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This Chapter Identifies Ways to Strengthen Public Ethics and the Identification and Management of Conflict-Of-Interest Situation

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This Chapter Identifies Ways to Strengthen Public Ethics and the Identification and Management of Conflict-Of-Interest Situation 3. STRENGTHENING PUBLIC ETHICS AND CONFLICT-OF-INTEREST MANAGEMENT IN PERU 49 - - This chapter identifies ways to strengthen public ethics and the identification and management of conflict-of-interest situations in Peru through improvements in institutional design, guidance and control. While each of these functions and elements are separate, important building blocks, they should be complementary and mutually reinforcing. Resilient interaction and synergy is required among these elements to achieve a coherent and integrated ethics infrastructure in Peru. Note: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. OECD INTEGRITY REVIEW OF PERU: ENHANCING PUBLIC SECTOR INTEGRITY FOR INCLUSIVE GROWTH © OECD 2017 50 3. STRENGTHENING PUBLIC ETHICS AND CONFLICT-OF-INTEREST MANAGEMENT IN PERU Embedding a culture of integrity in the public sector requires defining common values to which all public employees should adhere and drawing up concrete standards of conduct that they need to apply in their daily work. Setting values and standards of conduct for public officials in a code of ethics and actively implementing them is particularly relevant in situations where a conflict of interest may arise. Ensuring that conflict of interest is identified and managed adequately is among the first steps towards safeguarding integrity and transparency in the public sector. The growing synergies between the public and private sectors have meant greater opportunity for horizontal movement and ancillary work. In turn, this has raised the possibility of conflicts of interest between public duties and private interests and may be detrimental to employer/employee confidence. Ensuring that the integrity of government is not compromised by public officials private interests has become a growing concern across OECD member countries. To ensure a public service based on integrity, a strong culture of ethical behaviour facilitated through an Ethics Law or Code is imperative and operates as the backbone to managing conflict-of-interest situations. Managing conflict of interest is an inherent part of the wider ethics framework and is intrinsic to the integrity of government. A country s ethics infrastructure has at its base a legal framework in which laws and regulations define the basic standards of behaviour for public servants and enforce them through systems of investigation and prosecution. However, legal provisions and policies remain strings of words on paper if they are not adequately communicated and inculcated. Socialisation mechanisms are the processes by which public servants learn and adopt ethical norms, standards of conduct, and public service values. Furthermore, in order to effectively uphold public ethics and values, a balance is required between promoting extrinsic motivation through a rules-based approach and intrinsic motivation through a values-based approach. A value-based approach can be advocated for through an open organisational culture whereby the tone at the top needs to be conducive to nurturing an ethics-based climate. Similarly, if this approach is not upheld or an open organisation culture is not effectively implemented, formalised compliance is required to ensure that the system operates effectively with enforcement and sanctions in place. In response to serious acts of corruption that have been committed in Latin America during the last decade, many countries have made progress in creating and implementing codes of ethics for their public officials and employees. Ethics codes are one among many mechanisms for preventing and combating corruption. In Peru, the Public Administration Code of Ethics Law (Law No. 27815) was enacted in 2002 and applies to each Public Administration regardless of the labour regime under which public employees were contracted. The code also states that public servants are prohibited from maintaining situations of conflict of interest. Additionally, various laws contain specific conflict-of- interest regulations. To ensure that its ethical infrastructure functions soundly and encourages high standards of behaviour, Peru could consider strengthening public ethics and the identification and management of conflict of interest through a set of recommendations. These recommendations would aim to improve institutional design, provide guidance on ethical issues and conflict of interest, and raise awareness and provide training. Finally, they would aim to ensure effective control, monitoring and evaluation, including through the system of asset disclosure forms. Each function and element is a separate, important building block, but the individual elements should be complementary and mutually reinforcing. Resilient interaction and synergy is required among these elements to achieve a coherent and integrated ethics infrastructure in Peru. OECD INTEGRITY REVIEW OF PERU: ENHANCING PUBLIC SECTOR INTEGRITY FOR INCLUSIVE GROWTH © OECD 2017 3. STRENGTHENING PUBLIC ETHICS AND CONFLICT-OF-INTEREST MANAGEMENT IN PERU 51 The institutional framework for public ethics and management of conflict of interest As a long-term objective, Peru could consider developing a single policy framework for promoting integrity and conflict-of-interest management, including a definition of conflict-of-interest; in the meantime, Peru should ensure that the National Manual on Ethical Principles, Duties and Prohibition in the civil service developed by the CAN is effectively mainstreamed and used across the Peruvian public sector by engaging with SERVIR, SGP, and Human Resources Offices at organisational levels Codes articulate boundaries of behaviour as well as expectations of behaviour. In other words, they should outline values clearly and provide markers of prohibited and expected behaviour. Of particular importance is a definition of what constitutes a conflict of interest, and the provision of guidance to public officials in such situations. Realistic knowledge on which circumstances and relationships can lead to a conflict-of-interest situation should provide the basis for the development of a regulatory framework to manage conflict-of-interest situations in a coherent and consistent approach across the public sector (Box 3.1). Of key importance is the understanding and recognition that everybody has interests; interests cannot be prohibited, but rather must be properly managed. In all OECD member countries, conflict-of-interest policies and rules are stated in the country s legal framework. The descriptive and prescriptive approaches to managing conflict-of-interest situations are usually used simultaneously. Descriptive approach: General principles set out the regulations for managing conflict-of-interest situations for public officials, while complementary specific rules exemplifying cases provide guidance. Prescriptive approach: Specific situations that are incompatible with the role and duties of public officials are described, and public officials are given detailed enforceable standards they should use to manage them. In Peru, the Public Administration s Code of Ethics Law (Law No. 27815) establishes a set of principles, ethical duties and prohibitions. It is applicable to officials, servants or employees of the public administration agencies at all hierarchical levels, including persons working in State Owned Enterprises (132-2012-SERVIR/GPGRH). The Code of Ethics Law also regulates the management of conflict-of-interest situations. Specifically, Article 8 prohibits maintaining relationships or situations in which the personal, labour, economic or financial interest is in conflict with the official duties of the public officials. In addition to the Code of Ethics Law, the Peruvian legal framework addressing conflict-of-interest situations is fragmented throughout various provisions (Table 3.1). It contains regulations prohibiting ministers from engaging in the management of private companies and associations (Peruvian Political Constitution, Article 126) or from acting as lawyers, attorneys, advisors or similar in processes relating to government activities for up to one year after the termination of the official duty (Law No. 27588), establishing regulations to avoid nepotism (Law No. 26771) and regulating the public procurement process by excluding former public officials for up to 12 months after the renouncement of their positions (Law No. 30225) and by obliging public officials not to be part of contracts where they or their relatives have an interest (Law No. 30057). However, with OECD INTEGRITY REVIEW OF PERU: ENHANCING PUBLIC SECTOR INTEGRITY FOR INCLUSIVE GROWTH © OECD 2017 52 3. STRENGTHENING PUBLIC ETHICS AND CONFLICT-OF-INTEREST MANAGEMENT IN PERU the abolishment of the Supreme Decree No. 033-2005-PCM, Article 3, the Peruvian legal framework no longer provides an explicit definition of conflict of interest. Table 3.1. Key primary legislation on conflict-of-interest in Peru Legal provision Description Peruvian Political Constitution. Article 126 Ministers are prohibited from holding public offices other than legislative posts. Ministers are banned from engaging in gainful activity and must not interfere in the management of companies or private partnerships that they have a personal interest in. Law No. 27815, Public Administration s Code of All public officials are prohibited
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