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.