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Chile backs Lucchetti in Peru dispute |
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| CHILE: December 20, 2002 | ||
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SANTIAGO, Chile - The Chilean government has criticized the closure of a factory in Peru owned by Chilean pasta maker Lucchetti (LUC.SN), ordered shut this week on environmental grounds.
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Lima's city council ruled that the $40 million plant, built in 1998 on a nature reserve, should close because it was causing environmental damage. The municipality also revoked Lucchetti's operating license. "The Chilean government deplores this decision taken by the Lima municipality, in which it revoked a municipal license that Lucchetti Peru was legally given," the Chilean foreign ministry said in a statement late on Wednesday. Lucchetti, controlled by leading Chilean investment group Luksic, says the plant does not pose a threat to the reserve and claims the order to close was the result of political maneuvering within Lima council. Peruvian Prime Minister Luis Solari defended Lima council's decision. "I have no doubt at all that the municipality acted within its constitutional and legal rights," he told CPN radio station. Lucchetti, which had sales in Chile and Peru of around $120 million last year, said it would take the dispute to international arbitration. Next-door neighbors Chile and Peru are often at odds over arms purchases and territorial rights.
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REUTERS NEWS SERVICE
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