HomeNewsBriefConstruction Site Extortion in Peru Shows Evolution of Local Org Crime
BRIEF

Construction Site Extortion in Peru Shows Evolution of Local Org Crime

EXTORTION / 21 JUL 2014 BY MIMI YAGOUB EN

Peru is reportedly home to at least 60 criminal groups which extort the construction industry under the guise of trade unions, indicating the development and expansion of local organized crime.

According to the Secretary General of Peru's Federation of Construction Workers (FTCCP), Mario Huaman, up to 80 percent of Peru's 72 informal construction worker trade unions are cover-ups for extortion groups, reported La Republica.

The groups typically operate by demanding construction companies and workers pay extortion fees to allow construction to continue unhindered, often under the threat of death. According to Peru's Protection of Public Works Division (DIPROC), the extortion fees can vary between two and five percent of total construction costs, earning criminal groups up to $17,000 a month per construction site.

To combat this problem, Interior Minister Daniel Urresti said police officers had infiltrated the trade unions to determine which were dedicated to extortion, reported Prensa Latina. This facilitated the recent capture of the leader and various other members of "La Gran Familia Chinchana," a criminal organization operating in the southern city of Chincha.

The head of DIPROC, Jose Saavedra Ballon, stated that between 2010 and July 14, 2014, the institution disbanded 121 groups extorting the construction industry.

InSight Crime Analysis

The number of criminal groups extorting Peru's construction sector, and the apparently sophisticated tactics of some of these groups, is a sign of the evolution of local organized crime. In March, the president of Peru's National Confederation of Businessmen (Conaco) said there were 100 extortion gangs operating in capital city Lima alone, and that more than 500 businesses had been extorted nationwide in 2014.

General Cesar Cortijo, the director of Peru's Criminal Investigation Office (DIRINCRI), told InSight Crime last year that an increase in extortion -- especially in the construction sector -- was one of the country's most serious law enforcement problems. 

SEE ALSO: Peru News and Profiles

One of Peru's most signficant national organized crime groups, La Gran Familia, was dedicated principally to extortion -- particularly of the construction industry -- and contract killings. In spite of past attempts to disband the group, remnants of La Gran Familia appear to remain active.

The growing sophistication of these local criminal groups poses a challenge to law enforcement, whose job is made more difficult by the involvement of corrupt officials of all ranks in illegal activity. In 2013, a police chief in northern Peru was arrested for working with El Nuevo Clan del Norte, which is thought to have largely taken over La Gran Familia's extortion operations.

There is a risk that these groups could also get involved in the drug trade, with Peru now the world's principal producer of cocaine.  If they do so, they could make the leap into transnational organized crime, allying themselves with Colombian or Mexican criminal syndicates.

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