Peru’s newly installed government of President Keiko Fujimori has circulated a draft bill requesting Congress to delegate legislative authority across seven policy areas, covering prison management, labor reform, and changes to environmental and mining regulations.
The measure invokes Article 104 of Peru’s constitution, which allows the executive to issue legislative decrees on specific matters for a fixed period without ordinary parliamentary debate. The bill forms part of the initial agenda of the new cabinet led by premier Luis Galarreta.
Prisons and Security
The first section of the bill would allow the government to reorganize the management and security of prisons and juvenile detention centers and to enable temporary military support for prison services. The draft also opens the door to private investment in prison infrastructure and management.
Former Interior Minister Wilfredo Pedraza pointed to Chile as the region’s most successful example, saying the country built 16 prisons with private investment and contracted private operators to handle services including maintenance, health, and food, while keeping security under state control. Pedraza said the model allows prisons to be built quickly outside the constraints of public contracting, but noted that costs are higher than in standard state-run facilities. He also noted that a legislative decree promoting prison investment was issued during the Humala administration but was never put into practice.
Pedraza added that the state must retain control over core decisions including security rules and inmate movement, and that the private investor’s fundamental interest is a return on capital, not prison conditions.
Labor Reform
The labor section has drawn the most criticism. The draft requests authority to modify the rules for contract termination under objective causes, arguing that current regulations lack the flexibility companies need to respond to economic or technical changes. It also seeks to modify benefits including vacation time, bonuses, severance compensation, and profit-sharing through individual or collective agreements.
The draft further proposes reducing the number of public holidays in the name of productivity, a position that contradicts earlier statements by Fujimori and Labor Minister Juan Sheput, both of whom said they had no intention of altering the holiday calendar.
Labor law expert César Puntriano of the Pontificia Universidad Católica del Perú said the plan should focus on creating a new, progressive special regime for incoming workers rather than cutting benefits for those already employed, and that the goal should be to expand formal employment through a regime applied gradually to new hires, similar to the existing framework for small businesses. Puntriano also said that a decree reducing existing labor rights would not be automatically unconstitutional, but that the government would need to show a legitimate aim, evidence the measure would achieve it, and proportionality. Without meeting those standards, he said there would be grounds to challenge the reform as a violation of the principle of progressive labor rights.
Administrative Simplification
The bill requests authority to simplify, digitize, or eliminate administrative procedures and to establish automatic renewal of authorizations, permits, and certifications. It also proposes giving digital documents the same legal standing as physical ones and expanding the powers of consumer and competition regulator Indecopi.
Public management expert Karla Gaviño of the Universidad del Pacífico said the government should first assess whether the level of digital infrastructure across public agencies is adequate before applying such measures broadly, noting that not all agencies have reached the same stage of electronic government advancement. She said inadequate controls for verifying the authenticity of digital documents could pose risks.
State Modernization
The final section requests power to create, merge, or dissolve public bodies and other executive branch entities, along with stricter suitability requirements for public office, merit-based promotions, and financial incentives for the voluntary retirement of public servants. Agricultural Development Minister Marco Vinelli recently dismissed the possibility of eliminating or merging ministries, though the draft does not address the question directly.
One contested provision would shield officials involved in large investment projects from oversight mechanisms, framed in the draft as a way to prevent control bodies from inhibiting those officials. Gaviño said the concern was not without foundation, arguing that oversight bodies sometimes overstep their mandate by questioning the technical decisions of engineers and specialists rather than focusing on the use of public funds, and that such overreach can cause management paralysis. She called for coordinated reform across all oversight bodies.
Economic and Tax Measures
On the economic front, the bill proposes a unified, progressive corporate income tax with marginal rates that rise with higher profits, along with tax exemptions and deductions for strategic sectors, including credits for hiring young workers and deductions for training expenses.
The draft also proposes changes to mining regulations and to the rules governing protected natural areas in order to promote productive activity, without specifying which current restrictions would be removed. Environmental organization Red Muqui warned the changes could facilitate extractive activities that undermine the autonomy of affected communities and territories.
The government further proposes repealing the law that caps interest rates, currently set at 114.13 percent annually for loans in domestic currency and 99.84 percent for those in foreign currency, as well as modifying customs rules to reduce the costs and time required for exports and imports.
