The Amazon could soon reach a tipping point of global consequence. Beyond this, most of the remaining rainforest is projected to irreversibly change to a highly degraded ecosystem.ae22da92427f In 2020 alone, the Amazon lost nearly 2.3 million hectares of primary forest – the third-highest annual total since 2000.c7a132d7819d Despite formal anti-deforestation commitments, the development of legal frameworks to control forest loss, institution building, implementation of policies, and the allocation of resources from national and foreign agencies, Peru contributed 203,271 hectares to that year’s loss – a record for that country.e914ca2cdfd1

The proximate drivers of deforestation in the Amazon vary across provinces. In Madre de Dios, mining is one of the main drivers. Between 2021 and 2022, mining was directly responsible for the deforestation there of 11,200 hectares (70% was directly linked to gold mining).a9db53ab525e However, in Loreto, San Martin, and Ucayali, primary forest loss is mainly related to agriculture. In fact, over half (56%) of forest loss in the Peruvian Amazon between 2001 and 2017 is linked to agricultural activities.6ab2800fb1a4

While agriculture – including both small-scale farming and monoculture crops (eg palm oil, cacao, papaya) – is among the main proximate drivers of deforestation,08628be09ae7 indirect drivers create the basic conditions for deforestation. These include inadequate national and subnational public policies, road-building, land trafficking, and corruption.d2ee536c5379

This U4 Brief focuses on how informal practices, state capture, and collusion influence the implementation of policies and programmes in the forest sector and the development of mining and agriculture in the Peruvian Amazon. The role of subnational politics in particular is a growing field of study in Latin America.02f5e260979d Since the early 1990s, neoliberal policies saw Latin American countries undertake major reforms, including the reduction of state participation in the economy (eg privatisation of public enterprises) and decentralisation (ie the transfer of responsibilities for planning, management, and revenue raising and allocation from central government and its agencies to lower levels of government). In Peru, from 2009, forest-related functions were transferred to nascent regional governments, with these governments progressively acquiring powers to govern natural resources. The first five regional governments empowered with these new functions were all in the Amazon: Amazonas, Loreto, Madre de Dios, San Martin, and Ucayali.

The local implementation of national policies in Latin America is closely connected to the capacity of central governments to reach, and negotiate with, subnational authorities and civil society.e581a31969fc The success of such implementation is also partly dependent on political alignment between national and subnational authorities.351b5579e6c4 In the environmental sphere, state capacity,aa75f9d41bb4 the capacity of subnational authorities to adjust to national policies ,633fb4de2bdc and electoral and financial incentives,d84da022dc28 are all considered important for effective policy implementation. In Peru, regional governments have authority over the types of activities to be developed in the Amazon. It is important, therefore, to consider the role played by subnational politics in the implementation of national policies for protecting the Amazon.

Reflecting on two cases of proposed reforms that could further negatively impact conservation in the Peruvian Amazon, this brief is based on 20 in-depth interviews with Peruvian journalists, current and former public servants, and civil society actors with deep knowledge of the focus area, and supported by a review of relevant studies, public records, and media reports from investigative journalists. The two proposed reforms analysed are: (i) a reform to allow the expansion of artisanal small-scale mining and (ii) a reform of the Forestry and Wildlife Law (Law 29763), which allows the legalisation of crops developed on illegally deforested areas. These cases show how local and regional political and economic interests shape and influence national policies, against a backdrop of continued deforestation.

How the Peruvian forest sector is organised

The National Forestry Service (SERFOR), attached to the Ministry of Agrarian Development and Irrigation (MINAGRI), is the main governing and supervisory body for forest policies. It is also the axis of coordination between other institutions with competence in these matters. SERFOR oversees issuing and proposing regulations and national application guidelines related to the management, administration, and sustainable use of forest and wildlife resources. On the other hand, the Forestry and Wildlife Resource Oversight Entity (OSINFOR), which is attached to the Ministry of Environment, is tasked with supervising and monitoring compliance with forest concession contracts, as well as the obligations and conditions contained therein, and with applying corresponding sanctions if applicable. In the framework of decentralisation, the Regional Forestry and Wildlife Authority is responsible for forest and wildlife management at the provincial level. Its functions include the execution of regional forestry and wildlife plans and policies, the granting of rights and associated administrative acts, control of assets, and supervision of compliance with the obligations contained in administrative acts.

Apart from direct forest exploitation (ie through forest concessions, protected areas producing carbon credits, and tourism), the Peruvian Amazon is used for mining, cattle-ranching, and agriculture. The Forestry and Wildlife Law (Law 29763) and the Regulation for Forest Management (Executive Decree N° 018-2015-MINAGRI) state that, before authorising agricultural or cattle-ranching, Regional Agricultural Directorates (DRA) must assess the capacity of the forest. In other words, they must consider if the forestland can be used for forest production or qualifies as a protection area. The DRA must also assess land title requests in the applicable area. Unfortunately, there is evidence that the provincial governments in Loreto and Ucayali have provided land title certificates for agricultural activities without assessing forestland capacity, thereby promoting deforestation in areas that could have become forest concessions or protection areas.f1d7a9f59f2e

Exploring the informal relations at the national and subnational levels

In the case of Peru, corporations typically benefit from standing alliances or power partnerships with the state – principally via relationships with the president and the Ministry of Economy.1738738a53c1 This results in the nomination of allies to critical positions in the state, where corporations are then favoured in laws and regulations (eg via tax exemptions or the weakening of environmental regulations). It is therefore important in Peru to distinguish between state capture and corruption. State capture goes beyond single instances of political or administrative corruption and the payment of bribes. Rather, it allows private actors to exercise continuous influence on public policies, with the aim of protecting businesses through neutralisation of the state’s supervisory role.ec9d9cb797c9

There is a relationship between national state capture by corporations and the financing of Peru’s political parties,0c8210339cb6 in addition to the close relationships between these corporations and the national executive authority. Such state capture must be considered against the backdrop of the collapse of Peru’s political party system.af869c60ed67 Peru has become a ‘democracy without parties’,e140fc47b96c where the relationships between politicians and their constituencies have been reshaped. This has allowed the emergence of coalitions of independent politicians at the local, provincial, and national levels, characterised by their rooting in business and overlapping political-economic interests. This means many politicians in Peru are ‘independent’ and constantly renegotiate their political affiliations.

An example of this is the case of the current governor of Madre de Dios, Luis Otsuka Salazar, former president of Fedemin. Otsuka was elected in 2015 under the left-wing party, Democracia Directa. In 2022, standing on the same political agenda, he was elected governor of Madre de Dios under a right-wing party, Avanza País. Another example is Edwin Vasquez, Ucayali’s governor between 2003 and 2006. Vasquez is an entrepreneur linked to the logging sector. Prior to his election as governor, he participated in a municipal election and parliamentary elections, where he was affiliated with Somos Perú, a national political party. But, in 2003, he was elected governor as the head of a regional party – Nueva Amazonia. Yet another example is the case of Loreto’s former governor Elisban Espinosa who was elected in 2019 with the national party, Restauración Nacional, despite being affiliated to the regional party Movimiento Independiente Loreto – Mi Loreto since 2010.

Another characteristic of the Peruvian political context is the weakness of national political parties. Since the introduction of regional governments and the first regional elections in 2003, most elected authorities in the Amazon have represented regional political movements. As shown in Table 1, in Loreto, Madre de Dios, and Ucayali, some of these authorities have close links with local industries, particularly timber, palm oil, and mining.

A third characteristic of the Peruvian political context is the prevalence of corruption at high levels of the government. The prosecution of national and subnational authorities for corruption has become exceedingly common in Peru. It is widely known that all elected Peruvian presidents since 1990 have been prosecuted for corruption. By July 2013, three of the five former presidents are in prison (two on pretrial detention, one serving a sentence). However, both corruption accusations and actual prosecutions have also been common at the provincial level. This is not a problem that is exclusive to the Peruvian Amazon. Indeed, according to the Peruvian Ombudsman, 81% of provincial governors elected in 2022 faced accusations of corruption at the time of their election.70ac6d6c5960 In the Amazon, however, corruption allows deforestation.2e2179b7ca5d

In the current election period (2023–2026), the elected governors of Loreto, Madre de Dios, San Martin, and Ucayali, are subjects of investigations for corruption during their previous mandates,5e47e869721b and/or have been accused of contributing to environmental crimes.a8d565b0bab3 As noted above, however, casting the participation of provincial authorities in deforestation simply as ‘corruption’ would be to misunderstand the complex system of relations and collusion at play.

For example, the prosecution of authorities for corruption has not prevented San Martin from building considerable conservation capacities. While in Loreto, Madre de Dios, and Ucayali, deforestation increased between 2002 and 2021, San Martin’s deforestation rate slowed. In interviews, respondents noted a qualitative difference between the dynamics in San Martin, compared with Madre de Dios or Ucayali. For them, the penetration of illicit economic interests into the provincial and local governments in Madre de Dios and Ucayali is simply greater than in San Martin. This points to a need to analyse the roles played by various subnational actors in the Peruvian Amazon in moderating compliance with national policies. To this end, we consider two cases of proposed reforms that could have a negative impact on Amazon conservation: (i) the formalisation of informal miners and (ii) the reform of Law 29763 (Forestry and Wildlife Law). Both reforms have already been debated by Peru’s National Congress, with reform of Law 29763 being approved in January 2024.

Case 1: Reform of artisanal small-scale gold mining

Mining is one of the most important economic activities in Peru, representing 10% of its GDP. Artisanal and small-scale gold mining (ASGM) refers to mining operations – both formal and informal – that are oriented towards the exploration, extraction, processing, and transportation of gold. In some provinces of the Peruvian Amazon (such as Amazonas and Madre de Dios), alluvial gold mining has grown in a disorderly fashion, with little supervision, contributing to informality and illegality. In Madre de Dios alone, it is estimated that between 1984 and 2017 nearly 100,000 hectares of Amazon forest were lost to ASGM.38a3d37854e4

Since 2002, the Peruvian state has attempted to formalise ASGM by implementing a register of miners. However, this is seen by many as a measure that could limit their operations (eg by outlawing mining in protected areas) and impact revenues (ie where gold is traded informally). While the Peruvian state has aimed at the eradication of ASGM, reform attempts have been challenged by multiple actors – from striking ASGM miners to politicians who have delayed the registration process.

Since decentralisation, the provinces – through the Regional Directorate of Energy, Mines, and Hydrocarbons – oversee mining formalisation. These offices evaluate and approve miners’ registrations, including verification in the field to check compliance with requirements. During his first term as Madre de Dios governor (2015–2018), the current regional authority head, Luis Otsuka Salazar, appointed officials at the region’s directorate who have since been prosecuted for receiving bribes from illegal miners. Otsuka is a former leader of the Madre de Dios Mining Federation (Fedemin) and has openly opposed interdictions7743395d137f promoted by the national executive. In fact, he was only elected governor after he led opposition to these operations in 2014. During his first term in office, he oversaw weak compliance with national policies against illegal mining in the Amazon, and has also promoted the construction of new roads that have had negative environmental impacts in protected areas. He was re-elected governor for 2023–2026 under Renovación Popular.

In 2021, Otsuka’s former general manager in the provincial government, and former legal adviser at Fedemin, Eduardo Salhuana, was re-elected as a congressman with Alianza Para El Progreso. Salhuana co-authored a bill to delay the formalisation of ASGM miners for three years (to the end of 2024). This law was approved in 2021 by a majority in congress; however, the executive brought the deadline for formalisation forwards to 21st March 2024. But, in mid-March 2024, congress approved a law that reversed this executive measure and reverted to the original deadline (December 2024). Salhuana also issued a bill that could have further negative impacts on interdictions if it is passed and implemented. During his first term as congressman (2001–2006) he issued a bill to grant mining rights in buffer zones of protected areas without environmental impact assessments.

Salhuana is not the only congressman to have promoted bills that could undermine the actions against illegal mining in Madre de Dios. In 2021, congressman Alexander Lozano (of the left-wing party, Unión por el Perú) issued a bill to promote ASGM, weakening the requirements for environmental management. Lozano’s predecessor was Modesto Figueroa Minaya (2016–2019), a candidate for Fuerza Popular. Figueroa was investigated for his links to illegal mining and submitted a bill to promote ASGM. Amado Romero Rodríguez, congressman for Madre de Dios between 2011 and 2016, was also investigated for having two mining concessions that overlapped with a chestnut concession.

In the context of the political crisis faced by President Boluarte’s government, members of congress have become further empowered, which disrupts the balance of power between the executive and legislative branches. Congressmen directly address members of the executive to discuss and negotiate projects that benefit them, against the opinion of expert technical bodies. On February 2024, for example, the Minister of Energy and Mining announced a meeting with congressman Salhuana to discuss the registration of ASGM miners.

The case of Madre de Dios illustrates the immense powers now at the disposal of subnational elected officials, and how these dynamics undermine national policy implementation. This is possible because subnational elected officials do not necessarily represent the aims of national political parties. Amid the collapse of the former political party system and emerging coalitions of independent politicians at the local and regional levels, weak national parties depend on candidates who can win local and regional elections, to provide the party with greater power in congress. These politicians represent the interests of their constituents, and the powers that support their political campaigns. This is a form of capture of the subnational level by regional economic elites who have the capacity to block national policies, such as those against deforestation.

Case 2: Reform of the Forestry and Wildlife Law

Congressman Salhuana has also been involved in attempts to reform Law 29763 (Forestry and Wildlife Law). Although the bill was rejected in March 2023, this rejection has yet to be filed. The bill directly undermines the authority of the Ministry of Environment regarding the use of forests in the Amazon. It allocates all decision-making power to the Ministry of Agriculture, denying the crucial role that Law 29763 allocates to the Ministry of Environment. Under the present law, the Ministry of Environment leads the process of forest zoning – an ecosystem approach that determines the potential and limits of forest ecosystems. This is an important step in the process to decide whether a forest should be removed – for example, to develop agriculture.

Despite being previously rejected, the proposed reform to the bill was finally approved in January 2024, and opens the door to formalising settlers who are illegally deforesting the Amazon to perform agriculture.717de3a82dd8 It allocates greater powers to the regional agricultural directorates to recognise settlers, ignoring examples in Loreto, Madre de Dios, and Ucayali of malpractice in these directorates. In 2015, for instance, the then-governor of Loreto, visited and publicly supported the Cacao del Perú Norte SAC enterprise (now Tamshi SAC). By the time of the visit, the enterprise had been sanctioned by the Ministry of Agriculture, which ordered the cessation of its operations, and was being investigated for alleged forest crimes by Loreto’s Specialised Environmental Prosecutor’s Office.

In Ucayali, in January 2023, the new head of the regional government shut down an internal administrative process against the Director of Agriculture. According to the public prosecutor’s office, between 2015 to 2018 this official issued 128 land title certificates in the district of Nueva Requena, affecting the territory claimed by Indigenous communities. The former Director of Agriculture has also been accused of land trafficking in the province of Masisea. Despite the evidence presented, the governor closed the case against the official.

The congressmen behind the reform openly discussed it with representatives of agribusiness (coffee and palm oil) and Mennonites in Loreto and Ucayali, some of whom are accused of deforestation and land grabbing.7c7cadeb8b3c But no discussion of the reform occurred with Indigenous organisations, for whom any reform of Law 29763 must go through a process of free, prior, and informed consent. Congress also ignored the opinion of the Ministry of Environment, deciding to abstain from filing an observation to the law.

Strategies to conserve, not destroy

Those who wish to protect the Peruvian Amazon’s forests cannot afford to ignore how informal politics shapes policy implementation. Greater effort is required to enhance the transparency and accountability of elected officials in Peru. Conservation efforts should help lift the veil currently placed over political campaign finance at the national and subnational levels. Finance and asset declarations should be mandatory, with failings penalised.

Conservation endeavours in Peru would also greatly benefit from public debate on conflicts of interest, leading to new regulations. Efforts should be deployed to encourage key officials (such as the heads of regional forestry and wildlife authorities, or the head of the agriculture directorate) from the Amazon regions to declare connections to agribusiness, forest, or mining interests. In this task, alliances with regional and local civil society organisations are critical.

Prevention of collusion between private and political interests in the forest sector could also be addressed through strengthening the regional and national administrative bureaucracies. The independence of regional directorates could be assured by raising their level of technical competence and reorganising their selection process, boosting financing so that they are separated from direct political-economic interests. The experience of San Martin in the selection of regional human resources with the support of the National Civil Service Authority (SERVIR) could be used as a positive example to consider.

Environmental management overall must be strengthened in Peru, with direct authority for forest management placed under environmental actors. Despite the fragility of Peru’s remaining forests, these resources are still eyed by some national and foreign actors for their potential agribusiness – rather than conservation – value. Any proposed reforms must therefore be analysed carefully in a context where the Peruvian Amazon is close to a major tipping point.