The Rampant Corruption Inside Pan American Silver (PAAS) Peru

By Otto Rock

A fascinating report out of the regional news site Cajabamba Peru yesterday, showing the type of corruption that’s rife inside the Pan American Silver (PAAS) operations in Peru. The case has come to light because of the recent takeover of Tahoe Resources by PAAS, as the central figure in the corruption, one Christian Dávila Grados, was brought into the ex-TAHO operations from another mine and immediately went about cutting large slices of pie for his friends and family. When this came to the attention of locals in and around the La Arnea and Shahuindo mines and they found out that truly local companies (the people that should benefit) were being cold-shouldered and contracts awarded to Dávila’s chosen few, we on the outside finally get to see what must be rife inside PAAS (and perhaps for many years). Examples of the contracts include:

  • Dávila awarded a juicy managerial post at the Shahuindo mine to a personal schoolfriend from another region, instead of the post going to a Cajabamba local.
  • The company of another of his school friends, mysteriously won a U$600,000 services contract with Shahuindo for this year. To celebrate, Dávila and his friend went to Las Vegas (and the report link has great photos of them all at the gaming tables, smiling away).
  • Despite having no relevant qualifications, Dávila awarded the job of Residual Water Treatment Assistant in the La Arena mine to his brother.
  • Another schoolfriend of Dávila’s, who has already been found guilty of benefitting from a corrupt contract at another mine (the “El Brocal” mine for a U$400,000 services contract, and strangely at a time when Dávila was also working at that mine), has made it to the final round of another tendering process that is due to close in the next couple of days.

All this and more. Also, we hear that the investigative reporter behind the report is about to publish a series on the extent of pollution issues that have come from the Shahuindo mine in particular. If this is how PAAS goes about its ops in Peru, the people living locally around La Arena and Shahuindo who welcomed the news of the abysmally run Tahoe Resources may find themselves out of the frying pan and into the fire. How long has PAAS been a paradise of slush money for the chosen few? Hopefully we get to find out soon.

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