A letter signed by civil society organizations was sent this Thursday (30) to the Presidency of the Republic asking for the maintenance of the State-owned Companies Law, which came into the government’s sights after yet another change of command at Petrobras.
According to the entities, the current instability in the management of the state-owned company in the face of increases in fuel prices has been used as a pretext to relax a law that symbolizes a milestone in the prevention of corruption.
“It is easy to see that the real intention is to eliminate barriers so that political patronage, a shortcut to corruption, and the political-partisan capture of state-owned companies from happening again in our country, alienating private investors, affecting the attractiveness of the capital market and economic activity in general”, says the text.
The letter is signed by INAC (Institute Not Accepting Corruption), IBGC (Brazilian Institute of Corporate Governance), IBDEE (Brazilian Institute of Business Law and Ethics), Ethos Institute, Transparência Brasil and Educafro Brasil.
According to the document, the attempt to change the legislation does not consider the country’s greater interests, but only the “petty interests referring to the elections”.
In addition to President Bolsonaro, the letter was addressed to the presidents of the Chamber of Deputies and the Senate, the Federal Supreme Court (STF), the Attorney General’s Office and the AGU (Advocacy General of the Union).
Last week, members of the centrão defended changes in the State-Owned Companies Law. Making the criteria for appointing members of the boards and directors of public companies more flexible is one of the main points on the parliamentarians’ radar.
In the letter, the organizations highlight that the legislation was created in response to a series of investigations that pointed to political use of companies in previous administrations.
“The idea was to take Brazil out of the times of patrimonialism and reduce one of the greatest evils that corrode the Brazilian public administration and conspire against the efficiency of our state-owned companies (public companies and mixed capital companies): the culture of cronyism”, they say.
According to the document, from the entry into force of the State-Owned Companies Law, Brazil has gone up some steps in the protection of public assets, ensuring the efficiency and professionalization of the management of public companies.
Proof of this, in the view of the entities, is that the evaluation of good practices by federal state-owned companies almost doubled between 2017 and 2021. .15 to 8.07 (out of a maximum of 10).
Flexibility puts entry into the OECD in check
The letter also recalls that any relaxation of the law would represent a failure to comply with the requirements for Brazil to join the OECD (Organization for Economic Cooperation and Development).
Last week, a letter of similar content was sent to members of the government and the National Congress. Signed by capital market associations, the text said that the proposal to change the State-Owned Companies Law is in line with relevant achievements.
Both documents cite a report published in late 2020 by the group of rich countries, which recognizes that state-owned boards have become more independent from interference after the law was passed.
Therefore, the entities argue that flexibility would bring serious setbacks, even more so if the changes are made through MP (Provisional Measure) — as is possible to happen, since it is an ordinary law.
“The proposal goes against the prevailing public interest and unfortunately has been openly defended by representatives of the Chamber of Deputies and the federal government”, say the entities.
3 YEARS
is the minimum time required for the nominee to have ceased to exercise activities in a political party or in an electoral campaign
25%
is the proportion of independent members that the board of directors must have
0.5%
is the upper limit that advertising and sponsorship expenses can exceed the previous year’s revenue
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