Environmental and social threat

New legal framework for public-private partnerships tramples environmental licensing and public participation

Despite criticism from civil society, the Brazilian Senate approved yesterday, September 8, Provisional Executive Order 727/2016 that creates the PPI (Investment Partnership Program). The bill, which will now be signed into law by President Michel Temer, makes sweeping changes to the legal framework for public-private partnerships in the country.

With the express goal of expediting public concessions and eliminating state interference, the bill was approved quickly by 44 votes in favor and five against, without observing the minimum number of two full sessions established in the Constitution for voting Provisional Executive Orders.

According to Caio Borges, a lawyer for the Business and Human Rights program at Conectas, the bill was passed without any public debate on the relevance of the topic or the potential impacts on the environment and on economic, social and cultural rights.

“International bodies such as the World Bank and the UN have recognized that public-private partnerships often deliver results that fall short of what is promised, in terms of both economic efficiency and sustainable development. The Brazilian Congress ignored this evidence and approved Provisional Executive Order 727 without a thorough debate on the pros and cons of the legal framework for the PPI, which as a result has come into being with a lack of social control,” he said.

In a public statement released yesterday, 77 civil society organizations, among them Conectas, reiterated their grave concern with the program’s financing model and with the absence of public involvement in the decision-making processes. According to the organizations, the program “uses a vague concept of national priority to regulate infrastructure projects and privatizations without any effective guarantees of transparency, public participation or environmental and social protection”.

In addition to creating the PPI, the provisional executive order authorizes the BNDES (Brazilian Development Bank) to set up and participate in a private support fund for structuring projects. The organizations claim, however, that the bill does not make it clear how the bank will obtain subsidized credit in the current climate of economic crisis and fiscal austerity.

The board of the PPI will be chaired by President Temer and formed by his chief of staff, the ministers of finance, transport, planning and environment, and the chairs of the federal banks BNDES and Caixa. According to the organizations, “there are no provisions for the involvement of communities that may be directly or indirectly impacted by the projects included within the program in any of the stages, from prior assessment to project structuring and execution”.