Changing the law on state-owned companies only seeks to increase the power of Congress, says legislation coordinator
- June 25, 2022
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For Sylvio Coelho, who coordinated the drafting of the text in the Senate, the measure is innocuous to stop fuel readjustments
It doesn’t make any sense to change the State-Owned Companies Law to facilitate changes in Petrobras’ management to reduce fuel prices, as proposed by the Mayor Arthur Lira (PP-AL). The statement comes from the technical advisor Sylvio Coelho, who coordinated the drafting of this legislation in the Senate, working in the office of the rapporteur of the matter, Senator Tasso Jereissatti (PSDB-CE).
“The law does not prohibit a state-owned company from pursuing public policy objectives, it just needs to be compensated for that”, says Coelho. “What is at stake is not the concern with the price of fuel, it is the expansion of the field of power of those who hold the cards in the political scene, including budget execution. That is what is under discussion. That’s what matters.”
According to Coelho, who is also the co-author of a book on the subject, the idea of changing this legislation needs to be evaluated within the larger movement of Congress, which has been expanding its action over other Powers and areas of the State.
“This idea of amending the State-Owned Companies Law is one more step towards creating an environment where there is no control, in which the general submission of state-owned companies is sought to the interests of those who control power, which is the Legislature. That’s the background,” he says. Read below the main excerpts from the interview given to Sheet.
Mr. was technical coordinator of the State-Owned Companies Law in the Senate. What motivated the creation of this law and what are its main mechanisms? First, we have to consider the context. At that moment, we were coming from a sequence of several scandals in state-owned companies, especially in Petrobras. This opened space for discussion of the topic in the National Congress.
To write it, we sought the best international practices, especially what is recommended by the OECD. We consider successful experiences in other countries, such as Singapore and Norway.
Fundamentally, this law pursued three objectives. The first was to establish a new quality standard for management in state-owned companies. The second is to establish a new regulatory framework for bids and contracts. There was a whole fauna of regulations on the subject and we tried to establish a reference, which would distance itself from the general law of bids, the old 8,666, and that would give a new axis in this matter.
The third objective, perhaps the most important, was to remove or reduce the possibility of abuse of political power in state-owned companies.
What are the items that try to make this shield against political abuses? There are fundamentally two. Article 17, which regulates the applicable requirements for those appointed by the controller for senior management positions. We are talking about positions on the board of directors, directors, including the president, and on the fiscal council.
Regarding another issue —trying to avoid or reduce the risk of political abuse in these companies— it is important to highlight article 8. In it we make it very clear that the state-owned company, when used to pursue public policy objectives, must be remunerated for that purpose. So, the law does not prohibit a state-owned company from pursuing public policy objectives, it just needs to be compensated for doing so.
Does the argument that it is necessary to change the Law on State-Owned Companies to be able to reduce the price of fuel at Petrobras make sense? It makes absolutely no sense. What is happening is one more step in the process of expanding the power of Congress, the Legislature over the Executive.
This started about seven years ago, specifically when they established in the Constitution the mandatory execution of individual amendments by parliamentarians and also by benches.
Then came the special transfers, also with mandatory execution. They were called, with every point and circumstance, a tax budget, but in fact it was not a budget, it was an imposition on the Executive.
Then we saw the advent of the RP-9, of the rapporteur’s amendments, which are an abuse.
The rapporteur’s amendments were already foreseen and basically served to make adjustments to the Budget. We work with sectoral rapporteurs. Then, the general rapporteur made amendments to make small adjustments to the whole, when the various sectoral reports were brought together. The rapporteur’s amendments served this purpose. For three years now, that hasn’t happened anymore.
This idea of changing the State-Owned Companies Law needs to be considered within this movement. It is one more step in this sense of creating an environment where there is no control, in which general submission of state-owned companies is sought to the interests of those who control power, which is the Legislature. That’s the background.
So, does the revision of the State-Owned Companies Law only presuppose opening space for the return of political indications? I don’t have the slightest doubt about that. If you read article 17, you will see that there are requirements of both an academic nature and professional experience for senior positions. Governments are not always comfortable with this. Of course, they would like to make the nominations as freely as possible. These rules get in the way of political plans.
Instead of political agents adapting to the law, they are now moving in the opposite direction. They want to change the law so that it adapts to the political game. I wouldn’t say this is a step back, but many steps back.
It has bad reflexes not just for companies. At the moment when Brazil is testing a candidacy for the OECD, this is an absolute contradiction, as it goes against the management rules for state-owned companies established by the OECD itself.
Mr. mentioned that article 8 opens up the possibility of using state-owned companies in public policy. So, does the idea of changing the law of these companies lose even more sense? They could study some kind of politics. But even that is not the best way to solve the fuel issue.
We need to have this very clear. What is at stake is not the concern with the price of fuel, it is the expansion of the field of power of those who call the shots on the political scene, including budget execution. That is what is under discussion. That’s what matters.
Discussing changes to the State-Owned Companies Law to reduce fuel prices is smoke.
The idea was launched by the president of the Chamber, Arthur Lira. In view of that, Mr. Do you think she has a chance of advancing and being approved? You’re talking to a scenario artist. That’s my training. I have no way of predicting. I see that the scenario in the House is one, and in the Senate, another. But this is in the realm of the possible. If I had to make an estimate working with the worst probability, I would say that it has a chance of occurring, yes.
What we see today is a predominance of interests that are led by the president of the Chamber over those led by other leaders, whether from the same Power or from others.
Sylvio Kelsen Coelho, 57
Graduated in International Relations, with a master’s degree in Political Science, both from UnB (University of Brasília), he was technical coordinator in the elaboration of the State Government Governance Law in the Senate and co-author of the book “State Companies – Governance, Compliance, Integrity and Contracts”. A career member of managers at the Ministry of Economy since 1998, he held executive and advisory positions in the Ministries of Labor and Employment, Planning and in the Presidency of the Republic in the governments of Fernando Henrique Cardoso and Luís Inácio Lula da Silva. Transferred to the Senate, he advised Senator Francisco Dornelles from 2011 to 2014. Since 2015, he has been advising Senator Tasso Jereissati