The road to formalization in Peru

The Peruvian environment minister, Manuel Pulgar-Vidal, sparred with one of the leading representatives of Peru’s 300,000 informal miners, Hernando De Soto. As the head of the Institute for Liberty and Democracy, de Soto announced on Friday, at a meeting with the National Association of Small and Artisanal Miners, an alternative to the Peruvian government’s plan to formalize the country’s 300,000 informal miners.

De Soto argued that the government’s plan is too expensive, requiring an investment of $84,000 on the part of the miners to comply with environmental regulations; too slow, as it takes four years for a miner to be formalized; and ineffective, as to date, only 5 out of 300,000 informal miners have been formalized under the government’s plan. De Soto proposed that, first, formalization needs to be defined as a process by which all miners have the same rights; that second, the government listen to the miners in constructing policies and not go about it blindly; and lastly, that a strategy be devised to unblock the formalization process, so that it is about integration rather than exclusion.

Minister Vidal took exception to De Soto’s claims, arguing that the formalization process has actually been very simple and low-cost. He emphasized that the $84,000 are not a fee, but an investment, explaining that “high-impact mining needs rules, and the cost is that which Peruvians require to have an environment free of mercury, cyanide, and other toxic substances.”

One’s opinion on who won the debate likely depends on one’s perspective of mining: is it an inalienable right, born of a centuries-old tradition passed on from generation to generation, as Hernando De Soto would have us believe, or is it a capital-intensive, inherently-polluting endeavor that requires careful regulation, as Minister Vidal believes.