PERU Trends and Developments Contributed by: Renzo Salvatore Monroy Pino, Roberto Shimabukuro Miyasato, Aníbal Urtecho Gómez and Alexander Montenegro, Monroy & Shima Abogados
and continued increase in investment disputes. In this scenario, investors would need to maintain high- ly defensive strategies ‒ prioritising legal protections over growth opportunities. A gradual stabilisation scenario ‒ although currently appearing less likely ‒ could see an emerging politi- cal consensus on the need to attract foreign invest- ment for economic recovery. This could result in more coherent and predictable policies, reducing the risk of new disputes. Investors could begin adopting more constructive positions, while remaining cautious. A scenario of political radicalisation, with a turn towards more nationalist or statist policies, would pre- sent significant risks to existing investments. In this case, international protection mechanisms would be critical, and investors would need to be prepared to aggressively defend their rights. Strategic recommendations for navigating the current context In the politically uncertain environment characteris- ing post-2020 Peru, adopting a comprehensive and proactive approach to investment management is fundamental. Due diligence must transcend tradi- tional legal and financial analysis, incorporating deep assessments of political, social and reputational risks. Understanding local context, including regional and community dynamics, has become as critical as tra- ditional macroeconomic analysis. Corporate and contractual structuring must be under- taken with forward vision, anticipating possible sce- narios of instability and regulatory changes. This includes maximising access to protections under investment treaties through appropriate corporate structures, provided these have real economic sub- stance and are established before disputes arise. Contracts should incorporate stabilisation clauses, economic adjustment mechanisms, and escalated dispute resolution procedures that provide flexibility in the face of political environment changes. Meticulous and contemporaneous documentation of all interactions with government authorities is essen- tial. Maintaining detailed records of official representa- tions, bases for investment decisions, and changes in
regulatory treatment not only strengthens position in case of dispute but also facilitates constructive dia- logue with new authorities when government changes occur. This documentation should include legal opin- ions, updated financial models, and evidence of gov- ernment measures’ impact on project viability. Multi-level engagement with governmental and social stakeholders must be continuous and genuine. Rela- tionship building cannot be limited to central govern- ment but must include regional and local authorities and affected communities. The social licence to oper- ate has become an asset as valuable as legal authori- sations, requiring sustained investment in community development and transparent mechanisms for benefit sharing. Sectoral co-ordination among investors can provide a more effective platform for dialogue with government. Industry associations and chambers of commerce offer not only a stronger collective voice but also mechanisms for sharing information about emerging risks and the best practices for navigating them. This collective action is particularly valuable when facing legislative or regulatory proposals that could nega- tively affect the sector. Continuous monitoring of the political and regulatory environment must be systematic and sophisticated. Early warning systems integrating political, social and legal analysis can identify risks before they materialise into crises. This requires not only following national developments but also understanding local dynamics that frequently precede broader public policy chang- es. Finally, maintaining operational and financial flexibility to adapt to rapid changes in the business environ- ment is crucial. This includes maintaining viable exit options, diversifying risks across projects and sec- tors, and preserving resources to respond to emerging crises or opportunities. The ability to rapidly mobilise legal and operational resources when problems arise can make the difference between successful resolu- tion and prolonged conflict.
204 CHAMBERS.COM
Powered by FlippingBook