Peru targets corruption and red tape in legal reforms

 

Peru has maintained the legal framework adopted by the constitution of 1993, favouring a free market economy designed to promote and attract private investments. Indeed, it is through this framework that Peru has seen almost three decades of uninterrupted economic growth, despite the effects of the global financial crisis of 2008.

Fight Againts Corruption

Nevertheless, there have been some challenging times as the country’s legal system has been put to the test by recent corruption scandals involving the payment of bribes to Peruvian politicians by Odebrecht, the biggest engineering and contracting company in Latin America. Indeed, in the wake of the corruption allegations that swept the country, which encompassed politicians across the political spectrum indistinctly, the current administration has fought to maintain balance between passing comprehensive regulations and trying not to stifle growth through excessive bureaucracy.

The challenge has not been easy to overcome, given that the undertaking of these efforts is happening in the midst of a political crisis. Delays and obstruction have become common tools at the hands of political agents not wanting to lose leverage or be held accountable. Thus, the reforms are taking place, albeit at a slow pace as they progress through Congress and other branches of government.

Despite this, it is worth to note that the mood of the country has largely contributed to the fight against corruption, and that notable changes have been brought about as a result. Indeed, rather than simply adopting a retaliatory approach towards the parties and institutions that allowed corruption to thrive and flourish, the current administration has sought to make prevention a priority, whilst retaining the spirit of simplicity in the drafting of new laws.

In that regard, the current trend has been to locate and close the loopholes that allowed the parties involved to exploit the system to their advantage, as well as to increase the accountability of public and private agents who engage in acts of corruption. As a result, the country has seen recent changes in its corporate and public tender laws, with a heavy emphasis on prevention. Though burdensome at first glance, these laws are designed to prevent corruption by establishing oversight responsibilities for companies in regard to all of their agents and personnel.

In that sense, the government’s approach has not been to limit or reform the existing system but rather to implement mechanisms that will allow the authorities to detect instances of corruption and sanction them effectively. This approach does not delegate all of the responsibility upon the government; it also grants citizens the tools to report acts of corruption anonymously in order to prevent any retaliation against them. Thus, the approach to end corruption can best be described as a shared responsibility between the government and its citizens.

New Judicial Body

Additionally, it should be noted that the judiciary is also undergoing a process of reform, which has resulted in the creation of a new independent entity charged with appointing and removing both judges and prosecutors at all levels. Though still in progress at Congress, this reform effort is expected to continue beyond the current administration.

Open for Business

Reform efforts have not just been limited to the fight against corruption. The current administration has also remained committed to reducing unnecessary regulation. One of the most significant legal overhauls is the country’s recent openness to immigration and foreign capital. Since 2017 the administration has sought to pass a comprehensive immigration reform, expanding the scope of visas to allow foreigners to work in the country, coupled with changes to laws regarding the hiring of foreign workers.

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The Report: Peru 2019

Legal Framework chapter from The Report: Peru 2019

Cover of The Report: Peru 2019

The Report

This article is from the Legal Framework chapter of The Report: Peru 2019. Explore other chapters from this report.