FOREIGN INVESTMENT AND THE PRIVATIZATION OF COERCION: A CASE STUDY OF THE FORZA SECURITY COMPANY IN PERU

NAME: Charis Kamphuis *

BIO:

* B.A. (Toronto), LL.B. (Saskatchewan), LL.M. (Osgoode), Doctoral Candidate, Osgoode Hall Law School, York University, Canada, and Coordinator of the Justice and Corporate Accountability Project (“JCAP”). The empirical work that this Article is based on was funded in part by a grant from the Global Consortium for the Transformation of Security and by the Shin Imai Fund for Human Rights at Osgood Hall Law School. A translation of the previous version of this Article was published in 68 APUNTES: CENTRO DE INVESTIGACIÓN DE LA UNIVERSIDAD DEL PACIFICO 63-108 (2011) (Peru). The Author would like to thank Professor Shin Imai, for his constant support in all of the processes that made this research possible, and Jesica Karina Chuquilín Figueroa, for her indispensible collaboration in the development of this project.
SUMMARY:
… As such, to date there is no indication that Business Track’s powerful clients, among them Forza and a number of transnational mining corporations, will be subject to a criminal investigation. … As indicated in the previous two sections, there are documented links between Business Track’s surveillance activities and Forza’s alleged role in human rights violations against mining activists in the Majaz and GRUFIDES cases. … Bilateral investment treaties (“BITs”) protect the interests of each of the foreign investors implicated in Forza’s alleged human rights abuses: the American company Newmont in Yanacocha; the Swedish company Securitas in Forza; and formerly, the British company Monterrico in Rio Blanco. … In 2004, and again in 2006, mass protests took place against Yanacocha, resulting in the death of a protestor, the murder of a Campesino leader, and the subsequent persecution of GRUFIDES personnel. … In summary, these are (1) the increase in private security companies and officers relative to police officers, (2) the presence of private security companies, in some cases foreign owned, that specialize in providing services to mining companies and other companies in the resource extraction sector, (3) the high levels of participation of police and military officers in private security companies, and (4) the formation of private security contracts between the police force and transnational mining companies. … Each of these mechanisms or systems of law was examined in terms of its applicability to the Forza case study and its potential efficacy in addressing the issue of impunity.

TEXT:
[*529]  INTRODUCTION

This Article documents the exercise of coercive power ⁿ¹ by public police services and private security companies in response to the needs of foreign-owned mining companies in an environment of social protest and opposition. It describes how a particular transnational private  [*530]  security company has been confronted with a broad international social movement of human rights and environmental activists who are simultaneously invoking multiple regimes of domestic and international law in an effort to hold the company to account for its actions. Peru offers an important case study with regard to these issues because it is a relatively poor developing country dominated by foreign-owned mining activity. Between 1990 and 2000, former president Alberto Fujimori initiated the neo-liberalization of the Peruvian economy ⁿ² through a series of political and economic legislative reforms that sought to integrate the country into the global economy and reduce the presence of the state in all areas of economic and social policy. ⁿ³ In terms of the resource extraction sector, ⁿ⁴ this included the complete privatization of mineral production ⁿ⁵ and the restructuring of the country’s legal regimes to create favorable conditions for foreign investors. As a result, in 2001 the International Monetary Fund evaluated Peru as one of the national economies most open to foreign investment in the world. ⁿ⁶ Following the fall of Fujimori in 2000, subsequent governments ⁿ⁷ advanced policies that continued the neo-liberalization of Peru’s economic and legal order. ⁿ⁸ By 2006, Peru was  [*531]  one of the top mineral producing countries on the globe, with net project profits in the mostly foreign-owned mining sector totaling over seven billion dollars. ⁿ⁹

A record level of social and environmental conflict matches these record profits. ⁿ¹⁰ The majority of resource extraction conflicts relate to mining activities ⁿ¹¹ and many of Peru’s six thousand “Campesino Communities” ⁿ¹² own or occupy land in areas affected by mining. ⁿ¹³ These Communities are recognized in a legislative and constitutional framework that  [*532]  establishes communal property rights, autonomous communal self-government, and protected cultural institutions. ⁿ¹⁴ As such, two common issues underlie many of the conflicts between Campesino communities and mining companies: the question of whether or not the affected communities consented to mining development and the concern that the wealth generated by mining has not sufficiently benefited local communities. ⁿ¹⁵

In the face of widespread organized opposition to mining, transnational companies increasingly employ a mix of public police services and private security companies to protect their investment interests. ⁿ¹⁶ These  [*533]  practices, and their interface with international and domestic law, are examined in this Article. The Introduction begins with an analytical description of the domestic legal regime that structures security services in Peru. In this context, a case study of Forza is undertaken. ⁿ¹⁷ This section presents the allegations raised against Forza in three on-going cases: Majaz, ⁿ¹⁸GRUFIDES, ⁿ¹⁹ and Business Track. ⁿ²⁰ These cases depict the deep interpenetration of the economic and political power of foreign-owned mining companies, Forza, and the Peruvian justice system. ⁿ²¹ By tracing the legal trajectories of each case, this Article reveals a pattern of impunity for foreign investors and their security companies.

Taking the discrete empirical context of the Forza case study as its reference, Part II studies impunity’s legal contours by questioning how it is constituted in the midst of multiple systems of international and domestic law. At the domestic level, it discusses the legal mechanisms that have jurisdiction over the transnational actors profiled in the Forza case study. At the international level, it considers three distinct normative systems: public international human rights law, private international foreign investment law, and corporate social responsibility mechanisms. This overview provides insight into how the global gap ⁿ²² in the domestic regulation of the transnational corporation and the enforcement of domestic  [*534]  law, together with asymmetry in the enforcement of international law, function together to institutionalize and internationalize impunity in the Forza case study.

In view of the stark–and apparently totalizing–nature of the system of impunity described in Part II, this Article concludes by exploring the potential value of its own methodological approach. With this objective, Part III revisits the Forza case study in terms of a methodology of international lawyering and legal academic work on the issue of corporate impunity. The approach responds to some of the imperatives of certain critical international law scholars ⁿ²³ and, most importantly, to the practical needs of social movements adversely affected by the privatization of coercive force in favor of foreign investors. This focus ultimately invites advocates to contemplate the possibility that the invocation of voluntary corporate social responsibility mechanisms may risk broader political pitfalls.

I. TRANSNATIONAL RESOURCE EXTRACTION AND THE PRIVATIZATION OF COERCION

A. Domestic Legal Framework and Practice

Academics doing research in diverse contexts have widely observed that the proliferation of private security companies is one consequence that flows from neoliberal law and policy reform and the reduction of public expenditure. ⁿ²⁴ The findings of a recent report issued by a United Nations Working Group (“UNWG”) ⁿ²⁵ suggest that this hypothesis is supported by the Peruvian experience. ⁿ²⁶ Since sweeping neoliberal policy reforms were introduced in Peru in the early 1990s, the State has not increased  [*535]  the ranks of the public police force, while conversely the number of private security personnel has expanded tremendously. ⁿ²⁷

The United Nations (“UN”) study estimated that in 2008 there were 100,000 private security guards in Peru, outnumbering the 92,000 public police officers. ⁿ²⁸ It also concluded that approximately half of the private security guards in Peru work for companies in the informal sector. ⁿ²⁹ While the report itself does not define the term “informal,” it can reasonably be assumed that the term refers to companies that have not registered their operations with the appropriate ministry. If this is the case, these companies essentially operate illegally, given that the applicable legislation requires registration. ⁿ³⁰ The possibility that approximately half of the private security sector in Peru operates informally, and perhaps even illegally, suggests that the State may be either unable or unwilling to exercise effective regulatory control over the sector. ⁿ³¹

The lack of formal regulatory control over the private security sector is contrasted by the UNWG study’s observation of the close informal relationship between the private security sector, the police force, and the military:

In many cases, these companies are run by former members of the Armed Forces or the Police, or they occupy senior positions. Peru also seems to experience the “revolving door” syndrome whereby, when they retire, members of the military and police are hired by private security companies or start their own. The Ministry of the Interior apparently authorizes these companies to hire off-duty police officers to protect buildings; the officer’s weapon is the property of the police, not of the company. ⁿ³²

Thus it would appear that the private security industry in Peru is defined, rather ironically, first, by its high degree of illegality and second, by its close, informal relationship with the military and the police.

In this context, the relevant provisions of the corresponding Peruvian legal regime are pertinent. In 1994, Fujimori’s neoliberal reforms included the introduction of Peru’s first law with the stated objective of regulating  [*536]  the private security services. ⁿ³³ In 2006 the Private Security Services Act ⁿ³⁴ (“the Act”) replaced the initial 1994 law to form the current legislative context. ⁿ³⁵

Perhaps not surprisingly, the Act facilitates police and military officers’ access to employment in the private security sector. ⁿ³⁶ The Ministry of the Interior is responsible for the regulation, control, and supervision of all three institutions ⁿ³⁷ and authorizes the operation of privately owned Private Security Training Centers, which security personnel are required to attend. ⁿ³⁸ However, police or military officers may bypass this training requirement because Centers are empowered to recognize the equivalency of police or military training. ⁿ³⁹ The Act explicitly allows retired military or police officers to supervise private security companies ⁿ⁴⁰ and does not prohibit these companies from employing actively serving police/military officers. ⁿ⁴¹

While the Act facilitates the integration of the public security labor force into the private sector, it nonetheless imposes a certain division of labor on these officers as they cross between private and publicly paid positions. ⁿ⁴² Private security companies are prohibited from performing functions within the jurisdiction of the military or the police, such as the investigation of crime and espionage. ⁿ⁴³ However, despite this prohibition, in exceptional circumstances, private security officers may be required to support, collaborate with, and help the police force. ⁿ⁴⁴ However, when doing so, the Act stipulates that these private officers do not acquire the legal status of public authorities. ⁿ⁴⁵

The privatization of the Peruvian police force extends beyond the parameters of the Act. In 2009, a regulation was introduced by the national legislature that allows the National Director of the police force to enter into service provision agreements with private institutions, including  [*537]  transnational mining companies. ⁿ⁴⁶ These agreements provide a framework whereby individual police officers provide services to private companies on their days off. ⁿ⁴⁷

The Peruvian National Police force’s website displays a scanned copy of one such agreement. ⁿ⁴⁸ It is a 2009 contract signed by the General of the National Police Force and a representative of the Japanese-owned Santa Luisa Mining Company. ⁿ⁴⁹ However, since this is the only publicly available copy of an agreement of this type, it is difficult to determine how widespread these agreements are in the extractive industry. The information gathered in an ongoing journalistic investigation ⁿ⁵⁰ suggests that between 2008 and 2010 approximately thirty-three such agreements between the police force and transnational mining companies were in place across Peru. ⁿ⁵¹ The terms of the agreements collected in this journalistic investigation ⁿ⁵² are similar to those of the Santa Luisa agreement, described below, and they also coincide with what is publicly known  [*538]  about other arrangements of its kind. ⁿ⁵³ As such, it would seem that the Santa Luisa agreement is at least somewhat representative of the general nature of the agreements being made between police and mining companies in Peru.

The Santa Luisa agreement, entitled “Cooperation Agreement for the Provision of Services that are Exceptional and Complementary to Police Duties,” founds its existence on the constitutional duty of the police force to “maintain order” ⁿ⁵⁴ and has three named objectives. First, it aims to offer Santa Luisa “exceptional police services, complementary to [ordinary] police duties, utilizing the human resources of the Peruvian National Police.” ⁿ⁵⁵ Second, the police are to “detect and neutralize” any risks that threaten the personnel or property of the mining company, ⁿ⁵⁶ therefore guaranteeing the normal development of mining activities. Third, the agreement serves to generate the financial and logistical support that the police force requires to fulfill its institutional goals in service of the wider community. ⁿ⁵⁷ The agreement is drafted like a private contract in that it contains a privative clause specifically stating that controversies are to be resolved directly between the parties. ⁿ⁵⁸

In this framework, the police force commits to providing the mining company with officers from the Special Operations Division, which is notable for the reason that this division is trained to lead operations against drug trafficking, subversion, and violent conflict. ⁿ⁵⁹ The commitment  [*539]  on the part of the police force is to furnish the company with a rotating force of uniformed and armed off-duty police officers to protect the mine site twenty-four hours a day. ⁿ⁶⁰ In exchange, the mining company agrees to provide the off-duty officers with residence, food, life insurance, health care, and a daily salary. ⁿ⁶¹ Further, the company provides the police force as an institution with two different types of financial payments. ⁿ⁶² The first is equivalent to twenty percent of the total salaries paid to individual officers, ⁿ⁶³ and the second constitutes an unspecified amount designated to assist the police force in the fulfillment of its overall institutional objectives. ⁿ⁶⁴

To date, the constitutionality of the privatized funding and service arrangements described above remains unscrutinized by academics and activists alike. The Peruvian Constitution states that the funds designated for police force logistics must be used exclusively toward institutional ends under the control of the designated public authority. ⁿ⁶⁵ It is unclear that the “exceptional” services offered to Santa Luisa fall within the scope of the “institutional ends” contemplated by the Constitution, which include offering protection and help to people and to the community. ⁿ⁶⁶ According to one Peruvian law professor’s reading of the Constitution, an agreement of this nature violates the rights of all Peruvians to equal police protection and security to the extent that it compromises the constitutional tenet that the exercise of police power must respect the principle of neutrality between institutions and sectors in society. ⁿ⁶⁷

Taking into account the terms of the Santa Luisa agreement together with the findings of the UNWG study and the applicable legislative framework, some general conclusions can be drawn in regard to security in the Peruvian resource extraction context. First, it is clear that security services are being reorganized in accordance with a number of processes of privatization–in ways that are not yet fully understood. Second, law and practice facilitate the provision of a particular set of coercive resources to transnational mining companies. These resources consist of private security companies that are staffed by former and active police  [*540]  and military personnel. Further, these resources include fleets of off-duty police officers organized to function like a private security force pursuant to private agreements. Third, public security institutions have adapted their policies and practices to compensate for their apparent lack of public funds. Peruvian law created mechanisms whereby mining companies may fund the police force as an institution and also supplement the income of individual officers.

These observations suggest that the police force, both as an institution and as a labor force, has been partially privatized in the service of mining companies. As described above, the demand generated by mining companies for security services must be understood in the context of the widespread observation that the increase in resource extraction in Peru has encountered growing community-based opposition, ⁿ⁶⁸ or in the words of the Santa Luisa agreement, “risks.” ⁿ⁶⁹ In the course of these conflicts, companies–not communities–have the economic resources to generate a market demand for security services. Security services such as those offered in the Santa Luisa agreement are employed to physically protect the property of foreign investors. This is especially salient because the source of conflict between mining companies and communities often relates to the fundamental issue of land and land rights. ⁿ⁷⁰

However, the UNWG recently tied security companies in Peru to a “new development.”ⁿ⁷¹ Specifically, they have become implicated in the surveillance, coercion, harassment, and intimidation of human rights organizations with a particular focus on defending the economic, social, and environmental rights of mining-affected communities. ⁿ⁷² Thus the coercive relationship between private security companies and communities has two dimensions, namely the classical function of protecting property, “new” practices of surveillance, and even political persecution.  [*541]  ⁿ⁷³ Further, there is a strong indication that these dimensions coexist with a third feature of private security services in the Peruvian extractive industry, namely that these services are linked to a coordinated coalition of foreign governments and transnational corporations who are concerned with monitoring and strategically debilitating mining related social movements. This study of Forza, one of Peru’s most important and powerful security companies, allows for a detailed exploration of each of these three dimensions.

B. Case Study: The Forza Security Company

Forza was created in 1991 by retired personnel from the Peruvian Armed Forces who specialized in subversion and espionage work. ⁿ⁷⁴ Forza’s objective is to offer complete corporate security services to diverse companies with a specialization in the industrial, mining, and energy sectors. ⁿ⁷⁵ In addition to its work for transnational mining companies, Forza’s clients span an impressive array of high-profile international organizations, including the British Embassy, the Inter-American Development Bank, the Standard Bank London Limited, as well as subsidiaries of CocaCola, Eli Lilly, and Hewlett Packard. ⁿ⁷⁶ As Forza became one of Peru’s most important and powerful private security companies, its status garnered the interest of Securitas, one of the largest multinational private security corporation in the world. ⁿ⁷⁷ Due to Forza’s “prestige, experience  [*542]  and position in the Peruvian market,” Securitas acquired Forza in 2007 as part of its expansion into Latin America. ⁿ⁷⁸

Ironically, Forza’s power and status as the security company of choice in Peru for a significant number of international organizations and corporations seem to be proportionate to its growing reputation as a systematic human rights violator. The following section describes three ongoing legal proceedings that allege Forza systematically violated the human rights of activists and human rights defenders working on mining issues in Peru. ⁿ⁷⁹ The cases are presented in chronological order of the incidents they represent.

1. Majaz: Protection of “Private” Property

The Rio Blanco project, located in a “cloud forest” in the Peruvian Andes between 2,200 and 2,800 meters above sea level, is one of the largest undeveloped copper resources in the world. ⁿ⁸⁰ It has the potential to become one of the largest copper mines in South America and to create momentum for the creation of a larger “mining district.” ⁿ⁸¹ In 2003 the British company Monterrico Metals acquired the exploration rights to the Rio Blanco project. ⁿ⁸² Monterrico began operations in Peru through its wholly owned subsidiary Minera Majaz, whose name has since been changed to Rio Blanco. ⁿ⁸³ In 2007 the Chinese conglomerate Xiamen Zijin Tongguan Investment Development Company bought the capital share of Monterrico. ⁿ⁸⁴

Majaz’s exploratory operations at the Rio Blanco site were conducted on the communally owned territory of two Campesino Communities. ⁿ⁸⁵ These activities occurred without the permission of these Communities  [*543]  and in violation of Peruvian and international human rights law. ⁿ⁸⁶ Although the affected Campesino Communities repeatedly and clearly notified state and mining authorities of their opposition to the project, these efforts were met with “profound deficiencies” on the part of national authorities. ⁿ⁸⁷ In response to the extreme level of social conflict in the region, an independent delegation of UK experts–including one Member of Parliament–was created to engage in an in-depth evaluation of the social, political, cultural, environmental, and economic issues raised by the Rio Blanco project. ⁿ⁸⁸ The delegation concluded that “non-violent protest and the democratic process [had] completely failed local populations.” ⁿ⁸⁹

In 2004 community members marched on the Rio Blanco mine site, and one Campesino was killed in a confrontation with police. ⁿ⁹⁰ No police officers have been prosecuted or found responsible for this death. ⁿ⁹¹ A second march began in late July 2005 with the participation of between two and three thousand Campesino leaders and communal authorities from across the region. ⁿ⁹² This march was initiated because mining authorities failed to respond to an ultimatum from Communities demanding the cessation of exploration. ⁿ⁹³ Marchers referred to it as the “sacrifice march” ⁿ⁹⁴ because they walked for several days through difficult terrain toward the Rio Blanco mine site. ⁿ⁹⁵The protesters marched unarmed and waving white flags, ⁿ⁹⁶ with the expectation of negotiating with a special high-level commission of civil society leaders to be flown in by helicopter. ⁿ⁹⁷ The Ministry of Mining requested the formation of the commission in order to facilitate negotiations between marchers, Majaz, and state authorities. ⁿ⁹⁸However, unexpectedly, the commission’s helicopter was  [*544]  grounded a short distance from the mine site and police prevented its members from proceeding to the site. ⁿ⁹⁹

With the delegation grounded nearby, the marchers’ campsite was allegedly bombed with tear gas from helicopters and raided by Forza and police officers. ⁿ¹⁰⁰ Approximately twenty-eight Campesino leaders were detained and brought to the mine site. ⁿ¹⁰¹ The shocking claims of these Campesinos regarding the ensuing events were finally substantiated over three years later when photographs depicting officers engaged in cruel acts of abuse and torture of the Campesino detainees ⁿ¹⁰² were leaked to a national newspaper in late 2008 by an anonymous source. ⁿ¹⁰³ Officers bound the Campesinos, placed sacks over their heads, and forced them to walk barefoot. ⁿ¹⁰⁴ Their clothes were completely or partially removed and they were savagely beaten, tortured, subjected to tear gas, and deprived of food and water. ⁿ¹⁰⁵ One Campesino did not survive these events.ⁿ¹⁰⁶ Two female detainees reported being subjected to sexual abuse. ⁿ¹⁰⁷ After three days of torture in captivity, the Campesino detainees were released and charged with crimes such as terrorism. ⁿ¹⁰⁸

[*545]  In June 2008 a group of lawyers at the Peruvian NGO FEDEPAZ filed a complaint to the Prosecutions Office requesting an investigation of the Forza security officers, police officers, and mine officials allegedly responsible for the crimes committed against the detained Campesinos. ⁿ¹⁰⁹ In spite of the supporting photographic evidence, the local prosecutor rejected the complaint and closed the investigation. ⁿ¹¹⁰ This closure was successfully appealed and in April 2009 the Prosecutions Appeals Office ordered that the investigations be reopened. ⁿ¹¹¹ At this stage, a prominent national newspaper reported that the investigation and prosecution had been impeded by the refusal of the police force to provide the names of the officers who participated in the police operation in question, as well as the refusal of Majaz to provide a list of the mine staff–including Forza personnel–on site at the time. ⁿ¹¹²

One year later, in April 2010, the local prosecutor closed the investigation for a second time. ⁿ¹¹³ After another appeal, the Appeals Office again  [*546]  ordered that the investigation be reopened in August 2010. ⁿ¹¹⁴ The appeals prosecutor pointed out that the local prosecutor had failed to take into consideration that the police officers detained the victims and subjected them to torture and other crimes while carrying out a police operation that was likely previously planned by high level police Commanders. ⁿ¹¹⁵ As of the writing of this article, the domestic investigation continues. ⁿ¹¹⁶

In 2009 the victims brought parallel proceedings against Monterrico and its Peruvian subsidiary before the English High Court. ⁿ¹¹⁷ Their case alleged that the company’s directors, managers, and personnel directly participated in events related to the torture and detainment of the Campesino marchers. ⁿ¹¹⁸ The victims claimed that Monterrico was liable under the British Private International Law Act ⁿ¹¹⁹ for failing to fulfill its “responsibility for risk management.” ⁿ¹²⁰ They also claimed that both Monterrico and its subsidiary were liable under the Peruvian Civil Code for culpable or intentional damages on the basis of willful misconduct, failure to take adequate steps to prevent known risks, and actions of their employees (vicariously), including Forza security guards. ⁿ¹²¹ Finally, the victims made a claim for negligence. ⁿ¹²²

The nature of Majaz’s security arrangement was a major issue of contention in the UK action. It was clear that Majaz employed Forza to provide the Rio Blanco site with security services and that both Forza and police officers were at the mine site when the torture and abuse of protestors occurred. ⁿ¹²³ The victims testified that both Forza officers and police officers participated in the acts of torture, detention, and cruelty. ⁿ¹²⁴The company alleged that Forza officers refrained from such behavior and  [*547]  that any wrongdoing was solely committed by police officers, for which the company was not liable. ⁿ¹²⁵ Unfortunately, it was difficult to identify the institutional identity of some of the officers on the basis of the photographic evidence because the officers were not always fully uniformed or their uniforms were not always fully visible. ⁿ¹²⁶

In terms of the institutional relationship between the company and the police force, it is not known if Majaz had a security services agreement with the police such as the one described in the previous section. ⁿ¹²⁷ However, at a minimum, the nature of police participation in the events described above suggests a relationship of informal collaboration. ⁿ¹²⁸ The company liaised with the police force to ensure the presence of hundreds of officers from the Special Operations Division to protect the Rio Blanco site.ⁿ¹²⁹ In a statement to the press, a police general declared that Majaz was not paying the police but that it was providing food and some transportation. ⁿ¹³⁰ Finally, the detention of the Campesino marchers occurred on company property and officers allegedly used the company’s facilities to carry out the logistics and coordination related to the detention and torture. ⁿ¹³¹

When the UK proceedings began in June 2009, the Court imposed a worldwide freezing injunction to restrain Monterrico from removing any of its assets up to the value of just over £ 5 million from the jurisdiction. ⁿ¹³² In the months following, the Court held that the allegations against Monterrico for responsibility and participation in the brutality against the protestors constituted a “good arguable case” ⁿ¹³³ for the purposes  [*548]  of upholding the injunction. ⁿ¹³⁴ However in July of that year, before the October 2011 trial could take place, the claimants accepted an offer from the company of monetary compensation without admitting liability in return for the withdrawal of their claim. ⁿ¹³⁵

2. GRUFIDES: Political Persecution of Mining Activists

Minera Yanacocha, the largest gold mine in Latin America and one of the most profitable in the world, ⁿ¹³⁶ began operations in 1992 in the Ca-jamarca region of the Peruvian Andes, located between 3,500 to 4,000 meters above sea level. ⁿ¹³⁷ Yanacocha is owned and operated by three shareholders: the Peruvian Compañia de Minas Buenaventura and the International Finance Corporation each hold a minority interest, while the American Newmont Mining Corporation, the largest gold mining company in the world, is the majority shareholder. ⁿ¹³⁸ Yanacocha has employed Forza since 1993 as its exclusive private security company. ⁿ¹³⁹ Yanacocha also has a confidential contract with the police force to provide security services similar to those described in the Santa Luisa agreement. ⁿ¹⁴⁰

Like Majaz, Yanacocha also began its operations on the communally owned territory of a Campesino Community. ⁿ¹⁴¹ There is strong evidence that Yanacocha acquired the portions of the land it now mines in violation of the Campesino Community’s land-rights protected by domestic and international law. ⁿ¹⁴² In addition to the problematic legal and political  [*549]  underpinnings of Yanacocha’s presence in the area, ⁿ¹⁴³ a recent study of the United Nations (“UN”) Economic Commission on Latin America and the Caribbean identified Yanacocha as one of the least successful industrial clusters in terms of its contribution to local development. ⁿ¹⁴⁴ With these antecedents, it is not surprising that large-scale protests began in 1999 against Yanacocha’s expansion. ⁿ¹⁴⁵ These protests were essentially grassroots uprisings of local Campesino Communities affected by Yanacocha’s activities. ⁿ¹⁴⁶

Two of these high-profile protests are particularly relevant. In 2004, a Campesino-led general strike and road blockade occurred in the city of Cajamarca. Ten thousand urban and rural residents engaged in this sustained protest for a period of two weeks. ⁿ¹⁴⁷ The size and strength of the protests eventually forced Yanacocha to withdraw its planned expansion to a nearby mountain called Quilish. ⁿ¹⁴⁸ In 2006, another protest against Yanacocha sparked in the rural area of Combayo. ⁿ¹⁴⁹ Approximately 100 Campesinos blockaded Yanacocha’s use of a local highway while 500 Campesinos protested peacefully in the town square. ⁿ¹⁵⁰ In response, Yanacocha deployed somewhere between 75 and 200 armed officers, consisting of a mixture of Forza officers and off-duty police officers in the employ of Yanacocha pursuant to a private agreement with the police force. ⁿ¹⁵¹ In the first few days of what became weeks of protest, a Campesino protestor was shot and killed, allegedly by police officers in the  [*550]  employ of Yanacocha. ⁿ¹⁵² In an investigation of Forza’s warehouse, located on Yanacocha’s property, authorities allegedly found “war ammunition.” ⁿ¹⁵³ The possession of military-like weapons and ammunition by private security companies is illegal under the Act ⁿ¹⁵⁴ and a violation of the Peruvian Constitution. ⁿ¹⁵⁵

In each of the above instances of political deadlock between Campesino protestors and Yanacocha, state officials called upon members of the local NGO GRUFIDES to mediate,ⁿ¹⁵⁶ with GRUFIDES earning the 2004 National Prize in Human Rights for its role in contributing to the peaceful resolution of the Quilish conflict. ⁿ¹⁵⁷ However, the rise in Campesino organizing in Combayo in 2006 heralded the escalation of “Operación Diabló”–a systematic program of digital surveillance, intimidation, death threats, and defamation–which primarily targeted GRUFIDES personnel, but also spanned approximately thirty other related local environmentalists and Campesino leaders. ⁿ¹⁵⁸Later that same year, hit men murdered one of the Campesino leaders identified in the surveillance program as a “threat to Yanacocha.” ⁿ¹⁵⁹

The Peruvian justice system has refused to prosecute the perpetrators of Operación Diabló ⁿ¹⁶⁰ In 2009, GRUFIDES’ lawyers filed a petition with the Inter-American Commission on Human Rights (“IACHR”), alleging that the Peruvian State violated its obligations under the American  [*551]  Convention on Human Rights to prevent and sanction these crimes. ⁿ¹⁶¹ The petition documents overwhelming evidence that Forza implemented Operación Diabló pursuant to its security services for Yanacocha. ⁿ¹⁶² The evidence includes hundreds of photographs and surveillance reports, styled like those typically used by the police, which documented the activities of GRUFIDES personnel and other activists. ⁿ¹⁶³ These reports and photographs were produced by employees of a subcontracted security company who directed this intelligence to a Forza manager “in accordance with the terms of Operación Diabló.” ⁿ¹⁶⁴ Finally, there is documentation of payment for service between Forza and personnel from the subcontracted company. ⁿ¹⁶⁵The GRUFIDES petition also documents the specific acts of complicity of the Peruvian police force with Operación Diabló. ⁿ¹⁶⁶ The proceeding of the GRUFIDES petition in the Inter-American system has been subjected to significant delay given that to date, three years after its submission, the IACHR has not made a determination regarding its admissibility. ⁿ¹⁶⁷

3. Business Track: Coordinated Surveillance of Social Movements

The theme of surveillance raised in GRUFIDES is further expanded in Business Track. Business Track was a private security company officially registered in 2004 with the stated purpose of offering counterespionage and information security such as debugging telephone lines and information technology systems. ⁿ¹⁶⁸ A retired military captain who served under the Fujimori regime founded the company, which employed active  [*552]  and retired military officers. ⁿ¹⁶⁹ The clients listed on the Business Track website include oil, mining, and gas companies, as well as a number of private security firms–including Forza–that primarily provide security services to companies in these extractive industries. ⁿ¹⁷⁰ In early 2009, Peruvian authorities arrested Business Track managers and employees on charges of illegally tapping telephone conversations, bugging offices, and intercepting e-mail on behalf of third parties. ⁿ¹⁷¹

The illegal operation fell in the wake of an oil-kickback scandal. ⁿ¹⁷² Business Track allegedly recorded a discussion between a senior state official and a high profile lobbyist regarding payments in return for favoring a Norwegian company’s bid in a petroleum exploration auction. ⁿ¹⁷³ The contract was subsequently awarded to the same Norwegian company. ⁿ¹⁷⁴ Business Track allegedly sold the recorded conversation to a competitor company, which then leaked the audio file to the press. ⁿ¹⁷⁵ The scandal affected some of the highest officials in the Peruvian government, and Business Track personnel were prosecuted. ⁿ¹⁷⁶ The illegal surveillance company apparently made a political miscalculation in its pursuit of intelligence on behalf of transnational corporations. ⁿ¹⁷⁷

Following the arrest of Business Track personnel, the prosecution began to obtain victim statements while it reviewed and cataloged the enormous quantity of audio and electronic recordings of email, telephone, and web-based conversations that were confiscated from Business Track personnel. ⁿ¹⁷⁸ This process revealed that only about 20 percent of Business Track’s surveillance information related to possible criminal activity.ⁿ¹⁷⁹ The vast majority of the illegal surveillance targeted citizens  [*553]  as well as private and public institutions in relation to questions of security or matters of national interest.ⁿ¹⁸⁰ The evidence made public by the Court to date reveals that a significant number of the victims, from the 1990s onward, were human rights activists, mining activists, and grassroots community organizations, as well as several lawyers’ collectives. ⁿ¹⁸¹ Among these individuals are the victims and advocates in the Majaz and GRUFIDES cases who were surveilled during the time period corresponding to the issues in each case. ⁿ¹⁸²Notably, the confiscated audio files date back to the early 1990s–during the Fujimori era–and continue through the present. ⁿ¹⁸³ On the basis of these dates, it appears that the military intelligence personnel who founded Business Track took their intelligence files with them upon retiring from military service after the fall of the Fujimori government.

This helps to explain the observation of the International Working Group on Indigenous Affairs (“IWGIA”) that the scandal caused otherwise opposing political forces to align in order to prevent an investigation into Business Track’s client base. ⁿ¹⁸⁴ The Fujimori political camp, the Alan Garcia government, and at least some transnational companies operating in the resource extraction industry have a shared political interest in curtailing an investigation into Business Track’s activities. ⁿ¹⁸⁵ As noted above, while the Business Track scandal first broke in relation to the apparent corruption of the Alan Garcia government in favor of a transnational petroleum company, the confiscated files also included recordings of communications of civil society members made during the Fujimori  [*554]  era through to the present. ⁿ¹⁸⁶ Thus Business Track is a stark example of how the political surveillance practices previously employed by a repressive dictator can adapt to meet the needs of the transnational corporate sector when security services are privatized.

The IWGIA’s concerns about the investigation in Business Track seem to have been proven. After almost a year and a half of reviewing Business Track’s audio files, at the end of July 2010 the criminal court Judge issued her final decision regarding the judicial investigation. ⁿ¹⁸⁷ The 1,135-page decision is essentially a recitation of the 1,300 pieces of evidence reviewed. ⁿ¹⁸⁸ A key outcome of the report is the Judge’s refusal to authorize the Prosecutions Office to investigate the identity of Business Track’s clients–in other words, the individuals and institutions that paid for illegal telephone tapping and email hacking activities. ⁿ¹⁸⁹ Ironically, the Judge reasoned that such an investigation would be premature. ⁿ¹⁹⁰ As such, to date there is no indication that Business Track’s powerful clients, among them Forza and a number of transnational mining corporations, will be subject to a criminal investigation. ⁿ¹⁹¹

As indicated in the previous two sections, there are documented links between Business Track’s surveillance activities and Forza’s alleged role in human rights violations against mining activists in the Majaz ⁿ¹⁹² and GRUFIDES cases. ⁿ¹⁹³ These links suggest that transnational mining and private security companies have formed a highly integrated network of surveillance and information exchange regarding civil society actors who  [*555]  criticize their activities. There is also reason to believe that this information may be used to facilitate the political persecution of these actors. For example, as detailed in the previous section, GRUFIDES alleges that Forza perpetrated Operación Diabló against local activists in the service of Yanacocha Mine. ⁿ¹⁹⁴ It is undisputed that, at the very least, Business Track tapped GRUFIDES’ phones during the height of Operación Diabló. ⁿ¹⁹⁵ It is further documented that Forza was a client of Business Track. ⁿ¹⁹⁶ Thus, taking the above observations of the GRUFIDES and the Business Track cases into consideration, at least two strong inferences arise. First, there is reason to believe that Forza contracted Business Track pursuant to the security services it provides to Yanacocha. Second, there is a strong indication that the surveillance information collected by Business Track was ultimately used by Forza to advance the objectives of Operación Diabló, namely the persecution of activists working with communities negatively affected by Yanacocha’s mining activities. ⁿ¹⁹⁷

Documents made public by WikiLeaks in late January 2011 ⁿ¹⁹⁸ suggest that this network of surveillance is deeply integrated with key foreign embassies in Peru. ⁿ¹⁹⁹ The documents of interest are two U.S. embassy cables dated just after the events of Majaz that refer explicitly to the Majaz conflict. ⁿ²⁰⁰ These cables communicated that the embassies of the United States, Canada, Great Britain, Australia, Switzerland and South Africa “stepped up” efforts to improve coordination with major foreign mining investors “with an eye to reducing anti-mining violence.” ⁿ²⁰¹ Indeed, the “violence against British firm Majaz” had precipitated a meeting hosted by the US and Canadian Ambassadors for representatives of  [*556]  international mining companies, including Yanacocha Mine, which was later implicated in the GRUFIDES case. ⁿ²⁰² The objective of this meeting was to review companies’ operating difficulties in Peru and coordinate efforts to improve the investment climate. ⁿ²⁰³ At this meeting, the Ambassadors encouraged the companies to report NGO-funded groups or individuals “that advocate violence” so that the Ambassadors would be able to confront any NGOs from their respective countries. ⁿ²⁰⁴The mining executives suggested to the Ambassadors that they should meet with Peruvian and church officials to encourage them to rotate teachers and priests in and out of conflictive mining communities to ensure that any of these professionals with anti-mining sentiments would not stay too long in any given community. ⁿ²⁰⁵ When the contents of these cables are placed within the context of the Forza case study, they present a small glimpse of a web of high-level coordination between the representatives of foreign governments, the executives of transnational mining companies, and their private security companies. ⁿ²⁰⁶ The explicit objective of this coordination is to criminalize, repress, surveil, and dismantle local social movements and their international supports that either critique and/or oppose particular mining projects in Peru. ⁿ²⁰⁷

II. THE LEGAL ARRANGEMENT OF IMPUNITY

To the extent that systems of international and national law fail to bring the perpetrators of human rights violations to justice, impunity becomes a legal and moral issue. The Forza case study tells a story of impunity for private security companies and public police officers working in the service of transnational mining companies in Peru. Impunity refers to the

impossibility, de jure or de facto, of bringing the perpetrators of violations to account [in legal proceedings for the reason that] they are not subject to an inquiry that might lead to their being . . . tried and, if found guilty, sentenced to appropriate penalties, and to mak[e] reparations to their victims. ⁿ²⁰⁸

[*557]  The following section reviews the de jure international and national systems of law that govern Forza, but that have been de facto ineffective in preventing or sanctioning the violations alleged in the above case study. This approach is undertaken on the basis of the premise that in order to confront impunity, justice advocates must begin with an empirical study of the legal mechanisms that exist in the midst of the circumstances of impunity. Fully examining the shortcomings of present arrangements of law is a crucial first step toward meaningfully contributing to debates regarding law reform on the subject of transnational corporations and human rights. These debates are alive and well, and this issue has been extremely contentious at the international level. As a result, the UN’s pertinent agenda has been reincarnated into a radically different framework since its initial conceptualization in the early nineties. ⁿ²⁰⁹ The most recent UN proposals have been the subject of a highly public, personal, and antagonistic exchange between UN Special Representative John Ruggie and a Senior Director at Amnesty International. ⁿ²¹⁰The regulation of the transnational corporation is most certainly an unresolved complex issue and the details of this law reform debate are undoubtedly far beyond the reach of this Article. However, the existence of this debate is briefly referenced here in order to make the basic argument that  [*558]  empirical work, such as that undertaken in this Article, which analyzes the impunity of the transnational corporation in light of applicable systems of law, continues to have the potential to offer important insights to these broader international law and policy debates. This methodological point is revisited again in the Conclusion.

A. Domestic Law: the Global Gap

The legal system in Peru has failed to initiate proceedings against Forza in any of the cases reviewed. This is arguably due to the limitations created by a politicized prosecutorial system in a context where there is very little political will to hold Forza to account. In the Majaz case, the criminal investigation of the police and Forza officers was only initiated under pressure from local human rights lawyers, and occurred over three years after the incidents. ⁿ²¹¹ The prosecutor subsequently closed the investigation twice in spite of a preponderance of evidence. While the investigation was reopened each time after appeals were made by local lawyers–five years after the incidents of torture and abuse–the perpetrators have yet to be charged or prosecuted. ⁿ²¹² In GRUFIDES, the criminal investigation of Forza and Yanacocha followed a similar pattern, although the appeals made by local lawyers against the prosecutor’s decision to close the investigation were ultimately unsuccessful.” ⁿ²¹³ Finally, in Business Track, the institutions, such as Forza, that allegedly paid for the surveillance of mining activists, including activists involved in both Majaz and GRUFIDES, have yet to be officially named. ⁿ²¹⁴ Indeed, the Court has specifically decided not to investigate these institutions.

In light of the apparent failure of the Peruvian justice system, and given that Forza’s operations in the cases at issue implicate corporate actors from a variety of jurisdictions, one must examine the capacity of other domestic systems to address the impunity alleged in the Forza case study. In the Majaz case, the rights to the Rio Blanco mine site have passed from a British company to a Chinese consortium. ⁿ²¹⁵ In GRUFIDES, an American company, a Peruvian company, and the International Finance Corporation (“IFC”) jointly own Yanacocha Mine.” ⁿ²¹⁶ All of these companies  [*559]  employ Forza, owned by the Swedish corporation Securitas. ⁿ²¹⁷ Finally, Forza allegedly employed Business Track, a Peruvian company. ⁿ²¹⁸ Thus, Forza’s alleged human rights violations are linked to the interests of corporations based in at least five jurisdictions: Peru, the United Kingdom, the United States, China, and Sweden, as well as one truly international corporation, the IFC. A legal action against a multinational corporation in its home state is usually brought by way of a tort action, governed by either the common law or domestic legislation. However, notwithstanding the intersection of multiple domestic jurisdictions in the Forza study, there are significant obstacles to addressing the issue of corporate impunity in the “home state” of these foreign investors. What follows is a brief consideration of the possibilities of home state litigation in two important jurisdictions: the United States and the United Kingdom.

GRUFIDES could theoretically be brought to an American court under the Alien Tort Claims Act (“ATCA”), ⁿ²¹⁹ although the litigants have yet to explore this option. It is well known that home state courts in Canada ⁿ²²⁰ and the United States ⁿ²²¹ tend to refuse to take jurisdiction over the harm investors have allegedly caused abroad, often due to a narrow application of the international private law doctrine of forum non-conveniens.ⁿ²²² In the United States, as of 2004 there were approximately  [*560]  twelve active cases against corporate defendants under the ATCA, a handful of which survived a motion to dismiss on the basis of jurisdiction. ⁿ²²³ Indeed, most of the ATCA cases against private corporations have been dismissed for lack of jurisdiction and none have resulted in a final judgment against a U.S. corporation. ⁿ²²⁴ This indicates that on the few occasions that claims manage to survive a jurisdictional challenge, they are either dismissed later on other grounds or settled out of court. ⁿ²²⁵ Not surprisingly then, there have only been a handful of successful settlements in cases brought under the ATCA for corporate human rights violations. ⁿ²²⁶ Thus, to date, a resolution by way of a settlement is a common feature of every one of the few cases that have been successful under the ATCA. ⁿ²²⁷

The application of tort law in the European Union (“EU”) is somewhat more favorable to the victims of human rights violations than in Canada and the United States, particularly regarding the doctrine of forum non-conveniens. ⁿ²²⁸ A decision of the European Court of Justice in 2005 declared that the national courts of the EU may not halt proceedings on the grounds of forum non conveniens in cases brought against EU domiciled defendants, where the alternative venue is outside the EU. ⁿ²²⁹ In this context, the British High Court was required to take jurisdiction over the action in Majaz. ⁿ²³⁰ However, the company nonetheless challenged the existence of a legal basis for liability in UK law. ⁿ²³¹ While the Court found that the claimants had an “arguable case” (a low threshold), it further  [*561]  commented that the case undoubtedly had potential legal and factual weaknesses.ⁿ²³² While EU tort litigation against multinational companies occurs in a relatively favorable legal context, due to the commercial reality of this litigation to date, no cases have been resolved on the merits or have resulted in a finding of liability against the corporation. ⁿ²³³ Rather, among the few cases that have not been dismissed, most were resolved through private settlements. ⁿ²³⁴ Majaz ultimately held true to this pattern when the claimants accepted a settlement offer in July 2011, two years after initiating proceedings. ⁿ²³⁵

This settlement pattern warrants further consideration of the dynamics and implications of private settlements. If an NGO is litigating the claim, settlement is often the only option. ⁿ²³⁶ While NGOs generally do not stand to financially gain from settlement, they may lack the resources to pursue a trial, especially when litigation may promise to draw out over a period of decades. ⁿ²³⁷ However, claimants are usually represented by law firms working for a substantial contingency fee. ⁿ²³⁸ In these cases, settlement is likely the best business option for the firm. ⁿ²³⁹

Conveniently, Yanacocha offers an example of how such a settlement might play out. ⁿ²⁴⁰In 2009 Yanacocha paid $ 3,000,000 to settle an action brought to a U.S. District Court by the Municipality of Cajamarca in reference to a spill of 151 kilograms of mercury in the area that occurred in 2000. ⁿ²⁴¹ The Municipality’s American lawyers took $ 1,200,000 of the  [*562]  settlement pursuant to a contingency fee and a further $ 115,000 in additional general costs. ⁿ²⁴² The Municipality was left with about $ 1,685,000. This settlement–marked by significant controversy involving allegations of fraud, misrepresentation, and incompetence against the Municipality’s American lawyers and their Peruvian counterparts ⁿ²⁴³–illustrates the serious ethical questions that can arise when elite (Northern) lawyers purport to represent marginalized communities in developing countries where there are few effective mechanisms of lawyer-client accountability. ⁿ²⁴⁴

It is clear that, in addition to inherent financial challenges and doctrinal hurdles, an endemic feature of civil law home state litigation against corporate defendants is the tendency to settle. A settlement is undoubtedly a positive achievement in the sense that it offers the victims some compensation. However, as a systemic practice in response to corporate human rights violations, settlements have certain drawbacks. Settlements do not “bring the perpetrators to account in legal proceedings” as the definition of impunity presented above requires. ⁿ²⁴⁵ Rather, settlements allow the alleged perpetrators to purchase their immunity from civil suits according to the terms of secret private agreements. Further, due to the confidential nature of settlements and the location of the proceedings in the  [*563]  investor’s home country, the resolution of a case by way of a settlement undoubtedly militates against national or international public policy reform.ⁿ²⁴⁶ Moreover, settlements deprive social movements of a court sanctioned public record of events that might bolster their moral and political claims for reform. ⁿ²⁴⁷ For these reasons, private settlements can be seen as a means of privatizing the problem of impunity by converting the accountability of the perpetrators into a private matter and by limiting the impact of the proceedings on public policy and public action. ⁿ²⁴⁸

These observations raise serious questions about the capacity of home state litigation, at least in its present form, to address transnational corporate impunity and privatized coercion. It seems arguable that home state litigation is better positioned to maintain the status quo of impunity rather than change it. ⁿ²⁴⁹ Further, the presence of Chinese investors in Majaz signals a new challenge created by the emerging shift in the character of the “home country.” ⁿ²⁵⁰ Foreign investment increasingly originates in countries where there is very little history of home state litigation and where new, and as yet unexplored, legal challenges undoubtedly reside to transnational corporate accountability. ⁿ²⁵¹ For example, China has become the second largest foreign investor in Peru, and Peru is the number one destination in Latin America for Chinese investment. ⁿ²⁵²

[*564]  The above review depicts the global gap in domestic regulation and law enforcement with regard to transnational corporations. The gap results from an array of deficiencies, patterned along North and South lines. In the Forza case study, the Southern domestic jurisdiction (Peru) has failed to date to exercise its criminal jurisdiction over Forza, while the Northern jurisdictions pose formidable challenges to successful litigation against the corporations involved. ⁿ²⁵³ Taken together, these deficiencies create a global gap in the domestic regulation of the transnational corporation. As a result, even in the midst of domestic systems of law ostensibly available to address the alleged violations, the circumstances of impunity are maintained. The Forza case study suggests that the potential for impunity is particularly heightened where transnational corporations avail themselves of privatized and internationalized sources of coercive power. The following section will examine the extent to which current international law mechanisms are capable of filling the global gap created by the deficiencies in domestic legal systems reviewed above.

B. International Law: Asymmetrical Enforcement and Privatized Norm Development

The Forza case study engages three key systems of international law: public international law, private international investment law, and private corporate social responsibility mechanisms. ⁿ²⁵⁴ Each of these will be considered in turn.

The two international public law human rights treaty administration systems of relevance to the study are the Organization of American States (“OAS”) system ⁿ²⁵⁵ and the UN Human Rights Committee. ⁿ²⁵⁶ Each  [*565]  system has articulated norms relevant to the Forza case study. As a bedrock principle, both systems recognize that member states have a fundamental duty to appropriately prevent, investigate, and sanction all private and public actors that violate human rights within its territory. ⁿ²⁵⁷Further, both systems have declared that human rights violations occurring within a member state’s territory become the state’s responsibility under international law when the state fails to carry out its duty to prevent, investigate, and sanction human rights violators. ⁿ²⁵⁸ A study of the norms and jurisprudence in these two systems concluded that the privatization of the use of force traditionally associated with public law enforcement arguably contravenes state obligations under international human rights treaties and customary international human rights law. ⁿ²⁵⁹

There has been very little international public law jurisprudence that addresses human rights violations committed collectively by the state, private security actors, and transnational corporations. ⁿ²⁶⁰ Nonetheless, in principle, the norms referenced above appear to confront the problem of impunity depicted in the Forza study. These norms require that the Peruvian State carry out the criminal investigation and prosecution of those responsible in the GRUFIDES and the Majaz cases. Further, these norms arguably establish that at least some elements of the various arrangements of private security services used by mining companies in Peru are unlawful under international human rights law.

In practice, however, both the OAS and the UN human rights treaty oversight systems lack enforcement capacity with regard to their state signatories. ⁿ²⁶¹ If either of these were to able to take jurisdiction and find a human rights treaty violation in relation to any of the allegations raised in the Forza case study, the recommended remedy would nonetheless  [*566]  require voluntary implementation by the Peruvian State. ⁿ²⁶² This process is circular because it returns the analysis precisely to the originating problem–the Peruvian State’s explicit commitment to the privatization of security together with its evident lack of political will to address the human rights violations in the case study. It is widely acknowledged that the Inter-American system faces serious problems in achieving “meaningful and lasting implementation” of its reparations orders. ⁿ²⁶³ Even without taking into account the influence of powerful foreign investors and the dynamics of privatization, the obstacles to implementation have been identified by experts and scholars in the field as a lack of political will and the powerful position of the armed forces and the police in Latin American countries. ⁿ²⁶⁴

The current enforcement deficit inherent in public international human rights law is contrasted by the enforcement capacity of “international” foreign investment law. ⁿ²⁶⁵Bilateral investment treaties (“BITs”) protect the interests of each of the foreign investors implicated in Forza’s alleged human rights abuses: the American company Newmont in Yanacocha; ⁿ²⁶⁶ the Swedish company Securitas in Forza; ⁿ²⁶⁷ and formerly, the British company Monterrico in Rio Blanco. ⁿ²⁶⁸ Yanacocha’s investors further benefit from a private investment contract. ⁿ²⁶⁹ The terms of the applicable BITs create enforceable rights for investors through a system of international private arbitration tribunals that can impose financial penalties on  [*567]  the offending state. ⁿ²⁷⁰ A study of the political consequences of the BITs applicable to four Andean countries, including Peru, highlighted the enforcement power of these treaties ⁿ²⁷¹ and concluded that they present major fiscal risks to governmental decision-making in the extractive sector. This occurs because these treaties dramatically shift political bargaining power in favor of transnational firms and against other social interests that stand to benefit from efforts to regulate extractive industry investors. ⁿ²⁷² Since these BITs do not create any corresponding human rights responsibilities, they are unable to alleviate the problem of impunity in the Forza study. Rather, it is possible that the BITs may aid investors in resisting regulations aimed at addressing the conditions of impunity. In this light, BITs may well represent the privatization of the public power that could theoretically act to address impunity.

Finally, Forza is indirectly governed by an emerging patchwork of privatized human rights norms. ⁿ²⁷³ Forza’s multinational owner, Securitas, signed the UN Global Compact,ⁿ²⁷⁴ a private-public policy initiative for businesses that are committed to aligning their operations with “ten universally accepted principles” in the areas of human rights, labor, environment and anti-corruption. ⁿ²⁷⁵ Pursuant to the Global Compact, Securitas agreed that its business should support and respect the protection of internationally proclaimed human rights and ensure that it is not complicit in human rights abuses. ⁿ²⁷⁶ However, according to the UN Global Compact’s  [*568]  website, the compact is “voluntary and network based” and its “light and non-bureaucratic” governance framework is focused on promoting corporations’ capacity to prospectively conform to the Global Compact. ⁿ²⁷⁷ As such, this initiative offers no mechanism for addressing the criminal behavior of Forza officers alleged in the three cases reviewed. ⁿ²⁷⁸

Yanacocha, the mining company that employed Forza in relation to GRUFIDES, is governed by the most celebrated private human right mechanisms. Yanacocha’s majority shareholder, Newmont, has directly signed onto the UN Global Compact, the Global Reporting Initiative, the Voluntary Principles for Security and Human Rights in the Extractive Industry (“Voluntary Principles”), and the Position Statement on Mining and Indigenous Peoples of the International Council on Mining and Metals (“ICMM”). ⁿ²⁷⁹Yanacocha is also governed by the corporate responsibility regime of the Organization for Economic Cooperation and Development (“OECD”), the Guidelines for Multinational Enterprises, because its majority shareholder, Newmont, is an American company. ⁿ²⁸⁰Finally, the human rights policies pertaining to the IFC are applicable because of the IFC’s share in Yanacocha. ⁿ²⁸¹ Of these mechanisms, the OECD, ⁿ²⁸² the ICMM, ⁿ²⁸³ the Voluntary Principles, ⁿ²⁸⁴ and the IFC ⁿ²⁸⁵ permit the submission  [*569]  of complaints. The outcomes of complaints made against Yanacocha under the Voluntary Principles and IFC mechanisms will be reviewed here.

Since 2000, three complaints against Yanacocha have been filed with the IFC Office of Compliance/Advisor Ombudsmen (“CAO”). ⁿ²⁸⁶ While these complaints do not directly relate to Forza, it is nonetheless instructive to evaluate how they have fared. In general, the complaints alleged that Yanacocha failed to fulfil its commitments to help the victims of a mercury spill ⁿ²⁸⁷ and that the mine adversely affected local communities in a myriad of other ways. ⁿ²⁸⁸ However, each of the three CAO complaints brought against Yanacocha failed to proceed from an initial investigation to a conflict mediation phase ⁿ²⁸⁹ and none of them entered the subsequent compliance or follow up phases of the CAO process. ⁿ²⁹⁰There is no indication from the information presented on the CAO website that the substance of the complaints were ever successfully addressed. ⁿ²⁹¹ By  [*570]  August 2006, all three of the complaints had been closed without comment or explanation. ⁿ²⁹²

In 2001, the CAO attempted to address two of the three complaints ⁿ²⁹³ through the creation of a “Dialogue Roundtable.” ⁿ²⁹⁴ At the time, this initiative was a celebrated innovation for the CAO. ⁿ²⁹⁵ Yet a 2005 independent evaluation of the Roundtable questioned its capacity to serve as a dispute resolution mechanism and observed that the Roundtable had failed to respond to a number of key conflicts in its midst. ⁿ²⁹⁶ Due in part to this inaction, the evaluation concluded that the Roundtable had “never been able to gain the legitimacy and broad community acceptance that would enable it to [help ameliorate] the tension, distrust, and volatility that pervade the relationship” between Yanacocha and the community. ⁿ²⁹⁷ The conclusions of the 2005 evaluation are important because, at a minimum, to resolve the issue of impunity at the heart of the Forza case study, the CAO would have to engage in public fact finding and conflict mediation between GRUFIDES, Forza, and Yanacocha so that the perpetrators of the alleged violations would be “brought to account.” ⁿ²⁹⁸ One glaring testament to the CAO’s unsatisfactory resolution of the three complaints against Yanacocha is the fact that in the wake of these complaints, and their closure, the conflict escalated such that the events documented by GRUFIDES ensued. In 2004, and again in 2006, mass protests took place against Yanacocha, resulting in the death of a protestor, the murder of a Campesino leader, and the subsequent persecution of GRUFIDES personnel. ⁿ²⁹⁹

[*571]  The conduct of Yanacocha’s security forces during these events resulted in yet another voluntary human rights proceeding, initiated in 2007 by Oxfam America against Newmont under the Voluntary Principles for Security and Human Rights. ⁿ³⁰⁰ This complaint was the first of its kind under the Voluntary Principles, and in response Newmont agreed to an independent review of Yanacocha’s security and human rights policies and procedures. ⁿ³⁰¹ The 2009 report of the independent reviewer ⁿ³⁰²recommended that Yanacocha create a Risk Assessment and Conflict Resolution Office to “drastically investigate and sanction” violations of the Voluntary Principles and urge the justice system authorities to do the same. ⁿ³⁰³ Further, it recommended that Yanacocha-paid police officers no longer carry firearms and that Yanacocha collaborate with the police force to train these officers to respect human rights. ⁿ³⁰⁴ Finally, the review recommended the termination of Yanacocha’s contract of service with Forza. ⁿ³⁰⁵

A critical assessment of the independent review suggests that the appeal to the Voluntary Principles failed to effectively address the issue of impunity and privatized coercion portrayed by the Forza case study. ⁿ³⁰⁶ First, the review failed to even mention the outstanding criminal allegations against Forza raised by GRUFIDES and pertaining to Operación Diabló. ⁿ³⁰⁷ Second, by failing to question Yanacocha’s economic support for the police force, the review did not adequately critique the model of privatized force. ⁿ³⁰⁸Rather, it further conflated the roles of Yanacocha and the justice system by suggesting that Yanacocha should take a role in the training of its police employees, and that Yanacocha should create an internal adjudication process for addressing criminal allegations against  [*572]  its employees. ⁿ³⁰⁹ Third, to the extent that the review made proposals that could partially address the issue of impunity or privatized force, these do not appear to have been implemented. In the time since the review was issued, there is no evidence that Yanacocha has prohibited its contracted police officers from carrying weapons, nor is there any indication that Yanacocha has terminated its contract with Forza. On the contrary, community members regularly observe that Yanacocha-paid police officers are armed, and that Forza officers continue in the employ of Yanacocha. Finally, there is no indication that the company has taken action to urge the authorities to investigate the criminal allegations raised in GRUFIDES, nor has it clarified its alleged role in Operacion Diabló, either publicly or to the alleged victims of this operation.

Turning to Majaz, the British company Monterrico was not governed by any of the corporate social responsibility mechanisms that Newmont has purported to adopt. ⁿ³¹⁰ As a junior mining company, Monterrico likely lacked the capacity to cultivate long-term relationships with local communities. ⁿ³¹¹ Junior mining companies generally have a short life span devoted to obtaining and selling mineral exploration rights. ⁿ³¹² This is exactly the process that was followed in Majaz, Monterrico ultimately sold its interest in the Majaz project to a Chinese consortium. ⁿ³¹³ This consortium has likewise not signed onto any of the aforementioned international corporate social responsibility regimes. ⁿ³¹⁴

The above discussion of the international law mechanisms applicable to the Forza case study highlights the asymmetry in the enforcement of  [*573]  international law in favour of transnational corporate economic interests. The legal regimes, such as the BITS, in place to protect foreign investment interests are strong while the institutions that administer international human rights conventions continue to lack enforcement capacity, particularly with regard to the activities of transnational corporations. In the Forza case study, the enforcement of these conventions continues to depend on the political will of the Peruvian State.

The corporate social responsibility mechanisms that ostensibly govern the facts at issue in this case study have also been described above. Of these mechanisms, four would permit individuals or organizations to file a complaint in relation to Yanacocha ⁿ³¹⁵ and two have already been invoked to this end, namely, the Voluntary Principles and the IFC CAO. It is also noteworthy that these two mechanisms are arguably among the most robust of the applicable corporate social responsibility regimes. However, as discussed above, the appeals made to the Voluntary Principles and the IFC CAO regarding allegations against Yanacocha have produced very little in the way of concrete outcomes for the affected community members. In these specific circumstances, these two corporate social responsibility mechanisms have been unable to satisfy two key aspects of the definition of impunity, namely, they have not brought the perpetrators to account, nor have they been able to make reparations to the victims. ⁿ³¹⁶ Perhaps most alarmingly, there is cause to wonder, particularly on the basis of the Voluntary Principles example, whether or not the use of these mechanisms may actually perpetuate the conceptual and practical conflation of private and public coercive power.

CONCLUSION: A METHODOLOGICAL REFLECTION

From the perspective of Campesino and Indigenous communities in Peru, there are a range of potential human rights issues that arise in domestic and international law as a result of transnational corporate resource extraction. These include communities’ right to land, free prior and informed consultation–and perhaps even consent to extractive activity–and an equitable share in the benefits of resource extraction. ⁿ³¹⁷ [*574]  However, the Peruvian State, under the pressure of capital exporting countries and international financial institutions, ⁿ³¹⁸ has institutionalized the primacy of foreign investors’ rights in the form of increased property rights and the protection of investment rights. In this context, the Inter-American Commission on Human Rights concluded that the basic land, social, and economic rights of Campesino and Indigenous Communities in Peru are being systematically violated by laws and practices that promote resource extraction and free trade. ⁿ³¹⁹ A broad and powerful social movement has been consolidated in response. ⁿ³²⁰ This movement finds its expression in the interconnected work of certain NGOs; community organizations; and formal and informal transnational networks of concerned citizens, activists, and academics; as well as in protest marches and road blockades. ⁿ³²¹ In response to this social movement and its demands, the Peruvian State and mining companies have frequently resorted to the use of coercive force.

In this context, this case study of the Forza security company has undertaken a particular methodological approach. First, it explored the legal arrangements that structure the exercise of coercive power in Peru and the formal and informal practices that characterize the security sector. In summary, these are (1) the increase in private security companies and officers relative to police officers, (2) the presence of private security companies, in some cases foreign owned, that specialize in providing services to mining companies and other companies in the resource extraction sector, (3) the high levels of participation of police and military officers in private security companies, and (4) the formation of private security contracts between the police force and transnational mining companies. After analyzing the foregoing, this Article argued that public and private security services are being reorganized in accordance with a number of processes of privatization and that these services are increasingly at the disposal of transnational mining companies.

[*575]  Next, this Article investigated how these coercive resources are mobilized in response to social movements working on human rights issues in the area of resource extraction. As such, the allegations in Majaz, GRUFIDES, and Business Track were summarized. Each of these cases points to the participation of Forza’s private security officers (as well as police officers in the Majaz case) in the systematic persecution of social movement leaders by private security companies. ⁿ³²² Further, attention was paid to the procedural dimensions of each case. This information is important because it indicates that, at least to date, none of the legal efforts associated with each case have succeeded in bringing the perpetrators of the alleged violations to account for their actions.

Finally, this study identified the systems of national and international law that purport to govern the transnational companies associated with Forza and the human rights violations alleged. At the domestic level, these consist of the Peruvian domestic legal system and the investor’s home state legal system. ⁿ³²³ At the international level these consist of the human rights treaty system, the foreign investment regime, and voluntary corporate social responsibility mechanisms. ⁿ³²⁴ Each of these mechanisms or systems of law was examined in terms of its applicability to the Forza case study and its potential efficacy in addressing the issue of impunity.

This process helped to illuminate the operation, in the context of a particular case study, of the global gap in domestic law and the asymmetry of international law. It showed how the global gap results from a global pattern of deficiencies in the domestic regulation of transnational corporations. The claimants in the three cases reviewed argued that the Peruvian justice system failed to properly investigate and sanction Forza. On the other hand, in many jurisdictions in the global North, the courts are likely to refuse to take jurisdiction over a lawsuit against Forza or one of its transnational corporate employers, as the case may be. Where a Northern court does take jurisdiction and proceed to trial, the experience to date is that the case will be settled out of court. Notwithstanding the positive dimensions of these settlements, this Article has argued that they also carry significant drawbacks; in particular it is argued that, as a systematic practice, they may amount to the privatization of the problem of impunity. At the same time, international law’s enforcement capacity is asymmetrical in that the legal regimes that protect the rights of the investors that employ Forza are enforceable, while the regimes that purport to protect the human rights of those who seek to bring claims against Forza  [*576]  lack enforcement capacity. In this regard, this Article argued that the use of corporate social responsibility mechanisms by human rights claimants may ultimately produce outcomes that serve to perpetuate the privatization of coercive power and to entrench the problem of impunity.

In sum, this Article used a discrete case study to explore how the conditions of impunity are maintained in the face of multiple systems of domestic, transnational, and international legal regimes. It has posited that these regimes have failed in this regard because they are unable to confront impunity’s political and economic underpinnings, namely, the privatization of coercive force exercised in the service of transnational corporate power. In this respect, the Forza case study articulates with the fundamental concern of Third World Approaches to International Law (“TWAIL”) scholars that the international legal system works to disem-power Third World ⁿ³²⁵ peoples and intensify global inequality. ⁿ³²⁶ TWAIL scholars have argued that Third World social movements represent the “cutting edge of Third World resistance to antidemocratic and destructive development.” ⁿ³²⁷ They have declared that international lawyers must “assist the ongoing global movement for global justice” in whatever ways possible. ⁿ³²⁸ To this end, TWAIL scholars have called for the development of “a theory of resistance” that would enable lawyers to respond appropriately. ⁿ³²⁹ In response, this Article has worked toward developing a methodological approach to the study of the issue of impunity with the potential to inform theories of resistance. It endeavours to map the coercive arrangements of power that threaten to curtail or even destroy Third World social movements. This mapping begins from the experience of particular movements, in particular political moments, and documents  [*577]  the real life violations that threaten the political spaces that make these movements possible.

This methodology is oriented toward identifying the meaningful and strategic legal tools that movements can avail themselves of under current legal arrangements. It engages critically with national and international systems of law in search of a reform agenda that places the issue of effective enforcement at the center of discussions on mechanisms for protecting rights. In this sense, the adoption of the lens of impunity is consistent with the call from critical international law scholars to focus on the outcomes of legal regimes before committing to their vocabularies and institutions. ⁿ³³⁰ According to these scholars, the vocabularies and institutions of international law–particularly international human rights law–must themselves be sites of critique and contestation. They caution that if institutional outcomes do not change, then a change in vocabulary in favour of human rights will only subvert the capacity for transformation. ⁿ³³¹

In this framework, this study’s methodology has been alert to the potential strategic pitfalls of engaging with particular systems of law. The fact that well-intentioned engagements with certain mechanisms may have inadvertent consequences underscores the need for careful reflection on the broader legal and political consequences of these mechanisms. Particularly, advocates must carefully consider the potential risks associated with the activation of privatized human rights mechanisms, such as voluntary corporate responsibility or private tort law regimes. The Forza case study suggests that it may be difficult to engage voluntary mechanisms without perpetuating or reinforcing the legal and practical arrangements of the privatized coercion that forms the structural underpinnings of the human rights issues that advocates seek to address. In the same vein, this study questions the costs and benefits of the privatized outcomes generated by home state tort law settlements.

Of the many issues facing Third World social movements, the issue of systemic impunity for the criminal behavior perpetrated to benefit foreign investors deserves serious attention from progressive international lawyers. These circumstances constitute a moment where national and international systems of law fail to respond to protect the very existence of grassroots resistance to inequitable economic relations. Just as this is  [*578]  of deep concern, the persistence and tenacity of these movements against all odds suggests that these circumstances likewise represent a rare opportunity for change.

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