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PERU: MISSION TO THE AMERICAS 2008 - MARKET REPORT
JUNIORTEAMCANADA
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Cover Photo: Peruvian aboriginals in Puno.
Left: The Honourable Stephen Harper, Prime Minister of Canada, greeting Junior Team Canada delegates to Peru in Ottawa June 2008.
GLOBALVISION
PERU2008
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I am very pleased to present “JTC in Peru, August 6th to 23rd, 2008”. Since its inception in 1991, the mission of Global Vision has been to produce global leaders for Canada through the Junior Team Canada program; this report is the work of the team.
Twenty-three delegates across Canada were chosen from a national competition; the participants have successfully gained financial support for their communities and represent their interests in Peru. In addition the team accepted the mandate from the Department of Foreign Affai rs and International Trade (see page six).
To deliver on this mandate, the mission was structured so as to place the JTC delegates into three very distinct rural and aboriginal communities of Peru. In these three distinct regions (Huaraz, Sargento, and Puno), the delegates lived in the respective regions for seven days and during that time, they did the following: on-site visitations, government and private sector meetings, presentations, press conferences, and consultations with the rural and aboriginal community leaders.
The opportunities that JTC was provided were fantastic and made possible by the following DFAIT officials: Peter McGovern, who introduced us to the Associate Deputy Director of the Americas, Alex Bugailiskis. With the DFAIT staffs, Global Vision got a comprehensive picture of Canada’s relationship with Peru and what might unfold. Alex then connected us directly with the post in Lima and the Ambassador, Genevieve des Rivieres. The embassy graciously helped us with meetings both in
Lima and in the regions of Peru. In addition, the new Ambassador of Peru to Canada, Jorge Castenaa, and his staff, were most helpful in developing the program in Lima and connecting us to Loyola university.
Financial support to cover the costs incurred in developing the JTC program are met by national sponsors that include: Tal isman Energy, DFAIT Del l , Export Development Canada, Atlantic Canada O p p o r t u n i t i e s A g e n c y , a n d Ve r a z Petroleum Ltd. In addition, the candidates must successfully raise $5,000 each as support from their respective communities.
This JTC report features proposals for action in Peru and JTC’s way to give back. These actions by JTC delegates mirror Canadian government’s position to reengage the Americas - with focus on the aboriginal people. Further, they are intended to build the capacity of Peruvians to access the Free Trade Agreement between our two countries and contribute to their own socio-economic development.
I urge you to use the Golden Rolodex: it celebrates the new found Canadian interest in the regions of Peru. Everyone listed has offered their assistance towards building closer ties with private and public organizat ions, therefore advancing Canada’s commitment to the Americas.
Respectively yours,
Terry Clifford C.M.PresidentGlobal Vision
MESSAGEFROMTHEPRESIDENT
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Executive Summary P. 5
DFAIT Mandate for Junior Team Canada P. 6
Canada’s Re-engagement in the Americas P. 7
In Field Missions P.11
Corporate Social Responsibility P.13
Extractive Industries P.15
Giving Back to the Community P.17
Appendix A - Overview of Peru P.21
Appendix B - Details on Mission Sargento and the Jungle P.25
Appendix C - Overview of Yurac Yacu Community P.28
Appendix D - Details on Mission Huaraz P.34
Appendix E - Altiplano Overview P.36
Appendix F - Details on Mission Puno P.43
Appendix G - The Path to Leadership P.45
GOLDEN ROLODEX P.46
TABLEOFCONTENTS
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Top: Inca Statue located in the hills of Puno
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On July 17th, 2007 Prime Minister Steven Harper told the world that "Canada is committed to playing a bigger role in the Americas and to doing so for the long term." One year later Canada has delivered on its Prime Minister's words by signing a Free Trade Agreement (FTA) with Peru and expressing interest in creating free trade areas with other Latin American countries.
Global Vision has risen to this challenge of engaging the Americas. In February 2008, Global Vision sent a Junior Team Canada (JTC) delegation for an exploratory mission in Peru; a report from this mission was filed with DFAIT in April 2008. JTC recognized that poverty was a major problem in the rural and aboriginal communities.To address this problem, Global Vision designed a mission for August 2008 (see in field missions on page 11).
Since the extractive industry is the biggest component of the Peruvian economy, it was decided to select one of the regions where Canadian extraction was active; Talisman offered their operation for in-situ learning (refer to "Extractive Industries", page 15-16.).
Another team visited a CIDA project, Altagro, in the Altiplano region(Puno). This project is aimed at poverty reduction through building sustainable industries eg. agriculture, aquaculture, and handicrafts.
In the third region, Huaraz, the team had the opportunity to assist in healthcare, and entrepreneurship development (see appendixes A to F).
The three socio-economically diverse environments gave JTC a glimpse into the diversity the country has to manage. The teams' were to learn what role Canada can play in its capacity to utilize the FTA for g r o w t h , e q u i t y , a n d s u s t a i n a b l e development in Peru. The Canada-Peru FTA
contains elements of Corporate Social Responsibility (CSR), labour cooperation and environmental standards. These initiatives talked about is the key part of our investigation in Peru and the basis of our study in these regions. The FTA also provides funding through CIDA (Voluntary Sector Fund). The following proposals will address this very fund.
Global Vision is committed to staying in the Americas with the following proposals which focus on the need for poverty reduction, specifically in the rural and aboriginal regions. In addition, JTC will speak out reach their fellow Canadians ( see Appendix G for GV's mis s ion statement). Global Vis ion therefore recommends developing the follow actions w i t h C I D A a n d o t h e r C a n a d i a n organizations (public and private):
1. In the Puno, Altiplano region, lead an ent repreneursh ip and leadersh ip program for high school students, ta lented producers (agr icu l tu re , aquaculture), and community leaders
2. Develop and invite a team of Peruvian ambassadors to learn about Canadian technology, methods of production, and marketing in sectors of interest
3. Support the initiatives of Talisman and other extraction companies to build capacity for local young leaders in their operative communities
4. Social development project in the Yurac Y a c u r e g i o n w h i c h i n c l u d e entrepreneurship, healthcare, and education.
5. Support the October APEC Youth Camp in Puno with active participation
6. Bring forward the findings of social responsibility as practiced by Canadian companies and their impact on the Peruvians. Eg. Tell Canadians through university presentations and town hall meetings JTC’s findings on the corporate social responsibility practices and their effects on the communities
EXECUTIVESUMMARY
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The Department of Foreign Affairs and International Trade (DFAIT) has mandated Junior Team Canada to not only establish trade links for their regions, but also to engage Peruvian youth the fundamentals of entrepreneurship and free trade.
The mandates be low out l i ne how Canadian youth can help the Government
of Canada advance its Americas Strategy and further encourage Canada’s re-engagement in the Americas. by By strengthening ties between Peru and Canada not only at a governmental or commercial level, but also at a youth leadership level, Junior Team Canada can bui ld last ing relationships and help advance Canada’s interests in Peru.
DFAITMANDATEFORJUNIORTEAMCANADA
Far Left: David Lemor Bezdin of ProInversion Peru speaking to JTC delegates on investment opportunities in Peru.
Left: Karl Zadnik, Pinaymootang First Nation of Manitoba and JTC ambassador, greeting Doug Maddams of Talisman Energy.
DFAIT Mandate: • Build capacity between members of Junior Team Canada and their counterparts such
as young entrepreneurs and aboriginal youth in Peru in support of the Canada-Peru Free Trade Agreement (CPFTA) with special concentration on the issue of Corporate Social Responsibility;
• Advance the Government of Canada’s Americas Strategy and the vision that the Prime Minister set out in his Santiago speech of last year;
• Develop synergies with a range of contacts in government including the Vic President of Peru, industry, young entrepreneurs, aboriginal entrepreneurs and members of civil society, and undertake interviews with these contacts;
• Visit a number of mining/oil and gas projects in Peru; • Prepare and deliver mission activities and outcomes; and• Provide feedback to the Department of Foreign Affairs and International Trade based
on Junior Team Canada’s experience in Peru.
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In July of 2007, Prime Minister Harper re-confirmed Canada’s interests in the Americas and committed to increasing Canadian political and economic engagement with its Latin American neighbours.
Canada initially demonstrated its interests in the Americas more than a decade ago by signing the Canada-Chile Free Trade Agreement. The agreement helped increase two-way trade by 40%, reassuring Canada’s belief in Chile and showing the potential opportunities in Latin American markets. Recently, there have been significant political and economic reforms in the countries within the Americas. From strengthening democratic security, to decreasing corruption, to encouraging global market integration, the Latin American countries have made strides in building capacity for international business.
Canada’s re-engagement in the Americas is a wide-ranging endeavour with different roles for Canada to play within the region: partner, friend, and force of influence. The Americas Strategy is focused on working with key partners to advance common interests and values under three key themes of democracy, prosperity and security.
In a speech to the Canadian Council of the Americas in 2008, the Honourable David Emerson, Minister of Foreign Affairs and former Minister of International Trade, summarized Canada’s recognition of an integrated approach in its engagement in the Americas. “Prosperity cannot take hold without security, or in the absence of freedom and the rule of law brought about through the pursuit of democratic governance,” said Minister Emerson. “And a good, healthy democracy c a n n o t f u n c t i o n w i t h o u t a s o u n d underpinning of personal security, and the chance to improve living standards through increased trade and investment.”
Peru has been an important focus for Canada. The Canada-Peru double taxation agreement was signed in 2003 and in May 2008 Canada confirmed its commitment to partnerships between the two countries with the signing of the Canada-Peru Free Trade
Agreement. This will provide Canadian companies with an advantage and the ability to better compete with foreign companies who benefit from preferential market access terms.
The Canadian government is committed to playing a positive role in building strong political, social, and economic foundations throughout the Latin American region. With the Government of Canada’s priority focus on re-engagement in the Americas, the region provides increasing opportunities for Canadian businesses.
Advancing Prime Minister Harper’s Message
The Department of Foreign Affairs and International Trade (DFAIT) outlined a set of objectives for JTC for the 2008 JTC Mission to Peru. The team worked on advancing the America’s strategy, buildilng capacity betwen young Canadian and Peruivan entrepreneurs, and exploring CSR initiatives related to the Canada Peru Free Trade Agreement.
JTC visited the Canadian Embassy in Peru to meet with several officials to pass on Prime Minister Harper message and to prepare the delegation for its mission in Peru. Rebecca Mallet, Development Consular in Peru for CIDA, informed the team of CIDA’s mandate to reduce p o v e r t y a n d f o s t e r s u s t a i n a b l e development, and to improve governance by building public sector capacity and promoting decentralization. Daniel Vezina, Senior Trade Commissioner briefed the Team on h i s ro le as Sen io r T rade Commissioner and identified key business opportunities in Peru. Christian Jolicoeur, Management and Consular Affairs Officer, delivered the embassy’s role in addressing human rights issues for Canadians in Peru, such as consultation with detainees, as well as passport and medical issues. This briefing prepared the JTC delegation for its mandate to assist Canada in advancing Canada’s commitment to re-engaging itself with the Americas.
JTC attended a question and answer session at the Universidad de San martin de Porres
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with the APEC High Level Commission in order to gather information on the APEC Summit being hosted in Peru this November. The team was able to pose questions to members of the commission, expanding on their understanding of the impact of the APEC Summit on Peru and the benefits it will generate for the Peruvian economy.
JTC met with the Eduardo Ferreryos, Vice Minister of Trade to review the history of the Free Trade Agreement negotiations between Canada and Peru, and to discuss details regarding the Agreement signed by both countries. Peru has incorporated into this agreement, clauses which stress labour cooperation, environmental consideration, and the preservation of human rights. In addition to facilitating increased foreign direct investment and freer export markets for Peru, the Agreement will encourage formalization of the economy. Regional trade blocks have been established which will aid Peru in expanding its internal trade, and incorporate them into the international marketplace now open to Peru.
Rural Regions:The JTC team helped to further the America’s Strategy by increasing our hemispheric neighbours knowledge and appreciation of Canada. The team saw how weak governance and publ ic admin i s t ra t ion capac i ty hu r t s the commnity, so they met with local leaders to identify the reasons for the irresponsibility and incapacity. The delegation studied the challenges facing the area: an informal economy, insufficient social programs and stifled entrepreneurship. Interacting with the community on a day to day basis, showed the opportunties for development within the area, and gave the team an idea of how JTC, and Canada as a whole, can make a world of difference in rural Peru.
On August 12th , 2008 in Puno the delegation met with young producers in charge of a trout farm project, funded under CIP’s Altagro program in Chucasuyo. Felix Pacombia provided a presentation to the team about the trout farm operation and how producers, like Empresa Pesquera Gomez, were sustaining their families and communities by bringing the product to market. JTC informed the producers of the pending free trade agreement, and the benefits this agreement would create for
the people within the region. In addition to establ ishing export opportunit ies to Canada for the Peruvian trout farmers, JTC p r e s e n t e d t o t h e p r o d u c e r s , t h e opportunity to engage in a three year project, developed by the team to educate them on entrepreneurship and business management.
In Llungo, JTC held meetings with the mayor of Llungo, Felipe Quispe, and Altagro representatives. The donation of $250 from Global Vision to the school was provided to help build the community. In addition, JTC, with the knowledge they were provided on the community’s agricultural, dairy, cheese, and quinoa production, reinforced their commitment to the America’s by stating their desire to establish additional export markets in Canada for their products and improving their businesses through the entrepreneurial development program.
JTC connected with the chief and other community leaders of the man-made floating totora reed islands on Lake Titicaca as part of a cultural understanding activity in the Puno region. JTC promised to bring their issues of poverty to the attention of officials who can make a difference. In addition, JTC has offered to provide the leaders of the community with assistance in d e v e l o p i n g t h e i r t o u r i s m i n d u s t r y experience and through addit ional international exposure by working with C a n a d i a n f e d e r a l a n d p r o v i n c i a l governments to create a partnership and promote the islands internationally. This will build capacity in the region by developing the island’s tourism industry; at the same time, it will improve the Canadian tourism through additional international exposure in Peru.
Aboriginal Initiatives
For the first time in Global Vision history, the 2008 JTC delegation completed three in-field missions in separate parts of Peru. These missions all had distinct purposes and agendas, and resulted in distinct i n i t i a t i v e s f o r J T C t o b r i n g t h e i r experiences back home. Separating the d e l e g a t i o n a l l o w e d J T C t o m a k e connections with more people and to engage with more communities, allowing for a more effective re-engagement of Canada with Peru.
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008 Relations with Indigenous peoples in Peru
continue to improve, with the Peruvian government building positive policies that promote cultural sensitivity, economic development, and social improvement. Canadian companies are taking a leadership role in developing Indigenous communities and empowering them t o w a r d s l o n g - t e r m e c o n o m i c development. Key social issues such as health, infrastructure, education, and environmental protection are addressed through corporate social responsibility initiatives. An example of this is in the Achuar community local census is required before company expansion. Companies provide the local communities with detailed information on operational activities and develop an understanding of what local communities need. These actions build synergies as communities play an active role in a company’s efforts to expand in the local areas.
While some communities are short-term focused with their requests, it is important for firms to help build awareness of longer-term strategies that will benefit the locals in more effective ways. Training local Aboriginals to negotiate, as well as to work in the mining and oil and gas industries, will provide them with the skills and abilities for potential future employment. These initiatives are focused on making local communities better off than they would be if they received monetary compensation with no means of sustainable development. Whi le f inancia l compensat ion can immediately address needs such as food and water, it can also be exposed to m i sappropr ia t ion o f funds due to corruption, and lack of education in monetary spending.
The experience gained from Canadian companies and their init iatives with Corporate Social Responsibility among Aboriginal people in Canada can help the successful partnering with Indigenous people in Peru. A strong partnership between a firm and its surrounding community is vital because all stakeholders are key components in building economic sustainability.
Development
There is much to be done with Peru’s indigenous population, many of whom live
in the remote highlands of the Andean Mountains. The basic needs that must be addressed in these areas are governance, education, and healthcare. Management of monetary funds becomes a large p rob lem in these a reas , as many community members do not understand the long-term impl icat ions of thei r spending. Formal education is also a challenge, as the indigenous people tend to live a very traditional lifestyle. Parents would sooner have their children working in the field, as opposed to attending high school or University. Basic healthcare is also difficult for these communities to access, with the government taking no formal stance in furthering the issue. This builds mistrust between the various levels of the economy, which means thousands of Peruvians are not getting proper, if any, medical attention.
The informality of their economy presents a problem, as many indigenous communities do not register their businesses and therefore do not pay taxes. As a result, the government is reluctant to give funding or aid to the 80%+ Peruvians that operate in this manner. In the indigenous communities, many still operate by communal property and have no notion of private ownership. Again, this feeds into the informality of their governance.
There are many obstacles the indigenous communities face in the long term. More time must be invested in these areas, to allow them to self govern and self sustain their communities. By using Canada’s experience with land claim and indigenous issues, Peru can move forward with development in this specific sector.
Education in Peru
Like the dichotomy of wealth that exists between the rural and urban areas of Peru, such a dichotomy also exists in education. The quality of education available to students in rural and urban communities varies greatly, as well as the opportunities available for them to pursue higher education.While education is free and mandatory for youth between the ages of 7 to 16, a very small percentage of students in rural areas continue on into post-secondary education. This is due firstly to financial restrictions, and secondly to the inadequate quality of education in rural primary and secondary
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schools. Public universities in Lima do not charge tuition, however living expenses and transportation costs are still deterrents for low-income families. These universities determine admission through a national entrance exam, on which students need only score 25% to pass. Even so, graduates of rural secondary schools find this challenging. Private universities, frequently owned entirely by individuals, often have more stringent standards, and thus admission to these universities is much more difficult to obtain.In metropolitan places such as Lima, there many private primary and secondary schools established which offer high quality education and guidance. Many of these schools, such as Markham College in Miraflores, are bilingual, and teach English along with Spanish to provide their students with a competitive advantage. International Baccalaureate programs are also available for those aiming to study abroad. While fluency in English is becoming an educational staple in the large metropolises, rural community residents would often have difficulties Spanish since Quechua is their native dialect.
Opportunities for Canadian Universities
Opportunities available for Canadian educational institutions fall under two categories: educational development or
student recruitment. Many regions of Peru are greatly in need of training and knowledge, and partnerships between Canadian educational institutions and Peruvian communities would contribute to meeting that demand. The Canadian Embassy in Peru as well as the Canadian International Development Agency are interested in seeing Canadian post-secondary institutions develop programs to train Peruvian rural residents in agriculture technology and management, along with similar skills that would cause the greatest impact in the betterment of local economies.There is also interest among some of Peru’s population in studying abroad. While it is more common for students to complete graduate studies in other countries, there is growing demand, fueled perhaps by a growing economy, for international undergraduate studies. There is abundant opportunity for Canadian colleges or universities to educate some of the best and most motivated of affluent Peruvian youth.
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Team Lima
The Canadian government’s commitment to re-engaging the Americas involves forging relationships between the public and private sectors in Canada and the Latin American countries. The oil and gas sector is a driving force in both the Canadian and the Peruvian economies, making relationships between companies in these industries vital to Canada’s commitment. For an overview of the economic , po l i t ica l , and bus iness climates of Peru refer to Appendix A.
The first delegation spent one week in Peru immersed in the physical operations and policies of a Canadian oil gas company, Talisman Energy. In Lima, they met with Talisman executives and saw first-hand a drilling rig being built and tested. They then traveled by helicopter to Sargento Puño, a base camp located in Loreto, and experienced first-hand the challenges that working in a remote, sensitive area can bring. Their mandate was to learn about what it is like for a Canadian firm to do business in the oil and gas industry in Peru, focusing on Talisman Energy’s CSR initiatives towards the local community, the indigenous people, and the environment. For a more detailed description of the mission in Lima
and to the Talisman base camp refer to Appendix B.
Team Huaraz
The second delegation traveled to the Yu rac Yacu reg ion to ana lyze i t s e c o n o m i c , p o l i t i c a l , a n d s o c i a l environment. The team spent 7 days in the region studying the community and interacting with its people, while focusing on the key poverty reduction areas of h e a l t h c a r e , e d u c a t i o n , a n d ent repreneursh ip . For an in -depth community overview, and an analysis of the key poverty reduction areas and the opportunit ies for Canada, refer to Appendix C. The mandate of this mission was to further Canada’s commitment to bui lding stronger, more sustainable economies in the Americas.
JTC’s activities in Huaraz fell under three specific categories:
1. Experiencing the local culture and r i c h l a n d s c a p e t o f u r t h e r understand the region
2. Aiding in the construction of the Yurac Yacu Business Centre for Human Development
3. Producing a final report and video to promote the Yurac Yacu project on an international level
IN-FIELDMISSIONS
Far Right: JTC delegate working with school children from the Ancash region.
Right: Two JTC delegates with Mel Knezevich of Talisman Energy at the Sargento Puno base camp in the Amazon basin.
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The construction of the Yurac Yacu Business Centre for Human Development involved making adobe blocks used for building the community centre and the local school. The team worked on digging and sifting the dirt that was used as a component in the blocks, as well as transporting the finished blocks to the building site. JTC was eager to discover the local culture and gain an understanding of the Yurac Yacu community. In one of the most enriching days of the mission, the team embarked on a one day hike into the Cordillera Blanca mountains with the local children and residents, many of whom JTC had worked with side by side in the construction sites. Towards the end of the week long mission, the locals prepared a Pachu Manca, or a grand community barbecue, to thank JTC for their contributions.
T h e J u n i o r Te a m C a n a d a H u a r a z Delegation made an important difference in the construction and labour efforts, while analyzing the development project in context with the Yurac Yacu community. Global Vision is committed to making a long term impact in the region. For further information on the JTC experience in Huaraz, refer to Appendix D.
Team Puno
The final delegation traveled to Puno to e x p l o r e t h e r e g i o n a n d v i s i t t h e communities of Chucasuyo, Juli, Llungo, Ilpa, Uros, Taquille and the city of Puno. For an overview of the culture in Puno, and its main economic industr ies, refer to Appendix E.
The goal of the mission was to examine the development projects initiated by the Centro International de la Papa (CIP) and carried out by the non-governmental organization C I R M N A . C a n a d a ’ s I n t e r n a t i o n a l Development Agency funds CIP’s projects and Canada’s DFAIT has specific mandates for Peru-Canada relations with the pending Free Trade Agreement. JTC, therefore, explored the many opportunities emerging in Puno as the standard of life improves and looked for ways Canada can make a positive difference. Puno’s industries have great potential and communities will continue to develop with an emphasis on entrepreneurship and CSR. The sectors explored include agriculture, aquaculture, textiles, tourism, as well as a section on the unique culture of the Altiplano. While in Puno, JTC received presentat ions f rom and conducted interviews with various business people,
community leaders, and young people. For a more detailed outline of the JTC mission to Puno refer to Appendix F.
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Top: JTC delegate working with local community in Puno.
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Corporate Social Responsibility (CSR) is the continuing commitment by businesses to take into account the interests of all stakeholders when making business decisions. CSR includes analyzing the positive and negative effects that a firm’s business can have on employees, customers, the community, the environment and any other entities with a stake in the company’s operations. CSR goes beyond the legally-mandated obligations of a company to act in an ethical way, and reaches out to the community to make a difference. Peru’s current economic growth and delicate environmental and social situations make high CSR standards that much more important for the government to enforce. Peru is a developing country that has only recently begun to industrialize. Therefore, advances in infrastructure and technology are inevitable, as are the accompanying environmental and societal costs. Foreign firms who are entering the Peruvian market have a higher due diligence to CSR practices in Peru than they would in their own country. Extra care and attention must be paid to ensure the ecologically sensitive environment and the cultures of the indigenous people are not damaged.
Canada
There are approximately 80 Canadian businesses with a physical presence in Peru, and over 200 that are represented by agents. The CSR practices that these companies have focus on the environment, the indigenous people, the local culture, and domestic enterprise. Prior to entering the Peruvian market all firms must complete an Environmental Impact Analysis as well as a Community Participation Plan. Both of these documents outline the impacts that the operations will have on the surrounding community and environment, and sets out how the communities will be compensated.
Through question and answer sessions with representatives from Canadian companies such as Talisman Energy, Barrick Gold, Vena Resources, SNC Lavalin, and ScotiaBank, the JTC delegation dug deep into the CSR initiatives that Canadian companies have in place in Peru. In conversations with government officials and the APEC High Level Commission the JTC delegation discussed the inclusion of CSR issues into this year’s forum.
The JTC delegation experienced first-hand Talisman Energy’s CSR policy. Through interviews with the workers at the base camp, executives at head office, and an interview with a community correspondent, the delegates learned about the following CSR programs. Talisman Energy provides aid to community include a stringent re-vegetation program to reduce the footprint left on the jungle by drilling, an on-site medical office that provides free health care to the community, an on-site water purification plant, and enforcing strict health and safety regulations. Talisman Energy also educates the community in trades, agriculture, and fish farming to aid them in creating there own sustainable economy, and so that the locals have the skills to enter the workforce. Through a conver sa t ion w i th the Commun i ty Correspondent of an Achuar community close to Block 64 of Talisman Energy’s operations, JTC learned just how closely the oil company works with the community to ensure that they are not taken advantage of.
It is common for firms to provide projects to the community as concessions instead of cash payments. This reduces the potential for corruption and maximizes the benefits the community receives. Barrick Gold provides in tegrated soc ia l programs to the surrounding communities that focus on long-term development. For example, instead of just providing a water filtration system, they will provide a system that both filters water and irrigates crops. This assists the community in creating a sustainable economy. Vena Resources focuses on infrastructure d e v e l o p m e n t s s u c h a s ro a d s a n d manufacturing plants, as well as training.
Canadian firms have begun to implement CSR practices into their daily operations both domestically and abroad. They have portrayed to other countries the imminent need for firms to act in a responsible way regardless of which country their operations are in. The fact that the Peruvian government has decided to use the Canadian CSR standard as a benchmark for its own initiatives speaks to the level of ethical standards that Canada follows. To take CSR into the future and sustain its use by firms across the globe, Canadians need to continue to lead by example and show
CORPORATESOCIALRESPONSIBILITY
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is in sustaining both social and economic development all over the world.
Peru
At the 2007 G8 Summit in Germany, “G8 leaders agreed to promote a set of internationally recognized Corporate Social Responsibility (CSR) guidelines and principles for extractive sector industries (mining, oil, gas) that will help clarify expectations of investors in developing countries.” Junior Team Canada has witnessed many Canadian companies with commendable CSR practices in Peru. Th i s p rovokes the ques t ion “What programs do Peruvian companies have in place for CSR?”
As we met with various communities and their stakeholders, it became clear that CSR is a new ideology that must be embraced by Peruvian firms for the following reasons:
• To strengthen and promote values of freedom, democracy, human rights, and rule of law.
• To build strong, sustainable economies.
CSR has the potential to unify this nation that is divided by poverty; it can develop infrastructure; i t can create stable communities and livelihoods for all citizens. CSR was a term that we did not hear frequently in our meetings and visits throughout the rural region of Puno, most
workers did not know what this term meant, however, the CSR philosophy is alive and practiced.
In the dairy industry of Illpa, cheese producers purchase milk from local farmers to create a supportive and strong industry. In Puno at the Piscis fish processing plant they feed their workers breakfast in the mornings to alleviate malnutrition. In the region of Llungo the Altagro Project awards personal greenhouses to top students to encourage nutrition and reward hard work. The Rotary Club of Puno raises money to fix dilapidated communities that are plagued with broken infrastructures.
The rural industries and communities noted above do not refer to their activities as CSR but they implement practices and projects that are inline with CSR principles. Nations all over the world have come to a common ground and have realized the importance that CSR plays in developing communities and sustaining economies.
It is essential for CSR to be included in all Peruvian firms’ mandates. One way of doing this is to develop community and industry leaders to understand the significance of CSR. Global Vision has committed to a three year program to d e v e l o p l e a d e r s w i t h i n t h e r u r a l communities of Peru. This project will build CSR capacity amongst community members and will expand to the industries that they work in.
Left: JTC delegates giving away self-made care packages to school children in Puno.
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Oil & Gas
In a globalizing world as hungry for sustainable development as it is for energy, Peru is rising as a new hot spot for the hydrocarbon sector. This South American nation has an immensely large gap between the rich and the poor, because of p r e v i o u s p o l i t i c a l i n s t a b i l i t y . T h e
government is currently decentralizing the country, breaking down the barriers of trade between Peru and the rest of the world, and opening up its resources to the global market. In light of the recently signed Free Trade Agreement between Canada and Peru, an increasing number of Canadian companies are investing in Peru and recognizing the economic growth of this developing country. Peru is constantly prioritizing its energy matrix to make sure it is always getting the most out of its resources. Through opening itself to foreign investment, Peru's GDP has grown enormously. In 2006, GDP growth reached 8%, as compared to 0.2% growth in 2001. A large part of its growth is contributed to by its oil and gas industry. In 2007, the demand for hydrocarbons was 180 thousand barrels per day and the supply was 155 thousand barrels per day. The resulting 25 thousand barrel deficit makes the country a net importer of oil. However, s ince Peru's hydrocarbon exploration and exploitation has increased enormously, it is without doubt that it will
become a net exporter of hydrocarbons in the near future. With oil prices on the rise it is imperative that Peru reduce its trade deficit in order to protect itself from oil price volatility. One of the most exciting ventures in Peru's future is the Peru Liquefied Natural Gas project, expected to start operating in 2011. It will be one of the largest foreign direct investments in the country's history and Latin America's first liquefied natural gas export project. The project will cost US$3.8 billion dollars, and has already received US$300 million in funding from the International Finance Corporation, a member of the World Bank Group. Conditions of the loan include using an environmentally sensitive approach and providing beneficiary programs for the local communities. Peru also has deposits of natural gas totaling 16.1 tera cubic feet. The potential for this kind of hydrocarbon is immense, and Peru has definitely taken advantage of this. From 2004 to 2007, production of natural gas increased by 374%. This is largely due to the Camisea gas fields in Cusco, discovered in the 1980's. The Camisea pipeline runs from the Amazon, over the Andes, and finishes on the Pacific coast. Many companies are involved in this project, including PlusPetrol, a Peruvian oil and gas company. Canadian corporations are also beginning to invest in Peru. Recently, TransCanada Corporation has confirmed they are going to bid for the building of a new pipeline which is going to connect Peru's planned liquefied natural gas terminal south of Lima to the Camisea fields. The business opportunities available in Peru’s mining and oil & gas industries are exciting for a number of different reasons. Corporations invest in places where they can have a reasonable chance at long-term growth versus simple short-term growth. This is exactly why Peru is a great investment for Canadian companies. While there are still many challenges to be overcome, the advantages to investing in Peru’s oil and gas industry.
EXTRACTIVEINDUSTRIES
Top: JTC delegates with Julio E. Zavaleta and
Jose Noriega of Hazco . an environmental
company that contracts with natural resource
companies to assist in cleaning .
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Mining
Mining in Peru has for centuries been a core industry. The wealth in precious and base metals have contributed greatly to the development of the country as the Andes Mountains hold some of the richest and most diverse mineral deposits in the world. Peru is the number one producer of silver, and is among the top five producers of Arsenic, bismouth, copper, gold, lead, molybdenum, rhenium, tin and zinc.
Resources extracted in Peru are usually exported to foreign markets where they s u p p l y t h e d e m a n d s o f t e r t i a r y manufacturing; this resulted in mining representing approximately 40% of all Peruvian exports and indirectly a major source of foreign currency in Peru.
Government pol icy towards foreign investment allows Canadian business the ability to access natural resources using essentially the same process as domestic operators. This has led to significant investment in the Peruvian mineral industry. Foreign investment in the mineral industry is approximately $18 billion, and is the largest sector of foreign investment. Production has also been increasing steadily over the past 5 years. Production measured in dollar values jumped more than 20% in 2005-2006. Less than 6% of resources in Peru are being exploited, and just 10% of the country has been meaningfully explored. The raw value of unexplored potential, combined with the government’s openness towards foreign activity in the mineral sector, makes Peru one of the best mining opportunities in the world.
Talisman Energy Inc.
Talisman Energy(TE) is a Canadian-based oil and gas company that operates in countries across the globe. Its Peru operations are in the exploratory stage; light, crude oil has been discovered in Block 64 in Northern Peru. On August 11th, 2008, the delegation met with officials from the Peru office. Mark Dingley, Country Manager, said that the discovery of light oil presents a “significant opportunity” for TE. The main pipeline in Peru is being piped at 10% capacity; dilution from the light oil would increase the utilization of the pipeline and more oil could be exported. Talisman Energy is currently in an expansion phase with high potential for growth.
Barrick Gold
Barrick Gold(BG) is a Canadian mining company focusing specifically on the exploration and extraction of gold, and currently has two mining operations in Peru. Due to the environmentally sensitive nature of mining operations and its effects on the local communities, Guillermo Manrique, Corporate Responsibility Manager, spoke with JTC delegates about the integrative approach the company has taken in its CSR practices. BG helps the communities sustain themselves by building water filtration plants, irrigation systems, providing milk-producing cows, and reviving an old dairy factory.
Vena Resources
Vena Resources Inc. (Vena) is a Canadian junior mining company that operates out of Peru. Silvia Dedios, Business Development Manager , ga v e t h e d e l e ga t i on a presentation on Vena’s operations and CSR policies. Vena is comprised of four divisions: mining, clean energy, base metals, and precious metals. The mining division is the most developed with three joint venture projects currently underway. Vena is mining zinc and exploring for gold, silver, copper, uranium, and coal. Vena has a social investment budget that provides health programs, education programs, and training to the local communities.
Veraz Petroleum
Veraz Petroleum (VP) is a junior oil and gas subsidiary of True Energy Trust, a Canadian extraction conglomerate. Currently VP is in exploration phase with government agreement to explore block 126 in east central Peru. The delegation met with Victor Lay, General Manager, and came to the understanding that VP does place a strong emphasis on social responsibility and is already working with 24 communities situated along the Veraz pipeline to help bring the aboriginals greater understanding of the oil extraction process. Without government aid, Veraz Petroleum delivered healthcare assistances, legalizing the aboriginals and bringing in qualified teachers to teach full time.
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Team Huaraz: The Yurac Yacu Community Business Center for Human Development
The Yurac Yacu Community Business Center for Human Development is an institution currently under construction that aims to sustainability lift Peruvian families out of poverty. By increasing incomes through n e w b u s i n e s s o p p o r t u n i t i e s , a n d developing human abilities and community organization through education, the economic state of the region can improve. Initiated by the Andean Alliance, the community centre has already been in development for one year. The centre intends to achieve its goals through business services and human development programs that are mutually supportive.
The Yurac Yacu Business Center for Human Development is located within the territorial limits of the community of Rivas, at the base of the Cordillera Blanca Mountains, and on the edge of Huascarán National Park. The center will contain community operations including a mountain expedition service office and a neighborhood café, and presents significant potential for future business endeavors.
Over the long term, the programs will significantly improve the standard of health
in the community, and with the emphasis on poverty reduction education, a higher s o c i o - e c o n o m i c s t a n d i n g f o r t h e community is inevitable. This project will se rve as a cata lys t by wh ich the community of Yurac Yacu can integrate itself into the formal economy while retaining its cultural integrity. By addressing its needs with its own ingenuity, labor and resources, the community will progress e c o n o m i c a l l y . T h e i n i t i a t i v e a l s o compl iments ex i s t ing regional and m u n i c i p a l d e v e l o p m e n t p ro g r a m s designed to assist indigenous populations.
The Yurac Yacu Community Business Center for Human Development will provide o p p o r t u n i t i e s f o r t h e p r e v i o u s l y marginalized native community, typical of many in the high Andes. The Center’s construction allows for the locals to capitalize on opportunities and to utilize their own abilities to push themselves out of poverty, build pride and social capital in the process.
Team Huaraz: Contributions
JTC’s activities in Huaraz fell under three broad categories: aiding the construction of the Yurac Yacu community centre pro ject ; p roduc ing a f ina l repor t ,
GIVINGBACKTOTHECOMMUNITY
Far Right:
Right: JTC delegates learning about the local Ancash community in Huaraz through working with children.
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composing a video to outline and promote the Yurac Yacu project to interested parties, and experiencing the local culture and rich landscape which has played a major role in compiling this research.
JTC’s contribution to the Yurac Yacu Community Centre project consisted mainly of breaking ground for construction work. The team helped in manufacturing of adobe blocks – essentially sand, clay, and straw mixed together with water - and in transporting the dried blocks to storage areas. JTC members seized the ample opportunities to participate in the multi-step manufacturing process. Work began with the excavation of the ground, and involved digging up to nine feet deep within a hillside. JTC was able to help loosen the earth with pickaxes, shovel the dirt into wheel barrows, and transport this principal component to the next station. After excavation, JTC helped with sifting the earth to filter out larger stones and clumps through a large sieve. This finer dirt was mixed thoroughly with water and straw, which was chopped using a machete by a JTC member. The very moist and heavy mixture was shoveled into another wheelbarrow and routed to the drying grounds, where the mixture was fitted into square molds. These molded shapes were then left for up to six days to dry.
After the bricks were sufficiently hardened by the Ancash sun, JTC then helped to transport them to a nearby school which was being expanded to serve as an interim community centre until Yurac Yacu is completed. From the drying grounds, JTC members carried the large 30-40 pound bricks by hand or wheelbarrow to the loading zone which stood at approximately thirty meters away. Moving these bricks was a true test of strength and endurance for the JTC teammates. After piling the bricks around the loading zone, the team created a human chain to transport them one by one onto a truck. The truck was then guided down one of the small dirt roads from the community to the school. The chain was soon reformed at the school through coordination with local workers and JTC members, and the bricks were deposited for the workers to continue constructing new walls.
The expansion of the school consisted of the construction of new rooms. For JTC
during its time in Huaraz, this meant the construction of the inner wall and window frame. This construction is meant to create a new classroom and an open-air cooking room. A mortar was mixed with dirt and water from a nearby stream that sourced from the glacial formations far above the community. JTC members helped with mixing the mortar and laying the bricks.
The second activities category, the composition of a report and video, was more familiar for the JTC ambassadors. While the Yurac Yacu project lacked n o t h i n g i n v i s i o n , p a s s i o n , a n d commitment, it had only reached less than 10% of its projected fund requirement. Although the owner of Lazy Dog Inn, Wayne Lamphier, had worked extensively for CIDA in the past, the search for Canadian support by his local NGO, the Andean Al l iance, has gone largely unheeded. JTC and Global Vision have partnered with the Andean Alliance and are working to apply for CIDA funding through its Canadian NGO status. The JTC Huaraz delegation has also produced a report and a short video for presentation to CIDA in hopes of achieving the financial and resource support that could shorten the project’s completion time by several years.
The video, report, and proposal were composed based JTC’s experiences in Huaraz and primary research gathered from interviews with the locals and the founder of the Andean Alliance. JTC delegates have spoken with community leaders to gain insight into the local perspectives on the issues and challenges of the community. In an effort to capture the reality of the people, photographs and video footage were collected that reflected various aspects of their region and life.
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Top: Glacier in the Andes mountains.
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JTC was able to make a real contribution to the construction and labour efforts, and at the same time was able to analyze the project and the Yurac Yacu community in o r d e r t o m a k e a n i m p a c t o n a governmental and international level. Throughout the week, JTC was able to truly connect with the community, and the results of this partnership have laid the foundation for the future successes of Yurac Yacu and of Junior Team Canada.
Team Huaraz: Commitment to Give Back
The team will provide a major window into the Peruvian culture for those at home in Canada. Delving into the lives of the indigenous people of the Andes Mountains has allowed JTC to capture experiences that will contribute to three goals:
1. Promote and present experience to CIDA’s contacts in Huaraz, Peru through the official JTC video of the mission as well as the finalized report in order to support Andean Alliance’s bid for funds and resources.
2. Maintain contact with key members of the communities that JTC has interacted with. Promoting an open two way communicat ions between the two countries could allow further development into technology transfer and economic development.
3. Advocate and initiate fundraising programs for the Yurac Yacu region, and centralize focus on community building initiatives including materials, labour and
pursue ways to establish a library for the local school.
Team Puno: Entrepreneurship/Leadership Program
The delegation that traveled to Puno found that most youth in the rural regions surrounding Puno had industry specific skills related to their businesses. However, they did not have the entrepreneurial skills to effectively run these businesses. JTC is developing an online entrepreneurship course that will be offered to these youth. This course will cover legal aspects of business, sales, management, preparing financial statements and other pertinent information for the young business owner to be successful. Upon completion of the online course, graduates will form Junior Team Peru and will travel to Canada to learn about their respective industries.
Team Puno: Giving Back
There are several goals that the Puno team aims to accomplish:
1. Collaborate with organizations who are currently working with women and youth in the rural regions surrounding Puno to i n t r o d u c e a n d f a m i l i a r i z e t h e Entrepreneurship/Leadership Program with the various teachers using Train the Trainer Adult Learning Model
2. Build a Golden Rolodex of local women, children, and young adults in the region of Puno and surrounding rural communities to target and attract teachers to the program. These teachers have been identified throughout the 2008 mission and have agreed to work with the team on this project (Patricia de Durant, Owner of Posada Don Giorgio Hotel and President of Women’s Section of Puno Rotaract Club has agreed to assist the team with the delivery of the program).
3. Upon completion of 1 and 2, the team will then introduce to the said audience to global leadership. Entrepreneurial training will be provided to the women and youth where they will work through online workshops at different levels with their trainers (One part of this project will include
Top: Children from elementary school in
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a Women’s Empowerment Program to encourage, motivate, and boost the self-esteem of rural women. This will include breaking barriers facing these women and also encouraging risk taking).
Upon completion of the above objectives, a Junior Team Peru will be formed and will travel to Canada to learn about Canadian Practices in their respective industries. JTC will then evaluate the program, and will follow up with trainers to ensure the graduates are selling their products and making the connections necessary to prosper in their communities and in their industries. The program will be continuously revamped to ensure the best product is being delivered.
Team Lima: APEC 2008 Team Briefing
The experiences that JTC shared on behalf of Global Vision with Talisman Energy provided them with the opportunity to see first-hand how some Canadian companies go a step beyond the competition. They also were given valuable knowledge on CSR in different countries and how these initiatives greatly impact communities with limited access to education, health care, training, infrastructure and other social programs to benefit the whole community in becoming economically sustainable. Specifically in Peru, where no treaty land a g r e e m e n t s e x i s t o n b e h a l f t h e government, it is up to companies like Talisman Energy to initiate social change and implement a higher standard of living with communities that they partner with. The team members that visited Talisman Energy’s Block 64 operations have a mandate to educate and brief the 2008 Peru-APEC team on the experiences and knowledge gained in the Amazon Rainforest. This initiative will be achieved though a program structured to allow graduates of the August 2008 JTC Peru mission to communicate on a one on one basis with the upcoming team of Canadian
youth that will be attending the APEC forum this November. Only in this way will APEC team members be able to gain understanding on the unique experiences that this JTC team have undergone.
For example, Karl Zadnik, one of the JTC students from Pinaymootang First Nation, Manitoba got to share his experiences on how CSR is carried out in Canada with a leader o f an ind igenous Peruv ian community cal led Achuar. Through translation, the Achuar leader was able to re lay and share h i s own personal experiences as a native, and ultimately they both were able to relate to one a n o t h e r o n a c o m m o n l e v e l o f understanding. This experience is unique and valuable, and can only be recreated though the initiatives and mandate in place to brief and prepare the 2008 Peru-APEC team.
Team Lima Giving Back:
Two initiatives will be brought back to Canada from the JTC Ambassadors, sharing their experiences with the business community, Aboriginal community and a host of sponsors. Valuable information will be shared based upon the Achuar nation, economic development, CSR, and future business opportunities in Peru. This will be carried out through meetings, conferences, workshops, and written reports readily accessible to other back home.
1. Share their experiences on corporate social responsibility and aboriginal issues in Peru with the Canadian community Eg. local aboriginal communities, businesses, universities, and the municipalities.
2. Canadian Corporate social responsibility practices are enthusiastically endorsed by the gover nment of Peru as major contributors to their sustainable economy. Thus, JTC intends on informing Canadians, especially young women investors, in the shareholder value of such companies.
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Economy
Peru has a robust economy that has weathered the recent slump in the global market. From 2002 to 2006 Peru’s Gross Domestic Product grew at an average rate of 6%. In 2007 growth peaked at 9%, and is expected to stay strong at 7.2% and 6.8% in 2008 and 2009. All of these growth rates are well above the growth in other South American countries; in several years Peru has grown at twice the rate of the rest of the continent. The GDP per capita of Peru is also at an all time high, growing 8.1% in 2007 to levels well above its previous peak over three decades ago.
Despite rapidly rising commodity prices, inflation in Peru has remained relatively low. In 2005, 2006, and 2007 the Consumer Price Index for Peru increased 1.6%, 2%, and 1.8% respectively. Inflation is expected to be roughly 5% for 2008. The rise inflation for 2008 in Peru is a consequence of a general increase in the price of goods and services world wide. In order to contain inflation, the g o v e r n m e n t h a s i m p l e m e n t e d a n aggressive monetary policy involving interest rate hikes and increases to the reserve requirements of retail banks. Interest rate increases will encourage the public to save their money in the bank or to buy bonds, and to borrow less money. The increase to the amount of money that all retail banks must hold at the central bank will reduce the amount of loans any bank can issue. The recent growth in GDP in Peru has been fuel led by r i s ing consumpt ion and investment. Private investment has grown faster than public investment largely due to the attractiveness of the mining, oil and gas , and energy sectors . In 2007, investment in the mining sector was US$17.9 billion, and investment in oil and gas was US$10.6 billion. Peru’s nonrenewable resource sectors are still in their infancy and have not yet been saturated, indicating that there are substantial opportunities for investment in these areas. Total investment in Peru for 2007 was over 25% higher than in the previous year.
The mining industry is the largest contributor to Peru’s GDP and its growth relies on direct investment as opposed to exports. As a result , the economy is much more susceptible to volatility in interest rates than it is to volatility in commodity prices. This is challenge for the government because it has a restrictive monetary policy designed to control inflation. The reference rate is currently 4.75% in Peru, and has already been increased by 50 basis points in the first half of 2008. The rising interest rate may be a deterrent for investors who need to borrow capital to start up operations.
The Peruvian government has been making strides over the past decade to increase its country’s Balance of Trade. Tariffs and non-tariff barriers to trade have been reduced and efforts have been made to negotiate free trade agreements with countries in North America, Asia, and Europe. The graph to the left breaks down Peru’s total exports and to which country they were exported to. In the first half of 2008, 18% of Peru’s exports went to the U.S., 12% to China, and 11% to Switzerland. Other major trading partners include Canada (7%), Chile, Spain, Italy and Japan. Peru’s major exports are copper, gold zinc, f ish, asparagus, potatoes, and coffee. The main goods that Peru imports are petroleum, plastics, machinery, vehicles, iron and steel, wheat, and paper. 20% of Peru’s imports come from the U.S., 10.7% from China, 9.8% from Brazil, and 5% to 6% come from the other South American countries. In 2007, Peru imported CAD $331 millions of goods from Canada, and exported CAD $2.1 billion of goods to Canada.
Peru’s Balance of Payments accounts reflect the recent strength of its economy. Peru boasted a current account surplus of 14% of GDP and positive trade balance of US$7 million. 2007 was the first year that either of these accounts has been positive, indication that the amount of cash flowing into the country is more than it ever previously was. This is largely due to increased foreign investment as well as growth in exports.
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Last year the Peruvian government reduced public debt to less than 29% of GDP, down from 33% in 2006, and increased its foreign currency reserves to US$24 million. The Peruvian government is utilizing its country’s recent prosperity by making decisions that will help sustain its economy in the long run.
T h e 2 0 0 8 A s i a P a c i f i c E c o n o m i c Cooperation will be hosted by Peru this year. Leaders from twenty countries across the globe will attend the forum to discuss international business and facil itate relationships between member countries. By hosting the forum, Peru will have the chance to showcase itself as a viable place to do business in. The result is expected to be significant growth in foreign direct investment in Peru, as well as a st rengthening of the mult i lateral relationship between Peru and other member countries.
Political System
Peru’s current legislative system was established as a result of constitutional reform in 1993. It is a unicameral system, meaning the executive is constitutionally separated from the legislative body. The single legislative body, the congresistas, is made of 120 representatives who are elected by a proportional representation system. This has tended to create minority governments. Similar to most liberal democracies, there are few restrictions on who can stand for office. This, combined with a proportional representation, has allowed for some minor parties to gain seats in the congresistas.
The head of state in Peru is the functioning, rather than ceremonial, leader of the executive branch of the political system. The pres ident ia l sy s tem in Peru i s const itut ional ly separated from the legislative body; the president does not sit in the congresistas. The president is the head of government, appointing ministers and exercising power over the functioning of the state. Under the 1993 constitution the president retains a veto over the legislature. T h e e l e c t i o n o f t h e p r e s i d e n t i s accomplished via a dual ballot run-off system, in which voting is mandatory for the
public. Two voting days are used, on the first voting day all candidates are on the ballot; on the second, only the two who had garnered the largest number of votes from the first vote are on the ballot. This second ballot requires a simple majority.
Peru is not a federal state in the same manner as Canada. The country is divided into 25 regions, inside of which more than 190 provinces function. Although power is being decentralized to these regional authorities, the process is hampered by a lack of human and logistical capacity. Businesses operating in some parts of Peru may encounter conflict as some regional and central policies towards market capitalism and foreign investment differ.
In Peruvian political culture, the term p o l i t i c a l c e n t r a l i z a t i o n h a s t w o appl icat ions . S t ructura l ly , po l i t ica l centralization refers to the consolidation of power in the executive. Politically, it also refers the identification, by the Peruvian public, of the progression or regression of the country with a single political actor, namely the president. This personality driven identif ication has
s ignif icant impl ications for pol it ical stability and the rate at which Peru’s governing structures change.
The first 2 years of Peruvian independence saw the rule of 7 different leaders; this typifies the rapid nature of change that has been a persistent trend in Peruvian pol i t ical history. Both pol i t ical and structural factors combine to create a pol i t ical culture apt for rapid and potentially radical change. Consolidation
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Top: View of Lima.
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associated public identification of the country’s progress with the president, combine with constitutionally mandated presidential terms limits to ensure a sudden and significant, if not severe, change every 5 years. These factors, acting concurrently with a political culture that commonly displays expressions of political efficacy, in the form of populist protests and strikes, also contributes to the increased likelihood of radical change in times of public dissatisfaction.
The political stability outlook for Peru remains good but potentially concerning. The confliction of historical political trends with constitutional safe guards should not be seen as an inevitable creator of negative change. Consecutive terms of open market oriented leaders and like minded legislators suggest that political stabil ity is not an exigent problem. Supporting this is the recent expansion of Free Trade Agreement’s with Canada and other countries in Latin America and around the world. However, despite falling poverty rates and increasing GDP Peru risks developing resentment towards government policy due to increasing income disparity. Potential investors should look closely at the long-term stability of the investment friendly polit ical climate prior to substantial involvement in the Peruvian economy.
Environment
Peru, located in Western South America, is home to one of the most diversified natural environments in the world. To the west, Peru’s coastal plains border the southern Pacific Ocean. In Central Peru, the high Andes Mountains make up much of the terrain; while to the east, Peru is home to the jungles of the Amazon rainforest basin. The varied geography and climate has resulted in a high biodiversity range in the ecology of Peru, with over 20,000 species of plants and animals. Currently, Peru is one of the 17 mega-diverse countries in the world, and together with these countries, makes up 80% of the world’s biodiversity.
With the country undergoing significant economic growth, there are increasing environmental impacts as a result of business operations. To prevent negative
impacts on its natural resources in environmentally sensitive regions and slow down pollution in urban areas, the government of Peru has developed a national environment agenda focusing on priority issues on the environment. These issues include education, clean production, environmental management, and use of natural resources. Addit ional ly, the government is increasing its focus on e n v i r o n m e n t a l p r o t e c t i o n a n d conservation. In May 2008, President Alan Garcia Perez announced the creation of a Ministry of Environment, responsible for e n v i r o n m e n t a l p o l i c i e s a n d t h e management of sustainable natural resource usage.
Currently, Peru has high environmental impact regulations and standards that are comparable to international standards in stringency. The Canadian government and industry are both active in promoting environmental policies in Peru. Not only do many companies lead by example in setting high standards of environmental practises, the Canadian government also provides assistance to the Peruvian government in developing domestic environmental protection and conservation expertise.
Business Climate
The Peruvian business climate is growing, strong, and open to investment from both fo re ign and domes t ic en t i t ie s . I t s government is open to both trade and direct investment with other countries. Both the U.S. and Canada have Free Trade Agreements (FTA) in place that will enable companies to expand their operations abroad and give them a competitive advantage. The agreements will lower tariffs and non-tariff barriers to trade and increase market accessibility in all industries. The top five growing industries in Peru exports are: 1) Mining – US$17,328,400 2) Oil & Gas – US$2,248,300 3) Textiles – US$1,729,800 4) Agricultural – US$1,503,300 5) Fishing – US$1,456,000
The Canada-Peru FTA will allow Canadian exporters to maintain their competitive
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position, as Peru has agreements with the U.S. and other South American countries. If Canada had not entered into the FTA with Peru the market would be lost to those countries that did. The Canada-Peru FTA will eliminate tariffs on 95% of Canadian exports to Peru. Some of the products that will be tariff free include wheat, barley, lentils, beef, paper, eggs, and sugar. Wheat, machinery, and paper account for the largest percentage of Peruvian imports. The FTA should thus have a significant, positive effect of Canadian-Peru business.
Financial ServicesPeru’s banking system is composed of 13 commercial banks and several municipal and rural savings banks. There are also three government-owned entities: the Banco Central de Reserva del Peru (BCRP, the Central Bank), a deposit taking institution, Banco de la Nacion, and a d e v e l o p m e n t b a n k , C o r p o r a c i o n Financiera de Desarrollo (Cofide).
MiningMining is the most important source of export revenue, averaging around 50% of total export earnings in 2003-2007. This industry has grown to an estimated US$5.191 billion, as high commodity prices in the world and the strong demand for gold, copper, zinc, and other base and precious metals has encouraged foreign companies to expand their presence here.
Oil & GasTotal investment in Peru’s petroleum sector in 2007 reached $960 million compared with $687 million in 2006. The majority of investment projects are contained within the Amazon basin in the eastern part of the country. Canadian companies have great opportunities in the exploration and production of hydrocarbons as Peru’s natural resources remain untapped.
AgricultureExports of agri-food products from Canada to Peru increased by 39% in 2005, and by 25% in 2006. The exports of wheat and pulses account for most of the growth. Peru’s increasing economic prosperity also presents new opportunities for Canadian exporters of processed and finished products. These
opportunities require technical knowledge, services and equipment that Canadian companies can provide.
Fishing Peru is the world’s largest fishmeal exporter, producing one-third of global supply, and is the second-largest producer of fish for human consumption. Most investment in the fishing industry is related to replacing fleet and on new high-technology plants that use low-temperature steam-drying to produce premium-quality fishmeal. The meal i s used fo r f i sh - fa r ming and aquaculture and carries substantial price premiums which Canadian companies can utilize as opportunities to expand in.
Information Communications Technologies (ICT)Peru’s telecommunications market is expanding at a rate of 8% annually and reached over US$2 Billion in 2007. While having a strong demand for Voice Over Internet Protocol and other wireless technologies such as Wi-fi, VSAT and Wimax; these all have applications in both the private and public sector. There will be increasing opportunities in cellular, phone, internet and long distance services in Peru’s market for 2008.
EnvironmentFuelled by the government’s increasing f o c u s o n t h e e n v i r o n m e n t , t h e environmental industries sector is rapidly developing in Peru, and is expected to experience strong growth in the next few years. While the domestic industry is still in infant stages, Peru is showing a great appetite for foreign investment in this sector, particularly in research and development of new technologies that are adaptable for the Andes highland regions. Canadian companies have the experience and expertise necessary to be active players in the industry, particularly in the environmental consulting, water treatment, a n d s o l i d a n d h a z a r d o u s w a s t e management sub-sectors. As Peru is currently a net-importer of oil, there are also opportunities for growth in the renewable and alternative energies industry, and the Government of Peru has demonstrated strong interests in solar and wind energies.
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Day 1: August 11th
Team Lima started their mission to explore the oil and gas industry in Peru, with a focus on Canadian companies and their Corporate Social Responsibility initiatives. Team Lima’s project consists of work inside of Lima, as well as a two-day excursion to Block 64 of Talisman Energy’s drilling operation in Northern Peru.
Dur ing the day the Team had the opportunity to see a drilling rig that is being tested in Lima. Mel Knezevich, Drilling Superintendent, Talisman Energy - Peru. gave us a tour and explained how the rig operated. Mr. Knezevich was able to convey the operational and logistical challenges which face the oil and gas sector in Peru.
The rig will be assembled in Lima, tested to ensure that everything is in proper working order, disassembled, then transported to the site for reassembly and operation. Talisman Energy had difficulty finding a rig that could meet their needs, the ability to drill to over 19,500 feet. They were able to acquire the rig which and will spend $9 million to have it transported to the drilling site. The impressive part is not the cost of the transport, but the logistical challenges of actually accomplishing this mammoth
undertaking. There are no roads through the jungle, and Talisman has made a commitment to the local communities that they won’t build any as this would have detrimental effects on the environment and the indigenous way of life. Therefore, the rig has to be transported 2100 kilometers, in pieces, by truck, boat, and helicopter to the drilling site
The team also had the opportunity to ask questions to Doug Maddams, Corporate Responsibility Advisor, Talisman Energy - Peru. Mr. Maddams was engaging and did not shy away from answering questions regarding Talisman’s activities in sensitive areas like the Amazon rainforest. The team appreciated his candidness and was pleased by the frankness of his answers.
Day 2: August 12th
Today Team Lima met with executives from Talisman Energy, to review their operations. Mark Dingley, Country Manager of Talisman - Peru, opened the meeting with an exciting and frank review of Talisman’s operations. We then heard from Doug M a d d a m s , a n d o t h e r T a l i s m a n representatives on the operational, community relations, environmental, and safety related challenges faced by Talisman’s Peruvian operations.
APPENDIXBDETAILSONMISSIONLIMA
Far Right: Aerial view of the Andes Mountains.
Right: JTC delegates enjoying the helicopter ride over the Andes Mountains and the Amazon Rainforest.
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The majority of the meeting was dedicated to understanding Talisman Energy’s CSR activities and broader policies. Team Lima was encouraged by the conduct of Talisman Energy and the assertion that they use Canadian standards for health and safety as a minimum benchmark.
Team Lima also attended Interational Youth Day in Peru where they briefly attended a youth trade show prior to taking audience of a presidential address. Team Lima arrived at the Palacio de Gobierno, and was hurried past the crowd of 3,000 youth who had assembled in the courtyard of to hear President Alan Garcia Perez speak. Sitting in the fifth row of VIP seating we were but 50 feet from the President when he gave a riveting speech on the future of Peru and the role today’s youth have in its shaping. When the President spoke he had so much passion, so much energy, and so much conviction that the team understood the message regardless of language barrier. The group also had the opportunity to meet casually with Luciana León Desarrollado, the youngest congress women in Peru. She conveyed her interest in the program and the professional appearance of the group.
Day 3: August 13th
The view of the Amazon Rainforest from thousands of feet in the air is one of the most breathtaking views in the world. Team Lima left bright and early for Block 64 of Talisman Energy’s exploratory operations in Northern Peru this morning. They boarded a one hour flight out of Lima to Tarapoto before spending two hours in a helicopter at low altitude flying into the heart of the Amazon Rainforest.
The rainforest was endless trees, from horizon to horizon and everywhere in between. It was easy just to look out the window and imagine all the possible things that could be going on underneath the impermeable green canopy below us. Sometimes the forest was rolling hills that expanded forever, and sometimes it was jagged mountains. Other times it was so completely flat that it could rival the prairie landscape of Saskatchewan.
Immediately upon arrival the team set out upon a review of the operational functioning of the camp. Team Lima toured the base camp at Sargento Puño and asked as many
questions about Talisman’s operations and CSR practices that we could. Mel Knezevich, escorted the team, frequently facilitating the teams requests to halt operations to permit the team to safely review an area. There were hours of film and countless pictures taken by the team members during the 22 hours they spent on site. Mr. Knezevich and other members of the Management team participated in video taped interviews on issues ranging from indigenous relations to proper use of Personal Protective Equipment (PPE).
That evening the Lima Team took the opportunity to sit down to dinner with the management team, continuing their discussions regarding what they had seen earlier in the day. It was decided at dinner that a member of Lima Team would review health and safety data and policy in the morning following a 6:00 a.m. site-wide safety meeting.
Day 4: August 14th
One member of the Lima Team rose early at 5:30 a.m. to attend a site wide safety meeting, where general policies towards safety were reiterated by the management team. After this safety meeting this member of the team reviewed the site’s health and safety reports and hazardous material lists. The rest of the team rose only a few minutes later to watch the sunrise over the Amazon Rainforest.
Lima Team spent a portion of the morning compiling footage for a video presentation to be given the following week. This footage focused on the operations of the base camp, as well as the elements of social responsibility that the team had witnessed. Team Lima filmed the medical office where Talisman provides free medical services to the surrounding communities, the water purification plant, and the dock on the river where barges stop to unload cargo.
Team Lima was able to interview the local indigenous population’s Community Correspondent for Talisman Energy. He was a 24 year old Achuar man who was elected by his community to represent their interests to Talisman. There is always the debate that dr i l l ing for o i l in developing countries exploits the people of the region more than the resources. The correspondent told the team that many of the local people have hopes for
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opportunities, and to get an education outside of the rainforest. It was conveyed to JTC that they perceived the assistance offered by extractive companies, such as Ta l i s m a n E n e r g y , a s o n e w a y t o accomplish these goals.
Team Lima narrowly avoided being grounded by poor weather on their return flight to Tarapoto. Despite the incoming weather the team was able to view the
new drilling site, Situche Norte, from the air. The flight back to Lima was bitter sweet. The team was excited to start working on compiling and verifying their findings, but missed the enormity and awesomeness of the expanses they had been witness to in the rainforest.
Day 5: August 15thIn the morning we met with Barrick Gold. We learned about Barrick Gold’s CSR practices from Guillermo Manrique Franco, Gerente de Asuntos Sociales y Desarrollo Sostenible, and Katia Castillo Paredes, Lawyer. Barrick Gold’s CSR practices are integrated with the community in order to ensure sustainability of the initiative. For example, Barrick Gold will implement a water filtration system that leads to an irrigation system, rather than distribute food or make cash transfers. When the company abandons the site, the local people will still benefit from the initiative.
JTC gave a presentation based on the previous week’s findings to Mark Dingley and Doug Maddams. The group entered into a discussion with Mr. Dingley and Mr. Maddams about the public perception of CSR and the need and challenge of conveying a complicated message to a
modern public obsessed with the simplicity of abbreviated ten word answers.
In the afternoon the team met with Silvia Dedios, Business Development Manager, Vena Resources Inc. Vena Resources is a Canadian junior mining company that is in the exploration and preproduction stage of development in Peru. Vena Resources’ operations consist of four divis ions: operational mining, clean energy, base metals, and precious metals. A small budget is dedicated to social responsibility initiatives, even though the company is still largely in the exploration stages, and doesn’t have a lot of capital.
Day 6: August 16thTeam Lima spent their first day with out meetings working hard on JTC’s market intelligence report, and on their video presentation which was to be presented at the embassy the following week. The team was invited to have dinner with a student at USIL, and his family. The night was a traditional Peruvian affair, with all the trimmings and sounds of a Peruvian dinner. The discussions topics ranged from the political stability of modern Peru, to the best way to prepare cebiche. The dinner demonstrated the importance of family values in Peruvian culture. The host’s parents, sister, aunt, and uncle were all there to meet us and have dinner together. The team learned about Peruvian culture on a real scale, not just through abstract statements about their society and anthropology.
Day 7: August 17th Team Lima continued to work towards creating a video chronicle of their activities during the past week, and began work to finalize their written reports. The reports concentrated on Peru’s investment climate, for companies and entrepreneurs to gain a perspective on potentially expanding operations in Peru.
The team met infor mal ly wi th Mel Knezevich in the afternoon. This provided the team another opportunity to confirm their understanding of Talisman Energy operational and CSR related activities. They had the opportunity to learn about the oil and gas industry as a whole and gained insight into learning about career paths, and 5 year plans for those who are about to enter/exit University.
Top: JTC delegates at the Talisman Energy
base camp in Sargento Puno, after a meeting
with the Achuar community
correspondent (orange hard hat).
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On August 11, 8 members of Junior Team Canada arr ived in the Yurac Yacu community, located at the base of the C o r d i l l e r a B l a n c a M o u n t a i n s , approximately 8 km from Huaraz. Yurac Yacu is composed of the upper regions of the adjacent communities: Rivas and Cachimpampas. The populations of these two areas are largely concentrated in the lower regions, and these upper regions share more commonality with each other than with their respective communities.
The goals of the team were to interact with the indigenous people of the community, and to learn about the area and the dynamic situations that affect this particular region. The team has been conducting primary research over the duration of the mission through interviews and personal observations, the results of which have been delineated in this report.
Economic Situation
Over the past decade, Peru has been e x p e r i e n c i n g r a p i d e c o n o m i c advancement in its metropolitan areas, but i t f a c e s a m a j o r c h a l l e n g e o f decentralization. Traditionally, the economic activities of Peru have been centred in Lima with the rural communities
not receiving benefits from the country’s economic gains. However, given the drastic improvements in Peru’s economy and the high probability of its continued impressive performance, redistribution of wealth has now become a major focus for communities such as Yurac Yacu.
Yurac Yacu’s own wealth and income generation has been largely dependent on agriculture. Traditional farming methods are still in use: bulls for tilling the fields, donkeys for transportation, sheep wool, cows for milk, and pigs, roosters, and chickens for meat products. Wheat is threshed by horses that are made to run in a circle as people throw it under their feet. Most of the local people own dogs for the protection of their homes and their livestock.
The community’s vision for itself is to decrease dependence upon subsistence agriculture and move towards a more industrially competitive environment. Tourism represents a crucial component to that goal. The Yurac Yacu community is located at the base of the Cordillera Blanca Mountain range, which contains the highest peak in Peru. It is a major attraction for climbers and trekkers from around the world who come to enjoy the natural beauty the land has to offer. In
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Far Left: JTC delegates hiking with locals.
Left: Building the community.
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close to the modern conveniences of Huaraz. Yurac Yacu is located only 30 minutes outside of Huaraz, where there are bustling markets and vendors. Political BackgroundT h e p o p u l a t i o n s o f R i v a s a n d Cachimpampas are concentrated in the lower areas of each community. Historically, this has resulted in the oversight of the upper region’s concerns and the marginalization of its people. Consequently, one of the
primary struggles for the Yurac Yacu community is to achieve proper political representat ion in order to benef i t appropriately from government funds designated for their respective communities.
The Land
The Ancash earthquake of 1970 was devastating to the community, and has left the locals with a feeling of pessimism about home construction and security measures. Since the area is seismically active, infrastructure projects should be designed with enough structural flexibility to manage stress from movement. Many of the residents live between 3,400 and 3,700 meters above sea level. The mountains and glaciers present problems when melting ice overflows the lakes.
The housing in Yurac Yacu is primarily constructed using adobe blocks, which consist mostly of mud. Due to material restrictions in the surrounding area, such as the lack of sand, these blocks often lack reinforcement and stability. Seismic activity in the area poses inherent risks in this type of construction. As a solution to this problem, the Yurac Yacu community centre will be
built with blocks reinforced with chicken-wire for increased stability and safety.
Community residences are often spaced far apart, so each family has privacy. H o w e v e r, i t i s c o m m o n f o r t h r e e generations of a family to live together within a single adobe block home. Small straw structures are built outside of the home for washing animals.
Currently, a major priority within the Cachimpampa community is to help local families gain title over their lands. These titles serve to ensure inheritance, ownership, and the right to monies received from the sale of the land. In addition, land titles will enable the use of land as leverage for capital in order for land owners to initiate business ventures and fuel the local economy. As of yet, this potential is untapped, and few members of the community have shown interest in producing capital from their property. However, obtaining land titles is a vital step towards the formalization of the local economy, and will provide a basis of capitalistic ventures in the future as the community becomes more industrially advanced.
Health Care
The local diet is composed largely of simple carbohydrates. The primary staples are rice and potatoes, and people often dine on hot peppers from the area to help with altitude sickness. There is a local grain product called Lino, which is toasted and milled by locals for sustenance. Lino is f requent ly mixed wi th wheat, and sometimes sugar, as a replacement for a type of bread called Chachca. Meat is typically eaten twice a week. Cooking in Yurac Yacu often involves a fire pit in the ground; it is the easiest way to prepare a fire. Because of this method of preparation, large pots of water and food are often boiled on the ground, leaving children prone to serious harm.
Moreover, the cost and distance of healthcare act as major barriers between the local indigenous population and medical treatment. Often parents will not have the means to treat their children, leaving them with lifelong injuries that could easily have been treated. Partly as a result
Top: Tractor used at the Talisman Energy base
camp.
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of largely inaccessible healthcare and medical knowledge, many locals still believe in traditional healing, such as the medicinal properties of glacial ice.
Drinking water is also an issue, even though the water situation has improved in recent years. Water flows into the community through cement canals, separating the water from the dirt. The remaining problem is mainly that this water is used for purposes as ide f rom d r ink ing that se r ious l y compromise its purity. The same water is used to dispose of waste and excrement, wash animals and children, and to do laundry. In addition, the maintenance of the irrigation system is taken lightly, with a handful of chlorine being added at the source once a month, and the tanks being scrubbed out once every six months. In surrounding communities, residents are moving towards having a single tap in their houses. However, in Yurac Yacu, residents still do not have running or hot water.
In terms of dental health in the Yurac Yacu community, the majority of locals do not brush or floss their teeth due to financial restrictions. Local residents uniformly state that the vast majority of the population experience dental problems.
One of the first observations the JTC team made upon arriving in the Cordillera Blanca Mountains was that over half of the residents had metal teeth replacements due to poor dental care. Upon further research, it was clear that the same barriers to treatment mentioned formerly applied to dental health.
As expected, local residents do not have any kind of insurance plan or public policy. The expensive procedures the locals undertake, including cleaning, extraction, and replacement, are a testament to the poor state of the dental health care system, revealing how critical educating the community on dental hygiene truly is. Preventative care would eliminate the need for expensive procedures, by placing more emphasis on personal hygiene rather than simply fixing problems when they arise. Many locals undertake the expensive procedure of instal l ing metal teeth replacements, often paying up to NS 200, over a month’s income. Educating the locals on the importance of maintaining
hygiene and having proper preventative care could vastly contribute to the social and net growth of the community.
Education
The Yurac Yacu community faces some unique challenges in education, not only in the lack of it amongst its members, but also in the problems that are found in obtaining a formal education. Most adult residents in the community have completed primary education, but very few have progressed further into secondary education. The situation is improving for the younger generation, as most youth will attend school up until the completion of the secondary level. However, very few will consider a formal university education.
The youth of Yurac Yacu attend ‘Maria’, the local public school that includes primary as well as secondary schooling. The school is a 30 to 40 minute walk from the community. There, the students study mathematics, language, science, arts, physical education, and, as they proceed into secondary school, English. A typical student’s life at Maria involves class from 8:00 am to 1:00 pm. Upon their return home, students spend approximately two to three hours studying and completing assignments, and afterwards will help their families perform domestic or farming chores. Although most youth do attend school, they do so primarily due to c o n v e n t i o n , a n d h a v e a d d i t i o n a l responsibil it ies and roles aside from academics. In fact, success in academics is not nearly as emphasized in this community as it often is in Canada. Many families do not motivate their children to succeed in school or to attain a university education. Some prevailing perceptions contribute to this attitude: firstly, that a university education may not be useful; secondly, that food and a small income, enough to buy necessities, is enough. Many students share this attitude, and thus are not self-m o t i v a t e d t o a c h i e v e a c a d e m i c excellence and a university education. Financial limitations pose a problem as well. Even though public universities do not charge tuition, costs for room, board, and transportation represent a f inancial obligation that many families are unable to make. Scholarships to help reduce costs
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The underdeveloped public educational system is yet another deterrent. Although teachers at Maria must have a university education themselves, the curriculum is insufficient for graduates of secondary school to pass the main entrance exam for university. For Clodoaldo, a local youth who attends university in Huaraz, it was necessary for him to take additional classes at a private academy post graduation in order to succeed in the entrance exam. The impact on the community from the lack of education amongst its members can be seen in the need for development in areas such as personal health and the economy. Training is required for the community leaders to enable them to make more informed decisions concerning issues that the Yurac Yacu faces. Technical knowledge and new management methods are needed to address problems in agriculture - currently the community’s main economic activity. Information on nutrition and hygiene are integral to the personal health of individuals within the community. Familiarization with modern business concepts and practices is vital to entrepreneurship. In short, education beyond the secondary level is part of the foundation for development, and it is largely absent amongst the population. However, the solution is not as simple as
sending local youth to receive education in metropolitan areas. In fact, on its own that action has negative effects on the community. Local youth most often do not return after a university education because there are little or no career opportunities for an educated individual within Yurac Yacu. Al ready, the community faces the challenge of a shrinking population as families relocate to Lima or elsewhere due to the diminishing income generation through agriculture. Families prefer that their children remain in the community, even if at the expense of a university education and a professional career in a metropolitan area.
The Yurac Yacu community business centre proposes to address this problem in a more realistic and more suitable approach then simply promoting a formal university education. Through the income generated by businesses in the centre, funding will be provided for eight 48 hour education and training courses per year in key poverty reduction areas such as human health, hygiene, nutrition, maternal-infant care, computer ski l ls , knitt ing, and crafts production. This, in turn, directs progress of the local economy away from agriculture, and encourages the creation of more skilled jobs. Gradually, the modernization of the economy will lead to a demand for educated workers, and consequently, a demand for higher education.
Far Right: Standard wear for girls in the region of Yurac Yuca, Huaraz.
Right: Little boys in the Yurac Yuca region with a JTC delegate.
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Entrepreneurship
The economy of the area is primarily based on subsistence agriculture. Families are largely self-sustaining, and lack a diversified flow of income. Herding cattle and sheep, as well as harvesting modest crops of corn, wheat, and potatoes, are primary income contributors. Controlled community-based irrigation canals are routed throughout the region. The water which flows from glaciers overlooking the area is used for cleaning clothes, maintaining hygiene, and the community drinking water. Unfortunately, this lifeblood of the community has the potential to create health problems due to the fact that the water lacks any type of filtration. Another concern is that only 2% of the water from the glaciers are directed to the west, leaving those communities with a lack of useable water for agriculture. Small business development in the community is v e r y l i m i t e d d u e t o t h e l a c k o f entrepreneurial education. A lot of the community-based ventures revolve around families trading goods such as produce or meat with each other. Product export is a developing market. Eggs and milk are sold to the nearby city of Huaraz. The locals are lacking many of the book-keeping and administrative ski l ls for developing longstanding positive business growth. As a further entrepreneurial effort for the community, a dam, a water wheel, and a mill could be constructed, which would technologically enhance and accelerate the process of producing finished goods, such as bread and wool, will help to meet growing demands in larger cities in and outside of Peru. Having a community based effort to develop this type of technology would allow an easier transition and would avoid any discontent with water supply being used for this purpose. By having a viable dam, the community may also be able to direct water appropriately to address the need for clean drinking water.
The Yurac Yacu Community Business Centre for Human Development is a critical c o m p o n e n t o f t h e c o m m u n i t y ’ s entrepreneurial future. Through the businesses in the centre, community members would be able to further their business administration and management skills.
Industry Potential
Crops and FarmingThe land of the region is well maintained, and is still quite capable of producing crops. Grazing has been managed on a rotational basis so that the fields remain fertile. However, because new practices are not being implemented, the land may not be used to its full potential.
Cultivation of the land in Yurac Yacu begins with one or two bulls pulling a plough through the dry landscape of the community. The most common crops grown include potatoes, corn, cabbage, wheat, and a unique cereal product called lino, which essentially is a dark, rich wheat. The crops are rotated annually and, when possible, land is given a resting period of one year after approximately 6 years of mature cultivation.
Aside from potatoes, wheat is one of the most widely-grown crops in the community that can be made into finished products such as bread. Two to three horses or donkeys are led by a young male community member, often backed up by dogs, to trample large piles of dried wheat. Pushing the animals to run in a circular formation allows the grains to be separated
from the wheat stems, which are then collected for further crushing with rocks or other heavy objects such as pots and pans.
Livestock includes sheep, cows, chickens, and pigs, with chickens being the main source of meat consumption. The animals are butchered and cleaned in small, straw, cone-shaped huts located outside the
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Top:Cattle farmer off of the Puno region
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village houses. Meat is eaten on a limited basis and livestock is mainly used to produce eggs, milk, and clothing. Climate ChangeLocal community leaders have stated that climate change in the area has become detrimental to agriculture. Subsistence a g r i c u l t u r e i s b e i n g r e d u c e d t o economically unsustainable levels due to sudden and drastic weather changes. There is already a relocation of the population from the area towards the cities because of the difficulties associated with agricultural work in this drastically changing climate.
Furthermore, there is a long term challenge posed by the recent exponential rates of glacial melting. Since the glaciers are the main source of the area’s water supply, this threatens the feasibility of future crops and general wellbeing.
Eco-Tourism There is great potential for the Yurac Yacu community to capitalize on the growing public and private investment in the tourism infrastructure of the area. Located only 8 kms from Huaraz, above the town of Marian and on the edge of Huascarán National Park, Yurac Yacu lies near the center of a new tourism circuit being actively promoted by the local Municipality of Huaraz, as well as other institutions including Provias and Swisscontact. The tourism potential of the region is enhanced by the fact that its summer months correspond with those in North America and Europe. Through the months of May to August, Yurac Yacu enjoys bright, sunny w e a t h e r, a n d a b e a u t i f u l n a t u r a l landscape. The area is excellent for horseback riding, hiking, and other nature b a s e d a c t i v i t i e s . T h e Yu r a c Ya c u community centre will aid in realizing the t o u r i s m p o t e n t i a l t h r o u g h t h e implementation of two main tourist services,
including a expeditionary guide service and a café.
With this industry poised as the most viable successor or complement to agriculture, the community faces the challenge of improving the area’s transportation infrastructure so that its services can become more accessible.
Human FactorsThe community leaders of Yurac Yacu have made explicit their vision for the economic modernization of the community. They are committed to the community’s long term and consistent improvement, and are working to address the problem of a shrinking population and skill pool as families or youth relocate to larger and more developed areas of Peru. One of the greatest threats to their society is that those who acquire the skills necessary to help integrate the community into the global marketplace have tended to leave the community upon the completion of their studies.
The Need for ChangeAt present, many individuals are obligated to supplement their farming income through the sale of their agricultural produce and livestock, or through labour employment in Huaraz. Although families are in most part self-sustaining, it is necessary for them to acquire a small monetary income for the purchase of goods that cannot be produced from the land. The primary dependence upon agriculture causes the community to be particularly vulnerable to natural factors such as the weather and land degradation. The community’s way of life is under threat and its members must adjust to overcome the obstacles they face. Surplus value must somehow be created to properly cushion the community against the effects of crop failures and other such eventualities.
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Day 1 - August 11th Eight youth ambassadors from the JTC m i s s i o n t o P e r u e m b a r k e d o n a development mission to the area of Huaraz in the Ancash region. The team’s mission was to assist in the development of a sustainable community by participating in a project organized by local community leaders. At around 5:45 in the morning the delegates were on the way to the Jorge Chavez International Airport in Lima. It was already busy on the roads of this populous city and the JTC participants were just as sleepy as the locals on the buses. The team boarded a small 14 seat plane to Huaraz at 8:55 am and after an hour of flying the gorgeous peaks of the Andean mountains came into view.
The team drove for an hour into Huaraz and headed to the beautiful Lazy Dog Inn where they would be staying for the next week. The owners of the inn, Wayne and Diana, are Canadians that have lived in Peru for several years and are very involved in community building in this region. JTC delegates had the chance to get set up in our cabins before the altitude sickness hit most of them. For the rest of the day the team was advised to rest and recuperate in preparation for the challenging week ahead.
Day 2 – August 12th
The team worked on ideas and strategies for making the community center a reality and participated in the construction process. All morning delegates worked on site digging, sifting dirt, moving 40 pound adobe blocks, putting up walls, cutting hay and cleaning out the surrounding area. At over 13,000 feet above sea level and on a hot Peruvian day, this was challenging work. The team also met a local youth leader named Claudoaldo Yauri.
After lunch delegates had a detailed p resentat ion on the log i s t ic s and operational challenges of the project that got their minds working on possible solutions. In the evening they had a meeting with the community leaders to
discuss the situation in the region as well as shared knowledge and ideas.
Day 3 – August 13thThe delegates woke up to the cloudy skies of Huaraz. Outside the weather was chilly and the team bundled up for a slow walk up the hill to the main house for breakfast. After some delicious fruit and toast the team was greeted by the teacher for Spanish language lessons.
Refueled with knowledge of Spanish vocabulary and grammar, the team descended to the works i te of the community centre. The sky had cleared out and the sun was burning once again. At the worksite locals have been working since 7:00 a.m. At this altitude and with such proximity to the equator it’s a tough environment to work in. They put in 8 hours slowly and steadily every day. Today again, the team moved adobe blocks, shoveled, sifted through dirt, cut hay and moved rocks in the wheelbarrows. Delegates gathered for what, in Scott’s words, was “the most delicious meal he’s
ever eaten.” After lunch the team gathered to work on the video, the proposal and the report.
Day 4 – August 14th
Today the team hiked for 8 hours, going up 4,000 meters in altitude, powering their way through the mountain tops. They traveled
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Top: JTC delegates after climbing to the mountain peak with locals.
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mountain and the base of the glacier. The team had the chance to share delicious Peruvian food with the locals in a beautiful spot beside the glacier. During lunch JTC also built an Inukshuk by the lake to represent the relat ionship between Canada and Peru that JTC is forming. JTC had an absolutely amazing day, bonded as a team, and felt even more apart of Peruvian nature and culture.
Day 5 - August 15th
A large portion of the team was struck ill today. Because of the inability to do manual labour, the team worked very hard on preparing budgets, charts and other documents related to the Business and Community Development Center. A section of the team went on a community walk to meet the locals and observe more of the village and its buildings. This group was led by Claudoaldo Yauri, and met with community members who were enthusiastic
and receptive to them. A portion of the team went riding on horseback through the mountains, and observed the plants and animals of the region.
Day 6 – August 16thThe Saturday in Huaraz was a very special day. From heartwarming community ceremonies such as Pacha Manca to Amy’s Birthday, the day was filled with rich cultural experiences and traditional celebrations. The team started the day off with Spanish lessons after breakfast, followed by work on the video. Around lunchtime delegates were invited to a very special community event- the Pacha Manca. Locals dig a hole and build a pyramid of rocks with a fire inside. Once the rocks have been heated enough they collapse the pyramid and throw meat and potatoes in, cover it with dirt and let it cook. The result was a delicious meal of chicken and potatoes, like nothing JTC has ever tasted before.
After sharing the meal with the team, the locals divided the food amongst the participants of the ceremonies that bring it back to their families. After the community meal, local boys challenged JTC delegates to a game of football. Aside from a couple of interruptions from the cattle crossing the field, JTC delegates lost without a hitch. As a sign of defeat and sheer gratitude for the amazing workout delegates gave their JTC shirts to the local children.
Top: The indigenous locals in Yurac Yuacu.
Right: JTC Delegates horseback-riding in the
Huaraz sunset.
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Culture
The Puno Region of Peru, visited by Junior Team Canada’s Papa Team, contains a rich and diverse culture. The Altiplano (Plateau) has two strong indigenous groups, the Quechua and Aymara. Both of these cultures have direct ties to the empire of Tahuantinsuyl (commonly and inaccurately called the Incan empire) and the Papa’s team had the privilege of meeting with locals from both these cultures in different communities.
During our six day stay in Puno the team was able to meet two communities of Aymara people and were able to see their craftsmanship in producing wooden-carved objects and knitted products. The team was also able to meet with the chief and local people of the floating islands of Lake Titicaca. Through dialogue from both leaders the team was able to understand the issues facing these indigenous people. This conversation was followed by an informative discussion about Global Vision’s future leadership program for Peru and the opportunities available to all Peruvians following the FTA.
Team Puno was also able to meet with the Quechua in the community of Llungo where we were greeted with confetti, songs and many smiles from the school children. Presentations on the practices of local agriculture and handicrafts were also included with a playful conclusion of group pictures, gifts, and even some games of soccer and volleyball. We also were able to visit and hike across the Taquile island (located approximately 25km offshore of Puno in Lake Titicaca) while learning first-hand about their culture.
QuechuaBefore the Tahuantinsuyl Empire, the Quechua c iv i l i za t ion had a la rge population that resided on the island of Ta q u i l e , i n L a k e T i t i c a c a , a n d i n communit ies around the lake. The Quechua people of the Taquile island were conquered after the Tahuantinsuyl empire took control of Peru but were allowed to
keep their local customs and lifestyle during the Inca’s reign.
It was only after the Spanish took control of Latin America that this culture was forced to change their ways of dress to imitate the Andean communit ies on land. The Quechua of Taquile still believe in the philosophy of Aynii, “today for me, tomorrow for you”. This philosophy is based on community unity and the idea of the profits being shared with everyone. The Quecha’s also also hold true to the Tahuant insuy l s pagan i sm be l ie f o f “Chacana”.
Chacana is a religion which is based on the fundamental triad of the Condor, Puma and Serpent. The Chacana cross is an equal armed cross containing twelve corners all representing different religious symbols:
CondorPumaSerpent
Hana Pacha (similar to Christians heaven)Mama Pacha (current world)Kay Pacha (underworld, where the deceased’s bodies go)
FuturePresentPast
AirEarthWaterThe middle represents fire.
The Quechua of the island of Taquile also believe that the Condor represents intelligence, the Puma love and the Serpent action. In their beliefs you must collect knowledge and become intelligent about the people around you, learn to love them and take action to help them or better their situations. It’s said that if you do not honour this philosophy, when you die,
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008 your worldly body will continue on to Kay
Pacha but your soul will continue to return to Mama Pacha. Only after you learn to honour these three symbols will your soul continue to Hana Pacha.
AymaraThe Aymara culture is a diverse group of people who mostly live on land but also have a small proportion who reside on man-made islands made of reeds from Lake Titicaca.
During the wars of the Tahuantinsuyls, these people fled to the waters to keep safe. Eventually they created islands made of reeds to live on and now depend on fishing and tourism for their livelihoods.
TahuantinsuylThe Tahuantinsuyls are now commonly known as the “Inca’s” due to misleading information spread during the Spanish Inquisition. The title of the leader of the Tahuantinsuyls was the “Inca”. The legend of how the origin of the Tahuantinsuyl is centuries old and believed to be fact during their rule. It’s said that the first Inca and his wife came out of Lake Titicaca when the god of the Sun gave them a bar of gold. He told them that they must find a place where the bar will sink and when they do, they will start a great empire there. The Inca and his wife travelled to many different places and had no success in sinking the bar of gold until they came to Cusco. Cusco became the capital of the empire and centre from which the empire spread, in fact, the literal translation of Cusco is, “the navel from which all else spreads from”.
Sillustani TombsThe Sillustani tombs are a group of tombs located approximately 20 minutes outside of Puno. These tombs are over 400 years old and before being raided contained the remains of only the most important people o f the Coya l la and Tahuant in suy l civilizations and their immediate family. These 350 tombs cover over 1km² of land beside Lake Umayo. Because of their worship of the sun god, these tombs were built at an altitude over 3500m so they could be closer to him in death. Also, in plain sight of these tombs are some of the most well preserved Tahuantinsuyl temples of the era. The temple of the Sun and the temple of the Moon are located exactly beside each other each with three symbolic steps to enter the temple. Each step represents one of the sacred symbolic animals of the Chacana faith. From lowest to highest, the snake, the puma and the condor all lead up to the circular shapes of stone that make up the temples.
Floating IslandsThe floating islands of Lake Titicaca are hundreds of years old, made out of reeds. There are approximately twenty people living on each of these islands (three or four families). The “Uros” an indigenous group from the time of the Tahuantinsuyls originally designed and occupied these islands but eventually became extinct. The people living on these islands now are called “Uros” as well but are not direct descendants of the original occupants of the islands. The people of these islands rely on the trade of fish and hand-made goods (knitted and wooden carved products) for income.
AquacultureFarming trout on Lake Titicaca is an emerging industry in the Puno Region. Families in the community have fished the waters of Lake Titicaca for many years however, it is only within the last ten years, with the initiation of the Altagro project, that they began to build hatcheries and export their local fish products.
JTC went with Empresa Pesquera Gomez, family-run producer from Juli, out to see its trout farms on Lake Titicaca and visited a processing plant in Puno.
Top: A standard trout farming operation in Lake Titcaca, Puno.
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It also visited the aquaculture site in the community of Chucasuyo (7km from Juli, on Lake Titicaca). This site, an Altagro project, is maintained by 78 families who rely on CIRNMA engineers for advice and technical assistance to help develop their operation.
The Altagro aquaculture project initially consisted of production and harvesting workshops and training for locals engaged in fishing. They then split the families into 3 different groups determined by their productivity levels.
• Group 1 produced greater than 25 000 kilos/ year,
• Group 2 produced between 10 000 and 25 000 kilos/ year, and
• Group 3 produced less than 10 000 kilos/ year.
Altagro then gave each group additional and specific training related to their level of production, in order to enhance their productivity. For instance, families with production levels in group 3 were given more technical assistance in order to increase their productivity, while those in group 1 were educated in legal framework and business formalization.
Peruvian fish exporters face competition from Chile and Bolivia however, this c o m m u n i t y h a s t h e c o m p e t i t i v e advantage of using organic fish food (corn, soy, and fish oil) to enhance their quality to internationally acceptable standards.
The t ime to matur ity necessary for marketable farmed trout is approximately 6-8 months however, depending on market conditions at the time each batch is ready for sale, surpluses of trout stock can result. This will leave the farmers with additional costs as they must continue to feed the trout until a buyer is located.
“These families want to be able to s u s t a i n a n d d e v e l o p t h e i r communities by creating businesses that will allow them to export their products nationally and to the world. In doing so, they hope to alleviate malnutr i t ion, reduce poverty, increase their incomes and grow an economy filled with opportunities for future generations.” – Roberto Valdivia, Ing. CIRNMA
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Left: Typical houses in Puno.
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the Altagro aquaculture project have signed contracts with a fish product export companies to sell their fish between $3.00USD to $3.50USD/kilo and export them to national and international markets including the United States, Western Europe, and Canada. The pricing for regional markets is variable due to local bargaining practices.
JTC Objectives• Find export markets for Peruvian
trout and fishmeal in Canada.• Find freshwater fish species in
Canada that can be farmed in Lake T i t icaca to d ivers i fy i t s production
• Create internship collaboration between Canadian and Peruvian students to share knowledge and resources about the industry
Export OpportunitiesWe learned that Peruvian trout and fishmeal is exported to Canada, US, and Norway from the processing plant that we visited. While this is encouraging, there is still enormous potential for increased volume of Peruvian trout in international markets. Junior Team Canada will use its new connections to help increase trade between the two countries.
Diversify ProductionIt’s important for Lake Titicaca producers to diversify the types of fish species farmed so that their income is not reliant on only one type. There are freshwater fish species in Canada that can be farmed in Lake Titicaca to diversify its production.
Internship CollaborationEngineering and interested students from both countries can share knowledge, better understand global markets, and develop new opportunities for both Peruvian and Canadian entrepreneurs.
Also, by improving these connections students will be able to work together to explore new methods and become global leaders in the future.
Agriculture – Quinoa
Quinoa, the “Mother of All Grains”or “Chisaya Mama” in Quechua, is a type of
plant grown in the Andes Mountains whose seed is high in nutritional value and has been a valuable food source for South Americans for over 6,000 years. The Quinoa plant is invaluable because it is able to survive in high altitudes familiar to Peru and the Andes Mountains where a vast majority of the Peruvian population live.
J u n i o r T e a m C a n a d a r e c e i v e d presentations on the many uses of Quinoa at Chucasuyo and Llungo and saw how it was processed in Puno. The grain is currently being processed into flour for breads, cookies (SUMAWA), and cakes. Peruvians have also made a juice product labelled “Chicha-la-Quinua”.
Aside from the Quinoa plants’ ability to grow in high altitudes where fertile soil and water are scarce, its nutritional value makes it an important commodity to the Peruvian diet.
• Quinoa is a high souce of protein (12-18%),
• contains all 9 essential amino acids,• high in lysine – essential for muscle
growth and repair,• a good source of dietary fiber and
phosphorus,• high in magnesium and iron, and • gluten free
As a highly nutritious food source, Quinoa has been incorporated into many aspects of the Peruvian diet. It can be used as a substitute for flour in making breads, cookies (SUMAWA), and cakes; and is also used as an ingredient in milk candies. In addition, Quinoa producers have managed to use the plant’s nectar to make a juice product labelled “Chicha-la-quinoa”.
From start to finish, the processing of the quinoa is a complex process. Most often the quinoa is planted by hand. When the crop is ready to be harvested, it is cut down and grouped into sheaves. Farmers can then separate the seeds from the stalks. A small grain handler collects and takes the seeds to the processing plant. From there the seed is separated by size (must be between 1.4 – 2 mm). Then the quinoa is taken to a machine to remove the Chaff (the bugs, and the dirt). The seeds are soaked and laid out in the sun to dry. From there, workers separate the wild quinoa (only local) from the grown quinoa
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crushed into powder, flattened into flakes, or left as seeds to be sold in bulk.
In 2005, production of Quinoa totalled 78.3 thousand tonnes. It is currently produced in three South American countr ies ( in thousand tonnes):
• Ecuador (27.2), • Peru (26.0), and• Bolivia (25.1).
Quinoa is produced on plots of land averaging approximately 3 hectares in size. On average, annual production of Quinoa in Peru is approximately 20 thousand tonnes. Of this, only about 10 percent or 2 thousand tonnes is exported, leaving the rest for domestic consumption. Of this exported amount, 1.4 thousand tonnes is organic. Local farmers are attempting to switch over their fertilizers to organic in order to meet foreign demand for organic products free of the health risks associated with the use of chemical pesticides and fertilizers.
JTC Objectives:• Discovery of export markets for
f i n i s h e d q u i n o a p r o d u c t , byproduct, or seeds.
• Create bilateral partnership consisting of Canadian grain handling companies coming to Puno to set up grain handling systems and facilities to market their grain.
• Create internship collaboration between Canadian students
and Peruvian students in each industry to share knowledge and resources, and to develop leadership and entrepreneurial s k i l l s , a n d c r e a t e l a s t i n g connections.
• Research and analyze the region’s agronomics in order to maximize its output.
Export OpportunitiesQuinoa is currently being shipped to Germany and around Europe. In Germany they are processing the seeds, adding value, and making products that are sold for a higher price on the market.
The quinoa is then purchased by a broker for approximately $3 US, transported to Lima, and sold on the international market for nearly double. Once it reaches Germany, it can be processed or resold for as high as $18 US per kilogram.
Other opportunities exist for quinoa to be sold in health stores in North America. Improvement of quinoa product marketing and expansion of contacts for potential i n t e r n a t i o n a l b u y e r s w i l l r e d u c e dependency on brokers and al low Peruvians to capture the majority of the gains from their quinoa exports.
Grain Handling SystemsA well-established system in Canada that has helped many grain farmers develop their businesses is to allow a grain handling company manage the se l l ing and
Far Left: Quinoa processing plant in Puno
Left: Typical terrains around Lake Tiiticaca
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company, Viterra, is a good example of this and has been able to provide the best possible price to suppliers. Viterra engages in something called grain pooling. A grain pool is one of the most common ways for Canadian farmers to sell their grain. Farmers haul the grain to an elevator, the grain handler grades the grain, and when the grain is sold at the greatest possible price (which is usually an average) all farmers get the equal compensation for grain.
Internship CollaborationAgriculture and interested students from both countries can share knowledge, better understand global markets, and develop new opportunities for both Peruvian and Canadian entrepreneurs. Also, by improving these connections students will be able to work together to explore new methods and become global leaders in the future.
Agronomics Farmers currently do not know how to get the most out of the land that they own. Soil testing may be one of the best places to start to see what type of fertility this soil really has. Soil testing will reveal what types of fertilizers are needed in order to produce the best possible crop. Irrigation should also be explored to help deal with the scarcity of water during the dry season. During the rainy season, lots of the areas flood making it difficult to plant anything during this time. Many of the farmers still use an old way of farming that the Inca civilization used to use. This system was called Waro – Waru Camellones.
Agriculture – Livestock
Livestock is mostly in the hands of small scale farmers. Household-based grassland livestock production systems are the highlands, which include cattle, llama and alpaca, and livestock constitutes are the main source of income for pastoral communities in the Andean valleys.
In Peru the livestock industry is not completely sustainable. In 2002 there were only about 4,990,000 cattle in Peru. Meaning a large proportion of the dairy and beef consumption for the country are imported. But from 1990- 2000 there was a
1.8% growth for the livestock industry (FAO 2005). In 2002 there was about 16,000,000 sheep and goat, about 90,600,000 chickens, and about 2,800,000 pigs.
Alpaca and LamasThese animals are found all around the country and are a source of income for the Peruvian rural communities. They are a food source as well as a source of income for Peruvian women who are able to take the wool of these animals in order to make handicrafts and clothing.
CattlePeruvian cattle are owned by rural farmers what are separated into three categories which consist of small, medium and large enterprises. Small farms consist of 10 cows and a few hectares of land. Medium farms consist of 35 cows and a few hectares of land as well. Then the large enterprises have about 200 cows and about 12 hectares of land.
Cattle all across the country are primarily artificially inseminated in order for the Peruvian cattle to receive the particular genetics in order to optimize the volume of beef or dairy. By optimizing the efficiency for this industry more products can be produced and more prof it can be allocated to the producers. Over the last 10 years biogenetics in livestock have really taken off and because of this dairy volume, poultry and pork have all increased.
Livestock in Peru consist of Brown Swiss and Ordeno. These cattle are fed in the morning and later in the days in the dry season. During the days of the dry season livestock usually graze on the natural grasses. Livestock are fed maize (corn), green feeds, and oil crops in the morning and evening. These livestock also face some hard challenges in Peru. There are four main health concerns for livestock that farmers need to watch for and they are Classical swine fever, Foot and mouth disease, Newcastle disease and Vesicular stomatitis.
While in the community near Puno we were able to visit a local farm. Fernandez was a 25 year old man with a wife and a small child. They fed their 10 cattle in the morning before they milked out, on average, 7 litres of milk every day. They then take this milk to the local cheese production plant. We were able to
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travel to this cheese production plant and they are able to produce around 30 blocks of cheese a day. There are 450 families involved with 10 associations in 15 communities. Before this initiative was taken to help develop these cheese production plants local dairy farmers where not selling very much to local communities. Now they are able to sell to larger centres where they are able to sell not just cottage cheese but Monazo, Vilque, Cabarilllas and Cabanillas y Achaya.
J u n i o r Te a m C a n a d a h a s s e v e r a l recommendations for the development of this industry.
• Investment in l ivestock/dai ry research and development
• Establishment of rural cooperatives to ensure that small l ivestock keepers benefit from the growth
• Encouraging the private sector to supply pr ivate goods to the livestock keepers
• Establ i shment of an eff ic ient livestock market where livestock are registered and traded legally
Textiles
The production of handicrafts i s a necessary skill for women in the rural areas of Puno. Initially, these women knitted clothes and blankets to keep their families warm during the colder times of the year; however, it is now becoming evident that the production of handicrafts can be much more beneficial to these rural communities. Products are constantly being made, usually in the fields, while the women herd their animals. In the recent years these women have been travelling to local markets in Puno to sell their unique handicrafts, mostly to tourists. Through the Altagro project, many female youth in these rural areas are being taught how to knit and carve products and elder women, that already have some knowledge in t h e s e a r e a s , a r e i m p r o v i n g t h e i r craftsmanship through workshops.
The goal of this project, which we experienced in Juli and Llungo, is to give these young women the skills needed to produce these goods at an earlier age. It hopes to create young entrepreneurs who will generate income to help develop and improve communities faced with extreme poverty and malnutrition.
The Altagro trainers in various communities teach these skills by dividing the women in t h r e e d i f f e r e n t l e v e l s : b e g i n n e r, intermediate, and advanced. Each group is given training based on their individual knowledge and skills.
JTC Objectives• Discover export opportunities• Develop entrepreneur ia l and
marketing skills of artisans
Action:Export OpportunitiesThe quality of the handicrafts we encountered was very high and being improved. If the pending Free Trade Agreement between Canada and Peru removes tariffs on the textile industry then there should be a strong market for the products in Canada and other foreign markets.
Entrepreneurial DevelopmentThere is currently a strong focus on production capacity but Junior Team Canada saw a need for development of entrepreneurial and marketing skil ls. Beautiful craftsmanship is easily wasted without proper knowledge of the business world and export markets. The Papas Junior T e a m C a n a d a w i l l c r e a t e a n entrepreneurial program specific to the Puno region.
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Day 1 - August 11th JTC delegates left the city of Lima to travel to the region on Puno to begin their mission of assisting the International Potato Centre (CIP) with sustainable development. The region of Puno, which is south of Lima, is approximately 3,500 meters above sea level in the Andes and is also home of the world’s largest elevated lake: Lake Titicaca. On the way to Puno, the team had the opportunity to capture many sights in the rural areas of Peru. Puno is quite different from Lima in many ways, such as the architecture, the development stage, as well as the lifestyle in general. Once the team arrived in Puno, they met with Roberto Valdivia, an engineer working with the CIP, who briefed them on their week’s activities. Roberto also served as their leader for the entire week. The meeting included a friendly welcome to the community, their schedule for the next day - which included learning more about trout exporting - and finally ended with advice on coping with altitude sickness and adjustment. With this wonderful advice in mind, the team set out for their first dinner in Puno. The evening concluded with the team preparing for their upcoming meetings.
Day 2 - August 12th The JTC team was up early, as Roberto Valdivia, their local CIP representative and guide, had arranged a packed agenda for them for their first full day in Puno. They left the city and traveled to Juli, a small community located about 45 minutes outside of Puno. Their first stop was to a trout fish farm located on Lake Titicaca. There they met with the workers and families to discuss the possible opportunities between Peru and Canada in the aquaculture industries. The team was given a detailed introduction to the trout industry in the region by the Centro de Invesgacion de Recursos Naturales y Medio Ambiente (CIRNMA) engineers. CIRNMA is an NGO, which is in coordination with CIP and together they developed the program A LTA G R O , w h i c h i s d e d i c a t e d t o developing the Alti-plano. They then continued their journey to a nearby community to get their first look at the handicrafts industry. While there, they met with local women and their children, local quinoa farmers and producers as well as representatives from CIP and CIRNMA. The JTC team learned about both the difficulties, as well as the opportunities that locals are faced with while working in these industries. Junior Team Canada was
APPENDIXFDETAILSONMISSIONPUNO
Right: JTC President Terry Clifford and JTC members speaking with local communities.
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welcomed with open arms and they appreciated our interest in their work. The JTC team ended their day with a team dinner on Puno’s most vibrant and famous street, Lima St, while reflecting on the day’s lessons and our new found knowledge of Puno’s culture.
Day 3 - August 13th The JTC team started their third day with a very war m welcome f rom a local elementary school, where approximately 130 school children threw confetti and sang welcoming songs in their native language. It was very emotional for the team, as the celebration for their visit was more than ever expected. They were the first group of foreign student visitors to the school in over seven years. During the morning, they met with local farmers and learned about their quinoa production and farming methods. They also met with the women in the region who produced handicrafts and we discussed their future plans for their young daughters who were students of the school as well as participants of the ALTAGRO program. They also learned about the school’s newly acquired greenhouse operations and local nutrition. They left the school and travel led to Palcamayo where they ate lunch in a field on the side of the dirt road. Children and farm animals ran to them from across fields from every angle with a keen their interest in the foreign visitors. After lunch, they travelled to a nearby community where they went on a tour of a small cheese factory. A few minutes down the road from the factory they met with a local milk producer who supplied the milk for the cheese factory. It was amazing to see a local entrepreneur who was only 25 years old. There are not too many 25 year old Canadians who own their own cow, let alone 10.
Day 4 - August 14thThe JTC team had yet another eventful day. They started with a visit to the CIRNMA headquarters where they learned more about the projects they work on - particularly with the International Potato Centre - within the region of Puno. After our CIRNMA briefing, the team went on a tour of the quinoa production plant. The team was able to see firsthand the production of
quinoa, from raw grain to packaged product for sale. Most of these packages were being shipped to Germany. After th i s demonst rat ion the team moved into the trout processing part of the plant, owned by Aquasem. The plant had very high safety and health standards, so the team had to dress from head to toe in a sterilized uniform. There, they met with workers who were cleaning the fish and packaging them for storage. Most of these products were being shipped to Canada and the Netherlands.
As the JTC team was close to the end of their journey in Puno, the team was working hard on capturing the information they had received, as they had to make a presentation of their findings to local youth at the Rotaract on Friday.
Day 5 - August 15thThe JTC Team dedicated their fifth day to working and gathering final information for their report. They spent the day in and around the hotel, going from room to room discussing particular topics from our week-long adventures in the Puno region and preparing for their report and upcoming presentations. That evening, the team ventured out with Enr ique Valdiv ia (Roberto’s son) to the Rotaract clubhouse where they gave a presentation to the young Rotaract members. Rotaract is a youth organization derived from Rotary International. The presentation and meeting was very productive as both sides shared contact information and discussed the opportunities, which would stem from the JTC visit to Puno.
Day 6 & 7 - August 16th & 17thSaturday and Sunday were exploration days for the JTC team to gather cultural information. On Saturday, they set out on a boat adventure to visit the Uros Islands. These islands were man-made by the Uros peoples many years ago when they were removed from Puno by the Spaniards. While visiting these islands, Terry and a number of team members managed to meet with the chief of the islands. This meeting was very significant and heart-felt for Junior Team Canada. Sunday was thei r day of departure; however, they first managed to visit the Inca Tombs, which were located en route to the airport.
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APPENDIXGTHEPATHTOLEADERSHIP
Far Left: Dylan Carr, JTC 2008 Delegate from Prince Edward Island.
Left: An aboriginal girl living on the island of Santa Maria.
A Statement of Mission, Vision, and Values
We will champion the enterprising spirit of young Canadians in the promotion of Canadian industry and culture as we achieve recognition as a major force in the global marketplace.
Inspired by this irrepressible drive to become world-class, we will provide access to national and global networks for young Canadians to acquire the international development, trade and cross-cultural experience to become the next leaders of Canada.
Grounded in the enduring principles of integrity, compassion and mutual respect in everything we say and do, we will touch the hearts and minds of Canadians in communities across the land.
46
Embassy of Canada in Limawww.peru.gc.ca
Daniel VezinaSenior Trade CommissionerCalle Bolognesi 228, MirafloresLima, Peru(511)[email protected]
Trevor PaulResearch and Analysis AssistantCalle Bolognesi 228, MirafloresLima, Peru(511)[email protected]
Katia RivadeneyraTrade CommissionerCalle Bolognesi 228, MirafloresLima, Peru(511) [email protected]
Cynthia MartinezAPEC Coordinator AssistantCalle Bolognesi 228, MirafloresLima, [email protected]
Christian JolicoeurManagement and Consular Affairs OfficerCalle Bolognesi 228, MirafloresLima, [email protected]
APEC 2008 Peruwww.apec2008.org.pe
Luis FloresTechnological Support AdvisorAv. Javier Prado Oeste 580, San IsidroLima, Peru(511)[email protected]
Gladys SwinnenProtocol DirectorLas Palmeras 324Lima, Peru(511)[email protected]
Ines AviliaAccrediationLas Palmeras 324Lima, Peru(511)[email protected]
Julio VelardeDeputy Executive DirectorAv. Javier Prado Oeste 580, San IsidroLima, Peru(511)[email protected]
Jaime Augusto EspinosaExecutive DirectorAv. Javier Prado Oeste 580, San IsidroLima, [email protected]
Peruvian Government - Foreign Tradewww.mincetur.gob.pe
Eduardo Ferreyros KuppersVice Minister of Foreign TradeCalle Uno Oeste Nº 50 Urb. Corpac, Lima 27Lima, Peru(511) 224 3369 / (511) 513 6100 (1200)[email protected]
Alvaro Diaz BedregalAdvisor – Vice Ministry of Foreign TradeCalle Uno Oeste Nº 50 Urb. Corpac, Lima 27Lima, Peru(511) 513 6100 – [email protected]
Peruvian Government - National Youth Secretariat, Ministry of Educationwww.snj.gob.pe
Geanmarco Quezada CastroDirector of Research & DevelopmentAv. 2 de Mayo Nº 868, San Isidro, Lima 41Lima, Peru(511) 272 2441 Cell: 9737 2704 / 9425 [email protected]
GOLDENROLODEXGOVERNMENTCONTACTS
JUNIORTEAMCANADAMISSIONTOTHEAMERICAS2008
47
PISCIS
Jorge MunozOwner / Plant ManagerParque Ind. Salcedo Mz. N - Lote 10Puno, Peru51 51 951 677 [email protected]
Aquasem S.R.L.
Fernandos ZunigaPlant ManagerPque. Ind. Salcedo Mz. N - Lote 10Puno, [email protected]
Scotiabank
Guillermo CarbonelChief EconomistAv. Dionisio Derteano 102Lima, Peru(511)[email protected] Lily llanos Silva-SantistebanCoordinator RelationsAv. Dionisio Derteano 102Lima, Peru
(511)[email protected]
SNC Lavalin
Francisco SilvaGeneral ManagerAv. Pardo y Aliago No 699 Office:501-B, MirafloresLima, Peru(511)[email protected]
Plaza Consultores
Santiago BattistiniGeneral OperationsEl Corregidor 1265Lima, Peru(511)[email protected]
Empresa Pesquera Gomez
Jowey GomezFishermanCommunity: Chucasuyo [email protected]
Johnson GomezOperations ManagerAv. Titcaca 435 In. 2Puno, Peru985 [email protected] Eusebio GomezGeneral ManagerAv. Titcaca 435 In. 2Puno, Peru965 [email protected]
GOLDENROLODEXBUSINESSCONTACTS
JUNIORTEAMCANADAMISSIONTOTHEAMERICAS2008
Top: JTC delegates meeting with local
community members.
48
Palcamayo Cheese Plant
Bacilio Quisca PisnadoOwner / OperatorPalcamayo, PunoPeru051-505130
Family Cattle Farm
Alfredo Coila ApazaCattle OwnerYanamoco-IllpaPeru051-596990
Alicorp
René Andrés Zevillanos OlivaresAssistente Técnico JuniorParque Industrial Taparachi Mz "A" Lt "19"Juliaca, Peru(051) 322 [email protected]
Hotel Don Giorgio
Patricia De DurantOwner / President - Women's Sector, RotaryJr. Tarapaca 238Puno, Peru054 [email protected]
Barrick Minerals
Katia ParedesAbogada (lawyer)Av. Victor A. Belaunde 171, 2do.Piso, San IsidrosLima, Peru(511)[email protected]
Guillermo FrancoCorporate Resposibility ManagerAv. Victor A. Belaunde 171, 2do.Piso, San IsidrosLima, Peru(511)612-4100 [email protected]
Vena Resources Inc.
Silvia DediosBusiness Development ManagerAv. Jose Pardo No 601 Office 1301Lima, Peru(511)[email protected]
Talisman Energy Inc.
Mark DingleyGeneral ManagerAv. Victor A. Belaunde 147, Principal 155(511)[email protected]
Doug MaddamsCSR Director – Talisman PeruAv. Victor A. Belaunde 147, Via Principal 155, Edificio Real Tres Of. 602 Centro Empresarial Real, Lima 27(511)616-4013 / (511)[email protected]
GOLDENROLODEXBUSINESSCONTACTS
JUNIORTEAMCANADAMISSIONTOTHEAMERICAS2008
Top: JTC delegates meet with Guillermo Carbonel of Scotiabank.
49
Mario AscenzoSenior Assessment of LogisticsAv. Victor A. Belaunde 147, Via Principal 155Lima, Peru(511)616-4000 ext. [email protected]
Amy JarekSenior Policy Strategist, Corporate Responsibility & Government AffairsSuite 2400, 888 – 3rd St. S.W. AB T2P 5C5Calgary, Peru(403) 237 [email protected]
Universidad San Ignacio De Loyolawww.usil.edu.pe
Ramiro Salas-BravoDean International Development OfficeAv. La Fontana 550Lima, Peru(511)[email protected] Edward Roekaert Embrecht’sVice DirectorAv. La Fontana 550Lima, [email protected]
Dora BallenDeputy DirectorAv. La Fontana 550Lima, Peru(511)[email protected]
Jose GalvezEconomist StudentJr.Moises Mendelssohn 172 apt.102Lima, Peru(511)[email protected]
Jorge ChavezLaw & Chinese Language StudentCalle Obreon 275Lima, Peru(511)[email protected]
APEC CEO Summit 2008www.apecceosummit2008.org
Jose Miguel MoralesChairmanBartolome Herrera 254, Lima 18, Peru(511)[email protected]
Jimena BellinaExecutive AssistantBartolome Herrera 254, Lima 18, Peru(511)[email protected]
True Energy Peru SAC
Mariano Via MenesesGerente HSEAmador Merino Reyna 307 Of. 601 San Isidro(511)[email protected]
Milagros Landivar de NoriegaOffice ManagerAmador Merino Reyna 307 Of. 601 San Isidro(511)[email protected]
Hazco Environmental Services Del Pru S.A.
Ing. Julio E. Zavaleta A.Gerente GeneralAv. Camino Real 348, Edificio Torre El Pilar, Ofic. 1602 - San Isidro Lima 27 - Peru(511)[email protected]
Ing. Jose Noriga E.Grente Comercial Y DesarrolloAv. Camino Real 348, Edificio Torre El Pilar, Ofic. 1602 - San Isidro Lima 27 - Peru(511)[email protected]
GOLDENROLODEXBUSINESSCONTACTS
JUNIORTEAMCANADAMISSIONTOTHEAMERICAS2008
50
Centro International de la Papa
Roberto QuirozLead Research Scientist -Production Systems & Environment DivisionAchaya, [email protected] Dr. David TayDivision Leader - Genetic Resources Conservation and CharacterizationProv. Juli (Communities: Olla, Kajje, Chucasuyo, Yacari, Palermo, Huaquina, Pucara Sullicani)[email protected]
Centro de Investigación de Recursos Naturales y Medio Ambiente
Felix PacombiaCIRNMA Engineer - AquacultureApartado 388Puno, Peru51 51 36 [email protected]
CIRNMA
Roberto ValdiviaAltagro Coordinator, Production Systems & Environment DivisionYurac Yacu, PeruAvailable only through Wayne [email protected]
Enrique Valdivia AlatristaExecutive DirectorYurac Yacu, [email protected]
Altagro
Jackeline LaurenoTeacherParque Industrial Salcedo, Mza. N – Lote 11Puno, Peru366168 / [email protected]
Domingo CanahuaEngineer (Quinoa Expert)Yurac Yacu, PeruAvailable only through Wayne Lamphier
Luccio TorresEngineer (Technical Assistance/ Advisor)Yurac Yacu, PeruAvailable only through Wayne Lamphier
Cesar ChinoEngineer (Greenhouse expert)Peru(51-43) [email protected]
Randolfo OjedaVeterinarian: Chair of Programa GanaderiaPeru(51-43) [email protected]
Carmen GuerraEngineer (Technical Assistance/ Advisor)Huaraz, [email protected]
Asociacion Sector Yurac Yacu
Hipolito Silberio LazarCommunity LeaderYurac Yacu, [email protected]
Alberto CaururoSecretaryYurac Yacu, [email protected] Donato Oropeza CalduoCommunity LeaderN/AYurac Yacu, PeruN/[email protected]
GOLDENROLODEXCOMMUNITYCONTACTS
JUNIORTEAMCANADAMISSIONTOTHEAMERICAS2008
51
Comunidad Caserio de Rivas
Eucedio Leon AguilarLieutenant GovernorPeru
Mitchell KevinSoftware TesterPeru Mitchell JoannahFundraiser for NGO's and CharitiesPeru
Right: Mr and Mrs. Clifford with Her
Excellency Genevieve des
Rivieres, Ambassador of Canada to Peru
Top: JTC delegates meeting with local
community members.
52
Junior Team Canada Partners Peru 2008
www.globalvision.ca
53www.globalvision.ca
Abacus Mining & ExplorationArcher Education GroupAsper School of BusinessAtlantech CompaniesBank of MontrealBell CanadaBreakwater ResourcesBulletproof SolutionsBusiness Career CentreBusiness New BrunswickCalgary Airport AuthorityCameco CorporationCanadian Commercial CooperationCanadian Parents fo FrenchCeed PEICity of FrederictonCollege of the North AtlanticConnolly Financial GroupCornell UniversityCourchesne LaRose, LteeDalhousie UniversityDirect Office LeasingEdwards Business School Students SocietyEdwards School of BusinessFoundation Capital CorporationFredericton Chamber of CommerceGateway CollegeGolder AssociatesGovernment of British ColombiaGovernment of OntarioGovernment of AlbertaHanlon Centre for International BusinessHarris & RoomeHill and KnowltonIntegrated Informatics LtdInterlake Reserves tribal CouncilInternational Longshoremen AssociationInvestment SaskatchewanIsland Optical LtdJ.Leroy Gallant Insurance LtdKK Foods LtdLanguage Studies InternationalMaple Trade FinanceMcLeay Geological ConsultantsMelbourne Property ManagementMemorial UniversityMinistry of Transportation British ColombiaMir Huculak Law OfficeN&E Stucco ContractorsNewfoundland & Labrador HousingNiagra College
Nova Scotia Business IncNova Scotia Business InnovationOak Ridges Lions ClubOlive Land and BuildingParkers Service StationPEI BioAlliancePEI Business DevelopmentPEI Potato BoardPeterbilt New BrunswickPinaymootang First NationPKR Boarding KennelsRotary Club of CalgaryRotary Club of Lions Gate North VancouverRotary Club of Mississauga MeadowvaleSandlewood DevelopmentsSaskatchewan Ministry of Enterprse and InnovationSaskatchewan Research CouncilSaskatchewan Trade and Export PartnershipSauder School of BusinessScotia McLeodSF Charitable FoundationSilver WheatonSimon Fraser UniversitySpecialty CareSpike's PaintballSt Mary's UniversityStephenville Knights of ColumbusStephenville Lioness ClubStephenville Lions ClubStephenville Rotary ClubStonebridge FinancialStrictly HydraulicsSun Life FinancialTD Canada TrustTelfer School of ManagementThe Travel StoreTown of Richmond HillTrade and Export DevelopmentTransport CanadaTurf MastersUniversity of British ColombiaVictoria International AcademyWestern Biodisel IncWestmount Charter High SchoolWildfire EnergyWinnipeg Chamber of CommerceYork RegionYork University
Junior Team Canada Delegate Partners Peru 2008
