Cristiano Zanin Martins of Teixeira, Martins & Advogados published an op-ed in the Estado de S. Paulo in March 2007 on the current debate over laws limiting foreign participation in Brazilian airlines.
The firm is involved in the dispute over control of VarigLog, an airfreight subsidiary of the extinct Varig, acquired by a U.S. distressed equity firm, Matlin Patterson, which then used it to assume control of the parent company and sell it to Gol.
It was a proverbially heated business dispute. Nelson Tanure, a transport and logistics mogul and owner of the Gazeta Mercantil and the Jornal do Brasil, made a strong bid to acquire Varig, but failed in that bid.
The objectivity of the Jornal do Brasil’s reporting on the current dispute has been called into question by Márcio Chaer of Consultor Jurídico (of the Estado de S. Paulo group). See
The Jornal do Brasil claims credit for having called the alleged illegality to the attention of the judge, who reportedly based his decision on what it published.
In a recent series on the ills of contemporary Brazilian journalism, journalist Luis Nassif has described a number of cases in which this sort of gambit is used in the local lobbying wars: Interested parties to litigation feed rumors to the press that winds up getting used as “evidence” in the litigation on the theory that the “investigative reporting” provides independent confirmation of the allegations.
Think Dick Cheney, Judy Miller, and the aluminum tubes. Cheney planted the rumor, then appeared on the Sunday talks shows to say that “it is now independently confirmed, by the New York Times …”
In the Dantas-Citi legal dispute in New York, for example, clippings from Brazilian press coverage were used as exhibits to shore up the theory of political persecution, but the judge ruled them inadmissible. See
David Neelman, formerly of the (red ink-soaked) Jet Blue, is about to launch a domestic airline in Brazil, with local and foreign investors behind him, which gives the dispute some wider implications.
File generally under “political risk” and “legal uncertainty” for foreign firms entering this market, I guess. Mr. Neelman scored points by announcing that the new airline’s fleet will be provided by Embraer, the Brazilian airplane builder specializing in killer Cessnas (the “SuperToucan,” used in the raid on the FARC’s “Raul Reyes” in Ecuador) and what are by many accounts very solid midrange passenger jets. (We have flown some. They have comfy seats, and did not crash while we were on them.)
The Teixeira firm is accused, in a recent Estado article, of aiding and abetting an illegal fund transfer by Matlin Patterson from a VarigLog account. Matlin denies the attempt, one reads. Teixeira has yet to respond, at least that has been reported in the press.
Roberto Teixeira has been exposed to a number of colorful accusations over the years because of his historic ties to the PT, the current party of government, so there is a strong element of political risk to consider.
Veja’s Diogo “The Martyr to Freedom of Expression” Mainardi made a number of (apparently unfounded) accusations of corruption and cronyism against the attorney in April 2007, for example. Teixeira is suing Mainardi and Veja for libel, as Consultor Jurídico reported at the time:
Foi-lhe prometida a publicação das explicações em três ocasiões, o que não ocorreu. Roberto Teixeira sentiu-se ludibriado. Na ação, ele invoca o direito básico de ser ouvido em notícia a seu respeito. “A revista não apenas atentou contra a honra do dr. Roberto Teixeira, como feriu a lei, a verdade e as próprias regras elementares do jornalismo”, criticou o advogado Cristiano Zanin Martins que, na petição, questiona o fato de Mainardi sentir-se desobrigado de obedecer regras por não ser jornalista. Essa condição, reforça Zanin Martins, revela outra infração: “A legislação exige que o profissional de imprensa seja habilitado para a função, enquanto o sr. Mainardi exerce ilegalmente a profissão.” O colunista não tem diploma de jornalismo nem o respectivo registro profissional.
Teixeira was promised the right of reply on three occasions, but never received it. Teixeira felt that he had been deceived. “The magazine not only attacked the reputation of Dr. Teixeira but broke the law, violating the truth and the basic rules of journalism,” wrote Cristiano Zanin Martins, who, in the petition, questions the fact that Mainardi feels he is not bound to obey the rules of journalism because he is not in fact a journalist. This fact reveals another infraction, according to Zanin Martins: “The law provides that journalists be licensed to perform that function, while Mainardi exercises the professon illegally.” The columnist does not have a journalism degree or the proper professional registration.”
Neither do I, for that matter, but then we gringos do not labor under this dystopian legal provision. If your work follows proper journalistic methods and ethical principles, you are a journalist, and you get work. I have worked as a copy editor and managing editor because I learned copy editing and production on the job, with occasional professional development courses such as those offered by the NYU Publishing Program.
In Brazil, however, you tend to get more work thumbing your nose at those principles. Diogo Mainardi is not a journalist simply because he publishes baseless rumors and repeats untruths ad nauseam.
On this atavistic provision of the Brazililan press laws, see also
The same Mr. Zanin Martins of the Teixeira law firm made the case last year for removing barriers to foreign investment in domestic airlines in the Estadão op-ed pages.
A participação de capital estrangeiro em empresas nacionais de transporte aéreo no País voltou a ganhar destaque nos últimos dias. O correto enfoque do assunto pressupõe que seja afastado desde logo um equívoco fundamental que muitas vezes aparece nos debates envolvendo a matéria. É que o Código Brasileiro de Aeronáutica (CBA), editado em 1986, embora seja considerado altamente protecionista, não impediu a participação de capital estrangeiro em empresas nacionais de transporte aéreo.
The participation in Brazilian air transport companies by foreign capital is in the spotlight again in recent days. This very correct focus on the issue presupposes, however, that foreign capital should be ousted, based on a fundamental error that crops up often in debates on the subject. The error is that while the Brazililan Aviation Code (CBA), passed in 1986, considered highly protectionist, does not prevent foreign investment in Brazilian air transport companies.
Há, sim, uma severa restrição no artigo 182 do CBA, que impede a participação de estrangeiros em porcentagem superior a 20nas ações com direito a voto. Em relação às ações sem direito a voto não existe restrição no código. Tanto que as empresas aéreas nacionais de maior destaque detêm participação de capital estrangeiro em suas respectivas composições societárias. A questão é saber se o limite de 20ainda deve ser observado no Brasil. Há um argumento relevante em favor da ausência de qualquer limitação do capital estrangeiro em empresas aéreas nacionais.
There are, indeed, severe restrictions in Article 182 of the CBA, preventing foreign capital from holding more than 20% of the voting shares. But the Code does not place a limit on nonvoting shares. Thus, the leading Brazilian carriers have foreign participation in their capital. The question is whether the 20% limit should continue to be observed in Brazil. There is a compelling argument in favor of doing away with any limit on foreign capital in Brazilian airline companies.
Trata-se da Emenda Constitucional nº 6, que modificou a redação do artigo 171 da Constituição Federal. A nova redação não mais prevê a possibilidade de a legislação ordinária, como é o caso do CBA, estabelecer tratamento diferenciado para as empresas nacionais em virtude da origem do capital nelas empregado. A partir disso, renomados juristas se manifestaram no sentido de que a limitação prevista no CBA não foi acolhida pela Constituição e, portanto, não mais poderia ser exigida. Esse entendimento, todavia, ainda não encontrou amparo em decisões a respeito do assunto, proferidas pelo extinto DAC ou pela Agência Nacional de Aviação Civil (Anac).
On point here is Constitutional Amendment No. 6, amending Article 171 of the federal constitution. The new text of Article 171 no longer provides for the possibility of legislation like the CBA that provides differential treatment for domestic firms based on the origins of the capital they use. Based on this, eminent legal experts have opined that the limit provided for by the CBA is unconstitutional and therefore unenforceable. This view, however, has not yet been affirmed in rulings by the late DAC or ANAC, the current federal civil aviation authority.
Paralelamente a isso, existe uma constatação das próprias autoridades nacionais de que a limitação imposta pelo CBA não se mostra compatível com o atual cenário da aviação nacional. Além da recente manifestação do presidente da Anac, favorável à ampliação da participação estrangeira nas ações com direito a voto das empresas aéreas nacionais, existem três projetos de lei tramitando no Congresso versando a matéria: um do ex-senador Paulo Octávio (PFL-DF), que amplia a possibilidade de participação do capital estrangeiro para 49das ações com direito a voto; outro de autoria do senador Valdir Raupp (PMDB-RO), que prevê a possibilidade de outorga de concessão para exploração de serviços aéreos para sociedades com sede no País; e o terceiro do senador Tião Viana (PT-AC), que ‘revoga restrições à oferta de serviços aéreos’ a partir da revogação do artigo 182 do CBA.
At the same time, there are official statements by government officials that the CBA is no longer relevant to the current situation of Brazilian commercial aviation. In addition to a recent statement by the president of ANAC, who favors increasing the allowable participation of foreign capital in domestic airlines, there are three bills in Congress at the moment to this effect: one by former PFL senator Octávio increasing the limit to 49% of nonvoting shares, another by PMDB senator Raupp allowing the awarding of concessions to [foreign] companies domiciled in Brazil; and a third by PT senator Viana that removes these limits by revoking Article 182 of the CBA.
Nas justificativas que acompanham esses projetos, afirma-se que o sistema protecionista estabelecido pelo CBA se mostrou falho não só para a manutenção e o desenvolvimento das áreas nacionais, mas também para os usuários desses serviços, que a cada dia enfrentam maiores percalços como a restrição da oferta e a elevação dos preços das passagens.
The arguments in favor of these bills point out that the protectionist system established by the CBA has demonstrably failed in promoting the maintenance and development of national airlines and has failed the users of these services, who face increasing difficulties due to limited choices and the soaring prices of airfares.
Merece destaque o seguinte trecho das justificativas apresentadas pelo senador Tião Viana: Não há setor da economia nacional tão protegido contra a competição. Em vez de fortalecer as empresas brasileiras, esse modelo, de duvidosa constitucionalidade, tornou-as acomodadas e ineficientes. Apesar de toda essa proteção, algumas das mais tradicionais companhias aéreas nacionais atravessam dificuldades financeiras e outras foram obrigadas a encerrar suas atividades.
It is worth highlighting the following passage from the argument presented by Viana: There is no sector of the economy that enjoys more protection against competition. Rather than strengthening Brazilian companies, this model, which is constitutionally dubious, has made them complacent and inefficient. Despite all the protection they enjoy, some of Brazil’s more venerable airlines are experiencing financial difficulties and others have been forced out of business.
Verifica-se, pois, que há elementos suficientes para que esse tema seja repensado: seja para suprimir qualquer restrição na participação do capital estrangeiro, seja para, ao menos, ampliar a possibilidade de participação do capital estrangeiro. Com a eventual alteração na legislação, novos investidores poderão capitalizar as empresas aéreas nacionais em dificuldades, tornando-as financeiramente mais sólidas e competitivas num mercado globalizado.
There are clearly sufficient reasons for this topic to be revisited and rethought: Whether by removing all restrictions on foreign capital investment, or by simply raising the ceiling on such investment. If the legislation is changed, new investors will be able to capitalize struggling national airlines, making them more financially solid and more competitive in a globalized market.
Além disso, novos recursos permitirão ampliar a oferta de transporte aéreo no País, com benefícios aos passageiros e ao turismo, além da geração de novos postos de trabalho. A indústria da aviação civil nacional está aquém do seu potencial e isso poderá ter impacto negativo em relevantes projetos governamentais, como é o caso do Programa de Aceleração do Crescimento. A inversão desse cenário pressupõe a rápida alteração da legislação, a fim de superar restrições indevidas ao capital estrangeiro, tal como já ocorreu em outros setores estratégicos, como é o caso das telecomunicações. Abrir portas para a ampliação dos investimentos no País e também na aviação civil não mais pode ser encarado como uma opção, mas uma necessidade .
Furthermore, new funding would increase the supply of air travel across Brazil, benefiting passengers and the tourism industry, as well as generating new jobs. Brazil’s civil aviation industry is falling short of its potential, which may have a negative impact on such government programs as the PAC [economic growth acceleration program]. Turning this situation around will require prompt legislative action to remove undue restrictions on foreign investment, as has already occurred in other strategic sectors, such as telecoms. Opening the doors for wider foreign investment in Brazil, and in civil aviation in particular, can no longer be seen merely as an option, but as a necessity.
What ever happened to the Octávio, Raupp and Viana bills? Will the case turn on a ruling by ANAC?
You will often see a note of xenophobia creeping in to reporting on stories like this — the folklore of the rapacious multinational. Coverage of Cisco’s recent legal difficulties here, for example, featured a great deal of this type of slanted coverage.
Cisco claims it had a rogue executive representing it, whom it has dismissed. None of the issues have had their day in court. Cisco may have more responsibilibity that it is letting on. Or not. But in any event, the lynch mob was out in force.
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