The U.S. and Peru will discuss and attempt to resolve concerns about a recent Peruvian action to move the independent Agency for the Supervision of Forest Resources and Wildlife (OSINFOR) to a subordinate position in Peru’s Ministry of Environment (MINAM).
This is the first request for consultations under the PTPA.
USTR said a Peruvian government decree published on Dec. 14 appears to conflict with language in PTPA’s Annex on Forest Sector Governance stating that OSINFOR is to be an independent and separate agency with a mandate that includes supervision of verification of all timber concessions and permits.
OSINFOR was established in 2008 as an independent national forest oversight body responsible for monitoring and enforcing the sustainable use and conservation of forest and wildlife resources in Peru, including through conducting post-harvest inspections of forestry titles and sanctioning those that illegally harvest timber.
The PTPA enshrined an obligation for OSINFOR to be a separate and independent agency to ensure a “strong and independent” body with sufficient resources to safeguard Peru’s forest oversight from “undue political influence,” USTR said.
PTPA Article 18.12.1 provides for a party to request consultations with another party regarding any matter under the Environment Chapter (Chapter 18) and provides 60 days for the parties to resolve issues.
If the matter is not resolved within that time frame, the U.S. could request separate consultations or a meeting of a PTPA dispute settlement commission, consisting of cabinet-level representatives or their designees.
The commission can then form working groups and/or make recommendations for courses of action.
If 30 days pass after the commission convenes with no resolution of the underlying matter, any involved party can request establishment of an arbitral panel to comprise three members, selected from a roster that consists of three nationals from each party and two members who aren’t nationals of any party.
If such panels rule against the party complained against, they can require that party to make regulatory changes or else face the threat of suspended trade concessions, potentially translating to tariffs raised on goods originating in the party’s territory.
“By taking this unprecedented step, the Trump administration is making clear that it takes monitoring and enforcement of U.S. trade agreements seriously, including obligations to strengthen forest sector governance,” U.S. Trade Representative Robert Lighthizer said in a statement. “Since its creation in 2008, OSINFOR has played a critical role in Peru detecting and combating illegal logging, and we are gravely concerned that its independence is threatened. I urge Peru to abide by its obligations and restore OSINFOR’s separateness and independence, as called for in the PTPA.”