“A company that anticipates manages risk; one that does not manages crises”
- Interviewee
- Diego Rebaza Díaz
- Published
- August 27, 2026
- Reading time
- 15 min
Diego Rebaza Díaz worked on the side of the state that enforces regulation before advising companies from the outside. He explains why the real work begins before a regulation is published, how to identify an authority’s change of approach early, and why the adjustment period of a new rule is the worst time to lower your guard.
Diego Rebaza Díaz is a partner at JBA Legal Consulting and was Deputy Director of Energy and Mining Enforcement at OEFA, Peru’s environmental assessment and enforcement agency. He now works on enforcement, sanctioning procedures, and environmental and energy regulation, where a rule stops being text and begins to have consequences. We opened this series with him because he understands both sides: the authority that enforces and the adviser who now supports those being inspected.
Peru’s Congress is only beginning to take shape. On 19 August, the Chamber of Deputies installed seven more standing committees, including Energy and Mining. On the following day, the full chamber received the Prime Minister and cabinet for the government’s general policy statement. No committee had issued a report by then, so anyone seeking to anticipate change had to watch how the pieces were being arranged rather than read final outcomes.
How do you follow what is happening inside from the outside, and how much of that work is still manual?
Legislative monitoring is essential, and I learned that firsthand in public administration. I saw how a poorly written or misinterpreted rule created enormous enforcement problems. Now, from the other side, I know that the real work begins before the rule is published. For my clients, it is therefore not only a reading exercise, but a risk management tool.
Peru has a kind of overregulation, and I advise regulated sectors that are subject to many different and sporadic rules. You have to understand every part of the regulation very well.
Following what has already been approved is not enough. You also have to review draft rules, because they reveal the likely final direction of a regulation, make it possible to participate in consultations, help build relationships with legislators, and create space for industry associations in the discussion.
The work can be organised at three levels. The first is broad monitoring, which tracks rules every day. The second is early warning, which identifies changes relevant to a specialised sector. The third is the analysis of trends and of the main cases being decided. A company that knows the rules reduces the risks and liabilities it may later face during an inspection.
On paper, the legislative process looks orderly and predictable, with defined stages and deadlines. Anyone who works with it every day knows that much happens between the introduction of a proposal and the committee report, and that these unwritten events often carry more weight than the formal procedure.
What parts of the legislative process are not in the rules but end up determining the outcome?
The substance of a rule is discussed in technical working groups and committees. But provisions that were never part of public or technical debate are often included at the end. These are known as filler provisions or regulatory addenda, and their later impact can be considerable. The underlying problem is that the ex ante Regulatory Impact Assessment is bypassed.
An ex ante assessment first identifies the problem and considers how a rule should address it, or whether a nonregulatory alternative would work better. When this step is skipped and provisions are inserted outside the standard process, the result can be incoherent regulation. There is also no ex post impact assessment to determine whether the rule is solving the problem or needs to be adjusted, repealed, or replaced.
Unfortunately, the state often assumes that problems are solved by issuing rules, when that is not always the answer. Regulation exists, but it does not have to rely only on formal rules. Other regulatory alternatives are available.
In July, you explained that regulatory and enforcement agencies have high staff turnover and frequent changes to internal rules. This damages predictability precisely when it is most needed. You added that the value lies not only in learning about a change, but in anticipating how it will affect the authority’s conduct.
From the outside, what is the first sign that an authority is changing its approach?
There are early signs and signs that persist over time. The main ones appear in administrative decisions. When lawyers or clients receive a decision and find weak or generic reasoning, that is the first red flag. An authority may stop developing technical and legal arguments with its usual rigour, repeat standard formulas, or change its approach without explaining why it has departed from earlier precedents. For us, this is a serious warning because it creates legal uncertainty and makes a future challenge to the decision likely, prolonging the dispute.
Another indicator is a rise in information requests. When an authority asks for information already in its possession or in the case file, or extends deadlines without justification, companies and lawyers begin to suspect that the person in charge does not understand the procedure or is buying time to adjust to the change.
There are also medium term signs, such as changes to supervision criteria. If inspections have followed one approach for years and prioritisation criteria suddenly change without technical justification, the agency is not coordinating internally. High staff turnover and the loss of institutional memory then produce contradictory approaches within the same agency. Predictability breaks down, even though we need to understand how the authority is likely to decide in order to focus the legal analysis. The result is more uncertainty, more litigation, and less trust in the authority.
You have seen both sides. Your work must bring you two kinds of company: one arrives prepared because it has followed the change from the beginning, and the other learns about it only when the inspection has already begun.
What separates a company that learns of a regulatory change in time from one that learns only when it is being inspected?
The difference is substantial, and it is not only a matter of time. It concerns how risk is anticipated and how the company acts. A company that anticipates and understands regulation has room to implement structural changes, plan investments, and adjust its activity in a controlled way. One that does not actively monitor the rules affecting its business acts reactively, under pressure and against deadlines, bearing emergency costs and adopting last minute corrective measures. Some breaches can no longer be remedied and become financial liabilities.
There is also a reputational and institutional dimension that is often underestimated but matters greatly in regulated sectors. A company that anticipates and builds trust with the enforcement authority is seen as responsible and cooperative. A reactive company is viewed as a repeat offender, faces greater scrutiny, and may find the authority less willing to consider mitigating factors or allow remediation in future inspections. More than the penalty itself, this exposure can affect the trust of investors, communities, and strategic partners.
It can be summarised like this: a company that anticipates manages risk, and a company that does not manages crises.
Peru has returned to two chambers after more than thirty years, and the new system is only beginning to operate.
Beyond the political debate, what changes for a regulated company?
Bicameralism is neither good nor bad in itself, but its effect on regulated companies will be qualitatively different. It will require an adapted strategy: active monitoring of the legislative process in both chambers, participation in public consultations, relationships with legislators and, above all, anticipation of legislative timing because investment planning depends on it. If a company wants to develop a project while legislators are changing a rule that affects its activity, the process will take longer and require much more active monitoring.
The system will be slower, but it should also produce rules with broader consensus and greater durability. There will be a double filter and deeper, more specialised discussion of each proposal, including public hearings and sector consultations. This should reduce abrupt regulatory changes and volatility, allowing companies to plan with greater long term certainty. It also creates more space for associations to participate and form alliances that improve proposals.
The cost is delay. Each chamber can amend a proposal and send it back to the other, making effective dates less predictable. A law also usually needs implementing regulations. Considerable time may pass between the enactment of the law and the point when those regulations make it fully operational.
This leads to the next question, because the point when a rule exists and the point when it can genuinely be enforced are not the same.
What has to happen between the publication of a rule and its effective enforcement?
Every new rule has a vacatio legis, an interval that allows regulated parties to adapt their processes, systems, and internal procedures to the new requirements.
Understanding its scope comes next. Knowing the text is not enough. You have to review its explanatory statement and justification because regulation is often complex and contains grey areas and gaps that are resolved over time through the authority’s decisions.
This connects to predictability and the authority’s criteria. Legitimate and effective administration requires clear procedures, known technical and legal criteria, and defined stages and deadlines. Without predictability, enforcement becomes arbitrary and creates disputes in court. The agency also needs the real capacity to apply the rule, including resources, laboratories, information systems, and specialised staff.
The true milestone between a rule and its enforcement comes when a body of decisions and precedents makes it possible to interpret the rule and understand the administration’s settled practice. Before that, both regulated parties and enforcement agencies are learning its scope. This does not mean that enforcement cannot begin earlier, but it will generally be less rigorous, with transition periods and guidance based inspections. My professional advice, however, is never to lower your guard. This adjustment period is the ideal time for internal testing and changes because mistakes made now will set a precedent for stricter enforcement later.
We finish with what comes next. There is an open debate about how much of this work a machine can do. Some argue that it can do almost all of it because the task involves processing many documents. Others argue that it can do almost none because judgement and knowledge of the terrain carry the most weight.
What role can artificial intelligence play in legislative and regulatory monitoring, and what will continue to depend on a person?
Artificial intelligence is becoming an essential tool for lawyers, especially those advising in complex regulated sectors. Integrating it into our workflow is the path to being more strategic and adding distinctive value. It can greatly assist legislative and regulatory monitoring because it processes in a short time information that would take us weeks or months and can continuously track regulatory developments when given the right instructions.
Human supervision will always remain. Artificial intelligence can read regulatory texts, summarise them, and identify important provisions. The human role complements this because the system does not understand the political, economic, or social context behind a rule. Lawyers, political scientists, and economists will continue to provide that understanding. Relevance also requires judgement. A tool can generate many alerts, but a person decides which alert really matters and how much weight it carries.
Bias is another concern. Cognitive biases can be introduced when algorithms are programmed and can change how the tool processes information. It can draft a generic email, but a person writing a tailored message for a specific client understands the situation better.
Artificial intelligence will not replace legal advisers. It will enhance their work, and professionals who integrate it into their workflow will be more efficient and strategic than those who do not. It is like radar: it reveals the broad picture and the detail, but we continue to set its direction. The value of a human adviser lies not in reading the rule, but in understanding and explaining it so that clients can understand their business and design strategies to defend or develop it.
Regulatory innovation beyond rules and penalties
To close, I would like to discuss a subject that I care deeply about and believe is the future of regulation. My master’s research and public sector experience led me to explore regulation through behavioural economics. The aim is to find solutions that encourage compliance without resorting to inspections or penalties.
At OEFA, I was part of a multidisciplinary group that used this approach with very positive results. This nonpunitive or collaborative compliance model is now used by agencies such as Indecopi and in the health sector, with successful experiences in Chile, Colombia, and Central America.
This is an area where legal advisers can add considerable value, helping companies comply through efficiency and sustainability rather than fear of a fine. Regulation is therefore worth examining not only as formal rules and law, but through its many other forms, including those that are not written.