Brazil's Performance on the Resource Governance Index
Brazil earned a "satisfactory" score of 80, ranking 5th out of 58 countries. Excellent Safeguards & Quality Controls contrasted with a lower Enabling Environment score.
(out of 58)
(out of 100)
|8||Institutional & Legal Setting||81|
|2||Safeguards & Quality Controls||96|
Institutional & Legal Setting (Rank: 8th/58, Score: 81/100) learn more
Brazil's "satisfactory" score of 81 reflects a comprehensive legal framework but also takes into account the lack of a thorough public consultation during the environmental impact assessment process.
In 2010, Brazil significantly modified its regulatory framework with the introduction of a fiscal regime based on production-sharing agreements for strategic areas such as the pre-salt offshore oil deposits. While onshore oil concessions are still awarded through an open and competitive bidding process, this new regime favors the Brazilian semi-national oil company, Petrobras.
Extractive companies make payments to the National Treasury, with royalties and government profits from offshore oil reserves deposited into a social fund. In May 2012, Brazil approved a new access to information law and pledged to increase public transparency as part of the Open Government Partnership project.
Reporting Practices (Rank: 9th/58, Score: 78/100) learn more
Brazil provides data on many important aspects of the extractive industries, but does not publish full contracts or information on subsidies, earning a "satisfactory" score of 78.
Details on the licensing process and the basic provisions of concession contracts are made public, and non-confidential portions of contracts are available from the ANP upon request for a fee. Environmental impact assessments are published.
The ANP is the source of the most detailed information on resource revenue. It regularly publishes information on reserves, production volumes, prices, exports, investment, the names of companies operating in the country, production data by company, and disaggregated revenue streams such as production values, royalties, special taxes, bonuses, and acreage fees. The Finance Ministry publishes limited information on resource revenues, while the Mines and Energy Ministry publishes annual reports with information on reserves, production volumes and values, prices, investments, royalties, and special taxes.
Safeguards & Quality Controls (Rank: 2nd/58, Score: 96/100) learn more
Comprehensive reporting and audit requirements, as well as checks on the budgetary process, earn Brazil a particularly "satisfactory" score of 96.
The legislature has no formal oversight role in the licensing process, but Congress can review the ANP's decisions on an ad hoc basis. All resource revenues are subject to internal controls and external validation by a national audit office, and the legislature scrutinizes audited reports of national accounts. Government officials with an oversight role in the hydrocarbon sector are required to disclose their financial interests in any extractive project.
Enabling Environment (Rank: 9th/58, Score: 66/100) learn more
Brazil performs well on rankings of budgetary openness, but scores relatively poorly on government effectiveness and the rule of law, contributing to a "partial" score of 66, Brazil's lowest on any RGI component.
State-Owned Companies (Rank: 3rd/45, Score: 92/100) learn more
The state owns 64 percent of Petrobas, which produces 92 percent of Brazil's oil. In 2010, Congress created a new national oil company, Pre-Sal Petroleo SA (PPSA), to represent the government in production-sharing agreements for the offshore pre-salt area, although Petrobas will conduct those oil operations. Petrobras regularly publishes extensive information on its oil operations and subsidiaries, including data on all revenue flows and tax payments; PPSA's reporting policies are not yet established.
Petrobras undergoes annual audits by both the national audit court and an independent external auditor. These reports are published, as is information on the composition and decision-making processes of the company's board of directors.
Natural Resource Funds learn more
Brazil's sovereign wealth fund receives revenues from resource exploitation and other sectors. In 2010 the government added a social fund to receive revenues directly from oil production in the pre-salt area. Managed by the president, the fund will be used to promote development projects. It is not yet operational.
Subnational Transfers (Rank: 1st/30, Score: 100/100) learn more
Brazilian law establishes how oil revenues are distributed between federal and subnational governments. The ANP and local governments regularly publish information on these transfers. It is not yet clear how revenues from the pre-salt area will be distributed.
INSTITUTIONAL & LEGAL SETTING
SAFEGUARDS & QUALITY CONTROLS
To explore all data and compare country scores, use the RGI Data Tool.
Key Economic Indicators
|GDP (constant 2011 international $ billion)||823.0||999.0||2,476.7|
|GDP per capita, PPP (constant 2005 international $)||7,909||8,509||10,279|
|Extractive exports (% total exports)||11||16||30|
|Source: World Bank.|