HARMONIZING USG COOPERATION IN FORESTRY SECTOR

UNCLAS LIMA 002099

SIPDIS

SIPDIS

COMMERCE FOR 4331/MAC/WH/MCAMERON
USTR FOR BHARMAN AND MCARILLO
BRASILIA FOR ESTH HUB JSTORY
USDA FOR FAS/OCRA AND FOREST SERVICE
USEU FOR DCM MCKINLEY

E.O. 12958: N/A
TAGS: SENV EAID ETRD EAGR ECON USTR PE

SUBJECT: HARMONIZING USG COOPERATION IN FORESTRY SECTOR


1. Summary: With some of the most diverse ecosystems in the world,
Peru seeks to find a balance between protecting its environment and
deriving economic benefits from its natural resources. As a vote in
the U.S. Congress on the U.S.-Peru Trade Promotion Agreement (PTPA)
approaches, the GOP will need to address implementation of the
agreement's environmental chapter, in particular amendments on
illegal logging. In order to harmonize the array of environmental
programs offered by various USG agencies, representatives of USAID,
the Foreign Agricultural Service (FAS) and ECON met with senior
INRENA (GOP's National Natural Resource Institute) officials on June
1 to present and discuss USG forestry cooperation and assistance in
Peru. Post is developing a coordinated strategy for assistance to
the Peruvian forestry sector which includes the following:
USAID-funded activities in voluntary forest certification, forestry
rule of law, INRENA institutional capacity building, and protected
areas management; USDA support for providing PL 480 Title I
resources to fund specific projects in the areas of voluntary forest
certification, community management and reforestation, forestry rule
of law, and institutional capacity building; and State to fund
environmental law enforcement training. End Summary.


2. Peru is among a handful of mega-biodiverse countries in the
world, and its rainforests are among the largest of any country,
extending 700,000 square kilometers. As a lower middle-income
country, Peru faces important choices about how to manage its
environment responsibly, while leveraging it as an asset for
economic growth and poverty reduction. Without an environment
ministry, responsibility for implementation and enforcement of
Peru's relatively strong environmental legal framework rests with
INRENA and sectoral ministries. Environmental abuses,
non-sustainable practices, poor oversight, and lack of funding
continue to be hallmarks of the current approach.


3. Logging promises to be an important contributor to Peru's
growing economy. While 60% of Peru's land is forest, at present,
forestry contributes only 1.4% of the GDP. However, illegal logging
in the Peruvian jungle continues -- an estimated 70 to 90% of
mahogany exported from Peru in 2005 originated from illegal sources.
In addition, the national system of parks and protected areas is
potentially a tremendous base upon which to expand ecotourism and
sustainable forestry.


4. However, weak management and illegal activities, such as
logging, poaching and coca cultivation, threaten these lands and
their inhabitants (many of them indigenous people). International
development assistance has been important in supporting a variety of
forestry initiatives. Both the environmental chapter of PTPA and
the current proposed amendments have focused on our interest in
reducing illegal logging, as well as to improve overall forest
sector governance. The PTPA creates further potential opportunities
for development of activities in this area through its Environmental
Cooperation Agreement.


5. Seeking to develop a coherent and unified environmental
cooperation initiative, USAID, USDA/FAS and State/Economic officers
met on June 1 with senior level INRENA officials to present and
discuss USG forestry assistance in Peru. The objectives of the
meeting were to harmonize USG assistance in Peru as mandated by the
foreign assistance reform process, as well as to maximize congruence
with GOP priorities. Current USG environmental assistance includes
diplomatic efforts, protected areas management, forest sector
transformation, building on achievements to date, capacity building,
local ownership, environmental management for poverty reduction, and
alliance building between the GOP, private sector and civil
society.


6. Three agencies are working on these assistance efforts: USAID,
USDA (particularly the Forest Service) and State. Under a
harmonized approach:
-- USAID will continue funding activities in voluntary forest
certification, forestry rule of law, INRENA institutional capacity
building, and protected areas management;
-- USDA will support using resources generated by the most recent PL
480 Title I agreement to fund specific projects in the areas of
voluntary forest certification, community management and
reforestation, forestry rule of law, and institutional capacity
building; and

-- State will fund environmental law enforcement training.

COMMENT
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7. Environmental issues are a top priority for the GOP and for the
USG in Peru. Environmental provisions in the PTPA will bring new
challenges for the GOP in areas related to the environment, global
warming and logging. The Environmental Cooperation Agreement will
provide opportunities for working on capacity building activities
for the forestry sector. USAID, USDA and State aim to create a
joint platform of work at post for environmental cooperation
focusing on areas such as capacity building, forest certification,
reforestation, forestry rule of law, environmental compliance, and
protected areas management. This joint platform could lend itself
to future funding that might become available for PTPA
implementation. The meeting with INRENA served as the starting
point to harmonize and concentrate efforts into areas of common
interest for the USG and the GOP.
STRUBLE