August 18, 2008 / 11:45 PM / 10 years ago

UPDATE 1-Peru may use army to end protests at energy sites

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LIMA, Aug 18 (Reuters) - Peru’s government on Monday threatened to send in the army to break up protests at energy installations that indigenous groups surrounded a week ago to denounce laws they say will strip tribes of their land.

The government issued a decree for the provinces of Cusco, Loreto and Amazonas, allowing it to order the armed forces to disperse protesters.

Talks held last week between the government and indigenous rights groups faltered. Tribes are upset with a law President Alan Garcia passed earlier this year that makes it easier for big companies to buy land owned collectively by communities.

The law was passed as part of Peru’s free-trade deal with the United States, and indigenous groups fear it will be used by mining and energy companies to snap up their land.

“Indigenous people are defending themselves against government aggression,” Alberto Pizango, president of AIDESEP, a rights organization, told reporters.

Police in the area said at least two of their officers did not return after being sent to a protest site over the weekend, prompting local media to say they were taken hostage. AIDESEP denied protesters had taken hostages but insisted the officers were being treated well.

Tribal groups are asking Congress to revoke the land law and Pizango said the protests would end once the government shows a willingness to renegotiate.

The protests have involved some 500 people who surrounded two energy installations: an oil pipeline in northern Peru owned by state-run company Petroperu, and a lot of Argentine company Pluspetrol that sits in the Camisea natural gas field in southern Peru.

Pluspetrol said gas output in Peru has not been affected.

The protests started just as Peru’s energy supplies entered a period of tightness.

In the last few weeks, Peru has experienced two blackouts as spiking demand, a shortage of rains and poor infrastructure have combined to crimp power supplies.

Peru has huge natural gas reserves, but there is just one pipeline that moves it from the Camisea field to the capital Lima, and it is already operating at full capacity.

Fewer rains this year have forced Peru to rely less on hydroelectric power and more on power generated by natural gas or other energy sources like diesel. (Reporting by Maria Luisa Palomino, Dana Ford and Teresa Cespedes; Writing by Terry Wade; Editing by Christian Wiessner)

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