The Principles of Morality and Transparency in the Third                                 Sector	  	               ...
This was the case of the socialist response unmasked by Ludwig von Mises long timeago. The inevitable failure of the centr...
The State is not the answer to underemployment and there are political limits tostructural reforms and further consolidati...
- Due to a question of trust without which the sector does not have the resources. Andhere it is important to strengthen t...
between the latter’s method and the former’s purpose. That is, the Third Sector iscomposed of organizations of "private" n...
restrictive in the sense that the only thing that is allowed is what is not forbidden, butis based on the creativity and i...
as theft, robbery, extortion, damage, etc.) crimes against the Public Administration oragainst the Public Finances, etc..M...
be self-regulating and aim at the good practices and improvement of        management instead of punishment.    e) All org...
complexity the public controllers like so much - under penalty of the sector losing itscredibility and Social Economy is j...
Bibliography:	  	  Portuguese	  Constitution,	  1976	  	  	  Constitution	  of	  the	  Federal	  Republic	  of	  Germany,	...
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The principles of morality and transparency in the third sector by rui teixeira santos 2011 1-3


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  • Publiquei recentemente tres artigos sobre Economia Solidária. Estão on line dois artigos em:
    (Este artigo publicado com algumas modificações e ampliação em: Social Innovation - New Forms of Organisation in Knowledge–Based Societies, (2013) Edited by Carmen Ruiz Viñals, Carmen Parra Rodríguez Series: Routledge/Lisbon Civic Forum Studies in Innovation, Routledge, New York)
    (texto de uma conferencia em Barcelona sobre a Economia Social)

    Publiquei este ano ainda mais um capítulo de livro:
    Santos, RT,(2012) Misericordias como un instrumento de la economia solidaria en la Lusofonia, in Cood. Carmen Parra e Carmen Ruiz, Instrumentos solidários en tiempos de Crise, Bosh Editor, Barcelona.
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The principles of morality and transparency in the third sector by rui teixeira santos 2011 1-3

  1. 1.   The Principles of Morality and Transparency in the Third Sector     Rui  Teixeira  Santos1      We are in an especially dangerous period of the economic and social history of themost developed countries, where economic and social adjustments are being made atthe same time as we define geostrategic rebalancing at a global level, which forces usto a special reflection on the mechanisms of good government.The social thinker of the nineteenth century Saint Simon divided history into organicperiods and critical periods, which followed from the beginning of the historyexplaining the progress. The first corresponded to times of high moral profile andrespect for authority and the latter corresponded to periods of moral anxiety anddefiance of authority. We are clearly in a new "critical period" in the culture andliterature as already noticed in the 70s by Robert Nisbert2 in his critique of whathappened in universities and in Pop Art in the 60s, with regard to the nihilism andemptiness of existentialism and mediocrity culture.Also in the financial sector the entire mismatch to the order established by BrettonHoods enters this critical paradigm and the dysfunction itself, we also noticed today,in the Third Sectors crisis, the search for new means of financing, but mainly thesearch for trust and credibility.  There are lots of resources for the Third Sector in a practice that it is also marking thenew philanthropists of the BRICS.The great philanthropists no longer leave their fortunes in will to build museums filledwith useless objects and of doubtful criterion. Today they give the illegitimate parts oftheir wills to charitable and social causes or deliver them to the care of foundations orNGOs dedicated to the human and scientific development.It is in times of crisis - those critical periods - like this one that we make the choicesfor the following years, but also create the great myths and great falsehoods thatfurther trigger new and bigger problems. The third sector is not the answer toeverything, nor was it the "good savage", in the ingenuity described by theRousseauvians, or the "young" with all the virtues and capacity for innovation andaccess to new technologies that in the eighties had excluded the older from any usefulproductive activity.And above all, the solidarity sector or company with a social conscience implies trustand must be under a media scandal that could demonstrate the ever-possiblemisalignment of objectives in the joint action of some entity and thus affect all.And it is not worth considering the moral superiority of the Third Sector by itsconscience and volunteering, because previous social responses proved to be false andcaused severe humanitarian disasters.                                                                                                                1  Prof.  Rui  Teixeira  Santos  is  the  Director  of  Escola  de  Administração  de  Lisboa,  Associate  Professor  of  the  Faculty  of  Law  of  Universidade  Lusófona,  Lisboa  and  Director  of  the  Master  in  Social  Administration,  ULHT.  2  Robert  Alexander  Nisbet  (September  30,  1913,  Los  Angeles  –  September  9,  1996,  Washington  D.C.)  was  a  conservative  American  sociologist,  professor  at  the  University  of  California,  Berkeley,  Vice-­‐Chancellor  at  the  University  of  California,  Riverside  and  as  the  Albert  Schweitzer  Professor  at  Columbia  University.  
  2. 2. This was the case of the socialist response unmasked by Ludwig von Mises long timeago. The inevitable failure of the centralized government (planning) of the economy -despite some technological achievements - cost millions of deaths in one of thegreatest crimes against humanity that a certain youth of the mid-twentieth century didnot want to see.We realized with the crisis of 1929/1932 that the market has flaws and the Keynesiansbelieved that public initiative, albeit occasional, could be the answer 3, actually in thesame way as the economic advisers of Adolf Hitler.We realized later in the 70s of the twentieth century, that Keynesianism was purelyand simply false and that it was possible to exist both recession and inflation -whenever it had originated in the offer. Stagflation killed the interventionist dreams ofKeynesianism in the 70s in the same way that this crisis proves that there is a limit topublic investment through borrowing and that Keynes did not consider: the fact thatthe creditors do not want to lend more money to a state already indebted.We now see again as the public intervention during this crisis only increased thepublic deficits and exacerbated the problem of the sustainability of the euro and thedollar, making the financial and banking crisis in a sovereign debt crisis andeconomic recession, increasing inequality and poverty.The failure of the Social Welfare State in the seventies of the last century gave waynot only to Keynesian solutions, but also to realize that it is at the microeconomiclevel that we can conduct a Schumpeterian creative revolution4. A true revolution thatrepresents in time and space a qualitative evolution that is not comparable and of adifferent order from those that are observed in the daily economic life, which raisesnew analytical problems, but points to the greater utility of knowledge of theeconomic history and moral values in the face of economic models in theunderstanding of what we now see.The moral problem of monetarism is that everything that is not efficient must die andthus we create an underemployment equilibrium 5, which requires social and politicalresponses.                                                                                                                3  J.  M.  Keynes,  Teoria  geral  do  emprego,  do  juro  e  da  Moeda,  Relógio  de  Agua,  Lisboa  2010  4  According   to   Schumpeter,   in   the   economy   of   the   circular   flow,   the   economic   life   passes   monotonously,  each   good   produced   finds   its   market,   period   after   period.   This,   however,   does   not   mean   that   economic  growth  does  not  exist.  We  admit  productivity  increases  resulting  from  improvements  in  the  work  process  and   continuous   technological   changes   in   the   production   function.   However,   this   technological   base   is  already  known,  which  was  built  over  time  in  the  economys  productive  matrix.  Economic  agents  cling  to  the  established  and  the  adjustments  to  the  changes  occur  in  familiar  surroundings  of  predictable  trajectory.  In  these  circumstances,  according  to  Schumpeter,  substantial  economic  changes  cannot  come  from  the  circular  flow,  because  the  reproduction  of  the  system  is  linked  to  business  made  in  previous  periods.  The  question  for  Schumpeter  is  that  the  transformative  innovations  cannot  be  predicted  ex   ante.  However,  these   types   of   innovations   that   originate   in   the   system   itself,   when   introduced   in   the   economic   activity,  produce   changes   that   are   qualitatively   different   from   everyday   changes,   leading   to   the   disruption   of   the  balance   achieved   in   the   circular   flow.   Thus,   the   economic   evolution   is   characterized   by   ruptures   and  discontinuities  with  the  present  situation  and  is  due  to  the  introduction  of  novelties  in  the  way  the  system  works.  (,   p.   4.   Accessed   on   15  August  de  2011)  5  Underemployment   Equilibrium   Mean   a   condition   where   underemployment   in   an   economy   is  persistently   above   the   norm   and   has   entered   an   equilibrium   state.   This,   in   turn,   is   a   result   of   the  unemployment   rate   being   consistently   above   the   natural   rate   of   unemployment   or   non-­‐accelerating  inflation  rate  of  unemployment  (NAIRU)  due  to  sustained  economic  weakness.  Underemployment   in   an   economy   implies   that   workers   have   to   settle   for   jobs   that   require   less   skill   than  they   possess,   or   that   offer   lower   wages   or   fewer   hours   than   they   would   like.  The   degree   of  underemployment  is  dictated  by  the  strength  (or  lack  thereof)  of  the  job  market,  and  tends  to  rise  when  the  economy   and   employment   are   weak.   Advocates   of   Keynesian   economics   suggest   that   a   solution   to   an  underemployment   equilibrium   state   is   through   deficit   spending   and   monetary   policy   to   stimulate   the  
  3. 3. The State is not the answer to underemployment and there are political limits tostructural reforms and further consolidation. To intend to adopt the model of Chinesebusiness in Europe to prevent the relocation of a company, as it is already starting tohappen in Italy or in Galicia, in the fashion sector6, puts at risk the legal framework oflabor and the tax models that support the post-welfare state welfare state - that manystill advocate in Europe – but it opens the way for what I have called the GuaranteeSocial State or Guarantee State7, in which the economic model is more liberal and lessregulated, while the State, which is no longer producer and dealer, is committed to itsessential economic function of fighting poverty, guaranteeing everyone access tobasic social rights.The problem is that before this underemployment and especially in the face ofunequal situations in the market - which hampers competition - societys response wassometimes the one from the Social and Solidarity Sector, to secure employment oreven to respond to solidarity imperatives that States cannot perform efficiently. Andthis is the Third Sector we are now talking about with its centrality in man8.The great moral advantage of capitalism is that all economic players are on an equalfooting, so there is the possibility of competition in the price formation. Somehow thebalance of the market has the moral premise of equality and freedom of the economicplayers.But when the State tries to intervene, unbalancing the market or correcting its faults,what always happens is that it improves the condition of the wealthier, increasingpoverty and it becomes indebted, it increases taxes and causes unequal competition infundraising. But above all, as we explained in our communication of last year inBarcelona, at the Workshop of the International Year for Combating Poverty9, itincreases poverty and misaligns the initial objectives of its intervention due to the lackof transparency and probity.On the other hand, the lack of market economy and so many times of minimumconditions of competition, safety or stability 10, a situation which is far more obviousnow in the economic crisis in the developed world, because of the lack of certainproduction factors (including capital or legal reinforcement of work contract), createsnot only opportunities but demands to solidarity economy as the only possibleresponse. For example, in supporting the elderly or in combating exclusion andpoverty, where the SSPI are the best and sometimes the only stable solution in manymarkets where the market economy is unable to survive and for example wherevolunteering is necessary.And now if the Solidarity Economy gains a new dimension in the crisis - while it isalso in crisis because of the reduction of its financial resources – it is important to paygreater attention to the mechanisms of formation of the solidarity decision and itsgood government.Why?                                                                                                                                                                                                                                                                                                                            economy.   (­‐equilibrium.asp#ixzz1V6oQVr89,  accessed  on  15  August  2011)  6    It  may  be  the  case  of  the  alleged  slavery  in  a  factory  working  for  Zara  in  Brazil  is  just  that:  the  prevalence  of  the  Chinese  model,  in  the  case  with  Pakistani  manpower  installed  in  S.  Paulo,  Brazil.  7  September  2009,  Post  Graduation  Public  Administration  and  Economic  Public  Law,  ULHT,  Lisboa.  8  "Economy  does  not  just  work  as  a  commercial  self-­‐regulation,  but  requires  an  ethical  reason  to  work  for  man”  (Benedict  XVI,  Madrid,  18  August  2011,  in  the  World  Youth  Conference)  or  Pope  John  Paul  II,  quoted  by  Pope  Benedict  XIV:  "Man  must  be  the  centre  of  economy”.    9  Santos,  Rui  Teixeira,  Poverty  and  Corruption,  Barcelona  2010  10  As  it  also  happens  in  Africa,  where  there  is  no  market  due  to  the  lack  of  competitive  conditions,  where  the  response  of  the  social  economy  may  be  the  only  possible  response,  in  particular  by  seeking  to  obtain  results  without  the  requirement  of  efficiency  or  profit,  as  in  the  capitalist  economy  or  market  economy.  
  4. 4. - Due to a question of trust without which the sector does not have the resources. Andhere it is important to strengthen the behavioral mechanisms so that the social andsolidarity ethics is not just a vague principle without content.The Solidarity Economy does not have the natural controls of capitalism - where nosingle company controls the price - or the regulatory mechanisms to correct marketfailures. And so, today more than ever, it is important to take on ethical imperatives inthe social administration.We are in the year zero of Solidarity Ethics the same way we had to go through theneo-monetarist sweep of the eighties of the last century to introduce in the universityfirst cycle in Management the course " Ethics in Business " and realize that there arepolitical and social values besides the economic efficiency and that these values implya cost of inefficiency in the economy, either in taxes or in natural unemployment, butthey meet the higher economic goal of the State to combat poverty and inequality thatis, they perform the purpose of the "common good".But above all, in the social response to the development of the poorest regions of theplanet, as an economic sector that adapts to the lack of competitive market, throughthe participatory and egalitarian government between the members and that canreplace profit by the most efficient achievement of the social purpose that is intended,therefore addressing failures of the Welfare State or, failing that, responding to thefailures of the society itself in terms of growth and human development, the Socialand Solidarity Sector must abide its performance by the rules and values, which stemfrom the nature of the social and solidarity intervention, but also from the law andpublic order. It is the old quarrel of positivism.The philosophical question is not new: when Antigone defies King Creon, her uncle,to go and bury her brother, she knew that she was challenging the law, but that wouldhonor the son of her mother and her family name. It was the Natural Law prior to thePositive Law itself.Thus we have a moral imperative of transparency resulting from the Law and PublicOrder and, on the other hand, a requirement of the very nature of things and that in thecurrent economic and financial framework is an assumption of the Third Sector(pragmatism).The content of the principle implies that the social agent and the institution of theThird Sector as a human being or a legal person respectively, endowed with the legalcapacity to act, must necessarily distinguish Good from Evil, the honest from thedishonest.And when acting, they cannot disregard the ethical element in their behavior. So notonly they will have to decide between legal and illegal, just and unjust, profitable andnot profitable, sustainable and unsustainable, inefficient and efficient, convenient andinconvenient, opportune and inopportune, but also between honest and dishonest.Due to considerations of law and morality, the actions of the solidarity sector will notonly have to obey the law but also the ethics of the institution itself, because noteverything that is legal is honest, as the Romans said - non omne quod licet honestumest. The common morality is imposed on man for his outward conduct; the moralsolidarity is imposed on the agent of the Third Sector and its institutions for itsinternal conduct, as required by each institution and the purpose of its action: thecommon good.Let us start by the law.First, we must establish the autonomy itself of the sector: the Third Sector is the onethat is not public and it not private, in the conventional sense of those expressions; butkeeps a relationship with both; in that it derives its own identity from the combination
  5. 5. between the latter’s method and the former’s purpose. That is, the Third Sector iscomposed of organizations of "private" nature (without the goal of profit) dedicated toachieving social or public purposes, although not a member of the government (Publicadministration). From the legal point of view, we have not chosen the thesis of a thirdlaw that is not justified here either by the definition of Social Law as a law withscientific autonomy alongside the classic divisions between public and private. TheSocial Law with autonomy, undoubtedly assumed, for example, in Portugal or inBrazil since the end of the last century, but learning from the constitutionalrecognition of self-management, co-management and cooperative and social law,concepts that we get from the utopian socialism and the Catholic Churchs socialdoctrine that assumes them since the nineteenth century, does not mean it has anautonomous body of distinctive principles of Public Law and Private but we believethat with regard to the purposes the principles of Public Law apply and that for theinternal organization additionally predominate the principles of Private Law.Secondly, there are general principles of law applicable to all the families of PublicLaw and Private Law.In the economy of our communication it is important to note that they are namely inany State principles of Economic Public Law applicable to any of the economicsectors that coexist in a legal system, the Principle of Legality and Social Equality.The principles of Legality and Social Equality include the Principle of SocialMorality. There are even constitutional laws, like the German 11 or the Brazilian 12that expressly include the very Principle of Morality for the Public Administration asan autonomous principle of constitutional law at the head of the conception of statelaw. And in this way the Principle of Morality cannot be absent from the regulatoryright of the social economy, a fortiori, by the Economic Public Law.As a principle of the Economic Public Law, the Principle of Morality is present inthe regulatory law as a general principle of law and in particular in the RegulatoryLaw of the Social and Solidarity Sector, as expressly happens with the recent Spanishlegislation of the sector as the one that is being prepared in Portugal.On the other hand, the very idea of the third sector or solidarity sector often implies inthe face of the creativity of private solutions, the absence of the regulator and themarket with its limits, implying therefore a greater demand for public accountability,common sense in resource management and above all a clear moral distinctionbetween good and evil as necessary limit.They are located in the Third Sector, private organizations with public objectives,occupying an intermediate position, enabling them to provide services of socialinterest without the limitations of the State, not always preventable, and the ambitionsof the market, often unacceptable13. And in this aspect, the Social Law cannot be                                                                                                                11  The   German   Basic   Law   (Federal   Constitution)   is   the   legal   and   political   basis   of   the   Federal   Republic   of  Germany.   After   being   approved   by   the   Parliamentary   Council,   the   Basic   Law   came   into   force   on   23   May,  1949.  It  was  designed  originally  as  a  temporary  solution  until  a  single  Constitution  for  all  of  Germany  was  prepared.  When  the  German  Democratic  Republic  (GDR)  became  part  of  the  area  of  validity  of  the  Basic  Law  on   3   October   1990,   this   became   the   Constitution   of   all   Germany.   It   establishes   expressed   rules   of   equal  treatment  of  citizens  by  the  Public  Administration  in  Art.  33  °,  and  the  responsibility  of  workers  is  provided  for  in  Art.  34  º.  12  The  principle  of  morality,  with  the  advent  of  the  Constitutional  Charter  of  1988  ascended  for  the  first  time  in  our  positive  law  to  a  constitutional  principle,  under  Article  37,  caput,  which  establishes  guidelines  for  the  public  administration.  Also   Article   5,   paragraph   LXXIII   of   the   Federal   Constitution   provides   for   the   possibility   of   annulment   of   acts  that  may  harm  the  administrative  morality.  13Maria   das   Graças   Rodrigues   de   Paula,   TERCEIRO   SETOR:   AS   FUNDAÇÕES   EDUCACIONAIS   COMO   SECTOR  SOLIDÁRIO,  Econ.  Pesqui.,  Araçatuba,  v.S,  n.S,  p107-­‐127,  ago.  2006  
  6. 6. restrictive in the sense that the only thing that is allowed is what is not forbidden, butis based on the creativity and innovation in the social sector. In its origin there is theprinciple enshrined in our Constitutional Law of the Free Initiative of the PrivateSector and the Solidarity Sector14.In general since the end of the last century that the tax reforms have openedpossibilities for the third sector to build from their own initiatives and taking intoaccount their diversity, more agile efficient and creative mechanisms for obtainingfunding (public and private social funds, for example).If the third sector remained always dependent only on the State (it would be what wecall the Fourth Sector that fulfills public functions or provides public goods, withpublic resources and private management) it would never acquire the politicalmajority recognized by the constitutional legitimacy in the nineteenth century. Andtherefore, it could never fulfill its strategic or ideological role of space for theemergence of social control mechanisms of the State and social orientation of themarket.In addition to the tax reforms in some states and the construction of a new financingsystem for the third sector, there will be, for example in Portugal, people who thinkabout the change of the regime of the work contract obligations and mainly thepayments for the Social Security.These civil society organizations are not companies and they cannot be treated assuch, especially in less developed countries, since international donors do notrecognize such obligations and are unwilling to afford them.But in all these cases we create special rights, exceptions that involve a clearaccountability and public scrutiny of the destiny of resources and above all - what hasbeen worrying us lately - the criteria for measuring the efficiency of the sector.We all know stories of NGOs or even Cooperatives and Foundations whosemisappropriation of funds and the lack of transparency in the procurement of suppliesand social services of third parties or the nepotism in hiring or appointing leadersaffect competition and damage the image of the Third Sector.The Principle of Social Morality expressed or not expressed in the architecture ofConstitutional Law of any State shapes the entire solidarity economic activity,including the Principle of Fairness - that is the principle of ensuring transparency ofactions and activities of the social economy institutions.In Portugal this principle is guaranteed by the jurisdictional tutelage of the Court ofAuditors concerning the legality, purpose and efficiency of public resources given tothe Third Sector, and the Penal Code through the criminalization of immoral andillegal acts such as economic participation in business, crimes against property (such                                                                                                                                                                                                                                                                                                                     (accessed   on  15  August  2011)  14In   Portuguese   law,   Private   and   Cooperative   initiative   includes   the   right   to   create   companies   (having   as   its  basic  content  the  fundamental  right  to  property),  while  self-­‐management  is  fundamentally  a    management  (not  ownership)  right.  On   the   other   hand:   The   private   initiative   may   be   excluded   from   certain   basic   sectors   (Article   86.,   Paragraph  3  of  the  CRP),  the  Cooperative  has  a  general  scope,  although  it  can  legally  be  limited,  and  the  Self-­‐managed  only  exists  in  the  situations  described  in  the  law,  i.e.,  it  is  subject  to  law.  It   is   important   to   mention   that   as   all   these   rights   are   guaranteed,   while   negative   rights   or   defense   rights,  they   are   of   a   similar   nature   to   the   DLG   and   because   of   that,   they   benefit   from   the   mentioned   scheme,   under  Art.  17.  º.  It  follows  that  CRP  considers  the  Private  and  Social  Economic  Initiative  as  a  Fundamental  Right  and  not  as  a  mere  objective  principle  of  the  economic  organization  (No.  1).    
  7. 7. as theft, robbery, extortion, damage, etc.) crimes against the Public Administration oragainst the Public Finances, etc..Most legal frameworks must proceed to the criminalization of the corruption in theThird Sector organizations, particularly the Cooperative and foundations sector andobviously the NGOs where cases of illicit enrichment are often well known and evencause social alarm.We should note that, for example, in the Portuguese legal framework, whichincorporates all the recommendations of GRECO / OECD, there is only a crime in theactive and passive corruption in the Public Administration, in private or ininternational organizations and in sports, and as it is a principle of Criminal Law, theabsence of analogy, one cannot extend the crime to the Social Sector.The architecture of a strong protection of honesty and integrity in socialadministration will only be guaranteed if we proceed with, besides the criminalizationof corruption, the criminalization of illicit enrichment, which can have civilconsequences, but incomprehensibly, not in Portugal, Spain or Brazil has criminalconsequences regarding the guarantee of transparency in the social sector we are stillvery backward concerning the Public Administration and the Private Sector, or eveninternational organizations.Therefore, I propose to legislate to: a) The criminalization of active and passive corruption and embezzlement in a Third Sector entity or by agent or officer of the Third Sector; b) Obligation to publish on the official website of the entity the budgets of the revenues and expenditure of the Social Sector entities duly approved before the start of the fiscal year; The budgets should include the economic classification of the revenues and the functional economic and organizational classification of the expenses and must be approved by the assembly of cooperative members or by the General Council of the solidarity organization or its trustees in the case of a Foundation. c) Obligation to publish the profit and loss account and the balance sheet and social balance on the official online site of the entity until the third month of the year following the fiscal year, including the following elements: a) Total number of people supported or cases of intervention (with characterization) b) Total number of paid workers (number of people or full-time equivalent) c) Total number of volunteer workers (number of workers and its full-time equivalent) d) Total value of remunerations distributed e) Total values of other operating expenses f) Total economic value of volunteer work g) Total value of gross operating surplus h) Total gross value added i) Structure of income a. Sales of goods and services b. Contributions of members c. Donations and patronage d. Public financing d) Strengthening of the supervision of revenue and expenditure in the Social Sector, including the requirement of certification of accounts by Chartered Accountants or Chartered Auditors. In the case of very small organizations or those that are civil or even informal companies the supervision actions should
  8. 8. be self-regulating and aim at the good practices and improvement of management instead of punishment. e) All organizations should justify in an online report all the expenses made and to be made in the previous year before approving the new budget for the following year. f) All the Social Sector entities should be identified in a national record published online and all the fund-raising operations should be registered, whenever possible with the issuance of invoice. g) To identify in the same public record all public donations and all the donations registered with tax purposes (patronage and other tax benefits) by companies or individuals. h) The same for all public-social partnerships, in particular in the areas of health, education, sports, child support and social solidarity. i) Identification in a central online record of the employees of one or more organizations of the Third Sector and that are thereby paid by one or more solidarity entity. j) Code of conduct or law of incompatibilities that expressly prohibits that those who collaborate in the solidarity sector cannot be at the same time an officer or director in private companies or Public Direct, Indirect or Independent Administration bodies that compete or relate directly or indirectly in the economic and social sector in which the solidarity entity acts. k) The creation of the obligation of all board members and directors of solidarity entities to publish in the solidarity entity’s official website their assets and their tax return every year. (Some people advocate the accountability at the end of the mandates, but that is close to the legal concept of Intrusion that existed in the Philippine Ordinations and that was terminated by modern law l) The monitoring and study of new forms of social intervention whenever there is public funding in the Solidarity Sector and in public-social partnerships, namely the new corporate forms of public foundations with private social revenue (and with the corresponding administrative and financial autonomy), the private foundations with the appointment of public managers, public and municipal cooperatives etc. (These institutions came to greatly extend the dependence of the Social Sector on political clienteles and they are creating a true promiscuity between the political agents and the traditional social agents). m) The obligation of public tenders - with early publication of the contract and following the requirements of public procurement - to contract in the social sector above a certain amount, the direct adjudication must be justified, with publication of the adjudication and the justification in the official website of the social entity, under penalty of nullity. n) Create a self-regulatory entity of the Third Sector to monitor the application of good practices and good governance and monitor the efficiency of the various entities of the Third Sector through, for example, a barometer of the management efficiency of the Third Sector and a rating of the effectiveness of the Social Economy entities that allow donors to have a quick and certified assessment / information of the entities to which they will make funds available. (And right information in real time is essential to the trust that the sector needs to maintain its ability to finance with private funds). o) Establishment of a Code of Social Practice with the good practices of the sector and that includes the requirement for a complaints book.All this has to be done - obviously without involving bureaucracy or unnecessary
  9. 9. complexity the public controllers like so much - under penalty of the sector losing itscredibility and Social Economy is just a propaganda tool and not a trust certificate.But also for reasons of pragmatism and sustainability: without this the SolidaritySector will fall into discredit that characterizes nowadays the State or the Bankingsector.Lisbon, 18 August 2011    
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