Implementing Regulatory Impact Analysis in the Central Government of Peru

Chapter 2. Methodology to analyse regulatory impact assessment in Peru

Abstract

This chapter describes the methodology employed to elaborate this document, which consists of the following stages: 1) Selection of the ministries covered in the survey and the regulation that will be considered as the basis for the design of the current process for the issuance of regulation; 2) Fact-finding missions to collect information; 3) Desk work that includes the review of the legal framework in place and the information obtained; f) Comparative analysis between the current process for the issuance of regulation and the best international practices to define the ideal process to issue regulation in Peru.

The purpose of this survey is to contribute to the establishment of an efficient and effective process for the issuance of regulation in the central government of Peru, taking advantage of the regulatory impact assessment as an analytical tool to control the quality of regulations that are issued through the Executive Branch. International practices will be taken into account for the design of the ideal process, which will be adapted to the conditions and needs of the Peruvian government. The objective is to make this process effective and efficient when it comes to address the different problems that require government intervention.

The methodology used to conduct this document consists of the following phases described in this chapter: the first, selection of the ministries covered in this report, which will integrate the pilot programme for the adoption of RIA within the central government. It also describes the process of choosing the regulations that served as a reference to the ministries to describe the current process for the issuance of regulation. The second phase consists of two fact-finding missions to gather first-hand information from the public officials directly involved in the rule-making process. The third, which comprises desk work and examination of the current legal framework applicable to the rule-making process, as well as the analysis of all the information gathered by the fact-finding missions, to be able to determine the current process followed by the central government for the issuance of regulation. Finally, a comparative analysis between the current process for the issuance of regulations and the best international practices, to create the ideal process that is suggested for the issuance of regulations originating in the Executive Branch.

Selection of ministries and regulations

At the beginning of the preparation of this report, it was resolved, in the first place, which ministries would be included in the pilot program for the implementation of RIA. To this end, five ministries that often issue regulations or whose regulation affects a large number of economic units were selected.1 These ministries are shown in Table ‎2.1.

Table ‎2.1. Selected ministries

Ministry of Economy and Finance (MEF)

Ministry of Environment (MINAM)

Ministry of Transport and Communications (MTC)

Ministry of Production (PRODUCE)

Ministry of Housing, Construction and Sanitation (VIVIENDA)

Once the ministries were determined, a search was made in the Official Gazette El Peruano2 of the regulations issued by those ministries, to select the one that would be the basis to describe the process for the issuance of regulations currently carried out in Peru. As the survey focuses on the regulation originating in the Executive Branch, the following characteristics of the regulation were considered to select the instruments:

• Instruments arising from the Executive Branch;

• Of general nature, and

• With probable impact on businesses or citizens (may also have an impact on the public and social spheres).

The Political Constitution of Peru, Articles 107 and 118, paragraph 8, establishes the power of the President to issue regulation (laws and bylaws, and in the latter, he/she is empowered to issue decrees and resolutions).

Given what was mentioned above, and in accordance with the concepts stated in the Guide on Legislative Technique for the Development of Regulatory Proposals from the Entities of the Executive Branch, the types of regulation considered are described in Table ‎2.2.

Table ‎2.2. Types of regulation to consider

Type of regulation	Description
Bill or draft	Formal document containing the draft of a law that, according to the Political Constitution of Peru, the President has the power to submit before the Congress of the Republic for its study, discussion and, if appropriate, approval.
Legislative decrees	Law-level regulation arising from the Executive Branch by virtue of an explicit authorisation from the Congress of the Republic by means of authoritative law. These rules have a material and temporary limit.
Supreme decrees	General norms that regulate law-level rules or regulate sectoral functional or multisectoral functional activity at national level, and through which the President exercises the power to regulate the laws, without transgressing or denaturing them. These may or may not require the approving vote from the Council of Ministers, as provided for by the law, they also should be signed by the President of the Republic and endorsed by one or several of the relevant ministers.
Ministerial resolutions	Rules that allow for the development, implementation, and oversight of national and sectoral policies under the responsibility of a state minister. They are approved by the corresponding state minister.
Vice-ministerial resolutions	Norms that regulate specific aspects within a certain sector.

For the purposes of this document, directorate resolutions were not taken into account, since they are norms regulating the exercise of duties in entities from a specific sector, according to their organisation and obligations.

A two-year consultation period, from 2 June 2014 to 30 June 2016, was established to select the regulation of each ministry. The idea was to have a timeframe long enough to ensure the inclusion of current and relevant regulation; but that, in turn, such period did not compromise the effectiveness of the regulation, that is, that it became updated.

When the search of regulation was made in El Peruano website, the following search parameters were used, as stated therein:

• What do you want to look for?

• What do you want to exclude from the results?

• Type of publication

• Publication date (from-to)

• Entity group

• Entity

Considering these parameters, the following information was obtained:

• Ministry of Economy and Finance: 1 580 instruments, including supreme decrees, supreme, ministerial, vice-ministerial, directorate, and chief resolutions.

• Ministry of Environment: 293 instruments, including supreme decrees, ministerial and supreme resolutions.

• Ministry of Transport and Communications: 3 013 instruments, including supreme decrees, ministerial, vice-ministerial, and directorate resolutions.

• Ministry of Production: 949 instruments, including supreme decrees, executive, ministerial, and directorate resolutions.

• Ministry of Housing, Construction and Sanitation: 463 instruments, including supreme decrees, ministerial, supreme, and vice-ministerial resolutions.

It was observed, in the list of regulations obtained, that a large number of them are directly related to approvals for officials to leave the country and attend international commitments, others are of a particular and not general nature; some address internal norms or regulate internal conditions in the public administration—internal management procedures, appointments and resignations of officials, creation of working groups, authorisations of events, among other regulatory instruments. In particular, apart from the previous ones, in the case of the MEF, there is also a large number of supreme decrees related to the transfer of line items in the public budget; in the MINAM, there is a large number of ministerial resolutions aimed to recognise private preservation areas; in the MTC, there is a large number of authorisations to render broadcasting services; in PRODUCE, rules regarding the cancellation of extractive activities of certain marine resources and regulation about the organisation and operation of public entities; and, lastly, in VIVIENDA, various regulations related to the water service of the provinces are published, as well as authorisations of different programs and appointments of officials before diverse entities.

All the regulations mentioned above were not taken into account for the purposes of this study. Annex 2.A lists the regulation selected for each of the ministries.

Afterwards, the information was sent to the ministries for them to choose three instruments, which served as the basis to describe the current process for the issuance of regulations. A questionnaire was also prepared, which was sent to the five ministries to gather information on the practices that they follow for the issuance of regulations and identify those that – according to international practices – are not carried out or are done, but not in a standardised way. Once the questionnaires were completed, the information gathered was analysed along with the regulatory framework in place, in order to identify both in practice and in theory, the activities carried out in the five ministries; and be able to establish a harmonised process for the issuance of regulations and define the opportunity areas for the adoption of an ideal process.

Fact-finding missions

Two fact-finding missions were carried out, as outlined in Table ‎2.3:

Table ‎2.3. Fact-finding missions to implement RIA in Peru

Mission	Date	Description
First	21-24 November 2016	Objective: to hold meetings with the selected ministries to collect information about the rule-making process and to carry out the corresponding mapping by ministry, as well as a general mapping of the elements from the regulatory process in Peru.
Second	3-4 April 2017	Objective: to submit and discuss the preliminary results, which included presenting the identified mappings of the public policy processes of the regulation, as well as the initial diagnosis of the elements from the RIA system and get feedback from the ministries.

The goal of the first fact-finding mission was to gather first-hand information from the ministries covered in this survey about the procedure and practices carried out during the process to issue regulations. To this end, several meetings were held both with the ministries and with other entities participating in this process, such as the MINJUSDH and the PCM.

In the second fact-finding mission, the objective was to present the general process followed for the issuance of regulation. The purpose was to get feedback from the ministries and the various entities involved in this process; and to be able to define a general process, as well as the ideal one and the necessary steps to achieve it.

Moreover, as part of the activities of these missions, on 14-15 December 2016, a training workshop on regulatory impact and consultation was delivered, in which several ministries participated.

Analysis of the current process and definition of the ideal process

First, desk work of the applicable legal framework was made in order to define the current process followed by Peru for the issuance of regulations. For this purpose, the following regulatory instruments were mainly considered (see Chapter 4):

• Organic Law of the Executive Branch (Nº 29158)

• Law on the General Administrative Procedure (Nº 27444)

• Framework Law for Legislative Production and Systematization (Nº 26889)

• Bylaw of the Framework Law for Legislative Production and Systematization (Nº 008-2006-JUS)

• Bylaw that lays down rules on advertising, publication of regulatory proposals, and dissemination of general legal rules (Nº 001-2009-JUS)

• Guide on Legislative Technique for the Development of Regulatory Proposals from the Entities of the Executive Branch (Nº 007-2016-JUS/DGDOJ)

• Specific rules applicable to the ministries regarding their powers and sphere of competence for the issuance of regulations.

Parallel to the analysis of the regulatory framework, the information provided by the ministries through the questionnaires and the data collected in the interviews carried out during the first fact-finding mission was also analysed. Considering these sources of information, a first general process was identified, which highlighted the general practices performed in all the ministries, as well as the individual ones that, as appropriate, are carried out in each of them. In this case, it was noted that the MINAM is the ministry with the most complete regulatory practices; unlike the other ministries, it formally carries out—among other practices—an early consultation with stakeholders that, in most cases, is useful to define the problem and its scale and, consequently, the best alternative to solve it.

In the second fact-finding mission, the identified process was presented to the participating ministries, both for its validation and for their comments; and the final general process that is currently carried out in Peru for the issuance of regulations was defined (see Chapter 5).

Afterwards, a comparative analysis was made between the current regulatory issuance process in Peru and the RIA building blocks to identify the steps that are not considered by the Peruvian government (see Chapter 6). This analysis was the basis for the recommendations aimed at the modification the process followed by Peru and for the systematic incorporation of the RIA as a tool to ensure the quality of the regulations and adopting best international practices (see Chapters 7 and 8).

Once this analysis was concluded, the ideal process for the issuance of regulations in Peru was prepared; which was presented, along with the recommendations, in a meeting held with the MEF during the month of June 2017.

Reference

OECD (2016), Regulatory Policy in Peru: Assembling the Framework for Regulatory Quality, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264260054-en.

Annex 2.A. Selection of legal instruments to evaluate the process of issuing regulations in Peru

Economy and finance

• Supreme Decree Nº 164-2016-EF

Inclusion of operations in Appendix V of the Unique Ordered Text of the Law on General Sales Tax and Selective Excise Tax (Inclusión de operaciones en el Apéndice V del Texto Único Ordenado de la Ley del Impuesto General a las Ventas e Impuesto Selectivo al Consumo)

• Supreme Decree Nº 151-2016-EF (Decreto Supremo Nº 151-2016-EF)

They modify the Supreme Decree N° 051-2008-EF (Decreto Supremo N° 051-2008-EF) that regulates the reimbursement of undue payments or in excess of tax debts whose administration is in charge of the SUNAT by means of Payment Orders of the Financial System

• Supreme Decree Nº 100-2016-EF (Decreto Supremo Nº 100-2016-EF)

They modify the Bylaw of Law N° 29623 (Reglamento de la Ley N° 2962) that promotes financing through commercial invoices, approved by Supreme Decree N° 208-2015-EF (Decreto Supremo N° 208-2015-EF)

• Supreme Decree Nº 059-2016-EF (Decreto Supremo Nº 059-2016-EF)

They modify Articles 2, 19, 27, 28 and 29 from the Bylaw of Legislative Decree Nº 1126 (Reglamento del Decreto Legislativo Nº 1126), that establishes control measures for chemical inputs and controlled products, machinery and equipment used for the production of illicit drugs, approved by Supreme Decree Nº 044-2013-EF (Decreto Supremo Nº 044-2013-EF) and amendments thereof.

• Supreme Decree Nº 006-2016-EF (Decreto Supremo Nº 006-2016-EF)

Approval of regulatory standards from Law Nº 30220, University Law (Ley Universitaria), regarding the tax credit for reinvestment.

• Supreme Decree Nº 119-2015-EF (Decreto Supremo Nº 119-2015-E)

They modify the Supreme Decree N° 073-2014-EF (Decreto Supremo N° 073-2014-EF) that issues regulatory standards for the application of the First Final Supplementary Provision from the Legislative Decree N° 11033 (Primera Disposición Complementaria Final del Derecho Legislativo N° 1103).

Environment

• Ministerial Resolution N° 090-2016-MINAM (Resolución Ministerial N° 090-2016-MINAM)

Approval of Guidelines for the Integrated Management of Climate Change and the Climate Management Initiative (Lineamientos para la Gestión Integrada del Cambio Climático y la Iniciativa Gestión Clima)

• Ministerial Resolution N° 066-2016-MINAM (Resolución Ministerial N° 066-2016-MINAM)

Approval of the “General Guide for the Environmental Compensation Plan” (Guía General para el Plan de Compensación Ambiental)

• Ministerial Resolution N° 023-2015-MINAM (Resolución Ministerial N° 023-2015-MINAM)

Approval of “Summary of Guides to be applied in the Control and Surveillance Procedures for the detection of Living Modified Organisms – LMO” (Compendio de Guías a ser aplicadas en los Procedimientos de Control y Vigilancia para la detección de Organismos Vivos Modificados—OVM)

• Ministerial Resolution N° 398-2014-MINAM (Resolución Ministerial N° 398-2014-MINAM)

Approval of Guidelines for Environmental Compensation in the frame of the National System for the Environmental Impact Assessment – SEIA (Lineamientos para la Compensación Ambiental en el marco del Sistema Nacional de Evaluación de Impacto Ambiental—SEIA)

• Supreme Decree Nº 015-2015-MINAM (Decreto Supremo N° 013-2015-MINAM)

They modify the National Environmental Quality Standards for Water and establish supplementary provisions for its application (Estándares Nacionales de Calidad Ambiental para Agua y establecen disposiciones complementarias para su aplicación)

• Supreme Decree Nº 013-2015-MINAM (Decreto Supremo N° 013-2015-MINAM)

They issue rules for the submission and assessment of the Report on the Identification of Polluted Sites (Informe de Identificación de Sitios Contaminados).

• Supreme Decree Nº 010-2014-MINAM (Decreto Supremo Nº 010-2014-MINAM)

Supreme Decree that modifies Articles 3, 33, 34 and 35 and integrates two annexes in the Bylaw of Law N° 29811, approved by Supreme Decree N° 008-2012-MINAM (Decreto Supremo N° 008-2012-MINAM) on the control of entry into national territory of living modified organisms.

Transport

• Supreme Decree Nº 009-2016-MTC (Decreto Supremo Nº 009-2016-MTC)

Supreme Decree that modifies the National Regulations of Vehicular Technical Inspections and the Unique Ordered Text of the National Traffic Regulations (Reglamento Nacional de Inspecciones Técnicas Vehiculares y el Texto Único Ordenado del Reglamento Nacional de Tránsito)

• Supreme Decree Nº 008-2016-MTC (Decreto Supremo Nº 008-2016-MTC)

Supreme Decree that modifies the Bylaw of the Radio and Television Law (Reglamento de la Ley de Radio y Televisión), approved by Supreme Decree N° 005-2005-MTC (Decreto Supremo N° 005-2005-MTC)

• Supreme Decree Nº 003-2016-MTC (Decreto Supremo Nº 003-2016-MTC)

Supreme Decree that modifies the Supreme Decree Nº 023-2014-MTC (Decreto Supremo Nº 023-2014-MTC) and provides for the use of a Biometric Mechanism to validate the identity of subscribers of Prepaid Mobile Public Services

• Supreme Decree Nº 006-2016-MTC (Decreto Supremo Nº 006-2016-MTC)

Approval of modifications to the Unique Ordered Text of the National Transit Regulations, Transit Code and the National Bylaw on Transport Administration (Texto Único Ordenado del Reglamento Nacional de Tránsito—Código de Tránsito y al Reglamento Nacional de Administración de Transporte).

• Supreme Decree Nº 001-2016-MTC (Decreto Supremo Nº 001-2016-MTC)

Supreme Decree that modifies the Unique Ordered Text of the General Regulations of Telecommunications Law (Texto Único Ordenado del Reglamento General de la Ley de Telecomunicaciones)

• Supreme Decree Nº 013-2015-MTC (Decreto Supremo Nº 013-2015-MTC)

Supreme Decree that modifies the First Transitory Supplementary Provision of Supreme Decree N° 025-2014-MTC and lays down other provisions (Primera Disposición Complementaria Transitoria del Decreto Supremo N° 025-2014-MTC y establece otras disposiciones).

• Ministerial Resolution N° 303-2016 MTC/01.02 (Resolución Ministerial N° 303‑2016 MTC/01.02)

Draft Supreme Decree approving modifications to the Unique Ordered Text of the National Transit Regulations – Transit Code, approved by Supreme Decree Nº 016-2009-MTC (Texto Único Ordenado del Reglamento Nacional de Tránsito—Código de Tránsito, aprobado por Decreto Supremo Nº 016-2009-MTC)

Produce

• Supreme Decree Nº 009-2016-PRODUCE (Decreto Supremo Nº 009-2016-PRODUCE)

They establish measures to strengthen the fishing industry when processing the tuna resource

• Supreme Decree Nº 006-2016-PRODUCE (Decreto Supremo Nº 006-2016-PRODUCE

They establish general provisions to strengthen small-scale fishing in the production chain

• Supreme Decree Nº 003-2016-PRODUCE (Decreto Supremo Nº 003-2016-PRODUCE)

Approval of the Bylaw of the General Law on Aquaculture, approved by Legislative Decree N° 1195 (Reglamento de la Ley General de Acuicultura, aprobada por Decreto Legislativo N° 1195)

• Supreme Decree Nº 021-2015-PRODUCE (Decreto Supremo Nº 021-2015-PRODUCE)

Approval of the Bylaw of the National Registry of Associations of Micro and Small-size Enterprises – RENAMYPE (Reglamento del Registro Nacional de Asociaciones de la Micro y Pequeña Empresa—RENAMYPE)

• Ministerial Resolution N° 196-2016-PRODUCE (Resolución Ministerial N° 196-2016-PRODUCE)

Ministerial Resolution approving General Guidelines of National Policy for the Competitiveness of Provisions Markets (Lineamientos Generales de la Política Nacional para la Competitividad de Mercados de Abastos)

Vivienda

• Supreme Decree Nº 017-2015-VIVIENDA (Decreto Supremo Nº 017-2015-VIVIENDA)

Supreme Decree approving the Bylaw of Legislative Decree N° 1177, Legislative Decree that establishes the Promotion Scheme of Leasing for Housing (Reglamento del Decreto Legislativo N° 1177, Decreto Legislativo que establece el Régimen de Promoción al Arrendamiento para Vivienda)

• Supreme Decree Nº 002-2016-VIVIENDA (Decreto Supremo Nº 002-2016-VIVIENDA)

Supreme Decree approving the Bylaw of Chapter I of Title IV of Law N° 30327, Law on Promotion of Investments for Economic Growth and Sustainable Development (Decreto Supremo que aprueba el Reglamento del Capítulo I del Título IV de la Ley N° 30327, Ley de Promoción a las Inversiones para el Crecimiento Económico y el Desarrollo Sostenible)

• Supreme Decree Nº 006-2016-VIVIENDA (Decreto Supremo Nº 006-2016-VIVIENDA)

Supreme Decree approving Bylaw of Law Nº 29203, Law that creates the Information Center of Real Estate Developers and/or Construction Companies of Real State Units (Reglamento de la Ley Nº 2920, Ley que crea la Central de Información de Promotores Inmobiliarios y/o Empresas Constructoras de Unidades Inmobiliarias)

• Ministerial Resolution N° 330-2015-VIVIENDA (Resolución Ministerial N° 330-2015-VIVIENDA)

They modify the operating bylaws approved through Ministerial Resolutions Nº 102 y 209-2012-VIVIENDA, to adapt them to provisions contained in the Law that creates the Family Housing Bonus (BFH)

• Ministerial Resolution N° 326-2015-VIVIENDA (Resolución Ministerial N° 326-2015-VIVIENDA)

Approval of forms regarding procedures of licenses for urban fit out and edification licenses.

Others

Irrespective of the above legal instruments, the legislative decrees issued during the same period were also consulted, finding 74 instruments, 19 of which relate to security issues and 17 are errata; therefore, from the remaining ones the following are suggested to be considered:

• Legislative Decree N° 1205 (Decreto Legislativo N° 1205)

Legislative Decree modifying Legislative Decree N° 1034, that approves the Law on Suppression of Anticompetitive Behaviors (Decreto Legislativo que modifica el Decreto Legislativo N° 1034, que aprueba la Ley de Represión de Conductas Anticompetitivas)

• Legislative Decree N° 1209 (Decreto Legislativo N° 1209)

Legislative Decree establishing the procedure to be followed for the registration (original entry) of privately owned property in the Land Registry (Decreto Legislativo que Establece el Procedimineto a seguir para la Inmatriculación de Predios de Propiedad Privada de Particulares en el Registro de Predios)

• Legislative Decree N° 1212 (Decreto Legislativo N° 1212)

Legislative Decree strengthening the powers on the elimination of bureaucratic barriers for the promotion of competitiveness (Decreto Legislativo que Refuerza las Facultades sobre Eliminación de Barreras Burocráticas para el Fomento de la Competitividad)

• Legislative Decree N° 1232 (Decreto Legislativo N° 1232)

Legislative Decree that modifies various articles and Transitory and Final Supplementary Provisions of Legislative Decree Nº 1049, Legislative Decree of Notaries (Decreto Legislativo que Modifica Diversos Artículos y Disposiciones Complementarisa Transitorias y Finales del Derecho Legislativo Nº 1049, Decreto Legislativo del Notariado).

Notes

← 1.  The definition employed in this survey for economic units is: entities producing goods and services, either establishments, households or individuals.

← 2.  http://diariooficial.elperuano.pe/.

← 3.  This decree was published on 26 May 2015, but it was considered relevant to include it to have a greater variety of regulation covered by the review by the Ministry of Economy and Finance.