The question who should administer or control the process by which Environmental Impact Assessments (EIAs) are granted has long been contentious in Peru. Up until now, it has been the responsibility of the Ministry of Energy and Mines (MEM). Since the extractive sector of the economy was liberalised in the 1990s under Alberto Fujimori, the prime role of the MEM has been to attract investment, particularly foreign investment, in the mining and hydrocarbons (oil and gas) industries. Having the same ministry regulate the environmental studies is hardly conducive to the protection of the environment. There is a clear conflict of interest here.
Among other organisations, the Peru Support Group has long called for responsibility for EIAs to be removed to a different authority whose job it is to protect the environment. This was a suggestion that was highlighted in the influential PSG report into the conflicts surrounding development of the Majaz project in Piura. The creation of an Environment Ministry by Alan García seemed like a move in the right direction, even though it transpired that this initiative was due more to pressure from the United States (as a condition for approving the Free Trade Agreement with Peru), than it was to the political conviction of the García government.
The conflicts that have been generated over mining in the first 15 months of the Humala government – particularly the Conga dispute — have resulted in some decisions that respond to widespread criticism of the role played hitherto by the state in the granting of extractive concessions and the regulations governing how these are developed. One such move is the decision, announced in September, to shift responsibility for EIAs from the MEM to the Environment Ministry. The cabinet presided over by Prime Minister Juan Jimenez, appointed in July, appears more amenable than its predecessor to pressures to meet some of the criticisms about state support for mining whatever the environmental or social cost. The Conga dispute highlighted the shortcomings of EIAs.
Predictably, the extractive industry lobby groups – which are hugely powerful in Peru today – opposed this initiative. The Sociedad Nacional de Minería, Energía y Petróleo (SNMEP), argued that the creation of Senace, as the new institution charged with administering EIAs is to be called, would simply add further red tape to administrative procedures and delay investment decisions. The legislation to set up Senace is still before Congress, and it can be taken for granted that the SNMEP will use its political muscle to block the legislation, or at least to ensure that the teeth of Senace in standing up for good environmental practice are drawn.
The small print of the new legislation points in this direction. Two aspects merit emphasis here. The first is that the board of directors of Senace will be drawn not from the Environment Ministry but from a range of ministries including the MEM. The second is that, in certain circumstances, supreme decrees can be used to override Senace decisions on EIAs. When push comes to shove, firms in extractive industries will be able to use their influence over government to bypass the regulatory system. Assuming that the bill to create Senace is finally approved, it will be important to examine the detailed regulations (when these are published) to see how the new organisation’s remit is further compromised.
So it is still too early to say that this move is a significant shift in the way in which EIAs are produced and accepted (or not) by the authorities. It seems all too likely however, that the new institution will lack the authority to make robust decisions to protect the environment when these threaten powerful corporate interests.