In mature democracies, good organizing requires courage. But in Brazil, agency managers face a paradox: They face complex problems when fear of retribution threatens to paralyze decisions that affect millions of citizens.
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The law states that a director can only be punished for fraud or “serious error.” In theory, it is important to protect. In practice, when applied to organizational activity, this expression becomes imprecise: what is wise today may seem wrong tomorrow due to the emergence of new information. If decisions made in good faith are retrospectively reinterpreted, no technical governance will be able to resist.
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That is why regulatory impact assessments – which have been established in many countries – have become an essential element in protecting the rationality of decision-making. AIR presents data, alternatives, costs, benefits and risks. It gives a way to judge.
Hence the central thesis: the director should only be punished for a serious error when he decides without AIR whether to follow or deviate from the analysis. If it decides on solid air, it does its job; If you want to disagree, you can, as long as you bear the burden of argument and demonstrate that you made a rational assessment. Caused disagreement is not a vice, but rather a characteristic of the responsible regulatory authority.
The air doesn’t fool anyone. Managers remain at the heart of organizational decision-making, and are able to interpret nuances that no model can capture. AIR only ensures that the judgment is based on evidence, not by loose intuition.
External oversight – exercised by the Federal Court of Audit (TCU) – is also gaining more clarity. Instead of evaluating decisions based on their outcomes, taking into account the bias of hindsight, they begin to observe the process. Was there an analysis? Was there consideration? Was there justification? For a serious body, this is more important than punishing those who cannot predict it.
This distinction – between organizational independence and non-compliance with decisions – has already emerged in the TCU cases. In the episode concerning the surcharges imposed by terminals for container traffic, and the SSE/THC-2 tariff, the Court did not interfere with the jurisdiction of the National Waterway Transport Agency and did not determine the merits of the regulation. On the contrary: it identified a loophole and decided that the authority would exercise its powers, evaluate the problem and regulate the matter according to technical standards.
It was simple: “Organize yourself by your own methods.” But the agency remained inactive. The punishment that followed was punishment for institutional oversight, not meritocracy. It is unreasonable for the AIR to conclude that a local authority was not obliged to comply with an order the contents of which were simply “ordinary”.
In the opposite direction, in the process regarding the criteria for revision of tariffs in highway concessions, the National Road Transport Agency adopted marginal cash flow as the criterion for modernization. There was a discussion. TCU understood that this method would benefit franchisees at the expense of users; The agency emphasized that it better reflects contractual logic.
However, the court – although divided – excluded directors’ liability. He admitted that it was a motivated regulatory decision, made within the agency’s technical jurisdiction. If there had been an AIR Act, it would have served as an objective limit, making any attempt at punishment inappropriate. A decision preceded by a regulatory impact analysis does not, by mere disagreement, become a “serious error.”
Brazil needs to find this balance again. Without it, managers will fear their responsibility, postponing urgent decisions and innovations. No country moves forward with agencies that are intimidated.
Air is not a shield for bad managers; It is a beacon of good decisions. Managers who make blind decisions can and should be held accountable. Those who make decisions systematically – whether to approve or reject – need institutional calm to be able to do their part.
Max Weber pointed out that public responsibility requires insight, style and courage. AIR provides the first two conditions. Brazil needs to protect third place.
*Bruno Dantas, former Minister and President of TCU, LLM and JD, is the Hauser Global Senior Fellow at NYU School of Law, and LLM and JD Professor of Regulatory Law at FGV Direito Rio