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12.30.11

Cablegate: Peru’s Migration to Free/Open Source Software

Posted in America, Cablegate, Free/Libre Software at 1:10 pm by Dr. Roy Schestowitz

Cablegate

Summary: 3 cables from Peru where Free/open source gets mentioned, especially in relation to government policy

TECHRIGHTS has a dear contributor called Eduardo Landaveri, to whom the following Cablegate cables would probably provide insight that is needed for understanding of his home country’s policy regarding software. The first cable says that “[i]n 2003, the GOP[Government of Peru] passed a decree mandating that all government agencies use legally procured open-source software. GOP agencies had until March 31, 2005 to erase all pirated software and install the legitimate versions”; the second one is similar but newer and the third one is a bit gross because Intel is nominated for a goodwill award for merely attacking its competition and trying to make a profit at the expense of poor people in Peru. Intel is a viciously anticompetitive company.

The three cables follow.


UNCLAS SECTION 01 OF 03 LIMA 000870 
 
SIPDIS 
 
DEPT FOR WHA/AND, EB/IPE SWILSON 
COMMERCE FOR 4331/MAC/WH/MCAMERON 
DOC FOR J. BOGER 
USPTO FOR J. URBAN 
LOC FOR S. TEPP 
USTR FOR J. CHOE-GROVES 
 
E.O. 12958: N/A 
TAGS: ECON [Economic Conditions], ETRD [Foreign Trade], KIPR [Intellectual Property Rights], PE [Peru] 
SUBJECT: PERU: SPECIAL 301 REVIEW 
 
REF: A) State 23950   B) 04 Lima 1031   C) 04 Lima 1524 
 
¶1.  Summary.  Post recommends that Peru remain on USTR's 
Special 301 Watch List for 2005.  Peru continued to face 
high levels of copyright piracy, including a substantial 
increase in optical disc piracy affecting the audiovisual 
industry in 2004.  Indecopi, the GOP's IPR administrative 
agency, conducted high-profile raids and continued its 
public awareness campaign.  Peru continues to face several 
problems, including the overall inadequacy of enforcement 
and the lack of deterrent sentences.  The GOP did not take 
any significant steps to resolve the pharmaceutical 
industry's concern about a lack of protection for 
proprietary test data.  GOP trade officials indicated that 
the data protection issue should be resolved during the U.S.- 
Andean free trade negotiations in 2005.  End Summary. 
 
High Rates of Optical Disc Piracy 
--------------------------------- 
 
¶2.  Despite Indecopi's efforts, copyright piracy rates 
continued to climb in 2004.  The audiovisual industry 
suffered from a dramatic increase in pirated optical discs, 
with an estimated piracy level of almost 75 percent, up from 
65 percent in 2003.  Jose Vega, General Manager of 
Blockbuster Peru, informed us that the motion picture 
industry lost an estimated $5 million in 2004 due to 
audiovisual piracy.  The large amount of imported blank 
optical discs, as well as the wide availability of DVD 
technology, helps account for this increase.  Peru also has 
one of the highest rates of musical piracy in the world. 
According to the Anti-Piracy Crusade, 98 percent of CDs in 
Peru are pirated.  Martin Moscoso, head of Indecopi's 
copyright office, and the Business Software Alliance noted 
that Indecopi estimated that business software piracy levels 
have decreased from 60 percent in 2003 to 56 percent in 
2004. 
 
Efforts to Rein in Piracy 
But More Coordination Needed 
---------------------------- 
 
¶3.  Indecopi continued its "Anti-Piracy Crusade," which 
began in 2002.  Indecopi's anti-piracy efforts in 2004, in 
collaboration with other government agencies as well as the 
private sector, focused on:  1) intensifying enforcement 
actions and 2) expanding the public awareness campaign. 
Indecopi's copyright office conducted, jointly with the 
national police and SUNAT (Peru's tax and customs agency), 
37 raids in 2004 and confiscated over $20 million in pirated 
goods and blank optical discs.  In March 2004, the Peruvian 
police, coordinating with one of Peru's special IPR 
prosecutors, successfully uncovered and seized a shipment of 
750,000 blank optical discs valued at $400,000 (Ref C).  In 
December 2004, the national police raided a Lima shopping 
center where pirated goods are sold, confiscating over 
$500,000 in pirated DVDs and CDs. 
 
¶4.  Private sector and Indecopi officials note that although 
SUNAT has participated in several seizures of pirated goods, 
it needs to become more involved in overall IPR enforcement. 
SUNAT assumed control of Peruvian customs in 2003 and has 
worked with Indecopi on several raids.  The head of 
Indecopi's copyright office declared that SUNAT should take 
a more active role in coordinating and conducting raids, 
particularly at the ports.  Currently, SUNAT is more focused 
on facilitating shipments at ports by quickly clearing 
containers.  Many customs officials have had no prior 
training on how to recognize counterfeit goods. 
 
Harsher Punishments for 
Copyright Infringements 
----------------------- 
 
¶5.  Industry and Indecopi officials involved in the Anti- 
Piracy Crusade agree that the GOP needs to improve IPR 
enforcement.  Both call for the establishment of specialized 
judges to handle IPR cases, as well as greater authority for 
the two special IPR prosecutors (who only have authority in 
Lima).  Currently, judges lack expertise in intellectual 
property matters and have avoided imposing harsh sentences 
on IPR violators.  In July 2004, the GOP passed Law No. 
28289, the Law on the Fight Against Piracy, which increased 
the minimum penalty for piracy from a two-year to a four- 
year sentence, with a maximum sentence of eight years. 
There have yet to be any convictions under the new law, 
although there are more than 1,000 IP cases pending before 
Peru's courts. 
 
GOP Mandates the Use of Legitimate Software 
------------------------------------------- 
 
¶6.  In 2003, the GOP passed a decree mandating that all 
government agencies use legally procured open-source 
software.  Unfortunately, this loosely written decree did 
not establish which GOP agency was to take the lead on 
implementation, nor did it designate penalties for 
violations of this decree.  GOP agencies have until March 
31, 2005 to erase all pirated software and install the 
legitimate versions.  Peru's Software Association held 
several educational sessions for Congressmen in 2004, 
emphasizing the importance of using legal software. 
Mario Camara, Deputy Director General of the Office of E- 
Commerce and Information, informed us February 16 that not 
all agencies have complied with the requirement.  With no 
agency designated as point of contact, it is difficult for 
the GOP to monitor progress.  Camera noted that his office 
would meet with each GOP agency's Systems Office next week 
to encourage them to comply with the decree.  Camera also 
warned that the lack of funding to purchase the new software 
might limit some agencies' ability to procure legal 
software. 
 
Higher Taxes and a New Import Registry 
-------------------------------------- 
 
¶7.  A new decree passed as part of Peru's tax reform in 
January 2004 requires importers of blank CDs to make valued 
added tax payments in advance, improving SUNAT's ability to 
trace subsequent purchases.  In November, SUNAT began 
imposing a higher tariff on all importers of blank optical 
discs ($1.30 per DVD and $0.25 per CD), in an effort to 
differentiate between legal and illegal importers. 
 
¶8.  In July, the GOP passed a law requiring that SUNAT 
establish an import registry for all persons and companies 
importing blank optical discs and recording equipment.  With 
the registry, SUNAT would be able to monitor the frequency 
of optical disc importation and target those companies that 
cannot justify legal sales of these discs.  To date, SUNAT 
has not yet established this registry. 
 
Pharmaceutical Data Protection 
------------------------------ 
 
¶9.  The GOP did not take significant action in 2004 to 
improve the protection of confidential pharmaceutical data. 
The issue of data protection is increasingly sensitive, as 
local generic drug producers have high levels of political 
clout.  Trade officials continue to argue that the TRIPs 
Article 39.3 does not mandate any specific period of data 
exclusivity.  Peru, which is, along with Colombia and 
Ecuador, negotiating a free trade agreement with the United 
States, intends to resolve our data exclusivity concerns in 
the FTA process. 
 
Comment: Recommend No Change in Status 
--------------------------------------- 
 
¶10.  Post recommends that Peru remain on USTR's Special 301 
Watch List due to the continued high levels of piracy and 
copyright violations, as well as the continued lack of 
protection for pharmaceutical test data.  Despite increased 
focus and awareness of IPR problems, the GOP has not 
increased judicial enforcement of existing laws in order to 
create a meaningful deterrent nor established clear 
administrative measures for government agencies to comply 
with those laws. 
 
STRUBLE

Cable II:


VZCZCXYZ0002
RR RUEHWEB

DE RUEHPE #0699/01 0531554
ZNR UUUUU ZZH
R 221554Z FEB 06
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC 8820
INFO RUEHBO/AMEMBASSY BOGOTA 3011
RUEHQT/AMEMBASSY QUITO 0042
RUEHLP/AMEMBASSY LA PAZ FEB SANTIAGO 0213
RUEHCV/AMEMBASSY CARACAS 9102
RUEHBU/AMEMBASSY BUENOS AIRES 2269
RUEHME/AMEMBASSY MEXICO 3281
RUEHBR/AMEMBASSY BRASILIA 6520
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAFCC/FCC WASHDC
RHEHNSC/NSC WASHDC

UNCLAS LIMA 000699 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR WHA/AND, WHA/CEN, EB/IPE CLACROSSE AND AANDAMO 
COMMERCE FOR 4331/MAC/WH/MCAMERON 
DOC FOR JBOGER 
USPTO FOR JURBAN 
LOC FOR STEPP 
USTR FOR JCHOE-GROVES 
 
E.O. 12958: N/A 
TAGS: ECON [Economic Conditions], ETRD [Foreign Trade], KIPR [Intellectual Property Rights], PE [Peru] 
SUBJECT: PERU: SPECIAL 301 REVIEW 
 
REF: A) STATE 14937   B) 05 LIMA 1971  C)05 LIMA 3794 
 
¶1.  Summary.  Post recommends that Peru remain on USTR's 
Special 301 Watch List for 2006.  Peru continued to face 
high levels of copyright piracy in all sectors, including 
media, books, toys, apparel and other merchandise, in 2005, 
including a slight increase in optical disc piracy. 
Indecopi, the GOP's IPR administrative agency, conducted 
high-profile raids and continued its public awareness 
campaign.  Peru continues to face several problems, 
including the overall inadequacy of enforcement, inadequate 
border protections and the lack of deterrent sentences.  The 
GOP, in concluding Free Trade Agreement negotiations with 
the United States in December 2005, obligated itself to 
protecting proprietary test data for pharmaceutical and 
agrochemical products beginning in January 2007.  End 
Summary. 
 
Peru's International Obligations 
-------------------------------- 
 
¶2.  Peru is a member of the World Intellectual Property 
Organization (WIPO).  It is also a member of the Paris 
Convention, Berne Convention, Rome Convention, Geneva 
Phonograms Convention, Brussels Satellites Convention, 
Universal Copyright Convention, the WIPO Copyright Treaty 
(WCT) and the WIPO Performances and Phonograms Treaty 
(WPPT).  Peru's 1996 Copyright Law is generally consistent 
with the TRIPS Agreement.  Peru joined the WCT in July 2001 
and the WPPT in February 2002.  Although most of the 
provisions of these two WIPO treaties are included in Peru's 
1996 Copyright Law, officials at Indecopi, the IPR 
administrative agency, have acknowledged the need for 
additional legislation in order to clarify the rights of 
artists and producers.  The National Association of Music 
Publishers continues to criticize Indecopi's enforcement, 
claiming that its members are not receiving the royalties 
due to them.  Peru's 1996 Industrial Property Rights Law 
provides the framework for patent protection.  In 1997, 
based on an agreement reached with the U.S. Government, Peru 
addressed several inconsistencies with the WTO TRIPS 
Agreement provisions on patent protection and most-favored 
nation treatment for patents. 
 
Efforts to Rein in Piracy 
Enhances Coordination 
------------------------- 
 
¶3.  Indecopi continued its "Anti-Piracy Crusade," which 
began in 2002.  Indecopi's anti-piracy efforts in 2005, in 
collaboration with other government agencies as well as the 
private sector, focused on:  1) intensifying enforcement 
actions and 2) expanding the public awareness campaign.  In 
March and November, the Anti-Piracy Crusade organized "Anti- 
iracy Day" and "Movie Theater Day", in an effort to 
increase public awareness about intellectual property 
rights.  On both days, Peruvian movie theaters offered 
discounts on movie tickets prices, promoting increased 
attendance.  Moviegoers were encouraged to turn in pirated 
DVDs in exchange for discounts on food and future movie 
ticket sales.  On both days, the Anti-Piracy Crusade 
collected more than 80,000 pirated DVDs. 
 
¶4.  Indecopi's copyright office conducted, jointly with the 
national police and SUNAT (Peru's tax and customs agency), 
more than 60 raids in 2005, with 13 occurring outside of 
Lima.  Indecopi and SUNAT confiscated more than $30 million 
in pirated and contraband goods and blank optical discs.  In 
July 2005, the Peruvian police, coordinating with one of 
Peru's special IPR prosecutors, successfully raided "El 
Hueco", a market known for selling pirated products in Lima, 
and confiscated 8 tons of contraband and pirated merchandise 
worth $300,000. 
 
¶5.  In September 2005, SUNAT and Indecopi signed a 
Memorandum of Understanding, enabling Indecopi to assign one 
officer to the Port of Callao.  This officer works closely 
with Customs to review incoming shipments.  In six months, 
Indecopi and SUNAT screened 51 containers and confiscated 
the contents of 18 containers that were illegally 
transporting contraband and pirated goods.   Private sector 
and Indecopi officials agree that this is a step in the 
right direction, although they believe that SUNAT, which 
assumed control of Peruvian customs operations in 2003, must 
become more involved in overall IPR enforcement.  Many 
customs officials have had little or no prior training on 
how to recognize counterfeit goods. 
 
¶6.  In October 2005, Post, the U.S. Patent and Trade Office, 
and U.S. Customs conducted an IPR training seminar for 
Customs and Indecopi officials.  U.S. Customs officials 
advised the Peruvian participants on obligations under TRIPs 
and best practices for finding and seizing contraband and 
pirated goods.  One issue highlighted by the conference was 
the need for Peru to meet its TRIPS obligations; many 
Customs officials were unaware of TRIPS and how the 
agreement affects how they do their job. 
 
High Rates of Optical Disc Piracy 
--------------------------------- 
 
¶7.  Despite Indecopi's efforts (detailed below), copyright 
piracy rates remained the same in 2005.  The audiovisual 
industry suffered from the piracy of optical discs, with an 
estimated piracy level of almost 75 percent, up from 65 
percent in 2003.  Jose Vega, General Manager of Blockbuster 
Peru, informed us that the motion picture industry lost an 
estimated $5 million in 2005 due to audiovisual piracy.  The 
large amount of imported blank optical discs, as well as the 
wide availability of DVD technology, helps account for this 
increase.  Peru also has one of the highest rates of musical 
piracy in the world.  According to the Anti-Piracy Crusade, 
98 percent of CDs in Peru are pirated.  Martin Moscoso, head 
of Indecopi's copyright office, and the Business Software 
Alliance noted that business software piracy levels remained 
the same since 2004, at approximately 54 percent. 
 
Formal Importation of Blank Discs 
Decreases But Contraband on the Rise 
------------------------------------ 
 
¶8.  Indecopi estimates that in 2005, approximately 100 
million blank optical discs were legally imported into Peru, 
a decrease of 10 million since 2004.  Indecopi approximates 
that of these 105 million discs, only 14 million were used 
for legal purposes.  Martin Moscoso, Director of Indecopi's 
Copyright Office, explained that, due to the high private 
copy levies (approximately 200-300 percent of costs) imposed 
by the Peruvian Artists Association in 2005, formal 
importers of blank optical discs chose to reduce imports in 
order to avoid paying such a high fee.  Moscoso also 
indicated that contraband of blank optical discs has 
increased, although official figures are unavailable. 
 
SUNAT Implements Registry 
------------------------- 
 
¶9.  In July 2004, the GOP passed a law requiring that SUNAT 
establish an import registry for all persons and companies 
importing blank optical discs and recording equipment.  With 
the registry, SUNAT would be able to monitor the frequency 
of optical disc importation and target those companies that 
cannot justify legal sales of these discs.  On September 25, 
2005, SUNAT published regulation 020-2005, which established 
the norms for the import registry.  Importers of blank 
optical discs must provide SUNAT with the number of units 
imported, the name of the commercial organization that will 
sell the discs, the commercial brand of the discs, the model 
information and format characteristics. 
¶10.  The registry went into effect on October 24, 2005. 
According to SUNAT officials, legitimate importers of blank 
optical discs have faced no difficulty in providing SUNAT 
with the necessary information.  However, importers that 
either use the discs for illicit means or sell them to 
illegitimate vendors have been more reluctant to provide 
SUNAT with the information.  SUNAT officials predict that 
the level of legal imports of blank optical discs will 
decrease in 2006, as more discs are smuggled across land 
borders.  SUNAT plans on improving its border protections to 
crack down on the contraband of blank discs. 
 
New Regulations to Strengthen IPR Enforcement 
--------------------------------------------- 
 
¶11.  The GOP in 2005 passed several new regulations aimed at 
improving the IPR environment.  On October 28, SUNAT, 
coordinating closely with Indecopi and the private sector, 
issued a resolution modifying the January 2004 decree that 
required importers of blank CDS to make valued added tax 
payments in advance.  The new regulation seeks to improve 
SUNAT's ability to trace imports of blank discs and their 
subsequent purchases.  SUNAT now charges an advance VAT of 
$0.03 per CD and $0.06 per DVD.  Under the regulation, SUNAT 
is now able to audit importers' sales to determine the 
legitimacy of the sale and who are the largest consumers of 
blank optical discs.  If a company feels that it has paid 
too much in VAT, it must provide SUNAT with evidence of its 
sales.  SUNAT would then issue a credit for future VAT 
payments. 
 
¶12.  The Lima Municipality in October 2005 issued Order 717 
to improve the ability of police to raid local vendors of 
pirated products.  The regulation now enables the Municipal 
Government, working with the police, to revoke licenses for 
those vendors who sell pirated products.  The Anti-Piracy 
Crusade lauded the new regulation, but commented that the 
Lima Government has yet to enforce it.  Indecopi continues 
to work with the Lima Municipality, as well as several other 
municipal governments, to encourage the protection of 
intellectual property. 
 
Amendment to the Artists 
Protection Law Pending 
------------------------ 
 
¶13.  In July 2004, the Prime Minister approved a Supreme 
Decree establishing the Law of Artists, Interpreters and 
Music to protect the interests and rights of those involved 
in the creative arts, including performers and producers of 
musical recordings and motion pictures, from acts of piracy. 
The decree argued that blank optical media was being used 
for "private copies" and piracy of media and software, 
violating copyright laws.  Under the law, the Peruvian 
Artists Association can apply a levy of 200-300 percent on 
all blank optical discs, to be paid by the manufacturers of 
blank recording media. 
 
¶14.  The private sector, working with Indecopi, the Lima 
Chamber of Commerce, and the Peruvian Artists Association, 
sought to have the levy reduced to a more reasonable 20 
percent of the value.  A recommendation was passed to the 
Ministry of Trade in early January 2006 for action.  If the 
Ministry of Trade agrees with the recommendation, it will 
pass the document to the Prime Minister's office for a 
Supreme Decree. 
 
Still No Convictions of IPR Violators 
------------------------------------- 
 
¶15.  Industry and Indecopi officials agree that the GOP 
needs to improve IPR enforcement.  Both call for the 
establishment of specialized judges to handle IPR cases, as 
well as greater authority for the two special IPR 
prosecutors (who only have authority in Lima).  Currently, 
judges lack expertise in intellectual property matters and 
have avoided imposing harsh sentences on IPR violators.  In 
July 2004, the GOP passed Law No. 28289, the Law on the 
Fight Against Piracy, which increased the minimum penalty 
for piracy from a two-year to a four-year sentence, with a 
maximum sentence of eight years.  There have yet to be any 
convictions under the new law, although there are more than 
1,000 intellectual property cases pending before Peru's 
courts. 
 
¶16.  In mid-2005, Indecopi filed a lawsuit for piracy and 
money laundering against one of the main optical disc 
importers.  The case remains in the Judiciary, and the 
importer has filed a countersuit against the Indecopi 
officials for slander and wrongful prosecution.  Martin 
Moscoso lamented that the Peruvian Judicial system is 
inherently slow and corrupt -- this case could take several 
years to resolve. 
 
Deadline Extended for Legal Software Use 
---------------------------------------- 
 
¶17.  In 2003, the GOP passed a decree mandating that all 
government agencies use legally procured open-source 
software.  GOP agencies had until March 31, 2005 to erase 
all pirated software and install the legitimate versions. 
The E-Government Office in the Prime Minister's Office in 
late 2004 took the lead in implementing this project.  In 
mid-2005, Rafael Muente, the new Director of the E- 
Government Office, conducted an audit of the software used 
by GOP agencies.  He found that only 60 percent of GOP 
agencies were following the decree.  In November 2005, the 
GOP issued a regulation extending the deadline for 
installation of legal software to December 31, 2006. 
 
Increased Problems with Lack of 
Patent Protections for Pharmaceuticals 
-------------------------------------- 
 
¶18.  In 2005, three U.S. pharmaceutical companies complained 
that Indecopi was not adequately protecting patents.  In all 
three cases, the companies noted that they face unfair 
competition from local distributors selling foreign-made 
pirated copies of their best selling products.  While 
Indecopi initially issued a precautionary measure against 
the local producers, this measure, per Peruvian law, expires 
after 120 days.  In several cases, Indecopi ordered the U.S. 
companies to prove that the local distributors are selling 
pirated copies of their patented medicines, which is 
contrary to TRIPS obligations.  This process takes time and 
substantial funding, during which the company can still sell 
the pirated product on the market.  Even if Indecopi orders 
a local distributor to cease sales of the allegedly pirated 
product, the distributor can appeal the decision; during the 
appeals process, local producers can resume sales of the 
"pirated" product.  The companies estimate that they have 
lost more than $5 million in damages due to lost government 
procurement sales. 
 
Pharmaceutical Data Protection 
------------------------------ 
 
¶19.  The U.S. pharmaceutical and agrochemical industries 
also continue to be concerned about Peru's protection of 
confidential test data.  Peruvian government health 
 
SIPDIS 
authorities approved the commercialization of new drugs that 
were the bioequivalents of already approved drugs, thereby 
denying the originator companies the exclusive use of their 
data.  In effect, the Government of Peru allows the test 
data of registered drugs from some companies to be used by 
others seeking approval for their own pirate version of the 
same product.  U.S. companies also are concerned that the 
Peruvian government does not provide patent protection for 
second uses, which would allow a company with a patented 
compound for one use to subsequently patent a second use of 
that compound.  Although Peruvian law provides the means for 
effective trademark protection, counterfeiting of trademarks 
and imports of counterfeit merchandise remain widespread. 
 
¶20.  While Indecopi did not take significant action in 2005 
to improve the protection of confidential pharmaceutical 
data, the GOP did conclude negotiations on a bilateral free 
trade agreement with the United States.  In doing so, the 
GOP committed itself to protecting proprietary test data for 
pharmaceutical and agrochemicals for ten years.  The free 
trade agreement, once signed and ratified by the U.S. and 
Peruvian Congresses, is scheduled to go into effect on 
January 1, 2007. 
 
2006 Training Plans 
------------------- 
 
¶21.  In 2006, Post, working with the U.S. Patent and Trade 
Office and the Department of Homeland Security, plans on 
hosting several training classes in Peru for key IPR and law 
enforcement officials.  In February 2006, the International 
Law Enforcement Academy (ILEA) in Peru, with assistance from 
the U.S. Customs and Border Protection, hosted a training 
seminar for 50 officials from Peru, Brazil, Argentina and 
Paraguay.  During the seminar, officials learned new 
techniques for investigations and seizures, how to prepare a 
case report for pending prosecutions, and best practices 
from U.S. Customs. 
 
¶22.  Post in 2005 submitted to State/INL a request for 
funding for an IPR training seminar for Peru's special IPR 
prosecutors, police and judges.  To date, Post has not 
received an answer from State/INL on its proposal.  If money 
is not available from State/INL, Post will seek funding from 
alternate sources, such as the U.S. Patent and Trade Office 
and the private sector. 
 
¶23.  Post also plans on sending several Indecopi Officials 
to the United States for an international visitors IPR 
program.  Additionally, we would like to work with the U.S. 
Patent and Trade Office to host a conference on Peru's 
obligations under TRIPS and the U.S.-Peru Free Trade 
Agreement. 
 
Comment: Recommend No Change in Status 
-------------------------------------- 
 
¶24.  Post recommends that Peru remain on USTR's Special 301 
Watch List due to the continued high levels of piracy and 
copyright violations, as well as the continued lack of 
protection for pharmaceutical test data.  Despite increased 
focus and awareness of IPR problems, the GOP has not 
increased judicial enforcement of existing laws in order to 
create a meaningful deterrent or established clear 
administrative measures for government agencies to comply 
with those laws. 
 
ARELLANO

Cable III:


VZCZCXYZ0000
PP RUEHWEB

DE RUEHPE #2106/01 1662249
ZNR UUUUU ZZH
P 152249Z JUN 07
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC PRIORITY 5873
INFO RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS LIMA 002106 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR D, E, AND EEB/EPPD NSMITH-NISSLEY 
COMMERCE FOR 4331/IEP/WH/MCAMERON 
USTR FOR BENNETT HARMAN 
 
E.O. 12958: N/A 
TAGS: BEXP [Trade Expansion and Promotion], ECON [Economic Conditions],
 EINV [Foreign Investments], ELAB [Labor Sector Affairs], ETRD [Foreign Trade], 
USTR [Office of the Special Representative for Trade Negotiations], 
AID [Agency for International Development, International Cooperation Administration], PE [Peru] 
SUBJECT: EMBASSY LIMA NOMINATES INTEL FOR SECRETARY'S AWARD 
FOR CORPORATE EXCELLENCE 
 
REF: STATE 71180 AND PREVIOUS 
 
SUMMARY 
------- 
 
¶1.  Embassy Lima is pleased to nominate Intel Semiconductores 
del Peru S.A. for the Secretary of State's 2007 Award for 
Corporate Excellence.  Intel Corporation's office in Peru is 
an outstanding example of Intel's commitment to corporate 
social responsibility, education and bridging the digital 
divide.  In only two years of existence, the small Peru 
office has made major contributions to economic development 
in Peru and meets the standards of conduct in all eight 
categories on which the award is based.  Described below are 
three concrete examples that show why Intel deserves this 
award:  Intel's groundbreaking "PC Peru" program, the 
recently launched Intel Education Initiative, and an IT 
training center for the visually handicapped.  END SUMMARY. 
 
TRANSFORMATIONAL "PC PERU" PROGRAM 
---------------------------------- 
 
¶2.  In March 2005, Intel and Peruvian President Alejandro 
Toledo announced the launch of the "PC Peru" program, aimed 
at bridging the digital divide by offering low-cost 
high-quality computers throughout Peru.  With more than half 
of the population living in poverty and one of the lowest 
computer penetration levels on the continent, the Peruvian 
government wanted to raise the quality of life for its 
citizens by providing better access to IT and Internet-based 
resources.  Intel convinced other computer component 
manufacturers, distributors and content providers to join 
Intel in supplying the components at heavily discounted 
rates.  In order to stimulate the Peruvian IT industry, all 
of the computers were assembled entirely in Peru by at least 
five local companies.  The assembly was done under 
international standards and certified by Intel. 
 
¶3.  Two models were initially offered under the PC Peru 
program at over 300 points of sale, with the lower priced 
package costing $399.  Each PC included a 40GB hard drive, a 
15" monitor, a 52x CD-ROM, a keyboard, a mouse, two 240w 
speakers, a 1.44MB disk drive, free anti-virus software, the 
Linux operating system, three months of free Internet 
service, a warranty, and free training.  To make the PCs even 
more accessible, Intel provided a 36-month payment plan 
option.  One model included an Intel Celeron 1.8 processor 
and 128MB RAM, while the other included an Intel P4 2.26 
processor and 256MB RAM. 
 
¶4.  During the launch phase with the Peruvian Ministry of 
Production, 4,140 of these low-cost computers were sold 
publicly and distributed throughout Peru.  The private sector 
continued selling the PCs after the Peruvian government's 
direct involvement ended, and reached 20,000 units sold in 
2006.  There are countless testimonials of how access to 
affordable PCs improved the lives of lower and middle class 
Peruvians.  Many small and micro enterprises were able to 
computerize their inventories, create websites, use e-mail to 
contact clients, expand their sales, and even begin exporting 
their products.  Many of the PCs were acquired by schools, 
giving students their first access to a computer and the 
Internet.  Currently, PC Peru offers four more modern 
packages from $457 to $620, which can be purchased online at 
www.pcperu.org.  This program has been so successful, that it 
is being replicated by Intel in several other Latin American 
countries. 
 
INTEL EDUCATION INITIATIVE 
-------------------------- 
 
¶5.  Intel's Education Initiative is a worldwide program aimed 
at training teachers to effectively integrate technology into 
their classrooms.  Primary and secondary school teachers are 
taught how IT can improve and facilitate their students' 
learning, are coached on how to apply IT to existing 
curricula, and are given free on-line resources and 
interactive lessons.  Each teacher participates in 10, 4-hour 
modules (40 hours) of practical workshops plus 20 hours of 
homework.  They learn to develop unit plans, incorporate the 
Internet in classes, design web pages, use multimedia 
programs, and how to transfer what they learn in workshop to 
other teachers.  The Teachers are also put in contact with 
other trained teachers around the world, and invited to 
future meetings and Intel seminars.  Each teacher receives an 
extensive Study Program Manual and a CD-ROM with resources. 
The use of IT and the Internet motivates students and 
stimulates their creativity. 
 
¶6.  In September 2006, less than two months after taking 
office, Peruvian President Alan Garcia witnessed Intel and 
the Ministry of Education signing an agreement launching the 
pilot program of the Intel Education Initiative in Peru. 
During the first phase of the pilot program, which began in 
February 2007, foreign Senior Trainers trained 33 Peruvians 
for 40 hours, after which they themselves became qualified 
Senior Trainers.  In the second phase, which began at the end 
of April 2007, 10 of these new Senior Trainers are training 
100 teachers from 5 public schools in the Lima area that were 
selected by the Ministry of Education to become Master 
Teachers (trained teachers that will help expand the program 
throughout Peru).  This 10-week training also consists of one 
4-hour module and 2 hours of homework per week, and is 
scheduled to be completed in mid July.  Intel paid 100 
percent of the pilot program costs:  brought in trainers; 
rented computer center; provided manuals, CD-ROMs and 
incentives for Senior Trainers; and donated computers to a 
Ministry of Education training center. 
 
¶7.  The pilot program is being monitored by the Education 
Department of the Pontifical Catholic University of Peru, 
which will present its evaluation in mid July.  After the 
pilot phase, the next step will be to train 300 additional 
Master Teachers in August 2007, with the goal of training 
3,000 teachers nationwide (in all of Peru's 25 regions) by 
the end of 2007.  After the conclusion of the pilot phase, 
the costs to continue and spread the program will be split 
50-50 by Intel and the Ministry of Education.  Intel also 
signed an agreement with San Martin de Porres University to 
help expand the training program throughout Peru. 
 
¶8.  Worldwide, the Intel Education Initiative has trained 
nearly five million primary and secondary school teachers in 
more than 40 countries since the program's launch in 2000. 
Intel invests $100 million per year in this program, and 
plans to train 10 million teachers more in the next five 
years.  Intel donated 10,000 PCs to schools in developing 
countries in 2006 and plans to donate at least 90,000 more. 
 
COMPETITIVENESS CENTER FOR THE VISUALLY HANDICAPPED 
--------------------------------------------- ------ 
 
¶9.  In 2004, three blind young Peruvians, who had used a 
World Bank grant to launch Peru's first cyber cafe for the 
visually impaired in 2003, established the non-profit 
Association for Technology and the Handicapped (ATECNODIS). 
Later that year, Intel helped ATECNODIS establish the 
Peruvian Competitiveness Center for the Visually Handicapped 
(CCD), providing the building for the Center in the San Borja 
district of Lima, bringing foreign specialists to train 
ATECNODIS' volunteers, and donating 15 computers. 
 
¶10.  The CCD is a modern IT facility with accessible hardware 
and software that has provided individualized training to 
hundreds of visually handicapped Peruvians in computer and 
Internet use.  Courses offered include:  Introduction to IT, 
Windows Operating System, Microsoft Word, Excel, Internet and 
E-mail, Magic, Messenger, Open Book (scanner), Interactive 
Encyclopedias and Dictionaries, JAWS, and Mexvox.  Since 
2005, the CCD also offers text and book digitization services 
for the handicapped.  ATECNODIS, with Intel support, is a 
leader in promoting the social inclusion of handicapped 
Peruvians. 
 
OTHER INTEL ACTIVITIES INVOLVING PERU 
------------------------------------- 
 
¶11.  Intel has begun offering its wireless laptop "Classmate 
PC" in Peru for only $270 per unit.  These low cost laptops 
are especially designed for primary and secondary school 
students.  Intel donated 200 units to the Peruvian government 
for distribution to public schools in May 2007. 
 
¶12.  Intel made possible Peru's first ever wireless district 
in 2004, donating the infrastructure to provide free wireless 
"hotspots" throughout Lima's Miraflores district.  Similarly, 
in September 2005, Intel and two other companies launched the 
"Wireless Cuzco" initiative, which provides free wireless for 
the central plaza of Peru's number one tourist destination 
high in the Andes. 
 
¶13.  Peruvian students participate and have won awards in 
Intel's International Science and Engineering Fair (ISEF), 
the largest pre-university science fair in the world. 
 
Sponsored by Intel since 1997, Intel's ISEF brings together 
the most promising innovators and scientists at the primary 
and secondary school levels.  Prizes include cash and full 
university scholarships. 
 
INTEL'S PERU OFFICE 
------------------- 
 
¶14.  Intel has had a presence in Peru for eight years, but 
its local office opened two years ago and currently has four 
employees.  Intel Peru's corporate social responsibility 
contributions, with so few employees in such a short time, 
are truly amazing. 
 
¶15.  In addition to its exceptional corporate citizenship 
which contributes to economic development and innovation, 
Intel's Peru office follows exemplary employment practices 
and all Peruvian laws and regulations.  Intel Peru has not 
violated any laws or standards, and has not been involved in 
any acts of corruption.  Intel Peru is known as a great and 
safe place to work. 
 
COMMENT 
------- 
 
¶16.  Intel, an innovative U.S. firm respected worldwide, has 
made a real difference in Peru with a solid commitment to 
improving education and bridging the digital divide.  The 
work Intel has done in Peru is an excellent example of 
Intel's broader commitment to corporate social responsibility 
and great business practices worldwide.  Intel Peru, with a 
staff of only four, has done more to contribute to 
development in Peru than many huge firms and deserves the 
Department's recognition for its exemplary accomplishments. 
With the U.S.-Peru Trade Promotion Agreement (PTPA) close to 
fruition and Peru hosting the Asia-Pacific Economic 
Cooperation (APEC) forum activities in 2008 (including visits 
by Secretary Rice and President Bush), this would be a great 
time to recognize a model U.S. company that is doing great 
things in Peru. 
STRUBLE

That’s all from Peru for now.

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A Single Comment

  1. Needs Sunlight said,

    December 30, 2011 at 1:40 pm

    Gravatar

    ” Two models were initially offered under the PC Peru
    program at over 300 points of sale, with the lower priced
    package costing $399. Each PC included a 40GB hard drive, a
    15″ monitor, a 52x CD-ROM, a keyboard, a mouse, two 240w
    speakers, a 1.44MB disk drive, free anti-virus software, the
    Linux operating system…”

    Wow. That should have made international technology news.

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