By: Denisse Linares Suárez & Ciro Salazar Valdivia
The recent revelations made by the Peruvian press about large Chinese construction companies in consortium with an inexperienced local company offers us the missing brushstroke in knowing the behavior of Chinese companies in the country.
On the one hand we have Cosco Shipping, the main shareholder of the port of Chancay, with a strategic and disruptive proposal. This port, being designed to receive Post Panamax ships, the largest in the world, would not only reconfigure national logistics but would also do so at the South American level. However, Cosco goes further as brought before the Peruvian Government the formation of a special economic zone, which would facilitate the transition to a productive diversification, recognized by the MEF as an imperative objective of our economy [i].
Likewise, we have China Minmetals Corp., owner of Las Bambas, and Sinohydro, one of the shareholders of the Amazon Waterway, which limits itself to following our institutional framework in environmental and social matters, a common practice of Chinese companies throughout the world. As a consequence, the former is facing serious social and economic conflicts, while the latter had to withdraw its Environmental Impact Assessment (EIA) from the review process after serious questioning even by the State itself. And now we’ve just met China CAMC Engineering CO. LTD and China Civil Engineering Construction Corp., a consortium partnered with an unknown peruvian company, but apparently well contacted in the construction of various road infrastructure projects, which are possible acts of corruption and are being investigated.
Thus, from the extreme of a proactive and even disruptive attitude, to the low profile and navigating in unclear waters, the diversity of the relationship strategies of the Chinese giants represent a great challenge not only for the Peruvian State, but above all for civil society and particularly for the communities in the areas of influence of the projects.
There are, however, three common aspects in the Chinese companies mentioned: 1) they are public companies; 2) they are among the largest in their field globally; and 3) they execute important projects in the world within the framework of the Chinese Belt and Road Initiative (LFLR, in spanish).
Precisely, within the framework of the LFLR, the Chinese Government has issued various guidelines and recommendations (Green development guideline, May 2021 being the last of update), in which it seeks that its companies adapt to the best practices and international environmental standards regarding their operations in the world.
More importantly, the recent declaration fom Kummings, within the framework of the 15th Conference of the Parties to the Convention on Biological Diversity, led in this edition by China, is titled “Ecological Civilization”. It´s a concept proposed to the world by this country in 2013, a few months after its LFLR proposal, and which is considered by some experts as the most ambitious goal to achieve “living in harmony with nature”.
The environment in general and sustainable development in particular, has been widely incorporated by China as one of its objectives with LFLR. In fact, this concept has a prominent place in the Memorandum of Understanding with which Peru joined this initiative in April 2019. But, for now, the above is poetry if we take into account the environmental performance of Chinese companies, at least in the Amazon basin.
In fact, the report with complaints and recommendations made by the Coordinator of the Indigenous Organizations of the Amazon Basin – COICA around environmental and social impacts in the countries of the Amazon basin, presented within the framework of the Universal Periodic Review (UPR) to which China was submitted before the United Nations Human Rights Council in 2018, gives an account of it.
But if, in environmental matters, Chinese companies lack the implementation of the conceptual framework and the guidelines that their government proclaims in this field, it´s in the social field, another of the pillars of sustainability, where we believe that the gap exists from the conceptual point of view.
In particular, if we stick to the dimensions of governance, such as transparency, access to information, participation and consultation (prior consultation in the case of indigenous peoples), which must be observed throughout the project cycle, are not fully incorporated in the guides and guidelines issued by the Chinese government.
China’s challenges
We believe that the fulfillment of the commitments acquired by China in the framework of the UPR would contribute to confronting the socio-environmental crisis in the Amazon.
Likewise, their investments must be aligned with complying with the Glasgow Declaration, by which various countries have agreed, among other points, to protect 80% of the Amazon basin by 2025. This request was promoted by COICA and civil society through the report Amazonía Verde: 80×25. This represents an opportunity to direct specific efforts to the Amazon basin.
In the same line of environmental commitments, China has reaffirmed its vision for 2050 of «Living in harmony with nature», through the Kunming’s declaration, where it recognizes that we are experiencing an unprecedented and interrelated crisis of biodiversity loss, climate change, land degradation and desertification; as well as the role of indigenous peoples to help reverse this situation.
On the other hand, cultural differences play a role in delaying the adoption of better environmental and social standards by Chinese companies and, in this aspect as well, not all the responsibility lies with Chinese investments, but with Amazonian governments. Given this, the opening by Chinese companies of spaces for dialogue with civil society and the organized population, at least at the level of national and regional organizations, desirable with the presence of government actors, is key. Here too, what has already been stated in the Kunmings declaration must be put into practice; specifically in relation to its fifth commitment, where it speaks of the recognition of the right of indigenous peoples and local communities «guaranteeing their full and effective participation.»
Finally, and linked to the above, it is key for Chinese investors to know the legal frameworks related to the recognition of social and environmental rights, so that real solutions adapted to the region are implemented..
[i] According to the National Competitiveness and Productivity Policy (DS. N° 345-2018-EF).