Tag: corruption

Corruption Stones Economy

Laws such as fiscal responsibility were a major step forward. But there are others waiting, like the one that punishes the corrupters and the one that legalizes the action of the lobbyists.

Corruption is a factor underlying multiple distortions in the economy. It leads to reduced revenue and increased public spending. It causes damage to society, deprives the poorest of public policies and exacerbates social inequalities. It causes loss of competitiveness of companies. It strengthens the culture of leniency and connivance with situations of transgression.

In its most succinct definition, corruption is the use of a public position for private benefit. In order to prevent the action of corruptors and the corrupt, one must initially analyze the factors that contribute to corruption.

In Brazil, the main “triggers” reside in bureaucracy, high tax burden, complexity in paying taxes, perception of impunity and lack of awareness by society about business ethics.

The cost of corruption can be measurable. The National Confederation of Industry (CNI) estimates that if a country loses $ 1 million in resources diverted from its destination, the loss to the economy as a whole is $ 3 million. This is because the loss is not limited to the unapplied resource. The country is also left without what could result in economic activity resulting from it.

In addition, the impact on the economy is not just internal. The country's external image can be harmed, driving investors and creditors away.

According to the ranking of perception on corruption organized by Transparency International, Brazil is in 73rd place, among 180 countries. This situation also caught the attention of the World Bank. Otaviano Canuto, vice president and director of the entity for Poverty Reduction and Economic Administration, recalls that prevention is done with three basic points: strengthening institutions, transparency and accountability.

In this sense, Brazil advances with the Fiscal Responsibility Law, with the Transparency Portal and with the 8.666 law, which determines that untrue companies cannot be hired by any government agency.

The approval of the Proposed Amendment to the Constitution that creates Ethics Councils in Legislative Assemblies and Municipal Councils will mean a great leap in the path of transparency.

Bill 6826/10 (Anticorruption Law), which establishes punishments for companies that commit unlawful acts against public administration, is also being processed in the Chamber of Deputies. As deputy Carlos Zarattini, PL rapporteur, recalls that among 34 countries studied by the OECD, Brazil is one of three that does not have specific legislation to punish corruptors.

Another possible route is the legalization of the lobby. Congress today houses eleven bills on this. With legalized lobbying, achievements from a specific sector can be shared with all other sectors of the economy.

An environment of unfair competition and opacity in relationships encourages corruption. Serious and articulated measures in the direction of transparency and democracy, such as those listed here, among many others, are the greatest assets to end the "facilities" and create an environment conducive to economic and social development. Healthy and without corruption.

ROBERTO ABDENUR, 70, is a diplomat and executive president of the Brazilian Institute of Ethics in Competition.

Three questions for Otaviano Canuto

The World Bank vice president, Otaviano Canuto, talks about the International Seminar “The Impact of Corruption on Development” and about the fundamental points in the fight against corruption.

 

1) As mr. assessed the World Bank's participation in the seminar?

The World Bank has long understood the link between a fall in corruption and economic development. The opportunity to share experiences, in the company of such illustrious co-sponsors, was of great value for our work.

 

2) What, in your opinion, is the main impact that corruption has on world economic development?

Corruption, understood as the use of public position for private gain, distorts public spending and reduces its efficiency. Thus, it negatively affects the standard of living and the distribution of income among citizens. It affects different audiences (stakeholders) differently, with a greater impact on social segments that do not have protection mechanisms.

 

3) What are the fundamental points in the fight against corruption?

To discuss the issue, the focus must first be on governance. There are three basic points, which are the strengthening of institutions, which must be protected in relation to the transience of managers; transparency, which helps to hinder the misuse of resources and accountability, known as accountability. To achieve an adequate level of governance, it is essential, among other aspects, that information and data are detailed and updated and that the approach is multisectoral and at several levels.

 

André Franco Montoro Filho discusses corruption, ethics and economics in a book released by ETCO

In a busy autograph night at Livraria Cultura at Shopping Villa Lobos, in São Paulo, the author of “Corruption, Ethics and Economics”, André Franco Montoro Filho, received guests for the launch of the work published by ETCO and Campus / Elsevier publisher. On September 18, the book will be released in the Federal District

With a preface by Tercio Sampaio Ferraz Junior, “Corruption, Ethics and Economics - Reflections on Competitive Ethics in Market Economies” brings together 33 texts produced by ETCO's adviser, André Franco Montoro Filho, between 2006 and 2011, a period in which he dedicated himself the study of the advantages of ethical behavior and the social losses of transgressions.

Certain that, in order to be up to the stage of development it is in, Brazil needs to advance within the legal framework, ETCO has brought to the public an indispensable work for understanding what a healthy business environment is, showing how to overcome obstacles for healthy and sustained growth.

“The tests are interconnected in such a way that they allow us, with the resulting distance of time, to understand how the inducers of the culture of transgressions work, which has resulted in high economic and social costs”, comments the chief executive of ETCO, Roberto Abdenur.

In the preface by Tercio Sampaio Ferraz Junior, a summary of the work:

“This is a book of short texts and sharp reflections. In it, Montoro perceives the triggering of very real forms of economic and social inequality, bureaucratic imbalance and legal distortion, behavioral dysfunctions and corruption, which end up consummating a split between ethics, on the one hand, politics and law, on the other. Ethics are degraded in the morals of interest and efficiency, and politics and law end up in exile in the abstraction of the law or, then, confiscated by ideological opportunism. Hence its call for the rescue of legal security, legislative rationality and effective enforcement of laws. ”

CORRUPTION, ETHICS AND ECONOMY

Reflections on Competition Ethics in Market Economies

Author: André Franco Montoro Filho

Foreword: Tercio Sampaio Ferraz Junior

Publisher: Campus / Elsevier

1st edition, 2012, 168 pages

ISBN 978-85-352-6196-7

Suggested price: R $ 45,00

Corruption slows down the country's development

Corruption has a significant impact on the economy of Brazil and a continuous commitment from the whole society is needed to prevent its practice. This was the main conclusion of the international seminar “The Impact of Corruption on Development”, held by ETCO in partnership with the newspaper Valor Econômico, on August 15, in São Paulo. The meeting brought together jurists, businessmen, academics, lawyers and representatives of national and international institutions on the subject.

 

 

Among those present were the Chief Minister of the Comptroller General of the Union (CGU), Jorge Hage; former Federal Supreme Court (STF) Minister Ellen Gracie Northfleet; the vice president of the World Bank, Otaviano Canuto; the director of the Organization for Economic Cooperation and Development (OECD), Rolf Alter, and the director of Policies and Strategies of the National Confederation of Industry (CNI), José Augusto Fernandes.

The purpose of the event was to provoke a debate about corruption, its consequences for governance and what concrete has been done to combat it. According to the chief executive of ETCO, Roberto Abdenur, “it is essential to discuss corruption in the context of the country's economic development, since it is one of the main factors responsible for the reduction of State revenue with consequences for the loss of competitiveness of companies and in indicators such as the Human Development Index (HDI). “Corruption deprives the poorest of public policies such as health and education, which contributes to the worsening of social inequalities,” says Abdenur.

Considered as one of the main names of the Judiciary in the fight against corruption, Ellen Gracie highlighted the patrimonialism that persists in Brazilian society as one of the social practices that promote the transgression of the public interest by the private. "The path to be followed for a real fight against corruption is to reform institutions and change culture, and not to denounce and try any case without evidence."

Among the main causes of corruption pointed out by the seminar participants, are the lack of transparency in public accounts and the impunity of corrupt and corrupters. According to Minister Jorge Hage, in recent years Brazil has started to invest in transparency, which, together with the greater involvement of citizens, has been causing an increase in the reporting of cases. However, he warns that "more effective legislation is needed to punish legal entities for the practice of corruption, since the lack of such laws distorts markets, drives away investors and compromises development".

In this sense, the Bill of Law 6826/10 - also known as the Anti-Corruption Law - awaiting approval by the Chamber of Deputies, which allows punishing companies that benefit in cases of bribery or corruption practiced by their employees. Speaking at the seminar, the PL rapporteur, federal deputy Carlos Zarattini, commented that "the expectation is that the PL will be approved after the October elections". With its approval, Brazil is no longer - along with Argentina and Ireland - one of the few countries among the 34 signatories to the Convention on Combating Corruption of Foreign Public Officials in International Commercial Transactions of the Organization for Economic Cooperation and Development (OECD) , who did not create specific legislation to punish corrupt companies.

The importance of training public officials was also noted. According to the Director of Policies and Strategies at CNI, José Augusto Coelho Fernandes, the idea is that the State has the capacity to develop projects for the promotion of ethics, with good laws, good instruments of control and governance.

Demetrio Magnoli, a member of the International Conjuncture Analysis Group (GACINT) at USP's International Relations Institute (IRI-USP), made strong criticisms of the Brazilian political system. "Official Brazil celebrates corruption," said Magnoli.

The seminar also included the participation of the vice president of the Board of Directors of AMARRIBO Brasil, Josmar Verillo; the coordinator of the Unesp Corruption Studies and Research Group, Rita de Cássia Biason; the professor of Ethics and Philosophy at Unicamp, Roberto Romano; the political scientist and vice president of Arko Advice, Cristiano Noronha, and the coordinator Movimento Brasil Eficiente, Paulo Rabelo de Castro.

The president of the ETCO Advisory Council, Marcílio Marques Moreira, closed the event. "The fight against corruption is a process in which we will always have new challenges to overcome," he said, leaving a warning: "We are not indignant enough and this complacency can lead us to mediocrity".

Corruption, Ethics and Economics

In the last five years, André Franco Montoro Filho has devoted himself to studying both the advantages of ethical behavior and the social and economic losses caused by corruption, tax evasion and other types of transgressions. Gathering writings that the author produced over the years, this work highlights the importance of ethics in a troubled economy and the enormous losses caused by the general perception of corruption in institutions. The author covers issues such as competitive ethics, the role of law, deviations from corruption and dissatisfaction with purely legislative solutions. Through short texts and sharp reflections, Montoro demonstrates the triggering of very real forms of economic and social inequality, bureaucratic imbalance and legal distortion, behavioral dysfunctions and corruption, which prove a split between ethics, politics and law. Its main objective is to offer readers viable ways to overcome these problems.

Check here the full coverage of the ETCO & Valor seminar

Valor Online - 15/08/2012

Corruption fights with prevention and punishment, says OECD director

'Irresponsible denunciation' will not prevent corruption, says Ellen Gracie

For Brid, access to information is key to reducing corruption

Against corruption, procedural legislation must change, says Jorge Hage

 

Valor Econômico - Special Section - Fighting Corruption - 17/08/2012

 

Risk control

To turn wealth into benefit for the entire population, Brazil needs to reduce corruption rates

 

Increase in complaints is the result of greater transparency

Brazil needs legislation that effectively punishes legal entities for the practice of corruption

 

Corrupt companies are free from punishment 

An anti-corruption bill is slowly passing through the National Congress

 

For jurist Walter Maierovitch, the penal code prevents organized crime from being punished in an exemplary manner

 

Teacher recommends single standard for accountability 

Expert says small adjustments can have big effects, for example, in courts of accounts

 

For scholars, the good example should start from the top floor

Scholars heard by Valor reject the stereotype that corruption is in the DNA of Brazilians

 

Revenue Increases Enclosure to Major Offenders

In 2011, R $ 109,3 billion were evaded

 

Deviations make use of loopholes in the legal framework

Global Financial Integrity shows that up to $ 40 billion is diverted in developing countries annually

 

Public campaign funding divides opinions

Country is in urgent need of making the electoral process more transparent

For the first time, a candidate must have a “clean sheet”

 

Country loses up to 2,3% of GDP per year

World index gives Brazil 3,8 points, below the 2011 global average of 4,05

 

Foundation launches certification to prevent fraud

Process aims to help companies manage corruption risks

For the first time, a candidate must have a “clean sheet”

Valor Econômico - Special Section - Fighting Corruption - 17/08/2012

 

This year's elections will be the first to be held under the Clean Record Law, which prohibits people convicted by collegiate bodies from running for elected office. “The great importance of Complementary Law 135/2010 is to convey the message that candidates for public office must obey certain ethical standards”, comments the president of the Ethos Institute, Jorge Abrahão. "It demonstrates the existence of a new culture in Brazilian society, important for the strengthening of democracy", he says.

In the opinion of Pedro Abramovay, professor at the Faculty of Law of the Getúlio Vargas Foundation of Rio de Janeiro (FGV-Rio), “the Clean Record is fundamental in the fight against corruption. By demanding morality from postulants to public office, the law protects society and raises the level of the campaign ”.

The law, originated from a popular initiative saber project with around 1,3 million signatures, makes the candidate convicted in court in collegiate decisions (courts with more than one judge) ineligible for eight years, even when the possibility still exists appeal. Also those who had their mandate revoked by the Electoral Court or who resigned to avoid being revoked are also ineligible for the same period.

After many comings and goings, the PL was approved by the Chamber of Deputies and the Senate in May 2010, and was sanctioned by then President Luiz Inácio Lula da Silva in June of the same year, on the eve of the elections to choose the new President of the Republic , state governors, senators, federal and state deputies.

It was a stir. Until then, anyone who had not been definitively convicted was considered innocent - that is, when there was no longer any possibility of appeal. The constitutionality of the law was also contested for reaching facts that occurred before its effectiveness. The final word was given in February of this year by the Federal Supreme Court (STF), the highest level of Brazilian justice. By seven votes to four, the STF plenary declared the Clean Record Law constitutional and determined its validity from the October elections, which will appoint the new mayors and councilors in all municipalities in the country.

The requirements of the Clean Record Law are beginning to spread to other sectors of society, a proposal defended by Abrahão, from the Ethos Institute. Earlier this month, the National Council of Justice (CNJ) unanimously passed a resolution requiring a clean sheet when hiring commissioned employees for occupants of trust and outsourced positions in the country's courts. The only exception is the STF, which does not submit to CNJ decisions. The board members granted a period of 90 days to identify employees with a dirty record and 180 days to dismiss them. The requirement does not apply to public servants, who have their own legal regime.

In June, the Senate Constitution and Justice Commission (CCJ) had already approved a proposal to amend the Constitution (PEC) requiring a clean sheet for all commissioned servants of the Executive, Judiciary and Legislative branches of the Union, States, Federal District and municipalities . The proposal still needs to be approved in two rounds by the Senate plenary, then going to the Chamber. The PEC in progress even prohibits the appointment of people deemed ineligible by the Electoral Justice to the positions of minister and executive secretary. (JS)

Foundation launches certification to prevent fraud

Valor Econômico - Special Section - Fighting Corruption - 17/08/2012

 

An unprecedented certification in the country will be able to indicate whether a public or private company has adopted mechanisms to prevent and track fraud and corruption. Developed by the Vanzolini Foundation, the certification establishes minimum requirements for the implementation of a management system to combat illegal acts.

In addition to improving the organization's internal rules and processes, the system provides for practices to inhibit inappropriate actions. “The certification does not intend to show that the institutions are immune to unfair events, but that, after being certified, they have mechanisms to identify and combat fraudulent processes. This specification should qualify companies with excellence in good corporate practices ”, says José Salvador da Silva Filho, the foundation's new business manager. The certification will be announced on the 22nd and the foundation expects that in 12 months at least 15 major companies will have adopted the tool.

The system began to be designed exactly a year ago and was based on initiatives by the Organization for Economic Cooperation and Development (OECD), the Union's Comptroller General (CGU) and the United Nations Convention against Corruption. “Our role as a certifying body will not be to identify fraud, but to assess whether the company is organized to address the issue seriously. What will lead to greater performance will be the maturity of the management ”, explains Silva Filho.

The first step for a company to be certified is to define internal rules, for example, to have a policy to combat fraud and corruption. Once this policy was defined, the organization would have to do a due diligence, an in-depth assessment to identify the risks and threats of fraud and corruption, as well as actual and potential conflicts of interest. “Finally, to assess the impacts and damages that its practices can cause in the entire production chain and the significance of these risks and their occurrences”, says Silva Filho.

“The same policy can be extended to the value chain, reaching suppliers, customers, and can involve partners in this assessment. This stage is what we call due diligence and risk alarm ”, adds the executive. Once the risks are detected, it will be time to establish objectives, goals and programs to improve management performance in preventing and combating fraud and corruption. "Having implemented all the requirements, the Vanzolini Foundation will now audit the company and find out if it is meeting these specifications," he says.