Omar Chehade, Peru’s second vice president, resigned from his post on Monday evening in the midst of questions over his role in an influence-peddling scheme. The move, coming the night before a congressional vote on whether to suspend him from political office for five years, may have been a calculated attempt to keep his congressional seat, according to Peru21. If so, it appears to have worked. On Tuesday evening, after four hours of debate, the Permanent Comission of the Peruvian Congress rejected a motion (by only one vote) that would have removed him from Congress and temporarily banned him from political office.
The prime minister, Óscar Valdés, said that Chehade’s resignation earlier this week was a strictly personal move.
The vote last night came after opposition members like Congressman Mauricio Mulder said the move to push aside Chehade was actually an effort by the ruling parties to preserve their power in Congress. “It is a fabricated scene, so that this Tuesday the public opinion does not turn against the decision of Gana Peru and Peru Posible to protect him.”
In December, Chehade was suspended for 120 days over allegations that him, his brother Miguel Chehade, three police generals, and a businessman attempted to help another agricultural company gain control of the Andahuasi sugar plantation. This is a particular embarrassment for President Ollanta Humala who has vowed to fight corruption but yet has watched numerous cabinet officials face corruption allegations in recent months.
Peruvian President Ollanta Humala today declared a state of emergency in the northern Peruvian department of Cajamarca in the wake of protests last week that led to the suspension of the multi-billion-dollar Conga gold-mining project. Humala’s press office tweeted last night that the measure would take effect at midnight today and last for 60 days. This decree will affect the provinces of Cajamarca, Celendín, Contumazá, and Hualgayoc.
Last week’s clashes were biggest challenge to date of Humala’s nascent presidency and saw the resignation of his vice-minister of the environment, José de Echave. Humala has blamed the impasse on local Indigenous leaders, stating, “Every possible means has been exhausted to establish dialogue and resolve the conflict democratically, but the intransigence of local and regional leaders has been exposed.”
According to government statements, the emergency declaration is designed to mitigate violence and allow the restoration of basic public services. Police will now have the authority to issue arrests without warrants as well as to limit the right of assembly. Cajamarca’s governor and protest leader, Gregorio Santos, referred to Humala’s pronouncement as an unnecessary provocation and pledged to “continue with our fight.”
Please find the original text below, submitted in Spanish.
Two years ago the global community gathered in Copenhagen for the United Nations Climate Change Conference. Expectations of significant climate progress are still high, but various challenges remain before achieving the extension of the Kyoto Protocol in 2012—and Indigenous communities in Peru are caught in the middle. The United Nations hopes a legally-binding agreement can be signed next year that would cap carbon emissions of developed countries and create a fund to finance these reforms.
The creation of a market to regulate carbon credits also is necessary, and here’s where Peru’s Indigenous community comes in. The world’s forests—areas inhabited in Peru by the Indigenous—play critical roles in the planet’s climate water cycles and whoever protects these forests has a huge responsibility. This is why the United Nations Collaborative initiative on Reducing Emissions from Deforestation and forest Degradation (UN-REDD) proposes initiatives that will reduce carbon emissions.
Peru was accepted to the Fondo Cooperativo de Carbono de los Bosques (Forest Carbon Partnership Facility—FCPF) that designs and implements the UN-REDD schemes in developing countries. As a contingent of its membership, Peru must map out a Readiness Plan Idea Note (R-PIN, see example) that outlines the feasibility of how the state will implement UN-REDD initiatives.
Salomón Lerner, President of the Council of Ministers, announced today that the government had accepted the resignation of Viceminister of Environment José de Echave, who left his position over differences on the handling of protests around the Conga mine project. Echave—an expert in environmental conflict management and the leader of environmental group CooperAccion—offered his resignation yesterday in noting that President Humala’s government “lacks an adequate strategy for dealing with social conflict.”
The viceminister leaves his post on the sixth day of strikes in the city of Cajamarca, which has seen blocked roads, food shortages, and cancelled flights.
Echave’s decision—which follows the removal of special presidential advisor Carlos Tapia, a left-wing activist who supported the protests against the mining project—comes in response to the government’s strategy toward the protests. The viceminister said publicly he disagrees with President Humala’s plans to create a special authority within the Council of Ministers in charge of studies on environmental impact and environmental audits. “I believe that won’t help build a strong environmental authority, even more in a country where environmental concerns are the main source of social conflict,” Echave added.
Local communities in Cajamarca raised attention to the environmental impacts of the Conga mine project a month ago. The Conga project—a $4.8 billion gold and copper mine in northern Peru that is part of the larger Yanacocha mine—is largely controlled by U.S.-based Newmont Mininc Corp. The protestors are concerned about plans to dry up four lakes in order to extract the gold under the water in a zone where economy depends on agriculture and livestock.
The project shows the challenges that Humala faces in trying to promote economic growth while maintaining social inclusion, with inclusion being the foundation of his campaign and a key component of his government.
An article in the fall issue of Americas Quarterly, released today, explores the record of Chinese state-owned mining corporations on labor and the environment. In “Do Chinese Mining Companies Exploit More?” three researchers from the Peterson Institute for International Economics (PIIE) explore the impact of China’s foreign direct investment in natural resource extraction in Peru—underlining China’s increasing economic footprint in emerging regions like Latin America.
The article highlights an issue that is of growing concern. Just this month, Human Rights Watch (HRW) released a 122-page report outlining labor abuses by Chinese firms operating in copper mines in Zambia. The HRW paper states that the Chinese firms clamp down on union activity, promote low pay compared to the international average of copper mines, enforce 18-hour workdays, and operate mines with workplace safety concerns. The Chinese embassy in the Zambian capital of Lusaka has flatly denied HRW’s charges.
In comparing the practices of two OECD-owned companies to those of two Chinese companies, the PIIE scholars note some alarming differences in adherence to international labor and environmental standards. For example, the Shougang Corporation, which purchased the Hierro Perú mine in 1992, “angered the local population by cutting the Peruvian workforce in half and bringing in Chinese laborers. It reduced the quantity and quality of workers’ housing, while leaving blocks of homes once occupied by workers vacant in a town with an acute housing shortage.”
Nonetheless, Chinese firms may be treading a different path since the days of their earliest investments. According to the PIIE research, the Aluminum Corporation of China “appears to be working to avoid the behavior of Shougang.” It has not imported labor from China, has conducted public hearings with members of the local community, and has invested in infrastructure and community development.
The Peruvian Minister of Mines and Energy Carlos Herrera told Congress on Wednesday that the $4.8 billion Minas Conga mine project would not continue without the approval of the local community. “Projects should be approved by the people who will be affected by them," said Minister Herrera. Accompanied by the ministers of agriculture and the environment, Minister Herrera traveled to the project site in the northern Cajamarca region late Wednesday to negotiate an accord between the American mining company Newmont Mining and the local community.
Minas Conga is being developed in collaboration with Peruvian mining company Buenaventura and is expected to produce between 580,000 and 680,000 ounces of gold per year, starting in 2015. But local residents are concerned that the mine’s proximity to a water basin will cause pollution and sap vital water supplies. Responding to protests by local communities, some of which turned violent, Minister Herrera told Congress that "the position of the government is that it wants investment, but not at any price."
While it is unlikely that the project will be abandoned, Prime Minister Salomón Lerner Ghitis said on Wednesday that the government will carry out a "strict" evaluation of the mine’s environmental impact. On the other hand, the National Mining, Oil and Energy Society (SNMPE) said the government “cannot allow small, violent groups to impede inclusive development and private investment." An Americas Quarterly article to be released in the Fall issue on November 9 ("Do Chinese Mining Companies Exploit More?") looks at the labor rights and environmental records of Chinese mines in Peru.
As the world’s sixth largest gold producer, mines like Conga have fueled Peru’s stunning 7 percent annual growth rate. At the same time, President Ollanta Humala has made social inclusion a priority for his administration, promising to resolve the countless social and environmental conflicts plaguing Peru—many of them over mining and oil projects. President Humala will address the issue of responsible investment and social inclusion at the Americas Society and Council of the Americas Latin American Cities Conference in Lima tomorrow.
Of the top universities in Latin America, five countries dominate the top 30 schools: Brazil, Chile, Mexico, Argentina, and Colombia. Further, according to the recent survey by the University of Queensland in Australia Peru’s Pontificia Universidad Catolica de Peru came in 34th place. What are these five countries doing right that other countries in Latin America are not when it comes to higher education? Specifically, what is Peru doing wrong?
Looking at certain economic and education indicators, there is not a clear trend or relationship between the numbers of schools in the top 30 and the indicators. However, there does seem to be some relationship between the percentage of GDP allocated toward education and the top five countries. Each country in the top-30 spends 4 to 5 percent of its GDP on education; in Peru, it is only 2.7 percent. Brazil spends the most on education as a percentage of GDP and has the most number of schools (nine) in the top 30 ranking. Brazil’s Universidade de São Paulo also holds the number one spot.
Peruvian President Ollanta Humala’s brother, Antauro Humala, yesterday requested a presidential pardon that would cut short a 25-year prison sentence. He is currently serving time for his role in a 2005 attack on a remote Andean police station that left four officers dead.
Although President Humala has not publicly acknowledged that he is considering a pardon, speculation has grown following statements by Defense Minister Daniel Mora and Vice President Omar Chehade that downplayed Antauro Humala’s involvement in the attack. In a Monday interview with Peruvian daily El Comercio Mora said Antauro was "not directly involved.” Mr. Chehade on Tuesday supported this view, saying "from what I've been able to determine, Antauro Humala never grabbed and shot the gun, nor was he the person who issued an order to shoot the police.”
President Humala’s relationship with his brother Antauro has long been strained and a move to alter his sentence would carry political costs—as did a trip his older sibling Alexis recently made to Russia. This sensitive political environment is looked at in further detail in the Summer issue of Americas Quarterly, with an article written from the perspective on a remote jungle town on the levels of political frustration that the Peruvian President now must face in office.
Latin American stock markets plunged on Monday registering the worst numbers since February 2010. The Morgan Stanley Capital International (MSCI) Latin America—an index to measure equity market performance in emerging markets in the region—dropped 5.52 percent partly over concerns of the financial situation in the United States and Europe.
The downgrade from AAA to AA+ announced by Standard & Poor’s on Friday after the close of trading impacted the markets in Brazil, Chile, Colombia, Mexico, and Peru—the countries covered by the MSCI Latin America. Brazil’s Bovespa, the most dynamic market, lost 8.08 percent, the lowest since October 2008, amid international concern as well as domestic uncertainty over inflation and interest rates and a possible slowdown in consumer credit. Companies such as Petrobras (oil) and Vale (iron ore), two Brazilian giants, lost market value for up to 42 billion real ($26.5 billion).
Replying to suggestions that Brazil’s dominance as an emerging market is at stake, President Dilma Rousseff has said the country’s “fundamentals justified confidence in its prospects. Brazil’s foreign exchange reserves today are nearly $350 billion, up 80 percent since the global financial crisis in 2008.”
The Bolsa de Valores de Lima (BVL) dropped 7.09 percent, followed by Chile’s IPSA with 6.92 percent and Mexico’s Bolsa Mexicana de Valores (MBV), which fell 5.88 percent. While Colombia’s Bolsa de Valores (BVC) registered a decrease of 4.11 percent—and the 35 largest companies faced a market value decrease of 19.5 billion pesos ($10.7 million)—Argentina’s Merval suffered the most, plummeting 10.73 percent.
According to Nick Chamie, from RBC Capital Markets in Toronto, “Friday’s downgrade, along with recent weakness in the U.S. economic data and the ongoing European sovereign debt crisis, highlight the external risks currently facing emerging markets.”
Although Ollanta Humala became Peru’s president just last week, he has already achieved a landmark accomplishment by appointing the first black minister in the history of the republic. Renowned Afro-Peruvian singer, Susana Baca, 67, will lead Peru’s culture ministry.
Baca, whose name and work is synonymous with Afro-Peruvian tradition, mixes Andean and African beats in her music. Her work won her a Latin Grammy award in 2002 for “Best Folk Album,” referring to Lamento Negro which had been recorded in Cuba two decades prior. Over the years, Ms. Baca has become an ambassador of sorts for Peru’s black community; she is building a cultural center for Afro-Peruvians in the Peruvian town of Santa Barbara and has toured frequently around the world.
Ms. Baca’s nomination came as a welcome surprise to many who had become accustomed to the absence of black representatives in Peruvian politics. In 2009, Peru under Alan García became the first Latin American country to formally apologize to its citizens of African descent. The government apologized for the “abuse, exclusion and discrimination perpetrated against [Afro-Peruvians], from the colonial era until the present.” So while discrimination of Afro-Peruvians is not state-sanctioned, many believe that there remains a high degree of “underground” racism.
President Humala's new culture ministry is a welcome step in reversing such racism.