Brazil Names Former Communist Congressman To Oil Agency

A former congressman from Brazil's Communist Party was sworn in Monday as the newest board member of Brazil's oil sector regulator ANP.

Haroldo Lima was appointed by Brazil's president Luiz Inacio Lula da Silva and is replacing Julio Colombi, who left the ANP in January last year.

Lima took office at a ceremony in Rio de Janeiro's ANP headquarters with the presence of the country's Mines and Energy Minister Dilma Rousseff, among other ministers, as well as the chief executive of Petrobras. The appointment marked the first change in the ANP's board of directors since Lula took office a year ago.

Highlighting his three years as a political prisoner and 20 years in the opposition at Brazil's Congress, Lima said his appointment is "a sure sign of the times when a metalworker is President of the Republic."

Lima's arrival at the oil agency comes as Lula's administration has come under criticism from market observers for seeking to take away some of the power in Brazil's regulating agencies by appointing government-friendly executives to key posts.

"The appointment of Lima is yet another sign that the government is indeed moving toward a more interventionist stance, which could increase risk, especially in the infrastructure sectors," said Adriano Pires of the Brazilian Center for Infrastructure, a consultancy in Rio de Janeiro.

Lima, who participated in the 1970s armed resistance to the military dictatorship, is an engineer by trade. He was elected congressman for Brazil's Communist Party five times. The new director has strongly criticized the current legislation governing regulatory agencies and has proposed less autonomy and more control by the central government over regulatory issues.

According to Minister Rousseff, Lula is expected to name another two of the five ANP board members this year: a replacement for director Newton Monteiro, whose mandate ends this month, and for director Luiz Augusto Horta Nogueira, who announced in November he would leave his post early this year, before the end of his term in December 2005.

Earlier this month, in another key regulator, Luiz Guilherme Schymura de Oliveira stepped down as president of telecoms watchdog Anatel after being pressured by the government to leave his post owing to clashes with Communications Minister Miro Teixeira over annual tariff setting.

In Shymura's place, Brasilia appointed Pedro Jaime Ziller de Araujo, an ally of Teixeira. The move was seen aimed at strengthening the government's hand in directing key policy-making, particularly in concession rights and contracts.

Critics said Lula will likely continue to push for new appointments on the boards of other regulators to guarantee decisions that are in line with its policies. Many argue the government's strategy is to create a hostile attitude to the agencies' current presidents and directors, and thereby force them to resign before the end of their terms.

The president names board members and presidents of regulatory agencies. The appointments need to be ratified by the Senate. Board members have between four and five-year terms.