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Vladimir Gil Ramon

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OPINION

Is environmental deregulation in Peru's best interest?A law passed by the Peruvian government to de crease e nvironmental regulation has been met

by protest at home and abroad.

Last updated: 12 Aug 2014 15:31

Vladimir Gil Ram on is a researcher at the Earth Institute Center for Environmental Conservation (EICES) at

Columbia University, and a faculty member of the Environmental Development Masters Program and the

Social Science Department at the Catholic University of Peru (PUCP).

A Peruvian law curbing environmental safeguards to increase investments sparks conservation-

LATEST Iran dismisses direct US talks

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In 2009, 33 people died in clashes between anti-mining protesters and police. [Reuters]

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People & Pow er - Peru: Undermining Justice

development debates.

"Do not despair," Peru's main pro-business newspaper anxiously editorialised four days after the

government passed a new lawrelaxing environmental safeguards in an attempt to boost private

investments, mostly in mining and hydrocarbons.

The nervous plea summarised the media campaignwelcomed by mining companies demanding

governmental measures because they believe the so-called "Peruvian M iracle" - a decade of

extraordinary macroeconomic performance - is coming to an end.

Peru's spate of economic growth largely reflected the international demand for minerals, especially from

China. The world's second largest copper producer, Peru holds13 percent of global copper reserves, andminerals comprise more than half of all Peruvian exports.

Peruvian mediahas blamed governmental overregulation for the economic slowdown (a drop from 5.02

percent in 2013to 2 percent in May-June 2014), instead of declining mineral prices and an increasing

international mineral and hydrocarbon supply.

The business elite demanded state measures to promote investment, including environmental de-regulation,

in order to maintain the economic growth pace. But is environmental de-regulation appropriate when many

Peruvians have hardly felt this macroeconomic "marvel", particularly in the Andes where mining concessions

concentrate, and environmental impacts are accumulated and felt everyday?

According to official figures, roughly one third of the country's population lives below the poverty line, and

chronic infant malnutrition still affects between 20 and 30 percentof the population. Lima business and

political elites have reaped the benefits of the national mining boom while other regions of the country -

especially the rural and mining areas - face not only endemic poverty but also environmental damage, which

further endangers local livelihoods. Now the government risks exacerbating the social divide even fur ther by

reducing environmental safeguards protecting communities from the effects of mining.

The new law

The new law aims to increase investment by limiting the capabilities of the six-year-old ministry of

environment, among other measures. As a result, the environment ministry's Body for Assessment and Audit

(OEFA) will not be able to penalise companies for breaching some environmental safeguards for three

years, unless circumstances are exceptional.

Changes in eco zoning imply that the ministry of

environment will no longer be able to create nature

reserve zones, unless it obtains the approval of all

ministries, including the ones with the legal mandate

to promote extractive industries. The definition of

the Acceptable Maximum Limits and Environmental

Quality Standards of mining emissions will no longer

be a technical decision made by the ministry of

environment, but will require the authorisation of all

ministries.

Needless to say, Manuel Pulgar-Vidal, the minister of environment voted against the bill. While it

appeared that he was not entirely in agreement with the law's critics - recently declaring that his sector

"does not feel that it has lost power"- he recognised that a group of companies have attempted to limit

the environmental standards and "get rid of" the OEFA, fearing its efficacy.

Over the last four years (2010-2013), fines applied by OEFA exceeded $70m, most of them given out tothe

mining companies.

By contrast, the predecessor to the OEFA, the ministry of energy and mining was highly ineffective in

sanctioning environmental violations; for example, it did not finish more than 80 percent of contamination

claims.

Public reactions

As soon as the proposed law went public, about 30 Peruvianorganisations and more than 100

international institutions, including the Peruv ian Ombudsman, published letters criticising the

regulation. The presentation of the letter by Peruvian organisations was followed by street protestsin late

June and early Julyled by human rights organisations. Public forumsand TV debates were also organised.

The government's decision attracted the criticism of the international community, as Peru is scheduled tohost more than 10,000 delegates for the 20th UN Convention of Climate Change Conference of the

Partiesin December. The event is supposed to prepare binding environmental agreements to control global

warming emissions in order to mitigate the worsening effects of global climate change.

Organisations from Peruand abroadquestioned the "moral standards" of the host government for

sending a contradictory signal to industries involved in climate change, by lessening environmental

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Witness - Peru: A League of their ow n

Source: Al Jazeera

Tweet 62

safeguards to promote investments, in spite of the fact that protective environmental policies are known to

improve the quality of investments.

The government's move also could potentially

instigate another cycle of violence. Peru'sown

experience - as well as international evidence-

shows that a weakened environmental institutional

framework exacerbates violent resource-related

conflict. Peru already has a history of grassroot

resistance to extractive projects that threaten the

environment.

In 2009, during Alan Garcia's regime, 33 people

died(23 policemen and 10 citizens) and 205 more

were wounded in the Peruvian Amazon town of

Bagua during a violent confrontation between the

police and indigenous protesters. The local communities were protesting a decree enactedto implement

the US-Peru free trade agreement (TPA), allowing extractive industries - including forest, oil, and mining -

to enter their territory without the appropriate consultation and consent of indigenous communities, based

on the 169 ILO international convention.

As a result, 53 members of these indigenous communities are on trial for the protests. There are no

proceedings against policemen involved in the violence.

The situation in Peru has become even more complicated since in January when the government passed a

law exemptingthe police from criminal responsibility for death or harm they would cause while on duty.

Lessons learned

Two decades ago, the alarms of the "Natural Resource Curse " went off. Economists Jeffre y Sachs and

Andrew Warnerrevealed that many "countries with great natural resource wealth tend nevertheless to grow

more slowly than resource-poor countries." Social scientist Terry L. Karl also documented "the paradox of

plenty", in which superficial growth based on oil extraction actually weakens state institutions.

It is clear that the GDP of a country does not take into account crucial dimensions of resource extraction,

such as clean-up services or environmental degradation. A lake drained is not part of a mining company's

costs, nor is it discounted from the GDP. This condition becomes even more delicate in countries like mega-

biodiverse Peru, whose Amazonian territories contribute to carbon capture in the global climate change

crisis.

Yale University's Environmental Performance Indexranks Peru as 110 out of 175 countries. Although

Peru's environmental institutions are relatively new and still fairly weak, they have improved over recent

years to the point where they have worried the mining companies enough that pressure has been put on the

government to rein them in.

The open letter penned by Peruvian organisations ends by calling for a "new vision" of governance. It

advocates a "widespread and transparent debate about natural resource management," including affected

communities and the environmental supervision of investments. To tackle the issue of environmental

regulation, governments have the responsibility to adopt democratic, transparent and scientifically informed

approaches, not only to prevent environmental disasters and promote safe businesses, but also to preclude

potential conflict that could end in violent episodes.

Vladimir Gil Ramon is a researcher at the Earth Institute Center for Environmental Conservation

(EICES) at Columbia University, and a faculty member of the Environmental Development Master'sProgram and the Social Science Department at the Catholic University of Peru (PUCP).

The views expressed in this art icle are the author's own and do not necessarily reflect Al Jazeera's

editorial policy.

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Alan Garcia

Andrew Warner

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Is Environmental Deregulation in Peru's Best Interest_ - Opinion - Al Jazeera English

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