Regulation of the Law on the Prohibition of Appointment and Hiring of Personnel in the Public Sector in Cases of Kinship

Sector: PRESIDENCY OF THE COUNCIL OF MINISTERS Publication Date: July 30, 2000 Approve Regulation of the Law that establishes the prohibition of exercising the power of appointment and hiring of personnel in the Public Sector, in cases of kinship SUPREME DECREE Nº 021-2000-PCM THE PRESIDENT OF THE REPUBLIC CONSIDERING: That, by means of Law Nº 26771, the prohibition of exercising the power of appointment and hiring of personnel in the Public Sector in cases of kinship up to the fourth degree of consanguinity, second degree of affinity, and by reason of marriage was established; That, nepotism constitutes an inappropriate practice that fosters conflict of interest between personal interest and public service; restricts equal access to public functions; makes it difficult for public entities to objectively fulfill the functions for which they were created; weakens a healthy environment for internal control and evaluation; and even disturbs labor discipline due to the superior's lack of impartiality in exercising their command power on an equal footing over employees related by family to decision-making officials; That, Articles 3 and 4 of Law Nº 26771, provide that the sanctions applicable to the cases established therein would be established by the Regulation of the Law; That, likewise, by means of Article 6 of the Law, the Executive Power is entrusted with issuing the regulatory norms; That, in accordance with the provisions of subsection 8) of Article 118 of the Political Constitution of Peru and Legislative Decree Nº 560, Law of the Executive Power; DECREES: (*) Article modified by Article 1 of Supreme Decree Nº 017-2002-PCM published on 08-03-2002, whose text is as follows: “Article 1.- Scope of Application When the word Law is mentioned in this regulation, it shall be understood to refer to Law Nº 26771, which establishes the prohibition of exercising the power of appointment and hiring of personnel in the Public Sector in cases of kinship and by reason of marriage.

For the purposes of the Law and this Regulation, the term “Entity” shall be understood to include all organs and organisms of the State, among which are: a) Representative entities of the Legislative, Executive, and Judicial Powers; b) Public Ministry, National Jury of Elections, National Office of Electoral Processes, National Registry of Identification and Civil Status, National Council of the Magistracy, Ombudsman's Office, General Comptroller of the Republic, Constitutional Court; c) Public organisms created by Law; d) Entities corresponding to Regional and Local Governments, their Decentralized Organisms and Companies; e) Entities and companies under the scope of the National Fund for the Financing of State Business Activity. The Law is applicable to the aforementioned entities regardless of their source of financing, including sources of reimbursable or non-reimbursable international cooperation.” (*) Article modified by Article 2 of Supreme Decree Nº 017-2002-PCM published on 08-03-2002, whose text is as follows: “Article 2.- CONFIGURATION OF THE ACT OF NEPOTISM The act of nepotism, described in Article 1 of the Law, is configured when management officials and/or trusted personnel of the Entity exercise their power of appointment and hiring of personnel with respect to relatives up to the fourth degree of consanguinity, second degree of affinity, and by reason of marriage; or when the aforementioned officials exercise direct or indirect interference in the appointment and hiring of personnel. It shall be presumed, unless proven otherwise, that there is direct interference when the management or trusted official who has the indicated kinship holds a position superior to that of the person who has the power to appoint or hire personnel within their Entity. Indirect interference shall be understood as that which, not being included in the assumption contained in the preceding paragraph, is exercised by a management and/or trusted official who, without being part of the Entity where the hiring or appointment was made, has, by reason of their functions, some interference in those who make or adopt the decision to hire or appoint in the corresponding Entity. The renewal of pre-existing non-personal service contracts, carried out in accordance with the regulations on public sector contracting and acquisitions, does not constitute an act of nepotism.” Article 3.- On Prohibitions

The prohibitions established by Article 1 of the Law, include: a) The prohibition of exercising the power to appoint, hire, intervene in personnel selection processes, designate trusted positions or ad honorem activities, or appoint members of collegiate bodies. b) The prohibition of exercising direct or indirect interference in the appointment, hiring, personnel selection processes, designation of trusted positions or ad honorem activities, or appointment of members of collegiate bodies. The prohibitions indicated in literal a) and b) of this article are applicable with respect to relatives up to the fourth degree of consanguinity, second degree of affinity, by reason of marriage. Article 4.- Function of the Internal Audit Body It is the responsibility of the Internal Audit Bodies of each entity, as indicated in Article 2 of the Law:

1. To verify the content of the documents presented by those who join the entity.
2. To verify that a transparent selection and evaluation process has been carried out according to the position or role that the official or contractor will occupy in the entity, in accordance with Supreme Decree Nº 017-96-PCM, in order to determine whether or not the act of nepotism by the management official and/or trusted personnel of the same entity occurred in the hiring or appointment. “Article 4-A.- Function of the Administration Body It is the responsibility of the Administration Body of each entity to collect a sworn declaration from every person who enters to provide services, regardless of their labor or contractual regime, in which they state their full name, degree of kinship or marital bond, and the office in which their relatives up to the fourth degree of consanguinity and second degree of affinity, or their spouse, may eventually provide services in the same entity. For this purpose, the Administration Offices of the entities must provide the declarant with the list of their workers nationwide.”(1)(2) (1) Article incorporated by Article 2 of Supreme Decree N° 034-2005-PCM, published on May 07, 2005. (2) In accordance with Article 3 of Supreme Decree N° 034-2005-PCM, published on May 07, 2005, everyone who, as of the effective date of the aforementioned Supreme Decree, provides services in the Public Administration, regardless of their labor or contractual regime, must submit the Sworn Declaration referred to in this article, within the non-extendable period of fifteen (15) working days.

() Paragraph modified by Article 1 of Supreme Decree N° 034-2005-PCM, published on May 07, 2005, whose text is as follows: “Article 5.- On nullity Administrative acts that provide for entry into public administration, as well as contracts, are null and void by operation of law when both are carried out in contravention of the Law. The nullity must be materialized by an administrative act that declares it or by a declaration of nullity of the corresponding contract.” The provisions of the preceding paragraph do not apply to subsequent acts that are independent of the appointments or contracts subject to nullity. Article 6.- On the Process The procedure applicable to officials, servants, or authorities who commit acts of nepotism referred to in the Law, shall be regulated by Chapter XIII - On the Disciplinary Administrative Process - of the Regulation of the Administrative Career Law approved by Supreme Decree Nº 005-90-PCM and the pertinent articles of Legislative Decree Nº 276, for the case of officials included in said norm. In the case of officials belonging to the private activity regime, the provisions of literal 11) of Article 12 and literal a) of Article 25, as appropriate, of the Single Ordered Text of Legislative Decree Nº 728 approved by Supreme Decree Nº 003-97-TR shall apply. For Mayors and Councilors, the provisions of Articles 23, 26 numeral 3) and 27 of the Organic Law of Municipalities shall apply. () Article modified by Article 1 of Supreme Decree N° 034-2005-PCM, published on May 07, 2005, whose text is as follows: "Article 7.- On sanctions If the transgression of the provisions of the Law or this Regulation is proven, management officials and/or trusted personnel shall be sanctioned with dismissal, termination, or resolution of the contract. The official with respect to whom the direct or indirect interference referred to in Article 2 of this regulation is exercised shall be sanctioned with suspension without pay. If the function or position held is one of trust, the appointment shall be rendered null and void, or the contract shall be terminated; as appropriate. The suspension period shall depend on the seriousness of the fault and may not exceed one hundred eighty (180) calendar days. The official found responsible for exercising direct or indirect interference in the appointment and/or hiring, as applicable, shall be jointly and severally liable with the improperly appointed and/or hired person for the return of what was received, as a consequence of the nullity referred to in Article 4 of Law Nº 26771. If at the time of determining the applicable sanction, the person responsible for the act of nepotism, no longer holds the status of official and/or trusted personnel, the sanction shall consist of a fine equivalent to the remunerations or income that said person would have received in a period, not greater than one hundred eighty (180) calendar days. Until the payment of the fine is fulfilled, the responsible person may not be appointed to a public position or function nor receive income from the State." (*) Article modified by Article 1 of Supreme Decree N° 034-2005-PCM, published on May 07, 2005, whose text is as follows: "Article 8.- On the disqualification of officials As of the effective date of this Regulation, those persons who enter an entity in contravention of the provisions of Articles 1 and 5 of the Law, shall be disqualified from providing services in any of the entities indicated in Article 1 of the Regulation, up to two years after the nullity of the administrative act, labor contract or service contract is declared." COMPLEMENTARY AND FINAL PROVISIONS First.- Within a period not exceeding 90 calendar days from the day following the publication of this Regulation, the Internal Audit bodies of the entities or in case of lacking them, the Administration Directorates of the same must evaluate all personnel actions since the entry into force of the Law, in order to determine which actions have been carried out in contravention of the provisions of Articles 1 and 5 of the Law and proceed as indicated by said norm and this Regulation. Second.- For the purposes of Article 5 of the Law, the Internal Audit Bodies shall be responsible for verifying any complaints submitted, analyzing the background of existing contracts in order to determine whether the hired person has a degree of kinship with the decision-maker or with those who may have direct or indirect interference. If it is proven that there was any of the two types of interference in the decision-making, the contract would not be renewed. Third.- Cases of marriage subsequent to the appointment or hiring of the official are not included within the scope of Article 1 of the Law. Fourth.- This Supreme Decree shall be countersigned by the President of the Council of Ministers. Given at the Government House, in Lima, on the twenty-seventh day of July of the year two thousand. ALBERTO FUJIMORI FUJIMORI

Constitutional President of the Republic. ALBERTO BUSTAMANTE BELAUNDE President of the Council of Ministers.