“Agri-Food Security” in Venezuela, another form of private property appropriation -Industrias Zu
Mar 25, 2015
It could be said that in a little more than 15 years there has been a veritable transformation of Public Law in Venezuela, considering the modifications undergone by the principal laws of this discipline. It is not reckless to state that Public Law has turned from statist (with few exceptions) into totalitarian.
From a formal point of view, such modifications have not occurred in Private Law. We are still working with the same Civil Code and Commercial Code. But in reality, the rules that govern companies, for instance, have completely changed.
In Venezuela, the shareholders’ meeting is no longer the supreme body where the company’s will is formed. What best example of autonomy is there than the one we had, in which the shareholders gathering at their meeting were free to appoint their board of directors or their manager in the manner they chose under their by-laws, so that said board or manager would carry out the shareholder’s meeting decisions and fulfill duties of representation, administration, disposition, etc.?
Over time, however, this has significantly changed. In the decades of the 80’s and 90’s, a report of irregularities in the management of the company would entitle a Judge to order a precautionary measure that consisted in removing the managing body elected by the shareholders and replacing it with an ad hoc management.
Even if the decision was made by a judge following a process, it was objectionable because it infringed the decision of the shareholders. Today, however, the situation has worsened exponentially.
For instance, Article 147 of the Organic Law on Agro-Food Security and Sovereignty provides as follows:
“The following precautionary measures may be adopted and enforced, in the same act, by the acting official during the inspection or audit, in order to prevent that the defaults that may arise from the procedure will continue:
1. Suspension of the exchange, distribution, or sale of the products or provision of the services.
2. Seizure.
3. Destruction of merchandise.
4. Requisition or temporary occupation of establishments or property indispensable for conducting the agro-food activity or for transporting or storing the seized goods.
5. Temporary closure of the establishment.
6. Temporary suspension of the licenses, permits or authorizations.
7. Any measures required to ensure the supply of the foods or products regulated by this Organic Decree-Law.
When requisition or temporary occupation is preventively ordered, such measure will be implemented by the immediate possession, putting in operation, and utilization of the establishment, premises, vehicle, vessel or aircraft by the competent agency or entity, or the immediate use of the goods necessary for the continuity of agro-food chain activities, in order to guarantee agro-food security…”.
Due to these type of provisions, the owners of a company cannot enjoy the rights of ownership because these measures prevent their disposing, using and enjoying the property of their company. These measures prevent the shareholders meeting and the management from exercising their natural functions.
The company’s owner, in spite of still being formally the proprietor, in fact is not. As a matter of fact, the owner is the Superintendence that issued the occupation order because, in the end, that Superintendence is the one that makes the decisions regarding the company’s assets and its various means of production.
These provisions are not in paper only. They have been invoked against numerous companies. During the first days of this year, the National Superintendence of Food Management (SUNAGRO) inspected Industrias Zuly Milk, C.A., a company engaged in marketing dairy products and byproducts with its own sales force, transportation network, a processing plant, and powdered milk packing facilities.
During the inspection, the officials of SUNAGRO detected some inconsistencies and ordered the temporary occupation and seizure of certain products (see: http://radiomundial.com.ve/article/estas-fueron-las-sanciones-que-aplic%C3%B3-el-gobierno-nacional-zuli-milk-video; http://www.el-nacional.com/economia/Gobierno-impide-produccion-Zuli-Milk_0_559144159.html).
As of today, Zuly Milk, a company that had a production capacity of 80 tons per day, is in critical state as it has not produced a single kilo of product and has lost 80% of its personnel. (see: http://paisdepropietarios.org/home/zuly-milk-perdio-80-de-su-personal-por-intervencion-del-gobierno/)
In cases like this, we may assert that even if the Constitution, the Civil Code, and the Commercial Code are in force, the rest of the current legal framework repudiates the rights of ownership and economic freedoms by invoking such empty phrases as “agro-food security” when it allows that measures such as “temporary occupation”, “immediate possession”, “putting in operation” and “utilization of the establishment…” be ordered, entirely by the competent agency or entity.
* Member, CEDICE Academic Committee.