Newmont in Peru
2003 | Case No. IB51
This case describes events associated with Vladimiro Montesinos, Peru’s intelligence chief and advisor to President Fujimori, his network, and interventions in affairs of the Newmont Mining Corporation. Newmont, a U.S. company established in 1921, proclaimed its corporate values to be “behaving with integrity, working loyally, inspiring trust, telling the truth, caring for our colleagues and cooperating with our community.” Yet, on February 26, 1998, Lawrence T. Kurlander, a vice president of Newmont, met with Vladimiro Montesinos Torres in Montesinos’s office at the Servicio de Intelligencia Nacional (SIN, the national intelligence service) to seek his help in getting a resolution favorable to Newmont in a quarrel with the French company, Bureau de Recherches Geologiques et Minieres (BRGM), over their shared ownership of the Yanacocha mine. The mine was the richest gold mine in Latin America and one of the biggest in the world. BRGM wanted to sell part of its 25% share in Yanacocha to Normandy Ltd., an Australian mining company. Newmont sued to block the sale and to gain control of the mine for itself. The dispute had made its way to the Supreme Court of Peru. Montesinos secretly taped his conversation with Kurlander as was his habit, to so record all of his negotiations. The clandestine Montesinos videotapes provide a rare inside view of how business gets done where the rule of law is subordinated to political influence. “The rule of law is to be preferred to the rule of man,” wrote Aristotle in 340 BC. “We do not permit a man to rule but the law, because a man rules in his own interest and becomes a tyrant, but the function of a rule is to be the guardian of justice.” Peru was, on the face of it, subject to the rule of law. There existed, supposedly, a free press, opposition political parties, and an independent judiciary. But in fact Montesinos’s machinations had undermined the rule of law and substituted the rule of man.
This material is available for download by current Stanford GSB students, faculty, and staff, as well as Stanford GSB alumni. For inquires, contact the Case Writing Office. Download
Available for Purchase