The government of president Evo Morales has approved a new mining law for Bolivia. It received virtually no international news coverage, yet is proving highly divisive within the country.
A previous version of this law was passed by Bolivia’s lower house of parliament on March 29 but had to be revised by the upper house amid violent conflicts that also brought down the mining minister.
Miners from cooperatives who led the protests and represent most of those who work in the sector had caused 16 separate conflicts between January 2013 and March 2014. Then on March 31 they mobilised, blockading the main roads across the country, leading to 30 arrests; 43 policemen taken as hostages; 85 miners and 20 policemen injured; and two miners dead.
A truce has been declared, but now various other groups are protesting the proposals, notably those representing indigenous Bolivian interests. The law may have passed, but it is far from clear whether it will stay in force.
From silver to tin
Mining is deeply embedded in Bolivia’s national identity. During colonial times, so much silver was transported from mines in the southern region of Potosí to Europe that people used to say a bridge of pure silver could be built from the top of Cerro Rico mountain to the royal palace’s door in Spain. It came at an exorbitant price. An estimated eight million slaves died in Potosí alone.
By the time mining was nationalised after the 1952 national revolution, tin had long since supplanted silver as the main mineral product. The industry was privatised again in the 1980s during the era of neoliberal shock therapy, starting with the notorious Decree 21060 of 1985.
By 1991 at least 45,000 state mining jobs had gone. More reforms in the 1990s then further reduced the state’s role in the sector. This culminated in the 1997 mining code, which is what the current reforms are replacing.
The future is mine
His government has acted on social-movement demands to renationalise strategic resources, particularly hydrocarbons. Mining has generally been left in private hands though, contrary to promises early in his tenure.
Mining is the country’s second-most important natural resource sector after hydrocarbons in terms of production volumes and income. In 2012 it contributed approximately 6.8% of Bolivia’s GDP and 37.3% of exports, according to the National Institute of Statistics.
But the state is not a great beneficiary. Because mining has not been renationalised and taxes and royalties have not been significantly increased, there have not been the same rises in state rent collections as in hydrocarbons. Hence it only contributes 7% of state revenues while oil and gas contributes 36%.
The extra revenue from renationalising mining could finance a political set-up more attuned to the needs of the country’s different ethnic groups. With more than 60% of Bolivians identifying as indigenous-peasant, and Morales the first president from that background, their representative groups want to redesign state institutions according to their forms of organisation. This would be in line with the aims of the new Bolivian constitution that was approved in 2009.
During the president’s two administrations, mining cooperatives expanded, having previously mushroomed in the neoliberal 1980s. These are not social enterprises that redistribute profits among their members, but mainly small businesses with high levels of labour exploitation and no sense of social or environmental responsibility.
According to Bolivian government data, by 2011 these businesses employed more than 60,000 people and produced 31% of the country’s mineral output (though less than 9% of the sector’s tax revenues).
In comparison, state mining company COMIBOL employed less than 6,000 and accounted for 9% of production. Larger-scale private mining employed fewer than 5000 people but produced 60% of the minerals and contributed nearly 90% of tax revenues.
The cooperative miners’s protests came despite their being heavily involved in negotiating the new law – unlike indigenous organisations, which were excluded. These “cooperativistas” are represented in Morales’s executive and legislative, but have been ambivalent about their commitment to strengthening and transforming the state.
Hence they demanded to continue to be allowed to sign contracts directly with private companies. The fact that parliament rejected this request was behind the March clashes, and it took a partial U-turn by lawmakers to bring them to heel. To cement this new entente cordiale, the governemnt organised a public event near the capital of La Paz last week where it publicly donated 100 dumper trucks worth $8m (£5m) to the cooperative miners' federation.
The neoliberal hangover
Overall the new proposals are a mixed bag that still include some worrisome continuities from the neoliberal regime. In keeping with the principles of the 2009 constitution, they do provide for the state to have more presence in mining. They also acknowledge the need to reduce the current focus on exports in favour of using and processing more minerals in the country.
But they also enhance opportunities for foreign investors, guaranteeing them legal security and a competitive tax regime. This limits the state’s ability to nationalise resources and collect revenues.
The new proposals clearly favour mining over indigenous and peasant demands, including rights to non-contaminated territories. They also limit indigenous involvement in decision-making around new mining projects. They have not been given a veto and their consultation rights extend only to actual mining, not exploration work.
Some changes are also merely nominal. While mineral resources are declared to be the property of the Bolivian people, once extracted they become the property of the mining companies.
Hence the indigenous protests. Also taking to the streets have been irrigators’ associations concerned with access to water and women’s collectives demanding attention to gender issues.
On May 8 and 9, a national social summit took place in La Paz. The country’s main indigenous organisations and tens of other groups fully rejected the proposals and demanded to start the process anew with their full participation.
Nevertheless Morales allowed the law through, showing the difficulty in trying to incorporate principles of indigenous self-determination and resource democracy in the context of an intense mining boom in the region.
Now he faces the prospect that this indigenous-led coalition will lodge an appeal of unconstitutionality. This could force a review by the country’s constitutional tribunal that could lead to the law being blocked. With demonstrations also on the cards, it is hard to say how the situation will end.