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Business etiquette in Peru refers to the behaviors and actions that demonstrate respect, consideration, and trust required in a business connection. Cultural awareness is important to avoid offending others, which might result in critical consequences. Products and services may be noncompetitive with those of the company, which might result in penalties and lost clients. The purpose of the chapter is to facilitate your international business transactions in Peru. A brief overview is provided with reference to different categories of work, special public holidays, the workforce, treatment of superiors, business gift giving, relationships, answering the phone, business card exchanges, business luncheons, waiting to be served, and dining. Options for the gift-receiving event and the gift-giving event are presented. The author advises the reader to use common sense, avoid conflict, and cooperate.
Peru has a population of more than 27 million, and Lima is the largest city, with a population of about 11 million. The primary language is Spanish, but Quechua, the language of the Inca Empire, and Aymara are also used.
Peru has a market economy. The country has a GNP of $86.35 billion and an annual economic growth rate of 5.9%. Peru’s major trading partners are the United States, Japan, the European Union, China, Brazil, Chile, and Colombia. The capital, Lima, was home to an estimated 11 million people in 2012. The country experienced a constant rate of population growth in the twentieth century and now has one of the highest growth rates in South America.
Peru had the fastest growing economy in Latin America during the 2000s decade, but the rate has slowed down since then. Key industries in Peru include mining, fishing, aquaculture, manufacturing, agriculture, textiles, energy, and tourism. Industries in Peru produce chemicals, chemical products, instruments, textiles, and processed foods.
Peruvian mass-production industries in the areas of food products and beverages, as well as consumer durables, such as textiles, footwear, and leather accessories have grown considerably in the last decade. The Peruvian economy has grown more slowly in recent years. The second strongest economic sector in Peru is the energy sector, based on petroleum production.
Peru has an interim constitution which is undergoing constitutional review and national debate scheduled for the year 2003. The executive branch consists of the President, Cabinet, and a vice president. The legislative branch consists of the congress and the judiciary branch consists of the Supreme Court.
Politics and government are free of military interference by law. A covenant of free association with the United States has made the United States responsible for guaranteeing the security of Peru. Under this covenant, the United States established in Peru a joint task force and U.S. Coast Guard unit. The country was formerly the head of the Southern Command of the U.S. Southern Command is responsible for all security matters in the region. Recent terrorist attacks have made Peru a major U.S. ally in the campaign against terrorism in South America.
Peru is divided into twenty-five departments, one special district (Lima), and one province (Callao). The capital, Lima, is a department with special status. It is home to about 11 million people. The currency in Peru is the nuevo sol, which has a fixed exchange rate of one U.S. dollar to 3.25 nuevo sols. A plurality of land in Peru is devoted to agriculture. Most farms are small, with an average holding of about 2 hectares. Natural resources include oil, natural gas, copper, iron ore, zinc, lead, gold, coal, and timber. The transportation sector of Peru consists of railways, highways, and piers.
Peru is a popular tourist destination. Attractions include archaeological sites, ruins, museums, markets, and colonial architecture. The most visited sites are listed as follows: the Machu Picchu ruins (UNESCO World Heritage Site), the Nazca Lines, the ruins of Chan Chan (UNESCO World Heritage Site), the Museo Larco, and the Parque Nacional Huascarán.
The workforce in Peru consists of 12 million people. From the 1980s to the early 1990s, labor in Peru suffered from a high unemployment rate of 35%. This figure decreased to 20% in 2000, and 16.8% in 2001. In 2004, 15.6% of the labor force was unemployed. Peruvian income is distributed unequally, and the most significant differentiation is that of continuous versus discontinuous employment.
Continuous employment in Peru refers to the highest level of permanent workers. This group of workers has job security, access to privileges, benefits and opportunity to advance. Other workers in Peru have no security or access to benefits. They usually do not have the chance to advance in their career.
Peru has two kinds of labor policy along with union laws. The two policies are the individual contract of work and the collective contract of work. Both of these policies ensure a working environment, which is free of harm or risk to persons or property.
Greetings in Peru
Prolonged eye contact is perceived negatively in Peru. The business greeting in Peru is a handshake. Handwriting is not used in Peru. The message is conveyed by the oral language.
Because the dress standard in Peru is a bit more informal than in the U.S., it is a good idea to dress conservatively. Conventional office wear means a business suit with a neatly pressed button-down shirt.
In many countries, it is rude to leave a social function without making a good-bye formalities. Peruvian people like to maintain relationships, no matter how short and informal, even with strangers. The best way to end a business meeting or a social function is to say good-bye and shake hands.
Peru is culturally diverse. As such, behavior can vary from one city to another. One must be careful not to impose one’s own customs, languages, or gestures on the local culture. U.S. cultural diplomacy is an expression of the U.S. foreign policy of promoting understanding and relations with other countries through educational, informational, and cultural exchanges. The goal of cultural diplomacy is to create relationships by exchanging visits, discussing common interests, and building coalitions through visits to the United States.
In Peru, after finalizing a negotiation with a business partner, a social function is usually scheduled to celebrate and conclude the deal. Business dinners are expected. Cuisine reflects the influence of Chinese, Italian, and Spanish origins. Peruvian food is seasoned with lemon, garlic, and onion.
At many social functions in Peru, such as the welcoming ceremony/banquet, it is customary to use an alcoholic drink to toast. It is not customary to fill one’s own glass. Alcohol is served at room temperature in Peru, not cold. Some drinks in the United States that are assumed to be alcoholic may not be served in Peru, such as whiskey and brandy. Therefore, first-time customers should ask which drinks are served by the establishment. Some establishments use toxic additives to drinks. Therefore, when ordering drinks, it is best to specify, “sin preparación (without additives)”.
Peru Business Law and Customs Union
The law pertaining to union activities can be accessed via the following link:
In order to form a union, three work days (48 hours) must be given to the management. Management will include the union with the company union, or the existing union with the one applied for. The union is named with the lowest denomination given in the company union. For example, if the union from a textile company already exists, it will take the denomination “sindicato de obreros” and the new union will be called “sindicato de oficios varios”. In Peru, labor laws are very generous to the union. A union can strike and demand a continual salary.
Once the union is formed, it is necessary to count one’s membership. This means that the secretary of the union will take the list with the signatures of the workers and publish them as signed. After this publication in the local press, the president, secretary, and treasurer of the union must go with three or four workers to the company and remove all the union support posters.
If the company does not want to recognize the union, they will not be able to stay in the company’s private offices, and the contracts cannot be signed. After the signatures are counted, the union will take the list to the local court. If the court approves the signatures, it is necessary to publish these signatures in the local newspaper. The period in between signatures and publication takes a few weeks. After this article is published in the local newspaper, the union will receive a letter of approval from the labor court.
Many Local Labor Laws
Every city has its own labor code. First, it is necessary for the union to check if the company is inside the police district. For example, in Lima, in order to create a union, it is necessary that the company is inside the police district station 7. After the company is inside this police district, the union will file a request with the Labor Court in Lima.
If the union can collect the signatures from 50% of the workers, then the union can file a request with the Labor Court. Once the court approves the signatures, it will issue an article in the newspaper, and the judicial police will come in to remove the support posters that have been put up.
After the signatures have been counted, the union must go to the labor court that belongs to the police district. The court will then decide whether to approve the signatures.
After everything has been approved, the union president must go to the office of the employment standards inside of the police station and must fill out a form to begin the union. This process takes three or four weeks. Once the union is formed, it is necessary to negotiate a contract.
Labor Unions and Workers in Peru
Unions in Peru play a key role in the social structure. At the national level, Peru has four recognized national unions. Two represent privatization sectors and two represent public sectors, including federal employees. Within a workforce sector of 100,000 or more, unions can be formed and recognized to represent unions.
Some sectors are harder to unionize, such as hotel and tourism, mining and construction. The number of public employees from 1999-2004 grew from 17.6% to 18.3%. In 2007, private sector employment totaled 2.3 million with 15,000 collective labor contracts.
Below are descriptions of Peru’s major unions:
Federación de Trabajadores del Peru (Federation of Peruvian Workers): Founded in 1958, it is successor to the General Workers Confederation (CGT). Its membership is educated, professional, and lower-to-middle class. CGT advocated socialist politics.
Central Unitaria de Trabajadores (United Federation of Workers): Founded in 1936, is a labor confederation of metal and textile unions in Lima. Its membership is mostly artisan (metal and textile) and service workers. It advocates for workers interests in Lima’s National Congress and in the Executive Council, as well as in the national judiciary.
Sindicato Nacional de Trabajadores de la Educación (National Union of Teachers): Founded in 1991, is a union of teachers, named an affiliate of the Latin American Teacher’s Organization (OELA). It is the second largest union after the Federación de Trabajadores del Peru. It has members in all teacher categories and teaches in both public and private schools. Members belong to teachers unions and non-teachers unions. It has a strong anti-privatization platform and participates in social activities. The FETEPE has strong leadership and consists of several affiliates.
Unión Nacional de Trabajadores (National Union of Workers): Founded in 1925, the UNAT is affiliated with the Labor Advisory Congregation (CONADEL) of the Organization of American States. It is closely affiliated with the International Confederation of Free Trade Unions (ICFTU) and the Trade Union Advisory Council to the International Labour Organization (TUAC). It is the third largest union in Peru. It began developing worker participation programs in the 1990s. It has a more “classical” formation, with a national central executive committee and departmental offices. This union represents theater groups, telecommunication workers, and agricultural workers.
Unión Nacional de Trabajadores (National Union of Workers): Founded as a Communist union, it is affiliated with the Trade Union Advisory Committee to the International Labour Organization (TUAC) and the International Confederation of Free Trade Unions-Latin American and Caribbean Regional Office (ICFTU-C-LAC). UNAT is the fourth largest union and is considered one if the most disciplined unions in Peru. In 2003, it became affiliated with the Central American Trade Union (CAT). In 2003, its membership declined to 108,000, but it has since risen back to 130,000. It has moved progressively from a union of workers to a union of professionals. It had been generally considered as a representative of the working class, but in the last decade has more clearly defined itself as a union for professionals and officials.
Other major unions in Peru include
National Confederation of Cooperatives (Empresa Nacional de Servicios Laborales: ENSERL)
- Sindicato de Trabajadores de Empresas de Seguridad (Workers’ Union of Security Companies)
- National Federation of Universities and Higher Education Institutions (Federación Nacional de Universidades e Instituciones de Educación Superior)
- Union Federation of Subcontractors, Companies and Employment Services (Federación de Cooperativas de Subcontratación y Servicios de Trabajo: FECOTRAS)
- Union of Local Government Employers (Federación Municipal de Sindicatos de Empleados Públicos: FEMSEP)
- Union of Hospitals and Health Institutions (Sindicato de Establecimientos de Salud y Entidades Asistenciales)
- Peruvian Federation of Ship Owners (Federación de Armadores del Perú)
Peru has massive organizations of workers who are from the informal economy. However, since 2000, unions have become less effective in representing workers. The main reason is that many unions have not been able to negotiate or renew contracts with employers. According to some analysts, members have become uninterested in unions. The main organization that has been able to improve its presence in the informal economy is the Self-Employed Workers Union (Sindicato de Trabajadores Autónomos: SETRA). It has created 5,000 committees of self-employed workers within the last few years.
SETRA is one of the few unions that have negotiated with employers. In 2003, it began to negotiate with employers about their economic rights. SETRA has expanded its membership by negotiating contracts with employers in the informal economy, such as stores and restaurants. In addition, it receives support from the Office of the APRA Party in the Pueblo Libre district of Lima, and from the Secretariat General of the Presidency of the Council of Ministers. It advocates for self-employed workers rights and has become more of a trade union rather than one for professionals. However, its membership has stayed around 700,000 members and is less than the public sector unions. To avoid conflicts with the Trade Union Opposition, it chooses to negotiate contracts without joining the Trade Union Opposition. For example, it negotiated a three-year contract with the Self-Employed Workers Confederation of Peru (Confederación Sindical de Trabajadores Autónomos del Perú: CSTA) in 2004. Another critique of SETRA is that it tends to negotiate better contracts for businesses.