VZCZCXYZ0001
RR RUEHWEB
DE RUEHPE #0876/01 1401448
ZNR UUUUU ZZH
R 191448Z MAY 08
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC 8647
INFO RUEHBO/AMEMBASSY BOGOTA 5724
RUEHBR/AMEMBASSY BRASILIA 7859
RUEHBU/AMEMBASSY BUENOS AIRES 3366
RUEHCV/AMEMBASSY CARACAS 1154
RUEHLP/AMEMBASSY LA PAZ MAY QUITO 1898
RUEHSG/AMEMBASSY SANTIAGO 1872
RUEHRL/AMEMBASSY BERLIN 0344
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
UNCLAS LIMA 000876
USTR FOR BHARMAN, MBURR AND MCARRILLO
USAID FOR LAC, EGAT, JKUNEN
TREASURY FOR AJEWELL, KKOZLOFF AND MMALLOY
COMMERCE FOR 4331/MAC/WH/MCAMERON
BRASILIA FOR ESTH HUB BRAGHETTA
STATE PASS TO EXIM SPARSONS AND MHASAN
ENERGY INFORMATION ADMINISTRATION FOR CESSER
DOE FOR GWARD/SBROWNE
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ENRG SENV ETRD EINV EAID ECON USTR EXIM PE
SUBJECT: PERU CREATES ENVIRONMENT MINISTRY, NAMES ENVIRONMENTALIST
AS NEW MINISTER
SUMMARY
-------
1. (U) The Government of Peru officially announced the creation of
the Ministry of Environment and named the first Minister, ecologist
Antonio Brack. The new Ministry will incorporate most of the
existing environmental agencies and technical experts under one
roof, and strengthen the government's ability to tackle
environmental issues by giving the Ministry power to supervise
environmental management and impose sanctions for violations.
Antonio Brack is a well-respected pro-development ecologist, public
commentator on the environment and consultant to mining companies.
He had been tasked by President Alan Garcia several months ago with
designing the future ministry, and reaction to his selection as the
new minister is cautiously optimistic. Both events are clear signs
that Peru is moving in a positive direction on the environment and
in support of PTPA goals.
THE ANNOUNCEMENT
----------------
2. (U) On May 13, 2008, the Government of Peru officially announced
the creation of the Ministry of Environment at a ceremony in which
President Garcia signed the legislative decree creating the
Ministry. Ambassador and other chiefs of mission, Secretary General
of the Organization of American States Jose Miguel Insulza were
invited to witness the signing, as was visiting German Chancellor
Angela Merkel, in town for the annual Latin America and Caribbean-
EU summit. Merkel publicly promised that the German Ministry of
Environment will collaborate and support the development of the
future Peruvian Ministry. The ministry does not yet have a physical
home.
3. (U) The Ministry was created through a "legislative decree", a
kind of hybrid decree that has the force of law. The government is
currently enabled to pass "legislative decrees" by special powers
that the Congress ceded to the Executive at the beginning of the
year in order to expedie the implementation of the U.S. Peru Trade
Promotion Act (PTPA). Some members of the Peruvian Congress have
pointed out that while the President can issue decrees for items
related to the PTPA, the creation of a new ministry requires a
change in the Organic Law and this can only be changed by Congress.
Some people question if the special powers are broad enough to
create a new ministry. The government has been using this vehicle
for other non-PTPA related topics.
THE STRUCTURE
-------------
4. (U) The Ministry of Environment will incorporate the current
National Institute for Natural Resources (INRENA), the National
Council for the Environment (CONAM), and technical specialists on
environmental topics from each ministry. The Peruvian National
Geographic Institute and DIGESA (animal and plant health) will also
be absorbed by the new ministry. The new ministry will have control
over mining. A major change from the original proposal is the
decision, under the final decree, that will place the management of
the country's hydro resources, such as basins and water management,
under the Ministry of Agriculture.
5. (U) The newly created Ministry will have a Vice Ministry of
Natural Resources Strategic Development and another one for
Environmental Management. Other features:
--The ministry will design the plans for environmental standards as
well as define maximum permissible limits for the different sectors.
-- It will propose the modification or creation of Natural Protected
Areas.
-- It will establish and enforce sanctions, penalties, seizures,
immobilizations, closures or suspensions for environmental crimes;
-- It will be in charge of the National Plan for Environmental
Action;
-- It will establish a Tribunal for environmental disputes and an
Environmental Advisory Commission.
THE NEW MINISTER - ANTONIO BRACK
--------------------------------
6. (U) President Alan Garcia announced that the ecologist Antonio
Brack will be the first Minister of the Environment. President
Garcia stated that Brack had "all my support in order to do what is
necessary to defend the environment." He is viewed as a
pro-development environmentalist, acknowledging that development is
needed in Peru, but that there is a need for the new ministry to
ensure sustainable development and the conservation of biodiversity.
He has been a consultant to large mining projects, but supportive
of incorporating environmental management plans.
7. (SBU) An articulate public spokesman for sustainable
development, Brack has broadcast his themes through his regular
environmental TV series "The Good Earth" ("La Buena Tierra") where
he shows how environmentally-conscious activities can be positive
and benefit the areas where they are incorporated. He publicly
supports the PTPA and believes that it will inject responsibility
into the mining and forestry sectors. He criticizes informal mining
and his program has sought to educate the public on the deleterious
effects of informal illegal mining. Brack is not a politician,
preferring to speak his mind on both general and technical topics.
He was the head of CONAM, but left admitting that he did not like
the politics. It is expected that he will be able to bring
technical, non-political, individuals to the Ministry that will
likely be more concerned with the environment rather than political
gain. COMMENT: Brack has good relations with the U.S. Mission and
has even devoted two of his television shows to highlight USAID's
Alternative Development program. END COMMENT.
REACTION ON THE NEW ENVIRONMENT MINISTRY
----------------------------------------
8. (SBU) Reactions on new Ministry and selection of Antonio Brack
are mixed, with NGOs and extractive industry representatives
cautiously optimistic.
-- Javier Jahnke, member of the Red Muqui network (a grouping of
development NGOs) said that although Brack is a well known
ecologist, his position as consultant to the Majaz mine (which is
handling the embattled Rio Blanco mining Project in Piura) cast
doubts on his appointment. (NOTE: This network includes some more
radical anti-mining NGOs that have opposed various issues on the new
Ministry since the beginning.)
-- A congresswoman from Piura, Marisol Espinoza, questioned the
appointment of Brack given his relationship with the Majaz mine.
-- Ysaac Cruz, President of the Energy, Petroleum, and Mining
Society stated, "We think its fine that the Environment Ministry
supervises the mining sector, but it should also prioritize and
fight against illegal mining and forest depredation."
-- Gloria Ramos, President of the Environment and Ecology Commission
from Congress stated, "The main deficiency in the creation of this
new Ministry is the lack of debate over its objectives and
functions. Other proposals have not been taken into account and only
a small group of people related to the executive branch have had
access to the project."
-- Ismael Benavides, Minister of Agriculture, stated, "The
Environment Ministry will contribute to the reduction of social
conflicts caused by environmental issues. All sectors should
collaborate with this new entity that will look after environmental
resources."
-- Carlos Santa Cruz, General Manager of Yanacocha, the hemisphere's
largest gold mine told us he believed Brack was a "constructive"
interlocutor on mining and environmental issues.
NEW MINISTER'S GOALS: FIGHTING DEFORESTATION
--------------------------------------------- -
9. (U) According to the newly appointed Minister, Antonio Brack, the
main challenge that this new ministry will have is with the low
level of investment in environmental management. Currently,
investment only amounts to 0.01% of GDP, while the costs related to
bad environmental management make up 3.9% of GDP. Brack stated that
solving the deforestation problem in the jungle is crucial, as there
are more than 10 million deforested hectares of land and more
hectares of forests are being cut down and burned every year.
NEW ENFORCEMENT INITIATIVE
--------------------------
10. (U) The new ministry will create several new initiatives;
including in this is the creation of the Office for Environmental
Evaluation and Enforcement (OEFA). The OEFA will be a part of the
Environment Ministry, but will have independent decision making
authority. The new legislative decree provides authorities to OEFA
to enforce environmental standards in all the sectors (mining,
fisheries, hydrocarbons, industry, and agriculture). OEFA will have
the authority to supervise, sanction, and suspend operations that
have an environmental impact that is contrary to established norms
(this includes the ones performed by local, state, and municipal
authorities).
COMMENT:
--------
11. (SBU) The US-Peru Free Trade Agreement with its strict
environment and forestry provisions fueled the idea of establishing
an Environmental Ministry. However, the creation of this ministry
is the result of several decades of work in Peru on environmental
programs. A World Bank report (Republic of Peru Environmental
Sustainability: A Key To Poverty Reduction In Peru, Country
Environmental Analysis - May 2006) on environmental sustainability
in Peru states that over this time, "Peru has restructured its legal
and regulatory landscapes, undertaken numerous policy initiatives
and dramatically expanded and strengthened its institutional
capacity for protecting and managing the natural resources and
environmental quality that are vital to sustainable growth and
poverty reduction." In the past twenty-five years, Peru has
established a system of national parks and forestry reserves that
cover more than one-fifth of the national territory. It is moving
quickly to replace polluting gasoline with cleaner natural gas in
buses, cars and factories. "While the government made significant
advances, it still faces the serious challenge of slowing and
reversing environmental degradation," according to the World Bank's
most recent report.
12. (SBU) We see the establishment of the new ministry as a positive
step for the Government of Peru in addressing environmental
degradation. Overall, the sentiment here is positive on both the
new ministry and the selection of Antonio Brack. Observers are
pleased with sanctioning authority explicitly given, tough penalties
in Article 310, and what look like substantial budget resources from
the concession and forest permit fees going directly to the
regulatory authority OSINFOR or the forestry and wildlife areas. A
few concerns have also been cited, which include the 60-year period
of concessions, which seems abnormally long. Also, responsibility
for forestry management remains in the Agriculture ministry. As the
new ministry begins its activities, we will have to keep tabs on the
details of the implementing regulations, and the GOP's abilities to
turn good laws into good practices.