Brazil Gives Labor Unions Seat On State-Owned Company Boards

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SAO PAULO (Dow Jones)--Brazil's government on Friday authorized labor union representation on the boards of directors of state-owned companies.

The document was signed by Planning Minister Miriam Belchior shortly before President Dilma Rousseff sat down for her first talks with labor union representatives since she took office Jan. 1.

"It's important because the workers have, from their view point, a permanent vision of the company," Rousseff said in a speech. Later, she said the representation is "strategic for the company itself, it's something strategic for the country."

The law, which paved the way for this authorization, was passed in the final days of the administration of Rousseff's predecessor, former president and union heavyweight Luiz Inacio Lula da Silva. Both Lula and Rousseff are members of the Workers' Party, the main political body for Brazil's labor movement.

Rousseff praised labor unions for preventing privatizations of state-owned companies in Brazil. "It is important that we remember that the workers, even those from outside of companies, were responsible for their preservation (in state hands)," the president said.

Nonetheless, large numbers of companies were transferred to private-sector ownership in industries such as banking, telecommuications and mining over the last two decades, including during Lula's administration.

Unions will be represented in all state-owned companies with more than 200 employees which, according to the minister, covers some 59 firms.

These include government-run companies such as oil company Petroleo Brasileiro SA (PBR, PETR4.BR), Banco do Brasil SA (BBAS3.BR), Caixa Economica Federal and the agriculture research firm, Embrapa, according to the ministry.

-By Matthew Cowley, Dow Jones Newswires; +55 11 3544 7082; matthew.cowley@dowjones.com

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