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Peru - Amazon Forest Policy

Carlos Soria

Peru’s forest sector represents 1 per cent of Peru’s US$52,000 million GDP. 49% of Peru forest exports are round timber. The two larger exporters not only share the same provincial origin but also some family ties which turns them into Peru’s largest family group in the forest sector, with companies in Mexico and the US. The Bozovich Balarin companies provide 51% of Peru’s mahogany exports. They provide 70% of Peruvian cedar supplied to the world market. 
 
 
Peru’s forest policy is characterized by the divorce between the good intentions of a legislation trying to set the base for a sound forest policy, and the realities of powerful economic actors who profit on the status quo of illegal logging. Problems affecting the Peruvian Amazon region such as illegal logging and illegal crops are an expression of the lawlessness, the very low budget for law enforcement, and the non presence of the State in this area.
 
 
Peruvian Amazonian forests have been linked to the world market since early in the 16^th century. The export of mahogany, rubber, quinine, fauna and many other products have always influenced the regions economy with a boom and bust cycle. The chain of custody of natural products leaving the region serves as a channel through the subsistence economy, the mercantilist economy and the modern capitalist economy. The fate of the forest is very much related with the demands of the world market and the unwillingness of national governments to invest government resources in area already ruled by local economies supplying the world market.
 
 
Peru’s new forestry legislation was approved on July 16, 2000, by the Fujimori majority in Congress. The next day it was passed crowds in different cities of the Amazon region requested a new law be passed. The new legislation contained some good proposals but lacked the flexibility and richness to address the diversity of Peru’s forests. Loggers and their supply network confronted the government with violent up rest in Puerto Maldonado, capital of the Department of Madre de Dios, home to Peru’s last 4 million hectares mahogany forest.
 
 
This legislation can be characterized as: 1) lacking investment promotion mechanisms; 2) a strong emphasis on lowland Amazonian forests and, particularly, on timber; 3) excess of responsibilities on the hands of INRENA, and 4) a lack of citizen participation mechanisms in support of forest policy.
 
 
To overcome conflict and prepare the way for law implementation the government decided to listen to national and international NGOs, indigenous peoples organizations, the Agrarian university and the two main forest industry associations proposing a National Board for Dialogue and Agreement. On January the 2^nd, 2002, the government and these organizations agreed to: implement the forest law, provide access to the production forests and to require management plans.
 
 
During 2002 through to 2004 around 7 million hectares went into auction as forest concessions in the departments of Ucayali, Madre de Dios, Loreto, and San Martin. Initial enthusiasm with sound forest management soon vanished when the promises of financial and technical support from WWF - Peru Programme Office only reached a small amount of concessionaries. On the other side, the Bozovich Balarin group which publicly promoted opposition to the forest concession, in private, decided to apply for concessions.
 
 
The National Institute of Natural Resources [INRENA] in charge of forest resources is affected by internal forces that move around the realm of the politically posible and the economically viable. Recent scandals in 2006 confirm the high level of corruption inside INRENA. Moreover successive budget cuts durign the forest reform process have seriously restricted this institution’s capacity to intervene in everyday forest management effectively.
 
 
The forest reform process has lacked political support of the highest level. The unfortunate death of the Minister of Agriculture, Engineer Alvaro Quijandria, took away the only high rank government official clearly in support of the forest reform. Despite many promises of continuing the forest reform process, in 2006 there are enough signs to understand that the reform process has been neutralized by status quo supporters, while illegal logging rules in the forest. Recently, the US$2 million dollar project Forests Statistical Information Center [CIAEF] database was cracked from inside INRENA to copy and forge timber transport guides favoring the main exporter.
 
 
While approximately 7 million hectares of forests concessions struggle to comply with the prices offered in the auction, other 12 million hectares of forestlands are in the hands of indigenous peoples communities as property and as use concessions. Another source of timber are the permissions for habitat conversion that allow agricultural producers to sell timber, at the same time that INRENA is granting reforestation concessions over primary forests! Protected areas are another important source of illegal timber, as much as, the reserves for indigenous peoples in isolation such as, the Purus reserve in the border between Madre de Dios and Ucayali.
 
 
Indigenous peoples are the most deeply affected by the timber trade that drains their forests but, many times, their organizations and trust too. Indigenous peoples are affected by the forest reform through the overlapping of forest concessions over indigenous lands, particularly, that which is not yet inscribed; the lack of an adequate process of consultation prior to the awarding of all forest management categories; the invasion of communal land and indigenous peoples in isolation reserves; and, the government’s failure to meet the standards proposed by the law in support of communal forest management.
 
 
Recent progress in decentralization do not offer much hope for the forests. Regional and national politicians in Madre de Dios, Loreto and other Amazonian regions are proud representatives of illegal timber interests. The Regional President of Loreto recently announced in an international conference attended by the Minister of the Environment of Brazil that Loreto will not grant one square metter to protected areas or indigenous lands in accordance with the demands of loggers and other extractive industries. Regional political leadeship is very much influenced by the regional economic forces which in many cases are also strong political actors such as, the Mayor of Coronel Portillo (Pucallpa), Luis Valdez, a timber baron since the 1960’s and current Mayor of the Peruvian Amazon’s second city.
 
 
The implementation of the Regional Integration Initiative for South America [IIRSA] can only contribute to acelerate the processes already affecting Peruvian Amazonian forests. Protected areas and forest production areas will be crossed by new lines of flow of mahogany and other forest products. While at the same time government transfers few responsibilities to regional and local governments, mainly responsibilities in areas in which the national government finds no profit such as, artisan gold mining, while the profitable concessions of gas, oil and timber remain in the hands of the national government.
 
 
Posted: April 2007

Updated:  23 August 2007