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Politicians want to change the State Companies Law. See what the risks are

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Politicians want to change the State Companies Law.  See what the risks are

Rising fuel prices, which rose by 27% in the 12 months to June, driven by rising international oil prices, threaten one of the laws created in the context of the fight against corruption: the Law on State Companies, approved and enacted in 2016 under the government of Michel Temer.

Organizations and experts say that any change in the law not only represents a failure in the management of these companies, but also threatens the government’s bid to join the Organization for Economic Co-operation and Development (OECD), a “club” of excellence that brings together the world’s most advanced.

The President of the Chamber of Deputies, Artur Lira (PP-AL), demanded that the Ministry of Economy submit an interim measure to amend the Public Companies Law, while the leader of the government in the House of Representatives, Ricardo Barros (PP-PR), confirmed that an interim measure is being worked out in this direction.

The stated goal is to provide greater “synergy” between business and government at the moment. In practice, the idea is to force the board of directors of Petrobras to obey the orders of President Jair Bolsonaro (LP) not to adjust the fuel.

Although this proposal came from allies of the government, it was supported by the opposition. PT President Glasey Hoffmann defended that the Public Companies Act should be revised to allow the appointment of politicians to directorships and boards of directors. She says the law criminalizes politics.

In the midst of an attempt to reinstate political interference in state-owned companies, the Ministry of Economy reported that Union-controlled companies earned almost 1 trillion reais last year, reaching their highest profit in 13 years. The economic team – contrary to the changes in the Law on State Companies – links these results precisely with the professionalization of state companies.

“The State Companies Law has closed the door to the political exploitation of public companies by setting up barriers and requirements for appointments to senior positions and to the board of directors,” emphasizes the manager of institutional and government relations at the Brazilian Institute. Corporate Governance (IBGC), Daniel Gregorio.

In the midst of a legislative review debate, former President Temer said that initiatives to promote changes to the State Companies Law should not even be considered. “What is expected of the political world is that it constantly improves Brazilian legislation and institutions so that it does not contribute to failure. The law, which is supposed to be amputated, meant a moralization of the public activities of state-owned companies and a big step forward in the political customs of the country,” he said in a note.

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Misguided Petrobras Pricing Strategy

Another criticism of the position of politicians comes from the vice-president of the National Association of Federal Tax Inspectors of Brazil (Unafisco) Kléber Cabral. He acknowledges that fuel prices are exorbitant, but points out that the way to change this scenario is not to change the State Companies Law. “Abiding by the law would mean removing the protection against mismanagement and corruption and opening up space for inefficiency and falsification.”

According to him, the main achievements obtained through the adoption of the Law on State Companies, which responded to popular demand, were the non-political orientation of public companies and companies with mixed capital, improved agreement (compliance with laws and rules of conduct) and increased transparency of inspections. “The same actors who were exposed and convicted six or seven years ago in state-owned companies want to return to the surface,” says Cabral.

Markus Dantas, the IRS auditor who worked on Operação Lava Jato, also says Petrobras’s way of dealing with pricing issues does not involve changing the legal framework to fight corruption. “Amendments to the State Companies Law would encourage a return to corruption.”

Restrictions on political action in state-owned companies, established by legislation adopted in 2016, are strict. The legislation establishes that the appointment to the board of directors and directors of the company:

  • A representative of the regulator to whom a public company or company with mixed capital reports;
  • Minister of State, Secretary of State, Municipal Secretary;
  • The holder of a position that does not have a permanent connection with the public service, of a special nature or senior management and advice in public administration;
  • Statutory leader of a political party;
  • The holder of a mandate in the legislature of any subject of the federation, even if he has a license to office;
  • An individual who, in the past 36 months, has served as a member of the policy-making body of a political party or in work related to the organization, structuring and conduct of an election campaign;
  • a person working in a trade union organization;
  • A person who has signed an agreement or partnership as a supplier or purchaser, purchaser or supplier of goods or services of any nature with a political-administrative person controlling a public company or a company with mixed capital, or with the company or company itself, for a period of less than three years before the date of appointment; as well as
  • A person who has or may have any form of conflict of interest with a political/administrative person who controls a public or mixed capital company, or with the company or company itself.
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According to Dantas, the law is clear: “administrators must be people with technical ability and experience, and have an education appropriate to the position they hold.”

How Financial Market Entities Reacted to the Idea of ​​Amending the Law on State Companies

Entities connected with the financial market also spoke out against changes to the State Companies Law. On June 24, the Association of Capital Markets Investors (Amec), the Association of Analysts and Professionals in Capital Markets Investments (Apimec), the IBGC, the Brazilian Institute of Investor Relations (IBRI) and the Ethos Institute of Companies and Social Responsibility sent a letter to parliamentarians and the Federal Executive with a warning about the risk of failure in the event of changes to the Law on State Companies.

In the opinion of the organizations, the proposed change runs counter to relevant recent developments and jeopardizes Brazil’s aspirations to join the OECD. The document emphasizes that the attacks on the legislation are aimed at dehydrating the demands and bans on holding positions of board members and directors.

“These provisions form the main shield of the legislation against the risk of capture of state-owned companies by party-political interests that are responsible for notorious cases of corruption, inefficiency in the allocation of state resources and in achieving electoral and personal goals, to the detriment of the social goals for which the companies were created”, – says the text.

The organizations note that the damage from the intervention of political parties is not limited to the state treasury and the quality of services provided to the population: “in the case of companies with mixed capital listed on the stock exchange, the impact affects private investors, damaging the attractiveness of the Brazilian capital market as a source of financing for economic activity” .

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According to the signatories of the letter, the rules contained in the law serve to ensure that the management of companies is professional, by applying technical criteria for the selection of administrators and following recommendations from national and international sources, including management guidelines for companies in OECD countries. The alignment with these standards is one of the steps envisaged in the process of Brazil’s accession to the international organization.

The organization acknowledged in a report released in late 2020 that state company boards have become more independent of political party interference due to the hurdles imposed by the State Companies Law.

And he recommended that Brazil go further, seeking improvements such as extending the requirements and prohibitions to all board committees and fiscal boards, effectively giving the board of directors the power to appoint and dismiss the company’s CEO, as well as rules and procedures. for the appointment and appointment of directors.

Polls show improved governance of state-owned companies

Loosening the SOEs Law would also end the virtuous cycle of maturation of governance systems and the integrity of SOEs, the organizations say. According to the Secretariat for the Coordination and Management of Federal State Enterprises of the Ministry of Economy, the score for assessing compliance with the rules and practices of good governance in federal state-owned companies almost doubled between 2017 and 2021, reaching 8.07 on a scale that extends to 10.

Another study by the IBGC indicates that between 2018 and 2020 there has been an increase in the share of independent directors in independent public companies (from 21% to 30%) and the adoption of formal processes for assessing the effectiveness of directors (from 51% to 83%).

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Planalto controversy sparks debate over gender disparity in politics

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Planalto controversy sparks debate over gender disparity in politics
Plenum of the House on Election Day: few women in a predominantly male environment (photo: Clea Vian/Chamber of Deputies)

For the first time since the redemocratization, Brazil will have two all-female slates in the presidential race, for both the presidency and the vice presidency. The feat came after the confirmation of Mara Gabrilli (PSDB) as a deputy in the campaign of Simone Tebet (MDB-Federao PSDB/Cidadania-Podemos). Another slate woman from PSTU, with Vera Lchia next to the indigenous Kun Ipor. Together with Senator Soraya Tronic (MS), Unio Brasil’s official presidential candidate, this election becomes the election with the largest participation of women in the majority dispute.

The trend should repeat itself in the Legislature, in contrast to what was observed in the 2018 elections, when candidates represented only 32% of the candidates approved by the High Electoral Court (TSE), even with at least 30% of the votes distributed. election fund to ensure representation in elections. This year’s outcome of the October dispute is expected to better reflect the presence of women in Brazilian society, especially in the National Congress and in state legislatures.

Despite the stimulus policy, the National Congress is still not very feminine: the Senate has only 12 senators (15%) with 81 seats. In the Chamber of Deputies, out of 513 seats, only 77 (14.8%) are occupied by women.

In the last election campaign, cases of orange women’s candidacy were recorded in studies by foreign universities University College London and James Madison University. According to a poll, 35% of all female candidates for the Chamber of Deputies in the 2018 elections did not receive 320 votes. The numbers indicate that the candidates did not even campaign and raise suspicions that they were only used to comply with the quota law.

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The study also showed that 20 years after the passage of the Quota Act in 1998, there had been little progress in the representation of women in the House. From 1998 to 2018, the percentage of women MPs increased from 5.6% to 15%. Due to cases like “orange candidacies”, in January of this year, the TSE confirmed the gender quota and tightened electoral rules to ensure that parties effectively comply with the law in 2022.

In previous years, this issue was regulated by the regulations of the TSE itself. However, due to non-compliance with the rule, Constitutional Amendment 117 was adopted in April this year. The law establishes that political parties must allocate at least 30% of the funds of the Special Campaign Finance Fund (SFFC) and mandatory campaigning. on radio and television with their candidates.

In order to further encourage women candidates in the long term, the law provides for the establishment and maintenance of programs to encourage and promote women’s political participation.

little incentive

Luciana Panque, professor and researcher at the Federal University of Parana (UFPR) and external consultant to the Observatory of Women in Politics of the Chamber of Deputies, stresses that, unlike in countries like Mexico, where representation quotas are seats in the Legislature – i.e. after elections – in Brazil binding only for electoral disputes.

“Parties are obliged to nominate women, this does not mean that these candidates are competitive. Often candidates come either fictitious or with small investments,” he explained.

In addition to women’s quotas, other measures aimed at encouraging the representation of an identity can be seen in elections. Electoral lawyer and researcher at the National Observatory of Women in Politics of the Chamber of Deputies Carla Rodriguez identifies three main initiatives.

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“Dual voting for blacks and women to allocate the party fund and campaign fund should encourage parties to put forward more competitive female candidates, that is, they will invest in women with political capital. The Law on Combating Political Violence Against Women, a global and previously unseen phenomenon, also contributes to underrepresentation,” the lawyer explained.

According to experts, the inclusion of women in politics is a problem due to the lack of support and promotion of interests in this topic. So says political scientist Beatriz Finochio, who opposes quotas for female candidates as an interference that could encourage corruption.

“The role of women in modern politics, as well as interests. The way a society works, where even women cannot have an opinion, has recently changed. But now, for her to go from a voter to a candidate, a path. It’s good when there are women in politics, but it would be even better if we trained people regardless of gender,” the academician argues.

For University of Brasilia (UnB) political science graduate student Brenda Barreto, underrepresentation begins in the internal organization of the parties themselves. “The scenario of women’s underrepresentation at the national level, which we see, begins with the entry of women into the party. If we look at who are the chairmen of the parties, there are practically no women at the national level,” he said. outside.

The support of men is a fundamental reason for the success of existing public policies. However, coordinator of the Brazilian section of the Women’s Democracy Network (WDN/Brazil), Silvia Rita de Souza, sees that sometimes men feel cornered by the fact that the space is occupied by a large number of female figures.

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“When it comes to the political space, men feel cornered because in order for someone to enter, someone has to leave. They feel that they are losing space, and many do not understand the struggle, ”he appreciated.

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Center is not destiny – Opinion

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Civil society has risen to loudly and clearly declare that a democratic regime, won at the cost of much suffering, is non-negotiable and that its defense is above political and ideological differences that can divide citizens. Understandably, President Jair Bolsonaro’s authoritarian delusions may haunt him through sleepless nights and stimulate the imagination of the libertic fanatics who still support him, but it doesn’t go beyond that. Undermining the constitutional order that the President of the Republic has dreamed of in order to sustain himself over time will require a certain strength – material and political – and a spectrum of support that Bolsonaro certainly does not and will not have.

This was evident from the mass commitment of the population to Letter to Brazilians and Braziliansa civic manifesto organized by the Faculty of Law of the University of São Paulo in defense of the rule of law democratic state and electoral justice.

BUT Map idealized in Largo de São Francisco, has the historical merit of uniting the various representative strata of society – capital and labor – around a staunch defense of democracy and periodic elections. But Bolsonaro’s attacks on the e-voting system and the holding of the next election itself are only the most pressing problems facing Brazilian democracy.

Once the next elections are held and their results are approved by the Electoral Court and recognized by all decent people in the country, as happened without incident in recent decades, the way the country is run will need to be redesigned. If the current model, in which government guarantors weaken the executive power and control the budget without any transparency and respect for voters and taxpayers, is maintained, then one cannot speak of democratic strength, even if the elections are the cleanest and the fair of history.

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How a budget is made and executed is at the heart of democracy as it concerns diligence with public money and debate about the purpose of these scarce resources. When the budget is dominated by a handful of parties and leaders who take it upon themselves to choose how and where public money is spent without being accountable to citizens, one cannot speak of democracy.

Thus, the struggle for democracy is also fighting to ensure that the allocation of billions of reais from public resources is subject to national interests, and not to the limitations of Centrão. To defend democracy in a presidential country is to save the authority of the future President of the Republic from being the great inductor of the national agenda. This was lost due to the moral and political weakness of the incumbent. Among the many evils he has caused, Bolsonaro has reduced Brazilian democracy to a humiliating level, and there is no indication that if re-elected, he will be able to do otherwise. Thus, his reappointment will doom Brazilian democracy to a long winter.

However, there are many who believe that whoever takes over as president from 2023 will remain as it is. Perhaps out of apathy, it is assumed that Brazil is doomed to live under the yoke of this predatory device. Nothing further from the truth.

It is entirely possible that relations between the President and Congress will be minimally Republican. Contrary to appearances, the pernicious association of Bolsonaro and Centrão, and before him the criminal consortium between PT and monthly workers, are not the only ways to run the country. History shows that the formation of government coalitions does not necessarily involve corruption or the transfer of power to parliamentarians lacking public spirit. We are talking about the division of power, which is absolutely normal in a democracy. The anomaly, which has come to a paroxysm in the present government, lies in the false purpose which enlivens the exercise of all this power. And this is what needs to be changed. United by such a common cause, society is able to give Brazil the fate it wants.

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After the flood, typical barbs at a political event in Kentucky

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After the flood, typical barbs at a political event in Kentucky

Republicans running for governor in 2023 took to the stage at Kentucky’s biggest political event on Saturday, criticizing Gov. Andy Beshear’s handling of the COVID-19 pandemic, offering support for the recovery effort the Democratic governor is leading in the wake of the floods and tornadoes.

As pointed out by his opponents, Beshear spent the day comforting families displaced by the flash floods that flooded the Appalachian region more than a week ago, killing 37 people. Beshear visited two state parks where some of the homeless suddenly found refuge.

“I’m in our state parks today, spending time with our families in eastern Kentucky who have been displaced by catastrophic flooding,” Beshear wrote on social media. “These Kentuckys have been through the unimaginable. My priority is to be there for them.”

Last December, deadly tornadoes hit parts of western Kentucky. The political speech at the annual Fancy Farm picnic – the traditional start of the fall campaign – was held about 10 miles from Mayfield, which was directly hit by a tornado.

Living up to the event’s reputation for bold attacks, Republicans who wanted to oust Beshear took aim at the restrictions the governor had placed on businesses and gatherings in response to the COVID-19 pandemic. The governor said his actions saved lives at a dangerous time when there were no vaccines. The Republican-led state legislature controlled the governor’s policy-making power in a case decided by the state Supreme Court.

GOP gubernatorial candidate Ryan Quarles called Beshear “governor of closure.”

“It brought our economy to a halt,” said Quarles, the state’s agriculture commissioner. “He closed our Mom and Dad stores. It killed countless jobs and left big stores open.

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“Guys, just because we are going through a global pandemic does not mean that our rights, our freedoms and freedoms should be thrown out the window,” he added.

In his remarks, Kentucky Democratic Party Chairman Colmon Elridge defended Beshear, who consistently receives high approval ratings from Kentuckians in the polls. Elridge praised Beshear’s efforts to lead recovery efforts in tornado-hit western Kentucky and said he would do the same for flood victims in Appalachia.

“Once again, our governor is showing through our actions how we stand up to times of devastation and embrace our fellow Kentuckians not as Democrats or Republicans, but as Kentuckians,” Elridge said.

Beshear has already pledged not to attend the state’s first political event. The Governor originally planned a visit to Israel that coincided with a Fancy Farm picnic. He canceled this trip after severe flooding in eastern Kentucky.

The Fancy Farm scene was dominated by Republican officials, a testament to the dominance of the Republican Party in the elections. The event is a rite of passage for state candidates who are put to the test in the August heatwave while facing jeers and shouts from other party supporters.

The political attacks were accompanied by calls for continued public support for people recovering from tornadoes and facing the same challenge in flood-hit areas.

“We may have laughed a little today, but whether we’re Republicans or Democrats, you know we’re with you,” said Daniel Cameron, the GOP gubernatorial candidate. each other. We help repair and we help rebuild.”

Cameron then continued to promote his candidacy. He praised his support for former President Donald Trump and his work as state attorney general in defending Kentucky’s anti-abortion laws and fighting the Biden administration’s policies in court.

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“I am the best candidate and the only candidate who can beat Andy Beshear next fall,” Cameron said.

Two other GOP gubernatorial candidates also made presentations to the crowd and state television viewers who were watching: State Auditor Mike Harmon and State Representative Savannah Maddox.

Missing from Saturday’s political speech was Kentucky’s most powerful Republican, Senate GOP leader Mitch McConnell. A pillar of the picnic for decades, McConnell loves to brawl but missed the event due to Senate duties. In his Senate address on Saturday, McConnell said the federal government’s role in the long-term recovery of flood-hit areas will increase once reconstruction begins.

“I will be visiting the area in person shortly to meet with flood victims and listen to their concerns,” McConnell said. and better than before.”

Biden declared a federal disaster to send money to help affected Kentucky counties.

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