Name, Headquarters, and Purpose

Article 1 - The Brazilian Council of Purchasing Executives is a private, civil and not-for-profit association, with its headquarters and jurisdiction in the city of São Paulo, State of SP.

Sole Paragraph – The association shall last for an indefinite term and shall not discriminate in any way as far as race, color, sex, or religion is concerned.

Article 2 - The purposes of the Brazilian Council of Purchasing Executives are:

a) to promote the Purchasing area within Brazilian companies in order to add value and thereby seeking recognition for its strategic nature;

b) to promote an exchange among its members, thereby seeking to share knowledge and experiences that will leverage development of the area;

c) to consolidate the identity of the area;

d) to promote and encourage practice of the highest ethical principles in the area;

First Paragraph – The Brazilian Council of Purchasing Executives does not distribute to its associates, directors, employees or donors, any eventual gross or net operating surplus, dividend, bonus, interest or quota of its assets, which are generated as a result of the exercise of its activities, and uses them in their entirety for achieving its corporate objective.

Second Paragraph - In order to fulfill its objectives, the Brazilian Council of Purchasing Executives may, among other initiatives:

a) promote meetings, forums, working groups, courses and seminars to study themes that are relevant to the realities of the Brazilian and international scenarios, in depth;

b) produce, publish, edit, distribute and publicize books, magazines, videos, films, magnetic or optical disks and radio and television programs, among other things;

c) promote studies and research and prepare statistics on themes related to its activities

Article 3 - When developing its activities, the association will observe the principles of legality, impersonality, morality, publicity, economy and efficiency.

Article 4 - The association may adopt an Internal Regime, approved by the Board of Directors, intended to regulate and detail the provisions in these Bylaws.

Article 5 - In order to fulfill its purposes, the Brazilian Council of Purchasing Executives may organize itself into as many units as are necessary, in any part of Brazil’s territory, in order to achieve its mission and objectives.

The Associates and their Rights and Duties

Article 6 – The Brazilian Council of Purchasing Executives consist of associates, who share the objectives and principles of the entity. They are divided into the following categories:

a) Founding Associates: those who took part in the organization’s original meetings, the creation of the entity and were at the Founding Assembly, where they signed the respective minutes and committed to its purposes;

b) Full Associates: those who were elected directors, or indicated by a majority of the statutory directors, subject to referral to the Annual General Meeting;

c) Supporting Associates: individuals or corporate entities that identify with the association’s objectives and request to join, and who, having been approved by the Board of Directors, pay the corresponding contributions;

Sole Paragraph - The associates, regardless of their category, shall not be jointly or severally held liable for the liabilities of the association, nor may they speak in its name, unless expressly authorized so to do by the Board.

Article 7 – All associates are entitled to:

a) attend the Annual General Meeting and speak thereat.

Article 8 – The specific rights of founding or full associates are:

a) Founding associates are associates for life, may not be substituted and enjoy exemption from contributions in the following circumstances: on their retirement, when working definitively or temporarily outside the country, when exercising a function that is not compatible with a function related to the purchasing area, serious or chronic illness, unemployment, in the event that the company for which the associate is working does not want him or her to be an associate of the Council.

b) Full associates enjoy exemption from contributions only for the period in which they are exercising their mandate in the position of Director.

Article 9 – It is the duty of all associates to:

a) comply with the statutory and regulatory provisions;

b) accept Annual General Meeting and Board decisions;

c) ensure that the good name of the association is preserved and that its objectives are faithfully complied with;

d) strengthen and support all initiatives of the Brazilian Council of Purchasing Executives;

e) conduct themselves professionally in line with the highest ethical principles;

f) pay entity dues punctually.

Article 10 – The associate that fails to fulfill the provisions established in these Bylaws, or who practices any act contrary to them, may be excluded from the Association, if there is just cause so to do.

First Paragraph - The decision to exclude an associate from the association will be taken by a simple majority of the members of the Board;
Second Paragraph - The associate may challenge the Board’s decision to exclude him or her by appealing to the Annual General Meeting.

Association’s Organs

Article 11 - The association consists of the following organs:

a) Annual General Meeting;

b) Board of Directors;

c) Audit Committee;

d) Ethics and Social Responsibility Committee

Annual General Meeting

Article 12 - The Annual General Meeting is the highest ranking organ in the association and shall comprise founding and full associates, who enjoy full statutory rights.

Article 13 – The Annual General Meeting is solely responsible for:

a) electing, as well as removing from office, members of the Board, the Audit Committee and the Ethics and Social Responsibility Committee;

b) approving action plans, the annual budget and the association’s accounts;

c) amending these Bylaws;

d) deciding upon the winding up of the association.

Article 14 - The Annual General Meeting shall be ordinarily held once a year, in the first quarter, and extraordinarily, whenever necessary.

Article 15 - The Annual General Meeting shall be summoned by publication of a notice, placed in the association’s headquarters, by a letter sent to associates, or by any other efficient means, at least 30 days in advance.

Sole Paragraph - The Annual General Meeting shall be convened at the first summons, if there is an absolute majority of associates present and, at the second summons, a half-hour later, regardless of how many associates are present.

Article 16 – All resolutions of the Annual General Meeting shall be approved by a simple majority of votes of those associates present.

Sole Paragraph – Resolutions relating to statutory changes, the removal from office of any member of the Board, the Audit Committee or the Ethics Committee, and the winding up of the association, require the vote of two thirds of those present at the Meeting, specially summoned for such purpose. The Meeting may not decide at the first summons, unless there is an absolute majority of full associates present, or at any subsequent summons, if there are less than one third of full associates present.

Article 17 – Annual General Meetings shall be summoned by the Chairman of the Board and one fifth of the associates are entitled to promote it.

Board of Directors

Article 18 – The Board’s function and responsibility is to outline the political and technical directives of the association, decide on new projects and areas of activity and monitor the performance of ongoing projects.

Article 19 – The Board, which shall meet whenever necessary, and at the summons of its Chairman, shall comprise at least three directors, whose mandate will be for two years, but who are eligible for re-election to the same position, limited to 2 (two) consecutive mandates

Article 20 – The Board’s responsibility is to:

a) fulfill and enforce the provisions of these Bylaws;

b) establish strategies to accomplish the association’s objectives and the political guidelines, as laid down by the Annual General Meeting;

c) prepare and submit to the Annual General Meeting, extraordinarily, the action and marketing plans, working programs and annual activities of the Brazilian Council of Purchasing Executives;

d) coordinate the introduction of the policy of the Brazilian Council of Purchasing Executives in its respective areas of activity, in accordance with the entity’s action plan;

e) forward decisions of the Annual General Meeting, ensuring they are complied with in accordance with the specific attributions of each director;

f) manage the Brazilian Council of Purchasing Executives;

g) hire employees and the services of assessors, consultants and accountants, always with a view to the entity’s available funds;

h) authorize the requisition, disposal and encumbrance of assets of the Brazilian Council of Purchasing Executives;

i) define, collect and account for the contributions of associates;

j) render accounts for the last fiscal year, presenting them at the Annual General Meeting, along with the opinion of the Audit Committee;

k) supervise and coordinate the entity’s activities;

l) prepare and submit its management report to the Annual General Meeting;

m) make it possible to set up discussion groups, working groups, courses, meetings and seminars, as provided for in item “a”, second paragraph, of Article 2 of these Bylaws;

n) represent the Association vis-à-vis civil society, the State and international entities;

o) deliberate upon summoning Extraordinary General Meetings and make arrangements for them to take place;

p) deliberate upon points omitted from these Bylaws, subject to approval by the Annual General Meeting;

q) deliberate upon the admission of new associates and the possible removal of existing associates, submitting the decision to the Annual General Meeting;

r) indicate and exclude associates for non-compliance with these Bylaws, or for practicing acts that are contrary to them;

s) take actions and make arrangements relative to the voting process;

t) propose additions and changes for amending these Bylaws to the Annual General Meeting;

u) define people to represent the association vis-à-vis public agencies and the press;

v) immediately indicate, with the consensus of the founding members, without summoning an Annual General Meeting, the name of the substitute for those who have resigned their positions, or left during the exercise of their mandate.

Article 21 – The Chairman of the Board’s responsibility is to:

a) represent the association actively and passively, both in or out of court;

b) summon and preside over Annual General Meetings;

c) grant powers of attorney on behalf of the association, establishing their powers and periods of validity.

Audit Committee

Article 22 - The Audit Committee is the body responsible for inspecting the accounting and financial management of the association and shall consist of one (1) to three (3) members, elected by the Annual General Meeting, with a two (2) year term of office, effective as of their election; such members shall be entitled to re-election, limited to two (2) consecutive mandates.

Article 23 – It is the Audit Committee’s responsibility to:

a) systematically and permanently inspect the association’s activities and operations, by examining balance sheets and annual reports and their related ledgers and documents;

b) give an opinion on the balance sheets and the financial and accounting performance reports and on the asset operations performed, by issuing their opinions for appreciation by the Board and Annual General Meeting;

c) present to the Annual General Meeting any discrepancy detected in the association’s accounts;

d) request from the Board, at any time, documents supporting the financial and economic operations carried out by the association;

e) audit, or request an external audit, if and when deemed necessary;

f) give prior approval to any Board expenses not planned for in the annual budget;

g) approve the Board’s expense reports;

Sole Paragraph – In order to examine the accounts with a view to issuing an opinion to be submitted to Annual General Meeting, the Audit Committee may make use of the assistance of a legally authorized accountant, always observing the association’s available cash.

Ethics Commission

Article 24 – The Ethics and Social Responsibility Committee is the advisory body of the Brazilian Council of Purchasing Executives that also ensures the safekeeping and preservation of its principles and purposes.

Article 25 – The Ethics Committee shall consist of one (1) to three (3) members, elected by the Annual General Meeting, with a two (2) year term of office that shall be effective as of their election; they are entitled to re-election, limited to two (2) consecutive mandates.
Article 26 – It is the responsibility of the Ethics Committee to:

a) consider those acts of associates that may conflict with the principles of the Brazilian Council of Purchasing Executives;

b) ensure that associates are fully committed to the objectives of the Brazilian Council of Purchasing Executives;

c) ensure that the association is strengthened through the concrete actions of the associates is adopting the highest ethical principles;

d) carry out internal checks, if and whenever necessary.

The Sources of Funds

Article 27 – The association’s sources of funds are:

a) donations and gifts, legacies, inheritance, subsidies and any other support that it receives from public or private, national or international individuals or entities, as well as any income generated by these assets;

b) the contributions of its members, other income arising from services provided, from the sale of publications and income from assets;

c) income arising from contracts, covenants and partnerships, entered into with public or private individuals and entities;

d) financial earnings and other possible revenue.

The Assets

Article 28 - The association’s assets shall consist of movable and property assets, and vehicles.

Article 29 – If the association is wound up, the respective net assets shall be transferred to another related entity.

Accountability

Article 30 – The association’s shall be accountable at least as far as concerns observing:

a) basic accounting principles and Brazilian Accounting Rules;

b) disclosure of the entity’s activities’ report and financial statements, including SocialSecurity Service (INSS) and the Employment Security Fund (FGTS) debt clearance certificates, by any effective means, at the close of the fiscal year, making such reports and statements available for examination by members of the association;

c) the carrying out of investment audits of any funds, by independent auditors, if necessary.

General Provisions

Article 31 – The association shall adopt the necessary and sufficient business management practices in order to restrict any individual, or individuals working together, from obtaining personal benefit and advantage as a result of their participation in any decision process.

Article 32 – The association fully invests its earnings, funds and any eventual operational result in maintaining and developing its institutional objectives.

Article 33 - The association may reimburse members of its Board who incur expenses during the exercise of their functions, provided that:

a) they have been previously approved by the Audit Committee, and

b) are proven by means of receipts attached to the expense report, which must also be approved by the Audit Committee.

Article 34 – The association may remunerate those that provide specific services, provided the amounts charged for such services are in line with those practiced in the market in the region where the association exercises its activities.

Article 35 – Any cases omitted from these Bylaws shall be resolved by the Board and approved by the Annual General Meeting.

Article 36 – A court (Deliberative Ruling Body), comprising the founding associates, shall also be set up as a commission of superior instance, with the power to arbitrate upon and veto any decisions taken by the Board of Directors, in such a way as to preserve the strategic, moral and ethical principles of the Brazilian Council of Purchasing Executives.


São Paulo, April 13, 2004.

Fernando de Figueiredo Moura
João Paulo Lobo Monetti
Martha Christina Zangrandi Verçosa
Larte Farina
José Eduardo Bernardes de Barros
Attorney responsible Carlos Henrique Braga (OAB/SP n. 118.953)


Brazilian Purchasing Executive Committee (CBEC)
Code of Ethical Behavior

Introduction
The code of ethical behavior of the Brazilian Purchasing Executive Committee is not intended to replace the already existent policies and practices of each company; however, it should serve as a complement to whatever is omitted therein. In the event of conflict with CBEC’s principles and recommendations, or uncertainty regarding its interpretation, the associates shall consult the Ethics Commission of CBEC.

Once an inappropriate behavior by an associate is evidenced, the CBEC may apply the penalty of notification, censure, suspension, or dismissal from the staff board, depending on the severity of the action and only after the assured wide defense right is granted.


General Principle
CBEC’s associates shall set the pace and inspire the actions of their subordinates, by means of an impeccable behavior when dealing with the interests of the public or private entity he/she works for, so purchasing professionals can be respected in the business community and seen by the overall society as practitioners of the highest ethical standards.


Code of Procedures and Recommendations
Exercising their professional powers, CBEC’s associates shall observe the following code of ethical behavior and recommendations, to wit:

1. It is not enough to be ethical and honest, it is vital to look as such. Situations, actions, and communications that may be seen as inappropriate or anti-ethical must be avoided, since this may consequently damage the professional reputation of the purchasing in the same way as if they had indeed been inappropriate or anti-ethical.

2. The main task of the purchasing professional is to get the best cost-effectiveness with each cent spent in the purchasing of products and services. In order to do so, in addition to the unrestricted loyalty to the company he/she works for, the associate must ensure that personal interests and friendships shall never interfere with the purchasing decision.

3. Suppliers must be treated as allies in the search of the most advantageous solution for both parties. It is imperative to promote a professional, impartial, and mutually respectful environment in the relationship with the suppliers, avoiding harmful favoritisms and ensuring the equality of conditions in the competition for the best proposal for products and services. Although long-lasting relationships with suppliers are acceptable, conditions must be ensured to keep the competitiveness in purchasing.

4. Throughout the business relation, the exchange of symbolic-value gifts and souvenirs is common, as well as the demonstration of appreciation and hospitality, such as business lunches, invitation for seminars, fairs, different kinds of events, etc. However, CBEC’s associates must avoid presents, invitations and favors that exceed the inherent value of mere courtesy and that may jeopardize his/her neutral judgment of such supplier’s products and services.

5. As Purchasing executives, the associates must improve the status of the profession by the continuous acquisition of new knowledge and skills in order to have his/her competency acknowledged in the market. Similarly, the associate is further responsible for alluring and keeping the best talents in the Purchase area and providing training, development, and inspiration to the new professionals under his/her command, so the category may stand out in the business sector and be respected by the strategic contribution to the company’s results.

6. Fulfilling laws, regulations, and rules must be part of the creed of the purchasing professional when exercising responsible citizenship. Associates must obey the Brazilian laws, international agreements, internal policies and rules of the company they work for, and agreements entered into with suppliers, so the businesses may be executed in an environment of confidence and observance of the rules.

7. When in doubt about suspicious or not clearly legitimate situations and businesses, the purchasing professional must share his/her concern with or seek advice from one of his/her superiors, CBEC’s associate colleagues or the Ethics Commission.

8. The reciprocity in business that may limit the competitiveness and the purchasing professional behavior itself must be avoided. In case said reciprocity is the result of superior orders, this condition must be duly documented to evidence the interference of this factor in the purchasing process.

9. The associate must restrain from any business or professional activity external to the company he/she works for that may create a conflict of interests. Even when involving relatives, the associate must forward the situation to the company’s Board of Directors in order to obtain a statement that there is no such conflict.

10. Upon the best cost-effectiveness analysis in the purchase process, CBEC’s associates must take into account the practices of the suppliers regarding the preservation of natural resources, support to assistance programs to the handicapped or physically impaired and the promotion of development and education opportunities to underprivileged children, avoiding purchasing from those that are against the society’s interests.

11. CBEC is a politically neutral entity and, therefore, its associates must avoid getting involved or associating the CBEC’s name with political parties or party politics. Any activity in that sense must be forwarded to the CBEC’s Board of Directors in advance.

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