Peru – Corporate law and corporate governance
CHAPTER II
THE BUSINESS AND HUMAN RIGHTS SITUATION IN PERU
Some specific sectors have adopted RBC approaches to a greater extent, such as mining, hydrocarbons, energy, and agriculture. In 2002, the SNMPE approved a Code of Conduct, which has been developed over the years with the incorporation of new principles in 2016 and 2018. Through this, SNMPE members declare, among other issues, that their activities seek to contribute to sustainable development and promote and implement environmental protection practices, and that these should be carried out following principles of corporate governance, transparency, and anti-corruption, and respect and promote human rights.
A 2019 study prepared by Confiep (2019) with support from the ILO identified the good practices of the business sector in terms of human rights in Peru, based on information reported by 252 companies between 2016 and 2017. Regarding corporate commitments to human rights and other related policies, the sample evidenced the following: 5% stated their alignment with the Guiding Principles, 7% adopted human rights policies, 31% declared having human rights declarations, and 57% did not report specific information on human rights (Confiep, 2019, pp. 13-15). Regarding their corporate policies, those identified are related to labor rights (86%), supply chains or suppliers (75%), the environment (71%), and communities and local development (63%) (Confiep, 2019, pp. 18-19). Of the companies analyzed in the study, 63% reported having integrated management systems and 79% with risk management tools (Confiep, 2019, pp. 15-17), which contribute to due diligence. – page 32
In the area of mining, the Responsible Mining Founding report (RMF & Centro Vincular-PUCV, 2020) evaluates mining companies based on their policies and practices concerning economic, environmental, social, and governance issues, scoring each category from 0 to 6. – page 34
In terms of transparency and integrity, it is necessary to have specific trade union instruments on the implementation of integrity and anti-corruption policies in the value chains. In this regard, the initiative to adopt codes of ethics and the explicit anti-corruption commitment adopted by associations such as Confiep should be highlighted. Likewise, progress must be made in the implementation of corporate mechanisms for participation and access to information, especially on conflicts of interest and income and asset declaration systems for internal and external agents. – page 37
CHAPTER III DIAGNOSIS AND BASELINE: ACTION AREAS
3.2. Conclusions of the specific issues
Transparency, integrity, and fight against corruption
In recent years, the conviction has been established that corruption cuts across different areas and has a direct and unacceptable impact on human rights. For this reason, the State has signed the main treaties on the subject, which it has been implementing in its internal regulations through a National Policy and a National Integrity and Anti-Corruption Plan. It has also created integrity offices or units at the central government level, which has made relative progress at the sub-national level. In terms of transparency, progress has been made with measures such as the mandatory presentation of the declaration of interests. On the other hand, it is also necessary to strengthen the autonomy and effectiveness of the National Transparency Authority. Likewise, it is necessary to strengthen the public procurement model to include incentives for companies that meet integrity standards, as determined by the evaluation of the state of the art of the GP-RBC approach in the public procurement system, which will be carried out within the framework of the implementation of the NAP.
From the business sector, there is an explicit commitment of the unions to articulate their efforts with public policy on the matter. Proof of this are measures such as the Technical Secretariat of the Global Compact, the incorporation of SDGs in business work, the Private Anti-Corruption Council, the Ethics Committee, the Code of Conduct, the participation of important business associations in the High-Level Anti-Corruption Commission, the Transparency Initiative in the Extractive Industry, among others. Regarding reparation mechanisms, progress has been made in incorporating the administrative responsibility of companies for corruption offenses, which should be complemented with expeditious and accessible reparation procedures and a system of precautionary measures or guarantees of non-repetition. – page 43
Environmental Impact Assessment (EIA)
The formal business sector has generated good practices to be considered in the construction of a public policy on business and human rights and RBC. This should promote and guarantee corporate due diligence mechanisms from the formulation of the EIA, being strengthened by transparency mechanisms, training, multi-stakeholder dialogue, risk identification, complaints, among others, as recommended by the UN System, the Inter-American System, and the OECD. – page 49
Large-scale agriculture
Business associations in the sector, such as AGAP, have implemented good corporate practices, such as the adoption of codes of conduct, crime prevention policies, and measures against Covid-19, among others. However, there is no information from the public policy on their implementation, so it is necessary to generate public policy mechanisms to promote due diligence and reporting of these advances to the competent state sectors, as well as to strengthen the channels of complaint and internal human rights policies of the companies. – page 50
Table 8: NAP strategic guidelines and objectives, and alignment with the axes of the Peru Vision 2050
Strategic guideline No. 1: Promotion and dissemination of a culture of respect for human rights in the business environment in accordance with the framework of international standards of the guiding principles and other international instruments.
Objective No. 1: Officials, managers, and public servants incorporate the guiding principles and other related international instruments in public management, specifically in the service they provide.
2.
Action: To implement training on GP-RBC and other international standards, from the governing body of the corresponding entity, aimed at its officials, managers, and public servants
Background: In order to guarantee a permanent state training and awareness-raising effort for officials, managers, and public servants at all levels, each entity of the Executive Branch will progressively implement training initiatives on GP-RBC that meetthe particular institutional needs, taking into account, to the extent necessary, the context of the health emergency caused by Covid-19. For this purpose, the entities may coordinate with MINJUSDH, to articulate technical and/or financial support with international organizations and international cooperation.
Indicator: Annual progress report on the implementation of training initiatives. – page 57
Strategic guideline No. 3: Design of public policies that promote respect for human rights by companies through accountability, investigation, and sanction for the impacts of their activities.
Objective 1: Promote policies and/or standards that guarantee respect for human rights in business activities.
66.
Action: Institutionalize intersectoral coordination through the creation of a permanent coordination space, made up of directors of the Executive’s Social Management Offices
Background: Create a space for coordination with the directors of the social management offices to periodically analyze the different social conflicts registered in the Peruvian territory, establishing lines of action and proposing strategies to address the conflict in which situations that could constitute violations in terms of business and human rights are identified on time.
Indicator: Standard for the creation of the permanent intersectoral coordination space. –page 105
Objective No. 2: Technical assistance to companies for the observance of human rights in their business activities
74.
Action: Promote the implementation of compliance and corruption prevention mechanisms, considering the GP- RBC approach.
Background: It consists of generating spaces for discussion on the benefits of corporate compliance, as well as providing support to the business sector, both private and public, for the implementation of these corruption prevention schemes.
Indicator: Number of activities to disseminate and promote the measure. – page 109
Strategic guideline No. 4: Promotion and design of due diligence procedures to ensure the respect of human rights by companies
Objective 2: Establish mechanisms for companies to report on their human rights due diligence processes.