GREEN ACTION PLAN IN THE INFORMAL MINING SECTOR. THE REGION OF PUNO PERÚ.

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1 GREEN ACTION PLAN IN THE INFORMAL MINING SECTOR. THE REGION OF PUNO PERÚ. 0 Case Study La Rinconada y Cerro Lunar PERÚ Econ. Christian Zegarra 1 January Specialist employment programs / Ministry of Labour and Employment Promotion. 0

2 INDICE Tabla de contenido 1. BACKGROUND OVERVIEW OF LA RINCONADA Y CERRO LUNAR La Rinconada: Cerro Lunar: DIAGNOSIS IN LA RINCONADA Y CERRO LUNAR DIAGNOSIS OF THE EMPLOYMENT: Labour Market situation of the Región Puno: Labour Market Situation of the Province of San Antonio de Putina Labour Market Situation of the District of Ananea: Labour Market Situation of La Rinconada y Cerro Lunar DYNAMIC ECONOMIC MODEL IN LA RINCONADA Y CERRO LUNAR: Gold mining is the main activity Internalities not make the model sustainable A model with many negative externalities The living conditions of the population Precarity and limited presence of the State PLAN OF ACTION TOWARDS A GREEN ECONOMY IN LA RINCONADA Y CERRO LUNAR CONCEPTUAL FRAMEWORK GENERAL ASPECTS Multiannual Macroeconomic Framework Social and Labour Policy Guidelines Ministry of Labour Government prioritization to boost development in Puno Social dialogue INTERVENTION STRATEGY

3 4.2.1 Line of Action 1: Improved data collection Line of Action 2: Removal of policies that stimulate inefficiencies Line of Action 3: Design interventions which provide incentives Line of Action 4: Renewable energy for public services Line of Action 5: Potential of Sustanaible Livestock should be explored ANNEXES Photography 1: Highway heading to La Rinconada and Cerro Lunar Photography 2: District of Ananea Photography 3: La Rinconada Photography 4: La Rinconada Solid Waste Pollution Photography 5: La Rinconada / Pallaqueras Photography 6: La Rinconada / Cachorreros Photography 7: La Rinconada / Contratistas Photography 8: La Rinconada / Liquid Waste Pollution Photography 9: La Rinconada/ Area mining extraction Photography 10: La Rinconada /Artisanal Gold Mining (cachorreo) Photography 11: Cerro Lunar Photography 12: Cerro Lunar Disordered growth

4 ACKNOWLEDGEMENTS I want to thank the following people who helped to carry out the course: Maria Arteta, Office of Andean Countries of the ILO for its ongoing efforts in Peru to the issue of Economy and Green Jobs support. Elizabeth Cornejo, Director General of Employment Promotion of Peru Ministry of Labor, for its strong commitment to improving the skills of officials and specialists in particular for their support in my studies. Héctor Sedano, Specialist of the Ministry of Labour and Employment Promotion, for their support in data processing. Andrea Bassi, UNITAR and appropriate recommendations for their excellent leadership course. Maya Valcheva, UNITAR for their patience and willingness to throughout the course. 3 3

5 1. BACKGROUND GREEN ACTION PLAN IN THE INFORMAL MINING SECTOR. THE REGION OF PUNO PERÚ. This paper seeks to incorporate the skills acquired in the "Introduction to a Green Economy: Concepts and Applications" course conducted by the author between October and December 2013, thanks to a grant awarded by UNITAR. For its preparation, it took into account the mission work carried out by the author (October 2012) as representative of the Ministry of Labour and Employment Promotion, along with officials from the Ministry of Energy and Mines - MEM and the International Organization Labour - ILO, the mining areas of " La Rinconada and Cerro Lunar Gold " located in Puno. On that occasion, a tour of the mining area and attendees officials had meetings with some of the actors involved in the local mining activity check was performed. Additionally (2013), considered information multisectoral workshops and meetings with various representatives ministries ( Labour, Mines and Energy and Environment), in which the problems of mining in " La Rinconada and Cerro Lunar " is addressed, and articulate the key issues within the design of a " Special Program for Employment Formalization " in these areas, according to Law Also (2013), considered information from four workshops with stakeholders (contractors, cachorreros and pallaqueras ), where the appointment of representatives of each of the groups involved was achieved. 4 On this basis, considering what has been learned in the above course is designed this Action Plan, the main limitation is that it focuses primarily on employment and living conditions. 4

6 2. OVERVIEW OF LA RINCONADA Y CERRO LUNAR La Rinconada " and " Lunar Cerro de Oro" population centers are found in Ananea District, Province of San Antonio de Putina Departament of Puno. They feature located in an extremely adverse, rigorous and high-risk physical, climatic and geographical environment, which adversely affects the security, health and safety of people who are totally poor ( lack of basic services of water, drainage, power grids as well as an emerging presence of the state ). In both villages, there are two distinct climatic differences: September to April, heavy rainfall river, hail and temperatures of 3-13 C are presented, and from May to August, a cold climate temperature -13 º C. The predominant activity in both villages is the gold informal mining activity that involves the extraction of gold ore deposits of primary origin, whose quality laws vary from 6-7 tenths of an ounce of gold per ton up to 15 ounces per ton. The gold mining has generated a wild population, which seeks to increase job opportunities, which has led to a dynamic mining and commercial activity, characterized by high incidence of informality. Chart 1: Departament of Puno 5 5

7 Chart 2: Province San Antonio Putina Chart 3: District Ananea 6 6

8 2.1 La Rinconada: The town of La Rinconada is located at an average altitude of 5,200 meters, the space in which their population dynamics is set in ascending from migratory flows, especially boys, in the 90s (for Peru's economic crisis and low agricultural production caused by agricultural drought) 2 ; then, the growing trend is more persistent in the last decade due to the sustained rise in the price of gold in the international market product of the financial crisis (2008). La Rinconada, as gold ore mining area is worked since ancient times 3, which were taken up by artisanal miners from 1945 to date. Since 1999 also operates in the area, the Corporación Minera Ananea SA which coexists with three co-workers who account for nearly 500 contractors and around 30 thousand workers. It is also worth mentioning that in the Town Center La Rinconada, there Developments March 05 and 11 Neighborhood Associations, as detailed in the following chart and table: Chart Nº 4: Map of La Rinconada Town Center 7 Fuente: Diagnóstico de la situación actual y manejo de los residuos sólidos en La Rinconada y Cerro Lunar Región Puno OIT-CARE; Desafío y esperanza para la niñez en los Andes, Puno, Perú, GAMARRA F & RIVERA G, OIT; Estudio Socio Laboral en La Rinconada y Cerro Lunar, Puno, Perú, 2005, pág. 12 7

9 Table Nº 1: Urbanizaciones, Asociaciones y Barrios de La Rinconada Distrito Ananea Provincia San Antonio de Putina Puno. ID CATEGORY NAME 1 Santa Cruz 2 Urbanización Santa Rita 3 3 de Mayo 4 Barrio San Francisco 1 5 Barrio Alto Huáscar 6 Asociación de Comerciantes mixtos Los Nevados de Rinconada 7 Civil de Moradores Barrio San Jorge 8 Civil Barrio La Compuerta 9 Flor de Oro 10 Central Ritik Uchu 11 2 de Mayo 12 Central 13 Victoria 14 Barrio Independencia 15 5 de Diciembre 16 San Francisco 17 3 de Enero 18 Los Olivos 19 Santa Rosa Prepared by the author based on the document: Diagnóstico de la situación actual y manejo de los residuos sólidos en los Centros Poblados La Rinconada y Cerro Lunar de Oro, Región Puno, Alfonso Córdoba Rau Cerro Lunar: 8 The town of Cerro Lunar de Oro is located 4,800 meters above sea level at a distance of 500 meters from La Rinconada, both villages occupy a space of about seven square kilometers 4. In the case of Cerro Lunar, this town was built up gradually in the late 70's 5 as a result of the growth of La Rinconada. The "gold rush" allowed houses established since the late 80's to date. It is estimated that there are approximately 5000 workers engaged in mining. It is noteworthy that both towns are at the foot of the mountain "Awicha" as shown in the following graph: 4 CORDOVA, A; Diagnóstico de la situación actual y manejo de los residuos sólidos en los Centros Poblados La Rinconada y Cerro Lunar de Oro, Región Puno, pág CARO, J.; VILLENA, J. y MOLLOCONDO, CH. Situación socioeconómica en La Rinconada al Puno, Perú: Care, INEI, 2004.En: +Censo +La+Rinconada+y+Cerro+Lunar&highlight=la%20Rinconada. 8

10 Chart Nº 5: Panoramic View of La Rinconada y Cerro Lunar Photograph by the author (2013) Currently, in the Town Center Lunar Cerro de Oro, there are 11 Districts, as detailed in the following table and graph: Table Nº 2. Barrios de Cerro Lunar de Oro Distrito Ananea Provincia San Antonio de Putina Puno. 9 ID CATEGORY NAME 1 Huaynapata 2 Alto San Martín 3 Alto Belén 4 Santa Bárbara I 5 Alto Mirador 6 Barrio Lago de Oro 7 Independencia 8 Santa Bárbara II 9 5 de Setiembre 10 Villa Hermosa 11 Villa de Oro Prepared by the author based on the document: Diagnóstico de la situación actual y manejo de los residuos sólidos en los Centros Poblados La Rinconada y Cerro Lunar de Oro, Región Puno, Alfonso Córdoba Rau

11 Chart Nº 6. Map of Cerro Lunar de Oro Town Center Fuente: Diagnóstico de la situación actual y manejo de los residuos sólidos en La Rinconada y Cerro Lunar Región Puno In terms of accessibility and connectivity of La Rinconada and Cerro Lunar, there is a dirt road that connects the two villages within the district and a highway Ananea large paved portion communicating with said district Juliaca (about 195 Km away ) El tiempo de recorrido Juliaca-La Rinconada es de 3 a 4 horas, con presencia permanente de unidades de transporte público tipo camionetas rurales (combi). 10

12 3. DIAGNOSIS IN LA RINCONADA Y CERRO LUNAR 3.1 DIAGNOSIS OF THE EMPLOYMENT: Labour Market situation of the Región Puno: Puno's population for the year 2007 was 1 million 268 thousand people with an average annual growth rate estimated at 1.1, from this, the population projection for 2013 is 1 million 389 thousand people. i) Characteristics of Working Age Population Chart Nº 7: Puno: Distribution of Working Age Population according to activity status, 2012 (Population 14 and older) Working-age Population ( ) Economically Active Population ( ) Economically Inactive Population ( ) Adequated Employed ( ) Employed ( ) Underemployed ( ) Unemployed (17 909) students housekeepers retirees discouraged workers 11 Time related underemployed (60 854) Income related underemployed ( ) Fuente: INEI Encuesta Nacional de Hogares (ENAHO) continua, 2012 Prepared by the author. As seen in Chart 7, according to the National Household Survey on Living Conditions and Poverty (ENAHO) of 2012, the department of Puno had a working age population of people. The economically active population reached inhabitants, representing 82.0% of the working age population. Moreover, the economically inactive population in 2012 amounted to inhabitants, representing 18.0% of the working age population of Puno. De la Población en Edad de Trabajar, el 37.5% eran jóvenes de 15 a 29 años y el 49.1% eran adultos de 30 a 64 años. Population of working age, 37.5% were aged 15 to 29 years and 49.1% were adults 30 to 64 years. 11

13 (ii) Characteristics of Economically Inactive Population The economically inactive population consists of housewives, students, pensioners, retired, sick, among others, in 2012, inhabitants were inactive, which represented 18.0% of the population of working age of Puno. That is, in Puno, 100 people of working age, 18 are inactive and of these 10 are studying. ii) Characteristics of the Economically Active Population (EAP) According ENAHO 2012 the Puno region had economically active (working or looking for work), of which 50.7% were male and 49.3% female. That is, in Puno, 100 people belonging to the economically active population, 51 are men and 49 are women, with a downward trend in youth participation. iii) Characteristics of the Economically Active Population (EAP) Economically Active Population Employed as market structure In 2012, the occupied Puno amounted to people (workers independent public sector, private sector, etc.). 12 In Puno, 45.5% of employed persons working as independent, 23.7% work in the private sector and 22.7% as unpaid family workers (unpaid family workers). The average employed labor income in 2012 was S /. 720, with the public sector pays more on average (U.S. $ 541) and then the private sector (U.S. $ 332). On the other hand, in terms of income gaps, as is common, the average incomes of men are greater than women. And between 2004 and 2012, the income gap has been reduced: thus, it was found that in 2004 the average income of men was 81% higher than that of women, and in 2012 the average income of men was 79% higher than that for women. 12

14 Table 3: Puno: Economically Active Population and Average Revenue per Occupied Sex as Market Structure, 2004 and 2012 Percent labor income ($) Market structure Men Women Total Men Women Total Men Women Total Men Women Total Absolute total 351, , , , , , Relative total Public sector Private sector Self-employed Unpaid family work Others 1/ 2/ Nota: no se considera a los trabajadores familiares no remunerados, en el cálculo del ingreso promedio 1/ cifras referenciales 2/ trabajador del hogar, practicantes y otros Fuente: INEI - Encuesta Nacional de Hogares sobre Condiciones de Vida y Pobreza, continúa Metodología actualizada. Prepared by the author. Economically Active Population Occupied by occupational category In 2012, 46.6% of the economically active population was self-employed and 21.3% were unpaid family workers, also, only 28.6% were employed (between public and private workers). Table 4: Puno: Economically Active Population and Employed Seeking Average Income, per Occupational Category, 2004 and 2012 Percent labor income ($) Ocupational category Men Women Total Men Women Total Men Women Total Men Women Total Absolute total 351, , , , , , Relative total Employer employee Self-employed Unpaid family work Others 1/ 2/ Nota: no se considera a los trabajadores familiares no remunerados, en el cálculo del ingreso promedio 1/ cifras referenciales 2/ trabajador del hogar, practicantes y otros Fuente: INEI - Encuesta Nacional de Hogares sobre Condiciones de Vida y Pobreza, continua Metodología actualizada. Prepared by the author. 13 That is, in Puno, out of 100 workers, only 47 are independent and 21 are unpaid family workers (unpaid family workers). 13

15 Economically Active Population Employed by economic activity By 2012, 46.9% of employed persons working in Puno mining industry, 22.5% in the services sector and 16.7% in the trade industry. Higher average incomes correspond to the branch services (S / ) and trade (S /. 711). Also shows that the proportion of people working in the extractive industry decreased by 11.5 percentage points, while the services sector the proportion of workers grew by 5.3 percentage points. Table 5: Puno: Economically Active Population and Employed Average Income, According Branch Economic Activity, 2004 and 2012 Percent labor income ($) Economic activity Men Women Total Men Women Total Men Women Total Men Women Total Absolute total 463,95 256,13 381,67 396, , , Relative total extractive industry trade services Others Nota: no se considera a los trabajadores familiares no remunerados, en el cálculo del ingreso promedio Fuente: INEI - Encuesta Nacional de Hogares sobre Condiciones de Vida y Pobreza, continua Metodología actualizada. Prepared by the author. That is, in Puno, out of 100 workers, 47 working in the extractive industries, 23 in services, 17 in business and 11 in other activities also higher average income are presented in the trade and services sector. 14 Economically Active Population Occupied by occupational group In the department of Puno, 46.4% were workers in extractive industries and their average incomes are the lowest among other occupations (U.S. $ 155), while 7.5% were professional, technical and related workers, and their average incomes are the highest among other occupations (U.S. $ 417). Table 6: Puno: Economically Active Population and Employed Average Income, by occupational group, 2004 and 2012 Nota: no se considera a los trabajadores familiares no remunerados, en el cálculo del ingreso promedio Fuente: INEI - Encuesta Nacional de Hogares sobre Condiciones de Vida y Pobreza, continua Metodología actualizada. Prepared by the author. Occupational group Freq. % labor income ($) Freq. % labor income ($) Total 688, , Professional, technical and related occupations 45, , Manager, director, officer and employee of office 13, , Seller 86, , Worker in extractive 398, , Craftsman and operator 54, , Worker and laborer 17, , driver 20, , Service worker 51, ,

16 Labor Income, Inequality and Poverty Analyzing the Lorenz curve, in 2004, 80% of the population was distributed 41.0% of revenue, and in 2012 the distribution improved (decreased inequality), since 80% of the population was distributed 47.8% of revenue offered by the labor market. Chart No. 08: Puno: Lorenz Curve of Occupied Economically Active Population, 2004 and Perfect equality 80 % Cumulative inceme distribution % Cumulative population distribution 15 Nota: se excluye a los trabajadores familiares no remunerados. Fuente: INEI Encuesta Nacional de Hogares (ENAHO) continua, 2004 y 2012 Prepared by the author. Chart No. 09: Puno: Trends in Incidence of Poverty, (Percentage to total Population) 70.0 PUNO LORETO PASCO PIURA Fuente: INEI Encuesta Nacional de Hogares (ENAHO) continua, Prepared by the author 15

17 3.1.2 Labour Market Situation of the Province of San Antonio de Putina The province of San Antonio de Putina represented, for % of the population of Puno (50,490 people and an annual average growth rate of 4.1%), this pattern is similar in the districts of Sandia, Chucuito and Carabaya. On the other hand, emphasizes that 33% of the population was young (15 and 29), 22.5% were between 30 and 45 years, while the under 14 accounted for 30%. As for education, 76% had primary or secondary, while only 7.5% had higher education. Table 7 Puno: Census Population and Annual Growth Rate, according Province, Province Censal Population Intercensal average growth rate Total 890,258 1,079,849 1,268, Puno 177, , , Azángaro 115, , , Carabaya 33,090 46,777 73, Chucuito 85,292 93, , El Collao 61,407 75,456 81, Huancané 80,550 80,317 69, Lampa 38,979 43,461 48, Melgar 61,562 72,005 74, Moho 27,583 33,320 27, San Antonio de Putina 18,777 28,475 50, San Román 102, , , Sandia 44,140 50,042 62, Yunguyo 42,533 48,258 47, Fuente: Censos población y vivienda- INEI 1993 y Prepared by the author. 16 Its population of working age was 36 thousand 418 people (72.1% of the population), of which about half of them worked or looked for work. The 48% of the working population engaged in mining and quarrying, and other (21.9%) for agriculture and livestock. The province of San Antonio de Putina consists of 5 boroughs, but 80% of its people living in the districts of Putina and Ananea. Ananea district is located north of the Province of San Antonio de Putina and its Ananea capital located in the south-western part of the Eastern Cordillera of the Andes, flank boundary with the neighboring Republic of Bolivia at 4610 meters on the sea level. Its climate is cold and dry with minimum temperatures that can reach 27 degrees below zero. 16

18 Province and District Table No.08 Province of San Antonio de Putina: Main Social Indicators, 2007 Population Human Develoment Index Life expectancy literacy school educational attainment per capita household income DHI años % % % $ San Antonio de Putina* Putina Ananea Pedro Vilca Apaza Quilcapuncu Sina *Provincia Fuente: Unidad del informe sobre el Desarrollo Humano, Perú PNUD. Prepared by the author. The human development index (HDI) which was found in District Ananea for 2007 was the best in the province of San Antonio de Putina, driven by increased household income per capita, due to higher mining district, and comes to double revenues of districts like Sina and Vilcapuncu, purely agricultural. The proportion of literates is higher than in other neighboring districts (96.08%), but their schooling is the lowest (70%), the lowest in the province. Chart 10 Province of San Antonio de Putina: Human Development Indices, San Antonio de Putina* Putina Ananea Pedro Quilcapuncu Sina *Provincia Fuente: Unidad del informe sobre el Desarrollo Humano, Perú - PNUD Prepared by the author. 17

19 3.1.3 Labour Market Situation of the District of Ananea: Ananea district, in 2007, had the second largest population in the province of San Antonio de Putina (20,572 people), ie just over 40% of the population of this province is located Ananea district. His female population is the lowest in the province (42.8% of the population), its population is characterized as foreign. The district has 5 Ananea population centers, but which bind more than 70% of the population is La Rinconada (59%) and Cerro Lunar (14%). Table N 09 Ananea District: Number of Households and population by sex, according to population centers, 2007 Town center Classification Dwelling Population % Population Men Women Ananeas Urban 747 1, Cerro Lunar de Oro Urban 1,653 2, ,762 1,129 La Rinconada Ana María (La Rinconada) Urban 5,960 12, ,937 5,246 Pepa Azul Rural Ritty Azul Rural 1,423 2, , Población dispersa 739 1, Total district 10,561 20, ,769 8,803 Fuente: Censo población y viviendas INEI Prepared by the author. The INEI projected 2013 population of the district Ananea be 29 thousand people, but this estimate does not seem to capture the floating population coming from other nearby districts and even other departments to work. The information in the field showed that 90% of the floating population and about 35 thousand people are involved with mining. 18 9,000 Chart N 11 Province of San Antonio de Putina: Population by Five-Year Age Groups, ,000 7,000 6,000 6,466 8,240 6,997 PUTINA ANANEA SAN ANTONIO DE PUTINA 5,000 4,710 4,000 4,067 3,000 2,000 2,526 1, Fuente: Boletín Especial Nº 21 titulado Perú: Estimaciones y Proyecciones de Población total y edades quinquenales, según Departamento, Provincia y Distrito, , Prepared by the author. It should be noted that while in the other districts of San Antonio de Putina virtually 100% of the population lived in the same district, in the case of Ananea is different: in this district 23% of the population in 2007, not live permanently in the district, and 40% lived in this district in

20 This floating population or migration phenomenon happens in greater detail in the towns of La Rinconada and Cerro Lunar, to the point that the people, according to information gathered in the field estimate that are 50,000 people, of which about 35 billion would be devoted to mining. It is noteworthy that only 500 people listed in the electoral rolls of these population centers, ie, for statistics La Rinconada and Cerro Lunar small towns are not as many people, with another reality. According to Census 2007, shows that the main languages are Castilian (50%) and Quechua (40%). Furthermore, the educational attainment of about 80% is the basic (46.8%, 33.2% secondary and primary), also found that 80% of the population was not studied. Chart No. 12 District Ananea: Education Level, 2007 College complete College incomplete Non-university incomplete Non-university complete Secondary 46.8 Primary Early Education No Level Fuente: Censo población y viviendas INEI Prepared by the author. The proportion of children attending the education system is reduced with increasing age of the child, so the 90% of children aged 0 to 5 years were attending school. For children 6 to 11 years only attended 80% of children attending classes and only 10% of children under 12 to 16 years attending a course center. 19

21 Table 10 District Ananea Education, 2007 Education Absolute (%) Support the regular education system (6-24 years) From 0 to 5 years From 6 to 11 years From 12 to 16 years to 24 years Population with higher education (15 and over) Men Women Pobllación illiterate (15 or older) Men Women Urban Rural Fuente: Censo población y viviendas INEI Prepared by the author. Regarding the marital status of the residents of the district Ananea (over 12 years), it was found that 69.4% were married or living with their partner, while another 26.2% were single. On the other hand the average number of children 40% of the population older than 12 years, was among one or two children. Chart No. 13 District Ananea: Marital Status, Attached Single (a) Married (a) other * 26.2 Fuente: Censo población y viviendas INEI Prepared by the author. 20

22 Table No. 11 District Ananea: Housing Conditions, 2007 Occupied Dwelling Absolute (%) Type of tenure Own fully paid Own paying them in installments Predominant material in walls With brick walls or concrete block Adobe walls or wall With walls Mat Stone walls with mud other Material in floors land cement Parquet or polished wood Wood shingles Homes with water Public drainage within the home Public network outside the house but inside the building Pylon public use Households with toilet facility Public drainage system within the dwelling Public drainage system outside the house but inside the Black / latrine or cesspool Homes with electric lighting Public drainage Fuente: Censo población y viviendas INEI 2007 Prepared by the author. On the living conditions of households, the most striking point to mention, and that has not changed since 2007 is that this district does not have a sewerage system: waste are thrown through pipes to the streets, generating sources of pollution. Table 12 District Ananea: Busy Economically Active Population, Participation in Economic Activity (14 or older) Absolute % Economically Active Population (EAP) Labour force participation rate men women EAP occupied men women EAP occupied by main occupation Members of the public administration 4 0 professionals Middle level technicians Heads and office employees Trab.deservicio personal and Information Farmers and fishing Workers and mine operators construction workers Unskilled farm worker, peon others Occupation not specified Fuente: Censo población y viviendas INEI Prepared by the author. 21

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