Liability of Not-for-Profit Organizations

Country Reports: Latin America and the Caribbean

The International Journal
of Not-for-Profit Law

Volume 4, Issue 2-3, March 2002


La International Society for Third-Sector Research (ISTR) presentó el informe sobre el Tercer Encuentro de la Red Latinoamericana y del Caribe de Investigación de ISTR, celebrado en Buenos Aires, Argentina, en septiembre de 2001.  En la respectiva publicación, bajo el título “Perspectivas latinoamericanas sobre el Tercer Sector”, Inés González Bombal resume el interesante trabajo desarrollado en el evento.  La publicación también contiene la lista de las respectivas ponencias.


The Importance of the New Civil Code for Civil Society in Brazil 

By Fernando LaTorre

After 26 years of discussion and debates, the Brazilian President Fernando Henrique Cardoso finally approved the new Civil Code, on January 10th, 2002.  The Brazilian Congress previously approved the federal law that became the Civil Code on September of last year.  The new Code will become effective in January 2003.

The promulgation of the new Civil Code is a landmark for the Brazilian legal history.  The change represents not only another step forward in the government’s project to modernize the Brazilian legal framework.  Perhaps more importantly it represents the development and the change of values in the Brazilian civil society in the last century.

The old but still applicable Civil Code was promulgated in 1916.  At that time, Brazil was a newly independent nation and its economy was basically agrarian is nature.  The country had abolished slavery a couple of decades earlier.  It worthy to note that the abolition of slavery in Brazil was based more clearly on strong international pressure than on a change in the beliefs of the rural aristocracy, which controlled the country at the time.

It was just after the end of the Second World War that strong industrial development began in Brazil.  In just a few decades, the economy changed from being based on rural activities to industrial mass production.  In addition, the rural aristocracy lost its political power in behalf of the new comers who controlled the nascent industries.

By the beginning of the 1970’s, the majority of the population of Brazil was living in urban areas.  Urbanization created enormous changes in people’s life styles and it modified habits and values.  The civil society cried out for strong institutional reform based on its new social values.  A good indication of all this change in thinking is reflected in the High Court’s jurisprudence, which has changed several articles of the current Civil Code by interpretation over the past 30 years.

In addition, the Brazilian government has recently been questioning the efficiency of the Brazilian legal framework and the judicial system with regard to their interaction with global economic advances.  The government is aware that complicated laws, unclear rights, and overburdened and inefficient courts have earned Brazil the name of “Risk Brazil” with investors.  Therefore, in order to create a better environment for foreign capital and to better promote international relations, the Brazilian executive branch has also been pushing the Congress to reform the country’s core legislation.

The new Civil Code attempts to assimilate this cry for change into a new legal system.  The new Code not only intends to translate into law the modern values of civil society, but also the government’s need to bring the Brazilian legal system to a more developed stage.  The most significant changes brought by the new code will be noticed in the articles related to individual rights, family, contract, torts, and property law issues. [1]   What follows is a brief overview of the major legislative changes.

One of the most significant changes is regarding the individual civil majority. Currently, the civil majority age in Brazil is 21 years old.  Under the new Civil Code an individual is going to become fully legally responsible for his/hers acts by the age of 18.  In this case, Brazilian jurists believe that the legislators recognized the global tendency to consider young people as more mentally mature earlier.

Other significant changes are related to contract and property law.  Under the new Civil Code contract and property law will also be measured by their impact on society.  It means that a contract, for instance, will be drafted and evaluated according to its effects on the society and not only according to its effects on the parties to the contract.  Property law will follow the same path.  For example, unproductive farms are going to be highly taxed and, depending, on the circumstances, they might even be expropriated following due process of law.  On the other hand, productive properties will be rewarded with tax benefits.

With regard to family law issues, the major changes relate to the concept of the women’s role in the family.  The new Civil Code adopted the constitutional principle that women and men will be treated equally and have the absolutely the same rights in any matter related to their role in society.  In this case, the new Code brings the law into conformity with the majority position of the national jurisprudence of the past two decades.

In addition, the new Civil Code adds a chapter, which previously was part of the Commercial Code, which concerns partnerships and limited liability companies. The Commercial Code was also recently reformed.  As a result of this reform, a new corporate law is now effective in Brazil.

The new Civil Code and the changes made in some main Brazilian laws represent a major step forward in the improvement of the country’s legal framework.  It is worthy to note, however, that very important, current legal issues have not been resolved.  Matters such as the rights of those in homosexual relationships, e-business problems, and genetic experimentation were not even considered during the debates leading to the new Code.  However, these are very relevant topics in the Brazilian and the global civil society and need to be addressed in modern legal systems.  Thus, despite several very important changes made by the new Civil Code, the majority of national jurists in Brazil continue to believe that the reform of the Brazilian legal framework reform is just beginning.

In the next edition of this Journal, I will present a more in-depth, comparative analysis of the main differences between the new Code and the current one.  I will also analyze the consequences of these changes for the not-for-profit sector in Brazil.

[1] These are the traditional chapters of a civil code in any civil law system.


New Program in Nonprofit Management and Law

“The Post Graduate Course in the Management of Nonprofit Organizations” is the first degree program of its kind in Central America. The program is a collaborative effort between the Centro Nicaragüense de Desarrollo (N.D.C.), the Learning Institute for Nonprofit Organizations of the University of Wisconsin, and the Universidad Americana in Managua.

Actualmente se realiza en Managua el 2° Curso de este interesante post grado, con la asistencia de un nutrido grupo de reconocidos profesionales y directivos de las ONG nicaragüenses.

Como señala Diane Jackson, del N.D.C., los resultados del primer curso, que culminó en febrero de 2001, “confirman que estamos en el camino correcto, ya que los participantes realmente tienen herramientas, conocimientos y oportunidad de compartir con colegas experiencias adaptadas a la realidad nicaragüense”.

Entre las asignaturas del post grado encontramos: Planificación estratégica de las ONG, La diversificación en la recaudación de fondos, Gerencia de mercado, Gerencia financiera y Marco legal. Y entre los seminarios: Excelencia y liderazgo, Formulación de propuestas exitosa, Gerencia de voluntariado y Alianzas estratégicas.

Esperamos que esta interesante y poco divulgada experiencia nicaragüense sirva de modelo para otros países de la región.

For further information on the course, please contact Diane Jackson at NDC.


Venezuela – New book on freedom of association

A new book on the freedom of association has been published in Venezuela.  Its title is The Right of Free Association in the New Venezulean Constitution, and its authors are Antonio L. Itriago M. and Miquel Angel Itriago M.  In describing the book, the authors suggest that the most common and dangerous violation of the free association right, especially in Latin America, has been the amount of discretion available to registration officials who recognize, approve, or grant juridical personality to NGOs, and authorize their operations.  Such discretion was abolished by the Venezuelan parliament more than one hundred and twenty (120) years ago.  It was, however, not very well‑known how advanced the right of free association had been in Venezuela in the previous century.  Now the new Constitution has ratified and reinforced that right, which is what motivated the Itriago brothers to write their book.

The authors discuss 28 different criticisms of the “administrative recognition” of the juridical personality of NGOs.  These criticisms can serve as an analytical tool for determining in what instances administrative discretion is inappropriate.  Of particular relevance are the topics considered in the book, including: positive and negative freedom of association, associations of children and of adolescents, foreign associations, associations of foreigners, international associations, political associations, the associations with political aims, associations of judges, unions of children and adolescents, the new procedure of constitution of the cooperatives, and  external financing to the NGOs, among others.