Transparency and governance
Experts discuss role of state-run companies in the Brazilian economy at event in São Paulo
Conectas and the Fiscal Studies Center of the Getúlio Vargas Foundation’s São Paulo Law School (FGV Direito SP) staged a roundtable on transparency and governance of state-owned companies on August 13, which was attended by academics, experts and representatives of both civil society and government.
In the presentation by the event’s organizers, Conectas lawyer Caio Borges spoke about the relevance to the discussion of the work performed by the organization’s “Business and Human Rights” project. “We faced a conceptual question when conducting our study on the Brazilian Development Bank (BNDES): do state-owned companies have an obligation to respect or a duty to protect human rights?” explained Borges. “The obligations of state-owned companies concerning human rights involve various other areas, such as corporate governance, transparency, bidding processes, etc., which is why Conectas believes that different perspectives should be brought to the table now,” he added.
The opening address at the event was given by the National Justice Secretary, Beto Vasconcelos, who spoke about the initiatives implemented during the governments of presidents Luís Inácio Lula da Silva and Dilma Rousseff aimed at promoting more openness on the part of the State and the release of information on the public administration, such as the Freedom of Information Law and the Transparency Portal.
Vasconcelos also commented on the initiatives to combat corruption, such as the cooperation and information exchange agreements with foreign legal and police authorities and the Anti-Corruption Law. “The level of openness achieved by the Brazilian State cannot be undone by future governments,” said the secretary.
Mario Schapiro, a professor at FGV, explained that, despite the recent advances, transparency should be viewed as a minimum agenda in the context of public sector relations with the private sector. Schapiro emphasized the need to look more broadly at state-owned companies, since they are a key part of the Brazilian economy, and to identify other concerns, such as their utilization in the implementation of public policies. “This is why we should think in terms of governance,” he said.
The professor also stressed that the problem of corruption should not be the primary issue in the public debate on state-owned companies. He said that attention should be focused more on the definition of mandates, controls and accountability mechanisms that can measure the costs and benefits of their activities.
The important role played by state-owned companies was also addressed by Diogo Coutinho, a professor at the University of São Paulo Law School. According to Coutinho, the key issue should be how to strengthen these enterprises, not how to weaken them. “We need to improve the forms of social control of state-owned companies and remove the ideological bias that permeates the debate,” he said.
Patrícia Pellini, Issuer Regulation and Orientation Manager at the São Paulo Stock Exchange (BM&FBovespa), presented her governance program for state-owned companies. The document has four key topics: transparency, internal control structures and practices, management composition and obligations of controlling shareholders. Pellini pointed out that there are 30 state-owned companies listed on the stock exchange. And she detailed six of the nearly thirty objective measures that need to be adopted to improve the governance of these companies.
The obsession with corporate governance in the crisis of state-owned companies was challenged by Mariana Pargendler, also a professor at FGV. She criticized the excessive focus placed on corporate governance and its effectiveness in solving problems. Pargendler also made some comments on the provisions contained in the draft version of the State-Owned Company Responsibility Law, which was prepared by a special commission of lawmakers from the Lower House of Congress and the Senate.
Finally, Solange Falcetta of Transparency International (TI) in Brazil presented initiatives and documents aimed at combating corruption and promoting greater transparency by governments.
She presented some actions taken by chapters of TI in other countries to raise the transparency of state-owned companies, such as a ranking developed in Slovakia. Falcetta also addressed issues related to procedures for starting a career in the public sector, politically appointed positions and the importance of the corporate culture for the ethical conduct of employees of state-owned companies.
In this debate on governance, incentives and transparency, the guests provided important insights for the development of mechanisms for the effective inclusion of the obligation to protect human rights by state-owned companies.
