Source: State of S. Paulo, 19/12/2004

By Sonia Racy

Created to combat piracy, unfair competition and the consequent tax evasion, the Etco Institute is close to completing two years. To talk about what they achieved during this period, this column interviewed its leader, Emerson Kapaz. Come on:

The Etco Institute takes care of ethics in competition. How can we advance in this segment since the issue of ethics today is very comprehensive and profound? There is a revival of the theme. Not only in competition, but in all fields of activity. In less than two years, the Etco Institute has consolidated the perception that Brazil cannot grow in a sustained and vigorous way unless the problems of tax evasion, counterfeiting and smuggling are tackled. We are beginning, government and businessmen, a broad front of action.

Do you think there is ethics in politics? There are ethical and unethical politicians. Society has matured and has punished non-ethics by denying them the vote. The citizen begins to demand consistency between discourse and practice. Political reform, coupled with state reform, will be decisive for change. Ethics, says Hobbes, is the safe way to avoid everyone's war against everyone. It disciplines the power of the State, creates a foundation for “steady progress”. More than a system of thought, it is a system of life.

Is there ethics among entrepreneurs? In recent years, Brazilian businessmen have become more active and more aware of their role in formulating a development project. In addition, they became more aware of the importance of social responsibility and the serious damage caused by the lack of ethics in competition.

The Institute is financed by companies that are victims of competitive ethics. How far does this affect Etco's performance? The Institute was born to fight illegal competition in the areas of fuels, beers, soft drinks and tobacco. But it has been expanding its action. The fact that we have an initial nucleus does not limit us. On the contrary, it strengthens us. There is cohesion, there is firmness of purpose and commitment to dialogue with all sectors of the economy.

What has the Institute achieved since its creation? We took the issue of competitive ethics from a secondary position, even irrelevant, to the national priority plan. Right now, the government created the National Council to Combat Piracy and Defense of Intellectual Property, which will have civil society participation, non-existent in the commissions in operation. The Council does not address the issue of illegality as a whole, but it already involves piracy and the defense of intellectual property. If we do a good job with the advisers, I believe that we will soon expand its performance to a comprehensive and profound national policy. We will reach a stage where unethical companies will be in an increasingly fragile position.

How does the Institute act so as not to be just another organ with no means to carry out its mission? We have clear objectives. Etco plans, performs, seeks results. So much so that we anticipated our goals by two years and became a reference in Brazil and Mercosur. Today, we have built our reputation through a credible relationship with the government and civil society. Recently, we started accepting volunteer employees, which should help to strengthen our work in other business segments, such as building materials, civil construction, footwear, pharmaceuticals, copper wires, retail and food, which have been looking for us.

What are the goals for 2005? In January, we will have the introduction of flow meters in the beer sector. Soon after, in the soft drinks sector. This will allow greater control over production and taxes generated by the Federal Revenue and the state finance departments. Later, cigarette counters will come. We are going to get even closer to universities and research entities to bring out consistent indicators and statistics. And we are going to emphasize the imperative need for tax reform that reduces the burden for those who pay through the inclusion of the informal sector, thus favoring development. I believe that 2005 will be a milestone in the history of competitive ethics. The land is prepared for the future.

How does the government participate in the entity? The government is an interlocutor of the Institute. There is no official link. What we do is partnerships like the one we celebrated this month with the Public Ministry of Pernambuco. The goal is to join forces. Exchange information.

How could society help? The citizen is the main link in the entire chain of combating illegal competition. By saying no, he changes everything. Attitude makes the difference. Everyone needs to know that there is no way out of ethics. The bill will be charged to society later, in the form of job losses, mediocre development rates, more violence and a drop in competitiveness. Thanks to the intense support of the media, we managed to show that the supposed “benefits” of informality are nothing more than a mirage. The starting point was the Mckinsey consultancy survey, released on the occasion of our first anniversary celebrations. It brought to light the negative impacts of informality and illegal competition practices on Brazilian economic growth.

How to fight smuggling if RF and the Federal Police do not have enough staff to do so? The reality has shown that, when there is political will, changes happen. And the facts are there to demonstrate. Smugglers and tax evaders have been arrested. The certainty of impunity has ceased to exist. It went from defensive to offensive. The Federal Police, for example, has been noted for the growing number of winning operations. The increase in the number of police officers will come as a consequence.