The fomentation of tourist activity in Brazil. Operational mechanisms of resources canalisation into the Act 11.771/08.

The Brazilian Tourism Statute.[1]

IFTTA Annual Worldwide ConferenceRome, Italy. 1 – 5, September 2010.

Maria Goretti Sanches LimaMaster of Administrative Law (L.L.M.) by Pontifícia Universidade Católica de São Paulo

PUC/SP

[1] This paper was summarized and matched upon the thesis of postgraduate course leading by, S.J.D. and J.D. in Public Law Silvio Luis Ferreira da Rocha at the Pontificia Universidade Católica de Sao Paulo – PUC/SP – Brazil by public hearing on May 2010.

IFTTA Annual Worldwide ConferenceRome, Italy. 1 – 5, September 2010.

Maria Goretti Sanches LimaMaster of Administrative Law (L.L.M.) by Pontifícia Universidade Católica de São Paulo

PUC/SP

1. Introduction

The paper examines a chapter into the tourism act 11.771/08, which is: “The fomentation of tourist [2] activity” to provide answers re:

Whether or not fomentation is a kind of the State intervention; Which is the role of tourist activity faced by the Brazilian tourism statute. Whether the seven itens listed into the Article 16 are indeed “mechanisms of

fomentation” or “measurements” of it.

The fomentation is one of the administrative activities performed by the Public Administration to develop economies or reduce the effect of recessive crisis.

The activity itself is developed by mechanisms and measurements of fomentation and the study focused on to distinguish these concepts with regard to the chapter analysed, which has mixed it.

In addition, a comparison of administrative activity of fomentation and administrative activity of intervention has been taking into account.

The Public Law principles and Administrative Law framework shall be applied on this regard.

[2] Despite there is cross-language referencing to “tourism” and the like with variations even in English, the term “tourist” was exerted instead of “touristic” due to its proximity with English-speaking States providing better fits and other better interpretation when seeking uniformity.

2. The economic fomentation

On economic domain the term fomentation indicates generically: Any public activity used to increase the life conditions of the country. It is not a help or assistance in a common sense. On the contrary, it is related with planning and public policies.

The fomentation tools have a prior existence in the Brazilian law system, whilst the planning and public policies changes according to the Government strategies.

In such context, the fomentation does not refer to the object of an activity but rather a specific way of an administrative activity target to:

any object and, meaning an administrative activity of the State subjected to:

the principle of legality and; inserted into the law system of the nation. (PRATS)

2.1. (contd.)

Is the fomentation a kind of intervention? There is not a consensus in the administrative

law doctrine. The academic and professional literature have stated:

If there is coercion is an intervention;Fomentation is not an intervention;Fomentation is an intervention;Fomentation is an intervention but is not an

administrative activity;Fomentation is a middle way between inhibition

and intervention by the State.

2.2.(contd.)

Thinking by administrative activityFomentation and Intervention

Are not harmonious activities

When the State intervenes It enters into an outsider area

Which belongs to the civil society And means: “the market”

2.3.(contd.) However:

Family Civil Society, and The State

Are: in the same reality, and linked with each other

Although the private sector has its own entitlement and domain it does not exclude the regulation by the public sector.

The State has the function and duty to regulate the human relations through the law.

2.4.(contd.)

Therefore, If the State intervenes all the time at the economic

domain regulating the economy by its acts, and: the fomentation does not enforce neither sector nor

individuals only stimulate them to follow the current policy of the Government.

Is that: The Administrative activity of fomentation,

Is distinguished from:

The Administrative activity of intervention.

3. The tourist activity

The Article 21 of the Act 11.771/08Does not provide a clear definition re the

meaning of “tourist activity”. It restrict itself to say that:

“providers of tourist services are those who develop the economic activities into a tourism productive chain..”

i.e.: tourism agencies, lodgings or hotels, tourist carriers, events organizers, thematic parks, tourist campsite and so on…

3.1. (contd.)

Thus, even though there is not a legal definition there are studies pointing that:Tourist service is a commercial activityDeveloped by a company or individual,

which activity will be professional.Taking the aforementioned into account,

Tourist service is connected with the Tourist activity as an economic activity relying on tourists.

4. The fomentation of tourist activity

Summarising the study so far, the main question is:

Whether or not mechanisms of fomentation placed into the Act 11.771 are indeed mechanisms and/or measurements of administrative activity of fomentation.

4.1. (contd.)

The relevance of this issue is set as follow:

The chapter made a plethora of topics, and

The Administrative Law in Brazil requires accuracy approaching definitions regarding public administration.

4.2. (contd.)

The Article 15 and 22 of the tourism statute emphasize the official database as a requirement to private and public entities to get the government support by fomentation.

Once recorded at the database aforesaid the entity will be entitled to receive the support through the following mechanisms of fomentation described into the tourism statute:

4.3. (contd.)

1. By the annual budgetary statute addressed to the Ministry of Tourism and EMBRATUR.

2. By the tourism general fund – FUNGETUR.3. By the credit lines from Federal Banks and

Institutions.4. By the fomentation agencies to regional development.5. Placed by Brazilian Federal States, Federal District

and Cities.6. By the National and International Organizations and

the like.7. By the securitization of receivables – FIDC and

FICFIDC.

4.4 (contd.)

1. By the annual budgetary statute addressed to the Ministry of Tourism and EMBRATUR.

In wide approach due to its seasonality the annual budgetary statute can not be taken as a mechanism of fomentation, but

In strict approach if it disclose a measurement of fomentation, i.e: “ covenant” and the like it could be taken into account only as an exception. [4]

[4] The current budgetary Act 12.017/09 at Article 40 states that shall be made covenants and the like in order to promote events for tourism in the amount over to R$50.000,00.

4.5. (contd.)

2. By the tourism general fund – FUNGETUR. In Administrative Brazilian law a public fund shall

be established by a statute specifying all details relating to targeting, incomings, outgoings, and so on.

Its management is running by the Ministry of Tourism and operated by a Federal Bank.

by its attributes FUNGETUR is recognized as a mechanism of fomentation.

4.6. (contd.)

3. By the credit lines from Federal Banks and Institutions.

as long as we are talking about public resources the credit lines are already running into the system such as the constitutional funds set up by Article 159, Nr. I “c” of the Federal Constitution of Brazil and regulated by Acts 7.827/89 and 10.177/01.

With this regard these credit lines are considered mechanisms of fomentation as well.

4.7. (contd.)

4. By the fomentation agencies addressed to regional development.

Such agencies are considered only entities of fomentation, but neither a mechanism nor a measurement.

5. Placed by Brazilian Federal States, Federal District and Cities.

due to the vagueness of the item, the States, Federal District and Cities are entities of fomentation rather than mechanisms or measurements of it.

4.8. (contd.)

6. By the National and International Organizations and the like.

In a similar way aforesaid, National and International Organizations and the like are not mechanisms or measurements of fomentation per se.

Likewise, they are entities of fomentation and not mechanisms or even measurements of it.

4.9. (contd.)

7. By the securitization of receivables – FIDC and FICFIDC.

The securitization of receivables is typically used for the purpose of raising cash in a capital market structure.

Actually comparing a fund as the FIDC – a private fund, with another as FUNGETUR - a public fund, there is a huge gap between them under an administrative law view.

Whilst a public fund shall be established by a statute which must specify everything as earlier mentioned, the FIDC was set up by delegated legislation instead of statutes law, and it will become a reality just when issued by an entity.

5. Conclusion

Compared with the former legislation the Brazilian Tourism Statute has improved tremendously the focus on some matters.

The administrative activity of fomentation runs separately from intervention. The State naturally acts by the law upon the

economic sector regulating it. The fomentation does not enforce neither sector

nor individuals only stimulate them to follow the current policy of the Government.

5.1. (contd.)

Given the terms tourist activity and tourist service:

it was stressed that such terms are tied with a concept of economic activity.

that shall be developed ensuring environmental sustainability.

5.2. (contd.)

With regard the mechanisms of fomentation it revealed that the FUNGETUR as well as the credit lines from federal institutions by an Administrative Law view are the only

real operational mechanisms of resources canalisation pointed by the Brazilian Tourism Statute.

End

Thanks for your thoughtful attention.