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Although the recent appointment of Jorge Carrillo as the new president of the ISA is “subject to the fulfillment of some conditions that have not been confirmed so far”, the decision of the board of directors has caused intense controversy. The inclusion of the former manager of the Medellín Public Company (EPM) during the tenure of Daniel Quintero as mayor of the Antioquia capital raises serious ethical and political questions.
The first thing to say is that Carrillo’s election was not the result of a unanimous decision of the board of directors. The majority of votes in Ecopetrol favored his name, while the nomination was rejected by a minority that included pension funds and EPM. In addition, the current manager of the Antioquia public company sent a letter to the ISA Supreme Legal Body, in which he formally requested details of the selection process in order to verify that it complies with the ISA’s corporate governance standards.
In addition, the letter mentions the US Foreign Corrupt Practices Act (FCPA) and the risk of non-compliance with these North American anti-corruption provisions due to the ongoing investigations against the new president. The charges against Carrillo are not negligible: three proceedings by the Public Prosecutor’s Office, two by the Attorney General’s Office, two complaints by the Financial Supervisory Authority and another by the Superintendent of Industry and Commerce. The controversies surrounding his management at EPM concern housing loans, lowering of tender conditions and serious complaints about the “sale” of businesses.
It is worth remembering that only the disciplinary authorities and investigative entities can have the final say on the different charges against Carrillo. Indeed, his appointment was part of a political struggle in Antioquia and Medellín, and for this reason, defenders of this appointment speak of “persecution” and the presumption of innocence that should be given. However, among the many candidates offered by the ISA Board of Directors for the post of President, there are several men and women who have had distinguished careers, of undoubted size and fame.
To the ethical warnings raised by this case, one must also add the risks facing ISA’s corporate governance. The group has a solid business tradition and a strong presence as a multinational in Brazil, Chile, Peru and other countries. EPM, as a minority partner in ISA, asked for greater clarity in the selection and evaluation of Carrillo, in order to test the strength and respect of these practices, which is essential in today’s corporate world.
If we add to the ISA the recent presidential intervention in the Ecopetrol board in the CrownRock decision (which the president of the state oil company, Ricardo Roa, denies), we could be facing a dangerous trend of the Petro government undermining the interests of the oil companies.Corporate governance of listed companies in the energy and power sectors.Precisely because of the national nature of their ownership, the appointments and policies of the government in power and the inevitable political struggles, groups like Ecopetrol and companies like the ISA require corporate, technical and independent governance.
In summary, the selection of a new ISA president (who has yet to be approved) raises these ethical alarms and corporate risks, and the board should respond with the utmost transparency and seek to determine the suitability of the position.
Francisco Miranda Hamburg
framir@portafolio.co
X: @pachomiranda
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