Statute protects Petrobras against changes in the Law of State Companies, evaluate advisors

The change in the State-owned Law under debate in the Senate should not have an immediate effect on Petrobras, which included in its statute the restriction on members of political campaigns loosened by the Chamber of Deputies.

This is the opinion of experts and company advisers, for whom the statute is a second barrier to attempts at political interference in the management of the largest Brazilian state-owned company, which melted on the stock exchanges after the approval of the text.

But, even with the prohibitions of the statute, the Jair Bolsonaro (PL) government managed to place on the company’s board of directors names that faced restrictions and were even rejected by the internal committee that analyzes the nominations.

The change approved in a flash in the Chamber of Deputies this Tuesday (13), opens the door for the centrão and other representatives of the political class to occupy strategic positions in public companies and regulatory agencies and, with this, exert direct influence over them.

The project reduces to 30 days the quarantine of nominees to the administration of public companies that have participated in the organization, structuring and carrying out of electoral campaigns. It still needs to be approved by the Senate.

Still in the Michel Temer government, the management of Petrobras included in its statute prohibitions foreseen in the law, with the objective of creating a second shielding barrier to political offensives.

As with the original text of the State-Owned Companies Law, the statute prohibits the appointment of “a person who has worked, in the last 36 (thirty-six) months, in work linked to the organization, structuring and carrying out of an electoral campaign”.

It also restricts the appointment of “person who acted, in the last 36 (thirty-six) months, as a participant in the decision-making structure of a political party”.

Board members heard by Sheet assess that the statute would need to be changed to overturn the prohibitions, in case the government decides to appoint people who worked in campaigns or with party activities. This type of change depends on approval by the board and shareholders’ meeting.

The assessment of a council member, however, is that the government’s partnership with the mayor, Arthur Lira (PP-AL) to change the law signals that the statute will not be immune to changes after the beginning of the PT administration.

Goldman Sachs bank analysts have a similar view, for whom the State-owned Law and the company’s internal regulations offer protection against short-term interference, but there are uncertainties regarding what the new management will do.

The sources heard still do not have an assessment on possible restrictions on the most quoted name to take over the company, Senator Jean-Paul Prates (PT-RN), who is part of the transition group of the elected government for the energy area.

The elected government understands that there are no restrictions, although Prates ran in the October election to be an alternate senator on the ticket of Carlos Eduardo (PDT-RN). The law, argue sources, does not prohibit the nomination of candidates, but of people who worked in campaigns.

Although the company has tried to strengthen its shield against political indications, the Jair Bolsonaro (PL) government placed on the company’s board the number two of the Minister of Civil House Ciro Nogueira, Jônathas Assunção, and the Attorney General of the National Treasury, Ricardo Soriano.

The two nominations were rejected by internal governance, on the grounds of risk of conflicts of interest between their roles in the government and on the board of the state-owned company. But they were approved with votes from the Union in an assembly, after the company’s legal opinions denied the conflicts.

Sought after, Petrobras did not manifest itself until the publication of this text.