China is Peru's main trading partner, the largest destination of exports and the main source of imports for Peru. Peru is China's second largest investment destination in South America. The two countries have established a comprehensive strategic partnership and signed a free trade agreement. In the next five to 10 years, Peru will become another destination for Chinese enterprises going global. More Chinese companies will enter Peru and expand into the broader South American market through Peru. AllBright Law is actively exploring the legal service market in South America, providing reliable host country legal service resources and doing legal research on various host countries for Chinese enterprises going to South America, so as to provide legal protection for serving China's high-level opening-up and the "the Belt and Road" strategy. To this end, AllBright Law, together with Rodrigo, El í as &Medrano Law firms in Peru, launched this Series of Articles on Peru Business Environment, including Peru's going global, Peru's corporate structures, Peru's promotion of investment and legal stability, operational legal environment, business winding up and restructuring a business.
I. Environmental Issues
The right to a balanced and adequate environment is recognized by the Constitution.
The General Environmental Law (LGA) – Act No. 28611, governs the general legal framework for environmental management and protection, as well as the basic principles and rules for ensuring the effective exercise and defense of the right to a healthy, balanced, and adequate environment.
The LGA Law provides that any human activities involving construction, structures, services and other activities, as well public programs, policies and plans which may cause negative environmental impacts are subject to the National Environmental Impact Assessment System (“SEIA”) and therefore require the previous approval of an environmental management instrument.
In accordance with Law No. 27446, Act on the National System of Environmental Impact Assessment, the SEIA is a unique and coordinated system for identifying, preventing, monitoring, controlling and correcting potential negative environmental impacts derived from human actions expressed through the investment project ensuring citizen participation in this process. It should be noted that by Legislative Decree No. 1394 of September 5, 2018, several amendments were approved to Law No. 27446 regarding the creation of the National Certification Service for Sustainable Investments (“SENACE”) and the resulting transfer of competence in the environmental impact assessment to that authority.
In line with the provisions of Legislative Decree No. 1394, on January 26, 2022, Supreme Decree No. 004-2022-MINAM was published, which approved the provisions of the Single Procedure of the SENACE Environmental Certification Process. By means of the referred Single Procedure, called PUPCA, which came into force on July 21, 2022, the requirements, stages and deadlines of the environmental evaluation procedure in charge of SENACE were standardized, in order to provide it with predictability and efficiency. Likewise, within the framework of the rules and principles of Digital or Electronic Government, the use of the Environmental Certification Single Window (EVA) is reinforced, as the mandatory platform to present the environmental management instruments in charge of SENACE.
In accordance with SEIA regulations, the classification of the environmental impact of investment projects, as well as the applicable environmental management instruments, is as follows:
In accordance with these regulations, the execution of projects and service and trade activities shall not start without prior approval of the corresponding environmental management instrument. No national, sectorial, regional or local authority shall approve, authorize or allow these projects or activities if they do not have the pertinent environmental certification.
The Ministry of the Environment (“MINAM”) governs SEIA and is the primarily entrusted to propose and execute environmental policies. However, environmental authority, such as environmental management instrument approval, may be assumed by SENACE, the pertinent ministries, and the regional governments, as appropriate.
SENACE has been undertaking the approval of environmental impact assessments as follows:
(i) On December 28, 2015, authority to approve Detailed Environmental Impact Assessments for mining and energy activities (electricity and hydrocarbons) was assumed.
(ii) On July 14, 2016, authority to approve Detailed Environmental Impact Assessments for activities in the Transport sector was assumed.
(iii) On August 14, 2017, authority to approve the Detailed Environmental Impact Assessments for activities in the Agriculture sector was assumed.
(iv) On August 14, 2017, it took over powers to approve the Environmental Impact Studies for activities related to solid waste in the Health sector.
(v) On December 22, 2017, it assumed the authority to evaluate environmental assessments of public and private investment projects of solid waste infrastructure under municipal management (if the service is provided to two or more regions according to their significant impact) and non- municipal or mixed management (in case they are located outside the industrial or productive facilities, concession area or lot, or owned by a solid waste operating company, taking into account their significant impact).
(vi) On August 2, 2021, it assumed the authority to evaluate the Detailed Environmental Impact Studies for activities in the Housing and Construction sector.
It is important to mention that, progressively, SENACE will assume the aforementioned skills to assess environmental studies of additional economic sectors. It is expected that by 2023, the transfer of the functions corresponding to the Tourism, Communications, Health and Defense sectors will begin.
There are also other public entities with the authority to grant permits and/or authorizations that may be required by the owner of a project (depending on the nature of the project), such as the Natural Service of Natural Areas Protected by the State - SERNANP, the National Water Authority - ANA, the General Directorate of Environmental Health - DIGESA, and the Ministry of Culture. In this regard, it is worth mentioning that Law No. 30327 created the Global Environmental Certification procedure with the purpose of progressively incorporating into a single administrative procedure (i.e., the approval procedure of the environmental management instrument) the simultaneous approval of different permits, licenses and authorizations by the aforementioned public entities. The Regulation of Title II of Law No. 303227 - which refers to the Global Environmental Certification - was approved by Supreme Decree No. 005-2016-MINAM, published on July 19, 2016.
On the other hand, the Environmental Assessment and Control Organization(“OEFA”) is the governing entity of the Environmental Assessment and Control National System (“SINEFA”) in charge of supervising, auditing and sanctioning compliance with environmental obligations of titleholders of activities that are under its authority. Pursuant to the Executive Board’s Order No. 027-2017-OEFA- CD, OEFA Sanctioning Administrative Procedure Regulation was approved in order to regulate the sanctioning administrative procedure, as well as the issuance of precautionary and remedial measures, according to its controlling and sanctioning role (applicable to any individual and legal entity, autonomous equity, irregular corporation, business association or other type pursuant to law conducting commercial activities subject to OEFA). Similarly, Directive Council Resolution No.006- 2019-OEFA / CD adopted the New OEFA Supervision Regulations, adding principles of institutional coordination and various obligations of the supervisor.
Likewise, the OEFA has progressively assumed the authority to supervise and sanction, and to date, not all economic sectors are under the jurisdiction of the OEFA, but some ministries and regional governments maintain the authority to supervise, supervise and sanction in environmental matters, as established by current legislation. Specifically, the OEFA has assumed the competences of the mining and energy sectors (hydrocarbons and electricity), medium and large-scale fishery and aquaculture, manufacturing industry and domestic trade, agriculture, solid waste and environmental consulting firms.
It is also important to mention that in recent years the government has issued regulations and draft regulations to strengthen environmental institutions and regulate the environmental aspects of the different sectors. Among the most relevant are the following:
(i) Draft Regulations on Environmental Management of the Education Sector, approved by Ministerial Resolution No. 144-2022-MINEDU.
(ii) Draft Regulations on Environmental Management of the Agricultural and Irrigation Sector, approved by Ministerial Resolution No. 0141-2022-MIDAGRI
(iii) Draft Regulations on Environmental Management of the Communications Sector, approved by Ministerial Resolution No. 329-2022-MTC/01.03.
(iv) Regulations of the National Environmental Information System - SINIA, approved by Supreme Decree No. 034-2021-MINAM.
(v) The draft Regulations for Environmental Management in the Tourism Sector, approved by Ministerial Resolution No. 235-2021-MINCETUR.
(vi) The Integral Solid Waste Management Law, approved by Legislative Decree No. 1278, which establishes the general aspects for solid waste management, as amended by Supreme Decree No. 001-2022-MINAM.
Similarly, the Special Regime for the Management and Handling of End-of-Life Tires was approved by Supreme Decree No. 024-2021-MINAM, as well as the new Regime for the Management and Handling of Waste Electrical and Electronic Equipment, approved by Supreme Decree No. 009-2019-MINAM.
(vii) The Environmental Management Regulations for the Fishing and Aquaculture Subsectors, approved by Supreme Decree N° 012-2019-PRODUCE.
(viii) The Regulation for Environmental Protection in Electrical Activities, approved by Supreme Decree N° 014-2019-EM.
(ix) The Environmental Protection Regulation for the transportation sector, approved by Supreme Decree No. 004-2017-MTC.
(x) The modification of the Regulation for environmental protection in hydrocarbon activities by Supreme Decree No. 023-2018-EM.
(xi) The Environmental Protection Regulation for Mining Exploration Activities, approved by Supreme Decree N° 042-2017-EM, amended by Supreme Decree N° 019-2020-EM.
(xii) The Environmental Management Regulations for the Manufacturing Industry and Domestic Trade, approved by Supreme Decree N° 017-2015-PRODUCE, recently amended by Supreme Decree N° 006-2019-PRODUCE.
(xiii) Supreme Decree No.005-2020-EM, which amends the Regulation on Environmental Protection and Management for Mining, Beneficiation, General Work, Transportation and Storage Activities, approved by Supreme Decree No. 040-2014-EM.
(xiv) Supreme Decree No. 010-2020-MINAM, in order to establish the provisions for the submission of the corrective environmental management instrument for solid waste infrastructure.
On the other hand, it should be mentioned that Peruvian environmental law also promotes and force the investors to implement citizen participation mechanisms, mainly with the interest groups located in the area of influence of their investment projects. For example, the Regulations for Citizen Participation in the environmental management of the Fishery and Aquaculture subsectors have recently been approved by Supreme Decree No. 017-2022-PRODUCE.
Likewise, within the framework of ILO Convention No. 169, administrative measures (i.e., administrative acts that allow the initiation of a certain activity) and legislative measures that may affect native or indigenous peoples require prior consultation proceedings that are carried out by the authority responsible for issuing the administrative and/or legislative measure in question.
Finally, once the project is completed, the owners of the investment project are obliged to carry out remediation and closure activities to restore the areas disturbed by their activities and return the area where the project was executed, as far as possible, to its original state. A novelty in relation to the closure and post-closure stage was incorporated for the mining sector by Law No. 31347, which amended Law No. 28090, Law that regulates the closure of mines, in relation to the regime of guarantees for the closure of mines, as well as in relation to the joint and several liability of directors and majority shareholders with respect to environmental damages resulting from the abandonment of mining units in the closure stage.
On the other hand, on April 18, 2018, the Framework Law on Climate Change, Law No. 30754, was approved in order to establish the principles, general approaches and provisions regarding public policies for managing climate change adaptation and mitigation measures, in order to reduce the country’s vulnerability to climate change, take advantage of the opportunities of low-carbon growth and comply with the international commitments assumed by the State before the United Nations Framework Convention on Climate Change. The afore mentioned Law has been regulated by Supreme Decree Nº 013-2019-MINAM, establishing - for example - the creation of the National Registry of Mitigation Measures - RENAMI, where all the information referred to the level of progress of emission reductions and increase of Greenhouse Gas (GHG) removals from mitigation measures will be registered, as well as the transfers of GHG emission reduction units. However, to date, this registry is not operational until the corresponding regulations are approved. On August 2, 2022, the draft Supreme Decree approving the “Provisions for the operation of the National Registry of Mitigation Measures (RENAMI)” was published.
In addition, under Law No. 30754, a High Level Commission on Climate Change was established by supreme decree. In addition, its permanent nature has been specified, which is chaired by the Presidency of the Council of Ministers and the Technical Secretariat is the responsibility of the Ministry of the Environment, and that the conformation and development of its functions are defined in the norm of its creation.
In this sense, on July 3, 2020, Supreme Decree No. 006-2020-MINAM was adopted, which created the permanent Multisectoral Commission under the Ministry of the Environment called “High Level Commission on Climate Change”. The purpose of this body is to propose measures for adaptation and mitigation to climate change and to the National Determined Contributions (NDC), as well as to issue the technical report on the NDC every five years, the focal point at the United Nations Framework Convention on Climate Change (UNFCCC) in accordance with international commitments ratified by Peru.
Finally, it is important to mention that, through Supreme Decree No. 003-2022-MINAM, a climate emergency was declared of national interest in the country, with the aim of urgently executing measures to implement climate action, in accordance with the commitments assumed under the NDCs by 2030.
Source: AllBright Law Offices
Contributor：Peru Rodrigo, Elías & Medrano Law Office
Chinese Translation: WANG Liang, E-mail: wangliang@allbrightlaw.com
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