Peru towards the OECD: a long, complex and uncertain path

Everything seems to indicate that the process of Peru’s incorporation into the Organization for Economic Cooperation and Development (OECD) is faltering. Neither Ms. Boluarte’s trip to China (to offer donkey meat) nor the announcements of mining reactivations (Aunt Maria) will be enough to compensate for the enormous institutional and public policy deficits that characterize the Peruvian State. Deficits that were maliciously aggravated during this stage of the Government, with setbacks in matters of anti-corruption, environmental and labor regulation promoted by Congress and the Executive.

The OECD’s “wake-up call” in October last year regarding the weakening of legislation on effective collaboration leaves Peru’s entry in an uncertain situation, for now more outside than inside, so to speak.

But why is Peru’s incorporation into the OECD considered important? For Lisbeth Loja, coordinator of the OECD National Contact Point in Lima, “the countries of the organization accumulate the highest percentage of global GDP and management of global commercial transactions. The fact of belonging to the OECD gives you a certain standard, because if you are an OECD country you have certain patterns to follow in various sectors.” Loja refers to the leading role that this economic forum assumes in the “accompaniment” of the state management of public policies, “based on statistical evidence produced by the States and analyzed by the OECD itself.”.

Achieving this goal is not easy. Along with Peru, five other countries (Argentina, Brazil, Croatia, Romania and Bulgaria) aspire to join the club of the world’s leading economies. The challenge is superlative. The Peruvian government must demonstrate that its public policies meet the conditions of coherence, sustainability and effectiveness required by the OECD standards; made up, by the way, of 37 countries, the majority of which are from the European Union, with the participation of at least one economy from all continents (with the exception of Africa). In Latin America, the first countries to join were Mexico and Chile and, more recently, Colombia and Costa Rica. All of these are states with problems, but with better levels of institutionality and economic foundations than Peru. It is enough to compare a key indicator for the OECD requirements: while in Peru informality is estimated at 73% of the EAP, in Chile (27%), Costa Rica (37%), Mexico (55%), Colombia (55%) and Costa Rica (56%) it is considerably lower. Not to mention our direct competitors: Brazil (37%) and Argentina (50%).

To be part of the OECD, Peru must pass 24 evaluations carried out by analytical committees that monitor various dimensions linked to public policies, governance and sustainability. Last week, officials from the OECD’s Financial and Economic Affairs Division, responsible for an evaluation committee, met with union leaders and civil society representatives to analyze the level of progress in compliance with the recommendations addressed to the Peruvian State in the Study of Public Policies on Responsible Business Conduct (2020), many of which were included in the National Action Plan on Business and Human Rights (2021-2025). However, one year after its conclusion, the outlook is, to say the least, discouraging.

A study by Peru Equidad found that less than 5% of the PNAEDH actions have performance indicators. And that of 81 of the 97 actions that have goals that should have been met by 2023, only 10% were implemented, 20% were partially implemented, and 13% had initiated actions for their implementation. 57% had not even begun to be developed by May 2024.

Let us look at a specific case, that of reducing informality. The OECD presented the Peruvian State with a set of precise recommendations. To begin with, it proposed (i) adjusting the National Competitiveness and Productivity Plan (PNCP) through social dialogue, ensuring that the changes that occur do not weaken the protection of labor rights; (ii) adopting a labor regulatory framework that overcomes the current fragmentation that makes compliance difficult; as well as (iii) adopting measures adjusted to quantifiable goals to prevent and eradicate child and forced labor, discrimination and violations of union rights.

It also urged the Peruvian State to (iv) identify and modify the institutional problems that affect the effectiveness of labour protection in Peru (and to cease being the country with the most regular complaints before the ILO supervisory bodies in the region); (v) adopt measures so that labour inspections have sufficient resources, are independent from the Government and companies, and increase their power of sanction and authority.

Likewise, it recommended (vi) removing legal impediments that limit the recognition of the right to freedom of association and collective bargaining; in particular anti-union practices such as the dismissal of leaders and sanctions against unionized workers. Finally, within the framework of this study, it recommended (vii) reviewing the regulatory framework applicable to micro, small and medium-sized enterprises (given that very few companies covered use the specific regime to hire their workers).

None of the issues raised by the OECD have been given priority attention by our authorities. Not only was the PNCP not revised to incorporate adequate protections for fundamental rights, but the implementation of Agenda 19, which contemplated the approval of a labour code and the regulation of collective labour relations and outsourcing, was also suspended; these are essential aspects for the exercise – without problems or restrictions – of freedom of association.

It is only to be expected that a government more concerned with its survival and impunity will not seriously address these key issues. But it is striking that the private sector does not understand the relevance of the roadmap clearly outlined by the OECD. In order to access the most important markets, it is necessary to comply with the institutional, regulatory and impact standards required at a global level. This is something that our main commercial partners in Europe and North America have been demanding, within the framework of the commercial agreements signed with our country. There is no worse blind person than the one who does not want to see.