.

Mongabay: You seem to have a pretty good job.

Benavides: I do well, yes. I have no problems. I start early and I leave late. And I have to pay the payroll every month of 12,000 people. Mr. Pulgar-Vidal doesn’t need to be involved in those matters. There is a difference. A big difference. The bureaucrat is very different than the person in the private sector.

Mongabay: Are you Catholic?

Benavides: Yes. I was more at one time. I do care for the church, and I care for the religion. But I have become less religious. To me, it is not a matter of going to church only. It is a matter of your own morals and conscience, and doing well for your community, your people and your society. In that respect, I am a full Catholic.

Mongabay: As you know, Pope Francis is the first pope from Latin American. He is very different from John Paul II and Benedict. What do you think of him?

Benavides: I like the man. I think he is very sensible man. My impression is that he is coming from a country [Argentina] that has made a mess of themselves, an absolute mess. A country that was developed in 1940 — the only country that came from the developed world to the undeveloped world. [Laughs] They should receive the Nobel Prize for that! Where is the responsibility in the Argentinian society? The church has a responsibility there, too, and what is the Pope doing there?

My impression — when I listen to him — I think he brings up his own [national] bias. I have my own [Peru] bias. But the Pope comes from a country where everything was done wrong, especially by the business community. That is my impression. And when I read the encyclical [I believe] that is why he is blaming so much on the business community.

Mongabay: What would you say if you were invited to speak to Pope Francis?

Benavides: I would say he has to listen to all parts of society, and the business leaders. The problems you have with ideologically oriented politicians or inefficient government are problems that we would like to solve. But it’s not in our hands many time. We can contribute. And we should, but we can’t fix it.

Mongabay: Do you know the Peruvian economist Richard Webb? I spoke with Webb, and he calls the encyclical scientifically sound and economically naïve and idealistic.

Benavides: Benavides: He’s a fine person; he is very profound, and he knows all these matters. I would agree [about the economic naivety]. But I don’t think it’s scientifically sound. I think you would need to be far more profound to be scientifically sound.

Mongabay: Perhaps, as you say, you are only seeing what you want to see.

Benavides: When I read it, am I just looking at what touches me? It may wrong. It might not be intelligent, but that’s a fact. We all read things with our bias and complex.

Mongabay: Would you tell Pope Francis that this document is not relevant to you?

Benavides: No, it is relevant as I read it. Because society, at least in Peru, has to do a lot with my church. And if he comes out with an encyclical like this, it is my responsibility as a businessman to read it, and also as a Catholic.

Mongabay: Will the ideas and principles and guidelines and suggestions that Pope Francis speaks of have an impact on your company and perhaps the extraction industry?

Benavides: Obviously.

Mongabay: How?

Benavides: It is not as radical as some members of the church wanted it to be. And that’s important. Whenever I have a discussion with someone from the Catholic Church, or priests who claim that nothing has to be touched, I will take out the encyclical and show them — the business people can contribute to society, as the Pope says in the encyclical. But it has to be by taking care of the environment. We would use the encyclical as a reminder.

Mongabay: So the principles of taking sustainable care of the earth, you’re in agreement with that?

Benavides: Obviously. Nobody can be against it.Peru has been blessed beyond religion by God with national resources. We have the ability to [use] those resources for the benefit of society, not just ourselves. We have a responsibility. I have a responsibility. The thing is, we all have a responsibility. [Natural resources and business] can contribute a lot [to society]. If you go exploit people and make a profit and don’t care about the community, you are not doing the right thing.

Mongabay: Do you believe global warming is manmade?

Benavides: No.

Mongabay: What?

Benavides: No. That might sound strange, but there have been many, many years when the world has been freezing, or frozen. We deal in an industry focused on geology. In geology, we speak in millions of years. I am not sure that it’s a manmade phenomenon.

Mongabay: As I study this, having talked with many scientific experts — and I don’t come here to argue — but in geology, it’s millions of years that the freezing took place. But in just 150 years, we have warmed this earth 1 degree Celsius with all the fossil fuels we’ve burned. That kind of rapid change is unprecedented in the geological record.

Benavides: It could be — with the fossil fuels that have been burned. And where does that come from, and who has consumed those fossil fuels?

Mongabay: Mostly first-world countries.

Benavides: Precisely. Again, it’s a question of who do I blame. Don’t start with Peru, pointing with an accusing finger at us. It’s not our fault.

Mongabay: What does Peru owe the world? When environmentalists say, “Look, we need your rain forests because we keep burning oil and coal in the northern hemisphere.”

Benavides: Peru needs its rain forests. We also need growth. We have to have better management of our resources.

Mongabay: The Pope speaks to all these questions — biodiversity having a value all by itself.

Benavides: Yes, but mining in Peru, responsible mining, it doesn’t affect biodiversity. It is peculiar to Peru. Most of our mines, the big ones, are over 4,000 meters in elevation [13,100 feet, too high for most plants, animals and birds.]

The Mantaro River and the mountain beyond — with lifeless rocky outcrops appearing to have been melted, the result of several decades of intense acid rain from the adjacent smelting plant. Photo by Jason Houston.

Mongabay: Perhaps, but in Peru, mining requires a lot of water. And that’s a big worry in the encyclical.

Benavides: In Peru, there is no lack of water. In the Andes, 85 percent of the rainwater every single year goes to the sea. 85 percent.

Mongabay: This country is more than half desert! What do you mean no lack of water?

Benavides: We have plenty of water. Not just glaciers, but with the rains every year. You have to retain water in the high Andes in the rainy season.

Mongabay: Is it done?

Benavides: Very little. There is so much potential for hydroelectric energy in Peru. And how much are we exploiting? Five percent.

Mongabay: Is this being discussed here?

Benavides: By me. I don’t know how many others are. But it is the scientifically profound way to discuss environmental issues. Not with emotions, but with intelligence.

Mongabay: Will you go to Paris in December for the UN climate summit?

Benavides: No, no. We are organizing ourselves to have representation from the mining society there.

Mongabay: Forgive me, but I need to ask again: you just don’t see the encyclical having much impact.

Benavides: It has put the subject up for discussion. And that is important. Shared social responsibility; as we say in Spanish, meat doesn’t come without bone. Value cannot come without responsibility.

Mongabay: Any final thoughts?

Benavides: There is some sort of question that this [papal encyclical] is going to change the world. It’s not going to change the world. Nothing changes the world. But it is important. And we have to discuss these issues.

 

Justin Catanoso is director of journalism at Wake Forest University in North Carolina. His reporting is sponsored by the Pulitzer Center on Crisis Reporting in Washington, D.C. All photos of Mr. Benavides by Emilia Catanoso, also of North Carolina. All other photos by Jason Houston.