INTEGRITY AND TRANSPARENCY IN STATE-OWNED ENTERPRISES IN BRAZIL
Michael Freitas Mohallem, Beto Vasconcelos e Guilherme France.
Public perception of the fight against corruption is often paradoxical - the greater the revelations, the bigger the public's frustration with the institutions. This was revealed by the survey "Retratos da Sociedade Brasileira", which identified corruption as Brazil's main problem for 2016, according to 65% of the population. Likewise, Transparency International's Corruption Perception Index indicates the worsening perception of corruption in Brazil in the last five years, although this appears to be the most intense and effective period of fighting corruption in its history .
Recent popular and institutional reactions reflected the diffuse sentiment that was manifested in protests that had recording numbers. In this troubled scenario that has been left after Operation Car Wash are the Brazilian state-owned companies, especially Petrobras. The fact that these companies, which are important references to the Brazilian population, have been targets of corruption schemes maintained over the last decades has had an impact on Brazilian society. And, as a result of several institutional and legal changes in recent decades, it has also served as a starting point for the development of anti-corruption mechanisms specifically designed for these entities. This work intends to contribute with this type of analysis.
The perception that state-owned enterprises are subject to excessive political influence is permissive in Brazilian society. A survey conducted by Ernst & Young found that 91% of Brazilians believe that state-owned enterprises are overly influenced by politics. This does not differ too much among the the 24 countries where the survey was conducted. Despite this, 43% of Brazilians believe that state-owned companies provide services better than private companies, and "only" 60% argue that state-owned enterprises are less efficient than private ones. These figures put Brazilians among the largest defenders of state-owned enterprises.
The Congress, in its own way, has sought to respond to the public's perception on the gravity of corruption with record records of legislative initiatives to combat corruption. Only in 2015, more than 140 proposals focused on anti-corruption were presented by congressmen and women, especially directed towards the rules on bidding, electoral funding, corruption and crimes against the public administration.
Brazilian state-owned enterprises occupy a singular place in popular belief and in the country's political and economic history. Petrobras, in particular, is an important national symbol, often related to Brazil's economic potential and sovereignty. The privatization processes that reached particular economic sectors throughout the 1990s were controversial due, in part, to such impressions. Thus, the multiplication of full evidence of the involvement of Brazilian state-owned companies in corruption scandals, especially since Operation Lava Jato, has had a strong impact on the population's perception of the level of capture of these entities.
This paper presents a general review of the literature on integrity and transparency in state-owned enterprises in Brazil, as well as national legislation and international and domestic recommendations on the subject. It does not intend to address all themes, but to serve as a starting point for deeper discussions on these topics, which were selected after bibliographic research and meetings held with the Advisory Council of the Integrity Initiative for State Enterprises. Hence, this paper is organized as follows: initially, the particular political conditions in Brazil, which influence the functioning of state-owned enterprises, as well as the constant constraints to the desired reforms, are presented; the main characteristics of Brazilian state-owned enterprises will be outlined, with an emphasis on the institutional structure and the fundamental role they play in the national economy; later, the points considered of greater relevance for the subject under analysis will be discussed in more detail: (i) governance; (ii) compliance and integrity; (iii) transparency; (iv) institutional relations; and (v) internal control.
