Peruvian President Alan Garcia ordered a violent crackdown on indigenous protesters near the town of Bagua Grande, 1400 kilometres north of Peruvian capital Lima. Special Forces opened fire, including from helicopters.
The protesters were calling for the repeal of government decrees that open up vast swathes of indigenous people's land in the Amazon to oil, mining, timber and agribusiness companies.
On June 5, the Chachapoyas Medical College, in the region where the massacre occurred, put the number of indigenous people dead at 25. After a second day of clashes, indigenous leaders said at least 40 civilians were confirmed dead.
Twenty-three police also died in the clashes.
Eyewitnesses said Special Forces dumped the bodies of protesters into the nearby Manon River and others were burned in a nearby army barracks. Two journalists covering the clashes were also killed and four detained.
Human rights lawyers who visited the area said hundreds more were missing.
"The 5th of June 2009 will go down in history as the day when democratic illusions — illusions that were very weak, that's for sure — ended", Peruvian political economist Raul Weiner said on June 5.
"When Garcia decided that the decrees were more important than the relative social consensus, he changed the nature of power. His government cannot exist from now on without the use of force … This is the serious crossroad that exists in Peru."
However, the government has tried to downplay the massacre, initially admitting a civilian death toll of only three, then later nine.
Indigenous communities, led by the Interethnic Association for the Development of the Peruvian Jungle (AIDESED), have been protesting the decrees, a requirement of the 2007 free trade agreement signed with the United States, for over a year.
The decrees have been deemed unconstitutional by a multi-party congressional commission, but have not been repealed by congress.
In an attempt to undermine the legitimacy of their demands, Garcia has resorted to racist slurs against indigenous communities, describing them as "savages" and "barbarians". He said that "they are not first class citizens".
On May 22, the government issued an arrest warrant for AIDESEP president Alberto Pizango on charges of "conspiracy, sedition and rebellion". AIDESEP is the main indigenous organisation behind the protests.
Pizango has since been granted political asylum by the Nicaraguan embassy in Lima.
Garcia has even claimed that his government is the victim of a "conspiracy" and that indigenous communities are being manipulated by foreign powers — such as Venezuela and Bolivia — and political opponents such as left-nationalist Ollanta Humala's Nationalist Party (PNP).
Radio YKVE Mundial said on June 8 that AIDESEP member Shapion Noningo ridiculed the claims: "The decrees denounced by the indigenous peoples, were ordered by the Peruvian government in compliance with the demands of a foreign government, which is not located in South America, but rather in Washington."
Likewise, Humala has scoffed at the allegations: "Indigenous communities have the full capacity to make their own decisions." He said the PNP supported their demands.
The massacre has created a crisis for the government, with the women's minister Carmen Vildoso resigning on June 8 in protest over the government crackdown and in particular a government advertisement depicting indigenous people as "savages".
In an attempt to avert growing popular resistance, Congress suspended the decrees for 90 days on June 10. However, tens of thousands of indigenous Peruvians, students and trade unionists took to the streets across the country on June 11 demanding the decrees be repealed, not just suspended.
The demonstration in Lima was violently dispersed with teargas and rubber bullets.
In a further crackdown on political opposition, that day seven PNP legislators (all of whom are indigenous) were suspended from parliament for 120 days.
They held a protest during the congressional debate the previous day, waving signs saying, "No to transnational (corporations) in the Amazon", and "The land and water are not for sale".
Freddy Otarola, spokesperson for the PNP legislators, described the suspensions as "racist" and a "grave abuse against democracy".
"This confirms there is a civic-military dictatorship", he said.
The government has also extended a state of emergency, initially decreed in four provinces on May 9, to cover the Alto Amazonas region.
However indigenous communities have won widespread popular support. Strikes and protests continue to spread, involving highland regions such as Puno, near the Bolivian border, and in Lima and Arequipa on the Pacific coast.
Even sectors of the police, angry over poor conditions and low pay, have denounced the government.
A June 5 statement by the clandestine Union of the Peruvian Police held the government responsible for the massacre.
It sent condolences "to the spouses, children and families of our comrades in arms, who were members of the clandestine police union, as well as to the families of our native brothers, to all of those fallen in Bagua; those in uniform, who were following orders of repression by the APRA [Garcia's party] government,… and the natives defending the land and resources of the jungle, which belong to all Peruvians, in the face of their imminent privatisation.
"The only aim of the APRA government is to defend their sell-out politics and to sell off the country, which the most conscious uniformed workers [the police] reject, repudiate and condemn."
The Peruvian elite are represented by the Garcia government, which acts on behalf of multinational capital scrambling to control the oil- and gas-rich Amazon. The elite is in an irreconcilable conflict with indigenous communities fighting to defend the environment and their way of life.
The conflict is occurring in the context of a continental-wide rejection of neoliberalism, which means allowing for increased plunder of Latin America by multinationals. This has included indigenous movements in neighbouring Bolivia and Ecuador winning big gains.
In the face of government intransigence, Peruvian indigenous communities have vowed not to take a step back.
Libia Rengifo, president of the Regional Association of Indigenous Peoples of the Central Jungle said: "Our mobilisation is permanent and we want the full repeal of all the legislative decrees that affect our interests."
If the government did not comply, indigenous communities would march on Lima she said.