ARBITRATION UNDER THE RULES OF THE
INTERNATIONAL CENTRE FOR SETTLEMENT OF
INVESTMENT DISPUTES

ICSID CASE NO. ARB/20/46

LUPAKA GOLD CORP.

Claimant

VS.

REPUBLIC OF PERU

Respondent

CLAIMANT'S REPLY

23 September 2022

LALIVE

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[Page xiv]

TABLE OF DEFINED TERMS

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[Page 1]

1 INTRODUCTION

1 In accordance with Rule 31(c) of the ICSID Arbitration Rules and the
Procedural Calendar appended to Procedural Order No. 1 dated 16 April
2021 (as per Revision No. 5), the Claimant submits this Reply in support
of its claims against the Republic of Peru pursuant to the FTA and the
ICSID Convention.¹

2 In the Claimant's Memorial (“Memorial”), the Claimant demonstrated
that after acquiring the Invicta Project in October 2012, Lupaka spent six
years investing a significant amount of time and capital developing the
Project, taking it to the brink of production. Lupaka secured funding,
obtained the necessary land surface rights, negotiated binding
commitments with the relevant neighbouring communities, built the mine
infrastructure and agreed the purchase of a suitable offsite processing
plant.

3 Just as the Project came to fruition, the Parán Community decided to
violently seize it, impede any access and commence its own mining
operations. Lupaka took all possible steps to save its investment. It
engaged in discussions with Parán's leadership for many months with the
involvement of the central authorities. Over time it became apparent that
Parán was not acting in good faith. Lupaka also made multiple requests to
Peru in 2018 and 2019 to restore law and order. The response was, for nine
months, the same. High-ranked officials at the Ministry of Internal Affairs
(“MININTER”) pressured Lupaka to continue with fruitless “dialogue”
with the Parán Community, even though a police operational plan to lift
the Blockade and secure the Site (“Operational Plan”) was ready to be
implemented. Peru's refusal to intervene ultimately led to Lupaka losing
its investment in Peru.

4 In its Memorial on Jurisdiction and Counter-Memorial on Merits
"Counter-Memorial”), Peru shamelessly blames the victim. To hear Peru
tell it, Lupaka had it coming. Peru claims that Lupaka marginalised the

¹ All defined terms included in the Claimant's Statement of Claim dated 1 October 2021 apply, ↩
except where otherwise stated.

[Page 2]

Parán Community and ignored its allegedly legitimate environmental
concerns. It adds that Lupaka should have known that reaching an
agreement with Parán was required to develop the Project under Peruvian
law.² Peru then argues that the State acted diligently and reasonably at all
times. In particular, Peru contends that its insistence on perpetual dialogue
in response to Parán's illegal taking of the Invicta mine was reasonable and
consistent with its legal framework. According to Peru:

"[t]he use of force not only was unjustified and would have been
inconsistent with Peruvian law and policy, but it also would have
been counter-productive, as it surely would have aggravated rather
than resolved the dispute, rendering the mining project unviable."³

5 As this Reply will demonstrate, Peru's allegations are unsubstantiated and
contradicted by contemporaneous evidence. The Tribunal must not be
misled by Peru's attempt to blame the victim and excuse its failures to
intervene on the basis of its own incompetence. This is not the case of a
well-meaning rural community marginalised by an irresponsible mining
company. This is also not the case of a community whose environmental
concerns were ignored. Rather, this is the case of a community which
violently opposed the Project because it sought to exploit the Invicta mine
itself and to protect its illegal marijuana business and only fabricated
environmental concerns when it suited its increasingly untenable
bargaining positions. Put simply, this case is about violence, illegal mining
and drugs, not about ESG or CSR.

6 Peru knew of the Parán Community's plan to exploit the Invicta mine from
early January 2019. This was when Parán's leadership told State
representatives that the community would exploit the mine if its demands
were not satisfied.⁴ Such a clear threat should have triggered a robust State
response. It did not. With the Parán Community in control of the Site, it
was a matter of time before the community would make good on its threat.

² Counter-Memorial, 24/03/2022, p. 5 (para. 11). ↩

³ Counter-Memorial, 24/03/2022, p. 3 (para. 7). ↩

⁴ Witness Statement of Luis F. Bravo, 01/10/2021, para. 28; WhatsApp exchanges between ↩
Lupaka (Mr Bravo) and MININTER (Mr Saavedra), 5/02/2019-20/02/2019 (SPA), at Exhibit
C-192 (corrected translation), p. 3.

[Page 3]

7 Indeed, a few months later, the Parán Community took Lupaka's ore
stockpiled at the Site and then proceeded to illegally exploit the mine,
which it continues to do to the present day.

8 Peru also knew at the time that Parán's opposition to the Project was driven
by its interest to protect its illegal marijuana business, which would be
harmed by the increased attention that the Project would bring to the area
surrounding the mine. Peru even knew that the Blockade was funded with
money from this illegal trade. Yet, it failed to take any action to address
Parán's illegal drug trade. Tellingly, the Claimant addressed these two
issues - illegal mining and drug trafficking – in its Memorial, but Peru has
conspicuously ignored them in its Counter-Memorial. It did so despite
Peru's own internal documents showing not only that Peru was aware of
Parán's criminality at the time, but that any further "dialogue" with the
community was pointless as a result.

9 Lupaka developed the Project whilst complying with all social
requirements. In particular, Lupaka and Invicta's prior owner ensured the
participation of the rural communities of the Project's area of direct
influence (“Rural Communities”) in public consultation processes
before, during and after approval of the Project's key socio-environmental
management instruments. The Parán Community actively participated in
these processes. But Lupaka was not obliged to reach an agreement with
the Parán Community to develop the Project. Peruvian law is clear on the
fact that mining concession holders, such as IMC, must only reach "[an]
agreement with the owner of the terrain”⁵ where mining activities are to be
conducted - i.e., the Lacsanga and Santo Domingo communities. Peru
does not seriously contest that the Project was not on Parán's land. It
cannot do so given that its internal documents confirm that it was not.

10 Lupaka's experienced community relations team (“CR Team") devoted
time and resources from 2013 to 2018 to meaningfully engage with the
Parán Community, despite not needing an agreement with this community
to develop the Project. It did so because it was a good corporate citizen.
Lupaka held briefings within this community to explain the downsized

⁵ Supreme Decree No. 008-91-TR, Approval of the Regulation of Mining Procedures (SPA), at ↩
Exhibit C-228, p. 22 et seq. (Art. 23).

[Page 4]

scope of the Project, participated in Parán's Assemblies to communicate
IMC's proposals of mutually beneficial agreements, paid the debts of
Invicta's prior owner, supported infrastructure, technological and
agricultural projects to the benefit of this community, sought to involve its
members in the environmental monitoring of the Project, among many
other things. Lupaka never marginalised, much less disregarded, the Parán
Community. Despite all these efforts, Lupaka was unable to reach an
agreement with Parán because the community negotiated in bad faith with
IMC and took active measures to hinder the Project – which was consistent
with its plan to exploit the mine and protect its illegal marijuana business.

11 Aware of the illegality of the Parán Community's actions, Peru all too
predictably seeks to deploy ESG as a sword, rather than a shield by arguing
that Parán's opposition to the Project was the result of legitimate
environmental concerns.⁶ This is demonstrably false. If this were an ESG
case, the Parán Community would not be exploiting the Invicta mine itself
by using more rudimentary and environmentally harmful methodologies
than Lupaka intended. Indeed, Peru's internal documents show that it is
aware of the environmental danger that exists from Parán exploiting the
mine. In addition, if this were an ESG case, Parán would not have recently
violently opposed the closure of the Invicta mine by the Peruvian
authorities. Tellingly, the Parán Community only raised alleged water
pollution concerns with Lupaka for the first time in May 2018, when the
Project was on the verge of production. The company addressed these
concerns immediately by implementing, in mid-2018, a water management
system that, as the authorities confirmed, ensured that no mine effluents
reached Parán's water sources. Thus, given the timing, supposed water-
related concerns were clearly not the trigger for the Blockade.

12 Peru attempts to further its ESG case by referring to environmental
observations made by the Supervisory and Environmental Assessment
Agency (“OEFA”) to the Project during 2015-2018. As a preliminary
matter, none of these observations was ever raised by the Parán
Community as a source of discontent. More importantly, IMC promptly
and systematically addressed all these observations, none of which

⁶ Counter-Memorial, 24/03/2022, p. 1 (para. 1). ↩

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jeopardised the development of the Project – which, as noted, was on the
verge of production when Parán took it. They are therefore red herrings.

13 IMC informed Peru's National Police (“PNP”) and its intelligence service
in October 2017, a full eight months before the June 2018 Invasion, of the
risk of an invasion of the Site by Parán. From that point on, Peru's local
Police authorities communicated regularly with IMC's CR Team to help
IMC anticipate possible attacks by Parán. Despite this, Peru failed to
prevent the June 2018 Invasion – which, disturbingly, was led by the
Leoncio Prado Subprefect, the MININTER representative in the Project's
area – and thereafter the Blockade as of October 2018. Parán's Ronda
Campesina played a central role in these invasions, acting as a strike force
and illegally using its firearms to prevent anyone from entering the Site.
Lupaka requested Police support to recover control of the Site just three
days after the Blockade. The Police were obliged to assist Lupaka under
Peruvian law but failed to do so.⁷ Peru also failed to prosecute or sanction
any of the Parán invaders despite their violent actions and the various
criminal complaints filed by Lupaka.

14 IMC and the Parán Community twice signed a basic agreement, brokered
by Peru's central authorities, for Parán to stop its violent conduct against
IMC. This would have then allowed Lupaka and the community to
continue further discussions under more serene circumstances, even if
there was no legal requirement for any agreement with the Parán
Community. The Parán Community simply reneged on its commitments
shortly thereafter. This made it all the more clear that any agreement with
Parán was a dead letter. Despite witnessing this pattern of illegal behaviour
firsthand, the State insisted that Lupaka continue to pursue endless
dialogue with Parán. Peru's passivity emboldened Parán's members who
continued to act with extreme violence and intransigence.

15 What is more, Peru's insistence on perpetual dialogue was contrary to its
own legal framework and unreasonable in the circumstances. This is for
two primary reasons:

⁷ Civil Code, Legislative Decree No. 295, at Exhibit C-467, p. 226 (Art. 920). ↩

[Page 6]

16 First, Peruvian law provides that the Police are obliged to use force to
prevent the perpetration of crimes and arrest those who resist authority.
The Parán community members were in possession of firearms at all times
and used them to perpetrate their illegal acts, with total impunity. Indeed,
Peru's own documents show that its central and Police authorities knew
full well that Parán was misusing firearms and recognised that they should
be confiscated, yet inexplicably never took any action. The Parán
Community was also in control of IMC's explosives magazine, which
contained almost 6,000 kilos of explosives, and refused to authorise the
Peruvian authorities to inspect such magazine. These circumstances made
it apparent that the Police needed to act to restore law and order. It is
precisely for this reason that the Police were prepared to intervene upon
authorisation of the MININTER. There was no alternative to ensure that
Lupaka could continue with the Project. Yet the MININTER did not
approve the intervention for its own arbitrary, political reasons.

17 Second, Peru's own documents show that it knew dialogue with Parán was
of no use. The MEM-OGGS, the Peruvian entity which was closely
involved in the dialogue between IMC and Parán for many months
(“MEM-OGGS"), contemporaneously stated that "[d]ialogue
mechanisms are not appropriate in this case” and that “coordination at the
highest inter-sectoral level between the MEM and the MININTER [is
needed] in order to activate as soon as possible the mechanisms for the re-
establishment of public order".⁸ In other words, the Police needed to
intervene to restore law and order, as it had done in multiple other projects
in the face of unlawful behaviour by local communities. As the Minister
of Internal Affairs of Peru declared after authorising a police intervention
in the context of a different conflict in October 2019, two months after
Lupaka lost its investment, “[w]e are committed to dialogue, but this
cannot be confused with weakness. We are going to do our job”.⁹ When
it came to protecting Lupaka's investment, however, the State chose not to
do its "job" by enforcing the law. Peru cannot now hide behind the
vagaries of its own law to shield itself from liability.

⁸ Internal MEM email with attachment (SPA), 20/02/2019, at Exhibit C-468, p. 3. ↩

⁹ “Government Authorizes Armed Forces to Stop Protest Against Las Bambas Copper Mine", ↩
Reuters (SPA), 16/10/2019, at Exhibit C-311.

[Page 7]

18 The actions and omissions of Peru's central and local authorities led the
Claimant to lose its investment, for which the State must be held
accountable. But Peru's responsibility can and must also be predicated on
the basis of the actions of the Parán Community and its Ronda Campesina,
which are an organ of the State or which otherwise acted with
governmental authority. Peru vested Parán and its Ronda Campesina with
jurisdictional and police powers to fill the absence of the State in the area
of the Andes where this community resides, not only through its own laws
but also by giving them firearms. Indeed, Peru's Army gave them military
training and long-range weapons to exercise these powers. The Parán
Community and its Ronda Campesina abused these elements of
governmental authority during and after their multiple takings of the Site
and the Blockade, for which the State is responsible under international
law. Indeed, a State that grants an entity powers over part of its national
territory and allows it to act with autonomy must be held accountable for
such entity's actions.

19 Peru's actions and omissions therefore constitute breaches of its
obligations under the FTA (i) to refrain from unlawfully expropriating
Lupaka's investment; (ii) to provide full protection and security to
Lupaka's investment; and (iii) to treat Lupaka's investment fairly and
equitably. Peru's breaches of its FTA obligations entitle Lupaka to full
compensation for the loss of its investment, which, the Parties agree, must
be calculated based on the Project's fair market value (“FMV"). At the
date of this Reply, Lupaka is entitled to the payment of USD 41 million,
plus interest.

20 After this introduction, Sections 2 through 7 set straight the distorted and
unsupported factual account made by Peru in its Counter-Memorial. As
demonstrated in Section 8, Peru's jurisdictional objections are meritless.
Equally baseless is Peru's denial of its breaches of the FTA, as
demonstrated in Section 9. The Claimant is entitled to the compensation
set out in Section 10 and to the relief requested in Section 11.

21 This Reply is accompanied by:

i) the second witness statement of Mr Gordon Ellis, co-founder of
Lupaka and a director since its incorporation;

[Page 8]

ii) the second witness statement of Mr Julio Félix Castañeda
Mondragón, former General Manager of IMC from mid-2013 until
October 2018;

iii) [Redacted]

[Redacted]

iv) the second witness statement of Mr Luis Felipe Bravo García, former
General Manager of IMC between January and August 2019;

v) The second expert report of Messrs Edmond Richards and Erik van
Duijvenvoord of Accuracy;

vi) The expert report of Mr Christopher Jacobs of Micon International;
and

vii)Exhibits C-256 to C-636 and Legal Authorities CLA-106 to CLA-160.

2 THE PARÁN COMMUNITY BLOCKED THE PROJECT
TO EXPLOIT THE MINE FOR ITSELF AND PROTECT
ITS ILLEGAL MARIJUANA BUSINESS

22 In its Counter-Memorial, Peru attempts to portray the Parán Community
as a reasonable and well-intended community that sought in good faith to
reach a meaningful agreement with IMC in relation to the Project but
whose legitimate concerns were ignored by the company.¹⁰ Peru further
contends that it was “[the] Claimant [who] failed to take a constructive
approach to negotiations with [the Parán] Community".¹¹ This is a false
narrative.

23 On the contrary, IMC made strenuous efforts to reach an agreement with
the Parán Community, but this was not possible because the community
had other plans: it sought to exploit the Invicta mine for itself (Section 2.1)
and to protect its illegal marijuana business, which would be harmed by
the increased attention that the Project would bring to the Parán area

¹⁰ Counter-Memorial, 24/03/2022, p. 1 (para. 1). ↩

¹¹ Counter-Memorial, 24/03/2022, p. 2 et seq. (para. 5). ↩

[Page 9]

(Section 2.2). The Claimant addressed both of these in its Memorial,¹² but
Peru has conspicuously ignored them. Indeed, Peru makes no reference
whatsoever to either of these activities in its Counter-Memorial.

2.1 The Parán Community planned to exploit the Invicta mine and
is doing so

24 The Parán Community blocked the Project because it sought to exploit the
mine. Parán openly communicated this to IMC and MEM representatives
during a meeting held in Lima in late January 2019.¹³ In July 2019, Parán's
exploitation of Lupaka's stockpiled ore was photographed.¹⁴ IMC
communicated the community's illegal plan to other Peruvian authorities
as it confirmed that dialogue was of no use in the circumstances and a
police intervention was needed to lift the Blockade. This was to no avail.
Peru did not authorize a police intervention and the Parán Community
executed its illegal plan at least as from November 2019, i.e., a few months
after Lupaka lost its investment. Indeed, a police inspection conducted in
November 2019 confirmed that the Parán Community was illegally
extracting or allowing other companies to illegally extract ore from the
mine, and further evidence collected by IMC in 2021 and 2022 shows that
this activity continues to the present day.

25 Peru's silence on this issue is telling. Indeed, these facts contradict the
State's case that the conflict with Parán was aggravated because the
Claimant "ignored th[e] [Parán] Community's concerns, including in
respect of the environmental impact of Claimant's mining project".¹⁵ It is
clear that Parán did not oppose the Project due to environmental concerns;
the community sought to steal the mine. The best evidence of this is that,
now that Parán is illegally exploiting the mine, it is requesting the

¹² See Memorial, 01/10/2021, p. 24 et seq. (paras. 71-72, 146 and 191-192); Witness Statement ↩
of Julio F. Castañeda, 01/10/2021, p. 21 (para. 59); [Redacted] Witness Statement of Luis F. Bravo,
01/10/2021, p. 11 (para. 28).

¹³ Witness Statement of Luis F. Bravo, 01/10/2021, p. 11 (para. 28). ↩

¹⁴ Email from Lupaka to Canadian Embassy with attachments, 11/07/2019, at Exhibit C-469; ↩
Letter from IMC to MEM (SPA), 08/07/2019, at Exhibit C-13.

¹⁵ Counter-Memorial, 24/03/2022, p. 1 (para. 1). ↩

[Page 10]

authorities not to close the mine¹⁶ and opposing Police action seeking to
stop its activities.¹⁷

26 First, on 29 January 2019, i.e., some three and a half months after initiation
of the Blockade, IMC representatives, MEM-OGGS representatives, a
MININTER representative, Mr Soyman Román Retuerto, the Leoncio
Prado Subprefect, and Parán officials held a meeting to consider the
opening of a formal dialogue process (“mesa de diálogo” in Spanish) to
discuss the Parán Community's alleged grievances.¹⁸ During this meeting,
IMC requested the Parán Community to lift the Blockade to allow for
constructive dialogue,¹⁹ but the Community refused to do so. What is
more, it demanded that IMC pay some PEN 2 million before any
negotiations could take place and threatened to exploit the Mine if its
demands were not satisfied.²⁰ This was extortion, pure and simple and
Peru did nothing to break up the racket.

27 Second, on 8 July 2019, IMC sent a letter to the MEM reporting on the
Parán Community's appropriation of Lupaka's ore stockpiled at the Site,
which IMC had extracted for testing purposes.²¹ IMC further alerted the
MEM that trucks had been seen accessing the Site to inspect this ore
(photographs were provided), and requested the State to take measures to
prevent its removal from the Site:

"In this regard, we have learned that, in its last assembly, held on
Sunday, 7 July (2019), the Rural Community of Parán would have

¹⁶ Ombudsman's Office, Report on social conflicts No. 215 (SPA), January 2022, at Exhibit ↩
C-470, p. 123; Ombudsman's Office, Report on social conflicts No. 219, May 2022 (SPA), at
Exhibit C-471, p. 119; Ombudsman's Office, Report on social conflicts No. 221, July 2022
(SPA), at Exhibit C-472, p. 118.

¹⁷ [Redacted] ↩

¹⁸ Attendance List to the meeting between the Parán Community and Invicta Mining Corp. ↩
S.A.C., 29/01/2019, at Exhibit R-0157; Witness Statement of Luis F. Bravo, 01/10/2021, p. 10
(para. 24).

¹⁹ Witness Statement of Luis F. Bravo, 01/10/2021, p. 10 (para. 25). ↩

²⁰ Witness Statement of Luis F. Bravo, 01/10/2021, p. 11 (para. 28); WhatsApp exchanges ↩
between Lupaka (Mr Bravo) and MININTER (Mr Saavedra), 5/02/2019-20/02/2019 (SPA), at
Exhibit C-192 (corrected translation), p. 3.

²¹ Letter from IMC to MEM (SPA), 08/07/2019, at Exhibit C-13. ↩

[Page 11]

resolved to remove the ore that we have stockpiled in the field
since the date of the illegal blockade, i.e., since 14 October 2018.

Accordingly, we have been alerted that during last week up to
three trucks with personnel that we do not know have entered
the mine site, to inspect the sampling ore located in our storage
facilities [...].

It should be noted that, at the date of the mine takeover and
blockade of the access road, around 7,000 tonnes of ore
containing gold and other metals were in these storage facilities,
in various quantities, as described in the attached tables and
photographic panels. [...].

Finally, we demand that the authorities of the government of
Peru take the necessary measures to defend and protect the interests
of our company as a foreign investor in the country and to defend
the legality and the internal order in Peru, preventing the illegal
removal of the mineral located in our storage facilities.”²²

28 Three days later, on 11 July 2019, IMC sent photographs of the Parán
Community's illegal ore extraction to Canadian embassy officials in Lima,
who arranged a meeting with IMC and then Deputy Minister of the MEM,
Mr Augusto Cauti.²³ During that meeting, which took place on 15 July
2019, IMC informed Mr Cauti of the Parán situation and the evidence of
ore theft.²⁴ Mr Cauti stated that if Parán was indeed taking ore from the
Site, he would ask for a police intervention.²⁵ Such intervention never took
place.

²² Letter from IMC to MEM (SPA), 08/07/2019, at Exhibit C-13, p. 1 et seq. (emphasis added). ↩

²³ Email from Lupaka to Canadian Embassy with attachments, 11/07/2019, at Exhibit C-469; ↩
Witness Statement of Luis F. Bravo, 01/10/2021, p. 30 et seq. (paras. 96-97).

²⁴ Summary of the meeting between Deputy Minister of Mines and IMC with support of ↩
Canadian Embassy officials, 15/07/2019, at Exhibit C-222, p. 3 (paras. 21-22).

²⁵ Summary of the meeting between Deputy Minister of Mines and IMC with support of ↩
Canadian Embassy officials, 15/07/2019, at Exhibit C-222, p. 3 (para. 22).

[Page 12]

29 Third, on 11 November 2019, the Police intercepted four trucks loaded
with ore in the district of Sayán,²⁶ located some 22 kilometres from
Parán,²⁷ thus confirming that the Parán Community was illegally
extracting ore from the Site.

30 Fourth, the Police carried out an inspection of the Site on 13 November
2019, i.e., two days after the interception of the trucks loaded with ore.
During this inspection, which was conducted with the participation of the
Huaura Crime Prevention Prosecutor, the Police reported the presence of a
backhoe "at the entry of the mine adit" and a waste machine "at the exit of
the mine adit, where machine tracks were observed and it can be seen
that part of the material in the waste machine has been removed,
which seems to be mineralized material”.²⁸ Therefore, Peru's authorities
confirmed that the community was illegally extracting or allowing other
companies to illegally extract additional ore from the mine adit.

31 Fifth, Peru's own records show that Parán members have continued to
illegally extract or to allow other companies to illegally extract ore from
the Invicta mine in 2021 and through 2022 and that they have been doing
so without government sanction.

32 The official MEM website displays the Mining Formalisation Register
(“REINFO”, which is the Spanish acronym for “Registro Integral de
Formalización Minera”), a register listing all mining concessions located
in Peru and all persons and companies engaged in exploitation or
beneficiation in the small-scale industry. The REINFO website shows that
the Victoria Uno concession, which IMC focused on developing until
Parán installed its illegal Blockade, (i) was being exploited by a company
named MWC San Vicente S.A.C. as of November 2021,²⁹ and (ii) had also
been exploited by Mr Freddy Julio Rodriguez Sierra, whose status,

²⁶ Official Letter No. 52-2020-REGION POLICIAL LIMA/DIVPOL-HUACHO-OFIPLO, ↩
22/02/2020, at Exhibit R-0113, p. 11 (para. 30[Redacted]

²⁷ Map, Distance from Parán to Sayán, 04/08/2022, at Exhibit C-474. ↩

²⁸ Official Letter No. 004 from the Parán Community (A. Torres) to MINEM (F. Ismodes), ↩
12/02/2019, at Exhibit R-0013, p. 12 (para. 30) (emphasis added).

²⁹ MEM, Official website of the Integral Registry of Mining Formalisation (REINFO) (SPA) ↩
(accessed on 11/11/2021), 11/11/2021, at Exhibit C-465 (screenshot taken in November 2021).

[Page 13]

however, was marked "suspended" as of June 2022. [Redacted]
the Parán Community allowed Mr Sierra to extract ore from the
Invicta mine in for consideration:³⁰

REGISTRO INTEGRAL DE FORMALIZACIÓN MINERA - REINFO

NOTA IMPORTANTE
La información de Inscripciones del Registro Integral de Formalización Minera (REINFO), de conformidad con el párrafo 3.4 del articulo 3 del Decreto Supremo N° 018-2017-EM, es de acceso público y de carácter dinámico, actualizánd

REINFO Website screenshot dated 11 November 2021 (C-465)

← C A Not secure | pad.minem.gob.pe/REINFO_WEB/Index.aspx

REGISTRO INTEGRAL DE FORMALIZACIÓN MINERA - REINFO

NOTA IMPORTANTE
La información de inscripciones del Registro Integral de Formalización Minera (REINFO), de conformidad con el párrafo 3.4 del artículo 3 del Decreto Supremo N°018-2017-EM, es de acceso público y de carácter dinámico. EI REINFO

REINFO Website screenshot dated 17 June 2022 (C-466)

33 Parán's illegal exploitation of the mine is also confirmed by [Redacted]

[Redacted]³¹

[Redacted]

³⁰ [Redacted] ↩

³¹ [Redacted] ↩

[Page 14]

[Redacted]

[Redacted]³³

34 As the foregoing shows, the Parán Community sought to exploit the Invicta
mine itself and made good on its plan. As noted, the Respondent does not
even address the Claimant's allegations that Parán was mining Invicta for
itself - yet this allegation is central to the Claimant's case and dispositive
of the Respondent's hopeless defence that the Parán Community had
legitimate environmental concerns about mining at Invicta. There is a
simple reason for the absence of this discussion from Peru's Counter-
Memorial - it completely undermines Peru's disingenuous "ESG" defence.
Now that it is illegally exploiting the mine, Parán opposing the closure of
the mine.³⁴ Parán's illegal exploitation of the mine does not meet the
environmental requirements, and the authorities are simply unable to
inspect the Site due to the continuing Blockade.

2.2 The Parán Community also blocked the Project to protect its
illegal marijuana business

35 In addition to its plan to exploit the Invicta mine, the Parán Community
also blocked the Project because it interfered with its illegal marijuana
business.

36 The significant scale of the Parán Community's illegal marijuana business
has been known by Peruvian authorities for a long time. The local press
describes the Sayán District, located at just a 20-minute drive from the
Community of Parán, as the “country of marijuana", and Parán's Huamboy
area as a hotspot for drug traffickers to plant their crops as the local

³² [Redacted] ↩

³³ [Redacted] ↩

³⁴ Ombudsman's Office, Report on social conflicts No. 215 (SPA), January 2022, at Exhibit ↩
C-470, p. 123; Ombudsman's Office, Report on social conflicts No. 219, May 2022 (SPA), at
Exhibit C-471, p. 119; Ombudsman's Office, Report on social conflicts No. 221, July 2022
(SPA), at Exhibit C-472, p. 118.

[Page 15]

authorities turn a blind eye to this illegal business.³⁵ Colonel Fernández,
Chief of the Huacho Police Division (DIVPOL), described Parán's
Huamboy area as a “red zone” due to drug smugglers living therein.³⁶
Massive seizures or incinerations ranging from 3,000 to 10,000 marijuana
plants were reported in the area multiple times between 2014 and 2018 by
the local press,³⁷ with some seizures valued at more than PEN 1,500,000
(approximately USD 400,000).³⁸

37 In 2017, the local press noted the alarming increase in illegal marijuana
cultivation, particularly in the Sayán and Leoncio Prado Districts (the
Parán Community is located in the latter district), as a result of the suitable
climate and lack of police oversight.³⁹ The gravity of the situation led the
regional government in late 2017 to provide the Lacsanga rural patrol (i.e,
“Ronda Campesina") with uniforms, shoes, torches and radios so that they
could support the local police in curbing the expansion of the drug trade in
the area and the resulting rise in crime rates.⁴⁰ The Special Anti-Drug
Division ("DIRANDRO”) has also held meetings with the local
authorities and Rondas Campesinas to encourage them to guard their

³⁵ "Sayán is no longer the country of the sun, it is the country of marijuana", Prensa al Día ↩
(SPA), 12/01/2016, at Exhibit C-475.

³⁶ SSS, Weekly Report, Project (SPA), 06/11/2017 to 11/11/2017, at Exhibit C-414, p. 6. ↩

³⁷ "More than 3,000 marijuana plants incinerated in the highlands of Lima", Andina - Agencia ↩
Peruana de Noticias (SPA), 13/08/2014, at Exhibit C-104; "Nearly 10,000 marijuana plants
seized in Huamboy - Leoncio Prado", Diario Ecos Huacho (SPA), 09/05/2017, at Exhibit C-
105; "Nearly 10,000 marijuana plants found in Huaura", Peru21 (SPA), 09/05/2017, at Exhibit
C-106; "Hard blow to drug trafficking: Sierra of Huaura Province is the drug haven of the Norte
Chico", Agencia Digital de Noticias Huacho (SPA), 11/04/2018, at Exhibit C-107; “5,000
marijuana plants valued at 1.5 million soles incinerated", Litoral Noticias (Vol. 193) (SPA),
12/04/2018, at Exhibit C-108; "More drugs seized in Huamboy", Litoral Noticias (Vol. 194)
(SPA), 19/04/2018, at Exhibit C-109; "Peruvian National Police seizes 789 marijuana plants
in the Sayán District", Andina (SPA), 19/09/2017, at Exhibit C-476; "Sayán is no longer the
country of the sun, it is the country of marijuana", Prensa al Día (SPA), 12/01/2016, at Exhibit
C-475.

³⁸ "Hard blow to drug trafficking: Sierra of Huaura Province is the drug haven of the Norte ↩
Chico", Agencia Digital de Noticias Huacho (SPA), 11/04/2018, at Exhibit C-107; "5,000
marijuana plants valued at 1.5 million soles incinerated", Litoral Noticias (Vol. 193) (SPA),
12/04/2018, at Exhibit C-108.

³⁹ "Marijuana production follows cocaine route”, Perú21 (SPA), 01/10/2017, at Exhibit C- ↩
477.

⁴⁰ SSS, Weekly Report, Project (SPA), 01/12/2017 to 09/12/2017, at Exhibit C-446, p. 6 et seq. ↩

[Page 16]

territories against the threat of the drug trade.⁴¹ In mid-2018, the Chief of
DIRANDRO reported that a new type of enhanced marijuana was being
cultivated in the Huaura province,⁴² which could have a value equivalent
to cocaine hydrochloride.⁴³

38 The Parán community members who most vocally opposed the Project
belonged to three or four families heavily involved in the marijuana
business. One such family was the Narvasta family. As IMC's CR Team
reported to Mr Castañeda, then general manager of IMC, after participating
in a Parán Assembly Meeting held on 5 November 2016:

"[...] we have observed that there is a group of opponents (Saul
Narvasta and his family), who by all means misinform the
population, to confuse them and to prevent them from agreeing to
dialogue with the company. This opposition leader and his family
have been supported by a group of opposition community
members [...] whose main activity is the cultivation of
marijuana."⁴⁴

39 Other contemporaneous news articles confirm the involvement of the
Narvasta family in the marijuana business run in Parán. For instance, the
local press reported that in September 2017, the Police found and seized
789 marijuana seedlings in the Huamboy area that had been guarded by a
member of the Narvasta family who was arrested by the Police.⁴⁵ In 2018,
the Police reported other massive seizures of marijuana plants presumably
belonging to the Narvasta clan.⁴⁶

⁴¹ SSS, Weekly Report, Project (SPA), 20/11/2017 to 27/11/2017, at Exhibit C-426, p. 2 et seq. ↩

⁴² The Huaura province encompasses the Sayán and Leoncio Prado Districts. ↩

⁴³ "PNP General Héctor Loayza: 'Marijuana 'cripy' costs about the same as cocaine", Perú21 ↩
(SPA), 23/05/2018, at Exhibit C-478.

⁴⁴ Internal Lupaka email (SPA), 14/11/2016, at Exhibit C-103, p. 2 (emphasis added). ↩

⁴⁵ "Peruvian National Police seizes 789 marijuana plants in the Sayán District", Andina (SPA), ↩
19/09/2017, at Exhibit C-476.

⁴⁶ "Hard blow to drug trafficking: Sierra of Huaura Province is the drug haven of the Norte ↩
Chico", Agencia Digital de Noticias Huacho (SPA), 11/04/2018, at Exhibit C-107; "5,000
marijuana plants valued at 1.5 million soles incinerated", Litoral Noticias (Vol. 193) (SPA),
12/04/2018, at Exhibit C-108.

[Page 17]

40 Several members of the Narvasta family held leading positions in the Parán
Community or were part of the Parán Dialogue Committee, i.e., the
committee in charge of conducting negotiations with IMC. This gave them
weight in decisions and allowed them to lead discussions with IMC.
Others, despite not holding such positions, had the means to influence
other Parán community members. To name some of them:

i) Saúl Torres Narvasta was a member of the Parán Dialogue Committee
and a staunch opponent of the Project.⁴⁷ IMC filed a first criminal
complaint against him on 20 June 2018 due to his leading role in the
19 June 2018 Invasion,⁴⁸ and a second complaint on 7 January 2019
following the failed inspection of the company's explosives magazine
by the Public Prosecutor's Office on 21 December 2018.⁴⁹

ii) Israel Narvasta was part of the leadership of Huamboy, the Parán area
where, as explained above, most of the marijuana crops are located.⁵⁰
He was against the Project and would threaten IMC saying that “he has
the support of [Huamboy] to force the company to sign an agreement
under whatever conditions they want.”⁵¹ Indeed, Mr Israel Narvasta
would adopt a threatening and uncompromising attitude when
discussing the terms of a possible agreement with IMC, while also
encouraging other Parán members to invade the Site.⁵²

⁴⁷ See also ↩
SSS, Monthly Report, Project, November 2016 (SPA), at Exhibit C-394, p. 6 ("A leader with
regular influence within the community, he is very closed-minded and reluctant to talk about
the project. His speech on the project is that this will pollute the local population's crops and
that he knows of experiences of bad mining practices. He is one of the main opponents of the
project.")

⁴⁸ Sayán Police, Report No. 002-2019-REGPOL.LIMA/DIVPOL-H-CS.SEC (SPA), ↩
04/01/2019, at Exhibit C-458, p. 1; Expert Report of Iván Meini - Corrected Version,
22/03/2022, p. 64 (para. 178).

⁴⁹ Denuncia Ampliatoria, 07/01/2019, at Exhibit IMM-0053. ↩

⁵⁰ [Redacted] ↩

⁵¹ SSS, Weekly Report, Project (SPA), 14/08/2017 to 19/08/2017, at Exhibit C-444, p. 2. ↩

⁵² SSS, Special Report, IMC dealings with the Parán and Lacsanga Communities (SPA), ↩
09/02/2017, at Exhibit C-479, p. 1 ("[h]aving coordinated a meeting [...] with leaders of the
Huamboy area and after analysing the position taken by Mr. Israel Narvasta (local President)
and Absalon Narvasta (Leader of the [Huamboy area]), it was [...] coordinated [...] not to carry
out this meeting to [avoid discussing] the proposal that both leaders wanted to make to the

[Page 18]

iii) Absalón Narvasta was considered the leader of the marijuana business
and a highly influential individual in the Huamboy area.⁵³ Although he
initially portrayed himself as an IMC supporter,⁵⁴ he was eventually
found to be solely interested in negotiating high contributions from the
Claimant.⁵⁵ During the height of the conflict, he became a member of
the Parán Dialogue Committee and served as one of the main
opponents to the Project.⁵⁶

iv) Luis Narvasta Escudero was one of the more radical members of the
Parán Community and a staunch opponent of the Project.⁵⁷ IMC filed
a criminal complaint against him on 20 June 2018 due to his leading
role in the 19 June 2018 Invasion.⁵⁸

v) Wilber Narvasta was first Vice-President and then acting President of
the Parán Community.⁵⁹ In his capacity as Vice-President, he was also

company (request for S/2,000,000.00 soles), to start the dialogue for the signing of the
agreement."); SSS, Weekly Report, Project (SPA), 18/09/2017 to 22/09/2017, at Exhibit C-
480, p. 2 (“we encountered Mr. Israel Narvasta, local president of Huamboy, who intimidatingly
[...] informed us [...]: [...] [that] [a]ccording to information from a lawyer working in Brazil
(a relative of the [Parán official]), the project will not be able to begin because there is no
agreement with the [Parán] community. The company should negotiate with the Paran
community in accordance with their expectations before work can begin."); SSS, Monthly
Report, Project, August 2018 (SPA), at Exhibit C-162, p. 5 ("[...] but those present by majority
did not accept the proposal that the [opponent] Israel Narvasta Claros [put forward] [to invade
the Site]").

⁵³ IMC, Matrix of Local Stakeholders, Invicta Project (SPA), at Exhibit C-481, p. 4. ↩

⁵⁴ SSS, Monthly Report, Project, November 2016 (SPA), at Exhibit C-457, p. 7; SSS, Monthly ↩
Report, Project, December 2016 (SPA), at Exhibit C-424, p. 7.

⁵⁵ IMC, Matrix of Local Stakeholders, Invicta Project (SPA), at Exhibit C-481, p. 4; SSS, ↩
Special Report, IMC dealings with the Parán and Lacsanga Communities (SPA), 09/02/2017,
at Exhibit C-479, p. 1.

⁵⁶ Summary of the meeting between IMC and the Parán Community (SPA), 07/11/2018, at ↩
Exhibit C-183, p. 2; SSS, Monthly Report, Project, November 2018 (SPA), at Exhibit C-482,
p. 6.

⁵⁷ Report on meeting between IMC, the Parán Community, the MEM and the Mayor of the ↩
District of Leoncio Prado (SPA), 24/10/2018, at Exhibit C-173, p. 3 (point 3).

⁵⁸ Criminal complaint filed with the Sayán Police by IMC representatives (SPA), 20/06/2018, ↩
at Exhibit C-125; Expert Report of Iván Meini - Corrected Version, 22/03/2022, p. 64 (para.
178).

⁵⁹ [Redacted] ↩

[Page 19]

part of the Dialogue Committee and over time became a strong
opponent of the Project.⁶⁰

41 The Narvasta family and others involved in the marijuana business
opposed the Project because it would bring more Police presence to the
Parán area and thus disturb their illegal drug trade.⁶¹ Indeed, the Project
would bring suppliers, contractors, and private security to the area,
generating more movement and, as a result, the need for enhanced Police
checkpoints, patrols and surveillance for control purposes and to prevent
or deal with possible theft incidents or accidents at the Site.⁶² This, in turn,
would disrupt the drug business as Parán had typically operated without
police interference. The Narvasta family was aware of the threat the
Project posed to their drug business and feared it would result in the seizure
or incineration of thousands of marijuana plants.

42 Peruvian officials knew that the Parán Community's illegal marijuana
business was a major driver of its opposition to the Project and that the
Blockade was financed with funds coming from this illegal drug trade. The
State also knew that the Parán community members were armed with long-
range weapons. Indeed, as stated in a memorandum prepared by the MEM-
OGGS on 20 February 2019, i.e., four months after the Blockade:

"The social process that the mining company maintains with the
Parán Community, is affected by [the] presence of interests
outside the State (producers of local marijuana plantations) the
MININTER is aware of this problem and is activating the
corresponding mechanisms. Also, it is known that the local [Police]
is preparing an operations plan in the community, having identified
long-range weapons among the community members.

RECOMMENDATIONS:

Coordination at the highest inter-sectoral level, between the MEM
and the MININTER in order to activate as soon as possible the
mechanisms for the re-establishment of public order in the area by

⁶⁰ SSS, Monthly Report, Project, December 2016 (SPA), at Exhibit C-424, p. 8. ↩

⁶¹ [Redacted] ↩

⁶² [Redacted] ↩

[Page 20]

MININTER. Dialogue mechanisms are not appropriate in this
case because community leadership manages a double
discourse, with the State and with its population, evidencing
with it the presence and active participation of local actors who,
with an economy outside the law, subsidize activities contrary
to public order against the mining project.”⁶³

43 Although the MEM-OGGS memorandum states that the MININTER
planned to take action to address Parán's drug business and to seize Parán's
weapons, this did not take place. If Peru had taken action by re-
establishing law and order as this internal document recommended,
Lupaka would not have lost its investment.

44 Subsequent official documents reconfirmed Peru's awareness that Parán's
drug business was an obstacle to any potential agreement with IMC.

[Redacted]

[Redacted]

[Redacted]

[Redacted]

[Redacted]

[Redacted]⁶⁴

45 Peru's internal documents therefore show that there was consensus among
many of the higher authorities that Parán's drug business would make it
impossible to reach an agreement and that only police intervention would

⁶³ Internal MEM email with attachment (SPA), 20/02/2019, at Exhibit C-468, p. 3 et seq. ↩
(emphasis added) (As early as November 2017, IMC's CR Team reported on a meeting hosted
by both the Paccho District Committee for Citizen Security and the Anti-Drug Directorate of
the PNP, during which these authorities acknowledged before representatives of the
municipalities, the MININTER and local police the existing threat posed to the Project by
Parán's marijuana business.) See also SSS, Weekly Report, Project (SPA), 20/11/2017 to
24/11/2017, at Exhibit C-445, p. 2 and SSS, Weekly Report, Project (SPA), 20/11/2017 to
27/11/2017, at Exhibit C-426, p. 1.

⁶⁴ [Redacted] (emphasis ↩
added).

[Page 21]

resolve the issue. Despite this, Peru required that Lupaka lose its time (and
ultimately its investment) through pointless dialogue with the Parán
Community while the latter held Lupaka hostage through a Blockade.

3 THE PROJECT WAS ON THE VERGE OF
PRODUCTION WHEN THE PARÁN COMMUNITY SET
UP ITS ILLEGAL BLOCKADE

46 Lupaka made significant investments in the six years following its
acquisition of the Project, bringing it to the verge of production (Section
3.1) while complying with all legal requirements on citizen participation
(Section 3.2). The mine was ready to enter production when Parán set up
its illegal Blockade (Section 3.3), thus allowing IMC to comply with its
gold delivery obligations under the PPF Agreement (Section 3.4).

3.1 Lupaka's Project was on the brink of production when Parán
set up its illegal Blockade

47 In the six years following its acquisition of the Project (October 2012 –
October 2018), Lupaka invested a significant amount of time and money
to develop the Project, taking it to the eve of production before Parán
installed the Blockade. Indeed, Lupaka secured the necessary land rights,⁶⁵
conducted various technical studies which confirmed the Project's
prospects⁶⁶ and obtained key permits and approvals to move ahead with
the Project.⁶⁷ It secured funding to develop the Project⁶⁸ and completed
mine development works.⁶⁹ Lupaka further reached an agreement to
purchase the Mallay processing plant, where Lupaka would process the
Project's ore.⁷⁰

⁶⁵ Memorial, 01/10/2021, p. 14 et seq. (Section 2.2.3). ↩

⁶⁶ Memorial, 01/10/2021, p. 11 et seq. (Section 2.2.1). ↩

⁶⁷ Memorial, 01/10/2021, p. 25 et seq. (Section 2.2.4). ↩

⁶⁸ Memorial, 01/10/2021, p. 13 et seq. (Section 2.2.2). ↩

⁶⁹ Memorial, 01/10/2021, p. 31 et seq. (Section 2.2.6). ↩

⁷⁰ Memorial, 01/10/2021, p. 28 et seq. (Section 2.2.5). ↩

[Page 22]

47 The Claimant addressed all these key facts in its Memorial. As explained below, Peru has not refuted most of these facts and, when it has, its arguments are baseless.

48 First, Peru contends that the “Invicta Project was in fact within the Parán Community's territory”, and thus IMC needed to secure an agreement with such community to develop the Project.⁷¹ Peru relies on two statements in the Preliminary Economic Assessment of the Project (the “PEA 2018”) to support its proposition, namely that “[t]he property is located within the boundaries of the Parán, Lacsanga and Santo Domingo de Apache [Rural] communities” and “Invicta Mining Corp plans to have an agreement with the Parán Community in the short term.”⁷²

49 None of these statements supports Peru's case. Indeed, the first statement is referring to the fact that that, taken as a whole, the Invicta Project comprises six mining concessions which are scattered throughout the Parán, Lacsanga and Santo Domingo rural communities, i.e., the Victoria Uno, Victoria Dos, Victoria Tres, Victoria Cuatro, Victoria Siete and Invicta II mining concessions.⁷³ Indeed, as stated more fully in the same PEA 2018:

“The Invicta Gold Project is in the province of Huaura, department of Lima, Peru, 120 kilometres northeast of the city of Lima. The property is located within the boundaries of the Paran, Lacsanga and Santo Domingo de Apache peasant communities. Santo Domingo de Apache and Paran are in the district of Leoncio Prado, while Lacsanga is in the district of Paccho. The Invicta Gold Project comprises six mining concessions held by Invicta Mining Corporation S.A.C (Invicta Mining Corp), a subsidiary of Lupaka. and comprises a total area of 4,700 hectares.”⁷⁴

50 However, IMC's revised mining plan, as approved by the MEM in 2014, only assumed exploitation of the Victoria Uno concession and, more

⁷¹ Counter-Memorial, 24/03/2022, p. 82 (para. 166). ↩

⁷² Counter-Memorial, 24/03/2022, p. 82 (para. 166). ↩

⁷³ Memorial, 01/10/2021, p. 7 (para. 23). ↩

⁷⁴ 2018 PEA, 13/04/2018, at Exhibit C-34, p. iv. ↩

[Page 23]

specifically, of the part of such concession which is located on land belonging to the Lacsanga and Santo Domingo communities. This is clearly shown by the community land boundaries recorded in the Peruvian Registry.⁷⁵ Therefore, contrary to Peru's contention, IMC was not going to carry out mining activities on Parán land.

51 The second statement relied on by Peru, which is part of Section 3.4 of the PEA 2018 on Permits and Authorization, provides that “Invicta Mining Corp. plans to have an agreement with the Parán Community in the short term".⁷⁶ This is true but does not support Peru's case. Indeed, IMC made strenuous efforts to reach an agreement with the Parán Community because it sought to build a lasting relationship with all the communities in the area of direct influence of the Project. However, the absence of such agreement did not prevent Lupaka from advancing the Project. Indeed, as explained in Section 3.2.2 below, under Peruvian law, IMC only needed to reach an agreement with the communities holding rights over the land on which IMC was to carry out its exploitation activities, i.e., Lacsanga and Santo Domingo, which IMC did.

52 Contemporaneous documents confirm that IMC's mining activities were to take place on land belonging to Lacsanga and Santo Domingo, not Parán. Indeed, as stated in the Police document dated 9 February 2019 detailing an Operational Plan that the Police were ready to implement to evict the Parán members from the Blockade and secure the Site:

“70 percent of the mining project of the Invicta Mining Company is located within the territory of the rural community of Lacsanga, Leoncio Prado district and 30 percent on the land of the Santo Domingo de Apache rural community, Leoncio Prado district”.⁷⁷

⁷⁵ IMC map - Community boundaries according to Peruvian registry (SPA), at Exhibit C-486. ↩

⁷⁶ See 2018 PEA, 13/04/2018, at Exhibit C-34, p. 10. ↩

⁷⁷ Police Operational Plan to lift the Blockade (SPA), 09/02/2019, at Exhibit C-193, p. 31 (Conclusions). ↩

[Page 24]

53 This is further confirmed by other contemporaneous Police reports.⁷⁸ Of course, IMC had agreements with the Lacsanga and Santo Domingo Communities to develop the Project. Indeed, on 22 October 2010, Invicta's prior owner signed a Land Use Agreement with the Santo Domingo Community allowing IMC to conduct mining operations on Santo Domingo land.⁷⁹ Thereafter, on 31 March 2015⁸⁰ and 18 July 2017,⁸¹ IMC signed agreements with the Lacsanga Community authorising the company to conduct mining activities, build mine infrastructure, and develop and use Lacsanga's road for the Project.

54 Therefore, the Tribunal can only conclude that IMC had all necessary land rights to develop the Project.

55 Second, it is not in dispute that IMC conducted various technical studies which confirmed the Project's prospects.⁸² Indeed, in 2014, Lupaka commissioned SRK Consulting to conduct two conceptual studies of the Project,⁸³ and Aminpro to conduct metallurgical testing on the Project's ore.⁸⁴ These studies confirmed that the development of the Project was a

⁷⁸ Sayán Police, Report No. 002-2019-REGPOL.LIMA/DIVPOL-H-CS.SEC (SPA), 04/01/2019, at Exhibit C-458, p. 1 ("On the other hand, on 140CT18 at 06.30 hours, the undersigned, in command of the PNP Sayán Police Station, went to the mining camp of the mining company Invicta Corp. SAC, which is located between the rural communities of Santo Domingo and Lacsanga, between the districts of Leoncio Prado and Paccho") (emphasis added). ↩

⁷⁹ Public Deed for the 2010 SD Land Use Agreement (SPA), 22/10/2010, at Exhibit C-63, Framework Agreement (SPA), 22/10/2010, at Exhibit C-64 and Contract for the Constitution of Mining Easement between IMC and the Santo Domingo Community (SPA), 22/10/2010, at Exhibit C-65. (An addendum to the Land Use Agreement increasing payments by IMC was ready in early 2018 but could not be signed due to the Blockade). See Draft Addendum to Framework Agreement between the Santo Domingo Community and IMC (SPA), 15/09/2017, at Exhibit C-94 and SSS, Monthly Report, Project, May 2018 (SPA), at Exhibit C-452, p. 3. ↩

⁸⁰ Agreement between IMC and the Lacsanga Community (SPA), 31/03/2015, at Exhibit C-42. ↩

⁸¹ 2017 Lacsanga Agreement (SPA), 18/07/2017, at Exhibit C-43. ↩

⁸² Counter-Memorial, 24/03/2022, p. 70 (para. 142). ↩

⁸³ SRK, Conceptual Study Invicta Project: 300 tpd Option, 03/02/2014, at Exhibit C-37; SRK, Conceptual Study Invicta Project: Preliminary Results (1,000 tpd), 22/01/2014, at Exhibit C-67. ↩

⁸⁴ Aminpro, Lupaka Gold: Invicta Project, Test on Polymetalic (Pb/Zn/Cu) Sulphide Ore Phase II, 23/10/2014, at Exhibit C-73. ↩

[Page 25]

highly profitable venture.⁸⁵ Lupaka then prepared a revised mining plan to take into account the results of these technical studies, which was approved by the MEM on 11 December 2014.⁸⁶ In November 2017, Lupaka commissioned SRK Consulting to conduct a PEA 2018, which concluded that the Project “demonstrated positive PEA results" and had “considerable merit”. The PEA 2018 further highlighted the prospect for expansion at the Project, indicating that the data "strongly suggest[s] the potential for mineral resource expansion along existing mineralised structures".⁸⁷ Neither Peru nor its experts have disputed the geology of the Project nor its prospects.

56 Third, it is not in dispute that IMC obtained key permits and approvals to develop the Project. Indeed:

1. i) IMC secured a certificate of absence of archaeological ruins from the Ministry of Culture on 25 May 2010.⁸⁸
2. ii) The MEM approved IMC's revised mining plan on 11 December 2014, and the company was authorised to carry out mine preparation and development works.⁸⁹
3. iii) The MEM approved IMC's EIA on 28 December 2009.⁹⁰ IMC revised its EIA following the MEM's approval of IMC's revised mining plan in December 2014. The MEM approved IMC's revised environmental instrument on 9 April 2015.⁹¹

⁸⁵ Witness Statement of Eric Edwards, 01/10/2021, p. 13 (paras. 44-46); Witness Statement of Julio F. Castañeda, 01/10/2021, p. 6 (para. 13). ↩

⁸⁶ MEM Report and Resolution approving the Mining Plan (SPA), 11/12/2014, at Exhibit C-9 (corrected translation). ↩

⁸⁷ 2018 PEA, 13/04/2018, at Exhibit C-34, p. xi. ↩

⁸⁸ Ministry of Culture, Certificates of Non-Existence of Archaeological Remains for IMC, 2009-2010 (SPA), at Exhibit C-59; Counter-Memorial, 24/03/2022, p. 71 et seq. (para. 144). ↩

⁸⁹ MEM Report and Resolution approving the Mining Plan (SPA), 11/12/2014, at Exhibit C-9 (corrected translation); Counter-Memorial, 24/03/2022, p. 72 (para. 145). ↩

⁹⁰ MEM Resolution approving the EIA (SPA), 28/12/2009, at Exhibit C-7 (corrected translation). ↩

⁹¹ MEM Report and Resolution approving ITS No. 1 (SPA), 09/04/2015, at Exhibit C-40; Counter-Memorial, 24/03/2022, p. 72 (para. 145). ↩

[Page 26]

1. iv) The MEM approved IMC's Mine Closure Plan in 2012.⁹² IMC then revised its Mine Closure Plan following the MEM's approval of its revised mining plan in December 2014. The MEM approved IMC's revised Mine Closure Plan on 3 December 2015.⁹³ IMC was in the process of amending its Mine Closure Plan when the Parán Community set up its illegal Blockade – the approval of which, however, was not necessary to start exploitation.⁹⁴
2. v) In 2016 and 2017, IMC obtained the necessary licenses to purchase, use and store explosives.⁹⁵
3. vi) IMC secured various other authorisations to conduct its mine development activities, including water use permits and fuel usage authorisations.⁹⁶

57 As shown by the foregoing, the Claimant had obtained all key permits and authorisations needed to develop the Project by the time the Parán Community set up its illegal Blockade.

58 Fourth, it is not in dispute that IMC finished the mine preparation and development works by mid-2018, which led to its request to the MEM on 6 September 2018 to carry out its final pre-production inspection to authorise IMC to proceed with exploitation.⁹⁷

⁹² MEM Report and Resolution approving ITS No. 1 (SPA), 09/04/2015, at Exhibit C-40, p. 2 (Section 3.6); Counter-Memorial, 24/03/2022, p. 72 (para. 145). ↩

⁹³ MEM, Directoral Resolution No. 467-2015/MEM-DGAAM (SPA), 03/12/2015, at Exhibit C-418. ↩

⁹⁴ As explained in Section 3.3.3 below, IMC had made all updates required by Peruvian law to its Mine Closure Plan when the Parán Community set up its illegal Blockade. Indeed, IMC's Mine Closure Plan was approved on 17 February 2012 and updated for the first time on 3 December 2015. The next update was due 5 years thereafter, i.e., in December 2020 at the earliest. IMC could have therefore entered exploitation any time before December 2020 without requiring amending its Mine Closure Plan. ↩

⁹⁵ MEM, IMC mining operations certificate (SPA), 30/11/2017, at Exhibit C-10; SUCAMEC, Licence to operate explosive magazines (SPA), 06/05/2016, at Exhibit C-80; Counter-Memorial, 24/03/2022, p. 72 (para. 145). ↩

⁹⁶ ANA, Administrative Resolution No. 0192-2009-ANA-ALA Huaura (SPA), 27/10/2009, at Exhibit C-487; Second Amended and Restated PPF Agreement, 02/08/2017, at Exhibit C-45, p. 89 et seq. (Schedule H); Counter-Memorial, 24/03/2022, p. 72 (para. 145). ↩

⁹⁷ Letter from IMC to MEM (SPA), 06/09/2018, at Exhibit C-81; Counter-Memorial, 24/03/2022, p. 72 (para. 145). ↩

[Page 27]

59 Fifth, it is not in dispute that Lupaka secured funding to develop the Project. Indeed, on 30 June 2016, Lupaka and PLI executed the PPF Agreement,⁹⁸ which, as subsequently modified,⁹⁹ provided Lupaka with gross proceeds of USD 7,000,000 to develop the Project in exchange for deliveries of gold.¹⁰⁰

60 Sixth, Peru does not deny that Lupaka had reached an agreement with Buenaventura for the purchase of the Mallay processing plant, which had a capacity to process at least 600 t/d.¹⁰¹ Peru however states that the Claimant "should not be compensated for any alleged losses predicated on Claimant's purely hypothetical future ownership of the Mallay plant.”¹⁰²

61 Peru's contention that the purchase of the Mallay plant was "purely hypothetical" is belied by the facts. Mr Ellis explains in his second witness statement how if it had not been for the Blockade, the purchase of the Mallay plant would have occurred.¹⁰³ Indeed, by early October 2018, Lupaka and Buenaventura had agreed on the terms of the purchase and sale agreement, which reflected a purchase price of USD 10.4 million, plus VAT.¹⁰⁴ Funding for this transaction would be provided by PLI through a third amendment to the PPF Agreement, the terms of which had also been agreed by early October 2018.¹⁰⁵ The Mallay transaction was contingent upon the Mallay Community's approval of the transfer of its easement

⁹⁸ PPF Agreement, 30/06/2016, at Exhibit C-44. ↩

⁹⁹ The PPF Agreement was amended in 2017 and 2018. See Second Amended and Restated PPF Agreement, 02/08/2017, at Exhibit C-45 and Amendment No. 2 to the Second Amended and Restated PPF Agreement, 06/02/2018, at Exhibit C-46. ↩

¹⁰⁰ Witness Statement of Gordon Ellis, 01/10/2021, p. 11 (para. 33); Counter-Memorial, 24/03/2022, p. 78 et seq. (paras. 159-160). ↩

¹⁰¹ The Claimant's primary damages assessment is based on a production schedule of 590 t/d using the Mallay processing plant. For further details, see Section 10.3.3 below. ↩

¹⁰² Counter-Memorial, 24/03/2022, p. 364 (para. 780) (emphasis added). ↩

¹⁰³ Second Witness Statement of Gordon Ellis, 23/09/2022, p. 16 et seq. (paras. 34-38). ↩

¹⁰⁴ Draft Mallay Purchase Agreement between Buenaventura and IMC (Final version) (SPA), 05/10/2018, at Exhibit C-287, p. 7 et seq. (Clause Fourth); Expert Report of AlixPartners on Damages, 24/03/2022, p. 31 (para. 84). ↩

¹⁰⁵ Draft Amendment and Waiver No. 3 to the Second Amended and Restated PPF Agreement (Final version), 05/10/2018, at Exhibit C-285. ↩

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agreement with Buenaventura to IMC, which was obtained on 14 March 2019.¹⁰⁶

62 These milestones attest to Lupaka's full commitment to the Project and its advanced stage of development – it was on the brink of production.

3.2 Lupaka developed the Project whilst complying with all social requirements

63 As explained above, Lupaka invested a significant amount of time and money to develop the Project in the six years following its acquisition, taking it to the brink of production by the time Parán set up its illegal Blockade. Importantly, it is not in dispute that Lupaka and IMC's prior owner complied with all legal requirements aimed at ensuring citizen participation before, during and after approval of the Project's key socio-environmental management instruments (Section 3.2.1). Contrary to Peru's contention, IMC was not obliged to reach an agreement with the Parán Community to develop the Project, but in any event made countless good faith efforts to do so (Section 3.2.2).

3.2.1 Lupaka and IMC ensured citizen participation before, during and after approval of the Project's key socio-environmental management instruments

64 In Section II.B.1.b of its Counter-Memorial, Peru describes at length the key socio-environmental management instruments that a mining company is required to have under Peruvian law to develop a mining project. Peru places emphasis on the EIA and the mine closure plan, and the fact that both have to go through consultation processes involving the local population and authorities before they can be approved by the competent authorities. However, it is not in dispute¹⁰⁷ that IMC (before and after it

¹⁰⁶ Email from Buenaventura to Lupaka, 11/03/2019, at Exhibit C-233; Notarized Addendum to the Easement Contract between Buenaventura and the Mallay Community (SPA), 14/03/2019, at Exhibit C-289. ↩

¹⁰⁷ Indeed, Peru does not contend that IMC (before or after it was acquired by Lupaka) failed to conduct any of the consultation processes required by Peruvian law, nor that those processes were conducted in breach of said law. ↩

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was acquired by Lupaka) conducted these consultation processes in accordance with Peruvian law.

65 First, the "Citizen Participation Plan” (“CPP” – “Proceso de Participacion Ciudadana" in Spanish) is a relevant plan that a mine owner must submit. In it, there will be a proposal “to the competent authority [i.e., the MEM] detailing and substantiating the mechanisms that will be developed during the environmental study procedure and during the execution of a mining project" to engage with the local communities in the area of influence of the mining project.¹⁰⁸ Specifically, Peruvian law requires a mine owner to include in its CPP citizen participation activities to be developed “prior to the preparation of the [EIA], during the preparation [of the EIA], [] during the assessment procedure [of the EIA] carried out by the competent authority",¹⁰⁹ and also “during the execution of the mining project".¹¹⁰ IMC complied with these requirements.

66 The MEM approved IMC's CPP in December 2008,¹¹¹ and IMC carried out the activities provided therein before¹¹² and during the preparation¹¹³ and evaluation of its EIA.¹¹⁴ Indeed, IMC, together with its external consultant CESEL Ingenieros (“CESEL”), met on several opportunities with all three Rural Communities before and during the preparation and evaluation of IMC's 2009 EIA. CESEL reported that during these meetings, which took place between February-March 2007,¹¹⁵ April and

¹⁰⁸ Supreme Decree No. 028-2008-EM, 26/05/2008, at Exhibit R-0007, p. 8 (Art. 14). ↩

¹⁰⁹ Supreme Decree No. 028-2008-EM, 26/05/2008, at Exhibit R-0007, p. 8 (Art. 14) (emphasis added); Counter-Memorial, 24/03/2022, p. 40 (para. 82). ↩

¹¹⁰ Id., p. 8 et seq. (Art. 15) (emphasis added); Counter-Memorial, 24/03/2022, p. 40 (para. 82). ↩

¹¹¹ MEM Resolution approving the EIA (SPA), 28/12/2009, at Exhibit C-7 (corrected translation), p. 5. ↩

¹¹² Environmental Impact Assessment, Invicta Mining Corp. S.A.C. ("2009 ΕΙΑ”), 06/10/2008, at Exhibit R-0047, p. 58 (Table 10.4-1). ↩

¹¹³ Environmental Impact Assessment, Invicta Mining Corp. S.A.C. ("2009 ΕΙΑ”), 06/10/2008, at Exhibit R-0047, p. 59 (Table 10.4-2). ↩

¹¹⁴ Environmental Impact Assessment, Invicta Mining Corp. S.A.C. ("2009 ΕΙΑ”), 06/10/2008, at Exhibit R-0047, 2009 ΕΙΑ, p. 59 et seq. (Table 10.4-3 and Table 10.5.1-1). ↩

¹¹⁵ Environmental Impact Assessment, Invicta Mining Corp. S.A.C. ("2009 ΕΙΑ”), 06/10/2008, at Exhibit R-0047, p. 58. ↩

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September 2008,¹¹⁶ “an atmosphere of dialogue and mutual respect prevailed among the participants”, without incidents of any kind,¹¹⁷ and that all stakeholders were able to present their views.¹¹⁸ In September 2008,¹¹⁹ November 2008¹²⁰ and April 2009,¹²¹ IMC organized further participatory workshops and a public hearing with the communities of Lacsanga, Santo Domingo and Parán and with Peruvian authorities to discuss inter alia the Project's operations, social contributions, environmental impacts and employment opportunities.

67 IMC carried out further citizen participation activities following the MEM's approval of IMC's EIA on 28 December 2009. In this regard, IMC's EIA included two citizen participation schemes that would run in parallel during the mine preparation and development phase: (i) the Participatory Environmental Monitoring Scheme and (ii) the Consultation and Information Scheme.¹²² IMC carried them out.

68 The Participatory Environmental Monitoring Scheme sought the participation of members of the Rural Communities in the Project's environmental monitoring activities. IMC included provisions within its agreements with the Santo Domingo and Lacsanga Communities to allow for a systematic implementation of such a scheme,¹²³ and started

¹¹⁶ Environmental Impact Assessment, Invicta Mining Corp. S.A.C. ("2009 ΕΙΑ"), 06/10/2008, at Exhibit R-0047, p. 59. ↩

¹¹⁷ Environmental Impact Assessment, Invicta Mining Corp. S.A.C. ("2009 ΕΙΑ”), 06/10/2008, at Exhibit R-0047, p. 60. ↩

¹¹⁸ Environmental Impact Assessment, Invicta Mining Corp. S.A.C. ("2009 ΕΙΑ”), 06/10/2008, at Exhibit R-0047, p. 59 et seq. ↩

¹¹⁹ Environmental Impact Assessment, Invicta Mining Corp. S.A.C. ("2009 ΕΙΑ”), 06/10/2008, at Exhibit R-0047, p. 61. ↩

¹²⁰ Environmental Impact Assessment, Invicta Mining Corp. S.A.C. ("2009 ΕΙΑ”), 06/10/2008, at Exhibit R-0047, p. 61. ↩

¹²¹ MEM Resolution approving the EIA (SPA), 28/12/2009, at Exhibit C-7 (corrected translation), p. 4. Only the Lima Regional Mining Directorate did not show up for the hearing. ↩

¹²² Environmental Impact Assessment, Invicta Mining Corp. S.A.C. ("2009 ΕΙΑ”), 06/10/2008, at Exhibit R-0047, p. 554 (Chapter 10.6). ↩

¹²³ Framework Agreement (SPA), 22/10/2010, at Exhibit C-64 (Art. 5.2); 2017 Lacsanga Agreement (SPA), 18/07/2017, at Exhibit C-43 (Art. 8.6). ↩

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implementing it in February 2018, once it resumed its mine preparation and development activities.¹²⁴

69 For its part, the Consultation and Information Scheme was intended to keep the Rural Communities abreast of the Project's activities and their development. IMC implemented this scheme throughout the mine preparation and development phase, regularly meeting and consulting with all three Rural Communities.¹²⁵

70 Second, the Mine Closure Plan is another key socio-environmental management instrument which, according to Peruvian law, requires a separate CPP whereby the local population and authorities are given an opportunity to review and submit their views before a decision is made on its approval or disapproval.¹²⁶ IMC complied with this requirement.

71 Indeed, following the approval of its 2009 EIA, IMC prepared the corresponding CPP for its Mine Closure Plan, which the MEM approved on 14 March 2011.¹²⁷ IMC then conducted citizenship participation activities in the communities of Lacsanga, Santo Domingo and Parán to gather the local population's opinions in relation to its 2012 Mine Closure Plan, holding interviews and workshops with the participation of community leaders within the Project's area of direct influence.¹²⁸ Following these activities, and upon confirming that its comments had

¹²⁴ SSS, Monthly Report, Project, February 2018 (SPA), at Exhibit C-436, p. 5, p. 9, p. 10; SSS, Monthly Report, Project, March 2018 (SPA), at Exhibit C-430, p. 3; SSS, Monthly Report, Project, April 2018 (SPA), at Exhibit C-488, p. 5; SSS, Monthly Report, Project, May 2018 (SPA), at Exhibit C-452, p. 8; SSS, Monthly Report, Project, June 2018 (SPA), at Exhibit C-157, p. 8. ↩

¹²⁵ SSS, Monthly Report, Project: Informative workshop on agricultural technologies, October 2016 (SPA), at Exhibit C-149; IMC, Monthly Report, April 2018, at Exhibit C-235. ↩

¹²⁶ Counter-Memorial, 24/03/2022, p. 40 et seq. (para. 83); Supreme Decree No. 033-2005-EM, 14/08/2005, at Exhibit R-0008, p. 10 (Arts. 13 and 16). ↩

¹²⁷ MEM, Report No. 154-2012-MEM-DGAAM/LCD/MPC/RPP (SPA), 08/02/2012, at Exhibit C-417, p. 1 et seq. ↩

¹²⁸ MEM, Report No. 154-2012-MEM-DGAAM/LCD/MPC/RPP (SPA), 08/02/2012, at Exhibit C-417, p. 27. ↩

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been implemented,¹²⁹ the MEM approved the 2012 Mine Closure Plan on 17 February 2012.¹³⁰

72 As explained in Section 3.1 above, IMC subsequently revised its 2012 Mine Closure Plan, again complying with its CPP obligations. The MEM approved IMC's revised Mine Closure Plan on 25 October 2015.¹³¹

73 As demonstrated above, Lupaka and IMC (before and after it was acquired by Lupaka) complied with all legal requirements for the participation of the members of the communities of Lacsanga, Santo Domingo and Parán. IMC further contemplated in its Annual Operations Plan (“AOP”) for 2018, citizen participation activities such as public consultation and environmental monitoring.¹³² However, the Parán Community refused to participate in these activities.¹³³ As the citizen participation activities carried out by Lupaka throughout the life of the Project show, the company was committed to complying with Peruvian law and was respectful of the rights of the Rural Communities.

3.2.2 Lupaka was not obliged to reach an agreement with the Parán Community to develop the Project

74 The Claimant explained in its Memorial that it did not need the Parán Community's agreement to develop the Project because (i) the Project was located on land belonging to the Lacsanga and Santo Domingo Communities, not on Parán, and (ii) IMC had secured an access road to the Site through Lacsanga.¹³⁴ As explained in Section 3.1 above, Peru cannot deny that the Project was located on land belonging to the Lacsanga and Santo Domingo (not on Parán), and does not deny that IMC had secured an access road to the Site through Lacsanga road.¹³⁵ Peru further concedes

¹²⁹ MEM, Report No. 154-2012-MEM-DGAAM/LCD/MPC/RPP (SPA), 08/02/2012, at Exhibit C-417, p. 30. ↩

¹³⁰ MEM, Directorial Resolution No. 044-2012-MEM-AAM (SPA), 17/02/2012, at Exhibit C-489, p. 1 (Art. 1). ↩

¹³¹ MEM, Report 1005-2015 (SPA), 25/10/2015, at Exhibit C-490. ↩

¹³² SSS, Community Relations Annual Operating Plan, 2018 (SPA), at Exhibit C-397. ↩

¹³³ [Redacted] ↩

¹³⁴ Memorial, 01/10/2021, p. 25 (para. 74). ↩

¹³⁵ Counter-Memorial, 24/03/2022, p. 93 (para. 189). ↩

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that there is no express obligation under Peruvian law for mining companies (such as IMC) to reach an agreement with communities other than those holding rights over the land on which a mining project will be developed (such as Parán).¹³⁶

75 Despite the foregoing, Peru insists that IMC was required to reach an agreement with the Parán Community to develop the Project. It does so by referring to the notion of social license to operate, which it defines as "obtaining the ongoing and long-term support of local communities that are located within the project's purview".¹³⁷ Peru argues that "[s]ocial license principles are reflected in the legal framework applicable to all mining projects in Peru [...] [because] mining companies are required to ensure local community engagement and participation at every stage of a mining project".¹³⁸ On the basis of this, Peru then concludes that "[a]ccordingly, as a mining company operating in Peru, Claimant should have known that it would need to establish a long-term relationship, and secure agreements with all three of the rural communities affected by Claimants' mining project, including the Parán Community, in order to fulfil its obligations under Peruvian law".¹³⁹ Peru is clutching at straws.

76 Peruvian law does require that the EIA of a mining project contain certain social components for the benefit of the communities in the project's area of direct influence. I.e., a community development plan, a community relations programme, a social concertation plan, a social investment schedule and a social impact monitoring schedule. Peruvian law also requires mining companies to carry out the consultation processes described in the previous Section. However, nowhere does Peruvian law require that mining companies must reach an agreement with the communities in the area of direct influence of a mining project to be able to develop it. Although Peru suggests that such a requirement is embodied in Peruvian law, it is not. That should be the end of the matter.

¹³⁶ Counter-Memorial, 24/03/2022, p. 25 et seq. (para. 55); Witness Statement of Andrés Fernando Trigoso, 11/03/2022, p. 9 (para. 28). ↩

¹³⁷ Counter-Memorial, 24/03/2022, p. 25 et seq. (para. 55). ↩

¹³⁸ Counter-Memorial, 24/03/2022, p. 41 (paras. 84-85) (emphasis added). ↩

¹³⁹ Counter-Memorial, 24/03/2022, p. 41 (para. 85). ↩

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77 Rather, Peruvian law only requires mining companies to reach an agreement with the communities holding rights over the land on which a mining project is to be developed. In this regard, Article 23 of the Mining Procedures Regulation states clearly that:

"[...] The concession title does not authorise by itself to carry out exploration or exploitation mining activities, but previously the concessionaire must: [...]

c) Obtain permission for the use of land by prior agreement with the owner of the terrain or the completion of the administrative easement procedure, in accordance with the regulations on the matter.”¹⁴⁰

78 In other words, whether or not a mining company is required to reach an agreement with a certain community depends on whether it owns all or part of the land where the mining project is located. IMC complied with Peruvian law, as it signed surface agreements with the Lacsanga and Santo Domingo Communities to develop the Project.¹⁴¹ Nevertheless, Lupaka tried relentlessly to obtain an agreement with the Parán Community, but in light of Parán's bad faith, was unable to do so.

79 Peru relies on almost identical statements included in (i) an SRK report prepared in April 2012¹⁴² and (ii) a Joint Disclosure Booklet prepared by Lupaka and AAG in August 2012¹⁴³ to contend that Lupaka had

¹⁴⁰ Supreme Decree No. 008-91-TR, Approval of the Regulation of Mining Procedures (SPA), at Exhibit C-228, p. 22 et seq. (Art. 23) (emphasis added). ↩

¹⁴¹ 2017 Lacsanga Agreement (SPA), 18/07/2017, at Exhibit C-43; Public Deed for the 2010 SD Land Use Agreement (SPA), 22/10/2010, at Exhibit C-63; Framework Agreement (SPA), 22/10/2010, at Exhibit C-64; Contract for the Constitution of Mining Easement between IMC and the Santo Domingo Community (SPA), 22/10/2010, at Exhibit C-65. ↩

¹⁴² Counter-Memorial, 24/03/2022, p. 64 et seq. (para. 133) ("[n]egotiations regarding surface rights agreements are ongoing with the communities of Parán and Lacsanga as agreements with all three communities are required to initiate construction and operation"); 2012 SRK Report, at Exhibit C-58. ↩

¹⁴³ Counter-Memorial, 24/03/2022, p. 74 et seq. (para. 150) ("[n]egotiations regarding surface rights agreements are ongoing with the communities of Parán and Lacsanga as agreements with all three communities are required to initiate construction and operation of a mine."); Joint Disclosure Booklet between Lupaka Gold Corp. and Andean American Gold Corp. ("Joint Disclosure Booklet"), 22/08/2012, at Exhibit R-0041. ↩

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acknowledged the need to reach an agreement with Parán to develop the Project.¹⁴⁴ But these documents were prepared on the basis of AAG's original "business plan", which assumed that the Project would be developed on Parán's land and produce at a rate of 5,100 t/day.¹⁴⁵ The Project's scope was significantly reduced as per IMC's revised mining plan, which was approved by the MEM on 11 December 2014¹⁴⁶ and did not entail activities on Parán. Indeed, IMC's revised mining plan only assumed exploitation of the Victoria Uno concession and, more specifically, of the part of such concession which is located on land belonging to the Lacsanga and Santo Domingo communities.¹⁴⁷

80 For the foregoing reasons, Peru's contention that IMC was required to reach an agreement with the Parán Community to develop the Project is baseless and should be dismissed.

3.3 Lupaka could have easily obtained the few outstanding regulatory approvals it needed to start exploitation

81 According to Peru, the Claimant's “suggestion that the mine was virtually ready to exploit [when the Blockade was set up] is [...] unfounded and incorrect" because Lupaka was missing certain regulatory approvals needed to start exploitation.¹⁴⁸ Specifically, Peru contends that “there were still several outstanding regulatory steps that Invicta needed to take before [it] could bring the Invicta mine into its exploitation stage”.¹⁴⁹ Peru lists these outstanding approvals as (i) passing the MEM's final inspection (Section 3.3.1),¹⁵⁰ (ii) implementing a water management system, which had to be certified by the Directorate of Environmental Assessment for

¹⁴⁴ Counter-Memorial, 24/03/2022, p. 65 (para. 134). ↩

¹⁴⁵ Second Witness Statement of Gordon Ellis, 23/09/2022, p. 13 (para. 26); Witness Statement of Julio F. Castañeda, 01/10/2021, p. 6 et seq. (paras. 12 and 15); 2012 SRK Report, at Exhibit C-58, p. ii and p. 129. ↩

¹⁴⁶ MEM Report and Resolution approving the Mining Plan (SPA), 11/12/2014, at Exhibit C-9 (corrected translation). ↩

¹⁴⁷ See IMC map - Community boundaries according to Peruvian registry (SPA), at Exhibit C-486. ↩

¹⁴⁸ Counter-Memorial, 24/03/2022, p. 72 (para. 146). ↩

¹⁴⁹ Counter-Memorial, 24/03/2022, p. 148 (para. 292). ↩

¹⁵⁰ Counter-Memorial, 24/03/2022, p. 148 et seq. (para. 293). ↩

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Natural and Productive Resource Projects (the “DEAR") (Section 3.3.2)¹⁵¹ and (iii) obtaining the MEM's approval of the amendments to IMC's Mine Closure Plan¹⁵² (Section 3.3.3). As explained below, some of these approvals were not required for the Project to enter the production phase, and IMC could have easily obtained the others.

3.3.1 The Invicta mine was prepared to pass the MEM's final inspection

82 The Claimant agrees with Peru's contention that the Invicta mine had to pass a final pre-exploitation inspection by the MEM before it could enter exploitation.¹⁵³

83 On 6 September 2018, IMC requested the MEM to schedule such inspection as IMC had completed the mine preparation and development works.¹⁵⁴ Peru does not deny that IMC made this request, but contends that "[t]he reasons [sic] that Claimant's September 2018 request did not result in an inspection was because Claimant's submission was missing a critical certification and was therefore insufficient”.¹⁵⁵ This is misleading.

84 The contemporaneous exchanges between IMC and the MEM clearly show that the MEM's final inspection could not be carried out due to the Blockade:

1. i) On 6 September 2018, IMC requested the MEM to conduct its final pre-exploitation inspection. Specifically, IMC "request[ed] the

¹⁵¹ Counter-Memorial, 24/03/2022, p. 151 (para. 299). ↩

¹⁵² Counter-Memorial, 24/03/2022, p. 150 (para. 297). Peru only refers to these three issues as outstanding before IMC could obtain an exploitation license for the Project. Peru states once in passing that IMC required to have its Third ITS approved before it could move to exploitation. As explained in Section 3.3.2 below, this is wrong. See Supreme Decree No. 020-2012-EM (SPA), 06/06/2012, at Exhibit C-491, p. 2 et seq. (Art. 75(2)) and Supreme Decree No. 008-91-TR, Approval of the Regulation of Mining Procedures (SPA), at Exhibit C-228, p. 22 et seq. (Art. 23). ↩

¹⁵³ Memorial, 01/10/2021, p. 28 (para. 86); Witness Statement of Julio F. Castañeda, 01/10/2021, p. 9 (para. 22). ↩

¹⁵⁴ Letter from IMC to MEM (SPA), 06/09/2018, at Exhibit C-81; Counter-Memorial, 24/03/2022, p. 149 (para. 294). ↩

¹⁵⁵ Counter-Memorial, 24/03/2022, p. 149 (para. 295). ↩

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General Mining Directorate to order an inspection of our INVICTA UEA in order to verify that our preparation and development work has been carried out in accordance with the approved Mining Plan”.¹⁵⁶

1. ii) On 17 October 2018, before the MEM responded to IMC's request, IMC informed the MEM that the Parán Community had set up the Blockade and requested the postponement of the final inspection "for reasons of force majeure".¹⁵⁷
2. iii) On 23 October 2018, the MEM approved IMC's request for the postponement "due to [reasons of] force majeure” and indicated that before the inspection could take place, IMC must present a “certificate of quality assurance of the construction and/or installations”.¹⁵⁸

85 As these exchanges show, before the date of the inspection was scheduled, the MEM agreed to postpone it due to the Blockade. The MEM alerted IMC in the same letter that it had to submit the certificate of quality assurance. IMC sent this certification to the MEM on 20 December 2018.¹⁵⁹ A new date was set for the inspection i.e., from 23 to 25 January 2019.¹⁶⁰ However, the real reason why it could not take place continued, namely the persistence of the Blockade.¹⁶¹

86 Tellingly, other than its focus on the certificate of quality assurance, Peru has not provided any reason to suggest that IMC would not have passed the MEM's final inspection.

3.3.2 The Project's water management system was ready to be certified

87 Peru contends that one of the “outstanding regulatory steps that Invicta needed to take before [it] could bring the Invicta Mine into its exploitation

¹⁵⁶ Letter from IMC to MEM (SPA), 06/09/2018, at Exhibit C-81, p. 1. ↩

¹⁵⁷ Letter from IMC to MEM (SPA), 17/10/2018, at Exhibit C-11; MEM Resolution (SPA), 23/10/2018, at Exhibit C-82, p. 1 (para. 1.7). ↩

¹⁵⁸ MEM Resolution (SPA), 23/10/2018, at Exhibit C-82, p. 2. ↩

¹⁵⁹ Letter from IMC to MEM (SPA), 20/12/2018, at Exhibit C-492. ↩

¹⁶⁰ MEM Report fixing a date and inspector to carry out the final audit to enter the exploitation phase (SPA), 17/01/2019, at Exhibit C-231 (corrected translation), p. 2. ↩

¹⁶¹ Letter from IMC to MEM (SPA), 22/01/2019, at Exhibit C-232. ↩

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stage" was to implement a water management system, which had to be certified by the DEAR.¹⁶² This requirement was first imposed by the MEM in August 2015,¹⁶³ and was confirmed by the Directorate of Inspection and Application of Incentives under the Ministry of Environment (“DFAI”) following the Invicta mine inspection conducted from 27 February to 4 March 2018.¹⁶⁴ This inspection took place shortly after IMC resumed its mine preparation and development activities at the mine.

88 The MEM indeed instructed IMC that "[p]rior to the start of the mining activities of the ‘Invicta' mining project, the company must implement the alternative mine water management system [...], which must have the corresponding environmental certification”.¹⁶⁵ The purpose of this water management system was to ensure that mine effluents were effectively reused for Invicta's mining activities and not discharged into nearby streams.¹⁶⁶ IMC built its water management system in mid-2018 and communicated the completion of this work to the DEAR on 29 August 2018.¹⁶⁷

89 Indeed, as explained by Mr Castañeda:

“in mid-2018 [IMC] implemented a water management system inside the mine. This system consisted of two ponds, the first one for sedimentation and the second next to it for storage. The effluent from the mine entered the first pond where it sedimented and then passed - clarified and through 3 pipelines to the second pond, from where it was pumped to the upper levels of the mine to be reused in the development works. The ponds were located at the

¹⁶² Counter-Memorial, 24/03/2022, p. 151 (para. 299). ↩

¹⁶³ Counter-Memorial, 24/03/2022, p. 151 (para. 299); Report No. 099-2015-MEM-DGM-DTM/PM (attaching Resolution No. 0384-2015-MEM-DGM/V, 26 August 2015), 20/08/2015, at Exhibit R-0168. ↩

¹⁶⁴ Counter-Memorial, 24/03/2022, p. 89 et seq. (para. 181). ↩

¹⁶⁵ Report No. 099-2015-MEM-DGM-DTM/PM (attaching Resolution No. 0384-2015-MEM-DGM/V, 26 August 2015), 20/08/2015, at Exhibit R-0168, p. 3 (Section III). ↩

¹⁶⁶ Report No. 099-2015-MEM-DGM-DTM/PM (attaching Resolution No. 0384-2015-MEM-DGM/V, 26 August 2015), 20/08/2015, at Exhibit R-0168, p. 2 (Section II). ↩

¹⁶⁷ MINAM, Report on ITS No. 3 (SPA), 12/11/2018, at Exhibit C-226, p. 24. ↩

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3400 level, which is the lowest level of the mine. The water was pumped to the upper levels as all the development was planned upwards."¹⁶⁸

90 The structure of this system is shown in the image below:¹⁶⁹

Figura 6: Vista en planta de las pozas

[Image of a technical drawing of two ponds with pipes and a pump. Labels on the drawing read: "ALMACENAMIENTO DE AGUA VOLUMEN: 25M3", "BOMBA HIDROSTAL 30 HP", "TUBERIA HDPE", "POZA DE SEDIMENTACION VOLUMEN: 30M3", "ZONA DE ENTRADA", "CUNETA".]

Fuente: Tercer ITS UM Invicta

91 IMC's water management system had two main purposes. First, to ensure that mine effluents complied with the Maximum Permissible Limits (“MPLs”), i.e., the parameters to measure the concentration level of chemical and biological elements in the effluents.¹⁷⁰ IMC achieved this through a sedimentation process allowing for the removal of solid particles from the water (first pond). IMC regularly cleaned the ponds to remove the accumulated sludge which was then transported to a duly conditioned

¹⁶⁸ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 23-24 (para. 55). ↩

¹⁶⁹ MINAM, Report on ITS No. 3 (SPA), 12/11/2018, at Exhibit C-226, p. 23. ↩

¹⁷⁰ See MINAM website, Definition of Maximum Permissible Limit (MPL) (accessed on 16/09/2022) (SPA), at Exhibit C-493. ↩

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site.¹⁷¹ Second, to ensure that all mine effluents were reused in Invicta's mining activities and not discharged into nearby streams.

92 After implementing its water management system, IMC requested external consultant J. Ramón del Perú S.A.C. to take samples of the mine effluents and run laboratory tests to confirm that they complied with the MPLs. In June 2018, J. Ramón confirmed this was the case, which IMC transmitted to the OEFA.¹⁷² The Huaura Local Water Authority (“ALA") further conducted an inspection of the mine on 4 July 2018, confirming that no mine effluents reached the Parán Community's water sources,¹⁷³ and therefore that IMC's water management system effectively allowed for the reuse of all mine effluents in IMC's mining activities. On 29 August 2018, IMC informed the DEAR that it had implemented its water management system.¹⁷⁴

93 As the above shows, contrary to Peru's allegation,¹⁷⁵ by August 2018, IMC had implemented its water management system and the ALA had confirmed that it was effective. The DEAR had also been informed that the water management system was in place. The only outstanding issue was to obtain the certification of such system from the DEAR, which was a mere formality considering that the Invicta mine effluents had been shown to comply with the MPLs and were fully reused in the Project's mining activities.¹⁷⁶

¹⁷¹ IMC, Statement of Objections (SPA), 20/06/2018, at Exhibit C-406, p. 16. ↩

¹⁷² MINAM, Directorial Resolution No. 2203-2018-OEFA/DFAI (SPA), 27/09/2022, at Exhibit C-399, p. 16 (para. 42). ↩

¹⁷³ ANA, Technical Report No. 048-2018-ANA-AAA.CF.-ALA H/KHR (SPA), 13/07/2018, at Exhibit C-408, p. 8 (paras. 5.2 and 6.3). ↩

¹⁷⁴ MINAM, Report on ITS No. 3 (SPA), 12/11/2018, at Exhibit C-226, p. 24. ↩

¹⁷⁵ Counter-Memorial, 24/03/2022, p. 152 (para. 301). ↩

¹⁷⁶ Ministerial Resolution No. 527-2017-MEMDM, 21/12/2017, at Exhibit C-494; Draft Supreme Decree to Modify Supreme Decree No. 033-2005-EM, 21/12/2017, at Exhibit C-495; Draft Supreme Decree to Modify Supreme Decree No. 033-2005-EM (explanatory memorandum), 21/12/2017, at Exhibit C-496; Supreme Decree No. 013-2019-EM with annex (SPA), 29/05/2019, at Exhibit C-497; Supreme Decree No. 013-2019-EM (explanatory memorandum), 29/05/2019, at Exhibit C-498; Supreme Decree No. 040-2014-EM, 05/11/2014, at Exhibit C-499; Draft Supreme Decree No. 040-2014-EM (explanatory memorandum), 05/11/2014, at Exhibit C-500. ↩

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94 Peru contends that "[t]o receive the appropriate environmental certification from the [DEAR] [of its water management system], the Invicta mine needed approval of its Third ITS".¹⁷⁷ Peru adds that the DEAR found IMC's water management system to be deficient and further "rejected Invicta's Third ITS because [IMC] hadd [sic] not provided sufficient technical information to support the development and use of the new water management system.”¹⁷⁸ These allegations are baseless.

95 As noted above, IMC built its water management system in mid-2018. IMC requested the certification of this system as part of its Third ITS, which it submitted to the DEAR on 29 August 2018.¹⁷⁹ IMC provided all technical details concerning its water system together with its Third ITS application.¹⁸⁰ The DEAR issued its report on IMC's Third ITS on 12 November 2018. With respect to the water management system, the DEAR stated that the ITS is not the appropriate management instrument for certifying mining components that had been already built,¹⁸¹ thus making it clear that the certification of IMC's water management system was not within the scope of the approval process for the Third ITS.

96 The DEAR's decision shows that the certification of IMC's water management system was not linked to or impacted by the approval (or not) of IMC's Third ITS as both issues follow separate procedures. Therefore, contrary to Peru's contention, the certification of IMC's water management system was not conditioned to the approval of IMC's Third ITS.

97 Equally baseless is Peru's contention that the DEAR refused to certify IMC's water management system because it found that such system was

¹⁷⁷ Counter-Memorial, 24/03/2022, p. 151 (para. 300). ↩

¹⁷⁸ Counter-Memorial, 24/03/2022, p. 152 (para. 301). ↩

¹⁷⁹ MINAM, Report on ITS No. 3 (SPA), 12/11/2018, at Exhibit C-226, p. 1 (para. 1.2); MEM website, Definition of ITS Assessment (accessed on 16/09/2022) (SPA), at Exhibit C-501. ↩

¹⁸⁰ MINAM, Report on ITS No. 3 (SPA), 12/11/2018, at Exhibit C-226, p. 20 et seq. (Section 3.1.9.2.2). ↩

¹⁸¹ MINAM, Report on ITS No. 3 (SPA), 12/11/2018, at Exhibit C-226, p. 25 ("The information contained in the [Invicta] Third ITS [...] describes activities that are already underway; therefore, [these] should not be evaluated in this ITS") and p. 66 ("[IMC] is required to specify and describe the current mining effluent management system. It should be noted that the ITS is not a management tool for certifying constructed mine components.") (emphasis added). ↩

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deficient or IMC had provided insufficient information. The DEAR did not conduct a detailed assessment of IMC's water management system because, as noted above, it concluded that the Third ITS was not the correct proceeding to certify such system. Peru's assertion that IMC's water management system was deficient is further contradicted by the contemporaneous evidence, which shows that such system ensured that mine effluents comply with the MPLs and were fully reused in the Project's mining activities.¹⁸²

3.3.3 Lupaka did not need approval of the amendments to its Mine Closure Plan to start exploitation

98 Mr Castañeda explained in his first witness statement that one of the outstanding issues at Invicta when the Parán Community set up its illegal Blockade was to “secure the MEM's approval of an amendment to [IMC's] mine closure plan".¹⁸³ Peru relies solely on this statement to argue that Lupaka needed to obtain approval of the amendments to IMC's Mine Closure Plan "before [it] could bring the Invicta Mine into its exploitation stage".¹⁸⁴ This is incorrect.

99 Indeed, while it is true that the Claimant stated in its Memorial¹⁸⁵ that one of the outstanding issues before IMC could commence production was to obtain the MEM's approval of an amendment to IMC's mine closure plan, a closer look at the applicable regulations in Peru reveal that this was not the case.

100 According to Peru's Regulation of Mining Procedures (Supreme Decree No. 018-92-EM), mining concession holders such as IMC must have the MEM approve a Mine Closure Plan to secure an exploitation license from

¹⁸² MINAM, Directorial Resolution No. 2203-2018-OEFA/DFAI (SPA), 27/09/2022, at Exhibit C-399, p. 16 (para. 42); ANA, Technical Report No. 048-2018-ANA-AAA.CF.-ALA H/KHR (SPA), 13/07/2018, at Exhibit C-408, p. 8 (paras. 5.2 and 6.3). ↩

¹⁸³ Witness Statement of Julio F. Castañeda, 01/10/2021, p. 9 (para. 21). ↩

¹⁸⁴ Counter-Memorial, 24/03/2022, p. 148 (para. 292). ↩

¹⁸⁵ Memorial, 01/10/2021, p. 114 et seq. (para. 343). ↩

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the same authority.¹⁸⁶ Peru does not dispute this.¹⁸⁷ As explained in Section 3.1 above, the MEM approved IMC's Mine Closure Plan in 2012.¹⁸⁸

101 Furthermore, by the time of the installation of the Blockade, IMC had submitted and the MEM approved all legally required amendments to IMC's Mine Closure Plan, including to make it consistent with IMC's revised mining plan as approved by the MEM in 2014.¹⁸⁹

102 The procedure and timeframe for updating a mine closure plan is set out in Peru's Mine Closure Regulations (Supreme Decree No. 033-2005-EM). Article 20.1 of these Regulations states that the mining concession holder must update its mine closure plan for the first time 3 years after its approval, and then subsequently every 5 years.¹⁹⁰ IMC complied with this requirement. Indeed, IMC's Mine Closure Plan was approved on 17 February 2012¹⁹¹ and updated for the first time on 3 December 2015.¹⁹² The next update was due 5 years thereafter, i.e., in December 2020, at the earliest. IMC could have therefore entered exploitation any time before December 2020 without requiring amending its Mine Closure Plan.

103 Peru contends that “[...] by November 2018 Invicta had failed to respond to the concerns expressed by the Ministry of Environment regarding the Invicta Project's Third ITS (submitted by Invicta), and the impact of those concerns on the approval of any amendments to Invicta's Mine Closure

¹⁸⁶ Supreme Decree No. 008-91-TR, Approval of the Regulation of Mining Procedures (SPA), at Exhibit C-228, p. 22 et seq. (Art. 23); Memorial, 01/10/2021, p. 25 et seq. (para. 76). ↩

¹⁸⁷ Counter-Memorial, 24/03/2022, p. 40 et seq. (para. 83). ↩

¹⁸⁸ MEM Report and Resolution approving ITS No. 1 (SPA), 09/04/2015, at Exhibit C-40, p. 2 (Section 3.6); Counter-Memorial, 24/03/2022, p. 72 (para. 145). ↩

¹⁸⁹ MEM Report and Resolution approving ITS No. 1 (SPA), 09/04/2015, at Exhibit C-40. ↩

¹⁹⁰ Supreme Decree No. 033-2005-EM (SPA), 14/08/2022, at Exhibit C-502, p. 14 et seq. (Art. 20): ("Amendments to the Mine Closure Plan. The Mine Closure Plan shall be subject to review and amendment in the following cases: 20.1 A first update after three (3) years have elapsed since its approval and subsequently after every five (5) years from the last modification or update approved by the authority"). ↩

¹⁹¹ MEM, Directorial Resolution No. 044-2012-MEM-AAM (SPA), 17/02/2012, at Exhibit C-489. ↩

¹⁹² Letter from MEM to Lupaka (SPA), 04/12/2015, at Exhibit C-503, p. 22. ↩

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Plan.”¹⁹³ This is irrelevant for the same reasons explained above, but also because, as Peru's own case concedes, the Third ITS had not yet been approved by the time of the Blockade. Indeed, according to Peruvian law, a modification of the Mine Closure Plan would only be needed following approval of the Third ITS, and such modification can be made as part of the next legal update of the Mine Closure Plan.¹⁹⁴

* * *

104 Based on the foregoing, the Tribunal shall conclude that the Project was ready to enter exploitation when the Parán Community set up its illegal Blockade. Indeed, IMC was ready to pass the final MEM inspection, which it had already requested the MEM to schedule, and its water management system met the conditions to be certified by the DEAR.

3.4 Absent the Blockade, Lupaka would have had sufficient processing capacity to comply with its gold repayment obligations under the PPF Agreement

105 Peru contends that:

"[e]ven if Claimant had been successful at advancing the Invicta mining project to the exploitation phase, [it] still would have been unlikely to process ore at the rate necessary to satisfy the gold delivery obligations in the PPF Agreement [...] [because it] was having ore processing problems at four toll mills [being tested in mid-2018]".¹⁹⁵

106 Peru is incorrect.

107 Indeed, absent the Blockade, Lupaka would have acquired the Mallay processing plant from Buenaventura in March 2019, thus having sufficient

¹⁹³ Counter-Memorial, 24/03/2022, p. 151 (para. 298). ↩

¹⁹⁴ MINAM, Report on ITS No. 3 (SPA), 12/11/2018, at Exhibit C-226, p. 48 ("It is worth mentioning that according to Article 133 of the Mining Environmental Regulations, the [Third ITS] with the approval of the competent authority imply the consequent modification of the Closure Plan, which will be carried out in the corresponding Mine Closure Plan update, according to the legislation on the matter.") (emphasis added). ↩

¹⁹⁵ Counter-Memorial, 24/03/2022, p. 155 (para. 307). ↩

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processing capacity to comply with its gold repayment obligations under the PPF Agreement (Section 3.4.1). Even assuming arguendo that Lupaka would have needed to make gold repayments to Pandion for a few months before purchasing the Mallay unit, it could have easily done so by fine-tuning and improving the performance of the offsite processing plants being tested in mid-2018 (Section 3.4.2).

3.4.1 Lupaka would have acquired the Mallay processing plant in March 2019

108 In its Memorial, the Claimant explained that at the date of the Blockade, Lupaka had already reached an agreement with Buenaventura to purchase the entire Mallay production unit, including its processing plant, and with PLI to fund that transaction. Only the Mallay community's approval was missing for the transaction to proceed, which was obtained in March 2019.¹⁹⁶ In its Counter-Memorial, Peru repeatedly argues that the purchase of the Mallay plant was nothing but “hypothetical”,¹⁹⁷ without providing any evidence to suggest that this transaction would not have taken place absent the Blockade. This is clearly insufficient to rebut the Claimant's concrete demonstration that Lupaka would have purchased the Mallay processing unit in March 2019 absent the Blockade.

109 Mr Ellis provides an account of this in his second witness statement.¹⁹⁸ As already explained, by early October 2018, Lupaka had already reached an agreement with Buenaventura to purchase the entire Mallay production unit, including its processing plant, for a price fixed at USD 10.4 million plus VAT. A draft purchase and sale agreement had been prepared reflecting these terms.¹⁹⁹ Lupaka's purchase of the Mallay production unit was only contingent upon the transfer of the Mallay community's easement

¹⁹⁶ Memorial, 01/10/2021, p. 29 et seq. (paras. 91-94). ↩

¹⁹⁷ Counter-Memorial, 24/03/2022, p. 364 et seq. (paras. 780 and 782). ↩

¹⁹⁸ Second Witness Statement of Gordon Ellis, 23/09/2022, p. 16-18 (paras. 34-39). ↩

¹⁹⁹ Draft Mallay Purchase Agreement between Buenaventura and IMC (Final version) (SPA), 05/10/2018, at Exhibit C-287, p. 7 et seq. (Clause Fourth). ↩

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agreement with Buenaventura to IMC,²⁰⁰ which the community approved on 14 March 2019.²⁰¹

110 In parallel to its agreement with Buenaventura, Lupaka had also arranged for the financing of the Mallay transaction through a loan of approximately USD 13 million from PLI, a subsidiary of Pandion, which would be provided through a third amendment to the PPF Agreement.²⁰² By early October 2018, Lupaka and PLI had agreed on the financing terms of the Mallay transaction, which were reflected on a draft third amendment dated 5 October 2018.²⁰³

111 Hence, there can be no doubt that, absent the Blockade, Lupaka would have acquired the Mallay production unit, including its processing plant, from Buenaventura in March 2019, when the Mallay community approved the transfer of its easement agreement with Buenaventura to IMC.²⁰⁴ The Blockade was the only obstacle in the way of this transaction. Indeed, on 14 August 2019 – i.e., only a few days before Lupaka lost its investment – Buenaventura conveyed to Lupaka its disappointment about the Blockade and the ensuing failure of the Mallay transaction. As Mr Ellis reported in an internal memorandum prepared on the same day of his meeting with Buenaventura representatives:

"They [Mr Ortiz de Zevallos and Raul Benavides, from Buenaventura] expressed disappointment about the Paran blockade. Repeated that a Mallay/Invicta deal would have been the best deal for both groups [Lupaka and Buenaventura]. Would like to complete [the Mallay transaction] but must move

²⁰⁰ Email chain between Buenaventura, Pandion and Lupaka, 24/09/2018-09/10/2018, 09/10/2018, at Exhibit C-286. ↩

²⁰¹ Email from Buenaventura to Lupaka, 11/03/2019, at Exhibit C-233; Notarized Addendum to the Easement Contract between Buenaventura and the Mallay Community (SPA), 14/03/2019, at Exhibit C-289, p. 2 (Second Clause). ↩

²⁰² The PPF Agreement had been subject to two prior amendments. See Second Amended and Restated PPF Agreement, 02/08/2017, at Exhibit C-45; Amendment No. 2 to the Second Amended and Restated PPF Agreement, 06/02/2018, at Exhibit C-46. ↩

²⁰³ Draft Amendment and Waiver No. 3 to the Second Amended and Restated PPF Agreement (Final version), 05/10/2018, at Exhibit C-285. ↩

²⁰⁴ Memorial, 01/10/2021, para. 94. ↩

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quickly as they [Buenaventura] will close with someone else if we cannot complete."²⁰⁵

112 As explained by Micon, the Claimant's mining expert, the Mallay plant would have provided Lupaka with sufficient processing capacity to meet its gold repayment obligations under the PPF Agreement,²⁰⁶ which would most probably not have been due before January 2020.²⁰⁷

3.4.2 Lupaka could have easily resolved any issues with the offsite processing plants tested in mid-2018

113 In its Counter-Memorial, Peru refers to the ore processing issues that IMC found while testing some toll mills in mid-2018.²⁰⁸ It argues that absent the Blockade, these issues would have prevented Lupaka from securing enough ore processing capacity to start making gold repayments in December 2018, in accordance with the PPF Agreement's unamended schedule.²⁰⁹ This is incorrect.

114 The issues found by IMC while testing the offsite plants in mid-2018 would not have affected Lupaka's compliance with its gold repayment obligations under the PPF Agreement. This is because, as explained above, Pandion and Lupaka agreed in early October 2018 that gold repayments would only start after the purchase of the Mallay plant (hence, Lupaka would be able to rely on this plant to meet its commitments).²¹⁰ In any event, even assuming arguendo that Lupaka had to begin making gold repayments to Pandion in December 2018 (i.e., before the purchase of the Mallay plant), Lupaka would have been able to do so given that the issues found in the offsite processing plants being tested in mid-2018 – namely,

²⁰⁵ Memorandum of the Mallay Meeting between Buenaventura and Lupaka, 14/08/2019, at Exhibit C-504 (emphasis added). ↩

²⁰⁶ Expert Report of Christopher Jacobs, 21/09/2022, p. 40 et seq. (Section 6.2). ↩

²⁰⁷ Second Witness Statement of Gordon Ellis, 23/09/2022, p. 15 et seq. (paras. 32, 39); Draft Amendment and Waiver No. 3 to the Second Amended and Restated PPF Agreement (Final version), 05/10/2018, at Exhibit C-285. ↩

²⁰⁸ Counter-Memorial, 24/03/2022, p. 155 (para. 307). ↩

²⁰⁹ Counter-Memorial, 24/03/2022, p. 81 et seq. (para. 165); p. 146 et seq. (paras. 290-291); p. 173 (para. 341). ↩

²¹⁰ Second Witness Statement of Gordon Ellis, 23/09/2022, p. 15 (para. 32). ↩

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Coriland, San Juan Evangelista and Huancapeti II – could be solved with some basic remediation and without incurring high costs or delays.²¹¹

115 Mr Castañeda identified these limited issues in his first witness statement, namely operational errors, mechanical failures and adequate gold recovery.²¹² IMC could have easily addressed these issues by conducting further testing and refining internal procedures at the offsite processing plants. As explained by Mr Castañeda:

"We could have overcome the issues we identified when testing the offsite processing plants, i.e., Huancapeti, Coriland and San Juan Evangelista. It was a matter of refining internal procedures to avoid operational errors, repairing mechanical failures, which would not have meant delays or high costs, and the like. It should be borne in mind that we were testing these plants for the first time. It is normal to identify some obstacles and risks at the beginning, which can be solved by further testing and adjustments until optimal ore processing is reached.”²¹³

116 For example, adding more cyanide to the flotation process to ensure the proper separation of gold from less valuable components and its recovery in the concentrates would not have been problematic.²¹⁴ Similarly, adding an additional step to the process to recover gold from the tailings was a simple and low-cost measure which did not require stopping plant operations.²¹⁵

117 Lupaka carried out testing of these offsite processing plants in mid-2018. Absent the Blockade, Lupaka would have had enough time to fine-tune and improve their performance to ensure sufficient processing capacity was available, if needed, to meet its gold repayment obligations in the short term.

²¹¹ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 41 et seq. (para. 100); Expert Report of Christopher Jacobs, 21/09/2022, p. 40 (para. 125). ↩

²¹² Witness Statement of Julio F. Castañeda, 01/10/2021, p. 31 (para. 88). ↩

²¹³ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 41 (para. 100). ↩

²¹⁴ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 43 (para. 107). ↩

²¹⁵ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 43 (para. 108). ↩

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4 LUPAKA ACTED DILIGENTLY AND IN GOOD FAITH TO REACH AN AGREEMENT WITH THE RURAL COMMUNITIES

118 Unsurprisingly, Peru blames the Claimant for the loss of its investment in the Project. Specifically, it argues that IMC's CR Team lacked the requisite experience to adequately engage with the Parán Community and failed to take a constructive approach during its negotiations with this community.²¹⁶ Peru further contends that the Claimant should have known that reaching an agreement with the Rural Communities would be challenging given IMC's breach (before it was acquired by Lupaka) of its obligations with said communities.²¹⁷ These attempts to blame the victim are baseless.

119 As an initial matter, in its effort to avoid liability, Peru suggests to this Tribunal that it is legitimate for a local community to conduct multiple armed invasions of a mine owned by a foreign investor to mine it for itself. That crude suggestion only can operate in a “post-truth” world where a State not only subverts notions of ESG but also baldly denies its international obligations. If Peru seriously considers that local communities like Parán can hold foreign investors at gunpoint if all of their increasingly baseless demands are not met, it should, concurrently concede liability, because it has admitted a breach of its obligations under the FTA. What it should not do is point its finger at the victim of armed violence.

120 Lupaka had the experience and resources to effectively engage, as it did, with the Rural Communities and develop the Project (Section 4.1). Lupaka did not inherit a bad relationship with the Rural Communities when it acquired the Project in 2012 (Section 4.2). IMC made diligent and good faith efforts to reach a sustainable agreement with the Parán Community, which, however, was not possible due to the latter's plan to exploit the mine and protect its marijuana business (Section 4.3).

²¹⁶ Counter-Memorial, 24/03/2022, p. 2 et seq. (paras. 5, 310). ↩

²¹⁷ Counter-Memorial, 24/03/2022, p. 73 et seq. (Section II.C.3.d.(i)). ↩

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4.1 Lupaka had the experience and resources to effectively engage with the Rural Communities

121 The Respondent's witness, Mr Nilton León, states that "Invicta's community relations team appeared to lack experience”.²¹⁸ On the back of this alleged inexperience, the State argues that "[the] Claimant failed to adequately manage its resources or to engage effectively with the local communities”²¹⁹ in the other mining projects that it has operated in Peru, thus failing to advance them. Peru and its witness are wrong.

122 IMC's CR Team was both qualified and experienced (Section 4.1.1). Lupaka's experience in the Crucero and Josnitoro projects is irrelevant to this dispute and, in any event, contradicts Peru's case (Section 4.1.2).

4.1.1 IMC's CR Team was both qualified and experienced

123 When Lupaka acquired IMC in late 2012, Mr Javier Herrera, an experienced community relations professional, was IMC's CR manager.²²⁰ Mr Herrera had been acting in that role for the prior owner for several years. Mr Herrera continued in this role until late 2014/early 2015, when he was gradually replaced by Mr Elías Vila. Mr Vila is a geological engineer who had over 15 years' experience working in social responsibility management and community relations in the extractive industry. Mr Vila had led community relations teams at the major mining company Hochschild, where he had successfully concluded surface agreements with local communities in the Selene, Pallancata and Inmaculada mining projects.²²¹

124 Messrs Herrera and Vila led IMC's outreach to the Rural Communities in the period leading up to September 2016. During that period they engaged with these communities and implemented various community projects, including with the Parán Community. For example, in 2013 and 2014, IMC supported infrastructure projects for the benefit of the Parán

²¹⁸ Witness Statement of Nilton César León Huerta, 22/03/2022, p. 23 et seq. (Section II.C.(i)). ↩

²¹⁹ Counter-Memorial, 24/03/2022, p. 56 et seq. (para. 118). ↩

²²⁰ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 14-15 (para. 33). ↩

²²¹ Elías Vila Núñez CV, at Exhibit C-505. ↩

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Community, and donated food and medicine to the community.²²² In 2015 and 2016, IMC made further donations,²²³ reached out to the authorities of the Parán Community and held briefings on the Project with community members.²²⁴

125 In September 2016, IMC hired SSS, a company specialised in social development and community relations to intensify community relations efforts at the Project.²²⁵ The SSS team was led by Mr Rómulo Zarauz, a sociologist with significant experience in dealing with rural communities and sustainable development issues. [Redacted] [Redacted] [Redacted] [Redacted] [Redacted]

126 Contrary to Peru's suggestion that “Invicta's community relations team appeared to lack experience",²²⁷ the SSS was a capable and experienced team with a track record. Indeed, its members had worked together on several mining projects before working for IMC, some much larger than the Invicta project. On those projects the team had engaged effectively with local communities, signed agreements, and implement community relations plans. [Redacted] these projects included:²²⁸

²²² Lupaka Gold Corp., 2013 Annual Report, at Exhibit AC-49, p. 38; Letter from IMC to the Parán Community and Parán Educational Institution (Jorge Basadre School) (SPA), 01/12/2014, at Exhibit C-381; Letter from IMC to the Parán Community, Educational Institution of Parán (Colegio Jorge Basadre) (SPA), 01/12/2014, 01/12/2014, at Exhibit C-382; Letter from IMC to the Parán Community (SPA), 17/11/2014, at Exhibit C-383; Letter from IMC to the Parán Community (SPA), 07/05/2015, at Exhibit C-384. ↩

²²³ IMC, CR Team Report No. 05-2015/RRCC, May 2015 (SPA), at Exhibit C-386, p. 1 et seq. ↩

²²⁴ Letter from IMC to the Parán Community (SPA), 12/03/2016, at Exhibit C-387; Letter from IMC to the Parán Community (SPA), 05/11/2015, at Exhibit C-388; Letter from IMC to the Parán Community (SPA), 30/06/2016, at Exhibit C-389; IMC, CR Team, Report No. 10-2015-RRCC, January 2015 (SPA), at Exhibit C-390, p. 2. ↩

²²⁵ Second Witness Statement of Gordon Ellis, 23/09/2022, p. 14 (para. 30). ↩

²²⁶ [Redacted] ↩

²²⁷ Witness Statement of Nilton César León Huerta, 22/03/2022, p. 23 et seq. (Section II.C.(i)). ↩

²²⁸ [Redacted] Mr Estrada participated in all these projects, while Mr Zarauz participated in two of them. ↩

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1. i) The Yauricocha mining project, located in the Lima – Yauyos – Alis – San Mateo region. In 2010 and 2011, the SSS team negotiated and signed agreements with the communities of Alis, Tomás, Huancachi and Tinco to comply with outstanding commitments from the mining company.
2. ii) The Chancay mega-port project, located in the Lima – Chancay region. In 2010 and 2011, the SSS team negotiated and signed agreements with three associations of informal pig producers for their resettlement. The area that was released was then used as a boarding or parking area for the project's units.
3. iii) The Mario project, located in the Junín – Chongos Altos region. In 2011 and 2012, the SSS team negotiated and signed agreements with the communities of Palmayoc and Llamapsillón for the execution of mining exploration works.
4. iv) The Accha, Dolores and Yanque projects, three different projects located in the Cusco – Accha – Colquemarca region. In the 2010 - 2013 period, the SSS team negotiated and signed agreements with the communities of Parcco, Yanque and Pfocorohuay for the execution of mining exploration works.
5. v) The Santo Domingo, Taucane and Quenamari projects, located in the Puno - Ayaviri – Carabaya – Azangaro region. In 2014 and 2015, the SSS team mapped the social actors in the areas of influence of the projects (ten districts), prepared three proposals for local economic development, carried out one socio-economic study and executed the mining company's community relations plan to facilitate the execution of mining exploration activities.
6. vi) In southern, northern, and central Peru, in 2016 and 2017, the SSS team negotiated and resolved the social problems of more than 30 stalled telecommunications projects, achieving the installation and commissioning of antennas.

127 The SSS team was well equipped to engage effectively with the Rural Communities, as it did, reaching agreements with the Lacsanga²²⁹ and

²²⁹ 2017 Lacsanga Agreement (SPA), 18/07/2017, at Exhibit C-43. ↩

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Santo Domingo Communities.²³⁰ The efforts of the SSS team to reach a similar agreement with the Parán Community failed because, as demonstrated in Section 2 above, this community sought to exploit the mine – which it continues to do to the present day – and protect its marijuana business.

128 Peru's authorities never complained of IMC's CR Team. The only time Peru conveyed a request to IMC in relation to its CR Team was after the WDS team accessed the Site on 14 May 2019. At that time, the State conveyed the Parán Community's request that IMC restructure its CR Team as a condition to “re-establish" the dialogue process²³¹ – a request which, of course, was made in bad faith as Parán was only trying to justify its continuing illegal Blockade. Peru's complaint that IMC's CR Team was inexperienced is thus opportunistic. No amount of experience on part of IMC's CR Team would have been able to sate the Parán Community's extortionate demands.

4.1.2 Lupaka's experience in the Crucero and Josnitoro projects is irrelevant to the present dispute and, in any event, contradicts Peru's case

129 Peru contends that Lupaka's experience in the Crucero and Josnitoro mining projects shows poor business judgement and mismanagement of community relations, which led to the failure of these projects. Specifically, Peru argues that the Claimant “failed [in these two projects] to adequately manage its resources or to engage effectively with the local communities, leading to (i) an USD 11 million loss in the case of the Crucero project, [and] (ii) a terminated joint venture agreement in the case of the Josnitoro project [...]".²³² Peru is wrong in both respects.

130 In limine, Lupaka's experience in the Crucero and Josnitoro projects is irrelevant for this dispute, which pertains to the Invicta mining project.

²³⁰ Draft Addendum to Framework Agreement between the Santo Domingo Community and IMC (SPA), 15/09/2017, at Exhibit C-94. ↩

²³¹ Summary of the meeting between MEM, PCM, MININTER, Ombudsman's Office and IMC, 27/05/2019, at Exhibit C-18, p. 6 (item 18 (b)). ↩

²³² Counter-Memorial, 24/03/2022, p. 56 et seq. (para. 118). ↩

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Notwithstanding the foregoing, Peru's allegations are baseless. Lupaka's departure from the Crucero and Josnitoro projects was motivated by its decision to prioritise the Invicta project and does not reflect poor business judgment (Section 4.1.2.1). If anything, Lupaka's experience in the Crucero and Josnitoro projects shows that it effectively managed community relations (Section 4.1.2.2).

4.1.2.1 Lupaka's exit from the Crucero and Josnitoro projects was motivated by its decision to prioritise the Invicta project

131 By way of background, Lupaka acquired the Crucero project by means of two transactions executed in July 2010 and January 2012,²³³ and subsequently the Invicta project in a transaction executed in October 2012.²³⁴ In early 2013, Lupaka became interested in the Josnitoro project, an early exploration stage gold-copper project, executing in November 2013 a memorandum of understanding with the mining company Hochschild for 65% of the property,²³⁵ and in March 2014 an option contract reflecting the same terms.²³⁶

132 IMC commissioned several technical studies on the Invicta Project in 2014, with promising results. Indeed, in early 2014, IMC commissioned SRK Consulting to conduct two conceptual studies of the Invicta project, the first under a 1,000 t/d production scenario²³⁷ and the second under a 300 t/d scenario.²³⁸ These studies were important to assess the economic and technical feasibility of the Invicta project, and constituted a major departure from the much higher production rate of 5,100 t/d assumed by

²³³ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 4 (para. 4); Counter-Memorial, 24/03/2022, p. 57 (para. 119). ↩

²³⁴ Memorial, 01/10/2021, p. 7 (para. 22); Counter-Memorial, 24/03/2022, p. 63 (para. 130). ↩

²³⁵ Lupaka Gold Corp., "Lupaka Gold Announces Josnitoro Gold Project Option With Hochschild Mining PLC", 26/11/2013, at Exhibit R-0038; Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 4 (para. 4); Counter-Memorial, 24/03/2022, p. 58 (para. 121). ↩

²³⁶ Mining Assignment Agreement with Option to Purchase between Lupaka and Minera Ares S.A.C. (Hoschschild) (SPA), 31/03/2014, at Exhibit C-368. ↩

²³⁷ SRK, Conceptual Study Invicta Project: Preliminary Results (1,000 tpd), 22/01/2014, at Exhibit C-67. ↩

²³⁸ SRK, Conceptual Study Invicta Project: 300 tpd Option, 03/02/2014, at Exhibit C-37. ↩

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Invicta's prior owner.²³⁹ These studies demonstrated that by reducing the daily production rate and thus the CAPEX of the Invicta project, IMC could develop Invicta profitably.²⁴⁰ In early July 2014, IMC completed a resampling programme of mineralisation at the Invicta project, which also yielded promising results. As Lupaka expressed in a news release dated 10 July 2014, that "[t]his work confirms that the mineralization exposed in the existing workings is consistent with our understanding of the mineralization that we intend to initially target in our production plans for Invicta [....]"²⁴¹

133 However, as explained by Mr Ellis, the results from the exploration works at Crucero were not as promising:

"Although earlier studies had indicated that the mineralization was amenable to basic processing techniques, new metallurgical analyses carried out in 2013 revealed that a high percentage of the deposit consisted of “refractory" gold-bearing ores. This meant that the gold particles were encapsulated inside sulphide or arsenic minerals. In order to obtain a satisfactory recovery of these encapsulated gold particles, it was necessary to add an expensive step of very fine grinding before proceeding further with standard refining processes. In October 2013, we commissioned a conceptual study from SRK to determine the fundamental economics of what would now need to be a refractory project, including the feasibility of mining a portion of the defined Crucero mineralization. Unfortunately, the difficulties related to the low grade and high costs of processing the Crucero mineralization rendered it not economic to mine under the prevailing metal prices."²⁴²

²³⁹ 2012 SRK Report, at Exhibit C-58, p. ii. ↩

²⁴⁰ Witness Statement of Eric Edwards, 01/10/2021, p. 15 (para. 50). ↩

²⁴¹ Lupaka News Release, "Invicta Gold Project Mineralization Sample Results Include 6.38 Grams per Tonne Gold and 1.68% Copper at 6.4 Meters Width and over 105 Meters Length Exposed in Drift", 10/07/2014, at Exhibit C-70, p. 1. ↩

²⁴² Second Witness Statement of Gordon Ellis, 23/09/2022, p. 7-8 (para. 9). ↩

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134 As explained by Mr Castañeda, the promising results in the Invicta project also led Lupaka to prioritise it over the Josnitoro project:

"We had signed the Josnitoro option contract in March 2014, but that same year we decided to prioritise the Invicta Project. This was not inconsistent with the Josnitoro contract, which gave us a period of two years to work on the social front and reach an agreement with the communities. This gave us leeway to prioritize the Invicta Project. Hochschild was aware of our decision to prioritize the Invicta Project – I met regularly with its representatives to keep them abreast of our progress – and they agreed with our strategy.

As a consequence, our activities in the Josnitoro project were limited. In the exploration front, our geologists made visits to the Josnitoro site to confirm historical geologic mapping and conduct limited sampling programmes.²⁴³

135 As Mr Castañeda further explains in his second witness statement:

"The possibility of developing the Invicta Project with a low CAPEX and in a relatively short period of time led Lupaka to prioritise this project over Crucero and Josnitoro. It was a strategic business decision on where to direct the funds."²⁴⁴

136 Peru argues that Lupaka “failed to adequately manage its resources” in relation to the Crucero project,²⁴⁵ and also criticises Lupaka's decision to sell its interest in this project in November 2017.²⁴⁶ These criticisms are misguided, reflecting a lack of understanding of the business of junior mining companies and the context in which Lupaka decided to sell its interest in Crucero.

137 Indeed, one of the ways in which junior mining companies operate and develop their businesses is through the development of a portfolio of projects, which are evaluated over time and can be put aside, sold or

²⁴³ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 6 et seq. (paras. 8-9). ↩

²⁴⁴ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 5 et seq. (para. 6). ↩

²⁴⁵ Counter-Memorial, 24/03/2022, p. 56 et seq. (para. 118). ↩

²⁴⁶ Counter-Memorial, 24/03/2022, p. 58 (para. 120). ↩

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developed. This is the case of Lupaka, a junior mining company which held interests in various mining projects in Peru and decided to dispose of some of them – specifically, its interest in the Crucero project – to further its focus on the Invicta project.²⁴⁷

138 As explained by Mr Ellis in his second witness statement, the decision to sell Crucero provided funds to Lupaka which in turn unlocked further financing from Pandion.²⁴⁸ Mr Ansley, Lupaka's President and CEO, made the point as follows in November 2017, a few days after the sale of Crucero:

"[the sale of Crucero] bolsters our treasury as we focus on putting our Invicta Gold Development Project into production. [...] Proceeds from the sale of Crucero will be used to partially satisfy the remaining conditions precedent to receive Tranche 3 (US$ 2.5 million) of the Pre-Paid Forward Gold Purchase Agreement with PLI Huaura Holdings LP [to be used on the Invicta project] and to provide additional working capital flexibility as the Company proceeds with the development of the Invicta Gold Development Project".²⁴⁹

139 All in all, Peru's criticisms ignore that at all relevant times, Lupaka was led by individuals with extensive mining experience, including in Peru, such as Gordon Ellis, Eric Edwards and Julio Castañeda. Mr Ellis, Lupaka's founder and Chairman of its Board of Directors since 2011, has over 50 years' experience in corporate management and resource development and over 30 years' experience in the gold mining sector.²⁵⁰ Mr Edwards, Lupaka's president and CEO from 2011 to 2015, has over 40 years' experience in the gold mining sector and has managed mining projects in Australia, Argentina, Canada, Greece, Myanmar, Peru, and the United States.²⁵¹ Finally, Mr Castañeda, Lupaka Peru's president and

²⁴⁷ Second Witness Statement of Gordon Ellis, 23/09/2022, p. 7 (para. 8). ↩

²⁴⁸ Second Witness Statement of Gordon Ellis, 23/09/2022, p. 10-11 (para. 17). ↩

²⁴⁹ "Lupaka Gold Receives $5.7 Million in Cash and Securities From Sale of NonCore Asset to Goldmining”, NEWSWIRE, 21/11/2007, at Exhibit R-0035, p. 1. See also Second Witness Statement of Gordon Ellis, 23/09/2022, p. 8 et seq.f (paras. 11-19). ↩

²⁵⁰ Witness Statement of Gordon Ellis, 01/10/2021, p. 4 (paras. 2, 7-12). ↩

²⁵¹ Witness Statement of Eric Edwards, 01/10/2021, p. 4 (para. 8). ↩

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IMC's former general manager from 2013 to 2018, has over 35 years' experience in mining exploration and mining project management, having worked for leading mining companies such as Hochschild, Barrick Gold Corporation and Golden Minerals Company in different countries in the Latin American region.²⁵²

4.1.2.2 Lupaka effectively managed community relations at the Crucero and Josnitoro projects

140 Peru contends that Lupaka failed to "engage effectively with the local communities"²⁵³ of the Josnitoro project, which would have led Hochschild to terminate the option agreement signed with Lupaka for this project in April 2018.²⁵⁴

141 It is true that Lupaka did not reach agreements with the communities of Huancabamba, Cceñuharan and Umamarca, the communities in the area of the Josnitoro project, but this was the case because, as explained above, Lupaka's priorities changed in 2014 – not because of an alleged mismanagement of social relations. Indeed, as from 2014, Lupaka prioritized the development of the Invicta project over its other mining projects, including Josnitoro. As a consequence, as explained by Mr Castañeda in relation to the Josnitoro project:

"In the community relations front, we decided to keep only one person talking to the management, community members and artisanal miners of Huancabamaba, Cceñahuaran and Umamarca to maintain the relationship. We also held a few awareness-raising and informative meetings with those communities, including by participating in their assemblies. Our closest relationship was with the community of Huancabamaba, even coming to meet with some of its members in our Lima office. Our objective was to maintain

²⁵² Witness Statement of Julio F. Castañeda, 01/10/2021, p. 4 (paras. 5-6). ↩

²⁵³ Counter-Memorial, 24/03/2022, p. 56 et seq. (para. 118). ↩

²⁵⁴ Counter-Memorial, 24/03/2022, p. 59 (para. 123). ↩

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some presence and contact in the area, but the funds were primarily earmarked for the development of the Invicta Project."²⁵⁵

142 The development of the Invicta Project extended beyond what was anticipated, which led Lupaka and Hochschild to sign a first addendum to the Josnitoro contract in November 2015 to extend by one year the deadline for Lupaka to reach an agreement with the local communities.²⁵⁶ IMC and Hochschild signed a second addendum in early 2017, extending for one more year the contract term.²⁵⁷ As noted by Mr Castañeda, Lupaka had established a close relationship with the community of Huancabamaba. Lupaka would be able to dedicate more time and resources to engage with the other communities of the Josnitoro project if it decided to pursue it, although it did not do so.²⁵⁸

143 When IMC secured an access road to the Invicta project through Lacsanga in July 2017, it cleared a major hurdle to exploitation.²⁵⁹ IMC made a proposal to Hochschild in early 2018 to extend for one more year the contract term of the Josnitoro project. Hochschild did not accept IMC's proposal, which led to the termination of the option agreement.²⁶⁰ Such a decision was not a reflection of bad management of community relations by Lupaka as the Respondent alleges, but the reality that Lupaka was focussing on the Invicta project instead at that time.²⁶¹

144 Lupaka's ability to effectively engage with local communities is further confirmed by its track record with the Crucero project, where Lupaka was able to extend its exploration agreement for an additional 4 years (2013-

²⁵⁵ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 6-7 (paras. 8-9). ↩

²⁵⁶ Mining Assignment Agreement with Option to Purchase between Lupaka and Minera Ares S.A.C. (Hoschschild), First Addendum (SPA), 20/11/2015, at Exhibit C-370, p. 5 (Clause 2.2); Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 7 (para. 10). ↩

²⁵⁷ Mining Assignment Agreement with Option to Purchase between Lupaka and Minera Ares S.A.C. (Hoschschild), Second Addendum (SPA), 28/04/2017, at Exhibit C-371, p. 2 et seq. (Clause 2.2). ↩

²⁵⁸ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 7 (para. 11). ↩

²⁵⁹ 2017 Lacsanga Agreement (SPA), 18/07/2017, at Exhibit C-43. ↩

²⁶⁰ Lupaka Gold Corp., "Lupaka Provides Development Update; Commercial Production Expected in Q3/18", 17/04/2018, at Exhibit R-0039. ↩

²⁶¹ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 6 (para. 8). ↩

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2017) following successful negotiations with the community of Oruro, the community in the project's area, and the families of ancestral land holders.²⁶² Unlike the Josnitoro project, on which Lupaka embarked only in March 2014, Lupaka was able to dedicate more time and resources to engage with the communities of the Crucero project since it had purchased the latter several years before, between 2010 and 2012.²⁶³

4.2 Lupaka did not inherit a bad relationship with the Rural Communities when it acquired the Project in 2012

145 Peru contends that "relations between Invicta and the Rural Communities at the time that Claimant acquired Invicta were not what Claimant would have the Tribunal believe. Rather, evidence demonstrates that Invicta seriously mismanaged, and to varying degrees damaged, its relationship with the Rural Communities”,²⁶⁴ which led Lupaka to inherit a bad relationship with these communities. On this basis, Peru concludes that when Lupaka acquired the Project, “[it] knew or should have known that developing strong relationships and agreements with the Rural Communities would be challenging".²⁶⁵ This backward-looking statement is without foundation.

146 Lupaka did not inherit a bad relationship with the Rural Communities when it acquired the Project. Indeed, the Lacsanga Community supported the Project from the beginning of Lupaka's tenure of the mine (Section 4.2.1), the relationship with the Santo Domingo Community was friendly and cooperative (Section 4.2.2), and IMC was able to engage with the Parán Community from the beginning (Section 4.2.3).

²⁶² Lupaka News Release, "Lupaka Gold Completes Community Agreement and Provides Update on Community Relations and Government Developments", 23/07/2013, at Exhibit C-76, p. 1; Crucero Project, Exploration Campaign Results 2012 (SPA), at Exhibit C-369, p. 2 et seq. ↩

²⁶³ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 4 (para. 4); Counter-Memorial, 24/03/2022, p. 57 (para. 119). ↩

²⁶⁴ Counter-Memorial, 24/03/2022, p. 73 (para. 147). ↩

²⁶⁵ Counter-Memorial, 24/03/2022, p. 73 (para. 147). ↩

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4.2.1 The Lacsanga Community supported the Project from the beginning of Lupaka's tenure

147 Peru contends that:

"Invicta's previous owners had made promises to the Lacsanga Community which they had not kept, [...] [as a result of which] Invicta [under Lupaka's control] was forced to enter into a 'settlement agreement' with the Lacsanga Community on 31 March 2015, [accepting to pay PEN 500,000] in an attempt to repair its relationship with this community [....]"²⁶⁶

148 As already established in the Memorial, this is incorrect.

149 As Mr Castañeda explains in his second witness statement, when Lupaka acquired the Project in October 2012 there was, admittedly, not much of a relationship with the Lacsanga Community. This was the case because the Invicta project as conceived by its previous owner, AAG, was mostly on Parán land, and also because the company had wrongly assumed that land belonging to Lacsanga belonged to Santo Domingo.²⁶⁷

150 It is true that when IMC started negotiating with the Lacsanga Community in late 2014, the community demanded payment of PEN 500,000 (approximately USD 120,000) as compensation for the mining activities carried out by Invicta's prior owner before 2012.²⁶⁸ The community said that this amount had been agreed with Invicta's prior owner but not paid. In March 2015, IMC agreed to make this payment as a sign of good faith and with the aim to strengthen its bonds with the Lacsanga Community in the long term.²⁶⁹

151 The fact that the Lacsanga Community requested this payment does not mean that Lupaka inherited a bad relationship with this community. In addition, Lupaka did not make this payment to “repair” the relationship

²⁶⁶ Counter-Memorial, 24/03/2022, p. 76 (para. 153). ↩

²⁶⁷ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 11 (para. 21). ↩

²⁶⁸ Witness Statement of Julio F. Castañeda, 01/10/2021, p. 15 (para. 41). ↩

²⁶⁹ Agreement between IMC and the Lacsanga Community (SPA), 31/03/2015, at Exhibit C-42. ↩

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with this community. The reality was in fact quite the opposite. After participating in two Lacsanga General Assemblies held in November 2014²⁷⁰ and in meetings with Lacsanga's leadership and community members in early 2015, IMC confirmed the community's good predisposition to reach an agreement with the company for the development of the Project. As IMC's CR Team reported in February 2015:

"[t]he majority of the Lacsanga community members are in favour of development of the exploitation stage of the mine and want to work harmoniously with the company, they just require first to be paid what's owed to them to conclude that stage and only then meet to define the terms to start exploitation and once a mutually beneficial agreement is reached, a framework contract would be signed.”²⁷¹

152 Consistent with the above, IMC signed a surface agreement with the Lacsanga Community on 18 July 2017.²⁷²

4.2.2 IMC's relationship with the Santo Domingo Community was friendly and cooperative

153 Peru states that Invicta did not have a “strong relationship" with the Santo Domingo Community when Lupaka acquired the Project in 2012 because "it became necessary [for IMC] to renegotiate [its] agreement with the Santo Domingo de Apache Community in 2017 to increase the funds provided [] to that Community.”²⁷³ This is wrong and a non sequitur, as evidenced by the disconnection in the dates mentioned by Peru.

154 As Mr Castañeda explains in his second witness statement, from the moment Lupaka acquired the Project until 2017, the relationship with the

²⁷⁰ IMC, CR Team Report No. 011-2014-RRCC, November 2014 (SPA), at Exhibit C-373, p. 1. ↩
²⁷¹ IMC, CR Team Report No. 011-2014-RRCC, February 2015 (SPA), at Exhibit C-380, p. 3 et seq. (emphasis added). ↩
²⁷² 2017 Lacsanga Agreement (SPA), 18/07/2017, at Exhibit C-43. ↩
²⁷³ Counter-Memorial, 24/03/2022, p. 75 (paras. 152 and 154). ↩

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Santo Domingo Community was friendly and cooperative.²⁷⁴ Indeed, early on in Lupaka's tenure of the mine, IMC supported a pine plantation project to create a source of income for the Santo Domingo Community through the commercialisation of timber, and also a water management initiative which entailed the construction of irrigation canals and training on irrigation techniques.²⁷⁵ The pine plantation project eventually evolved into a global forestry and agricultural initiative.²⁷⁶ Thereafter, from 2014 to 2016, IMC donated medicines,²⁷⁷ provided financial and logistical support for the Santo Domingo Community's traditional celebrations²⁷⁸ and held informative meetings to keep the community's authorities abreast on Project developments.²⁷⁹

155 It is true that in 2017 there was some friction between IMC and Santo Domingo as some of the community members claimed that IMC had not fulfilled its obligations under the agreements signed with the community in October 2010. IMC disagreed with these allegations because the company's obligations under the Santo Domingo Framework Agreement were only triggered once the Project entered exploitation.²⁸⁰ However, since IMC sought to avoid tensions with the Santo Domingo Community where part of the Site was located, and was close to signing a surface

²⁷⁴ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 9-10 (para. 18). ↩
²⁷⁵ Lupaka Gold Corp., "Lupaka Gold Completes Community Agreement and Provides Update on Community Relations and Government Developments", 23/07/2013, at Exhibit R-0051. ↩
²⁷⁶ IMC, Internal Report on sustainable forestry development project in Santo Domingo Community (SPA), 21/08/2014, at Exhibit C-372. ↩
²⁷⁷ IMC, CR Team Report No. 011-2014-RRCC, November 2014 (SPA), at Exhibit C-373. ↩
²⁷⁸ IMC, CR Team Report No. 011-2014-RRCC, November 2014 (SPA), at Exhibit C-373; IMC, CR Team, Report No. 009-2014-RRCC, December 2014 (SPA), 31/12/2014, at Exhibit C-506; IMC, CR Team Report No. 05-2015/RRCC, May 2015 (SPA), at Exhibit C-386; Letter from Santo Domingo Community to IMC (SPA), 05/06/2015, at Exhibit C-375; Letter from Santo Domingo Community to IMC (SPA), 15/10/2016, at Exhibit C-376; Letter from IMC to Santo Domingo Community (SPA), 09/06/2017, at Exhibit C-377. ↩
²⁷⁹ IMC, Report on the meeting between IMC and Santo Domingo officials (SPA), 21/05/2017, at Exhibit C-378; Letter from IMC to Santo Domingo Community (SPA), 26/05/2017, at Exhibit C-379; IMC Memorandum, Training Programme Mining Project at Invicta Mining Camp (SPA), 08/07/2017, at Exhibit C-154. ↩
²⁸⁰ Framework Agreement (SPA), 22/10/2010, at Exhibit C-64, p. 3 (Art. 4). ↩

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agreement with the Lacsanga Community²⁸¹ (thereby clearing a major hurdle to exploitation), IMC proposed to negotiate with Santo Domingo an addendum to the 2010 Framework Agreement to increase the annual payments once the Project entered exploitation. This proposal was approved by the community.²⁸²

156 Beyond this incident, IMC had a good relationship with the Santo Domingo Community, as evidenced by the constant cordial communication between 2012 and 2016, and the further agreement reached in 2017.

4.2.3 IMC was able to engage with the Parán Community from the beginning of its investment until early 2018

157 Peru contends that "after acquiring Invicta, [Lupaka] learned from the Parán Community that Invicta's [prior owner] had breached [...] earlier Invicta-Parán agreements [....]"²⁸³ Peru further contends that “Claimant submitted proposals to settle these breaches with the Parán Community in 2016 and ended up paying the Community for Invicta's former noncompliance" in an attempt to repair the relationship with this community.²⁸⁴

158 It is true that in late 2016, as part of its negotiations with IMC, the Parán Community claimed certain breaches by Invicta's prior owner. These breaches had in fact created some tension, but this does not mean that Lupaka inherited a bad relationship with the Parán Community or that it could not overcome the situation. Indeed, IMC's CR Team was able to engage with the Parán Community and undertake projects in coordination with its leadership from the beginning of Lupaka's tenure of the Project. For example, in 2013 and 2014, IMC supported infrastructure projects and

²⁸¹ The surface agreement with the Lacsanga Community was signed on 18 July 2017. 2017 Lacsanga Agreement (SPA), 18/07/2017, at Exhibit C-43. ↩
²⁸² Letter from IMC to the Santo Domingo Community (SPA), 04/05/2018, at Exhibit C-93. ↩
²⁸³ Counter-Memorial, 24/03/2022, p. 77 (para. 157). ↩
²⁸⁴ Counter-Memorial, 24/03/2022, p. 77 (para. 157). ↩

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donated food and medicine to the Parán Community.²⁸⁵ In 2015 and 2016, IMC continued making donations to the community,²⁸⁶ engaged with the community leaders²⁸⁷ and also held briefings.²⁸⁸ These activities and projects were welcomed by the Parán Community and its authorities, who would usually extend invitations to IMC's CR Team and management to participate in Parán assemblies and other meetings²⁸⁹ or request further contributions when needed.²⁹⁰

159 As to the alleged breaches by Invicta's prior owner, IMC reached an agreement with the Parán Community to address them. Specifically, it was agreed that IMC would pay the community, as a sign of good faith, PEN 300,000 (approximately USD 80,000) to make up for such breaches, following which IMC and Parán would start negotiations to conclude an agreement in relation to the Project. IMC paid the PEN 300,000 in two instalments, the first one in December 2017 and the second one in January

²⁸⁵ Lupaka Gold Corp., 2013 Annual Report, at Exhibit AC-49, p. 38; Letter from IMC to the Parán Community and Parán Educational Institution (Jorge Basadre School) (SPA), 01/12/2014, at Exhibit C-381; Letter from IMC to the Parán Community, Educational Institution of Parán (Colegio Jorge Basadre) (SPA), 01/12/2014, 01/12/2014, at Exhibit C-382; Letter from IMC to the Parán Community (SPA), 17/11/2014, at Exhibit C-383; Letter from IMC to the Parán Community (SPA), 07/05/2015, at Exhibit C-384. ↩
²⁸⁶ IMC, CR Team Report No. 05-2015/RRCC, May 2015 (SPA), at Exhibit C-386, p. 1 et seq. ↩
²⁸⁷ Letter from IMC to the Parán Community (SPA), 09/01/2015, at Exhibit C-507; IMC, CR Team Report No. 011-2014-RRCC, February 2015 (SPA), at Exhibit C-380, p. 3 (Section 3). ↩
²⁸⁸ Letter from IMC to the Parán Community (SPA), 12/03/2016, at Exhibit C-387; Letter from IMC to the Parán Community (SPA), 05/11/2015, at Exhibit C-388; Letter from IMC to the Parán Community (SPA), 30/06/2016, at Exhibit C-389; IMC, CR Team, Report No. 10-2015-RRCC, January 2015 (SPA), at Exhibit C-390, p. 2. ↩
²⁸⁹ See .e.g., Letter from the Parán Community to IMC (SPA), 07/10/2016, at Exhibit C-422; Letter from the Parán Community to IMC (SPA), at Exhibit C-508; Letter from the Parán Community to IMC (SPA), 12/01/2017, at Exhibit C-509; Letter from the Parán Community to IMC (SPA), 15/02/2018, at Exhibit C-123. ↩
²⁹⁰ See e.g., Letter from the Berea-Parán Church to IMC (SPA), 27/07/2016, at Exhibit C-510; Letter from the Parán Community to IMC (SPA), 03/08/2016, at Exhibit C-511; Letter from the Parán Community to IMC (SPA), 05/10/2016, at Exhibit C-512; Letter from the Parán Community to IMC (SPA), 10/10/2016, at Exhibit C-513; Letter from the Parán Community to IMC (SPA), 16/10/2016, at Exhibit C-514; Letter from the Parán Community to IMC (SPA), 12/01/2017, at Exhibit C-515. ↩

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2018. Upon completion of the second payment, IMC's CR Team reported the following:

"During check delivery [to comply with the second and final payment] and signature of agreement with the community, much emphasis was put on what had been discussed and what is stated in the agreement, that the company is complying and PAYING the debt of the community, with the acknowledgement of its leadership. As a result of this payment and discussions with the CR team, [Parán's] leadership should be sending us an invitation letter first to request a visit to the project and second [to] start dialogue for a future negotiation for signature of an agreement between company and community” ²⁹¹

160 IMC hoped that the Parán Community would comply with its part of the deal, just as the Lacsanga Community had done after IMC paid compensation for the mining activities carried out by Invicta's prior owner.²⁹² Unfortunately, this was not the case. Indeed, IMC had a bitter surprise in May 2018, when it received a notarised letter from the Parán Community asking it to leave “their” lands – this, despite IMC's payment of the PEN 300,000 and that the company had repeatedly explained to Parán that the Project was not on its land.²⁹³ This was clear evidence that the Parán Community had ulterior motives not to reach an agreement with IMC and block the Project, which it did only a few months later – namely, to exploit the Invicta mine and protect its marijuana business.

4.3 IMC sought a sustainable agreement with the Parán Community, despite its nefarious motives

161 Peru contends that "[the] Claimant disregarded the critical importance of securing harmonious relations with local communities”,²⁹⁴ in particular with the Parán Community. According to Peru, IMC mismanaged its

²⁹¹ SSS, Monthly Report, Project, January 2018 (SPA), at Exhibit C-392, p. 6 (emphasis added). See also SSS, Monthly Report, Project, October 2017 (SPA), at Exhibit C-459, p. 6. ↩
²⁹² See supra Section 4.2.1. ↩
²⁹³ See e.g., C-122. ↩
²⁹⁴ Counter-Memorial, 24/03/2022, p. 1 (para. 2). ↩

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relationship with this community, and further marginalised it upon reaching a surface agreement with the Lacsanga Community. These allegations are baseless.

162 Rather, IMC made strenuous efforts to engage and reach an agreement with the Parán Community (Section 4.3.1), adequately managing its relationship with this community (Section 4.3.2), complying with its social commitments (Section 4.3.3) and never excluding the Parán Community from the benefits of the Project (Section 4.3.4). However, Parán negotiated in bad faith and took active measures to obstruct the Project as it sought to exploit the mine itself and protect its marijuana business (Section 4.3.5).

4.3.1 IMC made strenuous efforts to reach a lasting agreement with the Parán Community

163 Peru contends that IMC disregarded the importance of securing a harmonious relationship with the Parán Community,²⁹⁵ waiting until September 2016 to engage for the first time with this community²⁹⁶ and failing to take a proactive approach in its subsequent interactions.²⁹⁷ These allegations are false. As demonstrated below, IMC made strenuous efforts while held by Lupaka to engage in good faith with the Parán Community and build a lasting relationship.

164 First, Lupaka devoted time and resources to engage with the Parán Community after acquiring the Project. In 2013, IMC supported infrastructure projects for the benefit of the Parán Community, including the construction of a medical clinic facility within its territory.²⁹⁸ Further, in 2014 and 2015, IMC:

²⁹⁵ Counter-Memorial, 24/03/2022, p. 1 (para. 2). ↩
²⁹⁶ Counter-Memorial, 24/03/2022, p. 159 (para. 313 (b)). ↩
²⁹⁷ Counter-Memorial, 24/03/2022, p. 158 et seq. (para. 313 (a)). ↩
²⁹⁸ Lupaka Gold Corp., 2013 Annual Report, at Exhibit AC-49, p. 38. ↩

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• donated food and medicine to Parán,²⁹⁹
• engaged with its leadership to participate in Parán Assemblies and communicate IMC's intentions to work with the community and engage in meaningful dialogue,³⁰⁰
• held briefings with the community to explain the scope of the Project and reach mutually beneficial agreements,³⁰¹ and
• provided technical assistance to community members regarding their crops.³⁰²

165 Second, IMC continued to actively engage with the Parán Community in 2016, 2017 and 2018 to build a lasting relationship and reach a sustainable agreement.

166 In 2016, IMC:

• held briefings with members of the Parán Community to clarify its potential doubts on the Project's exploitation phase, make proposals for cooperation,³⁰³ and consider the community's counterproposals,³⁰⁴

²⁹⁹ Letter from IMC to the Parán Community and Parán Educational Institution (Jorge Basadre School) (SPA), 01/12/2014, at Exhibit C-381; Letter from IMC to the Parán Community, Educational Institution of Parán (Colegio Jorge Basadre) (SPA), 01/12/2014, 01/12/2014, at Exhibit C-382; Letter from IMC to the Parán Community (SPA), 17/11/2014, at Exhibit C-383; Letter from IMC to the Parán Community (SPA), 07/05/2015, at Exhibit C-384; IMC, CR Team Report No. 05-2015/RRCC, May 2015 (SPA), at Exhibit C-386, p. 1 et seq. ↩
³⁰⁰ IMC, CR Team Report No. 011-2014-RRCC, February 2015 (SPA), at Exhibit C-380, p. 3 (Section 3) (February 2015) ("Analyze new possibilities to make the project viable with the communities surrounding the project, such as Parán, which are showing that they want to resume dialogue with the company.") ↩
³⁰¹ Letter from IMC to the Parán Community (SPA), 05/11/2015, at Exhibit C-388; IMC, CR Team, Report No. 10-2015-RRCC, January 2015 (SPA), at Exhibit C-390, p. 2. ↩
³⁰² IMC, CR Team, Report No. 10-2015-RRCC, January 2015 (SPA), at Exhibit C-390, p. 2 ("At the initiative of the community members of the area, when visits are carried out to their cultivation plots, technical assistance is provided, achieving good acceptance and reception to the conversations and instructions that are given.") ↩
³⁰³ Letter from IMC to the Parán Community (SPA), 12/03/2016, at Exhibit C-387. ↩
³⁰⁴ Letter from IMC to the Parán Community (SPA), 12/03/2016, at Exhibit C-387; Letter from IMC to the Parán Community (SPA), 30/06/2016, at Exhibit C-389. ↩

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• developed a technological project that sought to ensure greater access to water resources and improved agricultural development techniques for the benefit of Parán,³⁰⁵ and
• conducted several training workshops on agricultural issues, including on (i) technical crop management, (ii) installation of micro reservoirs, (iii) implementation of irrigation systems and (iv) organic fertiliser production modules.³⁰⁶

167 IMC's engagement with Parán continued throughout 2017. IMC:

• held meetings with Parán's leadership to advance an agreement³⁰⁷ and keep them abreast of the Project's progress,³⁰⁸
• held informative meetings with the leaders of the Huamboy, Capia and Santa Ana areas to brief them on IMC's proposals,³⁰⁹
• held in-situ workshops on the Project status and the downsized mining plan,³¹⁰
• made financial contributions as part of the Christmas festivities,³¹¹ and
• supported community members with transport to and from Sayán to run errands.³¹²

168 IMC's efforts to engage with the Parán Community continued throughout 2018. Despite the limited willingness of Parán's leadership to cooperate

³⁰⁵ SSS, Monthly Report, Project, October 2016 (SPA), at Exhibit C-393, p. 3; SSS, Monthly Report, Project, November 2016 (SPA), at Exhibit C-394, p. 3 et seq (Sections I and VIII). ↩
³⁰⁶ Id.. ↩
³⁰⁷ SSS, Weekly Report, Project (SPA), 02/10/2017 to 07/10/2017, at Exhibit C-425; SSS, Weekly Report, Project (SPA), 13/11/2017 to 18/11/2017, at Exhibit C-427, p. 2; SSS, Weekly Report, Project (SPA), 11/12/2017 to 16/12/2017, at Exhibit C-428, p. 2. ↩
³⁰⁸ SSS, Weekly Report, Project (SPA), 20/11/2017 to 27/11/2017, at Exhibit C-426, p. 4. ↩
³⁰⁹ SSS, Monthly Report, Project, December 2016 (SPA), at Exhibit C-424, p. 4 et seq.; SSS, Monthly Report, Project, January 2017 (SPA), at Exhibit C-429, p. 4. ↩
³¹⁰ IMC Memorandum, Training Programme Mining Project at Invicta Mining Camp (SPA), 08/07/2017, at Exhibit C-154. ↩
³¹¹ SSS, Monthly Report, Project, December 2017 (SPA), at Exhibit C-391, p. 4; SSS, Monthly Report, Project, December 2017 (SPA), at Exhibit C-155. ↩
³¹² [Redacted] ↩

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with IMC, as had been acknowledged by OEFA's³¹³ and MEM-OGGS's³¹⁴ officials, IMC included the community in its AOP for 2018, which set the social activities that IMC would carry out in 2018 in terms of training workshops, public consultation, acquisition of local products, temporary hiring of personnel, environmental monitoring, etc.³¹⁵ Unfortunately, the community refused to take part in any of those activities.³¹⁶ IMC further requested Parán's leadership to create a committee to coordinate with the Parán community members interested in participating in the training programmes that IMC had planned to carry out in 2018, which included programmes on agricultural techniques,³¹⁷ strengthening of community management and organisation,³¹⁸ community relations³¹⁹ and health campaigns.³²⁰ However, Parán's leadership refused to create the requested committee or to allow Parán members to participate in these training programmes.³²¹

169 As shown by the foregoing, IMC undertook many actions and initiatives throughout the duration of the Project to engage with the Parán Community and reach a lasting agreement.

170 Peru's contentions that IMC disregarded the importance of securing a harmonious relationship with Parán or failed to take a proactive approach in its interactions with this community are baseless and should be

³¹³ SSS, Monthly Report, Project, March 2018 (SPA), at Exhibit C-430, p. 5. ↩
³¹⁴ SSS, Monthly Report, Project, August 2018 (SPA), at Exhibit C-162, p. 5. ↩
³¹⁵ SSS, Community Relations Annual Operating Plan, 2018 (SPA), at Exhibit C-397. ↩
³¹⁶ [Redacted] ↩
³¹⁷ SSS, Training Plan, Agricultural Techniques Invicta Project (Lacsanga, Parán and Santo Domingo), April 2018 (SPA), at Exhibit C-438. ↩
³¹⁸ SSS, Training Plan, Participatory Workshops on Development, Invicta Project (Lacsanga, Parán and Santo Domingo), April 2018 (SPA), at Exhibit C-440. ↩
³¹⁹ SSS, Training Plan in Community Relationships and Code of Conduct, Invicta Project (Lacsanga, Parán and Santo Domingo), 2018 (SPA), at Exhibit C-441. ↩
³²⁰ IMC, Training plan for Health Promoters, Invicta Project (Lacsanga, Parán and Santo Domingo), April 2018 (SPA), at Exhibit C-442. ↩
³²¹ [Redacted] ↩

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dismissed.³²² Construed properly, Peru's argument is not that the Claimant failed to engage with Parán at all, but rather, that engagement did not meet some fabricated standard which Peru itself fails to articulate.

171 Equally misguided is Peru's contention that IMC had to rush negotiations with the Parán Community because of its tight financial schedule with Pandion.³²³ IMC engaged with the Parán Community from the beginning of Lupaka's tenure of the mine in late 2012 as it sought to build a lasting relationship with this community. This was not possible because of Parán's ulterior plans to exploit the mine and protect its marijuana business.

172 The Claimant's good faith efforts to build a relationship with the Parán Community cannot be confused with a requirement to obtain this community's consent to advance the Project. While it may always be preferable to reach an agreement, and that is precisely what Lupaka vigorously attempted to achieve for several years, the absence of such agreement did not prevent Lupaka from advancing the Project. In fact, as explained in Section 3.2.2 above, Peruvian law only required IMC to reach an agreement with the communities holding rights over the land on which the Project was to be developed, i.e., Lacsanga and Santo Domingo, which IMC did.

4.3.2 IMC adequately managed its relationship with the Parán Community

173 Peru contends that "[the] Claimant's community relations efforts were responsible for the disintegration of relations with the Parán Community",³²⁴ pointing to specific instances of alleged mismanagement

³²² In para. 313 (a). of its Counter-Memorial, Peru contends that IMC's opening of a local office where members of the Rural Communities could drop by to enquire about the Project would show a passive approach. This criticism is absurd. Indeed, the opening of this office is consistent with IMC's CPP and Article 15 of Supreme Decree No. 033-2005-EM, which provides that "the mechanisms of citizen participation to be developed during the execution of the mining project should preferably consider the implementation of an Office of Permanent Information and/or a Participative Environmental Monitoring and Surveillance Committee [...]". See Counter-Memorial, 24/03/2022, p. 158 et seq. (para. 313 (a)); Supreme Decree No. 028-2008-EM, 26/05/2008, at Exhibit R-0007, p. 8 et seq. (Art. 15). ↩
³²³ Counter-Memorial, 24/03/2022, p. 5 et seq. (paras. 13 and 158). ↩
³²⁴ Counter-Memorial, 24/03/2022, p. 158 (para. 312). ↩

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of social relations. Peru is wrong, and none of the instances it identifies supports its allegation.

174 First, relying on the report prepared by SSS for September 2017, Peru contends that “[the] Claimant's community relations team tersely and falsely declared [to Parán] that they had no need for rural community support before carrying out its mining activities”.³²⁵ Peru's contention is inaccurate and misleading as it suggests that IMC would have stated that it did not require the consent of any rural community to develop the Project, which is not the case. IMC did not require the consent of the Parán Community, even though, as shown in the prior Section, IMC made strenuous efforts to reach a lasting agreement with that community.

175 The SSS report relied on by Peru states that "[i]n the same way, it was explained to [the President of the Huamboy area] that the company has all the permits granted by the Ministry of Energy and Mines to start its exploitation and that it does not depend on any community to start at this stage".³²⁶ This statement is accurate. Indeed, as of September 2017, date of the SSS report, IMC had already obtained the necessary land surface rights from the Santo Domingo and Lacsanga Communities, owners of the land in which the Project is located,³²⁷ and did not need to reach an agreement with the Parán Community to advance the Project.³²⁸ Hence, by September 2017, IMC did not depend “on any community" to start exploitation.

176 Second, Peru argues that IMC made “another false representation”³²⁹ to the Parán Community in a letter sent on 31 May 2017. In this letter, IMC stated the following:

"The main subject of this letter is to inform you that despite all the efforts made by Invicta (and Lupaka) to get the Banks to disburse us the money to fulfil our commitments and finance the mining

³²⁵ Counter-Memorial, 24/03/2022, p. 159 et seq. (para. 313 (c)). ↩
³²⁶ SSS, Monthly Report, Project, September 2017 (SPA), at Exhibit C-164, p. 6 (emphasis added). ↩
³²⁷ IMC map - Community boundaries according to Peruvian registry (SPA), at Exhibit C-486. ↩
³²⁸ See supra Section 3.2.2. ↩
³²⁹ Counter-Memorial, 24/03/2022, p. 160 et seq. (para. 313 (d)). ↩

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Operation in Invicta, they refuse to do so while the company does not have and submit an Agreement signed with the Community of Parán. In this regard, it is important to remember that in a first consultation in December 2016, the Community of Parán voted overwhelmingly to negotiate and sign an Agreement with Invicta, which we are willing to sign, and pay the amounts of money that have been owed for several years. This long-term Agreement is the only condition that the Banks place on Invicta to deliver the monetary funds. [...]".³³⁰

177 Peru contends that IMC made “a false representation” when it stated that the bank was requesting IMC for an agreement with Parán as the sole condition to disburse the money. According to Peru, this would be false because the condition was to secure an access road to the Site, which could be done through an agreement “with either the Lacsanga Community or the Parán Community”.³³¹ This criticism is unfounded.

178 The letter of 31 May 2017 is addressed to the Parán Community and there is nothing wrong or unsettling with IMC's statement that it needed to reach an agreement with Parán for the bank to disburse the money. It is true that IMC could also have obtained the funds through an agreement with Lacsanga, but IMC was negotiating with Parán and once it had secured an agreement with this community, the bank would disburse the funds.³³²

179 Peru further contends that IMC's engagement with Parán was opportunistic and only aimed at getting the bank to disburse the funds to develop the Project, and that this would be shown because, “once Claimant secured an agreement with the Lacsanga Community in July 2017 [...], it quickly discontinued its efforts at reaching an agreement with the Parán Community."³³³ This is plainly false. As demonstrated in Section 4.3.1 above, after signing the surface agreement with Lacsanga in July 2017, IMC continued to include Parán in all its social activities, including those

³³⁰ Letter from IMC to the Parán Community (SPA), 31/05/2017, at Exhibit C-114 (emphasis in original). ↩
³³¹ Counter-Memorial, 24/03/2022, p. 160 et seq. (para. 313(d)). ↩
³³² Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 18 (para. 40). ↩
³³³ Counter-Memorial, 24/03/2022, p. 160 et seq. (para. 313 (d)). ↩

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in its AOP for 2018. IMC also paid this community PEN 300,000 (approximately USD 80,000) between December 2017 and January 2018 to make up for Invicta's previous owner's alleged breaches and start negotiations for a future agreement. If IMC had not had a genuine interest in reaching an agreement with Parán, it would have not made this payment, nor those extensive efforts.

180 For the foregoing reasons, none of the instances identified by Peru demonstrate an alleged mismanagement of social relations by IMC.

4.3.3 IMC did not breach its social commitments

181 Peru contends that IMC failed to comply with its “social commitments contained in the Social Management Plan that Invicta had submitted as part of its 2009 EIA, [...] [which] illustrate how Claimant (mis)managed the critical relationship with the Rural Communities (in particular, the Parán Community) and how it conducted business [...].”³³⁴ Specifically, Peru refers to the inspection carried out by the OEFA from 27 February to 4 March 2018, in which the authority concluded that IMC had failed to comply with its obligation to "(i) [implement] a programme for temporary hiring of local personnel; (ii) [undertake] actions to improve services, health equipment and campaigns on health and nutrition issues [for the benefit of the Rural Communities] [...]; (iii) [undertake] actions to support or improve services, education equipment, school campaigns, teacher training and environmental education activities [for the benefit of the Rural Communities] [...]; and (iv) [undertake] actions to support sustainable development through participatory development workshops or alliances with [the Rural Communities] [...] [for 2016 and 2017]”.³³⁵

182 It is true that the OEFA concluded that IMC had not complied with these social obligations in 2016 and 2017 and fined the company (for the breaches found in 2017), but this decision was unjustified in the

³³⁴ Counter-Memorial, 24/03/2022, p. 85 (para. 174). ↩
³³⁵ Directorial Resolution No. 02050-2019-OEFA/DFAI, Invicta Mining Corp., 17/12/2019, at Exhibit R-0062, p. 8 (para. 83); Counter-Memorial, 24/03/2022, p. 85 et seq. (paras. 174-177). ↩

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circumstances, as shown below. In any event, IMC complied with the social obligations noted by the OEFA shortly thereafter.

183 First, in 2016 and 2017, IMC was in critical negotiations with the communities of Lacsanga and Parán to secure an access road to the Site. This was obviously IMC's priority given that without access to the Site, the company would simply not be able to develop the Project. IMC's activities at the Project were suspended during these negotiations, which meant that the Project's needs in terms of manpower and supplies were minimal. The OEFA was aware of this predicament.³³⁶ Notwithstanding the impossibility rendered by these negotiations and that IMC had not yet secured the land rights to develop the Project, the OEFA unreasonably sanctioned IMC for not carrying out certain social activities in 2017 and for not "[implementing] a programme for temporary hiring of local personnel".³³⁷

184 Second, the OEFA's decision is additionally unreasonable as it ignored that IMC's negotiations with the Rural Communities were also aimed at defining the specific commitments that IMC would assume on the hiring of personnel, education and health-related activities – i.e., the same issues for which the OEFA sanctioned IMC. IMC would assume these commitments in exchange for the communities giving the company an access road to the Site. Following these negotiations, IMC signed on 18 July 2017 a surface rights agreement with the Lacsanga Community,³³⁸ and in early 2018 finalised the terms of the draft addendum to the 2010 Framework Agreement with Santo Domingo.³³⁹ These agreements, as well as the surface agreement with the Santo Domingo Community signed in

³³⁶ Letter from IMC to OEFA (SPA), 27/03/2018, at Exhibit C-402; Letter from IMC to OEFA (SPA), 27/03/2018, at Exhibit C-403. Indeed, the OEFA was aware of this as early as September 2015 (OEFA, Minutes of Audit (SPA), 19/09/2015, at Exhibit C-516, p. 1; OEFA, Minutes of Audit (SPA), 30/11/2015, at Exhibit C-517, p. 1. ↩
³³⁷ Directorial Resolution No. 02050-2019-OEFA/DFAI, Invicta Mining Corp., 17/12/2019, at Exhibit R-0062, p. 8 (para. 83). ↩
³³⁸ 2017 Lacsanga Agreement (SPA), 18/07/2017, at Exhibit C-43. ↩
³³⁹ Draft Addendum to Framework Agreement between the Santo Domingo Community and IMC (SPA), 15/09/2017, at Exhibit C-94; Letter from IMC to the Santo Domingo Community (SPA), 04/05/2018, at Exhibit C-93, Letter from the Santo Domingo Community to IMC (SPA), 07/05/2018, at Exhibit C-92. ↩

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2010 - which would remain in force as long as it was not modified by the addendum - reflected IMC's commitments in terms of labour,³⁴⁰ education and health issues to these communities.³⁴¹

185 Third, the OEFA's decision ignores that IMC did “[undertake] actions to support sustainable development through participatory development workshops". As explained in Section 4.3.1 above, in 2016, IMC held workshops on agricultural related topics for the benefit of the Parán Community, including workshops on technical crop management, installation of micro reservoirs, implementation of irrigation systems and organic fertiliser production modules.³⁴²

186 But more importantly, IMC complied with the social commitments noted by the OEFA shortly after securing an access road to the Site. As IMC's AOP for 2018 shows, the company planned and implemented in 2018 – until the Parán invasions prevented IMC's CR Team from continuing – the following activities and projects:

• implemented a programme for temporary hiring of local personnel;³⁴³
• carried out health support and training activities to raise the quality of health services in the Rural Communities and reduce illnesses; these included equipment of health posts, improvement of medical

³⁴⁰ 2017 Lacsanga Agreement (SPA), 18/07/2017, at Exhibit C-43, p. 9 (Art. 8.7); Public Deed for the 2010 SD Land Use Agreement (SPA), 22/10/2010, at Exhibit C-63, p. 8 (Art. 5.3). ↩
³⁴¹ Framework Agreement (SPA), 22/10/2010, at Exhibit C-64, p. 2 et seq. (Arts. 2, 3.1, 5.3); 2017 Lacsanga Agreement (SPA), 18/07/2017, at Exhibit C-43, p. 6 et seq. (Arts. 6.1, 6.2, 6.3 and 6.4 and 8.3, 8.4 and 8.5). ↩
³⁴² SSS, Monthly Report, Project, October 2016 (SPA), at Exhibit C-393 (full version of C-149); SSS, Monthly Report, Project, November 2016 (SPA), at Exhibit C-394. ↩
³⁴³ See SSS, Weekly Report, Project (SPA), 07/05/2018 to 13/05/2018, at Exhibit C-518, p. 3 et seq. (item 3); SSS, Monthly Report, Project, March 2018 (SPA), at Exhibit C-430, p. 8 (item 2.3); SSS, Weekly Report, Project (SPA), 19/03/2018 to 25/03/2018, at Exhibit C-413, p. 3 (item 3); SSS, Weekly Report, Project (SPA) 19/02/2018 to 25/02/2018, at Exhibit C-519, p. 4 (items 1.1.2 and 1.1.3); SSS, Weekly Report, Project (SPA) 12/02/2018 to 18/02/2018 (SPA), at Exhibit C-520, p. 4 (items 1.1.1 and 1.1.2). ↩

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infrastructure, carrying out trainings and health campaigns for disease prevention and control;³⁴⁴

• carried out activities to support and improve education in the Rural Communities; these included improving the basic conditions of educational institutions, providing educational material, setting up libraries, promoting access to information technologies and carrying out educational campaigns on care and conservation of the environment;³⁴⁵ and
• carried out participatory development workshops for the benefit of the Rural Communities, including on sustainable development, community development and organizational strengthening.³⁴⁶

187 For the foregoing reasons, the Tribunal should dismiss Peru's contention that IMC breached its social commitments with the Rural Communities.

4.3.4 IMC did not marginalise the Parán Community

188 Peru contends that "[the] Claimant's focus on the Lacsanga and Santo Domingo de Apache communities isolated the Parán Community”,³⁴⁷ pointing to specific instances in support of its allegation. But, again, it must be reiterated that the Claimant was under no obligation to prioritise the Parán Community over the other local communities on whose land the Project was actually located. What is more, the Parán Community's hurt feelings does not justify its decision to take the Claimant's mine at

³⁴⁴ See IMC, Special Report on OEFA Audit (SPA), 27/02/2018 to 04/03/2018, at Exhibit C-437, p. 2 (item 10); IMC, Training plan for Health Promoters, Invicta Project (Lacsanga, Parán and Santo Domingo), April 2018 (SPA), at Exhibit C-442. ↩
³⁴⁵ See SSS, Monthly Report Project, November 2017 (SPA), at Exhibit C-521, p. 11 et seq. (item B); IMC, Special Report on OEFA Audit (SPA), 27/02/2018 to 04/03/2018, at Exhibit C-437, p. 2 (item 11). ↩
³⁴⁶ See SSS, Training Plan, Participatory Workshops on Development, Invicta Project (Lacsanga, Parán and Santo Domingo), April 2018 (SPA), at Exhibit C-440; SSS, Training Plan, Agricultural Techniques Invicta Project (Lacsanga, Parán and Santo Domingo), April 2018 (SPA), at Exhibit C-438; SSS, Monthly Report, Project, March 2018 (SPA), at Exhibit C-430, p. 14 (item 9) ("Delivered. In execution"). ↩
³⁴⁷ Counter-Memorial, 24/03/2022, p. 162 et seq. (Section II.F.2.b.). ↩

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gunpoint. In any event, none of the instances Peru identifies of alleged marginalisation supports its case.

189 First, Peru relies on a Lupaka press release dated 23 July 2013 to show that IMC assumed social commitments "to contribute to social and environmental development projects" for the Santo Domingo and Lacsanga communities.³⁴⁸ It then argues, relying on the same document, that IMC did not assume similar commitments for the Parán Community because IMC did not take a genuine interest in such community.³⁴⁹ This is false and ignores the long and tortuous negotiations that the Claimant conducted with the increasingly unreasonable Parán Community.

190 Peru cannot pick isolated social commitments made by IMC to some communities at a particular moment in time – in this case, on the sole basis of the Lupaka press release dated 23 July 2013 – to argue that they would show that IMC marginalised Parán. Conclusions on IMC's social engagement activities must be drawn in the round, as set out in Section 4.3.1 above, rather than relying on isolated instances. For instance, as noted, IMC undertook many activities and projects over the course of six years for the benefit of the Parán Community. In any event, it suffices to look at Lupaka's Annual Report for 2013 – the year referred to by Peru – to see that the company also supported social projects for the Parán Community at the time,³⁵⁰ in addition to donating food and medicines to this community.³⁵¹

191 Second, Peru contends that "[the] Claimant hired workers predominantly from the Lacsanga Community".³⁵² Specifically, Peru states that "[...] in February and March 2018, [the] Claimant had hired as many as 60 members from the Lacsanga Community and zero members of the Parán

³⁴⁸ Counter-Memorial, 24/03/2022, p. 163 (para. 318 (a)). ↩
³⁴⁹ Counter-Memorial, 24/03/2022, p. 163 (para. 318(a)). ↩
³⁵⁰ Lupaka Gold Corp., 2013 Annual Report, at Exhibit AC-49, p. 46. ↩
³⁵¹ Letter from IMC to the Parán Community and Parán Educational Institution (Jorge Basadre School) (SPA), 01/12/2014, at Exhibit C-381; Letter from IMC to the Parán Community, Educational Institution of Parán (Colegio Jorge Basadre) (SPA), 01/12/2014, 01/12/2014, at Exhibit C-382; Letter from IMC to the Parán Community (SPA), 17/11/2014, at Exhibit C-383; Letter from IMC to the Parán Community (SPA), 07/05/2015, at Exhibit C-384. ↩
³⁵² Counter-Memorial, 24/03/2022, p. 163 et seq. (para. 318 (b)). ↩

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Community",³⁵³ and that a similar pattern can be seen in the SSS reports prepared from July through October 2018.³⁵⁴

192 It is true that, in 2018, IMC hired more workers from Lacsanga than from Parán, but this was the case because Parán community members were not interested in working for IMC. IMC regularly probed if there was interest from Parán members to work with the company and the answer was negative.³⁵⁵ As discussed above, Parán further refused to take part in the initiatives included in IMC's AOP for 2018, one of which sought to promote the "Temporary Hiring of Workers" from "the population of the communities in the Project's area of direct influence”, including Parán.³⁵⁶ The only Parán members who were keen to work for IMC were the members of the Tena family, Marco Tena, Edwin Tena and Maycol Tena, whom IMC hired in various positions such as driver, security and surveillance personnel, assistant and equipment operator.³⁵⁷

193 The situation with Lacsanga in 2018 was entirely different. Its members were eager to work for IMC.³⁵⁸ IMC received multiple letters and CVs from Lacsanga community members expressing interest in working for the company.³⁵⁹ Several Lacsanga families were also in the process of setting up their enterprises to provide services to IMC.³⁶⁰ These circumstances made it easy for IMC to hire and work with Lacsanga community members.

³⁵³ Counter-Memorial, 24/03/2022, p. 163 et seq. (para. 318 (b)). ↩
³⁵⁴ Counter-Memorial, 24/03/2022, p. 163 et seq. (para. 318 (b)). ↩
³⁵⁵ [Redacted] ↩
³⁵⁶ SSS, Community Relations Annual Operating Plan, 2018 (SPA), at Exhibit C-397. ↩
³⁵⁷ IMC, Yearly staff attendance list 2019 (SPA), at Exhibit C-449; IMC, Parán staff security task (SPA), at Exhibit C-450. ↩
³⁵⁸ SSS, Weekly Report, Project (SPA), 14/08/2017 to 19/08/2017, at Exhibit C-444, p. 3 et seq.; SSS, Weekly Report, Project (SPA), 20/11/2017 to 24/11/2017, at Exhibit C-445, p. 5. ↩
³⁵⁹ SSS, Weekly Report, Project (SPA), 13/11/2017 to 18/11/2017, at Exhibit C-427, p. 3; SSS, Weekly Report, Project (SPA), 01/12/2017 to 09/12/2017, at Exhibit C-446, p. 8; SSS, Weekly Report, Project (SPA), 11/12/2017 to 16/12/2017, at Exhibit C-428, p. 7; SSS, Weekly Report, Project (SPA), 15/01/2018 to 21/01/2018, at Exhibit C-447, p. 6 et seq. ↩
³⁶⁰ SSS, Weekly Report, Project (SPA), 20/11/2017 to 24/11/2017, at Exhibit C-445S, p. 5 et seq.; SSS, Weekly Report, Project (SPA), 14/08/2017 to 19/08/2017, at Exhibit C-444, p. 4. ↩

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194 Third, Peru contends on the basis of SSS reports for September 2017 and June-July 2018 that “[the] Claimant gave explicit preference to the Lacsanga Community for the purchase of goods and services, without a similar level of commercial engagement with the Parán Community.”³⁶¹

195 While it is true that IMC gave preference to Lacsanga for the contracting of certain goods and services (food, lodging, laundry, transport and fuel supply), this does not give the Parán Community carte blanche to make extortionate demands and resort to violence. In any event, this preference for Lacsanga's goods and services came from the fact that in July 2017 IMC signed a surface agreement with this community and committed to buying certain goods and contracting certain services.³⁶² This was one of the conditions that Lacsanga put forward in order to give IMC the surface rights over its land. The company accepted this condition, as it needed an access road to the Site and Parán was unwilling to engage or partner with IMC. In any event, Peru's criticism is unfounded considering that Parán refused to take part in the initiatives included in IMC's AOP for 2018, one of which sought to promote the “Acquisition of local products" from "the population of the communities in the Project's area of direct influence", including Parán.³⁶³

196 Fourth, Peru states that "[the] Claimant's community relations team tellingly failed to include the Parán Community in the title of its own monthly reports on the progress of the Invicta Project. [...] Such omission suggests that Claimant did not even view the Parán Community as a relevant stakeholder in its community outreach efforts”.³⁶⁴ This is absurd.

197 Express reference (or not) to a community in the title of an SSS report says nothing about IMC's engagement efforts with that community. This is the type of omission only spotted by a disputes lawyer and says nothing of the substance of the Claimant's activities. But more importantly, it suffices to review the three SSS reports underlying Peru's contention – i.e., the reports for September 2017, June 2018 and July 2018 – to confirm that each and

³⁶¹ Counter-Memorial, 24/03/2022, p. 164 (para. 318 (c)). ↩
³⁶² 2017 Lacsanga Agreement (SPA), 18/07/2017, at Exhibit C-43, p. 9 (Clauses 8.9 and 8.10). ↩
³⁶³ SSS, Community Relations Annual Operating Plan, 2018 (SPA), at Exhibit C-397. ↩
³⁶⁴ Counter-Memorial, 24/03/2022, p. 164 (para. 318 (d)). ↩

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every one of them has a subsection describing the actions undertaken by IMC to engage with Parán on the month of the report.³⁶⁵

198 For the foregoing reasons, Peru's contention that IMC marginalised the Parán Community is baseless.

4.3.5 Parán negotiated in bad faith with IMC

199 The Claimant demonstrated in the previous Sections that it did not marginalise, much less disregard, the Parán Community. When IMC strived to reach a lasting agreement with the Parán Community, the latter negotiated in bad faith and use violence and intimidation to obtain its twin goals of exploiting the mine and protecting its illegal marijuana business.

200 A few examples are provided below of Parán's bad faith during the negotiations.

201 One, as explained in Section 4.2.3 above, when IMC and the Parán Community started negotiating in late 2016, one of Parán's initial demands was that IMC pay a debt allegedly owed by Invicta's previous owner, amounting to PEN 300,000 (approximately USD 80,000).³⁶⁶ IMC agreed to make this payment and Parán's leadership committed in exchange to negotiate an agreement with IMC in relation to the Project.³⁶⁷ Having obtained this fee, the Parán Community simply disregarded its commitment.³⁶⁸

³⁶⁵ See SSS, Monthly Report, Project, September 2017 (SPA), at Exhibit C-164, p. 5 et seq.; SSS, Monthly Report, Project, June 2018 (SPA), at Exhibit C-157, p. 3 et seq.; SSS, Monthly Report, Project, July 2018 (SPA), at Exhibit C-161, p. 3 et seq. ↩
³⁶⁶ Witness Statement of Julio F. Castañeda, 01/10/2021, p. 22 et seq. (paras. 61-63); Agreement between the Parán Community and IMC (SPA), 29/04/2008, at Exhibit C-60, p. 5 (item 2.2); Agreement between the Parán Community and IMC (SPA), 07/05/2008, at Exhibit C-61, p. 3 et seq. (item 2.1); Letter from IMC to the Parán Community (SPA), 21/08/2012, at Exhibit C-522. ↩
³⁶⁷ Internal Lupaka email with attachment (SPA), 25/01/2017, at Exhibit C-113, p. 3; SSS, Monthly Report, Project, January 2018 (SPA), at Exhibit C-392, p. 6; [Redacted] ↩
³⁶⁸ Witness Statement of Julio F. Castañeda, 01/10/2021, p. 23 (para. 64); Letter from the Parán Community to IMC (SPA), 03/01/2018, at Exhibit C-120; Notarised letter from the Parán Community to IMC (SPA), 04/05/2018, at Exhibit C-121. ↩

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202 Two, throughout its negotiations with IMC, the Parán Community sought to exclude the Santo Domingo and Lacsanga communities from the benefits of the Project. Parán repeatedly conditioned any agreement with IMC on a requirement that IMC transport all its ore exclusively through the Parán road. Parán imposed this condition on IMC during the early negotiations in 2016,³⁶⁹ and persisted in its efforts to exclude the other two Rural Communities after the Blockade. As IMC informed the MEM in a letter dated 29 March 2019, following another failed meeting with Parán:

"It is the leaders of Parán themselves who point out with particular vehemence and intolerance that the only access road to the Mining Unit must be through the Community of Parán and that no vehicle or person can transit and enter the mining unit via the road built on lands of the Community of Lacsanga, absurdly purporting not to be aware that our company has built its access road through these lands over which an easement has been granted by the Rural Community of Lacsanga".³⁷⁰

203 Parán's determination to exclude the other Rural Communities from the Project's benefits went so far as to guarantee IMC that if it accepted its demand, "nobody would bother [IMC]”.³⁷¹ This is behaviour typical of mafias running protection rackets, not a local community concerned about alleged environmental degradation.

204 Three, the Parán Community breached the promises it made to IMC before and after installing the Blockade. As explained in Sections 6.3 and 6.6 below, the Parán President committed in September 2018 to refrain from

³⁶⁹ [Redacted] IMC, Draft Agreement between Lupaka and the Parán Community (SPA), October 2016, at Exhibit C-464. ↩
³⁷⁰ Letter from IMC to MEM (SPA), 29/03/2019, at Exhibit C-209, p. 5 (para. 13) (emphasis added). See also: Summary of the meeting between IMC and the Parán Community (SPA), 07/11/2018, at Exhibit C-183, p. 1; Mr Marco Estrada showing the Blockade at the Lacsanga road (SPA) (Video), 14/05/2019, at Exhibit C-362 (00:50 to 01.07), Mr Marco Estrada showing the Blockade at the Lacsanga road (Transcript) (SPA), 14/05/2019, at Exhibit C-363. In this video, recorded on 15 May 2019, Mr Estrada explains that Parán demanded IMC to transport all its ore through Parán's road and to stop using Lacsanga's road as a condition to reach an agreement. ↩
³⁷¹ [Redacted] ↩

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all acts of violence, threats or harassment against IMC.³⁷² Notwithstanding that clear commitment, the Parán Community broke it shortly thereafter by setting up its illegal, armed Blockade on 14 October 2018.

205 In another broken promise, the Parán Community committed on 26 February 2019 to immediately "suspend all coercive measures" against IMC.³⁷³ It is worth pausing here again to acknowledge that in making that promise the Parán Community had already admitted to previous acts of coercion – a far cry from the picture Peru attempts to paint in these proceedings of a peaceful community simply seeking to protect its rural way of life. Despite making this commitment, the Parán Community then refused to lift the Blockade and only allowed IMC's staff to access the Site through Parán's impassable road.

206 Aside from showing bad faith during the negotiations with Lupaka, Parán actively sought to turn the Santo Domingo and Lacsanga Communities against the Project. Parán contacted the leadership of these two communities to propose the creation of an opposition block against the Project.³⁷⁴ Parán sought to convince the Santo Domingo Community to terminate its contract with IMC.³⁷⁵ Parán even retained lawyers to provide

³⁷² Memorial, 01/10/2021, p. 38 (para. 115); Minutes of the Subprefect meeting between IMC and the Parán Community including September 2018 Commitment (SPA), 18/09/2018, at Exhibit C-139, p. 2. ↩
³⁷³ Minutes of the meeting between the Parán Community, IMC and MEM including 26 February 2019 Agreement (SPA), 26/02/2019, at Exhibit C-200, p. 1 et seq. ↩
³⁷⁴ SSS, Weekly Report, Project (SPA), 03/01/2018 to 14/01/2018, at Exhibit C-398, p. 3; SSS, Weekly Report, Project (SPA), 14/05/2018 to 20/05/2018, at Exhibit C-435, p. 2 et seq. ↩
³⁷⁵ SSS, Weekly Report, Project (SPA), 09/10/2017 to 14/10/2017, at Exhibit C-456, p. 2 et seq.; [Redacted] The Leoncio Prado Subprefect, Mr Retuerto, assisted the Parán Community in these efforts. See SSS, Monthly Report, Project, July 2018 (SPA), at Exhibit C-161, p. 6 (“The new president of the Santo Domingo community, Adrián Román Mateo, has initiated efforts in the state institutions in company and advice from the sub-prefect of the Leoncio Prado district with the purpose of upsetting the company. This information was corroborated by Mr. Nilton León, representative of the Office of Social Management of the Ministry of Energy and Mines, who affirmed that this would not proceed.") The same document states that the Parán Community's authorities were being "manipulated by the subprefect of Leoncio Prado" (see p. 13 et seq.). ↩

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legal advice on how to obtain such annulment.³⁷⁶ Parán further exerted pressure on the President of Santo Domingo to demand more money from IMC for any potential agreement, stating that he could charge up to PEN 4 million (approximately USD 1,350,000, i.e., more than four times what IMC had agreed to pay Santo Domingo) to accept that its land be used for the Project, and proposing that said amount be split in equal parts by Parán and Santo Domingo.³⁷⁷ In other words, Parán’s extortion of IMC was not enough; it sought to persuade others to engage in similarly coercive behaviour.

207 Relatedly, Parán's authorities and influential community members actively misinformed the population of the Rural Communities and the central authorities on crucial aspects of the Project as a strategy to sew chaos and conflict. Indeed, no matter how many times IMC explained that the Project was not located on Parán land,³⁷⁸ and the evidence supporting this,³⁷⁹ the Parán authorities kept claiming without any support that the Project was on Parán territory.³⁸⁰ No matter how many times IMC explained that the Project had not entered exploitation,³⁸¹ the Parán authorities kept claiming

³⁷⁶ SSS, Weekly Report, Project (SPA), 09/10/2017 to 14/10/2017, at Exhibit C-456, p. 2 et seq. ↩
³⁷⁷ SSS, Weekly Report, Project (SPA), 14/05/2018 to 20/05/2018, at Exhibit C-435, p. 3. ↩
³⁷⁸ Letter from IMC to the Parán Community (SPA), 30/05/2018, at Exhibit C-122; [Redacted] Letter from IMC to the Parán Community (SPA), 07/11/2017, at Exhibit C-118; Letter from the Parán Community to IMC (SPA), 03/01/2018, at Exhibit C-120. ↩
³⁷⁹ IMC map - Community boundaries according to Peruvian registry (SPA), at Exhibit C-486. ↩
³⁸⁰ Notarised letter from the Parán Community to IMC (SPA), 04/05/2018, at Exhibit C-121; SSS, Weekly Report, Project (SPA), 03/01/2018 to 14/01/2018, at Exhibit C-398, p. 4; SSS, Report on Social Intervention for signing of an agreement with the Parán Community, 2018 (SPA), at Exhibit C-111, p. 4. ↩
³⁸¹ Letter from IMC to the Parán Community (SPA), 30/05/2018, at Exhibit C-122; IMC Memorandum, Training Programme Mining Project at Invicta Mining Camp (SPA), 08/07/2017, at Exhibit C-154; SSS, Weekly Report, Project (SPA), 09/04/2018 to 15/04/2018, at Exhibit C-462, p. 2 (“On Friday 04/13, there was an unexpected visit from a delegation of the Ronda Campesina of the Community of Paran. The purpose of this committee was to verify the work being carried out on the project and to verify the alleged contamination of the water coming out of the mine's adit. The visit was well managed by the RRCC team in coordination with the project's safety and environment[al] [team]. Finally, a minute of the visit was drafted and 04/30 was agreed as a tentative date to visit the project again.") ↩

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that it had.³⁸² No matter IMC's implementation of its water management system in mid-2018, which the Peruvian authorities confirmed ensured that no mine effluents reached Parán's water sources,³⁸³ the Parán authorities kept claiming that the mine was polluting the community's water sources.³⁸⁴ Tellingly, Parán's authorities did not allow IMC's external consultant J Ramon del Peru S.A.C. to monitor Parán's water sources after mid-2018.³⁸⁵

208 Parán brought in external advisors to assist in its “defamation campaign". One of these advisors was Mr Sabino Eusebio Samar Ugarte, president of the Oyón community, known by Peru's authorities for his active role in the social conflicts with mining companies Buenaventura (in charge of the "Uchucchacua" mining project) and Minsur (in charge of the "Raura" mining project) in the Oyón province. Peru's Police identified Mr Samar Ugarte, President of the Oyón Rural Community, as one of the "leaders of the rural community of Parán”³⁸⁶ who participated in post-Blockade meetings between IMC and the community.³⁸⁷ Parán's "defamation campaign" was further enhanced by MININTER officials, in particular Mr Soyman Retuerto, the Leoncio Prado Subprefect, who claimed falsely in

³⁸² Letter from the Parán Community (I. Palomares) to Ombudsman's Office (W. Camacho), 10/10/2018, at Exhibit R-0134; Letter from the Parán Community to MEM (SPA), 10/10/2018, at Exhibit C-163; SSS, Monthly Report, Project, October 2017 (SPA), at Exhibit C-459, p. 4 ("The company has been working at night") ↩
³⁸³ ANA, Technical Report No. 048-2018-ANA-AAA.CF.-ALA H/KHR, 13/07/2018, at Exhibit R-0091, p. 8 et seq. (paras. 5.2 and 6.3). ↩
³⁸⁴ Letter from the Parán Community to MEM (SPA), 23/06/2018, at Exhibit C-523; Letter from the Parán Community to MEM (SPA), 10/10/2018, at Exhibit C-163; Letter from PCM to MEM and MINAM (SPA), 18/10/2018, at Exhibit C-524; Minutes of the Subprefect meeting between IMC and the Parán Community including September 2018 Commitment (SPA), 18/09/2018, at Exhibit C-139; SSS, Weekly Report, Project (SPA), 18/06/2018 to 24/06/2018, at Exhibit C-453, p. 9. ↩
³⁸⁵ J. Ramón, Environmental Monitoring Report, September 2018 (SPA), at Exhibit C-407, p. 19 (item 6.1). ↩
³⁸⁶ Police Operational Plan to lift the Blockade (SPA), 09/02/2019, at Exhibit C-193, p. 29. ↩
³⁸⁷ Report on meeting between IMC, the Parán Community, the MEM and the Mayor of the District of Leoncio Prado (SPA), 24/10/2018, at Exhibit C-173, p. 1 (Item 1). ↩

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2018 that IMC had started production and was contaminating Parán's water sources.³⁸⁸ There was and is no evidence of any such contamination.

209 As the foregoing shows, Parán negotiated in bad faith with IMC and actively sought to hinder the Project's progress. Parán never had a real interest in reaching a sustainable agreement with IMC or allowing the Project to move forward because it intended to exploit the mine itself – which, as demonstrated in Section 2.1 above, Parán continues to do to the present day. Peru's attempt in this arbitration to portray the Parán Community as a reasonable and well-intended community which was a victim of a socially irresponsible mining company is fantasy.

5 IMC ADDRESSED ALL ENVIRONMENTAL CONCERNS AND REQUIREMENTS IN RELATION TO THE PROJECT

210 Peru attempts to portray Lupaka as an environmentally irresponsible mining operator, arguing that it “ignore[ed] the concerns of the Parán Community about the environmental impacts of the Invicta Mine —which included concerns over potential contamination of the Community's water sources—[...]",³⁸⁹ and that this would have been “one key source of dispute between Invicta and the Parán Community".³⁹⁰ This, of course, is

³⁸⁸ Official Letter No. 79-2018-DGIN-LMP-HUA from MININTER (S. Roman) to Council of Ministries (M. Aráoz), 04/01/2018, at Exhibit R-0076; Official Letter No. 105-2018-DGIN-LMP-HUA from MININTER (S. Roman) to Ombudsman's Office (W. Gutiérrez), 08/05/2018, at Exhibit R-0081; Official Letter No. 104-2018-DGIN-LMP-HUA from Huaura Subprefect (S. Retuerto) to MINEM (F. Ismodes), 08/05/2018, at Exhibit R-0165; Letter from MEM to OEFA (SPA), 28/05/2018, at Exhibit C-525; Interview with Leoncio Prado Subprefect (MININTER) (Video) (SPA), 21/12/2018, at Exhibit C-526, where the Subprefect claims that "[the OEFA] stated in the report that [the Project] was in a state of exploitation, but without activity. In other words, they were cleaning and doing things, but the works showed that [the mine] was already being exploited"; Interview with Leoncio Prado Subprefect (MININTER) (Video Transcript) (SPA), 21/12/2018, at Exhibit C-527; Interview with Leoncio Prado Subprefect (MININTER) (Video) (SPA), 08/07/2019, at Exhibit C-528, Interview with Leoncio Prado Subprefect (MININTER) (Video Transcript) (SPA), 08/07/2019, at Exhibit C-529, where the Subprefect claims that"[the conflict began] from May [2018] onwards, when a possible water contamination was found, I say possible, because there was no [] laboratory that determined it, then the ministries were immediately informed that the dialogue table was created." ↩
³⁸⁹ Counter-Memorial, 24/03/2022, p. 6 (para. 14). ↩
³⁹⁰ Counter-Memorial, 24/03/2022, p. 87 (para. 178). ↩

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untrue. This is not the ESG dispute that Peru would have the Tribunal believe. If it were, the Parán Community would not be mining Invicta itself and creating a much higher environmental risk that would have existed under Lupaka's stewardship of the Project.

211 Peru's focus on Parán's alleged environmental concerns is purely opportunistic (Section 5.1). In any event, IMC addressed Parán's water pollution concerns (Section 5.2) and systematically implemented all the requirements by the OEFA (Section 5.3).

5.1 Peru's focus on Parán's alleged environmental concerns is purely opportunistic

212 In its Counter-Memorial, Peru emphasises Parán's alleged environmental concerns hoping to convince the Tribunal that these concerns would have been "one key source of dispute between Invicta and the Parán Community",³⁹¹ and that Parán's opposition to the Project would have been justified in the circumstances. This entire line of argument is a red herring.

213 As the contemporaneous evidence shows, Parán's opposition to the Project was based for the most part on the false contention that the Project was located on Parán land, and that IMC was operating therein without authorisation. Put more simply, this was about money, not water. The "get off our property" argument was set out by Parán in 2014,³⁹² 2015,³⁹³

³⁹¹ Counter-Memorial, 24/03/2022, p. 87 (para. 178). ↩
³⁹² CR Team Report No. 003/RRCC/IMC (SPA), at Exhibit C-530, p. 2 ("[...] A group of community members from Paran went to the area where the construction of the powder magazine is being carried out, arguing that they are the owners of the land and that [IMC] [has] no reason to be building without first negotiating with them.; [...] Mr Tena [...] told them that if they said they were the owners, they should bring their deeds to prove that the land was their property. Things calmed down and the community members left the area.") ↩
³⁹³ Letter from the Parán Community to IMC (SPA), 24/08/2015, at Exhibit C-531. ↩

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2017³⁹⁴ and 2018,³⁹⁵ to justify the Blockade³⁹⁶ and also during the negotiations that followed the Blockade.³⁹⁷ As nothing more than an arbitration tactic, Peru seeks to remove the focus from these allegations and put it on alleged environmental concerns. Peru does this because it knows that the Project was not on Parán land, but on Lacsanga and Santo Domingo land.³⁹⁸ The Tribunal must not be misled. Indeed, Parán raised its alleged environmental concerns with IMC for the first time in May 2018,³⁹⁹ this is, when the Project was on the verge of production.

214 Peru further refers to a letter sent on 7 September 2011 by a grassroots environmental advocacy organization to the Ministry of Environment expressing concerns about the risks posed by the Invicta project to the environment.⁴⁰⁰ Peru refers to this isolated letter to suggest that environmental concerns arising from the Invicta project were long-standing.⁴⁰¹ But this letter is entirely irrelevant for the present dispute and does not support Peru's case. Not only does it not reflect Parán's concerns, but in addition this letter was sent in 2011, i.e., before the Claimant acquired the Invicta mine and when the mine plan consisted of open-pit ore extraction, with an on-site processing plant to be built next to the mine to process 5,100 t/d of ore.⁴⁰² This ceased to be the case under

³⁹⁴ SSS, Weekly Report, Project (SPA), 11/12/2017 to 16/12/2017, at Exhibit C-428, p. 2. ↩
³⁹⁵ SSS, Weekly Report, Project (SPA), 03/01/2018 to 14/01/2018, at Exhibit C-398, p. 4; Notarised letter from the Parán Community to IMC (SPA), 04/05/2018, at Exhibit C-121, p. 3 ("Fourth"). ↩
³⁹⁶ Minutes of the meeting between the Parán Community, IMC and Chief of Sayán Police (SPA), 14/10/2018, at Exhibit C-166, p. 1 ("The reason for our climb to the gate, which borders the Community of Lacsanga, Melcopallan área [sic] for expropriating [sic] territory of Paran" [...]). ↩
³⁹⁷ Letter from IMC to MININTER (SPA), 20/03/2019, at Exhibit C-206, p. 3 (para. 7). ↩
³⁹⁸ Minutes of the meeting between the Parán Community, IMC and Chief of Sayán Police (SPA), 14/10/2018, at Exhibit C-166; Police Operational Plan to lift the Blockade (SPA), 09/02/2019, at Exhibit C-193, p. 31 (Conclusions); Map, Invicta Project, Rural Communities (SPA), at Exhibit C-532. ↩
³⁹⁹ Notarised letter from the Parán Community to IMC (SPA), 04/05/2018, at Exhibit C-121, p. 3 ("Fourth"). ↩
⁴⁰⁰ Letter from Frente de Defensa del Medio Ambiente y Promoción (A. Román) to MINAM (R. Giesecke), 07/09/2011, at Exhibit R-0071. ↩
⁴⁰¹ Counter-Memorial, 24/03/2022, p. 87 et seq. (para. 179). ↩
⁴⁰² 2012 SRK Report, at Exhibit C-58, p. ii. ↩

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Lupaka's revised mining plan, which, as approved by the MEM on 11 December 2014,⁴⁰³ established that exploitation at Invicta would be underground, the production rate ten times lower than initially planned⁴⁰⁴ and ore processing would be done offsite.⁴⁰⁵ In sum, this letter was stale and unrelated to the actual project as developed by the Claimant. It is only relevant insofar it demonstrates the lengths to which Peru will go to paint this dispute as environmental.

5.2 IMC addressed effectively Parán's water pollution concerns

215 Peru tries to portray IMC as an environmentally negligent operator,⁴⁰⁶ arguing that it ignored Parán's “concerns over potential contamination of the Community's water sources and refused to cooperate with the authorities in the investigation of such issues.”⁴⁰⁷ This is false. IMC was an environmentally responsible operator (Section 5.2.1) which adopted active measures to address Parán's water concerns, including by implementing a water management system that ensured that no mine effluents reached Parán's water sources (Section 5.2.2). IMC did not obstruct the investigation of the authorities of Parán's water concerns (Section 5.2.3).

5.2.1 From the beginning, IMC was mindful of the impact of its activities on the surrounding environment and water resources

216 Lupaka acquired the Project in October 2012. Over the next two years, Lupaka focused its efforts on re-evaluating the Project's mining plan, obtaining conceptual studies from SRK Consulting and metallurgical studies from Aminpro to assess the Project's technical and economic

⁴⁰³ MEM Report and Resolution approving Mining Plan (SPA), 11/12/2014, at Exhibit C-9; Counter-Memorial, 24/03/2022, p. 75 (para. 145). ↩
⁴⁰⁴ MEM Report and Resolution approving the Mining Plan (SPA), 11/12/2014, at Exhibit C-9 (corrected translation), p. 9 (para. 7.1); IMC Memorandum, Training Programme Mining Project at Invicta Mining Camp (SPA), 08/07/2017, at Exhibit C-154, p. 1 (first paragraph). ↩
⁴⁰⁵ MEM Report and Resolution approving ITS No. 1 (SPA), 09/04/2015, at Exhibit C-40, p. 2. ↩
⁴⁰⁶ See e.g., Counter-Memorial, 24/03/2022, p. 94 et seq. (Section II.D.2.b). ↩
⁴⁰⁷ Counter-Memorial, 24/03/2022, p. 6 (para. 14). ↩

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feasibility.⁴⁰⁸ At that time, Lupaka did not carry out any works in the mine or in the tunnels, and therefore did not generate any effluents. The only effluent capable of being released was therefore minimal and occurring from a natural source, as it resulted from rainfall that filtered through the mountain to reach the mine tunnels.⁴⁰⁹

217 To address this natural run-off, IMC implemented a sedimentation pond outside the mine adit, at the 3400 level, into which it had channelled this natural effluent for sedimentation. The water entered this sedimentation pond, where it decanted and then came out at the other end of the pond clarified, i.e., without solids or other particles that might have adhered to the water as it passed through the mine tunnels. As explained by Mr Castañeda:

"I remember that we poured into the pond lime oxide (pure), i.e., commercial lime without any chemical additives, to neutralise the natural acidity of the water that was coming through. The aim was to make the natural effluent as neutral as possible. We opted for lime because it has many advantages. It is not harmful to health – all the water we drink contains lime, sodium, magnesium, etc. in minimal doses – nor for cultivation. In fact, lime is favourable for cultivation as it helps to control the pH of the soil; this is precisely why it is used in agriculture."⁴¹⁰

218 Despite the limited scope of its activities, in 2014, IMC asked its external consultant J. Ramón del Perú S.A.C. to carry out environmental testing at Invicta in terms of water, air, soil and sound pollution. The purpose of this testing was to understand the impact of IMC's very limited activities on these elements. The results were reassuring, confirming that the above elements materially complied with the MPLs.⁴¹¹ Notably, the testing confirmed that IMC's sedimentation pond was effective, and that IMC's

⁴⁰⁸ Witness Statement of Julio F. Castañeda, 01/10/2021, p. 6 (paras. 13 and 82). ↩
⁴⁰⁹ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 22 (para. 50). ↩
⁴¹⁰ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 22 (para. 51). ↩
⁴¹¹ J. Ramón, Environmental Monitoring Report, August 2014 (SPA), at Exhibit C-401, p. 26 et seq. ↩

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limited, natural mine effluents were within the MPLs. To date, Peru has never contested the result of these findings.

219 IMC then suspended its activities from June 2015 to February 2018 while it negotiated a surface agreement with the Lacsanga and Parán communities.

5.2.2 IMC implemented a water management system inside the mine to address Parán's water pollution concerns

220 Peru contends that IMC ignored "[Parán's] concerns over potential contamination of the Community's water sources [...]",⁴¹² and that therefore the community had “legitimate and well-founded reasons to be concerned about the [...] impact of the Invicta Project”.⁴¹³ This is not true and even if it was, it did not give Parán licence to resort to violence to take over the mine for its own exploitation.

221 As Peru explains in its Counter-Memorial, the OEFA conducted inspections of the Invicta mine from 10 to 12 June 2017 and 27 February to 4 March 2018. As a result of those inspections, the OEFA found that the Invicta mine effluents exceeded the MPLs for cadmium, copper and zinc.⁴¹⁴ As a result, the OEFA required IMC to implement a water management system to ensure that its mine effluents complied with the MPLs.⁴¹⁵

222 As explained in Section 3.3.2 above, IMC complied with this requirement in mid-2018,⁴¹⁶ building a water management system inside the mine. This system consisted of two ponds, the first one for sedimentation and the second next to it for storage. The effluent from the mine entered the first

⁴¹² Counter-Memorial, 24/03/2022, p. 6 (para. 14). ↩
⁴¹³ Counter-Memorial, 24/03/2022, p. 90 (para. 182). ↩
⁴¹⁴ Counter-Memorial, 24/03/2022, p. 89 et seq. (para. 181). ↩
⁴¹⁵ Counter-Memorial, 24/03/2022, p. 89 et seq. (para. 181); Supervision Report No. 238-2018-OEFA/DSEM-CMIN, 27/06/2018, at Exhibit R-0061 ("[...] improve its temporary system of treatment and control to ensure that the quality of the effluent from the [mine's] Adit the Level 3400 Pit meets the Maximum Permissible Limits."). ↩
⁴¹⁶ IMC, Statement of Objections (SPA), 20/06/2018, at Exhibit C-406, p. 10; MINAM, Report on ITS No. 3 (SPA), 12/11/2018, at Exhibit C-226, p. 25. ↩

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pond where it sedimented and then passed – clarified and through 3 pipelines - to the second pond, from where it was then pumped to the upper levels of the mine to be reused in the development works.⁴¹⁷

223 In June 2018, IMC's external consultant J Ramón del Peru S.A.C. confirmed that the mine effluents complied with the MPLs,⁴¹⁸ and the water authority (ALA) confirmed on 4 July 2018 that no mine effluents reached Parán's water sources.⁴¹⁹ Therefore, by early July 2018, i.e., three and a half months before the Blockade, IMC's water management system was up and running, and official documents confirmed that no mine effluents reached Parán's water sources. Thus, as a temporal matter, it was not possible for supposed water concerns to give rise to the Blockade.

224 Although the implementation of IMC's water management system was the key measure to address Parán's water pollution concerns, IMC took further actions throughout time to ease Parán's concerns. For instance, IMC sought to involve the community in the environmental monitoring of the Project and test their periodically Parán's water sources. However, Parán actually rejected these proposals. Indeed:

• during the first quarter of 2018, the IMC CR Team visited the Parán Community several times to promote its proposal to create a Community environmental monitoring committee, the purpose of which was to allow active participation of the Parán community members in the socio-environmental monitoring of the Project;⁴²⁰ Parán rejected this proposal every time;⁴²¹ and

⁴¹⁷ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 23-24 (para. 55); MINAM, Report on ITS No. 3 (SPA), 12/11/2018, at Exhibit C-226, p. 23. ↩
⁴¹⁸ MINAM, Directorial Resolution No. 2203-2018-OEFA/DFAI (SPA), 27/09/2022, at Exhibit C-399, p. 16 (para. 42). ↩
⁴¹⁹ ANA, Technical Report No. 048-2018-ANA-AAA.CF.-ALA H/KHR, 13/07/2018, at Exhibit R-0091, p. 10 (para. 6.3). ↩
⁴²⁰ CESEL Ingenieros, Invicta Project, EIA, December 2008 (SPA), at Exhibit C-533, p. 492. ↩
⁴²¹ SSS, Report on Social Intervention for signing of an agreement with the Parán Community, 2018 (SPA), at Exhibit C-111, p. 8; SSS, Monthly Report, Project, April 2018 (SPA), at Exhibit C-488, p. 8 et seq. (item 2.5) ↩

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• in June⁴²² and September⁴²³ 2018, IMC requested authorisation from Parán to monitor its water sources. However, Parán refused to provide such authorisation.

225 As the foregoing shows, IMC took active measures to address Parán's alleged water pollution concerns. IMC implemented the water management system required by the OEFA and further sought to involve Parán in the Project's environmental monitoring. Peru's contention that IMC ignored Parán's water pollution concerns is thus baseless.

5.2.3 IMC did not obstruct the investigation of Parán's water pollution concerns

226 Peru contends baselessly that IMC obstructed the ALA's investigation of Parán's water pollution concerns by refusing to allow an inspection of the Project's water sources on 7 May 2018.⁴²⁴ This criticism is unwarranted.

227 By way of context, on 11 April 2018, the Parán Community requested the ALA to conduct a visual inspection to verify the quality of the Parán community's water sources.⁴²⁵ A few days later, on 30 April 2018, the ALA requested that IMC participate in that inspection,⁴²⁶ which took place on 7 May 2018 with the participation of ALA representatives, IMC's personnel, members of the Parán Community and the Leoncio Prado Subprefect, Mr Soyman Retuerto. The day of the inspection, once the Parán Community's water sources had been inspected, Mr Retuerto proposed accessing the mine adit to inspect the Project's water sources. However, as stated in the minutes of the inspection, IMC could not authorise this inspection as the participants did not have the requisite insurance to access the adit and thus, there was a significant risk to the participants and Invicta itself.⁴²⁷ Indeed, the mine tunnels are excavated

⁴²² SSS, Monthly Report, Project, June 2018 (SPA), at Exhibit C-157, p. 8. ↩
⁴²³ J. Ramón, Environmental Monitoring Report, September 2018 (SPA), at Exhibit C-407. ↩
⁴²⁴ Counter-Memorial, 24/03/2022, p. 95 et seq. (para. 194). ↩
⁴²⁵ Letter from the Parán Community (W. Narvasta) to Huaura Local Water Authority, 10/04/2018, at Exhibit R-0077. ↩
⁴²⁶ MINAR, Multiple Citation No. 003-2018-ANA-AAA.CF.-ALA-H/KHR from ANA (V. Pineda) to Invicta Mining Corp. S.A.C. (J. Castañeda), 26/04/2018, at Exhibit R-0078. ↩
⁴²⁷ ANA, Record of Field Technical Verification, 07/05/2018, at Exhibit R-0080, p. 8. ↩

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in the hills, so once inside the mine adit there is a risk of landslides and rocks falling. Also, IMC was in the mine preparation and development phase, so there was vehicular traffic inside the mine.⁴²⁸

228 Contrary to Peru's contention, the fact that IMC was unable to authorise access to the mine adit does not evidence an attempt by IMC to obstruct the work of the ALA or a lack of collaboration.⁴²⁹ First of all, blocking regulators from inspecting a mine on the verge of production would be counterproductive. But more importantly, allowing such access would have exposed IMC to serious civil and criminal liability. Mining companies in Peru are legally required to take out Supplementary Risk Work Insurance (“SCTR”, which is the Spanish acronym for “Seguro Complementario de Trabajo de Riesgo”), which provides coverage for occupational accidents and illnesses to their employees and workers engaged in high-risk activities.⁴³⁰ IMC's employees are covered by this insurance, but not the Project's occasional visitors, who are legally required to take out this insurance for safety purposes.⁴³¹ This is an important requirement which, if not respected, can lead not only to IMC's civil liability for any problems/damage that may arise in its facilities, but also to criminal liability in the event of an accident involving an occasional visitor to the Project.⁴³² The participants in the inspection conducted on 7 May 2018 had not taken out this insurance because the purpose of the

⁴²⁸ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 26-27 (para. 60). ↩
⁴²⁹ Counter-Memorial, 24/03/2022, p. 6 (para. 14). ↩
⁴³⁰ Law No. 26790, Law on the Modernisation of Social Security in Health Care (SPA), 17/05/1997, at Exhibit C-534, p. 14 (Art. 19); Supreme Decree No. 009-97-SA, Regulation for the Law on the Modernisation of Social Security in Health (SPA), 09/09/1997, at Exhibit C-535, Annex 5. ↩
⁴³¹ Supreme Decree No. 009-97-SA, Regulation for the Law on the Modernisation of Social Security in Health (SPA), 09/09/1997, at Exhibit C-535, p. 28 (Art. 82); Supreme Decree No. 003-98-SA, Normas Técnicas del SCTR (SPA), 14/04/1998, at Exhibit C-536, p. 5 (Art. 5). ↩
⁴³² Law No. 29783, Law on Safety and Health at Work (SPA), 20/08/2011, at Exhibit C-537, p. 31 (Art. 103); Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 26 et seq. (para. 60). ↩

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inspection was to verify Parán's water sources, not those of the Invicta mine.⁴³³

229 In any event, as explained in the previous Section, the ALA was able to inspect IMC's water sources less than two months later, on 4 July 2018, confirming that no mine effluents reached Parán's water sources.⁴³⁴

230 Peru further contends that "[a] report on the findings of the inspection [carried out on 7 May 2018] indicate that the Parán Community's water sources, including basins from which children from the Parán Community drank, contained oxide residues which discoloured the water."⁴³⁵ This is false. Nowhere in the inspection minutes is it stated that Parán's water contains oxide residues. The minutes only state that "it is observed that murky water with a whitish hue is observed to flow/run".⁴³⁶ Even the Subprefect of Leoncio Prado, Mr Soyman Retuerto, who opposed the Project and participated in the mine invasions with the Parán community members, has confirmed there was no evidence of water pollution in Parán.⁴³⁷

5.3 IMC promptly and systematically addressed all environmental requirements by the OEFA

231 Peru and its community relations and environmental expert, Mr Daniel Vela, refer to OEFA findings of environmental infractions by IMC in the period 2015-2018, arguing that these infractions were a “key source of dispute between Invicta and the Parán Community", and that “the Parán

⁴³³ MINAR, Multiple Citation No. 003-2018-ANA-AAA.CF.-ALA-H/KHR from ANA (V. Pineda) to Invicta Mining Corp. S.A.C. (J. Castañeda), 26/04/2018, at Exhibit R-0078; MINAR, Multiple Citation No. 003-2018-ANA-AAA.CF.-ALA-H/KHR from ANA (V. Pineda) to the Parán Community (W. Narvasta), 26/04/2018, at Exhibit R-0079. ↩
⁴³⁴ ANA, Technical Report No. 048-2018-ANA-AAA.CF.-ALA H/KHR, 13/07/2018, at Exhibit R-0091, p. 8 et seq. (paras. 5.2 and 6.3). ↩
⁴³⁵ Counter-Memorial, 24/03/2022, p. 95-96 (para. 194) ↩
⁴³⁶ ANA, Record of Field Technical Verification, 07/05/2018, at Exhibit R-0080, p. 4. ↩
⁴³⁷ See Interview with Leoncio Prado Subprefect (MININTER) (Video) (SPA), 08/07/2019, at Exhibit C-528; Interview with Leoncio Prado Subprefect (MININTER) (Video Transcript) (SPA), 08/07/2019, at Exhibit C-529. ↩

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Community's concerns regarding potential environmental damage were legitimate."⁴³⁸

232 In limine, Peru and its expert conflate Parán's alleged water pollution concerns (addressed in the prior Section) with the environmental infractions found by the OEFA to suggest that all these issues would have generated concern in Parán,⁴³⁹ fuelling IMC's looming conflict with the community.⁴⁴⁰ This is not the case. In fact, the only environmental concern voiced by the Parán Community related to the impact of the Project on the community's water sources, i.e., the risk of water pollution. The specific infractions found by the OEFA were never the subject of complaint by Parán and thus were not, and could not have been, a cause of its rejection of the Project.

233 It is true that the OEFA found some specific infractions by IMC in the period 2015-2018, but IMC promptly and systematically remedied all of them, despite its disagreement with some of the OEFA findings⁴⁴¹ and the irregularities in the inspections leading to such findings, some of which were carried out without the presence of IMC staff.

234 For instance, Mr Vela, Peru's expert, refers to an inspection conducted from 19 to 20 February 2016 during which the OEFA found that IMC had failed to service the drainage ditches located on the access road to the

⁴³⁸ Counter-Memorial, 24/03/2022, p. 87 (para. 178). ↩
⁴³⁹ Counter-Memorial, 24/03/2022, p. 87 (para. 178) (“However, the contemporaneous evidence demonstrates that Claimant failed to comply with its environmental obligations, and that the Parán Community's concerns regarding potential environmental damage were legitimate"); Expert Report of Daniel Vela, 22/03/2022, p. 42 (para. 124) ("The reiteration of [environmental] breaches [found by the OEFA] and the times when those were identified, investigated and penalized suggest a strong correlation with the opposition of the rural Parán Community to the Invicta project, and lend credibility to the obvious concern of the Parán Community about a perceived deterioration of the environment associated with the mining project.") ↩
⁴⁴⁰ Counter-Memorial, 24/03/2022, p. 156 et seq. (Section II.F.2.). ↩
⁴⁴¹ For instance, some of the OEFA inspections were carried out between June 2015 and February 2018, when IMC was negotiating with the Lacsanga and Parán communities to secure an access road to the Project. IMC should not have been held liable for infractions found during this period as the company did not have regular access the Site. See Supreme Decree No. 006-2017-JUS, General Administrative Procedure Act (SPA), at Exhibit C-538, p. 2 (para. 1.4, principle of reasonableness). ↩

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Invicta mine. Mr Vela argues that this a sensitive “breach" due to the importance of the correct management of the mine's effluents.⁴⁴²

235 Mr Vela's assertion is inaccurate from a technical standpoint because, as explained by Mr Castañeda, the servicing of the drainage ditches located on the access road to the Invicta mine was aimed at diminishing the risk of landslides, which had nothing to do with the management of mine effluents.⁴⁴³ In any event, and despite the irregularities that transpired during this OEFA inspection, such as the absence of IMC personnel,⁴⁴⁴ IMC took prompt measures to address the OEFA's observations. Indeed, it took IMC only two months to service the drainage ditches⁴⁴⁵ once it had been notified of the finding in August 2018.⁴⁴⁶ Beyond this isolated incident, IMC would periodically service the drainage ditches, especially during the rainy season.⁴⁴⁷

236 Peru further refers to the inspection carried out by the OEFA between 18-19 September 2015, which concluded that IMC had failed to segregate its solid and non-solid waste and to properly dispose of sludge as well as installing a biodigester instead of septic tanks, contrary to its EIA.⁴⁴⁸

237 It is true that the OEFA found these discrepancies, but again IMC took prompt action to address them. On 4 January 2016, i.e., three and a half months after this inspection, IMC sent a detailed report to the OEFA (with photographs) proving the implementation of corrective measures.⁴⁴⁹ IMC only departed from the OEFA's requirements in relation to the implementation of septic tanks because, as IMC explained to the OEFA,

⁴⁴² Expert Report of Daniel Vela, 22/03/2022, p. 43 (para. 128). ↩
⁴⁴³ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 27-28 (para. 63). ↩
⁴⁴⁴ Directorial Resolution No. 2203-2018-OEFA/DFAI, 27/09/2018, at Exhibit R-0074, p. 6 et seq. ("Analysis of Objections"). ↩
⁴⁴⁵ Letter from IMC to OEFA (SPA), 06/11/2018, at Exhibit C-410. ↩
⁴⁴⁶ OEFA, Directoral Resolution No. 1924-2018-OEFA-DFAI (SPA), 24/08/2018, at Exhibit C-409. The inspection was conducted from 19 to 20 February 2016. ↩
⁴⁴⁷ Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 27-28 (para. 63). ↩
⁴⁴⁸ Directorial Resolution No. 2005-2018-OEFA/DFAI (SPA), 29/08/2022, at Exhibit C-411, 3 et seq. (Sections III.1, III. 2, and III.3). ↩
⁴⁴⁹ Letter from IMC to OEFA (SPA), 04/01/2016, at Exhibit C-412. ↩

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biodigesters are a much better system for disposing of human waste, virtually eliminating any soil and water pollution.⁴⁵⁰

238 The OEFA received IMC's 4 January 2016 report and said nothing in response. However, unexpectedly, on 28 August 2018, i.e., more than two and a half years later, the OEFA issued Directorial Resolution No. 2005-2018-OEFA/DFAI, concluding that the corrective measures implemented by IMC were insufficient and ordering the company to implement further measures to remediate the three abovementioned infractions, failing which it would be fined.⁴⁵¹

239 In stark contrast with the OEFA's belated resolution, on 2 October 2018, i.e., only one month and one week after being notified with said Resolution, IMC informed the OEFA that it had implemented the corrective measures pertaining to the first breach (segregation of solid and non-solid waste).⁴⁵² On 19 October 2018, IMC requested a time extension to implement the corrective measures pertaining to the second (sludge disposal) and third (septic tanks) infractions due to the Blockade.⁴⁵³ The authority acknowledged the Blockade as a force majeure event, granting the requested time extension.⁴⁵⁴ IMC renewed its extension request on 13 November 2018⁴⁵⁵ and 15 April 2019⁴⁵⁶ given the persistence of the Blockade, being finally unable to comply with the OEFA requirements.

⁴⁵⁰ Letter from IMC to OEFA (SPA), 04/01/2016, at Exhibit C-412, p. 16; Second Witness Statement of Julio F. Castañeda, 23/09/2022, p. 29 (para. 65). The biodigester existing at the Invicta mine was installed by Invicta's prior owner in 2011. ↩
⁴⁵¹ Directorial Resolution No. 2005-2018-OEFA/DFAI, 29/08/2018, at Exhibit R-0072. ↩
⁴⁵² MINAM, Directorial Resolution No. 2765-OEFA-DFAI (SPA), 19/11/2018, at Exhibit C-539, p. 2 (para. 6). ↩
⁴⁵³ MINAM, Directorial Resolution No. 2765-OEFA-DFAI (SPA), 19/11/2018, at Exhibit C-539, p. 2 (para. 7). ↩
⁴⁵⁴ MINAM, Directorial Resolution No. 2765-OEFA-DFAI (SPA), 19/11/2018, at Exhibit C-539, p. 7 (Art. 1). ↩
⁴⁵⁵ MINAM, Directorial Resolution No. 2765-OEFA-DFAI (SPA), 19/11/2018, at Exhibit C-539, p. 2 (para. 8). ↩
⁴⁵⁶ Letter from IMC to OEFA (SPA), 15/04/2019, at Exhibit C-540. ↩

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240 Peru further refers to the inspections conducted by the OEFA from 10 to 12 June 2017⁴⁵⁷ and 27 February to 4 March 2018,⁴⁵⁸ during which the OEFA found that Invicta's mine effluents contained cadmium, copper and zinc in excess of the MPLs.

241 As an initial matter, there were serious irregularities in these inspections and the ensuing OEFA Resolutions. The 10 to 12 June 2017 inspection was carried out without the participation of IMC personnel,⁴⁵⁹ and the OEFA Resolution issued following the 27 February to 4 March 2018 inspection was declared null and void due to the violation of due process principles.⁴⁶⁰ Unsurprisingly, Peru does not mention any of this when relying on these two OEFA inspections to build its artificial ESG case.

242 In spite of this, as explained in section 3.3.2 above, in mid-2018, IMC implemented its water management system to ensure that the Invicta mine effluents complied with the MPLs (which IMC's external consultant J. Ramón del Perú S.A.C. confirmed was the case in June 2018)⁴⁶¹ and do not reach Parán's water sources (which the ALA confirmed was the case in July 2018).⁴⁶²

243 Peru refers to two additional infringements found in the inspection conducted by the OEFA from 27 February to 4 March 2018, namely, that IMC improperly disposed of its non-hazardous solid waste by discharging it at the community of Quintay's landfill, and also failed to implement the waste rock deposit required by its 2009 EIA.⁴⁶³ Again, IMC took prompt action to address these observations.

⁴⁵⁷ Directorial Resolution No. 2203-2018-OEFA/DFAI, 27/09/2018, at Exhibit R-0074, p. 1. ↩
⁴⁵⁸ Directorial Resolution No. 02050-2019-OEFA/DFAI, Invicta Mining Corp., 17/12/2019, at Exhibit R-0062, p. 1. ↩
⁴⁵⁹ Directorial Resolution No. 2203-2018-OEFA/DFAI, 27/09/2018, at Exhibit R-0074, p. 7. ↩
⁴⁶⁰ Resolution No. 158-2021-OEFA-TFA-SE ("Resolución Núm. 158-2021-OEFA-TFA-SE"), 25/05/2021, at Exhibit DV-0010, p. 49 (point 1). ↩
⁴⁶¹ Directorial Resolution No. 2203-2018-OEFA/DFAI, 27/09/2018, at Exhibit R-0074, p. 16 (para. 42). ↩
⁴⁶² ANA, Technical Report No. 048-2018-ANA-AAA.CF.-ALA H/KHR, 13/07/2018, at Exhibit R-0091, p. 8 et seq. (paras. 5.2 and 6.3). ↩
⁴⁶³ MINAM, Supervision Report No. 238-2018-OEFA/DSEM-CMIN, 27/06/2018, at Exhibit C-404, p. 37 et seq. (paras. 105-113). ↩

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244 This OEFA inspection took place when IMC had just resumed its mine development activities, which is why the amount of non-hazardous solid waste that IMC generated was moderate – and had been minimal until mid-February 2018. At the time of this inspection, IMC disposed of its non-hazardous waste at a sanitary landfill in the Quintay community, which had a license to receive and store non-hazardous waste.⁴⁶⁴ This was not contrary to IMC's 2009 EIA, which required IMC to implement a sanitary landfill during the mine development phase but did not fix a specific deadline for doing so.⁴⁶⁵ In spite of this, less than one month after the inspection, IMC informed the OEFA that it was evaluating the implementation of its sanitary landfill.⁴⁶⁶ Ultimately, the OEFA's Tribunal for Environmental Auditing annulled the fine imposed on IMC due to the violation of its due process right, something which, again, Peru does not mention when relying on this OEFA inspection.⁴⁶⁷

245 In relation to IMC's waste rock deposit, the OEFA's finding was that, pursuant to its own 2009 EIA, IMC had to implement one waste rock deposit in a precise location but instead it was found to have two waste rock deposits located 50 metres and 430 metres from the correct location.⁴⁶⁸ IMC explained to the OEFA that these two waste rock deposits pre-dated Lupaka's acquisition of the Project,⁴⁶⁹ and that the company had impermeabilized one of them to avoid contact with rainwater.⁴⁷⁰ IMC further committed to building the new waste rock deposit as per its 2009

⁴⁶⁴ SSS, Weekly Report, Project (SPA), 19/03/2018 to 25/03/2018, at Exhibit C-413, p. 11. ↩
⁴⁶⁵ MINAM, Supervision Report No. 238-2018-OEFA/DSEM-CMIN, 27/06/2018, at Exhibit C-404, p. 37 (para. 107); Environmental Impact Assessment, Invicta Mining Corp. S.A.C. (“2009 ΕΙΑ”), 06/10/2008, at Exhibit R-0047, p. 154 et seq. (item 3.11.1) and p. 396 (Table 5.3.1-1). The OEFA had not requested IMC in the past to implement its landfill, and IMC had just resumed operations after a suspension period of two and a half years. ↩
⁴⁶⁶ IMC, Statement of Objections (SPA), 26/03/2018, at Exhibit C-405, p. 6. ↩
⁴⁶⁷ Resolution No. 158-2021-OEFA-TFA-SE ("Resolución Núm. 158-2021-OEFA-TFA-SE"), 25/05/2021, at Exhibit DV-0010, p. 49 (Third). ↩
⁴⁶⁸ MINAM, Supervision Report No. 238-2018-OEFA/DSEM-CMIN, 27/06/2018, at Exhibit C-404, p. 28 (para. 76). ↩
⁴⁶⁹ MINAM, Supervision Report No. 238-2018-OEFA/DSEM-CMIN, 27/06/2018, at Exhibit C-404, p. 28 et seq. (paras. 77 and 83). ↩
⁴⁷⁰ MINAM, Supervision Report No. 238-2018-OEFA/DSEM-CMIN, 27/06/2018, at Exhibit C-404, p. 32 (para. 90). ↩

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EIA,⁴⁷¹ which was ongoing when Parán set up its illegal Blockade and could not be completed as access to the Site remained obstructed. The fine imposed to IMC for this infraction was subsequently annulled due to the violation of its due process right.⁴⁷²

246 Peru's expert, Mr Vela, states that IMC would have failed to comply with its obligation to carry out water, air and noise quality testing during the first three quarters of 2018, a breach that he argues would project a negative image of IMC to the Rural Communities.⁴⁷³ This allegation is largely incorrect.

247 IMC did not conduct environmental testing in the first quarter of 2018 because its development activities only resumed in mid-February 2018, after having been suspended for more than two and a half years due to IMC's negotiations with the Lacsanga and Parán communities to secure an access road to the Site. The OEFA was aware of this.⁴⁷⁴ But IMC did conduct environmental testing for the second and third quarters of 2018. What is more, in June 2018, IMC sent the environmental testing report prepared by J. Ramón del Perú S.A.C. to the OEFA.⁴⁷⁵ This same consultant conducted the testing for the third quarter of 2018.⁴⁷⁶

248 Peru refers to an inspection conducted by the water authority on 4 July 2018, where it was “concluded that Invicta was using water from Quebrada Ruraycocha, a creek belonging to the Lacsanga Community, without having obtained the legally-required water use rights".⁴⁷⁷ Peru's choice of

⁴⁷¹ MINAM, Supervision Report No. 238-2018-OEFA/DSEM-CMIN, 27/06/2018, at Exhibit C-404, p. 32 (para. 94). ↩
⁴⁷² Resolution No. 158-2021-OEFA-TFA-SE ("Resolución Núm. 158-2021-OEFA-TFA-SE"), 25/05/2021, at Exhibit DV-0010, p. 49 (Second). ↩
⁴⁷³ Expert Report of Daniel Vela, 22/03/2022, p. 43 (para. 127). ↩
⁴⁷⁴ Letter from IMC to OEFA (SPA), 27/03/2018, at Exhibit C-402; Letter from IMC to OEFA (SPA), 27/03/2018, at Exhibit C-403. ↩
⁴⁷⁵ Directorial Resolution No. 2203-2018-OEFA/DFAI, 27/09/2018, at Exhibit R-0074, p. 16 (para. 42). ↩
⁴⁷⁶ J. Ramón, Environmental Monitoring Report, September 2018 (SPA), at Exhibit C-407, p. 19 et seq. (Section Conclusions). ↩
⁴⁷⁷ Counter-Memorial, 24/03/2022, p. 167 (para. 326). ↩

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words suggests that IMC was using water from said creek without authorisation from the Lacsanga Community, which is not the case.

249 On 31 March 2015, IMC and the Lacsanga Community signed an agreement whereby IMC was authorised to lay a pipeline across Lacsanga land to collect water from the Ruraycocha creek in exchange for payment of PEN 17,000 (approximately USD 4,300) to the community.⁴⁷⁸ Later in 2015, IMC paid this amount to Lacsanga,⁴⁷⁹ hired Lacsanga community members to lay the pipeline⁴⁸⁰ and started a procedure before the ALA to obtain a water use license for the Ruraycocha creek.⁴⁸¹ The Lacsanga Community authorities changed in late 2016⁴⁸² and the new authorities decided to disregard the agreement with IMC, which withdrew its water use license application on 22 May 2017 so as not to hinder its ongoing negotiations with Lacsanga of the surface agreement.⁴⁸³ IMC and the Lacsanga Community signed the surface agreement on 18 July 2017 and, in early 2018, the Lacsanga authorities again authorised IMC to use the Ruraycocha creek.⁴⁸⁴ On 4 July 2018, before IMC had resubmitted its water use license application, the ALA conducted an inspection finding that IMC was using water from the Ruraycocha Creek without a water license, for which it fined the company with PEN 8,715 (approximately USD 2,500).⁴⁸⁵

250 As the foregoing shows, IMC had an agreement with the Lacsanga Community to use water from the Ruraycocha Creek and timely paid the community for such use. IMC also started the corresponding procedure

⁴⁷⁸ Agreement between IMC and the Lacsanga Community (SPA), 31/03/2015, at Exhibit C-42, p. 2 (Second Clause). ↩

⁴⁷⁹ Minutes of Lacsanga Community Extraordinary General Assembly (SPA), 10/10/2015, at Exhibit C-541. ↩

⁴⁸⁰ IMC, CR Team Report No. 05-2015/RRCC, May 2015 (SPA), at Exhibit C-386; Letter from IMC to the Lacsanga Community (SPA), 21/08/2015, at Exhibit C-542. ↩

⁴⁸¹ Letter from IMC to Huaura ALA (SPA), 15/07/2015, at Exhibit C-543. ↩

⁴⁸² Letter from Lacsanga Community to IMC (SPA), 13/12/2016, at Exhibit C-544. ↩

⁴⁸³ Letter from IMC to ANA-ALA (SPA), 22/05/2017, at Exhibit C-545. ↩

⁴⁸⁴ IMC, Minutes of Lacsanga Community Social and Environmental Supervision (SPA), 26/02/2018, at Exhibit C-546. ↩

⁴⁸⁵ The ALA fined IMC with 2.1 UITs. In 2018, 1 UIT = PEN 4,150, so 2.1 UIT = PEN 8,715. See C-547. ↩

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before the ALA to obtain a water use license, which, however, had to be discontinued so as not to hinder IMC's ongoing negotiations with Lacsanga of the surface agreement. IMC's only failure was to delay its reapplication for a water use license, which IMC was to do shortly after the ALA's inspection. If anything, this incident shows that IMC was respectful of the rights of the Rural Communities and sought to comply with Peruvian law.

* * *

251 While it is true that the OEFA found specific environmental infractions from time to time, IMC promptly and systematically addressed them, implementing the appropriate corrective measures. None of the OEFA's findings were the subject of a complaint by the Parán Community, and hence could not have fuelled its opposition to the Project – which, as explained in Section 2 above, was driven by Parán's plan to exploit the mine and protect its marijuana business. The infractions found by the OEFA did not jeopardise the development of the Project either, which was on the verge of production when Parán set up its illegal Blockade. They are therefore red herrings relied upon by Peru as a post hoc justification for its failure to protect the Claimant's investment.

6 PERU'S ACTS AND OMISSIONS DESTROYED THE PROJECT

252 Peru contends that it acted “with due diligence" in the face of IMC's conflict with the Parán Community. Specifically, Peru argues that “[its] reaction to [the conflict] [...] was reasonable, even-handed, taken in accordance with due process, and based on sound principles of Peruvian law",⁴⁸⁶ that "[it] took diligent and reasonable actions in relation to the [invasions carried out by the Parán Community]",⁴⁸⁷ and that it made "numerous efforts to assist the Claimant".⁴⁸⁸ As demonstrated in the remaining of this Section, these assertions are unsubstantiated.

⁴⁸⁶ Counter-Memorial, 24/03/2022, p. 2 (para. 4). ↩

⁴⁸⁷ Counter-Memorial, 24/03/2022, p. 6 et seq. (para. 17). ↩

⁴⁸⁸ Counter-Memorial, 24/03/2022, p. 7 (para. 18). ↩

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253 Peru was aware at least since October 2017 of the risk of Parán invading the Site (Section 6.1), despite which it failed to prevent the June 2018 Invasion by the Parán Community and to subsequently prosecute and sanction accordingly (Section 6.2).

254 Parán committed in September 2018 to refrain from all acts of violence against IMC, but breached its commitment less than a month later by setting up the Blockade (Section 6.3). The Police failed to intervene and lift the Blockade shortly after Parán had set it up, despite being obliged to do so under Peruvian law (Section 6.4), and the MININTER refused to authorise a police intervention in mid-February 2019 for no valid reason (Section 6.5).

255 IMC persisted in its efforts to reach an agreement with Parán, which committed to lift the Blockade on 26 February 2019. However, Parán breached its commitment once again (Section 6.6), failing to lift the Blockade and only allowing IMC to enter the Site through Parán's territory on foot for two weeks, after which Parán violently evicted IMC's staff from the Site. Despite Parán's flagrantly illegal behaviour, Peru continued to refuse to authorise a police intervention (Section 6.7). Parán persisted to act violently in the following months, shooting at members of IMC's security team who had accessed the Site in May 2019 unimpeded (Section 6.8). Peru stood, again, as a mute witness, leading IMC to lose its investment in August 2019 and allowing Parán to illegally exploit the mine from then on (Section 6.9).

6.1 Peru was aware at least since October 2017 of the risk of an invasion by Parán

256 Peru contends that "[the] Claimant first involved Peru in its emerging conflict [with the Parán Community] in June 2018, [Redacted] This initial protest began on 19 June 2018 and ended the same day."⁴⁸⁹ This is demonstrably false. Indeed, Peru's Police and its

⁴⁸⁹ Counter-Memorial, 24/03/2022, p. 246 (para. 517). ↩

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intelligence service were aware at least since October 2017 – a full eight months earlier – of the risk of an invasion of the Site by Parán.

257 In October 2017, [Redacted] IMC's CR Team found out through [Redacted] contacts in the Parán Community that a group of Parán members intended to access the Site without authorisation under the excuse that IMC was already extracting ore from the Invicta mine (they said they heard explosions during the night).⁴⁹⁰ This was, of course, false, as all IMC activities at the mine were suspended at the time.⁴⁹¹ [Redacted] informed Mr Castañeda, then IMC's general manager, of this situation, following which IMC contacted Major Andrés Rosales Andrade, Chief of Sayán Police, and Colonel Fernández, Chief of Huacho's Police Division (DIVPOL), to request them to prevent Parán's members from illegally accessing the Site.⁴⁹²

258 Following this first contact, IMC's CR Team held meetings with Major Andrés Rosales Andrade, Colonel Walter Fernández Martinez and Senior Police Officer Henrry Lezcano to discuss a plan to counter the potential invasion by Parán. As part of these meetings, Colonel Fernández instructed Major Rosales to conduct intelligence investigations in Parán's Huamboy area as it was considered a “red zone" due to former terrorists and drug smugglers operating in the area, and also pointed out that members of the Narvasta family living in the area had arrest warrants. It is understood that Colonel Fernández thought that these Parán community members were behind the potential invasion.⁴⁹³ In parallel, IMC informed the Parán President about the risk of invasion, requesting him to take action to prevent it.⁴⁹⁴ In the end, the Parán Community backtracked on its decision to access the Site.

259 [Redacted] remained in contact with Major Rosales from November 2017 onwards. Indeed, Major Rosales was a key contact for IMC given the

⁴⁹⁰ SSS, Monthly Report, Project, October 2017 (SPA), at Exhibit C-459, p. 4; SSS, Weekly Report, Project (SPA), 23/10/2017 to 29/10/2017, at Exhibit C-460, p. 1. ↩

⁴⁹¹ Letter from IMC to OEFA (SPA), 27/03/2018, at Exhibit C-402; Letter from IMC to OEFA (SPA), 27/03/2018, at Exhibit C-403. ↩

⁴⁹² SSS, Weekly Report, Project (SPA), 06/11/2017 to 11/11/2017, at Exhibit C-414, p. 6. ↩

⁴⁹³ Id. ↩

⁴⁹⁴ Letter from IMC to the Parán Community (SPA), 07/11/2017, at Exhibit C-118. ↩

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intelligence work he was conducting in the Huamboy area,⁴⁹⁵ and also because in his capacity as Chief of Police in Sayán, the nearest police station to the Site, he was regularly visited by members from the three Rural Communities. During the first semester of 2018, Major Rosales shared information [Redacted] to help IMC anticipate possible attacks by Parán.⁴⁹⁶ [Redacted] relationship with Major Rosales was cordial as he was very receptive to IMC's concerns.⁴⁹⁷

260 As shown above, Peru was aware of the threat posed by the Parán Community to the Project since, at least, October 2017. Police officials regularly communicated with IMC's CR Team about this threat and were further aware of the danger presented by some of Parán's members. Peru's contention that "[the] Claimant first involved Peru in its emerging conflict [with the Parán Community] in June 2018”⁴⁹⁸ is therefore provably false.

6.2 Peru failed to protect the Claimant's investment during the June 2018 Invasion

261 Peru contends that it "acted promptly, reasonably and diligently" in relation to the June 2018 Invasion. Furthermore, Peru argues that "Claimant's assertion that Peru should have adopted measures to prevent the 19 June 2018 Protest is unreasonable”,⁴⁹⁹ and that its response to said invasion “was entirely consistent with Peruvian law”.⁵⁰⁰ Not only are these allegations baseless, they are an express disavowment of Peru's international obligations under the FTA.

262 Indeed, Peru's contention that it acted "reasonably and diligently" in relation to the June 2018 Invasion is belied by the active role it played in inciting said invasion (Section 6.2.1). In any event, Peru could have

⁴⁹⁵ SSS, Weekly Report, Project (SPA), 06/11/2017 to 11/11/2017, at Exhibit C-414, p. 6. ↩

⁴⁹⁶ SSS, Weekly Report, Project (SPA), 20/11/2017 to 24/11/2017, at Exhibit C-445, p. 3; SSS, Weekly Report, Project (SPA), 06/11/2017 to 11/11/2017, at Exhibit C-461, p. 3. ↩

⁴⁹⁷ SSS, Weekly Report, Project (SPA), 09/04/2018 to 15/04/2018, at Exhibit C-462, p. 7. ↩

⁴⁹⁸ Counter-Memorial, 24/03/2022, p. 246 (para. 517). ↩

⁴⁹⁹ Counter-Memorial, 24/03/2022, p. 106 (para. 212) (emphasis in the original). ↩

⁵⁰⁰ Counter-Memorial, 24/03/2022, p. 108 (para. 217) ↩

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prevented Parán's armed invasion, but failed to do so (Section 6.2.2) and also to sanction Parán's invaders (Section 6.2.3).

6.2.1 Peruvian officials actively incited and participated in the June 2018 Invasion

263 Peru attempts to distance itself from the June 2018 Invasion, arguing that it "acted promptly, reasonably and diligently" upon the invasion of the Site by "approximately 250 members of the Parán Community".⁵⁰¹ But this is an incomplete presentation of the facts that seeks to hide the fact that Peruvian authorities – such as the Leoncio Prado Subprefect – played an active role in inciting and carrying out said invasion.

264 Leading up to the June 2018 Invasion, the CR Team identified a controversial figure within the MININTER who seemed interested in pushing an anti-mining agenda among the Rural Communities. Indeed, as early as August 2017, Leoncio Prado's Subprefect, Mr Soyman Román Retuerto, stoked conflict between IMC and the Rural Communities for his own benefit.⁵⁰²

265 In Peru, District Subprefects act as the MININTER's direct representatives within the territorial scope of their jurisdiction (i.e., the district). They are appointed by Resolution of the General Director of Interior Government of the MININTER, and their functions include “supervising compliance with the laws and regulations in force” within their jurisdiction, “preparing the Annual Work Plan based on the Operational Plan and Institutional Strategic Plan of the Ministry of Interior” and “promoting dialogue between the authorities within its jurisdiction to ensure an adequate coordination of the Government's action."⁵⁰³

⁵⁰¹ Counter-Memorial, 24/03/2022, p. 105 et seq. (para. 211). ↩

⁵⁰² [Redacted] SSS, Weekly Report, Project (SPA), 14/08/2017 to 19/08/2017, at Exhibit C-444, p. 2; SSS, Monthly Report, Project, September 2017 (SPA), at Exhibit C-164, p. 4; IMC, Matrix of Local Stakeholders, Invicta Project (SPA), at Exhibit C-548, p. 7. ↩

⁵⁰³ Ministerial Resolution No. 1973-2019-IN (SPA), 28/11/2019, at Exhibit C-549, p. 13 (item g). ↩

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266 In early 2018, Subprefect Retuerto began a defamatory campaign against IMC, sending letters to various State authorities making unsubstantiated allegations against IMC. Indeed, the Subprefect sent letters to the PCM,⁵⁰⁴ the Ombudsman Office,⁵⁰⁵ and the MEM⁵⁰⁶ stating that according to the information found “on social media (internet)”, IMC was “[playing] with the faith of the people" and its representatives were not engaging in dialogue with the Parán Community.⁵⁰⁷ Yet, this was shortly after IMC paid PEN 300,000 (approximately USD 80,000) to Parán to settle the alleged debt further to the agreements reached by IMC under control of the prior shareholders, a payment that should have paved the way for IMC to negotiate an agreement with the community.⁵⁰⁸ The Subprefect would further convey that IMC was "at the beginning of the exploitation", which, of course, was false.

267 IMC flagged the Subprefect's misbehaviour to his superior, the Huaura Subprefect, noting his failure to fulfil his duties as the local authority responsible for promoting social peace and ensuring the safety of private investment. In its letter to the Huaura Subprefect, IMC stated that

"[it] strongly reject[s] the attitude that [Subprefect Retuerto] has been assuming, who is taking advantage of his role as Subprefect, has been filing documents against [the Project], misinforming the state institutions such as the [MEM] and the [PCM], [and] using the rural communities of Parán and Santo Domingo de Apache [...],

⁵⁰⁴ Official Letter No. 79-2018-DGIN-LMP-HUA from MININTER (S. Roman) to Council of Ministries (M. Aráoz), 04/01/2018, at Exhibit R-0076; SSS, Weekly Report, Project (SPA), 03/01/2018 to 14/01/2018, at Exhibit C-398, p. 3. ↩

⁵⁰⁵ Official Letter No. 105-2018-DGIN-LMP-HUA from MININTER (S. Roman) to Ombudsman's Office (W. Gutiérrez), 08/05/2018, at Exhibit R-0081. ↩

⁵⁰⁶ Official Letter No. 104-2018-DGIN-LMP-HUA from Huaura Subprefect (S. Retuerto) to MINEM (F. Ismodes), 08/05/2018, at Exhibit R-0165. ↩

⁵⁰⁷ Directorial Resolution No. 2203-2018-OEFA/DFAI, 27/09/2018, at Exhibit R-0074. ↩

⁵⁰⁸ Confirmation of payment from IMC to the Parán Community (SPA), 18/12/2017, at Exhibit C-116, see Confirmation of payment from IMC to the Parán Community (SPA), 31/01/2018, at Exhibit C-117. ↩

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communities with which [IMC] maintains a transparent communication [...].”⁵⁰⁹

268 The Huaura Subprefect did not respond to this complaint, allowing Mr Retuerto to continue inciting opposition against the Project.

269 On 15 June 2018, IMC's CR Team held a meeting with Parán's leadership where it was informed that the Subprefect Retuerto had authorised the Parán Community to carry out the June 2018 Invasion.⁵¹⁰ On that same day, Mr Retuerto sent a letter to the Regional Directorate of Energy and Mines notifying it of the upcoming invasion,⁵¹¹ and four days later, on 19 June 2018, he led the invasion and seizure of the Site.

[Redacted]

⁵¹² Notably, in its Counter-Memorial, Peru has not denied that one of its officials authorised the June 2018 Invasion and even led the invasion himself.

270 But Peru's active participation in, and consequent responsibility for, the June 2018 Invasion is also predicated on the actions of the Parán Community and its Ronda Campesina during the invasion. That participation is undisputed and, as explained in Section 9.2 below, attributable to Peru under international law.

⁵⁰⁹ Letter from IMC to the Lima Prefect of Lima and the Huaura Subprefect (SPA), 24/01/2018, at Exhibit C-455. ↩

⁵¹⁰ [Redacted] SSS, Monthly Report, Project, June 2018 (SPA), at Exhibit C-157, p. 4. ↩

⁵¹¹ Letter from Leoncio Prado Subprefect (MININTER) to MEM (SPA), 15/06/2018, at Exhibit C-550. See also SSS, Monthly Report, Project, June 2018 (SPA), at Exhibit C-157, p. 4; SSS, Weekly Report, Project (SPA), 18/06/2018 to 24/06/2018, at Exhibit C-453, p. 7. ↩

⁵¹² [Redacted] ↩

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271 [Redacted] the role of the members of Parán's Ronda Campesina – all of whom were armed – during the invasion was to surround the areas adjacent to IMC's mining camp to prevent anyone from escaping and then to act as a strike force. The Ronda Campesina also escorted other Parán invaders to the premises, the camp and the main adit, and further expelled from the Site Lacsanga members who were working on the day of the invasion by shooting at them.⁵¹³

272 The actions taken by Peru to incite and carry out the June 2018 Invasion belie its assertion that it acted "reasonably and diligently" in the circumstances.

6.2.2 Peru failed to prevent the June 2018 Invasion

273 Peru contends that "Claimant's assertion that Peru should have adopted measures to prevent the 19 June 2018 Protest is unreasonable.”⁵¹⁴ According to Peru, “[t]he [Police] would have required considerable notice to pre-emptively intervene to stop the Parán Community from following through on its plan for that protest",⁵¹⁵ which it alleges it did not have. This is an interesting position for Peru to take, instead of quarrelling over whether it was obligated to exercise its police powers – which, of course, it was; it contends that it only has to do so if it has sufficient advanced notice. It is not for this Tribunal to decide how much notice is sufficient, but rather whether Peru was obliged to and effectively carried out its police powers - which it did not. In any event, Peru had ample notice of the June 2018 Invasion.

274 As explained in Section 6.1 above, Peru was aware of the risk of a Parán invasion since, at the latest, October 2017, some eight months before the invasion occurred. Since then, Peru had Police officials on the ground

⁵¹³ SSS, Special Report, seizure of the Invicta Mine Camp and Facilities (SPA), 19/06/2018, at Exhibit C-129, p. 2. ↩

⁵¹⁴ Counter-Memorial, 24/03/2022, p. 106 (para. 212) (emphasis in original). ↩

⁵¹⁵ Counter-Memorial, 24/03/2022, p. 106 (para. 212). SSS, Parán Community Ronderos Register (prepared by Marco A. Estrada) (SPA), at Exhibit C-551. ↩

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(such as Major Rosales, Superior PNP Lezcano⁵¹⁶ and Major PNP Salcedo⁵¹⁷) investigating the Parán community members identified as opponents to the Project⁵¹⁸ as well as Parán's marijuana business – which, as official documents from Peru show, was a major driver of Parán's opposition to the Project.⁵¹⁹ These Peruvian officials also had regular exchanges with members of the Parán Community, who kept them abreast of the decisions of Parán's leadership and the actions being planned.⁵²⁰ They were accordingly further aware of how dangerous some of Parán's members and their families were – including the Narvasta family, whose members had outstanding arrest warrants.⁵²¹ In these circumstances, Peru's allegation that its authorities could not take measures to prevent the June 2018 Invasion is simply not credible, and its failure to act reflects, at the very least, recklessness or gross negligence.

275 Peru further attempts to justify its passivity by stating that:

"[t]he PNP authorities closest to the Invicta Mine were those of the Sayán Police Station, which is located at least a two-hour drive away. Reaching the Invicta Mine from the Sayán Police Station is difficult, requiring favorable weather conditions to travel across steep, unpaved terrain. Traveling to the Invicta Mine —particularly with a large contingent of officers—thus would have required a certain minimum amount of time and planning."⁵²²

276 It is not true that the Sayán Police Station is located “a two-hour drive away" from the IMC's mine camp. Indeed, [Redacted]

⁵¹⁶ SSS, Weekly Report, Project (SPA), 06/11/2017 to 11/11/2017, at Exhibit C-414, p. 5; SSS, Weekly Report, Project (SPA), 06/11/2017 to 11/11/2017, at Exhibit C-461, p. 3 and 5; SSS, Monthly Report Project, November 2017 (SPA), at Exhibit C-521, p. 12 and 15. ↩

⁵¹⁷ SSS, Weekly Report, Project (SPA), 20/11/2017 to 27/11/2017, at Exhibit C-426, p. 6; SSS, Weekly Report, Project (SPA), 20/11/2017 to 24/11/2017, at Exhibit C-445, p. 4. ↩

⁵¹⁸ SSS, Weekly Report, Project (SPA), 06/11/2017 to 11/11/2017, at Exhibit C-414, p. 5. ↩

⁵¹⁹ Internal MEM email with attachment (SPA), 20/02/2019, at Exhibit C-468, p. 3; Internal PCM email with attachment (SPA), 21/05/2019, at Exhibit C-552, p. 4; Internal MEM email with attachment (SPA), 16/10/2019, at Exhibit C-553, p. 2. ↩

⁵²⁰ [Redacted] ↩

⁵²¹ SSS, Weekly Report, Project (SPA), 06/11/2017 to 11/11/2017, at Exhibit C-414, p. 6. ↩

⁵²² Counter-Memorial, 24/03/2022, p. 106 (para. 213). ↩

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the route from the Sayán Police Station to IMC's mine camp can be travelled in about a one-hour drive. That Peru feels the need to exaggerate these distances is telling. The first half of the journey is on the national road system, which is in good condition. The second half is on the Lacsanga road, which is wide and in good condition since it is where IMC's trucks, dump trucks and other machinery used to go through.⁵²³ It is clear that this distance was not too far because when the Police sought to intervene in due time, it did so. This is exactly what happened in September 2018, when a contingent of 40 police officers acted pre-emptively to avoid what would have been, at the time, a second Parán invasion of the Site.⁵²⁴ Furthermore, as noted above, Peru was aware at least since October 2017 of the risk of a Parán invasion. So to suggest that it did not have sufficient time to plan and prepare to prevent future invasions by the Parán Community – such as the June 2018 Invasion, which took place 8 months later – is simply not credible.

6.2.3 Peru failed to sanction the conduct of the Parán invaders

277 Peru contends that its response to the June 2018 Invasion was adequate and “entirely consistent with Peruvian law”⁵²⁵ because, shortly after IMC filed its criminal complaint on 20 June 2018 reporting on the invasion, the Sayán Police inspected the Site, [Redacted] and initiated a criminal investigation.⁵²⁶ While it is true that Peru took these immediate and short-lived actions, it ultimately chose not to prosecute or sanction the Parán invaders. Such a sanction would have been crucial to deter further invasions and acts of aggression, which of course, took place just a few short months later.

278 By way of reminder, [Redacted] IMC's CR Team filed a criminal complaint against several members and leaders of the Parán

⁵²³ [Redacted] ↩

⁵²⁴ Police approval of plan to avoid the Parán Community's invasion (SPA), 08/09/2018, at Exhibit C-136; CR Team Report on the Police intervention 10-12 September 2019 at the Project Site (SPA), 13/09/2018, at Exhibit C-137. ↩

⁵²⁵ Counter-Memorial, 24/03/2022, p. 108 (para. 217). ↩

⁵²⁶ Counter-Memorial, 24/03/2022, p. 108 (para. 217). ↩

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Community on 20 June 2018, the day after the invasion of the Site. The complaint (as amended) was filed for the crimes of coercion, usurpation, and aggravated damages to IMC's property.⁵²⁷ Indeed, the Parán invaders had beaten IMC's staff, shot at IMC's workers, damaged IMC's property and coerced [Redacted] to sign fabricated minutes stating that Parán's invasion had been peaceful.⁵²⁸ IMC expected Peru to process its criminal complaint diligently and in accordance with Peruvian law, to sanction the Parán offenders and to set a precedent of legality to deter future crimes. Unfortunately, the reality was the exact opposite.

279 The Prosecutor's Office for the Huaura Province (“Huaura Prosecutor's Office") blatantly disregarded Peruvian law when he acted with very significant delay and absolved the Parán offenders from any responsibility despite the grave crimes committed:

• Following the admission of the complaint on 23 July 2018,⁵²⁹ the Huaura Prosecutor's Office had a maximum of 8 months to conduct its preliminary investigation (“diligencias preliminares” in Spanish) and render a decision on whether or not to launch a preparatory investigation (“investigación preparatoria" in Spanish).⁵³⁰ This period began running on 23 July 2018, the date on which the complaint was admitted, and expired on 23 March 2019.⁵³¹ The Huaura Prosecutor's Office failed to comply with this mandatory legal period, as it only rendered its decision on 15 June 2022,⁵³² i.e., more than three years

⁵²⁷ Law Firm Lazo, de Romaña, Criminal Case Status Report for Lupaka (SPA), 09/07/2018, at Exhibit C-159; Police Operational Plan to lift the Blockade (SPA), 09/02/2019, at Exhibit C-193, p. 3 (para. 1); Summary table of complaints filed by Invicta, at Exhibit IMM-0047, p. 1 (Item 1). ↩

⁵²⁸ Memorial, 01/10/2021, p. 32 et seq. (Section 2.3.1); SSS, Special Report, seizure of the Invicta Mine Camp and Facilities (SPA), 19/06/2018, at Exhibit C-129, p. 1-2. ↩

⁵²⁹ Summary table of complaints filed by Invicta, at Exhibit IMM-0047, p. 1 (Item 1) ↩

⁵³⁰ See Court of Cassation Decision No. 144-2012 "Ancash" (SPA), 11/07/2013, at Exhibit C-554, p. 10. This conservatively assumes that this was a complex case. The Prosecutor will launch preparatory investigations if he considers there is some evidence of the commission of a crime. See Criminal Code of Procedure, 2004 (SPA), at Exhibit C-555, p. 109 et seq. (Arts. 334(1) and 336(1)). ↩

⁵³¹ Criminal Code of Procedure, 2004 (SPA), at Exhibit C-555, p. 109 (Art. 334(2)). ↩

⁵³² Huaura Prosecutor's Office website, Case File No. 1006014500-2018-4336-0 (accessed on 11/08/2022) (SPA), at Exhibit C-556. ↩

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after its expiry and just a few months before the Claimant lodged this submission. This delay cannot be excused by the suspension of procedural deadlines decreed as a result of the COVID-19 sanitary emergency, which was effective for the first time on 16 March 2020, i.e., one year after the expiry of the legal deadline.⁵³³

• In its 15 June 2022 decision, the Huaura Prosecutor's Office decided not to launch a preparatory investigation, closing the case file and freeing the Parán invaders from any responsibility.⁵³⁴

280 Peru's passivity and erratic behaviour in respect of enforcing its own laws emboldened Parán offenders, who saw that their criminal actions had no negative consequences. Peru also failed to disarm the Parán Ronda Campesina despite the evidence of misuse of their arms during the June 2018 Invasion, which would have gone a long way to preventing future invasions and acts of aggression.

6.3 Peru's acquiescence in the Parán Community's breaches of the September 2018 Commitment

281 In its Memorial, the Claimant referred to the September 2018 Commitment, whereby the Parán President committed to refrain from all

⁵³³ Procedural terms in Peru were suspended from 16 March 2020 to 31 October 2020, and from 31 January 2021 to 28 February 2021, i.e., a total of 257 days. See Resolution of the Attorney General's Office No. 588-2020 (SPA), 16/03/2020, at Exhibit C-557; Resolution of the Attorney General's Office No. 733-2020 (SPA), 29/06/2020, at Exhibit C-558; Public Prosecutors Office, Administrative Resolution No. 842-2020-MP (SPA), 15/07/2020, at Exhibit C-637; Public Prosecutors Office, Administrative Resolution No. 748-2020-MP (SPA), 30/06/2020, at Exhibit C-638; Resolution of the Attorney General's Office No. 953-2020 (SPA), 29/08/2020, at Exhibit C-561; Resolution of the Attorney General's Office No. 1066-2020 (SPA), 30/09/2020, at Exhibit C-562; Resolution of the Attorney General's Office No. 134-2021 (SPA), 29/01/2021, at Exhibit C-563; Resolution of the Attorney General's Office No. 167-2021 (SPA), 07/02/2021, at Exhibit C-564; Resolution of the Attorney General's Office No. 209-2021 (SPA), 14/02/2021, at Exhibit C-565. ↩

⁵³⁴ Huaura Prosecutor's Office website, Case File No. 1006014500-2018-4336-0 (accessed on 11/08/2022) (SPA), at Exhibit C-556. This information was obtained from the Prosecutor's website. The Claimant has not been able to access the Huaura Prosecutor's Office decision as it lost control of IMC on 26 August 2019. ↩

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acts of violence, threats or harassment against IMC.⁵³⁵ As was also noted, Parán breached such commitment less than a month after making it by setting up its illegal Blockade. The Claimant further explained that despite being aware of this breach, “[t]he central authorities were unwilling to enforce the law against the Parán Community.”⁵³⁶

282 Peru does not deny that the Parán Community breached the September 2018 Commitment, nor does it deny having been aware of that breach. However, Peru attempts to excuse its failure to act by stating that "Claimant does not identify what ‘law' the referenced ‘central authorities' were allegedly unwilling to enforce, or even what ‘central authorities' it is referring to.”⁵³⁷ Peru's excuse is disingenuous as the State should know its own legal framework and the duties of its authorities thereunder. Nor should the invasion of private property by armed intruders be a cause for such pedantry. In any event, the Claimant clarifies this below.

283 Shortly after the June 2018 Invasion, Mr Castañeda filed before the Huaura Subprefect, Ms Bertila Hijar González, a request for protective measures for IMC personnel (“Solicitud de Garantias Personales” in Spanish).⁵³⁸ In Peru, requests for protective measures are governed by Directive No. 0010-2015-ONAGI-DGAP,⁵³⁹ which sets out the procedure that authorities must follow upon receipt of these requests. Further to this Directive, upon receipt of Mr Castañeda's request for protective measures, the Huaura Subprefect convened Mr Castañeda and the Parán President to a hearing,⁵⁴⁰ which resulted in the signature of the September 2018 Commitment whereby the Parán President committed to refrain from all acts of violence, threats or harassment against IMC. This agreement was

⁵³⁵ Memorial, 01/10/2021, p. 38 (para. 115); Minutes of the Subprefect meeting between IMC and the Parán Community including September 2018 Commitment (SPA), 18/09/2018, at Exhibit C-139, p. 2. ↩

⁵³⁶ Memorial, 01/10/2021, p. 38 (para. 116). ↩

⁵³⁷ Counter-Memorial, 24/03/2022, p. 114 et seq. (para. 227). ↩

⁵³⁸ Request by J. Castañeda to the Huaura Subprefect for protection (SPA), 26/06/2018, at Exhibit C-128. ↩

⁵³⁹ MININTER - ONAGI, Directive No. 0010-2015-ONAGI-DGAP (SPA), 27/11/2015, at Exhibit C-566. ↩

⁵⁴⁰ MININTER - ONAGI, Directive No. 0010-2015-ONAGI-DGAP (SPA), 27/11/2015, at Exhibit C-566, p. 5 (para. 7.3.1). ↩

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also signed by the Huaura Subprefect, acting in her capacity as "District Governor of the place where the events [underlying the request for protective measures] occurred".⁵⁴¹ Consistent with Directive No. 0010-2015-ONAGI-DGAP, the September 2018 Commitment stated that "[t]he signing of these Minutes has a decisive character and the failure of either party hereto to comply carries the responsibilities of the Law", namely the commission of the crime of contempt of authority.⁵⁴²

284 As stated above, Parán breached the September 2018 Commitment by setting up the Blockade. Hence, on 9 November 2018, IMC sent a letter to the Huaura Subprefect communicating Parán's breach and requesting the Subprefect to “fil[e] before the corresponding authority the complaint for contempt of authority".⁵⁴³

285 Upon receipt of IMC's letter, the Huaura Subprefect was obliged under Peruvian law to file a criminal complaint against Parán for the crime of contempt of authority. Indeed, Article 326(2) of Peru's Criminal Procedure Code provides that "[...] officials who, in the exercise of their powers, or by reason of their position, bec[o]me aware of the commission of any punishable act" are obliged to file a criminal complaint.⁵⁴⁴ Had the Huaura Subprefect complied with her duty to file the criminal complaint against Parán, the Prosecutor's Office would have, in turn, been legally obliged to conduct an investigation and sanction Parán's members who had set up the Blockade.⁵⁴⁵ But the Huaura Subprefect did not comply with her duty. In fact, she did not even respond to IMC's letter. Tellingly, Peru's criminal law expert, Mr Iván Meini, has omitted referring to the request made by

⁵⁴¹ MININTER - ONAGI, Directive No. 0010-2015-ONAGI-DGAP (SPA), 27/11/2015, at Exhibit C-566, p. 3 (para. 7.1.1). ↩

⁵⁴² Minutes of the Subprefect meeting between IMC and the Parán Community including September 2018 Commitment (SPA), 18/09/2018, at Exhibit C-139, p. 2; MININTER - ONAGI, Directive No. 0010-2015-ONAGI-DGAP (SPA), 27/11/2015, at Exhibit C-566, p. 6 (para. 7.4.8). ↩

⁵⁴³ Letter from IMC to Huaura Subprefect (SPA), 09/11/2018, at Exhibit C-237, p. 2 (emphasis in original). ↩

⁵⁴⁴ Criminal Code of Procedure, 2004 (SPA), at Exhibit C-555, p. 107 (Art. 326(2)). ↩

⁵⁴⁵ Criminal Code of Procedure, 2004 (SPA), at Exhibit C-555, p. 108 (Art. 329(2)). ↩

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IMC to the Huaura Subprefect and the latter's duty to act upon such request.

286 Peru further contends that the “Claimant also provides no evidence that it exercised – let alone exhausted – any judicial remedies to enforce its bilateral agreement with the Parán Community [i.e., the September 2018 Commitment]".⁵⁴⁶ Peru does not explain what IMC should have done concretely in the circumstances. Yet, as noted, IMC filed a request before the Huaura Subprefect, which should have led to criminal sanctions against Parán for its breach of the September 2018 Commitment. This is more than sufficient to demonstrate Peru's passivity. In addition, IMC lodged numerous criminal complaints for Parán's egregious acts of violence, not just in relation to the June 2018 Invasion referred to at Section 6.2 above,⁵⁴⁷ but also in relation to the Blockade referred to at Section 6.4 below⁵⁴⁸ and to the March 2019 Invasion referred to at Section 6.7 below.⁵⁴⁹ IMC further lodged criminal complaints against Parán following the failed inspections by the Huaura Prosecutor of IMC's explosives magazine on 21 December 2018⁵⁵⁰ and 9 February 2019,⁵⁵¹ and for Parán's theft of IMC's explosives shortly thereafter.⁵⁵² Yet, nothing came of all these proceedings. Not once were any of Parán's members sanctioned in any way. To suggest therefore that Lupaka cannot complain because it did not exhaust every legal remedy available to it is highly cynical.

287 Equally misplaced is Peru's shallow contention that "Claimant has not provided any evidence to show that it performed its own obligations to the

⁵⁴⁶ Counter-Memorial, 24/03/2022, p. 114 et seq. (para. 227). ↩

⁵⁴⁷ Summary table of complaints filed by Invicta, at Exhibit IMM-0047, p. 1 (Item 1); Law Firm Lazo, de Romaña, Criminal Case Status Report for Lupaka (SPA), 09/07/2018, at Exhibit C-159. ↩

⁵⁴⁸ Summary table of complaints filed by Invicta, at Exhibit IMM-0047, p. 2 (item 3). ↩

⁵⁴⁹ Criminal complaints filed with the Sayán Police by IMC representative (SPA), 21/03/2019, at Exhibit C-208; Disposición Fiscal Nº 02, 24/02/2020, at Exhibit IMM-0054, p. 2 (Crime No. 56). ↩

⁵⁵⁰ Denuncia Ampliatoria, 07/01/2019, at Exhibit IMM-0053. ↩

⁵⁵¹ IMC, Criminal complaint for aggravated theft and illegal possession of explosives (SPA), 20/02/2019, at Exhibit C-342. ↩

⁵⁵² Criminal complaints filed with the Sayán Police by IMC representative (SPA), 21/03/2019, at Exhibit C-208; Disposición Fiscal Nº 02, 24/02/2020, at Exhibit IMM-0054, p. 2 (Crime No. 57). ↩

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Parán Community under this agreement”.⁵⁵³ Indeed, Peru does not point to any alleged breach by IMC, and Parán never alleged that IMC was in breach of its obligations under the September 2018 Commitment. This agreement was signed following a request for protective measures filed by IMC due to the Parán members' aggressions, not the other way around. IMC did not use violence, threats, or harassment against the Parán Community neither before nor after the September 2018 Commitment.

288 As the foregoing shows, Peru disregarded its own legal framework by failing to act against Parán following its breach of the September 2018 Commitment. Peru failed again to set a precedent of legality, sending a clear message to the Parán Community's leaders and members that their illegal behaviour would go unpunished.

6.4 Peru failed to lift Parán's Blockade shortly after its installation, despite being obliged to do so under Peruvian law

289 The Parán Community installed its illegal Blockade on 14 October 2018, cutting off access to the Site, expelling IMC's staff and taking control of the mine and camp facilities. Disturbingly, the Leoncio Prado Subprefect once again endorsed Parán's illegal taking of the mine.⁵⁵⁴ Peru contends that its response to the Blockade was adequate, as “it relied on dialogue to broker a long-term, sustainable solution to the conflict between Claimant and the rural community.”⁵⁵⁵

290 As the Claimant demonstrates in Section 7.2.3 below, Peru's attempt to excuse its failure to lift the Blockade on the basis that dialogue was the adequate solution is belied by its own internal contemporaneous documents. Those documents show that the State knew that dialogue was not a viable option in the circumstances because of Parán's plan to exploit the mine and protect its drug business. Notwithstanding the foregoing, the Police were obliged under Peruvian law to assist IMC in recovering control

⁵⁵³ Counter-Memorial, 24/03/2022, p. 114 et seq. (para. 227). ↩

⁵⁵⁴ Interview with Leoncio Prado Subprefect (MININTER) (Video) (SPA), 21/12/2018, at Exhibit C-526; Interview with Leoncio Prado Subprefect (MININTER) (Video Transcript) (SPA), 21/12/2018, at Exhibit C-527. ↩

⁵⁵⁵ Counter-Memorial, 24/03/2022, p. 3 (para. 7). ↩

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of the Site because IMC so requested it within 15 days of dispossession. IMC put forward such request, to no avail.

291 Indeed, Article 920 of the Civil Code of Peru provides that:

The possessor can repel the force that is used against him or the good and recover it, if he is dispossessed. The action is carried out within fifteen (15) days after becoming aware of the dispossession. [...]

The National Police of Peru as well as the respective Municipalities, within the framework of their powers provided for in the Organic Law of Municipalities, must provide the necessary support in order to guarantee strict compliance with this article, subject to its own responsibility.⁵⁵⁶

292 This Article regulates the so-called extrajudicial defence of possession (in Spanish, "defensa posesoria extrajudicial”), providing a possessor (such as IMC) who is dispossessed of an asset with the right to request the Police's assistance to regain possession within 15 days. Upon the filing of such a request, the Police are obliged to assist. Peru's criminal law expert, Mr Meini, agrees with this interpretation of the law.⁵⁵⁷

293 IMC requested Police support to recover control of the Site within 15 days of Parán's taking, in line with Article 920 of the Civil Code, to no avail. On 17 October 2018, i.e., 3 days after Parán's taking of the Site, IMC sent a letter to the Lima Region Chief of Police stating that:

"Subject: We request Police Support to Enter, Recover, Avoid acts of vandalism and possible attacks against our facilities (Mining Camp) by community members of the Rural Community of Paran

It is our pleasure to greet you on behalf of Invicta Mining Corp. SAC, a company dedicated to the development of mining exploration and exploitation projects, we hereby respectfully and cordially request through its representative that you provide

⁵⁵⁶ Civil Code of Peru ("Civil Code"), 24/07/1984, at Exhibit R-0005, p. 226 (Art. 920) (emphasis added). ↩

⁵⁵⁷ Expert Report of Iván Meini - Corrected Version, 22/03/2022, p. 42 et seq. (para. 118). ↩

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POLICE SUPPORT to recover and prevent acts of vandalism and the latent social conflict by the Paran Rural Community, who have invaded, taken over our facilities and closed access to the INVICTA mining camp, located in the Lacsanga Rural Community, Paccho district, Huaura Province, Lima Region."⁵⁵⁸

294 Peru knew that it was obliged to assist IMC in recovering control of the Site. On 24 October 2018, i.e., seven days after IMC's request for Police support, IMC and Police representatives held a meeting where the Police stated that IMC's request had been approved, an operational plan to recover control of the Site was in the making and the police intervention would take place on either 30 or 31 October 2018.⁵⁵⁹ However, ultimately, the Police did not intervene.

295 Peru's failure to assist IMC in regaining control of the Site is contrary to Peruvian law and IMC's rights thereunder. It is also inconsistent with the police interventions carried in the face of similar requests by mining investors. For instance, with respect to the Las Bambas mining project, on 28 April 2022, the Police deployed a 676-strong force⁵⁶⁰ to recover control of the mine site upon the investor's exercise of its right to the extrajudicial defence of possession. The Police remained on the site guarding the project and were subsequently joined by a private security team retained by the mining company (just as IMC had planned to do so by hiring

⁵⁵⁸ Letter from IMC to Police Headquarters in Lima (SPA), 17/10/2018, at Exhibit C-170, p. 1 (emphasis added). ↩

⁵⁵⁹ Report on meeting between IMC, the Parán Community, the MEM and the Mayor of the District of Leoncio Prado (SPA), 24/10/2018, at Exhibit C-173, p. 4 (Section 4): "Police Roadmap. The Invicta request (Request for Police Support) has been approved by the Police Region of Lima and the Provinces. The PNP Major, Andrés Rosales, has received the order to prepare the Police Operation Order for regaining access to the mine and Paran's eviction. [...] The police operation would take place between Tuesday 30 or Wednesday 31 October." (emphasis added). ↩

⁵⁶⁰ "Peruvian police evicts communities in Las Bambas mining", teleSURtv (SPA), 28/04/2022, at Exhibit C-315; "Police eviction in Peruvian mine leaves three injured and 11 arrested", DW (SPA), 28/04/2022, at Exhibit C-316; “Peruvian police carry out a new eviction of an indigenous community in the Las Bambas mine", Euronews (SPA), 28/04/2022, at Exhibit C-314; "Las Bambas: clashes between the police and community members left 14 injured and 11 detained", Infobae (SPA), 28/04/2022, at Exhibit C-317. ↩

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WDS).⁵⁶¹ The central government simultaneously decreed a state of emergency in the area for 30 days to allow the Police and the armed forces to take full control of the area.⁵⁶² Yet, Peru took no similar actions with respect to the Project.

6.5 Peru's refusal to authorise the Police to lift the Blockade in February 2019 was arbitrary

296 With its Memorial, the Claimant provided the document reflecting the Operational Plan to lift the Blockade dated 9 February 2019 as prepared by the Sayán Police.⁵⁶³ Peru accepts that the document is authentic and was prepared by the Sayán Police, but argues that such Plan was prepared "on a contingency basis",⁵⁶⁴ “as a way to get organized and be prepared",⁵⁶⁵ and that the “PNP [police] took no position at that time on whether that particular Operational Plan should or would be implemented, or, if it were implemented, when that would occur.'."⁵⁶⁶ None of these assertions are true. The facts show that the Police were ready to implement the Operational Plan on 19 February 2019 at 9 a.m., but that the MININTER blocked its implementation for no legitimate reason.

297 By way of background, the document dated 9 February 2019 reflecting the Operational Plan had been prepared further to IMC's 7 December 2018 requests before each of the Police and the MININTER for a police intervention to lift the Blockade, alerting these authorities of the danger

⁵⁶¹ "Las Bambas: mining conflict gets out of control and the crisis worsens due to attacks by community members", Instituto de Ingenieros de Minas del Perú (SPA), 29/04/2022, at Exhibit C-318; "Las Bambas: they ask that assault and attempted rape of security personnel not go unpunished", Instituto de Ingenieros de Minas del Perú (SPA), 02/05/2022, at Exhibit C-319. ↩

⁵⁶² "Peruvian government calls for dialogue in conflict over Las Bambas mine", DW (SPA), 30/04/2022, at Exhibit C-320. ↩

⁵⁶³ Memorial, 01/10/2021, p. 49 et seq. (para. 150). ↩

⁵⁶⁴ Counter-Memorial, 24/03/2022, p. 102 et seq. (para. 208). ↩

⁵⁶⁵ Counter-Memorial, 24/03/2022, p. 131 (para. 256). ↩

⁵⁶⁶ Counter-Memorial, 24/03/2022, p. 131 (para. 256). ↩

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posed by the Parán Community having access to the explosives on the Site.⁵⁶⁷

298 After submitting its request, IMC continued to coordinate with the MININTER on the lifting of the Blockade, and the company informed the MEM-OGGS of this during a meeting held on 16 January 2019.⁵⁶⁸

299 By 30 January 2019, IMC obtained internal Police information that its 7 December 2018 request was being processed favourably within the Police hierarchy⁵⁶⁹ and that the Huacho Police had requested the seizure of the arms held by the Parán Community.⁵⁷⁰ The CPO at Sayán, Major Soria, had also formally requested from his superiors that the special forces intervene to reinstate public order and guarantee “the security of public and private property and free transit.”⁵⁷¹

300 Shortly after, on 4 February 2019, the Huacho Police requested the Sayán Police⁵⁷² to prepare an Operation Plan to lift the Blockade, which was completed on 9 February 2019 and was signed by CPO Soria in Sayán on 11 February 2019.⁵⁷³ The Operational Plan was a complete and final document only awaiting approval from the higher authorities. As outlined in this plan, the Police forces were to surround the Invicta mine camp, then defuse any resistance including through arrests of violent Parán members

⁵⁶⁷ Letter from IMC to MININTER (SPA), 07/12/2018, at Exhibit C-184, Letter from IMC to Police Headquarters (SPA), 07/12/2018, at Exhibit C-185, Letter from IMC to Sayán Police (SPA), 07/12/2018, at Exhibit C-186; Memorial, 01/10/2021, p. 45 (para. 137). ↩

⁵⁶⁸ Internal MEM email, meeting (SPA), 16/01/2019, at Exhibit C-567; Internal MEM email, information (SPA), 16/01/2019, at Exhibit C-568; Internal MEM email (with attachment) (SPA), 16/01/2019, at Exhibit C-569, p. 2. ↩

⁵⁶⁹ Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 20 (para. 42) ↩

⁵⁷⁰ Letter from Huacho Police to Chief of Lima Region Police (SPA), 25/01/2019, at Exhibit C-338. ↩

⁵⁷¹ Huacho DIVPOL, Report No. 004-2019-REGPOL.LIMA/DIVPOL-H-CS.SEC. (SPA), 23/01/2019, at Exhibit C-332. ↩

⁵⁷² Huacho DIVPOL, Decree No. 47-2019-REGIÓN POLICIAL LIMA/DIVPOL-H-OFIPLO (SPA), 04/02/2019, at Exhibit C-340. ↩

⁵⁷³ Police Operational Plan to lift the Blockade (SPA), 09/02/2019, at Exhibit C-193; Approval by Mayor Soria of the Police Operational Plan to lift the Blockade (SPA), 09/02/2019, at Exhibit C-195. ↩

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and consolidate their position to regain control of the Site.⁵⁷⁴ It also annexed a report by the intelligence services dated 6 February 2019 noting the situation on the ground,⁵⁷⁵ and contained numerous issues which had been coordinated with IMC, as Mr Bravo notes.⁵⁷⁶

301 On 13 February 2019, the Sayán Police informed Mr Arévalo that the police intervention to lift the Blockade was scheduled to take place on 19 February 2019 at 9 a.m.⁵⁷⁷

302 Also on 13 February 2019, the MEM-OGGS agreed, at a meeting with Mr Bravo, that the Operational Plan should continue to be pushed forward, while the MEM-OGGS tried in parallel to engage with the Parán authorities to reinitiate dialogue with IMC.⁵⁷⁸

303 On 14 February 2019, the Huacho Police approved the Operational Plan, a copy of which was sent to Lima for approval.⁵⁷⁹ Messrs Bravo, Arévalo and Estrada met with CPO Soria on that same day at 7 p.m. CPO Soria confirmed that the Operational Plan had been fully approved by the Police

⁵⁷⁴ Police Operational Plan to lift the Blockade (SPA), 09/02/2019, at Exhibit C-193, p. 13. ↩

⁵⁷⁵ Police Operational Plan to lift the Blockade (SPA), 09/02/2019, at Exhibit C-193, p. 40. ↩

⁵⁷⁶ Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 23 et seq. (para. 48). ↩

⁵⁷⁷ Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 24 (paras. 53). ↩

⁵⁷⁸ Email from Lupaka to LAVETA with attachment, 13/02/2019, at Exhibit C-341, p. 2. The MEM-OGGS' view that the Operational Plan should go ahead belies Peru's allegation in this arbitration that IMC's requests for police intervention in parallel to its attempts to dialogue with Parán would show bad faith. If anything, a Police intervention would have allowed IMC to resume its operations and guaranteed a level playing field to negotiate, a basic condition to any meaningful dialogue as the MEM-OGGS itself told Parán. See Letter from MEM to the Parán Community (SPA), 18/02/2019, at Exhibit C-191, p. 1 (“[...] dialogue must be established on equal terms and on the basis of social peace, consistent with public order. In this sense, such continuation will be exercised without any coercive measure. In this context, the next session will be convened immediately after verifying that there is no blockade in the area, or resistance from the population against the company") (emphasis added). Equally baseless is Peru's contention that IMC's request for police intervention was undue as it was contrary to the agreement signed by IMC and Parán on 14 October 2018, when the Blockade was set up (Minutes of the meeting between the Parán Community, IMC and Chief of Sayán Police (SPA), 14/10/2018, at Exhibit C-166). Indeed, this agreement was signed under coercion, just as the one signed on 19 June 2018. If Marco Estrada did not sign the agreement proposed by Parán on the day of the Blockade, his physical integrity would have been compromised. [Redacted] ↩

⁵⁷⁹ Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 25-26 (para. 57). ↩

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hierarchy and he coordinated with IMC's representatives on the final logistical details.⁵⁸⁰

304 A few days later, on 18 February 2019, the MEM-OGGS wrote to the Parán Community stating:

"The time that has elapsed with the road blockade in place (more than 100 days) will compel the relevant entities in charge to perform their duties, within their powers and in accordance with public order and social peace. I hereby put you on notice for the relevant purposes.'⁵⁸¹

305 As this letter makes clear, the Parán Community had to lift the Blockade or otherwise the Police would use force imminently. The MEM-OGGS forwarded this letter on the same day to the Sayán Police with a request to follow up on the matter.⁵⁸²

306 Consistent with the foregoing, on 20 February 2019, the MEM-OGGS prepared an internal memorandum stating that dialogue had failed in this case because the Parán Community sought to protect its marijuana business. The community did not wish to negotiate, it wished to further its illegal marijuana business instead and was financing the Blockade with illicit drug money. As stated in the memorandum:

"The social process that the mining company maintains with the Parán Community, is affected by [the] presence of interests outside the State (producers of local marijuana plantations) the MININTER is aware of this problem and is activating the corresponding mechanisms. Also, it is known that the local [Police] is preparing an operations plan in the community, having identified long-range weapons among the community members.

RECOMMENDATIONS:

⁵⁸⁰ Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 26 (para. 58). ↩

⁵⁸¹ Letter from MEM to the Parán Community (SPA), 18/02/2019, at Exhibit C-191 (emphasis added). ↩

⁵⁸² Email from MEM to Chief of Sayán Police with attachment (SPA), 18/02/2019, at Exhibit C-570. ↩

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Coordination at the highest inter-sectoral level, between the MEM and the MININTER in order to activate as soon as possible the mechanisms for the re-establishment of public order in the area by MININTER. Dialogue mechanisms do not proceed in this case because community leadership manages a double discourse, with the State and with its population, evidencing with it the presence and active participation of local actors who, with an economy outside the law, subsidize activities contrary to public order against the mining project.”⁵⁸³

307 The MEM-OGGS's memorandum also refers to the fact that the Parán Community was armed with long-range weapons, which posed a major danger for the implementation of the Operational Plan. Although the memorandum states that the MININTER was planning to do something about Parán's illegal drug business and the Police would seize Parán's weapons, nothing ever occurred. Given the actions that the MININTER and the Police were planning to take, it is highly cynical for Mr Saavedra, Deputy Minister of the MININTER, to state that "[i]f Invicta considered a “criminal problem” to have existed, that should have been resolved through the appropriate police, prosecution and judicial mechanisms, according to the Peruvian legal framework.”⁵⁸⁴

308 Having been approved by the Police hierarchy, the implementation of the Operational Plan was only contingent on the approval by the MININTER. As the memorandum referred to above states:

“ACTION TO BE IMPLEMENTED: The PNP [Police] has prepared an operational plan to effect the unblocking of the access roads, the approval of which is pending by the Ministry of Interior's senior officials. [...]

RECOMMENDATIONS: Coordination at the highest inter-sectoral level between the MEM and MININTER in order to

⁵⁸³ Internal MEM email with attachment (SPA), 20/02/2019, at Exhibit C-468, p. 3 et seq. (emphasis added). ↩

⁵⁸⁴ Witness Statement of Esteban Saavedra Mendoza, 15/03/2022, p. 9 et seq. (para. 25 (d)). ↩

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activate as soon as possible the mechanisms for the re-establishment of public order in the area by MININTER.”⁵⁸⁵

309 Unfortunately, as the Deputy Minister of the MININTER, Mr Saavedra, told Mr Bravo in their WhatsApp exchanges, the MININTER did not approve the police intervention out of fear of bad press and political repercussions.⁵⁸⁶ This was not a decision taken for legal reasons, as Peru contends in this arbitration.⁵⁸⁷

310 As the foregoing shows, the Operational Plan was ready to be implemented on 19 February 2019 further to the approval by the relevant Peruvian Police authorities. Only the MININTER, concerned by political optics, refused to authorise its implementation. The Parán Community was also informed that a police intervention was imminent by the MEM-OGGS. Therefore, Peru's contention that the Operational Plan was prepared “on a contingency basis”⁵⁸⁸ and that “the PNP took no position at that time on whether that particular Operational Plan should or would be implemented”⁵⁸⁹ is plainly false.

6.6 Peru's acquiescence in the Parán Community's breaches of the 26 February 2019 Agreement

311 It is not in dispute that on 26 February 2019, IMC and the Parán Community signed an agreement (the “26 February 2019 Agreement") whereby (i) the Parán Community committed to immediately “suspend all coercive measures", (ii) the Parán Community “guarantee[d] the development of the activities of the mining company [IMC] through the access road of the Parán Community” and (iii) the parties agreed “[to]

⁵⁸⁵ Internal MEM email with attachment (SPA), 20/02/2019, at Exhibit C-468, p. 2 et seq. (emphasis added). ↩

⁵⁸⁶ WhatsApp exchanges between Lupaka (Mr Bravo) and MININTER (Mr Saavedra), 5/02/2019-20/02/2019 (SPA), at Exhibit C-192 (corrected translation), p. 3. ↩

⁵⁸⁷ Counter-Memorial, 24/03/2022, p. 3 (para. 7). ↩

⁵⁸⁸ Counter-Memorial, 24/03/2022, p. 102 et seq. (para. 208). ↩

⁵⁸⁹ Counter-Memorial, 24/03/2022, p. 131 (para. 256). ↩

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identify and locate the affected land (Rural Community of Parán) through a topographic survey” to be conducted on 20 March 2019.⁵⁹⁰

312 In its Memorial, the Claimant demonstrated that the Parán Community breached its obligations under the 26 February 2019 Agreement. Peru denies this, but its denials lack factual bases. The Claimant addresses these denials below, showing that Parán breached its obligation to lift the Blockade (Section 6.6.1) and to conduct the topographical survey agreed upon by the parties (Section 6.6.2). Despite these patent breaches, Peru supported Parán in allowing it to continue with the Blockade and to make additional claims for benefits which were not covered by the 26 February 2019 Agreement.

6.6.1 Parán breached its obligation to lift the Blockade

313 In its Memorial, the Claimant explains that the Parán Community breached its obligation to “suspend all coercive measures” as from 26 February 2019 since it refused to lift the Blockade.⁵⁹¹ The Parán Community only allowed IMC personnel to access the Site through the Parán road as from 4 March 2019, which had to be done on foot as such road was in an unusable condition.⁵⁹²

314 Peru denies Parán's breach, arguing that "no express condition to lift the Access Road Protest [i.e., the Blockade] appears in the 26 February 2019 Agreement".⁵⁹³ Peru further argues that the Parán Community only "guarantee[d] the development of the activities of the mining company [...] through its territory, and not through the Lacsanga Community Access Road. Thus, [...] the Parán Community's position [...] is entirely

⁵⁹⁰ Minutes of the meeting between the Parán Community, IMC and MEM including 26 February 2019 Agreement (SPA), 26/02/2019, at Exhibit C-200, p. 1 et seq.; Memorial, 01/10/2021, p. 51 (para. 154); Counter-Memorial, 24/03/2022, p. 135 et seq. (para. 264). ↩

⁵⁹¹ Memorial, 01/10/2021, p. 51 (para. 154). ↩

⁵⁹² Memorial, 01/10/2021, p. 52 (para. 159); Witness Statement of Luis F. Bravo, 01/10/2021, p. 18 (para. 53). ↩

⁵⁹³ Counter-Memorial, 24/03/2022, p. 138 (para. 270). ↩

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understandable [...]".⁵⁹⁴ Peru's attempt to purposefully misread the 26 February 2019 Agreement is unavailing.

315 First, the plain text of the 26 February 2019 Agreement demonstrates Peru's position to be wrong. That text expressly states that the Parán Community "will suspend all coercive measures" as from 26 February 2019.⁵⁹⁵ The only coercive measure in place at the time of this agreement was the Blockade set up by the Parán Community on the Lacsanga road, a fact that was duly acknowledged by the relevant authorities.⁵⁹⁶ The Parán Community was obliged to lift this Blockade and failed to do so. The fact that Parán had also guaranteed IMC access to the Site through Parán territory does not mean that it could fail to lift the Blockade. The agreement was for the access to be open through both the Lacsanga and Parán roads.

316 Peru's contemporaneous documents confirm Parán's obligation to lift the Blockade. A MEM report dated 28 February 2019, i.e., two days after the 26 February 2019 Agreement was signed, states that "[a]t the last meeting on 26.02.2019, it was agreed, among other points, to suspend the protest measure (abandonment of the blockade of access roads)”.⁵⁹⁷ An internal memo of the MININTER dated 11 March 2019 further states:

"The president of the Paran community, Mr. Azarías Torres Palomares, has stated that the workers have been allowed free access to the mining unit [through the Parán road] since 4 March to carry out an inventory, and that the presence of 16 to 18 community members on the access road through the Lacsanga community has been done to prevent a conflict or attack from that community at its borders. Therefore, there seems to be a

⁵⁹⁴ Counter-Memorial, 24/03/2022, p. 137 (para. 268) (emphasis in original). ↩

⁵⁹⁵ Minutes of the meeting between the Parán Community, IMC and MEM including 26 February 2019 Agreement (SPA), 26/02/2019, at Exhibit C-200, p. 1 et seq. ↩

⁵⁹⁶ Letter from MEM to PCM (SPA), 04/01/2019, at Exhibit C-571, p. 4 ("[...] the coercive measure therefore is still in place.") (emphasis in original); Letter from MEM to PCM (SPA), 04/01/2019, at Exhibit C-571, p. 4. ↩

⁵⁹⁷ Internal MEM email with attachment (SPA), 28/02/2019, at Exhibit C-572, p. 2 (para. 2.3) (emphasis added). ↩

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willingness in the community to comply with the agreements adopted."⁵⁹⁸

317 While Parán's explanations for maintaining the Blockade were not credible, this document shows that the MININTER had understood the 26 February 2019 Agreement to allow for access through both the Lacsanga and Parán roads. Other contemporaneous documents prepared by State entities confirm this understanding,⁵⁹⁹ as did the discussions that Mr Bravo had with various central authorities at the time.⁶⁰⁰

318 Second, Peru's stance runs counter to common sense, as IMC would have never agreed to abandon exploiting the mine through the Lacsanga road. Indeed, IMC had invested substantial amounts of time and money to improve such road, and its agreement with the Lacsanga Community provided for yearly payments totalling PEN 80,000 for the use of its road during the full period of IMC's mining activities.⁶⁰¹ In fact, the whole point of IMC's insistent requests for the Blockade to be lifted was its interest in using the Lacsanga road, the only access road which had been made suitable for the transit of ore trucks and other vehicles.⁶⁰²

319 Peru did nothing to remedy the situation despite Lupaka's insistent call for assistance. Indeed, Mr Bravo explains how he sent letters, made calls and held meetings with the MEM and MININTER in the days and weeks following the 26 February 2019 meeting. Yet, nothing came of this; the State remained passive.⁶⁰³

⁵⁹⁸ MININTER, Report No. 00008-2019-IN_VOI_DGOP-HKRA (SPA), 11/03/2019, at Exhibit C-573, p. 3 et seq. (emphasis added). ↩

⁵⁹⁹ See Internal PCM aide mémorie (SPA), 10/07/2019, at Exhibit C-574, p. 2. This document, which was prepared by the Presidency of the Council of Ministers on 8 July 2019, further confirms the State's understanding that the Parán Community "committed to suspend its [force] measure". ↩

⁶⁰⁰ Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 40-41 (paras. 101 and 103). ↩

⁶⁰¹ 2017 Lacsanga Agreement (SPA), 18/07/2017, at Exhibit C-43, p. 8 (Art. 8.2) ("INVICTA shall contribute the sum of S/ 80,000.00 (eighty thousand and 00/100 Soles) each year for the use of the road and for the necessary improvements to be carried out (widening, pairing, etc.)"). ↩

⁶⁰² Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 31 (para. 73). ↩

⁶⁰³ Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 38 et seq. (Section 5.3). ↩

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320 Based on the foregoing, Peru's contention that the Parán Community was not obliged to lift the Blockade, and that its failure to do so would be “entirely understandable” is baseless. It is also clear that while the State understood that there had been a serious breach of the 26 February 2019 Agreement at the time, it did nothing to remedy it.

6.6.2 Parán breached its obligation to conduct the topographic survey agreed with IMC

321 In its Memorial, the Claimant explained that the Parán Community also breached the 26 February 2019 Agreement through its refusal to conduct the topographic survey that had been agreed with IMC. Specifically, the Claimant explained that Parán refused to conduct a survey to identify the areas within its territory that had been allegedly affected by the Project, instead seeking to force IMC to pay for a survey in relation to a future access road to the Site through Parán (which had not been agreed).⁶⁰⁴

322 In its Counter-Memorial, Peru strategically removes the focus from the scope of the topographical survey and puts it on IMC's refusal to pay the topographer's fees in an attempt to shift blame. Indeed, Peru argues that the "Claimant's refusal to fund the topographical survey [at a cost of PEN 30,000 (approximately USD 9,000)] was unreasonable, and undermined the progress that had been brokered by Peru.”⁶⁰⁵ Peru's witness Mr Nilton León further states that “the progress achieved by the OGGS in the 26 February 2019 dialogue table [was] dismantled due to Invicta's radical objection to this request to pay the [topographic] surveyor."⁶⁰⁶ Peru only refers once in passing to the scope of the topographic survey, stating that “a topographer [was] to analyze the Parán Community's land that might be adversely affected by the works that were planned for the access road through Parán Community territory.”⁶⁰⁷ Peru's contentions are baseless.

⁶⁰⁴ Memorial, 01/10/2021, p. 53 (para. 162); Letter from IMC to the Parán Community (SPA), 18/03/2019, at Exhibit C-205, p. 2 (para. 5). ↩

⁶⁰⁵ Counter-Memorial, 24/03/2022, p. 139 (para. 272). ↩

⁶⁰⁶ Witness Statement of Nilton César León Huerta, 22/03/2022, p. 22 (para. 68). ↩

⁶⁰⁷ Counter-Memorial, 24/03/2022, p. 138 et seq. (para. 271). ↩

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323 Indeed, the 26 February 2019 Agreement provides that "[t]he Invicta mining company, together with the Rural Community of Parán, will identify and locate the affected land (Rural Community of Parán) through a topographic survey”.⁶⁰⁸ The "affected land" was the Parán land that had supposedly been affected by IMC's mine preparation and development activities, which went back to Parán's claim that its land had been damaged by the Project. Parán's claim was discussed during the meetings held by IMC and State representatives in January and February 2019,⁶⁰⁹ prior to the signing of the 26 February 2019 Agreement, and addressed in the draft agreements prepared in connection with those meetings by providing for both IMC and Parán “[to] identify and locate any negative impacts to which the Community refers".⁶¹⁰ As Mr Bravo explains, in none of these meetings was there a discussion on making improvements to the Parán road.⁶¹¹

324 As the foregoing shows, the agreement was not for a topographer to conduct a survey in relation to a future access road to the Site through Parán. IMC was right to refuse to pay the fees for a unilaterally appointed topographer who was not going to do what was stipulated in the 26 February 2019 Agreement. The stance taken by Parán at the time confirmed yet again how unreasonable it was.

325 Mr Nilton León states that “Invicta limited itself to complaining about the price [of the topographic survey] but did not seek a way to overcome this disagreement."⁶¹² This is false. As the Claimant explained in its Memorial, upon learning on 15 March 2019 that Parán sought to change the scope of the topographic survey, IMC extended an invitation to the Parán President on 18 March 2019 to discuss and “reach an Agreement that

⁶⁰⁸ Minutes of the meeting between the Parán Community, IMC and MEM including 26 February 2019 Agreement (SPA), 26/02/2019, at Exhibit C-200, p. 1 et seq. (para. 4) (emphasis added). ↩

⁶⁰⁹ Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 32 et seq. (Sections 5.1 and 5.2). ↩

⁶¹⁰ Email from IMC to MEM with attachments (SPA), 25/02/2019, at Exhibit C-199, p. 4 et seq. See also MEM, Draft agreement between Parán, MEM and IMC (as drafted by the MEM during 29 January 2019 meeting) (SPA), at Exhibit C-344. ↩

⁶¹¹ Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 37 (para. 92). ↩

⁶¹² Witness Statement of Nilton César León Huerta, 22/03/2022, p. 21 et seq. (para. 65). ↩

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meets the expectations of all parties”.⁶¹³ Mr Bravo and Lupaka's CEO, Mr Ansley, travelled the next day to Huacho to meet with the Parán President, who raised demands different from those discussed on 26 February 2019, including that IMC cancel its agreements with the Lacsanga and Santo Domingo Communities.⁶¹⁴ IMC explained that this was not possible, offering as a sign of good faith to reconsider the topographic survey for the Parán road and to make enhancements to the Parán access road over time if the Blockade would be lifted.⁶¹⁵ However, the Parán President insisted on its demands and stated clearly that the Parán Community did not intend to lift the Blockade, making it impossible to reach an agreement.⁶¹⁶

326 Peru further contends that “if [the] Claimant genuinely believed that the 26 February 2019 Agreement had been breached by the Parán Community, it should have considered possible legal recourses under Peruvian law (e.g., civil law actions, including before the judiciary).”⁶¹⁷ This argument is disappointing.

327 By the time of the 26 February 2019 Agreement, Parán had occupied the Site for four months and a half, using wanton violence against IMC personnel and showing a total disregard for Peruvian law and its authorities. IMC had by this point filed three criminal complaints against Parán, none of which succeeded in prompting any reaction from the State. Indeed, while the investigations pertaining to two of these complaints were still ongoing by then (one of them after the expiry of the 8-month maximum legal period),⁶¹⁸ the other complaint had been dismissed by the

⁶¹³ Letter from IMC to the Parán Community (SPA), 18/03/2019, at Exhibit C-205, p. 2 (last paragraph); Memorial, 01/10/2021, p. 53 et seq. (paras. 162-163). ↩

⁶¹⁴ Memorial, 01/10/2021, p. 53 et seq. (paras. 163-165); Witness Statement of Luis F. Bravo, 01/10/2021, p. 21 et seq. (paras. 65-66); Email from Lupaka to Lupaka and Laveta, 27/03/2019, at Exhibit C-354. ↩

⁶¹⁵ Email from Lupaka to Lupaka and Laveta, 27/03/2019, at Exhibit C-354, p. 2; Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 47-48 (para. 121). ↩

⁶¹⁶ Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 48 (para. 123); Email from Lupaka to Lupaka and Laveta, 27/03/2019, at Exhibit C-354, p. 2. ↩

⁶¹⁷ Counter-Memorial, 24/03/2022, p. 140 (para. 275). ↩

⁶¹⁸ Huaura Prosecutor's Office website, Case File No. 1006014500-2018-4336-0 (accessed on 11/08/2022) (SPA), at Exhibit C-556; IMM-0047, p. 1 et seq. (Item 1)) and Case 1006014500-2018-8034-0 (consolidating Case 1006014500-2018-7786-0) (IMM-0047, p. 1 et seq. (Item ↩

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Huaura Prosecutor's Office.⁶¹⁹ It is clear that legal action against Parán's members was totally useless to protect IMC's interests. IMC needed immediate Police action to restore law and order and recover control of the Site, which was not forthcoming despite being entirely justified in the circumstances.

328 Based on the foregoing, it should not be in dispute that the Parán Community breached its obligations under the 26 February 2019 Agreement. IMC sent numerous letters to Peruvian authorities reporting on Parán's breaches and requesting that the Police intervene and lift the Blockade given that any agreement with Parán was a dead letter.⁶²⁰ There was no answer to these requests.⁶²¹ Mr Bravo was able to contact the Peruvian authorities in early March 2019 and the MININTER even said it would send over the Police, but nothing happened.⁶²² Indeed, Peru continued to refuse to authorise a police intervention, again showing Parán's leadership and its members that their illegal behaviour had no negative consequences, and that they were essentially above the law.

6.7 Peru remained passive despite the Parán Community's latest Site invasion on 20 March 2019

329 In its Memorial, the Claimant explained that on 20 March 2019, i.e., only two weeks after Parán had started allowing IMC to enter into the Site through Parán territory, 150 hostile Parán members – many of whom were armed - invaded the Site a third time (“March 2019 Invasion"). Similar to what had happened during the 14 October 2018 invasion, the Parán

3)). For Case File 4336-0, this period is counted from 23 June 2018 (date of entry - "fecha de registro" in Spanish) until 27 February 2019, date in which Parán started breaching its obligations under the 26 February 2019 Agreement.

⁶¹⁹ Case No. 1007010900-2018-192-0 (IMM-0047, p. 1 et seq. (Item 2)). More generally, none of the five complaints filed by IMC against Parán between 2018 and 2019 neither reached the trial stage nor yielded a judicial decision on the merits of the cases. See IMM-0047, p. 1 et seq. (items 1-3 and 6-7). ↩

⁶²⁰ Letter from IMC to MININTER (SPA), 20/03/2019, at Exhibit C-206; Email from IMC to MEM with attachment (SPA), 21/03/2019, at Exhibit C-207; Letter from IMC to MEM (SPA), 29/03/2019, at Exhibit C-209. ↩

⁶²¹ "The importance of multi-stakeholder dialogue for the Peruvian mining sector", BNamericas (SPA), 20/09/2022, at Exhibit C-575. ↩

⁶²² Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 42-43 (para. 106). ↩

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invaders evicted IMC's staff (there were twelve workers onsite) and took control of the Site, including IMC's equipment, machinery and 5,675 kilograms of explosives.⁶²³ The day after the invasion, IMC filed a criminal complaint against the Parán Community's President and members for the crime of coercion.⁶²⁴ Yet, nothing came of this complaint. Indeed, as explained further below, the Huaura Prosecutor decided to close the investigation related to IMC's complaint and absolved the Parán offenders from any responsibility.

330 Peru makes no reference in its Counter-Memorial to the March 2019 Invasion, even though it refers to contemporaneous letters sent by IMC that expressly refer to this invasion. These letters include IMC's letter dated 29 March 2019 addressed to the MEM, the MININTER and the Canadian Embassy stating that "[...] since 21 March, we were again forcibly evicted from the camp and we currently do not have access to the Mining Unit”.⁶²⁵ Peru's silence on the March 2019 Invasion is unwise, as this was the third Parán invasion of the Site after which IMC was never able to regain access to the Site. Peru's silence is also not accidental. If there was any doubt as to Parán's breaches of the 26 February 2019 Agreement, this doubt was completely dispelled by this new invasion, which took place on the same day that the topographical survey was due to be carried out and for which IMC had made arrangements.⁶²⁶

331 The March 2019 Invasion confirmed once again that dialogue with Parán was futile and a police intervention to lift the Blockade was necessary. The MEM-OGGS was convinced that the MININTER had to abandon its non-intervention policy and authorise a Police operation, as it noted in a draft memorandum prepared on the day of the March 2019 Invasion:

"Given this situation [i.e., the March 2019 Invasion], it is recommended that the public order mechanisms be activated

⁶²³ Email chain between Lupaka to Canadian Embassy (SPA) - 20/02/2019 to 20/03/2019, at Exhibit C-356, p. 1. ↩

⁶²⁴ Memorial, 01/10/2021, p. 55 (para. 168). ↩

⁶²⁵ Letter from IMC to MEM (SPA), 29/03/2019, at Exhibit C-209, p. 3 (Item 7) (emphasis in original). ↩

⁶²⁶ Witness Statement of Luis F. Bravo, 01/10/2021, p. 22 (para. 68). ↩

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by the MININTER, which has an action plan for this, but not signed, given that the current policy is one of non-intervention, therefore requiring that dialogue be exhausted, as in this case. However, since the beginning of the conflict to date, the policy of non-intervention has prevailed, in relation to which a discussion at the highest level between the [Deputy Ministers] is proposed to enable the activation of this plan of action in the face of a scenario like the present one”.⁶²⁷

332 Consistent with the foregoing, on 9 April 2019, the Chief of Police Intelligence in Huacho, senior officer Otoya, informed Mr Estrada of IMC's CR Team that the Lima – Huacho Police Division had requested the Sayán police to prepare another Operational Plan to lift the Blockade.⁶²⁸ This was the third operational plan since the Blockade.⁶²⁹ However, on 25 April 2019, IMC was informed that the MININTER had instructed the Police not to implement the Operational Plan as the situation was not seen as sufficiently grave.⁶³⁰

333 But this was not all. Indeed, contrary to Peru's contention that the Prosecutor's Office "acted in accordance with [its] duties" upon receipt of IMC's criminal complaints,⁶³¹ the Huaura Provincial Prosecutor's Office

⁶²⁷ MEM, aide mémoire (SPA), 20/03/2019, at Exhibit C-576, p. 2 (emphasis added). This was consistent with the MEM-OGGS internal memorandum prepared two days before, on 18 March 2019, which stated that “the re-establishment of public order through the corresponding channels, MININTER, PNP, DGOP, should proceed", and with another MEM-OGGS internal memorandum prepared the previous month, on 20 February 2019, which stated that opposition to the Project was being financed with funds coming from the Parán Community's illegal marijuana business and there was no use in continuing with dialogue. See Internal MEM email with attachment (SPA), 20/02/2019, at Exhibit C-468. ↩

⁶²⁸ Internal IMC email (SPA), 10/04/2019, at Exhibit C-213. ↩

⁶²⁹ Indeed, a first operational plan was being prepared as of 24 October 2018, following IMC's request for a Police intervention dated 17 October 2018 (see supra Section 6.4 and infra Sections 7.1 and 7.2.3), and a second plan was prepared on 9 February 2019 by the Sayán police upon request of the Colonel Arbulú of the Police Division in Huacho (see supra Section 6.5). ↩

⁶³⁰ Witness Statement of Luis F. Bravo, 01/10/2021, p. 24 et seq. (paras. 76-77); OGGS Weekly Report (SPA), 06/04/2019, at Exhibit C-577, p. 4. ↩

⁶³¹ Expert Report of Iván Meini - Corrected Version, 22/03/2022, p. 67 (paras. 186-187). ↩

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processed the complaint filed by IMC on 21 March 2019 (related to the March 2019 Invasion)⁶³² in total disregard of Peruvian law. Indeed:

• Following admission of the criminal complaint on 25 March 2019,⁶³³ the Huaura Provincial Prosecutor's Office ordered the Huacho Criminal Investigation Department (DEPINCRI) to carry out preliminary investigations first for 30 days and then for an additional 80 days⁶³⁴ in order to decide whether to launch a preparatory investigation.⁶³⁵ This latter deadline was largely exceeded, as the Huaura Provincial Prosecutor's Office only rendered its decision on 24 February 2020 (i.e., well over 300 days after the initial complaint).⁶³⁶ This delay cannot be excused because of the suspension of procedural deadlines decreed as a result of the health emergency, which was effective for the first time on 16 March 2020.⁶³⁷
• Disturbingly, on 24 February 2020, the Huaura Provincial Prosecutor's Office decided to close the investigation resulting from IMC's complaint and absolve the Parán offenders from any responsibility.⁶³⁸ The Huaura Provincial Prosecutor's Office closed the investigations pertaining to the 20 March 2019 Invasion arguing that the crime of coercion had not been proved, without opening an investigation for

⁶³² Criminal complaints filed with the Sayán Police by IMC representative (SPA), 21/03/2019, at Exhibit C-208. ↩

⁶³³ Disposición Fiscal Nº 02, 24/02/2020, at Exhibit IMM-0054, p. 10. ↩

⁶³⁴ Disposición Fiscal Nº 02, 24/02/2020, at Exhibit IMM-0054, p. 1 (Provision No. 1). ↩

⁶³⁵ Criminal Code of Procedure, 2004 (SPA), at Exhibit C-555, p. 108 (Art. 330 (1)). ↩

⁶³⁶ Disposición Fiscal Nº 02, 24/02/2020, at Exhibit IMM-0054. ↩

⁶³⁷ Procedural terms in Peru were suspended from 16 March 2020 to 31 October 2020, and from 31 January 2021 to 28 February 2021, i.e., a total of 257 days. See Resolution of the Attorney General's Office No. 588-2020 (SPA), 16/03/2020, at Exhibit C-557; Resolution of the Attorney General's Office No. 733-2020 (SPA), 29/06/2020, at Exhibit C-558; Resolution of the Attorney General's Office No. 953-2020 (SPA), 29/08/2020, at Exhibit C-561; Resolution of the Attorney General's Office No. 1066-2020 (SPA), 30/09/2020, at Exhibit C-562; Public Prosecutors Office, Administrative Resolution No. 748-2020-MP (SPA), 30/06/2020, at Exhibit C-638; Resolution of the Attorney General's Office No. 167-2021 (SPA), 07/02/2021, at Exhibit C-564; Resolution of the Attorney General's Office No. 209-2021 (SPA), 14/02/2021, at Exhibit C-565; Public Prosecutors Office, Administrative Resolution No. 842-2020-MP (SPA), 15/07/2020, at Exhibit C-637. ↩

⁶³⁸ Disposición Fiscal Nº 02, 24/02/2020, at Exhibit IMM-0054. ↩

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another crime despite being aware that the invasion was ongoing and being empowered to do so.⁶³⁹

334 IMC filed a second complaint against Parán on 21 March 2019, i.e., the same day in which it filed its complaint arising from the March 2019 Invasion, this time for theft of explosives.⁶⁴⁰ The same breaches of mandatory legal deadlines discussed above in relation to the complaint for the March 2019 Invasion apply mutatis mutandis to the complaint for theft of explosives because the Huaura Provincial Prosecutor's Office jointly processed and decided both complaints. Additionally, and as with the complaint for the March 2019 Invasion, the Huaura Provincial Prosecutor's Office concluded that there was no sufficient evidence to prove the theft of explosives and ordered to close the investigations.⁶⁴¹

335 Peru criticises IMC's refusal to continue dialogue with the Parán Community while the Blockade remained in place. Specifically, referring to a meeting convened by the MEM-OGGS on 1 April 2019 in which IMC did not participate, Peru contends that “[...] [this] intransigent attitude [by IMC] led to entrenchment by both parties in their respective positions, thereby rendering amicable resolution more elusive and unlikely.”⁶⁴² This criticism is baseless. Indeed, the MEM-OGGS itself had told the Parán Community in February 2019 that dialogue could only resume once the Blockade was lifted.⁶⁴³ Furthermore, it was apparent from the Parán Community's breaches of the September 2018 Commitment and the 26 February 2019 Agreement and the relentless violent behaviour of its members that the community could not be trusted to comply with its commitments. This could only change if law and order were restated, for which Peru had to lift the Blockade, confiscate Parán's weapons,⁶⁴⁴

⁶³⁹ Criminal Code of Procedure, 2004 (SPA), at Exhibit C-555, p. 109 et seq. (Art. 334 (1)). ↩

⁶⁴⁰ Cuadro resumen de denuncias presentadas por Invicta, at Exhibit IMM-0047, p. 3 et seq. (item 7); Disposición Fiscal N° 02, 24/02/2020, at Exhibit IMM-0054, p. 2 (Crime No. 57). ↩

⁶⁴¹ Disposición Fiscal N° 02, 24/02/2020, at Exhibit IMM-0054. ↩

⁶⁴² Counter-Memorial, 24/03/2022, p. 115 et seq. (para. 279). ↩

⁶⁴³ Letter from MEM to the Parán Community (SPA), 18/02/2019, at Exhibit C-191, p. 1. ↩

⁶⁴⁴ PCM, aide mémoire (SPA), 27/05/2019, at Exhibit C-578, p. 3; see updated memo, Internal PCM aide mémorie (SPA), 10/07/2019, at Exhibit C-574. ↩

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address Parán's illegal drug business and prosecute and sanction the Parán offenders. However, the State did none of this.

6.8 Peru misrepresents the events of WDS's Site entry on 14 May 2019

336 In its Memorial, the Claimant explained that on 14 May 2019, members of WDS were able to access the Site and that, while they were waiting for the Police, Parán community members arrived by the hundreds, shooting at WDS personnel and Mr Estrada of IMC's CR Team. This led to WDS personnel and Mr Estrada fleeing the area through the hills, without returning fire.⁶⁴⁵

337 Peru refers repeatedly in its Counter-Memorial to WDS's entry of the Site and the events that transpired thereafter. Specifically, Peru argues that IMC's hiring of WDS shows its determination to use violence against the Parán Community,⁶⁴⁶ that WDS physically attacked Parán members,⁶⁴⁷ and that this incident significantly aggravated the conflict between IMC and Parán,⁶⁴⁸ making future negotiations more difficult⁶⁴⁹ and leading Parán to demand the closure of the Project.⁶⁵⁰

338 Peru significantly misrepresents and exaggerates what happened during the WDS access to the Site in an attempt to blame IMC for the conflict with the Parán Community and excuse the State's passivity in enforcing IMC's mining rights. The Tribunal must not be misled. The Claimant addresses Peru's contentions below.

339 First, Peru contends that IMC "resorted to the use of force and violence [against the Parán Community] by engaging and deploying a private security company called War Dogs Security S.A.C”.⁶⁵¹ This is false. IMC did not retain WDS as part of an alleged plan to use force or violence

⁶⁴⁵ Memorial, 01/10/2021, p. 58 (para. 177). ↩

⁶⁴⁶ Counter-Memorial, 24/03/2022, p. 2 et seq. (para. 5). ↩

⁶⁴⁷ Counter-Memorial, 24/03/2022, p. 169 et seq. (para. 333). ↩

⁶⁴⁸ Counter-Memorial, 24/03/2022, p. 9 (para. 22). ↩

⁶⁴⁹ Counter-Memorial, 24/03/2022, p. 143 et seq. (para. 282). ↩

⁶⁵⁰ Counter-Memorial, 24/03/2022, p. 144 (para. 284). ↩

⁶⁵¹ Counter-Memorial, 24/03/2022, p. 2 et seq. (para. 5). ↩

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against Parán, but rather to join the Police forces upon their lifting of the Blockade to secure the Site and keep Parán from invading it again once the Police had done their job. This is common practice in dealing with illegal mine invasions in Peru, as evidenced by MMG's handling of Las Bambas and described in Section 6.4 above.

340 As explained in Section 6.5 above, the Operational Plan prepared by the Sayán Police on 9 February 2019 outlined the Police's strategy to recover control of the Site, stating that once such control had been regained, the Police would stay on the Site for a maximum of 72 hours.⁶⁵² This necessitated that IMC retain a private security firm to join the Police forces once the Blockade had been lifted and stay thereafter to prevent Parán from invading the Site again. This is exactly what IMC did, i.e., it retained WDS to provide “security and surveillance services” of the Site 24 hours a day⁶⁵³ once the Blockade was lifted.⁶⁵⁴

341 The strategy outlined in the 9 February 2019 document reflecting the Operational Plan, and IMC's hiring of WDS, were consistent with other police interventions, both in the mining sector and outside of it. Indeed, as explained above, in the Las Bambas mining project the State authorized the Police on 28 April 2022 to remove the invaders from the project site and was then joined by the private security hired by the mining company to secure the Site.⁶⁵⁵ As another example, the Police also acted together with private contractors on 23 December 2016, when evicting more than

⁶⁵² Police Operational Plan to lift the Blockade (SPA), 09/02/2019, at Exhibit C-193, p. 13 (item d). ↩

⁶⁵³ Draft Contract between IMC and WDS (SPA), at Exhibit C-361, p. 2 et seq. (Clauses 2 and 5). ↩

⁶⁵⁴ Email from Lupaka to Lupaka and Laveta, 27/03/2019, at Exhibit C-354. ↩

⁶⁵⁵ "Peruvian police evicts communities in Las Bambas mining", teleSURtv (SPA), 28/04/2022, at Exhibit C-315; "Police eviction in Peruvian mine leaves three injured and 11 arrested", DW (SPA), 28/04/2022, at Exhibit C-316; “Peruvian police carry out a new eviction of an indigenous community in the Las Bambas mine", Euronews (SPA), 28/04/2022, at Exhibit C-314; "Las Bambas: clashes between the police and community members left 14 injured and 11 detained", Infobae (SPA), 28/04/2022, at Exhibit C-317. ↩

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100 invaders from privately-owned land where a real estate project was to be developed.⁶⁵⁶

342 As explained in the prior Section, IMC was informed on 25 April 2019 that the MININTER had instructed the Police not to implement the Operational Plan as the MININTER did not see the Blockade as sufficiently grave. However, the Police were well aware of the gravity of the situation, so they continued to investigate matters further in coordination with the WDS team, who had ex-police officers among its personnel.⁶⁵⁷ As Mr Bravo explains, on 1 May 2019, the Police and WDS personnel went to a lookout to observe how many Parán members manned the Blockade, and WDS subsequently assisted the Police in preparing a new iteration of the Operational Plan.⁶⁵⁸ The Police's close collaboration with the WDS personnel, and its receptiveness to IMC's concerns, gave the company hope that a police intervention to lift the Blockade could take place in the short term. This was furthered by the approval of the new iteration of the Operational Plan, which had been drafted by the Sayán Police, by the head of the Huacho Police Division, Colonel César Arbulú.⁶⁵⁹

343 Second, Peru contends that "War Dogs physically attacked the Parán Community protesters and sparked a violent confrontation.”⁶⁶⁰ This disturbing statement is false and disproved by the facts.

344 As the Claimant explained in its Memorial, when WDS accessed the Site on 14 May 2019,⁶⁶¹ no Parán members were manning the Blockade. The tents set up by Parán on the Lacsanga road were empty, as confirmed by a video recorded on the same day by Mr Estrada of IMC's CR Team.⁶⁶² This

⁶⁵⁶ See "Ica: police evict more than 150 land invaders in Subtanjalla", 24 horas (Video) (SPA), 23/12/2016, at Exhibit C-579; "Ica: police evict more than 150 land invaders in Subtanjalla", 24 horas (Transcript) (SPA), 23/12/2016, at Exhibit C-580. ↩

⁶⁵⁷ Witness Statement of Luis F. Bravo, 01/10/2021, p. 54 (para. 144). ↩

⁶⁵⁸ Witness Statement of Luis F. Bravo, 01/10/2021, p. 54 (para. 144). ↩

⁶⁵⁹ Witness Statement of Luis F. Bravo, 01/10/2021, p. 54 (para. 145). ↩

⁶⁶⁰ Counter-Memorial, 24/03/2022, p. 169 et seq. (para. 333). ↩

⁶⁶¹ Memorial, 01/10/2021, p. 57 et seq. (paras. 176-177). ↩

⁶⁶² Mr Marco Estrada showing the Blockade at the Lacsanga road (SPA) (Video), 14/05/2019, at Exhibit C-362; Mr Marco Estrada showing the Blockade at the Lacsanga road (Transcript) (SPA), 14/05/2019, at Exhibit C-363. ↩

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was also consistent with the report given by WDS to Mr Bravo a few days before.⁶⁶³ WDS's access to the Site was therefore made without any confrontation, much less by attacking Parán community members. It was only some three hours after WDS personnel had accessed the Site that Parán's members arrived in the hundreds, shooting their guns and the WDS team and Mr Estrada to flee. Notably, no WDS personnel returned fire against Parán, despite the danger to their personal safety.⁶⁶⁴ This was a new and escalated instance of the abuse of firearms by the Parán community members, which resulted in members of WDS's team being wounded.⁶⁶⁵ Parán's attacks continued the next day, with community members intercepting other members of the WDS team and, sadly, killing one of them.⁶⁶⁶

345 Peru's further contention that the WDS access to the Site "ma[d]e future negotiations [between IMC and] the Parán Community far more difficult"⁶⁶⁷ together with Mr León's assertion that this “brought the conflict to a crisis point”⁶⁶⁸ are both baseless and opportunistic. Indeed, the Parán Community had breached each and every one of its commitments to IMC by this date, including the September 2018 Commitment to refrain from all acts of violence against IMC⁶⁶⁹ and the 26 February 2019 Agreement where it committed to suspend all coercive measures.⁶⁷⁰ Several contemporaneous official documents from Peru also confirm that

⁶⁶³ Witness Statement of Luis F. Bravo, 01/10/2021, p. 55 (para. 147). ↩

⁶⁶⁴ Witness Statement of Luis F. Bravo, 01/10/2021, p. 56 (para. 150). A few days later, on 20 May 2019, Parán's members also shot at certain Santo Domingo community members that were moving their cattle to graze to an area on their community land. See Summary of the meeting between MEM, PCM, MININTER, Ombudsman's Office and IMC, 27/05/2019, at Exhibit C-18, p. 5 (point 11). ↩

⁶⁶⁵ Internal PCM email with attachment (SPA), 21/05/2019, at Exhibit C-552, p. 3. Internal PCM aide mémorie (SPA), 10/07/2019, at Exhibit C-574, p. 2. ↩

⁶⁶⁶ Id. ↩

⁶⁶⁷ Counter-Memorial, 24/03/2022, p. 143 et seq. (para. 282). ↩

⁶⁶⁸ Witness Statement of Nilton César León Huerta, 22/03/2022, p. 16 et seq. (para. 51). ↩

⁶⁶⁹ Minutes of the Subprefect meeting between IMC and the Parán Community including September 2018 Commitment (SPA), 18/09/2018, at Exhibit C-139, p. 2. ↩

⁶⁷⁰ Minutes of the meeting between the Parán Community, IMC and MEM including 26 February 2019 Agreement (SPA), 26/02/2019, at Exhibit C-200, p. 2 (para. 5). ↩

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“dialogue mechanisms are not appropriate in this case”⁶⁷¹ because of the community's interest in exploiting the mine⁶⁷² and protecting its marijuana business, both of which were inconsistent with IMC developing the Project. Hence, it was crystal clear at the time WDS accessed the Site that dialogue was not a viable option with the Parán Community and a police intervention was necessary to lift the Blockade and restore order. If anything, Peru's contention that the WDS entry of the Site “brought the conflict to a crisis point”⁶⁷³ ignores the previous acts of extreme violence by the Parán Community and Peru's failure to act.

346 Third, and consistent with the foregoing, the facts relating to the WDS access to the Site on 14 May 2019 show the double standard that Peru followed when dealing with IMC – or its contractors – and the Parán Community. Indeed, on 15 May 2019, i.e., the day after WDS accessed the Site, the Police arrested certain members of the WDS team.⁶⁷⁴ This arrest was made even though IMC's contractors, such as WDS, have every right to enter the Site and the WDS personnel did not shoot or injure any of Parán's members. In stark contrast, there is no publicly available information suggesting that the Police arrested any Parán members, nor has Peru asserted as much in these proceedings, even though they were illegally occupying the Site, misusing their arms, and had killed a member of the WDS team.

347 As the foregoing shows, it is false for Peru to contend that IMC planned to resort to violence when retaining WDS or that this security company attacked the Parán community members. If anything, this episode reveals a new instance of illegal behaviour by Parán's members, in the face of which the State did not take any action. Indeed, the Police did not arrest any Parán members nor confiscate any firearms, even though official documents from Peru going back to January 2019 show that such guns

⁶⁷¹ Internal MEM email with attachment (SPA), 20/02/2019, at Exhibit C-468, p. 3. ↩

⁶⁷² [Redacted] ↩

⁶⁷³ Counter-Memorial, 24/03/2022, p. 144 (para. 284). ↩

⁶⁷⁴ Memorial, 01/10/2021, p. 58 (para. 177). ↩

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were to be confiscated long ago.⁶⁷⁵ Peru showed once again to Parán's leadership and members that their illegal behaviour had no negative consequences, and that they were essentially above the law.

348 In its Memorial, the Claimant referred to its continuous requests for the State to enforce its mining rights in the weeks and months that followed the events of 14 May 2019, which were made once again to no avail.⁶⁷⁶ Indeed, Peru was more interested in asking IMC's representatives to explain the 14 May 2019 events, even proposing that IMC “display an act of good faith towards the Parán Community” to somehow make up for such events,⁶⁷⁷ which were being used by Parán as an excuse to justify the continuity of the Blockade.⁶⁷⁸ Peru further insisted that a “police intervention was not necessary or reasonable” in the circumstances,⁶⁷⁹ and yet again stated that dialogue should continue. Peru does not deny any of these facts in its Counter-Memorial.⁶⁸⁰

349 Peru's misrepresentation of the events of 14 May 2019 and its apparent reproval of WDS's actions is shocking since IMC and its contractors had peacefully entered the Site. There was nothing wrong with how WDS had proceeded. The State also seemed oblivious to Parán's violent acts spanning many months. Peru's insistence on dialogue was also unjustified given that Parán had breached all its prior commitments and was clearly

⁶⁷⁵ Indeed, on 25 January 2019, the Huacho police had requested General Arata, of the Lima Police Division, to confiscate these weapons, yet either he or other Government authorities did not approve this dramatic request. See Letter from Huacho Police to Chief of Lima Region Police (SPA), 25/01/2019, at Exhibit C-338. A PCM memorandum prepared on 27 May 2019 further insisted on the need for the Police to confiscate Parán's arms. See PCM, aide mémoire (SPA), 27/05/2019, at Exhibit C-578, p. 3; see updated memo, Internal PCM aide mémorie (SPA), 10/07/2019, at Exhibit C-574. ↩

⁶⁷⁶ Memorial, 01/10/2021, p. 58 et seq. (Section 2.3.11). ↩

⁶⁷⁷ Counter-Memorial, 24/03/2022, p. 143 et seq. (para. 282); Summary of the meeting between MEM, PCM, MININTER, Ombudsman's Office and IMC, 27/05/2019, at Exhibit C-18, p. 6 (para. 19). ↩

⁶⁷⁸ Memorial, 01/10/2021, p. 61 (para. 187); Official Letter No. 011-2019-CCP from the Parán Community (A. Torres) to MINEM (F. Ismodes), 04/06/2019, at Exhibit R-0110. ↩

⁶⁷⁹ Counter-Memorial, 24/03/2022, p. 144 (para. 283); Summary of the meeting between MEM, PCM, MININTER, Ombudsman's Office and IMC, 27/05/2019, at Exhibit C-18, p. 6 et seq. ↩

⁶⁸⁰ Counter-Memorial, 24/03/2022, p. 143 et seq. (Section II.E.5). ↩

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not willing to engage with IMC in any meaningful negotiation – simply put, the community's interests were incompatible with the Project.⁶⁸¹ In fact, as explained in the next Section, the Parán Community was already taking action to exploit the mine.

6.9 The Parán Community made good on its stated plan to exploit the mine shortly after Lupaka lost its investment

350 Since at least 29 January 2019, Peru was aware of Parán's plan to exploit the mine. It was on that date that Parán officials told expressly MEM-OGGS and MININTER representatives that they would exploit the mine if its demands were not satisfied.⁶⁸² This threat materialised some months later. On 8 July 2019, IMC alerted the MEM that the Parán Community was taking actions to appropriate the nearly 7,000 tons of Lupaka ore stockpiled at the Site and to exploit the mine.⁶⁸³ This was not the first time IMC informed the State of Parán's plan to exploit the mine.⁶⁸⁴ Peru did not respond to this letter nor did it change its stance that dialogue should continue.⁶⁸⁵ Tellingly, in its Counter-Memorial, Peru refers to this letter as showing that the Claimant had no willingness to resume dialogue with the Parán Community, overlooking everything the letter states on the community's illegal exploitation of the mine⁶⁸⁶ – a topic that Peru decided to ignore entirely in its Counter-Memorial.

351 Lupaka lost its investment on 26 August 2019, when Lonely Mountain seized IMC's shares following Lupaka's failure to service its obligations

⁶⁸¹ See supra Sections 4.3.5, 6.3 and 6.6. ↩

⁶⁸² Witness Statement of Luis F. Bravo, 01/10/2021, p. 11 (para. 28); WhatsApp exchanges between Lupaka (Mr Bravo) and MININTER (Mr Saavedra), 5/02/2019-20/02/2019 (SPA), at Exhibit C-192 (corrected translation), p. 3. ↩

⁶⁸³ Letter from IMC to MEM (SPA), 08/07/2019, at Exhibit C-13. ↩

⁶⁸⁴ Letter from Lupaka to MEM, 06/02/2019, at Exhibit C-15. ↩

⁶⁸⁵ Despite the commitment assumed by Mr Cauti, then Deputy Minister of the MEM, on a meeting held with Mr Bravo on 15 July 2019 that he would "call the Vice Minister of Internal Order at the [MININTER] to alert him [of Parán's illegal extraction of ore from the Site] and ask[] for a [P]olice intervention.". See Summary of the meeting between Deputy Minister of Mines and IMC with support of Canadian Embassy officials, 15/07/2019, at Exhibit C-222, p. 3 (para. 22). ↩

⁶⁸⁶ Counter-Memorial, 24/03/2022, p. 145 et seq. (para. 288). ↩

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under the PPF Agreement.⁶⁸⁷ As explained in Section 2.1 above, the Parán Community made good on its plan to illegally exploit the mine once Lupaka lost its investment, and continues to do so to the present day.

* * *

352 Peru portrays the Claimant as having taken a “combative approach”,⁶⁸⁸ demanding that the State act violently against Parán community members to satisfy the Claimant's selfish interests, allegedly exacerbated by a project financing schedule that “left close to zero margin for error”.⁶⁸⁹ This is a highly distorted account of the facts. The Claimant repeatedly requested Peru to exercise its prerogative police power and reinstate law and order and enforce the Claimant's mining rights, which was fully justified in the circumstances. Put more succinctly, Lupaka only ever asked that Peru do its job.

353 Peru knew that there were obstacles that it had to tackle to reinstate public order. Indeed, as explained in Section 2.2 above, Peru knew that the Parán Community's marijuana business was a major driver in the opposition to the Project but failed to address this issue. It also knew that disarming the Parán community members, who had long-range firearms, would have gone a long way to de-escalating the conflict (as Parán's members would be deprived of their instruments of intimidation and violence), but also failed to do this. Despite being aware at least since January 2019 of the Parán Community's plan to exploit the mine, and that the community had effectively started exploiting the ore stockpiled at the Site in July 2019, Peru only authorised its long overdue police intervention on 14 December 2021, more than two years after Lupaka lost its investment. Peru's acts and omissions led to the loss of the Claimant's investment, for which the State must be held accountable.

⁶⁸⁷ Memorial, 01/10/2021, p. 64 et seq. (Section 2.4). ↩

⁶⁸⁸ Counter-Memorial, 24/03/2022, p. 2 (para. 5). ↩

⁶⁸⁹ Counter-Memorial, 24/03/2022, p. 5 (para. 12). ↩

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7 PERU'S FAILURE TO LIFT THE BLOCKADE IS INEXCUSABLE

354 Peru submits various arguments in its Counter-Memorial to justify its failure to lift the Blockade, all of which are meritless. Indeed, contrary to Peru's contentions, the State was obliged under Peruvian law to lift the Blockade (Section 7.1) and doing so was consistent with its reaction to other social conflicts (Section 7.2).

7.1 Peru was obliged under Peruvian law to lift the Blockade

355 Peru relies on the criminal law expert report of Mr Meini to argue that a police intervention to lift the Blockade would have been illegal under Peruvian law. Specifically, Mr Meini argues that the use of Police force is justified in very limited circumstances, including (i) upon a request for police support made by a dispossessed party within 15 days of dispossession,⁶⁹⁰ (ii) to prevent the perpetration of crimes⁶⁹¹ and (iii) in cases of “resistance of authority”,⁶⁹² none of which existed in this case according to his analysis.⁶⁹³ Mr Meini is wrong in his analysis of the facts and the law.

356 First, Mr Meini acknowledges that pursuant to Article 920 of the Civil Code of Peru, a dispossessed party (such as IMC) has the right to request Police support to recover possession within 15 days of dispossession, in which case the Police shall provide the requested support, under its own responsibility.⁶⁹⁴ However, Mr Meini then goes on to say that "[i]n a criminal legal report such as this one, the details of these civil mechanisms are not examined. Nor does one speculate on the reasons Claimant might have considered for not availing itself of them. An opinion is issued on facts: the 15-day period for exercising the extrajudicial defense of

⁶⁹⁰ Expert Report of Iván Meini - Corrected Version, 22/03/2022, p. 10 et seq. (para. 18). ↩

⁶⁹¹ Expert Report of Iván Meini - Corrected Version, 22/03/2022, p. 25 et seq. (para. 72). ↩

⁶⁹² Expert Report of Iván Meini - Corrected Version, 22/03/2022, p. 25 et seq. (para. 72). ↩

⁶⁹³ Expert Report of Iván Meini - Corrected Version, 22/03/2022, p. 26 (para. 73). ↩

⁶⁹⁴ Expert Report of Iván Meini - Corrected Version, 22/03/2022, p. 42 et seq. (para. 118). ↩

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possession contemplated by Article 920 of the CC expired on October 29, 2018 [...].”⁶⁹⁵

357 This statement demonstrates a profound misunderstanding of the record evidence. As explained in Section 6.4 above, IMC requested Police support to take back control over the Site on 17 October 2018, i.e., three days after Parán's taking and twelve days before the expiry of the deadline to request such support. Accordingly, under Mr Meini's own analysis, the Police were obliged to assist IMC in recovering control of the Site. Peru's failure to provide such support is contrary to Article 920 of the Civil Code of Peru and IMC's rights thereunder, and also with police interventions in other cases in the face of similar requests by mining investors also grounded on Article 920 of the Civil Code of Peru – such as in the Las Bambas mining project, where the Police deployed a 676 contingent to recover control of the mine site upon the investor's exercise of its right to the extrajudicial defence of possession.⁶⁹⁶

358 Second, Mr Meini acknowledges that pursuant to Article 8.2(c) of Legislative Decree 1186, Regulating the Use of Force by the Peruvian National Police, the Police is also obliged to use force to “prevent the perpetration of crimes".⁶⁹⁷ However, Mr Meini contends that this provision was not applicable in the circumstances because:

"[t]he use of force by the [Police] as a preventive measure would require an analysis of the actions of the police officers at a time prior to that of the events that Lupaka considers to be harmful to its rights. In fact, preventive action by the [Police] could only have

⁶⁹⁵ Expert Report of Iván Meini - Corrected Version, 22/03/2022, p. 44 (para. 123) (emphasis added). ↩

⁶⁹⁶ "Las Bambas: mining conflict gets out of control and the crisis worsens due to attacks by community members", Instituto de Ingenieros de Minas del Perú (SPA), 29/04/2022, at Exhibit C-318; "Las Bambas: they ask that assault and attempted rape of security personnel not go unpunished", Instituto de Ingenieros de Minas del Perú (SPA), 02/05/2022, at Exhibit C-319. ↩

⁶⁹⁷ Expert Report of Iván Meini - Corrected Version, 22/03/2022, p. 25 et seq (para. 72); Decreto Legislativo Núm. 1186, 15/08/2015, at Exhibit IMM-0040, p. 4 (Art. 8.2) ("Officers of the Peruvian National Police may use force, in accordance with articles 4, 6 and point 7.2, in the following circumstances: [...] (c) [t]o prevent the perpetration of crimes or misdemeanors.") ↩

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taken place before the occurrence of the events that took place in June and October 2018.”⁶⁹⁸

359 This is wrong. Mr Meini's analysis assumes that Police action would have only been relevant to prevent the June and October 2018 invasions, ignoring that Police action was also required to prevent the commission of further crimes as from the time the Blockade was installed – many of which materialised due to the Police's inaction. Importantly, the Police was aware at all times of Parán's illegal behaviour and the ensuing risk of commission of new crimes. The Claimant provides three illustrative examples below:

360 One, the Parán invaders were in possession of arms at all times during the invasions. They had misused those arms during the June 2018 Invasion, when they shot at the IMC workers who were on the Site.⁶⁹⁹ They remained in possession of those arms after the Blockade, which in turn showed that there was a very real risk of commission of further crimes at any moment. Such risk materialised shortly thereafter:

• on 20 January 2019, after Chief Police Officer Soria visited the site of the Blockade, Parán members shot at Lacsanga members;⁷⁰⁰
• on 20 March 2019, Parán carried out another armed invasion of the Site, forcibly evicting IMC's staff and taking control;⁷⁰¹
• on 14 May 2019, after WDS accessed the Site unimpeded, Parán members shot at WDS's team members and Mr Estrada;⁷⁰²

⁶⁹⁸ Expert Report of Iván Meini - Corrected Version, 22/03/2022, p. 26 et seq. (para. 74) (emphasis added). ↩

⁶⁹⁹ SSS, Special Report, seizure of the Invicta Mine Camp and Facilities (SPA), 19/06/2018, at Exhibit C-129, p. 2. ↩

⁷⁰⁰ Huacho DIVPOL, Report No. 004-2019-REGPOL.LIMA/DIVPOL-H-CS.SEC. (SPA), 23/01/2019, at Exhibit C-332, p. 2. ↩

⁷⁰¹ Email chain between Lupaka to Canadian Embassy (SPA) - 20/02/2019 to 20/03/2019, at Exhibit C-356, p. 1. ↩

⁷⁰² Witness Statement of Luis F. Bravo, 01/10/2021, p. 26 (para. 82). ↩

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• on 15 May 2019, Parán members shot and killed one member of the WDS team:⁷⁰³ and
• on 20 May 2019, Parán members shot at Santo Domingo community members that were moving their cattle to graze to an area within their community land.⁷⁰⁴

361 Peru's authorities were aware of the risk posed by Parán's possession of arms, which led the Huacho Police to request the Lima Police on 25 January 2019 to confiscate those arms. The request expressly stated that Parán members were threatening and even attacking Lacsanga's community members, causing serious injury.⁷⁰⁵ On 20 February 2019, a MEM-OGGS memorandum stated that the Police were preparing an operational plan to seize these arms,⁷⁰⁶ and a memorandum prepared by the PCM on 27 May 2019 insisted on the need for the Police to confiscate these arms.⁷⁰⁷ However, the State took no action at any time before Lupaka lost its investment even though it was clear they had the power to do so, not least under Article 8.2(c) of Legislative Decree 1186, Regulating the Use of Force by the Peruvian National Police.

362 Two, the Parán Community controlled IMC's explosives magazine, which contained 5,675 kilos of explosives.⁷⁰⁸ As IMC warned the State on numerous occasions, just such loss of control and adequate surveillance created a serious risk not only that the Project's facilities would be destroyed but also for the safety of the local civilian population and

⁷⁰³ Internal PCM email with attachment (SPA), 21/05/2019, at Exhibit C-552, p. 3. Internal PCM aide mémorie (SPA), 10/07/2019, at Exhibit C-574, p. 2. ↩

⁷⁰⁴ See Summary of the meeting between MEM, PCM, MININTER, Ombudsman's Office and IMC, 27/05/2019, at Exhibit C-18, p. 5 (point 11). ↩

⁷⁰⁵ See Letter from Huacho Police to Chief of Lima Region Police (SPA), 25/01/2019, at Exhibit C-338. ↩

⁷⁰⁶ Internal MEM email with attachment (SPA), 20/02/2019, at Exhibit C-468, p. 3. ↩

⁷⁰⁷ See PCM, aide mémoire (SPA), 27/05/2019, at Exhibit C-578, p. 3; see updated memo, Internal PCM aide mémorie (SPA), 10/07/2019, at Exhibit C-574. ↩

⁷⁰⁸ Email chain between Lupaka to Canadian Embassy (SPA) - 20/02/2019 to 20/03/2019, at Exhibit C-356, p. 1. ↩

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security forces.⁷⁰⁹ The risks posed by Parán's access to explosives were also acknowledged by the Police at the time.⁷¹⁰

363 IMC also warned the State that Parán could steal those explosives,⁷¹¹ which Parán did shortly thereafter. This was first confirmed on 8 February 2019, during a short inspection carried out by the Huaura Prosecutor and Colonel Arbulú where they saw that there had been an illegal entry into IMC's explosives magazine.⁷¹² This was reconfirmed on 4 March 2019, when IMC's personnel were able to access the Site on foot and found that the explosives magazine had been forced open and several items were missing.⁷¹³ As Mr Bravo explains, the Peruvian authorities were informed of this.⁷¹⁴ The correct “preventive measure” would have been to lift the Blockade, expel Parán's members from the Site and allow IMC to regain control of the Site, including the explosives magazine.

364 Three, on 29 January 2019, Parán's members threatened IMC and the State to exploit the mine if its demands were not satisfied,⁷¹⁵ and then pursued its plan. Indeed, on 8 July 2019, IMC sent a letter to the MEM reporting on the Parán Community's appropriation of the Lupaka ore stockpiled at

⁷⁰⁹ Letter from IMC to Sayán Police (SPA), 07/12/2018, at Exhibit C-186, p. 1; Letter from IMC to MININTER (SPA), 19/02/2019, at Exhibit C-16 (corrected translation), p. 4 (para. 13); WhatsApp exchanges between Lupaka (Mr Bravo) and MININTER (Mr Saavedra), 5/02/2019-20/02/2019 (SPA), at Exhibit C-192 (corrected translation), p. 2; Witness Statement of Luis F. Bravo, 01/10/2021, p. 8 (paras. 17, 31 and 55). ↩

⁷¹⁰ Police Operational Plan to lift the Blockade (SPA), 09/02/2019, at Exhibit C-193, p. 14 (para. 4 (e)). ↩

⁷¹¹ Letter from IMC to MININTER (SPA), 19/02/2019, at Exhibit C-16 (corrected translation), p. 4 (para. 13); WhatsApp exchanges between Lupaka (Mr Bravo) and MININTER (Mr Saavedra), 5/02/2019-20/02/2019 (SPA), at Exhibit C-192 (corrected translation), p. 2. ↩

⁷¹² Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 22 et seq. (para. 47). ↩

⁷¹³ Witness Statement of Luis F. Bravo, 01/10/2021, p. 18 et seq. (paras. 54 and 55); IMC, Inventory on missing items from the explosive magazine, 08/03/2019, at Exhibit C-203-ENG; IMC, Internal Report on missing items from the explosive magazine (SPA), 08/03/2019, at Exhibit C-247. ↩

⁷¹⁴ Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 40 (para. 100). ↩

⁷¹⁵ Witness Statement of Luis F. Bravo, 01/10/2021, para. 28; WhatsApp exchanges between Lupaka (Mr Bravo) and MININTER (Mr Saavedra), 5/02/2019-20/02/2019 (SPA), at Exhibit C-192 (corrected translation), p. 3. ↩

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the Site⁷¹⁶ and including photographic evidence.⁷¹⁷ Police reports dated November 2019 confirmed that Parán was illegally extracting or allowing other companies to illegally extract ore from the Invicta mine.⁷¹⁸ Nothing was done to prevent this illegal conduct.

365 Based on the foregoing, there is no doubt that the Police was obliged to lift the Blockade and expel Parán's members from the Site, thereby allowing Lupaka to take possession of its Project.

366 Third, Mr Meini acknowledges that pursuant to Article 8.2(e) of Legislative Decree 1186, the Police is also obliged to use force and arrest "anyone resisting authority".⁷¹⁹ However, Mr Meini contends that this possibility would be ruled out in this case because:

"[t]he requisite context for such analysis would include either the existence of an order issued by any authority which had also been disobeyed and thus warranted the use of force; or a certain police action that was resisted and required the use of force to be carried out. This case, however, does not involve [any of these]."⁷²⁰

367 This statement is, again, inconsistent with the facts of this case.

368 Indeed, in its Memorial, the Claimant explained that on 21 December 2018, the Huaura Prosecutor escorted by fifteen police officers travelled to the Blockade site to inspect the explosives magazine.⁷²¹ However, these authorities were met at the Blockade by 50 Parán representatives, “who, in a bullying, threatening and defiant manner [...] indicated [...] that they

⁷¹⁶ Letter from IMC to MEM (SPA), 08/07/2019, at Exhibit C-13. ↩

⁷¹⁷ Email from Lupaka to Canadian Embassy with attachments, 11/07/2019, at Exhibit C-469; Witness Statement of Luis F. Bravo, 01/10/2021, p. 30 et seq. (paras. 96-97). ↩

⁷¹⁸ Official Letter No. 004 from the Parán Community (A. Torres) to MINEM (F. Ismodes), 12/02/2019, at Exhibit R-0013, p. 12 (para. 30) (emphasis added). ↩

⁷¹⁹ Expert Report of Iván Meini - Corrected Version, 22/03/2022, p. 25 et seq. (para. 72); Decreto Legislativo Núm. 1186, 15/08/2015, at Exhibit IMM-0040, p. 4 (Art. 8.2) ("Officers of the Peruvian National Police may use force, in accordance with articles 4, 6 and point 7.2, in the following circumstances: [...] (e) [t]o control any person resisting authority."). ↩

⁷²⁰ Expert Report of Iván Meini - Corrected Version, 22/03/2022, p. 27 et seq. (para. 76). ↩

⁷²¹ Memorial, 01/10/2021, p. 45 et seq. (para. 138). ↩

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were not going to allow anyone to enter [IMC's] camp”.⁷²² The authorities therefore could not conduct the inspection. On 7 January 2019, IMC filed a criminal complaint following this failed inspection.⁷²³ This resistance by Parán's members warranted the use of force by the Police.

369 The Huaura Prosecutor scheduled a new inspection of IMC's explosives magazine for 9 February 2019. On this day, the Prosecutor travelled to the Blockade but was only allowed to perform a very short inspection of the explosives magazine as a result of the Parán community members' aggressiveness.⁷²⁴ A few days later, IMC filed a criminal complaint concerning this failed inspection.⁷²⁵

370 These two failed inspections are clear examples of resistance to authority by the Parán members manning the Blockade. The Police were obliged to arrest the Parán offenders but failed to do so.

371 For the foregoing reasons, the Tribunal must conclude that Peru was obliged to authorise a police intervention to lift the Blockade, either in response to IMC's request for Police support dated 17 October 2018, to prevent the commission of further crimes or in the face of the Parán members' resistance of authority. Tellingly, while Peru's witness Mr Trigoso, General Director of the MEM-OGGS from December 2018 to March 2019, states that he was not competent to order a police intervention to lift the Blockade, he does not state that such intervention would have been illegal in the circumstances.⁷²⁶ On the contrary, as Peru's internal documents show, Mr Trigoso and others at the MEM-OGGS recommended it, as did the Police.⁷²⁷

⁷²² Public Prosecutor's Office, Inspection Report (SPA), 21/12/2018, at Exhibit C-246, p. 1. ↩

⁷²³ Denuncia Ampliatoria, 07/01/2019, at Exhibit IMM-0053. ↩

⁷²⁴ IMC, Criminal complaint for aggravated theft and illegal possession of explosives (SPA), 20/02/2019, at Exhibit C-342; Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 22-23 (para. 47). ↩

⁷²⁵ IMC, Criminal complaint for aggravated theft and illegal possession of explosives (SPA), 20/02/2019, at Exhibit C-342. ↩

⁷²⁶ Witness Statement of Andrés Fernando Trigoso, 11/03/2022, p. 12 et seq. (para. 36).. ↩

⁷²⁷ See supra Sections 6.5 and 6.7. ↩

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7.2 The use of Police force to lift the Blockade was consistent with the State's reaction to other social conflicts

372 The Respondent refers to the long history of social conflict in the mining sector in Peru, which allegedly came to a turning point in 2009 with the Bagua case.⁷²⁸ According to Mr Incháustegui, Deputy Minister of the MEM from April 2018 to May 2019 and one of Peru's witnesses in this arbitration, after the Bagua case in 2009, which involved indigenous peoples of the Amazon and resulted in several deaths, the State has given prevalence to dialogue over the use of force in the face of conflict with a community.⁷²⁹ On this basis, Peru contends that when Lupaka acquired the Project in late 2012, it knew or should have known that the State would “prioritize[] dialogue over force when dealing with conflicts between rural communities and mining operators.”⁷³⁰ These assertions are contradicted by the record evidence.

373 Indeed, in the past decade and even this year, the State has authorised multiple police interventions to dislodge invaders, both in the mining sector (Section 7.2.1) and outside of it (Section 7.2.2). In any event, Peru knew that dialogue with the Parán Community was of no use and that the use of Police force was required. Hence the Respondent cannot excuse its failure to lift the Blockade on an alleged attempt “to broker a long-term, sustainable solution to the conflict” through dialogue⁷³¹ (Section 7.2.3).

7.2.1 During the past decade, Peru has authorised numerous police interventions to dislodge invaders in mining conflicts

374 During the past decade, the press in Peru has reported numerous instances in which the Police removed invaders from mining sites. The Claimant provides below some examples.

375 First, Mr Bravo provides the example of Century Mining Perú S.A.C. As Mr Bravo explains in his second witness statement, he worked for the

⁷²⁸ Counter-Memorial, 24/03/2022, p. 20 et seq. (Section II.A.1.). ↩

⁷²⁹ Witness Statement of Luis Miguel Incháustegui Zevallos, 06/03/2022, p. 12 et seq. (paras. 35-37). ↩

⁷³⁰ Counter-Memorial, 24/03/2022, p. 340 (para. 723 (b)). ↩

⁷³¹ Counter-Memorial, 24/03/2022, p. 3 (para. 7). ↩

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company from 2006 to 2017, which exploited a gold mine called "Alpacay" in the Peruvian department of Arequipa. From 2010, the local community, through protest, tried to obtain better conditions than the company had agreed with them. These protests occurred every year, and the Police would invariably not hesitate to use force against the protesters, which successfully defused community participants.⁷³²

376 Second, as reported by the Peruvian press in May 2016, the Police dislodged 100 local community members who had invaded land owned by a mining company in the province of Pasco. The Police removed the protesters, dismantled the tents that had been installed, and arrested some of the invaders. As noted by the prosecutor in a press article, the Police would also arrest the organiser of the invasion “as he is the subject of a criminal complaint for the misappropriation of land".⁷³³ By contrast, in Lupaka's case, there was no police intervention and IMC's criminal complaints against Parán's invaders led nowhere.

377 Third, various local communities in the Ayacucho region in Peru protested against mining projects in the area from 28 October 2019 onwards, arguing that the projects had contaminated their water – even though there was no evidence of this.⁷³⁴ The protests rapidly escalated, with around 500 community members entering one of the mining companies' camps (Apumayo) and burning offices, vehicles and the processing plant, as well as stealing assets, including explosives. Other violent actions followed in relation to other mining companies in the area.⁷³⁵ These illegal actions were met with a strong response.⁷³⁶ The Police also arrested many of the protesters. The prosecutor was also involved in the arrests and thanks to

⁷³² Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 6 (para. 9); "Arequipa: with pellets they try to evict protesters from the Plaza de Armas", Diario Correo (SPA), 14/08/2016, at Exhibit C-304. ↩

⁷³³ "Pasco: Police evicted invaders from private land of a mining company", Andina (SPA), 23/05/2016, at Exhibit C-305. ↩

⁷³⁴ Second Witness Statement of Luis F. Bravo, 23/09/2022, p. 7 (para. 11). ↩

⁷³⁵ "This was the invasion and burning of the Apumayo gold mine in Ayacucho", El Comercio (SPA), 30/10/2021, at Exhibit C-306; “Ayacucho: Apumayo mining camp and machinery were set on fire", Noticias SER (SPA), 30/10/2021, at Exhibit C-307. ↩

⁷³⁶ "At least ten injured and a mining camp destroyed in protests in Peru", SWI swissinfo (SPA), 30/10/2021, at Exhibit C-581. ↩

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the joint efforts with the Police, the stolen items were retrieved.⁷³⁷ By contrast, none of this was done to protect Lupaka's investment.

378 Fourth, just last year, on 14 December 2021, the State authorised a belated police intervention at the Invicta mine to stop the Parán Community's illegal mining of ore. Indeed, as shown by [Redacted] and press reports,⁷³⁹ the Police deployed a very significant operation to stop the illegal mining. Although the operation was unsuccessful, the State has further confirmed in this arbitration that the Police are currently planning to carry out a new intervention.⁷⁴⁰

379 Fifth, the Las Bambas mining project has been the subject of recurring violent attacks by the local population for years. Following a police intervention in March 2019, the authorities decreed a State of emergency in the area. Later, in October of that same year, the State issued a decree authorising the intervention of the armed forces and the Police to unblock access to the Las Bambas project site. Regarding this measure, the Minister of Internal Affairs declared that "[w]e are committed to dialogue, but this cannot be confused with weakness. We are going to do our job".⁷⁴¹ In September 2021, the Police ousted the Las Bambas Blockade.⁷⁴² The next year, on 28 April 2022, the police deployed 676 officers to evict the community members that had once again taken the mine site.

⁷³⁷ "They capture agitators who stole equipment from a mining company", Expreso (SPA), 06/11/2021, at Exhibit C-308. ↩

⁷³⁸ [Redacted] ↩

⁷³⁹ "Clash between community members and police leaves a deceased person as a result", DIARIO ASI (SPA), 14/12/2021, at Exhibit C-326. ↩

⁷⁴⁰ Peru's Reply to Claimant's 28 June 2022 Application, 05/07/2022, p. 5. ↩

⁷⁴¹ “Government Authorizes Armed Forces to Stop Protest Against Las Bambas Copper Mine", Reuters (SPA), 16/10/2019, at Exhibit C-311 (emphasis added); "Peruvian security forces unlock access to Las Bambas copper mine", Minería en Línea (SPA), 17/10/2019, at Exhibit C-312. ↩

⁷⁴² See e.g., "Las Bambas: all the blockades that were reported this year in the mining corridor", El Comercio (SPA), 28/09/2019, at Exhibit C-313. ↩

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380 These police interventions show that, contrary to Peru's contention, throughout Lupaka's tenure of the Invicta mine, the State remained committed to the use of Police force in the face of conflict with local communities. Tellingly, except for the police intervention in the Las Bambas mining project on 28 April 2022 and the belated police intervention at Invicta on 14 December 2021, the State does not refer to any of the other police interventions listed above.

381 These police interventions further show that Peru's allegation that the use of force "would likely have served only to harden the Parán Community's opposition to the Project”⁷⁴³ is one put forward only for purposes of this arbitration. Indeed, in all the cases listed above, the same concern arguably existed yet did not prevent the State from authorising the police interventions – in most cases, successfully.

382 Peru further contends that a police intervention to lift the Blockade would have been disproportionate as it “could have violated fundamental rights without effectively resolving the conflict”.⁷⁴⁴ In making this argument, Peru appears to ironically forget its obligations to protect the Claimant's "fundamental rights" both as a matter of domestic law and under the FTA. What is more, in all the cases listed above the same concern arguably existed which did not prevent the State from authorising the police interventions.

7.2.2 During the past decade, Peru has also authorised numerous police interventions to dislodge invaders outside of the mining sector

383 Just as with conflicts in the mining sector, the local press has reported numerous instances during the last decade in which the Police dislodged invaders from privately-owned land. The Claimant provides below some examples:

⁷⁴³ Counter-Memorial, 24/03/2022, p. 9 et seq. (para. 24). ↩

⁷⁴⁴ Counter-Memorial, 24/03/2022, p. 118 (fn. 480). ↩

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1. on 5 June 2014, 250 Police officers evicted more than 1000 invaders from privately-owned land located in Yurimaguas – Tarapoto, in the north of Peru,⁷⁴⁵
2. on 19 May 2015, the Police evicted invaders of an archaeological area located in Tablada de Lurín, Lima province. The Police used tear gas to defuse the invaders and arrested ten people. The major of the district stated that the principle of authority would be enforced,⁷⁴⁶
3. on 20 October 2015, two prosecutors escorted by the Police evicted 150 invaders from privately-owned land in El Tambo, in the province of Huancayo. The prosecutors warned the invaders that they were committing the crime of usurpation and that the Police would use force if they did not voluntarily leave the land.⁷⁴⁷ Thereafter, the invaders peacefully left the land,
4. on 23 December 2016, more than 150 Police officers escorted by private forces evicted invaders from privately-owned land in Ica where a real estate project was to be developed. The police intervention resulted in ten people being arrested,⁷⁴⁸
5. on 26 February 2020, more than 200 Police officers escorted by members of citizen security of the Lima Municipality evicted invaders of privately-owned land in the district of Villa María del Triunfo.⁷⁴⁹ The operation was carried out in a peaceful and orderly manner, and the Police also demolished dwellings built by the invaders,⁷⁵⁰