Participatory engagement in developing a city ordinance produces a fair policy for formalizing street vendors

                                                              

Participatory engagement in developing a city ordinance produces a fair policy for formalizing street vendors

Women in Informal Employment Globalizing and Organizing (WIEGO)
Solution proposed by: 
WIEGO: Women in Informal Employment: Globalizing and Organizing
In a Nutshell: 
Metropolitan Lima City Council’s 2014 city ordinance is an innovative policy that balances street vendors’ livelihoods and governments’ desire to formalize informal economy workers. The city ordinance, developed through a two-year consultative process involving organizations of street vendors, community leaders and municipal authorities, recognizes street vendors as workers, strengthens their organizations, and regularizes street vending in public spaces through gradual processes of formalization assisted by the local government.
Where and When: 
Lima Peru, 2012-2014
Challenges: 
Vendors recognize metropolitan and district municipalities as the most important institutions affecting their work, although their relations with them have been marked by mutual distrust and confrontation in the past. Despite some programs and measures from the municipal governments aimed at this group, the perception of street vending as a problem permeates planning processes and government practices related to vending. This leads to the implementation of restrictive measures towards vendors that affect their working conditions and livelihoods. In general, vendors perceive municipalities as abusive, lacking in transparency and unwilling to engage in dialogue with vendors. For those reasons, vendors’ perception of the municipalities is negative.
Innovation: 
In contrast to most street vending regulations in the world, this ordinance, passed in May 2014, recognizes street vendors as workers, seeks to strengthen their organizations, and aims at regularizing street vending in public spaces through gradual processes of formalization assisted by the local government. The ordinance is the result of a participatory process supported by WIEGO in which 150 vendors’ organizations expressed their views and submitted proposals and recommendations; this new legal framework includes a number of measures that street vendors themselves identified.
Concept: 
Peru has one of the highest incidences of informal employment in Latin America – 75 per cent of the workforce is informal, according to National Household Survey data (Dec 2011). In 2012, Lima’s Metropolitan Council began a process of developing a new ordinance to regulate street vending in the city’s downtown area. After two years of discussions and a collaborative, participatory process, the city ordinance developed addresses the need for street vendors to access their livelihoods with the city’s desire to formalize street vending activities. The ordinance intends to formalize street vendors; therefore, in order to obtain a license, vendors must register into a formalization process and participate in capacity-building workshops to develop skills in various areas. The ordinance streamlines the allocation of licenses to operate in public spaces and extends the license from one year to two years, allowing for greater certainty for vendors in their occupation. The allocation of licenses will also take into consideration and give priority to the most vulnerable among street vendors. The process promoted by the ordinance ensures that with these new skills, vendors and their organizations will be better equipped to operate in the market and to eventually leave the streets and establish themselves in formal businesses, in turn allowing the neediest people to obtain those licenses. The ordinance also makes the city government responsible for the promotion of savings schemes (individual and collective) so that vendors would have access to the financial sector and would be able to accumulate the necessary capital to make the transition from the streets to formal urban commercial projects.
Description: 
Key aspects of the ordinance: • The ordinance, which replaces one that is nearly three decades old, recognizes street vendors as legitimate workers. A pro-poor orientation in the ordinance prioritizes licenses to vendors who live in extreme poverty and those who have particular difficulties, including women heads-of-households, seniors, pregnant women, and people with disabilities. It will now allow the presence of “assistants” for those who need them. • Underlying the licensing regime is a fundamental commitment to encouraging vendors to save money and move toward formalization of their businesses over time, helping them leave the streets for more secure incomes. Individual and collective savings are promoted through specific programmes, with the aim of having street vendors move from the street to more secure, profitable, and promising urban/commercial projects. This in turn will free up licenses for others who need the opportunity to earn. • The process simplifies and shortens the process by which a street vendor can receive authorization to vend, and extends the period of a vending license from one year to two, so vendors can plan for more continuous income. Also, authorization now will be given earlier in the year for the next year, so vendors can plan their near future. And the appeal process is more immediate, reducing vendors’ uncertainty. • A requisite for vendors to have health insurance in order to obtain a license encourages them to use state programmes now available that offer health coverage for the poor. As well, the city commits to promoting special agreements with the health insurance system for the poor. • The creation of a tripartite committee to resolve issues is another novel feature; the committee includes representatives from the municipality, street vendors, and local residents. These committees are institutionalized spaces for dialogue between the authorities, vendors and neighbours’ associations.
Impacts: 
The success of the street vendors in achieving this more favourable ordinance is one example of how important law is to the lives and livelihoods of informal workers. The creation of Tripartite Concertation Committees included in the ordinance can change the public image of street vending from a “problem” to an essential economic activity in the city. The process promotes improved interactions between local government, vendors, and city residents and community leaders. The process of formalizing and building the capacity of street vendors will address their economic vulnerabilities by empowering them and improving their income earning capacities.