Carlos Alvierga: A joint stock consortium of state-owned companies

Since 2016, during the last two governments, Brazil has expressed its intention to join the OECD (Organization for Economic Co-operation and Development), an organization founded in 1961, which includes 38 countries, including developed countries such as the United States, the United Kingdom, Germany, France, Italy, Sweden and some countries Emerging, such as Mexico, Slovakia, Chile, Israel and others.

As advantages of Brazil’s entry into this entity, there are factors such as the presence of a kind of quality seal to attract foreign investment, the potential for GDP (Gross Domestic Product) growth of up to 0.4% per annum according to Ipea and the possibility of improving economic regulation and public policies in the country. Of the disadvantages, elements related to Brazil’s loss of autonomy with regard to the formulation and implementation of tax rules, the adoption of mechanisms to control the flow of capital in the balance of payments, and government procurement policies, among other aspects, can be indicated.

With regard to the management of government stakes in state-owned enterprises, the Organization for Economic Co-operation and Development (OECD) recommends that the public administration centralize the management of these stakes/contributions in a single entity or under the responsibility of a coordinating unit. However, as will be discussed below, the Brazilian federal model for managing the federation’s stakes in controlled entities is decentralized and spread across three agencies under the Ministry of Economy.

The federation exercises its role as controlling shareholder of federal state-owned and public corporations (which hold wholly state-owned capital, such as BNDES and Caixa Econômica Federal) and mixed-capital companies (which own both majority and controller state-owned capital, in addition to the capital Private money, such as Banco do Brasil and Petrobrás, through the intervention of the Secretariat of the National Treasury (STN), the Secretariat of Coordination and Administration of State-Owned Enterprises (Sest) and the Public Prosecutor of the National Republic Treasury (PGFN), all from the organizational structure of the Ministry of Economy.In other words, it is a structure Decentralization is contrary to the recommendations of the Organization for Economic Co-operation and Development.

In this case, the STN manifests itself, among other functions, in the destination of the result obtained by the federal state-owned companies (payment of dividends to the controlling shareholder, constitution of reserves), and opens to the increases in the capital of the companies entities, based on the agreements of the shareholders of the companies controlled It directly unionizes it, announces mergers and acquisitions, and directs the appointment of members to the financial boards of federal state corporations, which are technically subordinate to the national treasury. As for the Sest Company, it is responsible for preparing the investment budget for non-governmental companies, which are those that do not need to transfer treasury resources to cover their expenses with employees, which is the budget stipulated in Article 165 of the 1988 Constitution.

Other related powers of the Sest include appointing members of the board of directors of federal state-owned enterprises, controlling a portion of the remuneration of state-owned officials, and monitoring the preliminary outcome of federally-controlled state-owned enterprises, among other qualities.

The main function performed by the PGFN is to represent and defend the interests of the national treasury in incorporation acts and in associations of mixed-capital companies and other entities whose capital the treasury owns, and in underwriting, buying, selling or transferring shares of the company. As can be seen, the decentralized model adopted by the Federation differs from the centralized model advocated by the Organization for Economic Cooperation and Development, and this fact may constitute an obstacle to Brazil’s accession to the aforementioned international organization.

To address this final hurdle, it might be interesting for the federal government to start adopting the model present in the São Paulo state government, whereby all state participation management in SOEs is consolidated into a single unit. State Capitals Defense Council. It is a collegial body on which it alone, in contrast to a federal structure, concentrates powers: to advise the state in setting up state-controlled companies, impeachment, merger, division, liquidation and extinction; expressing opinions guiding the state’s vote at ordinary and extraordinary shareholders’ meetings held by companies controlled by the state and those in which the state holds a minority stake; Supporting the role of the state as a controlling shareholder, including the performance of the powers of elected representatives as members of the board of directors, audit board, eligibility and advisory committees of state-controlled companies, among other functions.

Finally, it is worth concluding that if Brazil persists in its intention to become part of the list of countries that make up the Organization for Economic Cooperation and Development, it would be advisable to modify the current decentralized federal model for the administration/management of federation/community contributions to state-owned enterprises controlled by this The latter directly, whose performance of powers is distributed in three different bodies, although all of them are subordinate to the Ministry of Economy, and will adopt the centralized and unified model, as is the case with the Defense Council of State Capitals, collegiate member of the structure of the Ministry of Finance in the State of São Paulo and subordinate to it.