Braskem’s board of directors earns more than BB’s command – 12/08/2023 – Market

Braskem’s top management, made up of six members of the statutory board and 11 members of the board of directors, received more than the command of Petrobras, Banco do Brasil, Itaúsa (the holding company that controls Itaú) and Gerdau in 2022 These companies had billion-dollar profits last year: R$188.3 billion (Petrobras), R$31 billion (BB), R$13.7 billion (Itaúsa) and R$11.4 billion (Gerdau). The petrochemical company suffered a loss of R$336 million in the last year but, even so, paid R$60 million (including fixed and variable remuneration) to the main executives and advisors.

For this year, the forecast is to disburse a 44% higher amount, R$85.5 million (R$84.4 million of which is for directors alone), according to the minutes of the shareholders’ meeting held in April. In the accumulated period from January to September 2023, however, Braskem accumulated losses of R$3 billion.

The information belongs to a survey carried out exclusively for the Sheet by financial market data consultant Einar Rivero, based on data from the financial information platform Comdinheiro. According to the research, among the 83 companies that make up Ibovespa, an index made up of the most traded shares on B3, Braskem occupies the 21st position among those that best pay senior management.

When contacted, Braskem said that administrators’ remuneration “follows market standards, being approved by the annual general meeting.”

Payment to senior executives has been growing at least since 2018, when there was the first earthquake in Maceió, an event that only a year later was officially associated with the exploration of salt by Braskem in the capital of Alagoas, according to an investigation by the Geological Survey of Brazil , a body linked to the Ministry of Mines and Energy. So far, the peak of disbursements was in 2021, when the petrochemical company made a profit of R$14 billion and paid R$74 million to top management.

Also in 2021, the documentary “Braskem passed by here: the Maceió catastrophe”, by filmmaker Carlos Pronzato, was released, which reports on the drama of families forced to leave their homes that began to crack due to the subsidence of the soil, caused by the “lack of control” in the rock salt extraction process in 35 Braskem mines in the region, as pointed out in the report by the Brazilian Geological Survey.

On the 29th, Maceió Civil Defense warned of the imminent risk of collapse in the region, following five seismic shocks in November. Even the Sanatorium Hospital, in the Pinheiro neighborhood, had to be emptied and the patients transferred.

For corporate governance experts interviewed by Sheet, the rising remuneration of Braskem’s command is incompatible with the company’s stance in the face of the urban environmental disaster still underway in Maceió, already considered the largest in the country. In the last four years, around 60 thousand families, or more than 200 thousand people, equivalent to a fifth of the population of the capital of Alagoas, were forced to leave their homes and businesses in the region.

“To date, Braskem has not taken responsibility for the disaster. No company director has been held responsible, on the contrary, the board of directors is receiving high profits”, says Alexandre di Miceli, partner at senior management consultancy Virtuous.

“It is an amoral company, which does not reflect on the consequences of its actions on society and the environment”, he says, also referring to the destruction of the Mundaú lagoon ecosystem, an area of ​​mangroves and restinga.

Corporate governance consultant Renato Chaves agrees. “Braskem has a galactic board of directors, a very well-paid board of directors, but extremely fragile governance, capable of treating the Maceió disaster as a ‘geological event’, as if it were something independent of its will,” says Chaves, master in Accounting Sciences from UFRJ (Federal University of Rio de Janeiro) and member of the audit committee of Previ (Bank of Brazil Employees’ Pension Fund).

Questioned by Sheetthe petrochemical company responded, through its press office, that it adopts “all necessary measures to mitigate, compensate or repair impacts resulting from the vacancy of properties in the neighborhoods of Bebedouro, Bom Parto, Pinheiro, Mutange and Farol.”

Among these initiatives, according to Braskem, are “support for the preventive eviction of risk areas and relocation of families, traders and businesspeople and payment of financial compensation to those relocated, in addition to resources for compensation for collective damages and socio-urban and environmental”. The company emphasizes that “all actions are supervised by the competent bodies.”

Agency that supervises mining companies has 70% of its positions empty

Geologist and civil engineer Fábio Reis, director of Febrageo (Brazilian Federation of Geologists), remembers that the ANM (National Mining Agency), responsible for monitoring and regulating mining companies, was created recently, at the end of Michel Temer’s government (2017 ), and it is empty.

“The agency has around 70% of its staff unfilled,” says Reis. The report contacted ANM, which confirmed it operates with 664 servers, a number that “represents less than a third provided for by law”, it reported. According to the agency, its budget in 2023 is R$1.06 billion.

According to Reis, unlike oil and energy exploration, mining activity is not obliged to invest part of the profits in research, development and innovation. “Companies in the oil and gas sector and the electricity sector are required to allocate part of their revenue to R&D programs, regulated by the respective sector agencies,” he says.

“But mining does not need to be linked to research in Brazil. Which is nonsense, as it is an extremely complex activity and should not be carried out in urban areas, such as in Maceió, as this maximizes risks” , says Reis, PhD in Geosciences and Environment from Unesp (Universidade Estadual Paulista), where he is also a professor in the Department of Geology at the Rio Claro (SP) campus.

For Reis, the cases of Samarco in Mariana (2015) and Vale in Brumadinho (2019), both in Minas Gerais, were not fortuitous. “What we see in Brazil are mining companies placing profits above risks, which generates a history of dramatic events”, says the expert.

As of 2019, Braskem began to indicate in its balance sheets the costs of the Financial Compensation and Relocation Support Program for residents of neighborhoods affected by the “geological event in Maceió”, which established an aid of R$5,000 per family and R$ $1,000 a month for rent. R$3.8 billion has been spent so far on these actions.

“Braskem did not pay compensation to residents because it still questions the results of the investigation presented in 2019 by the Brazilian Geological Survey”, says Fábio Reis. The report asked Braskem if the company recognizes its responsibility in the Maceió disaster, but the petrochemical company did not respond. He just said that “even before any liability, Braskem made its commitment to people’s safety, this is the company’s priority.”