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Instituto Ethos | Je Recuse


Source  Instituto Ethos.

The business ethics NGO, underwritten by such corporate giants as WalMart, Suzano, Alcoa, Natura and Vale, among others,  and part of an extensive international network of corporate citizenship groups, has been tapped to form part of a tranSParency — SP stands for São Paulo — initiative by the governor of the state.

Ethos also works in partnership with the CGU — the federal comptroller-general, roughly translated, and an agency of the presidency — in the maintenance of a roll of good corporate citizens. The index is said to be reconsidering the status of Siemens.

Paulo Itacarambi — vice-president of Ethos and executive director of Uniethos — defends the organization’s participation in an ad hoc state government blue-ribbon commission that will “accompany” the official cartel investigations already underway by an already dizzying alphabet soup of investigative bodies.

There exists a certain legend that August is a month for major debates in Brazilian politics. August 2013 seems to prove the rule. No social movement has yet surpassed the mobilizations of June, but the news organizations have a new topic to explore:  The investigations by antitrust authority CADE of alleged cartel formation in public auctions for trains in three different states of the federation, involving such companies as Alstom, Bombardier, CAF, Mitsui and Siemens, among others.

According to the press, the investigations were triggered by an accusation made by Siemens,which pointed to cartel formation and other alleged irregularities in the construction of the  São Paulo subway and in the acquisition of trains by the Companhia Paulista de Trens Metropolitanos (CPTM) — contracts entered into by the state government.

Based on the documents presented by Siemens, CADE organized an investigation into 16 contracts and 31 bids related to rail and subway systems between 1998 and 2008. For its part, the São Paulo state government, through the state prosecutor, requested access to these documents and determined that the CGA —  the state Corregedoria-Geral da Administração — may also launch a parallel investigation in the case.

On August 8,  São Paulo governor Geraldo Alckmin invited a dozen civil society groups to join a comission for the purpose of tracking the CGA investigation.

Instituto Ethos was one of the organizations selected, together with the Brazilian Order of Attorneys –São Paulo chapter — the Movement to Combat Electoral Corruption (MCCE), the São Paulo Union of Engineers, the Commission on Social Control of Public Spending, Transparency Brasil, the Council on Transparency in Public Administration, the General Commission on Ethics …  the Brazilian Press Association, São Paulo chapter, the Brazilian Order of Economists, FIPE and the Tellus Institute for Human Development.

According to the S. Paulo government, this commission will be created to accompany the investigations of the CGA, which are identical to those conducted by CADE.


We have been questioned through our Web site and Facebook page and in the blogs about our participation in this commission. We would therefore like to explain our position.

Why is Instituto Ethos participating in this commission of the state government?

Because we believe that if there is  perfect transparency in all its proceedings; if its members have  access to all the information supplied by the CGA and can publish them freely; and finally, if these investigations can be conducted so as to leave no doubts about relationships of companies with the State — examining contracts of all the companies involved in the supposed cartel — then this commission will  represent progress toward transparency and social control of the public administration.

Judging from recent news, there is a possibility that this supposed cartel operated in other states. If this turns out to be true, then the São Paulo cases will be much more emblematic, because they can show us how to conduct an investigation with the participation and control of organized civil society.

But isn’t this commission illegitimate?

This is another question we face:  How can we accept taking part in a commission whose legality is contested? Others defend the position that the issue should be dealt with in other contexts, such as a parliamentary inquiry (CPI).

We remind those critics that this commission will not investigate, it will merely to accompany the work of the CGA, suggesting paths to take in the investigative process. It is important to realize that the commission will be ale to supplement work performed in other contexts and that its actions may result in the creation of new rights for civil society, including the right to accompany investigations.

Can the commission lend transparency to the investigations?

No. It is merely one among several mechanisms and does not replace the others. All of them are vital at this stage.

Does  Ethos not have a conflict of interest?

Uh, yes.

Is it not simply playing the game of one of the interested parties?

Siemens and Alstom, two of the companies cited in the case, are among the associates of Ethos and sponsor our activities. This fact is public knowledge and Ethos made a point of divulging it before it resulted in headlines.

I must have missed that announcement. I thought I had combed the Institutes`s own transparency materials pretty thoroughly.

Questioning our involvement based on conflict of interest is not justified, moreover. Ethos does not represent the specific interests of any company and has always acted independently of its financiers, and independently of any political party or public authority.

We work with companies toward an agenda of changing business practices and [the business climate]. Whenever there has been a conflict between this agenda and the interests of a corporation, we have not hesitated to publicly defend the agenda.

Our corporate associates do not decide the direction and the actions of our institute. Since our founding, we have been invited to take part in the commissions and councils of civil society, the public authority and market organizations, precisely because our relationship with the corporate world is recognized as independent.

We take part, for example, in the National Council on Public Transparency and Combating Corruption — Conselho Nacional da Transparência Pública e Combate à Corrupção —  established by the federal government  in 2004; in the Index of Corporate Sustainability   since its founding in 2005;  and the Brazilian Mobilization Against Corruption and Impunity (ABRACCI, of which we were among the founders in January 2009.

We are well aware of the political, financial and reputational risks involved in our participation in this commission, but we believe we  can make a relevant contribution to the proceedings and that the current moment represents an opportunity to advance the agenda  of  promoting integrity and combating corruption.

The National Context

It is important to point out that this fresh case of corruption — an alleged formation of a cartel — is happening just as the Law Against Corporate Corruption becomes law. Among other provisions, this law provides for the creation of a “blacklist” of corporations who practice active corruption, which will be an important instrument in the workings of the market, just as blacklists have proven effective in the case of labor in conditions of virtual slavery.

In sum, it is always positive to investigate the facts relating to the supposed cartel with severity, with severe punishment for all involved. …