House Chairperson and hon members, it is my privilege to introduce this report to the National Assembly on behalf of the Portfolio Committee on Public Enterprises.
In Caracas, Venezuela, we met with the leadership of a number of state- owned companies, members of parliament and several ministries. We also visited one of the developmental projects of a state-owned oil company, Petrleos de Venezuela SA, PDVSA, observing their facilities for health, rehabilitation, recreation, irrigation and training.
The economy of Venezuela centres on petroleum production and export and is dominated by the Venezuelan government. The state oil company, PDVSA, controls the petroleum sector, while other government companies control important parts of most sectors.
President Chavez's vision of a 21st-century socialism is actively supported by the government and all state-owned companies. The latter participate extensively in the economy and also compete with the private sector by realising the social justice provisions in the constitution of Venezuela. State-owned companies are the vehicles used for service delivery, with the main aim and emphasis on the wellbeing of the people of Venezuela.
A high value is placed on the participation of communities through their communal council on the boards of state-owned enterprises. State-owned companies have shared values and principles which guide the operation and management of such companies and include selflessness, humanity, love for the people, a commitment and a political willingness that is applied in a socialist economy.
In So Paulo, Brazil, we met with a state-owned water management company and received a high-profile overview presentation of the underlying principles for the success of SOEs, or state-owned enterprises, in Brazil. The government of Brazil has a comprehensive presence in its state-owned entities, and controls 122 entities that cover more than 15 different sectors in that country. Three sectors, namely banking, oil and electricity power production, have the most significant impact on the economy.
State-owned enterprises have two basic forms in Brazil, namely public companies with shareholders that represent a mix of government and private capital on the one hand; with, on the other hand, government companies with only government capital. With 11 billion barrels of oil in reserve, it is not surprising that the oil company, Petrobras, is responsible for 90% of the total state-owned enterprise investment in Brazil.
Corporate governance at a national level in Brazil has a high priority. The president of Brazil has three organisations that oversee the performance and strategic decisions of state-owned enterprises. Moreover, each state- owned enterprise is connected to a specific Ministry in government, with the Ministries of Energy and Finance controlling the majority of state- owned enterprises.
The report contains a number of recommendations. Once the report is adopted, the portfolio committee will follow up on these recommendations in 2012. We conclude that there are ample opportunities available for our own state-owned enterprises to explore ventures both in Venezuela and Brazil, and that this should be encouraged. While the portfolio committee respects the unique political and economic systems adopted in each of the countries visited and the highly visible role played by state-owned enterprises in Venezuela and Brazil, we need to investigate the applicability of their successes to our own state-owned enterprises, including labour and local community representation on the boards of state-owned enterprises, and identifying critical success factors which contribute to successful state- owned enterprises. House Chairperson, I hereby submit the report for adoption in this House. I thank you. [Applause.]
There was no debate.