Eighteenth Edition, December 2011
Towards an Alternative and Just Investment Regime
by Conrado Olivera, Director Red Uniendo Manos
Peru, like many other countries, is being enveloped by lawsuits from transnational investors, who with the backing of free trade agreements or bilateral investment treaties are suing governments with the purpose of obtaining greater profits at the cost of the citizens in those very countries (generally economically poor or emerging countries).
This has become a systemic issue that is spreading throughout the world, due to the rapid increase in the number of trade and investment agreements that give powers to foreign investors that allow them to act without consideration of the interests of the local population.
The citizens of Peru find themselves in a fight for the defense of their rights, the protection of water and access to the benefits of their natural resources; furthermore, they find themselves in a growing number of social conflicts that are directly related to foreign investors within the extractive industry (mining and oil) that are operating in the country.
In this context, I had the opportunity to participate in an international conference, “Week for International Action Against Bilateral Investment Treaties”, alongside a gathering of affected peoples, activists and experts with experience in investment and the power of transnational corporations in the world. The conference took place in Brussels, Belgium, November 4-8, 2011, with the objective of articulating strategies in order to develop a unified international campaign to advance viable alternatives that will nurture local and popular mobilizations. I was asked to present the ongoing case of Renco Group, Inc.’s arbitration filed against the State of Peru, related to its investment Doe Run Peru which operates the metallurgical complex in La Oroya. The case of Renco Group has suddenly become a motivation for discussion, and is now seen as an emblematic case that causes great indignation and that should never be repeated.
The arbitration filed by Renco Group came about following repeated failures by Doe Run Peru to fulfill its environmental obligations with the State, grave damage to the health of the population, and finally after Doe Run Peru became immersed in financial problems originating the with world financial crisis, and then from pressure from its creditors, ultimately leading to the closing of operations.
Through arbitration in an international forum, with the backing of the Chapter on Investments of the US-Peru Free Trade Promotion, Ira Rennert (owner of Renco Group and sole investor in Doe Run Peru) is suing the State of Peru for $800 million for projected losses.
Because of this, we believe the following is necessary:
Furthermore, in order to protect the people against such arbitrations by foreign investors against the State, it is necessary to insure by way of national legislation that the government not commit itself to agreements that open the possibility of investor-state arbitration.
No Greater Rights for Doe Run Peru
by Jed Koball, Companionship Facilitator
On October 21, 2011 the Red Uniendo Manos Peru (UMP) hosted a conference inside the Congress of the Republic of Peru, entitled, Free Trade Agreements and International Arbitrations: the lawsuit of Doe Run Peru.
The UMP, in coordination with other Peruvian NGO’s and church agencies that form the La Oroya Strategy Table, began organizing the conference following the international arbitration filed in UNCITRAL on April 7, 2011 by Renco Group (owner of Doe Run Peru) against the people of Peru for $800 million.
In its Intent to File, Renco Group claims that the State of Peru, by enforcing the environmental adequacy program in La Oroya (a program articulated in a contractual agreement between Doe Run Peru and the State of Peru) negatively affected the profitability of its investment Doe Run Peru ultimately leading to its bankruptcy therefore violating their investors rights as stipulated in the Chapter on Investments within the US – Peru Free Trade Agreement (FTA).
This is the first such arbitration filed within the framework of the US – Peru FTA which was enacted in February of 2009, and it is the largest such arbitration to date.
The purpose of the conference was to demonstrate to Peruvian authorities and media outlets that the “investors rights” as stipulated in the FTA provide greater rights for transnational corporations like Renco Group who invest in Peru than for the very citizens of Peru itself. Ultimately, such “investors rights” provide an outlet for transnational corporations to avoid the regulatory authority of the State.
Such is the case, not only in Peru, but across Latin America as a growing wave of arbitrations continue to be filed primarily by foreign investors from within the extractive industry, as they attempt to sue for profits potentially lost due to local regulations that they claim affect the profitability of their investment.
Keynote speakers at the conference, were: Congressman Javier Diez Canseco, Conrado Olivera of the Red Uniendo Manos Peru, Rosa Amaro of the Movement for the Health of La Oroya, Alejandra Alayza of the Red GE (Globalization with Equality), Dr. Matthew Porterfield (Harrison Institue for Public Law at Georgetown University); and, Dr. Manuel Perez (Institute for Policy Studies).
The conference was co-sponsored by the Congress of the Republic of Peru and Giddings-Lovejoy Presbtery. Representing Giddings-Lovejoy and the Presbyterian Hunger Program at the conference were Rev. Ellie Stock and Rev. Alexa Smith.
Update from JH Presbyterians of Giddings-Lovejoy
by Mark Strothmann, Giddings-Lovejoy JH Coordinator
Joining Hands in the presbytery of Giddings-Lovejoy is currently working with our partners in Peru on several new projects which will advance their work:
Lima conference on La Oroya
Earlier this year Doe Run Peru and the Renco Group announced their intention to sue the government of Peru under the provisions of the United States-Peru free trade agreement. Their contention is that the Peruvian government’s enforcement of environmental agreements is limiting their return on investment from the lead smelter operation in La Oroya.
In response to this development, several Joining Hands Presbyterians traveled to Washington, D.C. in July to meet with professors from Georgetown University Law Center and staff from the Institute for Policy Studies to share ideas and develop strategies. Those attending included Alexa Smith (PHP staff in the Presbyterian Center), Jed Koball, (Companionship Facilitator in Peru), and Karen Wilson and myself as Presbytery JH delegates.
We were well received and they gave us an excellent presentation on World Trade issues and free trade agreements. Jed took the information back to Peru and shared it with Mesa Technica, a coalition of Peruvian organizations advocating for the people of La Oroya. The result is an October 21 conference in Lima, held in the offices of the Peruvian Congress!
We supported the conference by sending a delegation from the United States including the featured speakers Matthew Porterfield from the Georgetown Law Center and Manuel Perez-Rocha from the Institute of Policy Studies. Also attending were Ellie Stock, Coordinator of Friends of La Oroya and Alexa Smith. Out of this conference will emerge new strategies and relationships that will empower us and our partners in Peru.
Partners for Just Trade liaison for Bridge of Hope.
Bridge of Hope is our Peruvian partner that exports Fair Trade crafts to the United States. One of their critical needs is staff who can help the artisans with design and marketing. Toward this end, we have given a grant to Partners for Just Trade, the American importer of their crafts located in our Presbytery offices in St. Louis. With this grant they are supporting Jessica Penner, who has gone to Peru as a volunteer liaison to work with Bridge of Hope. We are seeking further support so that this project can be sustained for up two years. Jessica is posting a blog about her experiences through the website of Partners for Just Trade.
2012 partnership visit to Peru
We are planning a visit to Peru for April 14-22, 2012. You and members of your churches are invited to apply and participate. For more information read the information flyer, see the trip application form or visit our presbytery website. If you have any questions feel free to e-mail me at email@example.com
Support a Fair Trade Agreement
For more information, see http://www.citizen.org/trade/
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