OEFA's future hinges on Court verdict

19 June 2017

The future of the Oficina de Evaluación y Fiscalización Ambiental (OEFA) rests in the hands of the Constitutional Tribunal (TC), following an appeal lodged by the mining company Perubar, a subsidiary of Glencore. The company wants the TC to rule unconstitutional the payments that businesses must give to OEFA, and that OEFA should return the money that the company has paid hitherto. If the TC rules in Glencore’s favour, it will set a precedent that other companies will follow.

In an interview with Diario Uno, Carlos Monge, analyst and head of the Natural Resources Governance Institute for Latin America, says that a sentence in Glencore’s favour would be highly detrimental to OEFA, the entity responsible for environmental oversight and for punishing those companies that breach environmental rules. OEFA depends for much of its budget on the fines it levies from companies. Without this contribution its capabilities would be seriously undermined.

OEFA puts much of its emphasis on regulating mining and oil companies. “These are the companies that are mainly punished by OEFA, but they are also the companies with the greatest lobbying power to reduce its capacity to impose sanctions” says Monge. But, he points out, threats to the environment extend well beyond such companies: “The government is reducing air quality standards to attract investors in the smelting plant at La Oroya, and (…) there is also a problem with big agribusiness that uses fertilizers and pesticides on a massive scale”.

Monge stresses the need for a well-functioning OEFA that can monitor environmental impacts and which has the power to sanction companies that infringe the rules. “Without OEFA there is no entity that can oversee and exact punishment”, he says.

Tessy Torres Sánchez, the president of OEFA’s executive board, is hopeful that the TC’s verdict will yield a positive outcome for the regulator. Glencore had already filed a complaint before the courts in Callao which the Supreme Court turned down. This is why the company appealed to the TC.

More than 75% of the fines levied by OEFA go towards funding the regulator and thus are crucial in helping provide environmental oversight. Without this money, OEFA would be hard pressed to maintain the 29 offices it has around the country that are key to its ability to detect environmental transgressions.

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