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Río Blanco Fined
Update 126. 31 March 2008
In late February, the Peruvian government's Supervisory Board for Investment in the Energy Sector (OSINERGMIN) imposed a sanction on Monterrico Metals' Río Blanco copper mine project. This was due to the failure to comply with promises made in their environmental evaluation, including a failure to implement measures to control erosion.
Furthermore, Zijin, the Chinese consortium which owns a majority shareholding in Monterrico Metals, stated that it would delay construction and scale down spending on the project. Zijin's chairman said that the revised plan would be more economical and environmentally friendly. However, production would be maintained at 200,000 tonnes of copper a year as originally planned.
Presumably as a reaction to the recent, and ongoing, credit crisis, Monterrico Metals shares have tumbled from 300 pence on March 12th to around the 150p mark. The company says that it is not aware of any undisclosed commercial reason for the 50 per cent drop in its share price over the past week.
In early March, the firm released a statement saying that following a change in management in June 2007, it was conducting a complete review of the Detailed Feasibility Study (DFS) for its wholly owned Rio Blanco copper/molybdenum project in Piura (Northern Peru).
The new study is expected to be completed in the second half of 2008, when a revised timetable for the project will be announced.
Current CEO Xiaodong Huang said that "although this will inevitably cause some delay to start the construction of the project, I am confident that the new options being prepared for evaluation by the trade off study will provide opportunities to unlock considerable value from Rio Blanco".
US Backs Trade Pact With Peru
Update 125. 31 January 2008
The US Senate has finally approved a free trade agreement (FTA) with Peru. It is the first trade agreement that President Bush has managed to get through Congress since the Democrats took control in January 2007.
The agreement means that both countries must enforce core international labour practices, such as the right to strike. They will also have to implement national environmental laws and adhere to international environmental requirements in line with the environmental provisions in the FTA.
The EU and the CAN
Update 124. 30 November 2007
With the next round of negotiations between the European Union (EU) and the Andean Community (CAN) scheduled to take place in Brussels on December 10th-14th, the Andean countries are under pressure to define a common negotiating position. The Andean countries face two key challenges:
1. Defining a common Andean position
The negotiations are supposed to strengthen regional integration, requiring member countries to act as a bloc. However the CAN has been weakened by the different integration and trade strategies favoured by the countries involved. Whilst Peru and Colombia are following liberal economic models based on trade liberalisation (as illustrated by the Free Trade Agreements (FTAs) they have negotiated with the United States), Bolivia and Ecuador have stated that their reluctance to sign up to this type of agreement. There is also uncertainty whether Venezuela will return to the fold. Defining an Andean consensus is therefore proving difficult.
2. Going beyond the FTA approach
The second challenge is not to negotiate an FTA as such - which is what Peruvian negotiators are accustomed to thinking about - but rather an Association Agreement. This sort of agreement places the emphasis on strengthening bi-regional relations in such a way as to promote Andean integration, but going well beyond the narrow trade focus. Association agreements are based on three complementary pillars: trade, political dialogue and cooperation, in ways designed to foster social cohesion.
Andean negotiators need to be careful, however. Beyond issues of democracy and human rights, the EU is looking to create markets for its products in Peru and other countries. It is also looking for firmer guarantees than currently exist with respect to the treatment of foreign investment in the Andean region.
As the dust settles: The earthquake and its implications
Update 123. 30 September 2007
On August 15th 2007, an earthquake measuring 7.9 degrees on the Richter Scale struck Peru. The epicentre was 25 miles northwest of Chincha Alta, 90 miles south of Lima, in the department of Ica. The effects were also felt strongly in Lima. According to Peru's geophysical institute, the country has experienced more than 480 strong aftershocks.
Figures from INDECI (National Institute for Civil Defence) state that 519 people died and 1,366 were wounded. Immediately after the earthquake residents of affected areas had no electricity, water or phone lines. Damage on the roads meant access was limited.
Fujimori trial to start this year
Update 123. 30 September 2007
Peru's former president Alberto Fujimori will stand trial in November on charges of human rights abuses. The trial will focus on the cases of Barrios Altos (1991) and La Cantuta (1992). He will then face major trials for corruption, including: embezzling $15m; payoffs to congress members; and illegal wiretapping.
Extradited Fujimori sent back to Peru
Update 122. 31 July 2007
On Friday 21 September 2007, Chile's Supreme Court made public its ruling in favour of the extradition of former Peruvian President Alberto Fujimori for two charges of human rights violations and five for corruption. He was sent back to Peru the following day.
This is a landmark case setting an important precedent for global justice as it will be the first time a former leader will be extradited to his home country to be tried for human rights violations, says Human Rights Watch. Rosa Villaran from the citizens' movement 'Para Que No Se Repita' ('so that it doesn't happen again') also cautioned that this case presents an enormous challenge as the "justice system is infected with persistent corruption from many previous governments". Fujimori has declared that this is part of his strategy to reencounter his people and country. His lawyers have guaranteed that they will respect the Chilean decision.
For more information, visit: http://news.bbc.co.uk/1/hi/world/americas/7008302.stm
Chilean judge denies Fujimori's extradition to Peru
Update 122. 31 July 2007
International human rights organisations Amnesty International and Human Rights Watch have expressed their dismay at Chilean Judge Orlando Alvarez's ruling made on July 11th denying Peru's request for the extradition of its former President Alberto Fujimori to face charges for human rights violations and corruption.
According to Human Rights Watch, the judge's decision does not question the fact that most of the human rights abuses and corruption attributed to Fujimori did in fact take place. However, he concludes that there is insufficient evidence of Fujimori's participation in the crimes.
Nevertheless, the Peruvian government has vowed to press on with its attempt to extradite Alberto Fujimori from Chile and will appeal against the Chilean judge's ruling.
'Popular Consultation' on the Río Blanco Project confirmed
Update 122. 31 July 2007
Authorities representing the communities closest to the Río Blanco mining project in the province of Piura have announced that a local referendum will be held on September 16th 2007 to decide whether or not they are in favour of Minera Majaz's (Monterrico Metals) proposed mine.
The consultation, which is being organized by Red Muqui and the Frente de Defensa (a group of local NGOs), will take place in the districts of Carmen de la Frontera (Huancabamba), and Ayabaca and Pacaipampa (Ayabaca).
The Mayor of Ayabaca, Humberto Marchena, states that it is the people themselves who have requested the referendum and they hope that the result will be respected and accepted by the government, the mining company and the local community.
Coca Cultivation Increases in Peru, According to White House Report
Update 121. 31 May 2007
The U.S. Office of National Drug Control Policy (ONDCP) estimates a 17% increase in coca cultivation and cocaine production potential when compared to similar survey areas assessed during 2005, and a 25% increase when including survey areas assessed for the first time in 2006.
Despite the aforementioned increases in coca cultivation and cocaine production, the ONDCP reports that in 2006 Peru exceeded its 10,000 hectare eradication goal - eradicating 12,688 hectares of coca - and interdicted over 19 metric tons of cocaine.
ONDCP figures debatable?
In response to this report, executive director of Peru's National Commission for Development and a Life without Drugs (Devida), Rómulo Pizarro, claims the ONDCP's figures are debatable. He has indicated that Devida will present more realistic figures, based on data from Peru's Alternative Development Programme (Cuerpo de Asistencia para el Desarrollo Alternativo - CADA) and the U.S. government's Crime and Narcotics Center. According to Pizarro, coca cultivation rose by approximately 50,000 hectares, or some 5%, compared with 2005. He said that eradication figures need to be considered together with the interdiction of chemical inputs and confiscation of cocaine.
The United Nations Office on Drugs and Crime's (UNODC) Andean Survey, which includes the Peru Coca Cultivation Survey, showing coca production levels for 2006 should be published later this summer.
García Granted Emergency Powers
Update 121. 31 May 2007
Peruvian Congress overwhelmingly approved emergency powers at the end of April for President Alan García in order to deal with drug trafficking and organised crime, reports the BBC. However, some 20 Congress representatives walked out of the session in protest before the vote.
The president promised not to abuse the powers, which are valid for the next 60 days, and he can only rule by decree on nine specific types of crime. Analysts believe that García will use this period of emergency powers to toughen jail sentences for those involved in cocaine production and trafficking.
Strikes by coca farmers in protest at the government's crop eradication programme and an attack in mid-April on a coca eradication team may have been the catalysts for this vote. Though García's detractors see this as a move to boost the president's powers following a recent fall in his popularity.
A recent opinion poll conducted by the University of Lima of people living in the metropolitan area of Lima and Callao found 70% of respondents, who felt adequately informed about this issue, to be in favour of these emergency powers.