VZCZCXYZ0007
RR RUEHWEB

DE RUEHPE #2099/01 1661852
ZNR UUUUU ZZH
R 151852Z JUN 07
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC 5860
INFO RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHBO/AMEMBASSY BOGOTA 4759
RUEHBR/AMEMBASSY BRASILIA 7404
RUEHQT/AMEMBASSY QUITO 1276
RUEHLP/AMEMBASSY LA PAZ JUN SANTIAGO 1325
RUEHBS/USEU BRUSSELS
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC

UNCLAS LIMA 002099 
 
SIPDIS 
 
SIPDIS 
 
COMMERCE FOR 4331/MAC/WH/MCAMERON 
USTR FOR BHARMAN AND MCARILLO 
BRASILIA FOR ESTH HUB JSTORY 
USDA FOR FAS/OCRA AND FOREST SERVICE 
USEU FOR DCM MCKINLEY 
 
E.O. 12958: N/A 
TAGS: SENV EAID ETRD EAGR ECON USTR PE
 
SUBJECT: HARMONIZING USG COOPERATION IN FORESTRY SECTOR 
 
¶1.  Summary:  With some of the most diverse ecosystems in the world, 
Peru seeks to find a balance between protecting its environment and 
deriving economic benefits from its natural resources.  As a vote in 
the U.S. Congress on the U.S.-Peru Trade Promotion Agreement (PTPA) 
approaches, the GOP will need to address implementation of the 
agreement's environmental chapter, in particular amendments on 
illegal logging.  In order to harmonize the array of environmental 
programs offered by various USG agencies, representatives of USAID, 
the Foreign Agricultural Service (FAS) and ECON met with senior 
INRENA (GOP's National Natural Resource Institute) officials on June 
1 to present and discuss USG forestry cooperation and assistance in 
Peru.  Post is developing a coordinated strategy for assistance to 
the Peruvian forestry sector which includes the following: 
USAID-funded activities in voluntary forest certification, forestry 
rule of law, INRENA institutional capacity building, and protected 
areas management; USDA support for providing PL 480 Title I 
resources to fund specific projects in the areas of voluntary forest 
certification, community management and reforestation, forestry rule 
of law, and institutional capacity building; and State to fund 
environmental law enforcement training.  End Summary. 
 
¶2.  Peru is among a handful of mega-biodiverse countries in the 
world, and its rainforests are among the largest of any country, 
extending 700,000 square kilometers.  As a lower middle-income 
country, Peru faces important choices about how to manage its 
environment responsibly, while leveraging it as an asset for 
economic growth and poverty reduction.  Without an environment 
ministry, responsibility for implementation and enforcement of 
Peru's relatively strong environmental legal framework rests with 
INRENA and sectoral ministries.  Environmental abuses, 
non-sustainable practices, poor oversight, and lack of funding 
continue to be hallmarks of the current approach. 
 
¶3.  Logging promises to be an important contributor to Peru's 
growing economy.  While 60% of Peru's land is forest, at present, 
forestry contributes only 1.4% of the GDP.  However, illegal logging 
in the Peruvian jungle continues -- an estimated 70 to 90% of 
mahogany exported from Peru in 2005 originated from illegal sources. 
 In addition, the national system of parks and protected areas is 
potentially a tremendous base upon which to expand ecotourism and 
sustainable forestry. 
 
¶4.  However, weak management and illegal activities, such as 
logging, poaching and coca cultivation, threaten these lands and 
their inhabitants (many of them indigenous people).  International 
development assistance has been important in supporting a variety of 
forestry initiatives.  Both the environmental chapter of PTPA and 
the current proposed amendments have focused on our interest in 
reducing illegal logging, as well as to improve overall forest 
sector governance.  The PTPA creates further potential opportunities 
for development of activities in this area through its Environmental 
Cooperation Agreement. 
 
¶5.  Seeking to develop a coherent and unified environmental 
cooperation initiative, USAID, USDA/FAS and State/Economic officers 
met on June 1 with senior level INRENA officials to present and 
discuss USG forestry assistance in Peru.  The objectives of the 
meeting were to harmonize USG assistance in Peru as mandated by the 
foreign assistance reform process, as well as to maximize congruence 
with GOP priorities.  Current USG environmental assistance includes 
diplomatic efforts, protected areas management, forest sector 
transformation, building on achievements to date, capacity building, 
local ownership, environmental management for poverty reduction, and 
alliance building between the GOP, private sector and civil 
society. 
 
¶6.  Three agencies are working on these assistance efforts:  USAID, 
USDA (particularly the Forest Service) and State.  Under a 
harmonized approach: 
-- USAID will continue funding activities in voluntary forest 
certification, forestry rule of law, INRENA institutional capacity 
building, and protected areas management; 
-- USDA will support using resources generated by the most recent PL 
480 Title I agreement to fund specific projects in the areas of 
voluntary forest certification, community management and 
reforestation, forestry rule of law, and institutional capacity 
building; and 
 
-- State will fund environmental law enforcement training. 
 
COMMENT 
------- 
 
¶7.  Environmental issues are a top priority for the GOP and for the 
USG in Peru.  Environmental provisions in the PTPA will bring new 
challenges for the GOP in areas related to the environment, global 
warming and logging.  The Environmental Cooperation Agreement will 
provide opportunities for working on capacity building activities 
for the forestry sector.  USAID, USDA and State aim to create a 
joint platform of work at post for environmental cooperation 
focusing on areas such as capacity building, forest certification, 
reforestation, forestry rule of law, environmental compliance, and 
protected areas management.  This joint platform could lend itself 
to future funding that might become available for PTPA 
implementation.  The meeting with INRENA served as the starting 
point to harmonize and concentrate efforts into areas of common 
interest for the USG and the GOP. 
STRUBLE