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PERU / URUGUAY
“Environmental degradation in the country is not free; it has a cost”
Ramiro Escobar
7/20/2016
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Interview with economist José De Echave

Economist José De Echave served as Deputy Minister of Environmental Management at the Ministry of Environment (MINAM) between August and December 2011 during the outgoing government of President Ollanta Humala. De Echave is currently the head of the Observatory of Mining Conflicts of CooperAcción, a non-governmental organization dedicated to promote sustainable land management and building development alternatives to extractivism.

In conversation with Ramiro Escobar, Latinamerica Press collaborator, De Echave analyzes the environmental performance of the five years of the government of Humala and refers to the perspectives on this issue under the government of President-elect Pedro Pablo Kuczynski who is to assume his five-year term on July 28.

How do you evaluate environmental management under the Humala government?
At the beginning much expectation was generated with how he was going to handle social conflicts, and with the prior consultation mechanism being approved at the end of August 2011. The President even visited Bagua [a northeastern city where an indigenous uprising took place in 2009 that left 33 dead] at that time. At the same time, announcements were made that projected the image of a stronger environmental authority.

One of the announcements was that Environmental Impact Assessments (EIAs) were to be moved to the Ministry of Environment (MINAM). This gave the Ministry powers it did not have before. And what’s more, in the opening speech there was mention of a national land use policy.

What happened then?
The government found itself dealing with various social conflicts. The country was in a conundrum, discussing whether the Conga mining project [to extract gold and copper that lie beneath four lakes in the northern Andean department of Cajamarca] was going to be feasible or not. Humala’s first cabinet, headed by Prime Minister Salomón Lerner Ghitis, crumbles in December 2011, only five months after taking power, and does it symbolically in Cajamarca main square.

It was a very intense situation, which caused for several strategic objectives to be put on hold; something that came amid a political crisis that developed rapidly.

From that point on the government runs out of political operators, wears down, it begins to change cabinets. In 2013, people are already speaking out strongly about the slowing economy. The international context was changing, but it was said by many in Peru that the economic slowdown was the result of a combination of hurdles and permits regarding social and environmental issues that resulted in investments bogging down.

That’s when the famous little word “red tape” gained traction.
Or “permitology”. And several economic groups very skillfully argue that this is what slowed down the economy. We were at a second stage by then, where a package of legislative measures was passed that took us in another direction. The so-called environmental paquetazo [in 2014] which are actually four laws: two laws given by Congress and two supreme decrees that caused MINAM and its connected agencies to lose some of their powers. The ministry transferred a number of prerogatives to the Presidency of the Council of Ministers (PCM), such as the standards of environmental quality and of land use planning. MINAM would still have powers, but everything was defined in the PCM.

Several agencies have been the target of these norms. If there is one that was badly impacted, it is the Agency for Environmental Assessment and Enforcement (OEFA), which has now relegated to carrying out awareness-raising activities.

The law that was going to transfer all EIAs to MINAM was also unsuccessful.
It was approved in 2012 during the conflicts in Conga and Espinar [in the department of Cusco, brought on by mining pollution. Both conflicts left several people dead.] and in the midst of a new ministerial crisis. Humala announced a project that would create a new relationship with the mining industry, and the National Environmental Certification Service (SENACE), which was supposed to review the EIAs, was created as part of that project. We are in 2016 and SENACE is not operating.

Was it simply a lack of vision of the Executive regarding environmental matters, or was the decision to give priority to other issues?
I think the environmental issue was never a priority. It’s curious, because we don’t even notice its presence in the economic analysis. There are projections from the World Bank according to which we lose 4 percent of our gross domestic product due to environmental degradation. That has an impact, environmental degradation in the country is not free; it has a cost.

In this scenario enters the government led by Pedro Pablo Kuczynski, of Peruanos por el Kambio (PPK-Peruvians for the Change). What measures will the new government have to take to reverse this trend?
Honestly, I’m not very optimistic. We must not forget that in the beginning of the campaign, Kuczynski said that some ministries such as Culture and Environment could become technical secretariats. He did not repeat it later, and I doubt he will, because it would bring a political cost for him. But that already shows a perspective.

One of the first announcements of Alfredo Thorne, the next Economy minister, is that he would favor that indigenous territories are fragmented, so they can be sold; something that goes against communal property.

And this makes certain ecosystems to become more vulnerable.
Sure, but we are also not as in the beginning of the Humala government, when we were still in the super cycle of international mineral prices. That is in the past now. Peru is increasing its copper production, but this is thanks to projects that come from years ago. This will last for a couple of years, but then we will only have expansions.

Something that could also happen is the escalation of extraction.
Yes; prices fall, but extraction increases. Arequipa [in the south], for example, just moved to first place in the production of copper, overtaking Ancash [on the central coast]. There is an increase in production mainly in the south of the country: Las Bambas, Toquepala, Cerro Verde. In economic terms, this means we will have a growing mining sector for a couple of years, at fairly high rates, but there may be problems in social and environmental terms.

What would Kuczynski have to do if he chose to approach a balance between investment and the environmental policy?
To begin with, he needs to take into account the social and environmental issues. We remain a country where most conflicts are environmental [as of June 30 the Ombudsman’s Office recorded 212 conflicts of which over 70 percent are socio-environmental]. It would have to generate a sensitivity,  something that seems to me that is lacking today in the Kuczynski team. We would have to see who will be those that make up the new cabinet because I do believe that some people can generate some equilibrium conditions. It could happen if certain people are given the space.

The first thing he should do is try to reverse these environmental paquetazos. It would be impossible to build something serious in matters of environmental institutions if they are not reversed. What has happened in recent years has been a setback. It would be significant if Kuczynski does reverse them.

What should be done in the subject of illegal mining?
This activity has grown in 21 of the 25 regions in the country. In 2011 it came to displace the drug traffic in matters of illegal exports. Today there is no election in the country in which there are no candidates trying to exert influence on this activity. I do believe that there was a very clear difference on this issue between Popular Force [Fuerza Popular, led by former presidential candidate Keiko Fujimori] and PPK.

In addition to the “clean gold” initiative [that aims to help small and artisanal mining to formalize], PPK is also planning to revive the Mining Bank program to, and through financing, formalize this industry. He marked differences with Popular Force, who sought more alliances with illegal miners to disrupt what had already been accomplished.

And what about the water?
This is an extremely sensitive issue. In regions such as Ica [on the central coast], for instance, where you find water stress and where water demand exceeds the supply. This is a subject on which we have no current data available. The data we have dates back 30 years. The data that says that mining uses 2 percent of the water in the country is from 1979. We have a lag of information. We would need to make a diagnosis of the basins, watersheds, of the Atlantic, the Pacific, of Lake Titicaca. There is a huge task ahead in the subject of water.

One issue that is not mentioned much is the conservation of biodiversity, despite having to do with environmental services, with forests, the water even.
I think that a link with the economy should be established in the analysis of biodiversity. Of the 78 million hectares in the Amazon we have already lost 2 million of them and 8 million are in the process of degradation. And the pressures being exerted in the Amazon brings us to a situation that can turn it into a savannah.

On climate change; how does the Paris Agreement need to be addressed by the new government?
If the country does not adopt a serious national strategy, with precise goals, climate change will continue. It may even turn into a problem for investment.

The environmental issue is not only a responsibility of Kuczynski. We need to do advocacy because, eventually, reality will show us convincingly that the losses and costs will continue to increase. From the outside we can do a lot. The people on the streets also have much to say about it. —Latinamerica Press.


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José De Echave / CooperAcción
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