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PROPOSED LAW NO. 114 /X

Exhibition of Motives

Decorations almost seven years of the term of the Decree-Law No. 558/99 of December 17,

it is considered necessary to make some changes to the legal regime of the sector

business of the State, taking into account the experience taken in the respective application

practice and the need to ensure harmony between that regime and the new Statute

of the Public Gestor, which the Government also intends to approve.

The changes to be introduced are found to be in the framework established by the Code of

Commercial Societies, in accordance with the revision operated by Decree-Law No. 76-

A/2006, of March 29, and also result from the increasing attention to the

good government practices and the internal organization of public companies.

With regard to, in particular, the organic structure, a new Section is intended to be adopted

IV, where the distinction is drawn between executive and non-executive administrators and whether

provides for the existence of an executive committee as well as commissions

specialized, auditing and evaluation, and still the approval by the various organs

of the respective internal regiments.

It is also considered necessary to ensure the effective definition of guidelines of

management for the business sector of the State, second three differentiated levels:

strategic guidelines for the entire business sector of the State, fixed by the Council

of Ministers; general guidelines aimed at a given sector of activity, fixed

upon joint dispatch of the Minister of Finance and the Minister of the respective sector

of activity; and specific guidelines, company the company, fixed also through

joint dispatch or through the exercise of the shareholder function, depending on the

modality of public company concerned.

Finally, considering the need to ensure, also in this area, containment

of public spending and thoroughness in the management of available resources, it is intended to still

strengthen the mechanisms of financial control and special reporting duties of the

public companies.

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The self-governing bodies of the Autonomous Regions and the Association were heard

National of Portuguese Municipalities.

Thus:

Under the terms of the paragraph d) of Article 197 (1) of the Constitution, the Government presents to the

Assembly of the Republic the following proposal for a law:

Article 1.

Subject

Is the Government authorized to amend the legal regime of the state business sector,

set out in Decree-Law No. 558/99 of December 17.

Article 2.

Sense

The authorisation referred to in the previous article is granted in the sense of creating conditions for

improve the efficiency and effectiveness of the state's business sector, setting levels

various for the management guidelines, adapting the organic structure of the companies to the

demands for rigour and transparency and strengthening the mechanisms of control

financial and the special information duties of public companies.

Article 3.

Extension

The decree-law to be adopted under the authorisation conferred by this Law shall

establish:

a) A model of organic structure, where the distinction is consecration between

executive and non-executive trustees and if it provides for the existence of a

executive committee, as well as specialized, audit and technical commissions

evaluation, and still the approval by the various organs of the respective regiments

internal;

b) The definition of management guidelines, second three differential levels:

strategic guidelines for the entire business sector of the State, fixed by the

Council of Ministers; general guidelines aimed at a given sector of

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activity, fixed by joint dispatch of the Minister of Finance and the

minister of the respective sector of business; and specific guidelines, company a

company, fixed also through joint dispatch or through the exercise

of the shareholder function, depending on the modality of public enterprise in question;

c) The strengthening of the mechanisms for financial control and special duties of

information from public companies, specifically:

i. The presentation by the public companies of investment plans

annual and multiannual and their sources of funding;

ii. The identification of the elements that must appear in the annual reports

of the public companies;

iii. The obligation of the annual publication in Journal of the Republic from

information relating to the administrators of each public company;

iv. The need for prior authorization for the assumption of

responsibilities that exceed in accumulated terms 30% of the capital

of the public companies and are not provided for in the respective

budget or investment plan.

d) The need for prior permission from the Minister of Finance and the Minister

responsible for the business sector for the changes in corporate statutes

public in a society-based manner that are carried out under the terms of the commercial law;

e) The adjustments that show necessary for the harmonisation and coherence of

scheme, arising from the changes provided for in the previous paragraphs, providing for

that the amendments to be made to the Decree-Law No. 558/99 of December 17,

prevail over the statutes of the public companies which, the deadline of

six months, have not been reviewed and adapted and show themselves contrary to the

referred to changes.

Article 4.

Duration

The authorisation granted by this Law shall be for the duration of 180 days.

Seen and approved in Council of Ministers of November 16, 2006.

The Prime Minister

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The Minister of the Presidency

The Minister of Parliamentary Affairs

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Decorations almost seven years of the term of the Decree-Law No. 558/99 of December 17,

considered it is now necessary to make some changes to the legal regime of the

business sector of the State, taking into account the experience taken in the respective

practical application and the need to ensure harmony between that regime and the new

Status of the Public Gestor, also approved by the Government on this occasion.

The changes introduced are also found in the framework established by the Code of

Commercial Societies, in accordance with the revision operated by Decree-Law No. 76-

A/2006, of March 29, and denote growing attention to good practices

of government and the internal organisation of public companies.

As regards, in particular, the organic structure, a Section IV is added, where

enshrines the distinction between executive and non-executive administrators and provides for

existence of an executive committee, as well as specialized commissions, of

audit and evaluation, and still the approval by the various organs of the respective

internal regiments. Considering, however, the great diversity of the companies that

make up the business sector of the state, the mandatory implementation of this structure

of management becomes dependent on joint decision of the Minister of Finance and the Minister

responsible for the sector of activity concerned.

With the present decree-law is also intended to ensure the effective definition of

management guidelines for the business sector of the State, highlighting the role it

it is up to the dynamisation of economic activity and to the satisfaction of public needs

or with a public interest and also with a view to a more rational, effective and

transparent.

Within this framework, three levels of management guidelines are planned: strategic guidelines

for the entire business sector of the State, fixed by the Council of Ministers;

general guidelines aimed at a given sector of activity, fixed by

joint dispatch of the Minister of Finance and the Minister of the respective sector of

activity; and specific guidelines, company the company, fixed also through

joint dispatch or through the exercise of the shareholder function, depending on the

modality of public company concerned. The observance of these guidelines will be after

considered in the performance evaluation of public managers, in the terms of the

the respective Statute.

Finally, considering the need to ensure, also in this area, containment

of public spending and thoroughness in the management of available resources, strengthen the

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financial control mechanisms and the special information duties of companies

public.

Thus:

In the use of the legislative authorization granted by the Law No [...], and in accordance with the terms of the b)

of Article 198 (1) of the Constitution, the Government decrees the following:

Article 1.

Amendment to Decree-Law No 558/99 of December 17

Articles 4, 6, 10, 12, 13, 26, 31, 32, 35, 35, and 37, 35, 35 and 37 of the Decree-

Law No 558/99 of December 17 shall be replaced by the following:

" Article 4.

[...]

The activity of public enterprises and the business sector of the State shall

be guided in the direction of achieving appropriate levels of satisfaction of the

needs of the collectivity, as well as develop second

demanding parameters of quality, economy, efficiency and effectiveness,

contributing equally to the economic and financial balance of the

set of the public sector.

Article 6.

[...]

1-[...].

2-Without prejudice to the provisions of the following number, the integration of companies

participations in the business sector of the State applies only to the respective

public participation, specifically with regard to its registration and

control, as well as the exercise of the rights of shareholder, the content of which

shall take into consideration the principles arising from the present decree-law

and too much applicable legislation.

3-The members of the administration bodies of the participating companies

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designated or proposed by the State, directly or through the

companies referred to in Article 10 (3), shall be subject to the scheme

legal applicable to public managers, under the terms of their respective Statute.

Article 10.

[...]

1-The rights of the State as a shareholder are exercised through the

Directorate General of the Treasury, under the direction of the Minister of Finance, who

may delegate, in accordance with the guidelines laid down in the article

next and by prior coordination with the responsible ministers

by the sector.

2-[...].

3-The rights referred to in the preceding paragraphs may be exercised

indirectly, through exclusively public capitals.

4-The entities responsible for the exercise of the shareholder function, in the

terms of this article, they shall be represented in the organ of

administration of public companies, through a non-executive member,

or, in case the management structure of the company does not provide for the existence of these

members, in the respective supervisory body.

Article 11.

Guidelines for management

1-With a view to the definition of the exercise of the management of public companies, they are

issued strategic guidelines aimed at the whole sector

business of the state, through resolution of the Council of Ministers.

2-With the same purpose, the following may still be issued

guidelines:

a) General guidelines, defined by means of joint dispatch of the

Minister of Finance and Minister responsible for the sector and

intended for a set of public companies in the same sector of

activity;

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b) Specific guidelines, defined through joint dispatch of the

Minister of Finance and Minister responsible for the sector or of

shareholder deliberation, depending on whether it is a public entity

business or society, respectively, and intended

individually to a public company.

3-The guidelines provided in the previous figures are reflected in the

deliberations to be taken at a general meeting by the public representatives or,

dealing with business public entities, in preparation and approval

of the respective strategic plans and activities, as well as in the

management contracts to be concluded with public managers, under the law.

4-General and specific guidelines may involve quantified targets

and contemplate the conclusion of contracts between the State and the companies

public, as well as set parameters or guidelines for the

determination of the remuneration of public managers.

5-Compete to the Minister of Finance and the minister responsible for the sector,

that they may delegate, directly or through the companies provided for in the n.

3 of the previous article, the verification of compliance with the guidelines provided for

in paragraphs 1 and 2, and may issue recommendations for their pursuit.

6-A verification of compliance with those guidelines is taken into account in the

performance evaluation of public managers, under the law.

7-The provisions of the preceding paragraphs shall be without prejudice to the specification in

each diploma constitutive of public company of the remaining powers of guardial and

oversight that come to be established.

Article 12.

[...]

1-Public companies are subject to financial control that

comprises, in particular, the analysis of sustainability and the evaluation of the

legality, economy, efficiency and effectiveness of its management.

2-[...].

3-[...].

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Article 13.

Special duties of information and control

1-Without prejudice to the provisions of the commercial law as to the provision of

information to shareholders, should the public companies provide the

Minister of Finance and the Minister responsible for the respective sector,

directly or through the societies laid down in Article 10 (3), the

following elements, aiming for their monitoring and control:

a) [...];

b) [...];

c) Annual and multi-annual investment plans and their sources of

funding;

d) [ Previous paragraph (c) ];

e) Quarterly budget implementation reports, accompanied by the

reports of the supervisory body, where they are chargable;

f) [ Previous point (e) ].

2-The indebtedness or assumption of responsibilities of a similar nature

out of the balance sheet, the medium-long term, or in the short term, if they exceed in

accrued terms 30% of the capital and are not foreseen in the

respective budget or plan of investments, are subject to

authorization of the Minister of Finance or the general meeting, depending on whether

treat corporate or company public entity, respectively,

having on the basis proposed basis of the management body of the respective public company.

3-Information covered by paragraph 1 is provided by the companies

public in the conditions that come to be established by dispatching the

Minister of Finance.

4-Societies participated by the capital companies exclusively

public referred to in Article 10 (3) refers through these the

information referred to in paragraph 1 of this article.

Article 15.

Public managers

The members of the governing bodies of public companies,

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regardless of their respective legal form, they become subject to the Statute

of the Public Gestor.

Article 26.

[...]

1-The business public entities have a capital, designated " capital

statuary ", held by the State and intended to respond to the respective

permanent needs.

2-[...].

3-A remuneration of the statutory capital is carried out in accordance with the

scheme provided for the distribution of the profits of the financial year in the societies

anonymous.

Article 29.

[...]

1-[...].

2-[...]:

a) The approval of activities and investment plans, budgets

and accounts, as well as appropriations for capital, subsidies and

compensatory damages;

b) [...];

c) [...].

Article 31.

[...]

1-The projects of the activities plan, the annual budget and the plans

of annual and multi-annual investment and their sources of financing

are drawn up with respect for the macro-economic assumptions, by the

management guidelines provided for in Article 11 and by the guidelines set out

by the Government, as well as, where appropriate, by management contracts or

by contracts-program, and must be remitted for approval, up to 30 of

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November of the previous year, to the Minister of Finance and the Minister

responsible for the respective sector of activity.

2-In special cases, it may the deadline specified in the preceding paragraph be

anticipated through joint dispatch of the Minister of Finance and the

minister responsible for the sector of activity.

Article 32.

[...]

1-Business public entities must draw up, with reference to 31

of December of the previous year, the reporting documents,

referring them to the Inspectorate General of Finance and the Directorate General of the

Treasury, on the deadline in which in the public limited companies is to proceed to

provision of those documents to shareholders.

2-The documents referred to in the preceding paragraph are approved by the

Minister of Finance and the Minister responsible for the sector of activity

of each company.

Article 35.

Amendment of the Statutes

1-When the statutes of public companies are approved or amended

by piece of legislation, should the same be republished in annex to the

referred to as a legislative act, without prejudice to being able to be the subject of later

changes to the applicable legal terms.

2-A amendment of statutes of public companies in a society-shaped manner may

be carried out under the terms of the commercial law, lacking prior authorization

upon joint dispatch of the Minister of Finance and the Minister

responsible for the sector of activity.

Article 37.

Constitution of companies and acquisition or disposal of parts of capital

1-Without prejudice to the provisions of special legislation, the participation of the

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State or other state public entities, as well as companies

public, in the constitution of companies and in the acquisition or alienation of parts

of capital shall be subject to the authorization of the Minister of Finance, except in the

acquisitions that arise from dation in fulfillment, donation, resignation or

abandonment.

2-For the purposes of the provisions of the preceding paragraph, the application for permission

must be accompanied by a demonstrative study of the interest and

feasibility of the intended operation.

3-Failure to comply with the provisions of paragraph 1 determines the nullity of the business

legal in question. "

Article 2.

Addition to the Decree-Law No. 558/99, of December 17

They are adjourned to Decree-Law No. 558/99 of December 17, Articles 13-and 13-B,

as well as Section IV of Chapter I, containing Articles 18 to 18.-G, with the

following wording:

" Article 13.

Reports

The annual reports of the companies, in addition to the elements that characterize the

respective economic and financial situations, contain:

a ) The management guidelines laid down under Article 11 that are

applicable to the company concerned;

b ) The structure of boards of directors and their committees

specialized;

c ) The identity, the main curricular elements and the functions

exerted by each administrator;

d ) Where appropriate, the duties exerted by any

administrator in another company;

and ) The selection procedures of independent administrators, when

exist;

f ) Information on the mode and conditions of compliance, in each

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exercise, of functions related to the management of services of

general interest, whenever this one finds itself committed to certain

Undertakings, pursuant to Articles 19 to 22;

g ) Information on the effective exercise of powers of authority by

part of companies that are holders of that kind of powers, in the

terms provided for in Article 14;

h ) The indication of the executive and non-executive administrators or,

being a case of this, that of the executive administrators and members of the

general and supervisory board;

i ) The indication of the number of meetings of the board of directors with

succinct reference to the versed subjects;

j ) The indication of the persons and entities in charge of auditing

external;

l ) The amounts of the remuneration of the administrators and the way in which

are determined, including all remunerative add-ons of

any species, the social security schemes as well as the value

global of charges relating to each administrator for the company

in each exercise;

m ) The reports of the non-executive administrators on the performance

of the executive administrators;

n ) The external audit reports.

Article 13-B

Obligation of information

1-The governing bodies of public companies give to know annually,

on notice to be published in the 2 th grade of the Journal of the Republic , the following

information, without prejudice to, by the porterie of the Minister of Finance, if

determine the conditions of its supplementary disclosure:

a ) The structure of its boards of directors and the general council and

of supervision, when it exists;

b ) The identity of the administrators and the members of the general council and

of supervision, when it exists;

c ) The selection procedures of independent administrators, when

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exist, and, being the case, of the members of the general council and

supervision;

d ) The main curricular elements and the qualifications of the

administrators;

and ) When it is the case, the posts occupied by the administrators nother

company;

f ) The competence, functions and mode of operation of all the

specialized commissions within the board of directors and,

being a case of this, of the general and supervisory board;

g ) The total, fixed and variable remunerations, earned by each of the

administrators, in each year, as well as earned remunerations

by each member of the supervisory body;

h ) Other elements that are set in resolution of the Council of

Ministers.

2-The conditions for publication of the notice referred to in the preceding paragraph are

object of dispatch of the member of the Government responsible for the edition of the

Journal of the Republic and the Minister of Finance.

Section IV

Structures of management

Article 18-The

Management structures of public companies

Without prejudice to the provisions of the Code of Commercial Societies, it may be

determined by the Minister of Finance and the minister of the respective sector

of activity the adoption of the constant management structures of the articles

following, taking particular account of the size of public companies and the

complexity of the respective management.

Article 18-B

Holders of executive and non-executive management bodies

1-Without prejudice to the provisions of paragraph 3, the board of directors

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comprises executive and non-executive administrators, these being in

higher number than those.

2-The non-executive administrators, or some from among them, integrate

an audit committee.

3-The board of directors can integrate exclusively

executive administrators being, in that case, their activity

accompanied by a general and supervisory board.

Article 18-C

Executive Commission

1-Executive directors constitute the executive board.

2-Compete to the executive board to ensure the day-to-day management of the

company, as well as exercise the functions that the board of directors

in it delight.

Article 18-D

Specialized commissions

1-The non-executive administrators assigned to the commission of

audit appoints among themselves their president.

2-The non-executive administrators designate among themselves a commission of

evaluation.

Article 18-And

Audit committee

1-Compete to the audit committee:

a) Choose independent and qualified external auditors, negotiate the

respective remunerations and ensure that they are afforded

within the company the conditions appropriate to the provision of its

services;

b) Define the scope and extent of internal and external audits;

c) Approve the plans, programmes and audit manuals;

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d) To ensure the maintenance of the independence of external auditors;

e) Appreciate the reports of the external auditors;

f) Evaluate internal and risk control systems;

g) Communicate to the board of directors and to the general meeting the

results of the audit.

2-In the event of the existence of a general and supervisory board, this

appoints, from among its members, an audit committee aimed at the

exercise of the powers referred to in the preceding paragraph.

Article 18 -F

Commission of evaluation

1-Compete to the evaluation committee to submit a report annually

circumstantial assessment of the degree and conditions of compliance, in

each exercise, of the management guidelines set out in the terms of the law.

2-In the event of the existence of a general and supervisory board, the

respective members designate among themselves an evaluation commission, to which

applies, with due adaptations, the scheme provided for in the preceding paragraph.

Article 18-G

Regiments

1-The board of directors prepares and approves a regiment, of which

are listed, specifically:

a ) The tasks or the pelgoles assigned to each administrator;

b ) The committees you understand to create, in addition to the audit committees

and of evaluation, and the respective competences;

c ) The periodicity and rules relating to meetings;

d ) The way to give publicity to the deliberations.

2-The general and supervisory board, when it exists, also approves a

regiment, the content of which, with due adaptations, should integrate the

elements referred to in the previous number.

3-A audit committee and the evaluation commission, integrated by

non-executive trustees or by members of the general council and

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supervision, when this exists, they also approve of their regiments. "

Article 3.

Approval of resolution

Within the maximum period of three months after the beginning of the present decree-law, the

Council of Ministers approves the resolution laid down in Article 11 (1) of the Decree-

Law No 558/99 of December 17, as amended by this decree-law.

Article 4.

Amendment of statutes

1-The statutes of public companies that contravene the provisions of the Decree-Law

n ° 558/99 of December 17, as amended by this decree-law, shall

be reviewed and adapted in compliance with the same, within the maximum term of six

months after the start of the present decree-law.

2-The provisions of the Decree-Law No. 558/99 of December 17, with the wording given

by the present decree-law, it prevails on the statutes of the entities referred to in the number

previous that, the deadline mentioned therein, have not been reviewed and adapted.

Article 5.

Repeal

The Decrees-Leis No 75-A/77 of February 28, paragraph 397/78, 15 of 15 are repealed.

December, and paragraph 300/80, of August 16.

Article 6.

Republication

It is republished, in annex, which forms an integral part of the present decree-law, the Decree-Law

n. 558/99, of December 17.

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Article 7.

Entry into force

This decree-law shall come into force within 30 days of the respective decree

publication.

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ANNEX

(As referred to in Article 6)

Republication of the Decree-Law No. 558/99 of December 17

CHAPTER I

General provisions

SECTION I

State business sector and public companies

Article 1.

Subject

1-The present diploma is for the purpose of establishing the scheme of the business sector of the

State, including the general bases of the status of public enterprises of the State.

2-The scheme provided for in this diploma shall apply still to the companies held, direct

or indirectly, by all state public entities.

Article 2.

Business sector of the State

1-The business sector of the State integrates public companies, in the terms of the article

3., and the participating companies.

2-Participated companies are the business organizations that have a

permanent participation of the State or any other state public entities,

of an administrative or business character, in a direct or indirect way, provided that the

set of the public shareholdings does not originate any of the situations provided for in paragraph 1

of Article 3 para.

3-Consider permanent stakes those that do not have objectives

exclusively financial, without any intention to influence the orientation or the

management of the company by the participating entities, provided that the respective

title does not reach a duration, continuous or interpolated, greater than one year.

4-Presume-if the permanent nature of the social participations representative of more

of 10% of the social capital of the participating entity, with the exception of those that are

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held by companies in the financial sector.

Article 3.

Public companies

1-Public companies are considered to be companies constituted under the law

commercial, in which the State or other state public entities may exercise,

either isolated or jointly, in a direct or indirect way, a dominant influence on

virtue of some of the following circumstances:

a) Detention of the majority of the capital or voting rights;

b) Right to designate or to remove the majority of the members of the organs of

administration. or of supervision.

2-Are also public companies the entities with business nature regulated in the

chapter III.

Article 4.

Mission of public companies and the business sector of the State

The activity of public companies and the business sector of the State should orient themselves

towards the achievement of appropriate levels of satisfaction of the needs of the

collectivity, as well as develop second demanding parameters of quality,

economy, efficiency and effectiveness, contributing equally to the economic balance and

financial from the public sector pool.

Article 5.

Regional and municipal business sectors

In addition to the State, they only have own business sectors the Regions

Autonomous, the municipalities and their associations, in the terms of special legislation,

in respect of which the present diploma has a supplement nature.

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Article 6.

Framework of the participating companies

1-Without prejudice to the autonomies assigned to state public entities, of character

administrative or business, holder of shareholdings, or recognized to the Regions

Autonomas, the municipalities and their associations, a company participated by various

public entities integrates in the business sector of the entity which, on the whole of

participations in the public sector, be holder of the largest relative share.

2-Without prejudice to the provisions of the following number, the integration of companies

participations in the business sector of the State applies only to the respective participation

public, specifically with regard to their registration and control, as well as to the

exercise of the rights of shareholder, the contents of which shall take into consideration the

principles arising from the present decree-law and other applicable legislation.

3-The members of the governing bodies of the designated participating companies or

proposed by the State, directly or through the companies referred to in paragraph 3 of the

article 10, shall be subject to the legal regime applicable to public managers, in the terms

of the respective Statute.

SECTION II

Applicable law

Article 7.

General legal regime

1-Without prejudice to the provisions of the legislation applicable to regional public undertakings,

intermunicipal and municipal, public enterprises are governed by private law, unless

in what is willing in the present diploma and in the diplomas that have passed the

respective statutes.

2-Public companies are subject to direct and indirect taxation, in the terms

general.

3-Participated companies are fully subject to the commercial legal regime,

labour and tax, or of another nature, applicable to companies whose capital and control is

exclusively private.

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Article 8.

Subjection to the rules of competition

1-Public companies are subject to the general rules of competition, national and

community.

2-Of relations between public companies and the State or other public servants not

may result in situations which, in any form, are likely to prevent,

distort or restrict competition in the whole or in part of the national territory.

3-Public companies are governed by the principle of financial transparency and their

accounting must be arranged in such a way as to allow the identification of any

financial flows between them and the state or other public ones, as well as ensuring the

compliance with national and community requirements on competition and

public aid.

Article 9.

Derogations

The provisions of the n. the

1 and 2 of the preceding Article shall be without prejudice to derogatory regimes

special, duly justified, whenever the application of the general standards of

competition is likely to frustrate, in law or in fact, the missions entrusted to the

public companies tasked with the management of services of general economic interest or

that support the management of the state's heritage.

SECTION III

Other provisions

Article 10.

Shareholder function of the State

1-The rights of the State as a shareholder are exercised through the Directorate General of the

Treasury, under the direction of the Minister of Finance, who can delegate, in compliance

with the guidelines provided for in the following article and by prior coordination with the

ministers responsible for the sector.

2-The rights of other state public entities as a shareholder are exercisable

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by the respective governing bodies with respect to the guidelines arising from the

oversight and the tutelage that about them are exercised.

3-The rights referred to in the preceding paragraphs may be exercised indirectly,

through exclusively public capital societies.

4-The entities responsible for the exercise of the shareholder function, pursuant to the

present article, shall be represented in the business administration body of

public, through a non-executive member, or, in case the management structure of the

company does not provide for the existence of these members, in the respective supervisory body.

Article 11.

Guidelines for management

1-With a view to the definition of the exercise of the management of public companies, they are issued

strategic guidelines aimed at the overall business sector of the State,

by resolution of the Council of Ministers.

2-With the same purpose, the following guidelines may still be issued:

a) General guidelines, defined through joint dispatch of the Minister of

Finance and the Minister responsible for the sector and aimed at a set of

public companies in the same sector of activity;

b) Specific guidelines, defined through joint dispatch of the Minister

of Finance and the minister responsible for the sector or deliberation

shareholder, depending on whether it is a corporate or a corporate public entity,

respectively, and intended individually for a public company.

3-The guidelines provided for in the preceding paragraphs are reflected in the deliberations to

take in general assembly by the public representatives or, dealing with entities

business public, in the preparation and approval of the respective strategic plans and

of activities, as well as in the management contracts to be concluded with public managers,

in the terms of the law.

4-General and specific guidelines may involve quantified targets and

contemplate the conclusion of contracts between the state and public companies, as well as

set parameters or guidelines for the determination of the remuneration of the

public managers.

5-Compete to the Minister of Finance and the minister responsible for the sector, who can

delegating, directly or through the companies provided for in paragraph 3 of the previous article, to

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verification of compliance with the guidelines provided for in the n. the

1 and 2, and may issue

recommendations for their pursuit.

6-A verification of compliance with those guidelines is taken into account in the assessment of

performance of public managers, in the terms of the law.

7-The provisions of the preceding paragraphs shall be without prejudice to the specification in each diploma

public company constitutive of the remaining powers of guardian and superintendence that

come to be established.

Article 12.

Financial control

1-Public companies are subject to financial control that comprises,

specifically, the analysis of sustainability and the evaluation of legality, economics,

efficiency and effectiveness of its management.

2-Without prejudice to the powers conferred by the Act to the Court of Auditors, the control

financial of the public companies compete with the Inspectorate General of Finance.

3-Public companies shall adopt appropriate internal control procedures to

guarantee the reliability of the accounts and too much financial information, as well as the

articulation with the entities referred to in the preceding paragraph.

Article 13.

Special duties of information and control

1-Without prejudice to the provisions of the commercial law as to the provision of information to the

shareholders, should the public companies provide the Minister of Finance and the Minister with

responsible for the respective sector, directly or through the societies provided for in the

n Article 10 (3), the following elements, aiming at their monitoring and control:

a) Projects of the annual and multi-annual activity plans;

b) Projects of annual budgets, including estimation of financial operations

with the State;

c) Annual and multi-annual investment plans and their sources of

funding;

d) Annual reporting documents;

e) Quarterly budget implementation reports, accompanied by the reports of the

25

supervisory body, where they are chargable;

f) Any other information and documents requested for the follow-up

of the situation of the company and its activity, with a view to, in particular, the

ensure the sound management of public funds and the evolution of their situation

economic-financial.

2-Indebtedness or assumption of responsibilities of a similar nature outside the

swing, medium-long term, or in the short term, if they exceed in accumulated terms

30% of the capital and are not provided for in the respective budget or plan of

investments, are subject to authorization from the Minister of Finance or the assembly

general, depending on whether it is a corporate or a public entity,

respectively, having on the basis of the proposed basis of the respective company's management body

public.

3-Information covered by paragraph 1 is provided by the public companies in the

conditions to be laid down by dispatch from the Minister of Finance.

4-Societies participated by the uniquely public capitals to

referred to in Article 10 (3) refers through these to the information referred to in

n. 1 of this article.

Article 13-The

Reports

1-The annual reports of the companies, in addition to the elements that characterize the

respective economic and financial situations, contain:

a) The management guidelines laid down under Article 11 that are applicable to the

company concerned;

b) The structure of the boards of directors and their specialized committees;

c) The identity, the main curricular elements and the functions exerted by

each administrator;

d) Where applicable, the duties exercised by any administrator in another

company;

e) The selection procedures of independent administrators, when they exist;

f) Information on the mode and conditions of compliance, in each exercise, of

functions related to the management of services of general interest, whenever

this one finds itself committed to certain companies, pursuant to Articles 19.

26

at 22.

g) Information on the effective exercise of authority powers by the

companies that are holders of that kind of powers, in the terms provided for in the

article 14;

h) The indication of the executive and non-executive administrators or, being the case

of that, that of the executive administrators and members of the general council and of

supervision;

i) The indication of the number of meetings of the board of directors with

succinct reference to the versed subjects;

j) The indication of the persons and entities in charge of external auditing;

l) The amounts of the remuneration of the administrators and the way they are

determined, including all remunerative complements of any

species, social security regimes, as well as the overall value of charges

relating to each administrator for the company in each exercise;

m) The reports of the non-executive administrators on the performance of the

executive administrators;

n) The external audit reports.

Article 13-B

Obligation of information

1-The governing bodies of public companies give to know each other annually, on notice to

publish in the 2 th series of the Journal of the Republic , the following information, without prejudice to,

by porterie of the Minister of Finance, if it determines the conditions of its disclosure

complement:

a) The structure of its boards of directors and of the general council and

supervision, when it exists;

b) The identity of the administrators and the members of the general council and of

supervision, when it exists;

c) The selection procedures of independent administrators, when they exist, and,

being a case of this, of the members of the general and supervisory board;

d) The main curricular elements and the qualifications of the administrators;

e) When it is the case, the posts occupied by the administrators in the other company;

f) The competence, functions and mode of operation of all committees

27

specialized within the board of directors and, being the case, of the

general and supervisory board;

g) The total, fixed and variable remunerations, earned by each of the

administrators, in each year, as well as the earned remunerations for each

member of the supervisory body;

h) Other elements that are set out in a resolution of the Council of Ministers.

2-The conditions for publication of the notice referred to in the preceding paragraph shall be the subject of

dispatch of the member of the Government responsible for editing the Journal of the Republic and the

Minister of Finance.

Article 14.

Powers of authority

1-Powers public companies exercise powers and prerogatives of authority that

enjoys the state, specifically as to:

a) Expropriation by public utility;

b) The use, protection and management of infrastructure allocated to the public service;

c) Licensing and granting, pursuant to the legislation applicable to the use of the

public domain, occupation or the exercise of any activity in the

land, buildings and other infrastructure that are affected by it.

2-Special powers will be assigned by legal diploma, in exceptional situations

and to the extent strictly necessary for the pursuit of the public interest, or constaron

of concession contract.

Article 15.

Public managers

The members of the governing bodies of public companies, regardless of

their respective legal form, they become subject to the Statute of the Public Gestor.

Article 16.

Status of staff

1-The status of the personnel of public companies is that of the individual contract scheme of

28

work.

2-A The subject matter for collective contracting is governed by the general law.

Article 17.

Commissions of service

1-Can exercise specific character functions in public companies, in committee

of service, state officials and public institutes, local authorities, well

as workers of any public companies, which will keep all rights

inherent in their home framework, including the benefits of retirement or retirement and

survival, considering the whole period of the commission as service provided

in that frame.

2-Workers of public companies may exercise, in commission of service,

functions in the State, public institutes, local authorities or in other companies

public, while maintaining all the rights inherent in their professional status in the company

of origin, considering the entire period in the commission as the service provided in the

source company.

3-The workers in service commission, in the terms of the previous numbers,

you will be able to opt for the maturity corresponding to your home frame or by the

corresponding to the functions they will play.

4-The salary and too many charges of the employees in the service commission will be from the

responsibility of the entity where they are found to be performing duties.

Article 18.

Competent courts

1-For the purposes of determination of the jurisdiction for the trial of disputes, including

contentious resources, relating to practiced acts and contracts concluded in the

exercise of the powers of authority referred to in Article 14, shall be the undertakings

public equated with administrative entities.

2-In the remaining disputes follow the general rules of determination of competence

material from the courts.

29

Section IV

Structures of management

Article 18-The

Management structures of public companies

Without prejudice to the provisions of the Code of Commercial Societies, it may be determined

by the Minister of Finance and the Minister of the respective sector of activity the adoption

of the management structures set out in the following articles, answering in particular to the

size and the complexity of the respective management.

Article 18-B

Holders of executive and non-executive management bodies

1-Without prejudice to the provisions of paragraph 3, the board of directors shall comprise

executive and non-executive administrators, these being in number higher than the

of those.

2-The non-executive administrators, or some from among them, integrate a commission

of auditing.

3-The board of directors can uniquely integrate administrators

executives being, in that case, their activity accompanied by a general council and

supervision.

Article 18-C

Executive Commission

1-Executive directors constitute the executive board.

2-Compete to the executive board to ensure the day-to-day management of the company, as well as

exercise the functions that the board of directors in it delight.

Article 18-D

Specialized commissions

1-The non-executive administrators assigned to the audit committee

30

nominate among themselves their president.

2-The non-executive trustees designate among themselves a commission of evaluation.

Article 18-And

Audit committee

1-Compete to the audit committee:

a) Choose independent and qualified external auditors, negotiate the

respective remunerations and ensure that they are provided within the

company the conditions appropriate to the provision of its services;

b) Define the scope and extent of internal and external audits;

c) Approve the plans, programmes and audit manuals;

d) To ensure the maintenance of the independence of external auditors;

e) Appreciate the reports of the external auditors;

f) Evaluate internal and risk control systems;

g) Communicate to the board of directors and to the general meeting the results of the

audit.

2-In the event of the existence of a general and supervisory board, this appoints, from among

its members, an audit committee aimed at the exercise of competences

referred to in the preceding paragraph.

Article 18-F

Commission of evaluation

1-Compete to the evaluation committee to submit a report annually

circumstantial assessment of the degree and conditions of compliance, in each

exercise, of the management guidelines set out in the terms of the law.

2-In the event of the existence of a general and supervisory board, the respective

members designate among themselves a commission of assessment, to which it applies, with due

adaptations, the scheme provided for in the preceding paragraph.

31

Article 18-G

Regiments

1-The board of directors prepares and approves a regiment, of which they are listed,

specifically:

a) The tasks or the pelgoles assigned to each administrator;

b) The committees you understand to create, in addition to audit and committee committees

evaluation, and the respective functions;

c) The periodicity and rules relating to meetings;

d) The way to give publicity to the deliberations.

2-The general and supervisory board, when it exists, also approves a regiment,

whose contents, with due adaptations, shall integrate the elements referred to in the

previous number.

3-A audit committee and the evaluation commission, integrated by administrators

not executives or by members of the general and supervisory board, when this exists,

they also approve of their regiments.

CHAPTER II

Public companies entrusted with the management of services of general economic interest

Article 19.

Notion

1-For the purposes of this diploma, companies in charge of management are considered

of services of general economic interest those whose activities should ensure the

universality and continuity of services provided, economic and social cohesion and

protection of consumers, without prejudice to the economic effectiveness and respect of the

principles of non-discrimination and transparency.

2-Saved when the law diversely disposes, the terms in which the management is assigned and

exercised constartion of concession contract.

32

Article 20.

Guiding principles

The public companies entrusted with the management of services of general economic interest

shall continue the missions entrusted to him in the sense, depending on the cases,

from:

a) Providing the services of general economic interest in the whole of the territory

national, without discrimination from rural and inland areas;

b) Promoting access of the generality of citizens, under financial conditions

balanced, to essential goods and services, by seeking, as far as possible,

that all users are entitled to identical and neutral treatment, without

any discrimination, either as to the functioning of the services, or

as to the fees or due hires, unless the general interest the

justifies;

c) Ensuring compliance with the requirements for the provision of services of character

universal with respect to economic activities whose access is found

legally vetted to private companies and other entities of the same nature;

d) Ensure the provision of services or the management of activities whose

profitability is not assured, in particular due to investments

necessary for the development of infrastructure or distribution networks or,

yet, due to the need to carry out activities demonstrably

loss-making;

e) To ensure the effectiveness of the management of public service networks, seeking,

specifically, that the production, transport and distribution, the construction of

infrastructure and the provision of the set of such services if they proceed in a manner

articulated, taking into attention the organizational modifications imposed by

technical or technological innovations;

f) Comply with specific obligations, related to safety, with the

continuity and quality of services and with the protection of the environment, owing

such obligations to be clearly defined, transparent, non-discriminatory and

susceptible to control.

33

Article 21.

Contracts with the State

1-For realization of the purposes provided for in the previous article may the State appeal

to the conclusion of contracts with the public companies entrusted with the management of services

of general economic interest, contemplating, in particular, the allocation of

compensatory damages to the extent strictly necessary for the pursuit of the

public interest.

2-These contracts will aim to ensure permanent adaptation to the evolution of

circumstances, including technical and technological, and the satisfaction of needs

collective, reconciling the economic effectiveness of operators with the maintenance of the

social cohesion and the fight against exclusion.

3-The contracts referred to in this Article, which involve the assumption of

obligations or financial commitments on the part of the State or other entities

public, they should provide for the respective quantification and validation, fit to the services

competent from the Ministry of Finance the issuance of prior opinion to its conclusion,

as well as the general monitoring of the implementation of its financial clauses.

4-The scheme for compensatory damages appears in a special decree-law.

Article 22.

Participation of users

1-The State will promote the development of forms of concertation with users

or representative organizations of these, as well as their participation in the definition of the

objectives of the public companies entrusted with the management of services of interest

general economic.

2-The right of participation of users in the definition of business objectives

public entrusted with the management of services of general economic interest will be regulated

by decree-law.

CHAPTER III

Business public entities

34

Article 23.

Scope of application

1-Register by the provisions of this Chapter and, secondarily, by the remaining

standards of this diploma the legal persons of public law, with a nature

business, created by the State and henceforth designated by " public entities

business ".

2-The provisions of the preceding paragraph shall apply to public undertakings to which the

article 1 of the Decree-Law No. 260/76 of April 8, existing at the date of entry into force

of the present diploma, which they go on to adopt the planned designation at the end of the

previous number.

Article 24.

Creation

1-Corporate public entities are set up by decree-law, which it will approve

also the respective statutes.

2-A The denomination of business public entities should integrate the expression

"Corporate Public Entity" or the initials " E. P. E. ".

Article 25.

Autonomy and legal capacity

1-Corporate public entities are endowed with administrative autonomy,

financial and patrimonial, not being subject to the standards of public accounting.

2-A The legal capacity of corporate public entities covers all rights

and obligations necessary or convenient to the pursuit of its object.

Article 26.

Capital

1-Corporate public entities have a capital, designated "statutory capital",

held by the State and intended to respond to their respective permanent needs.

2-The statutory capital may be increased or reduced in the terms set out in the

35

statutes.

3-A remuneration of the statutory capital is carried out in accordance with the envisaged scheme

for the distribution of the profits of the exercise in the public limited companies.

Article 27.

Organs

1-A The administration and the audit of business public entities shall

structure under the modalities and with the envisaged assignments for the societies

anonymous.

2-The administration and supervisory bodies have the generic skills provided for

in the commercial law, without prejudice to the provisions of this diploma.

3-Statutes may provide for the existence of other organs, deliberative or

advisory, defining the respective competences.

4-The statutes shall regulate, with observance of the applicable legal standards, the

competence and the mode of designation of the members of the organs to which the

previous numbers.

Article 28.

Commercial register

Business public entities are subject to the commercial register in the terms

general, with the adaptations that are necessary.

Article 29.

Tutela

1-A The economic and financial tutelage of business public entities is exercised by the

Minister of Finance and the Minister responsible for the sector of activity of each

company, without prejudice to the respective oversight power.

2-A tutela covers:

a) The approval of the activities and investment plans, budgets and accounts,

as well as appropriations for capital, subsidies and compensation

compensatory;

36

b) The approval of prices or tariffs to be practited by companies that exploit

services of general economic interest or to exercise the respective activity in

Exclusive scheme, save when its definition compeates with other entities

independent;

c) The remaining powers expressly referred to in the statutes.

Article 30.

Special management regime

1-In duly justified exceptional circumstances, they may the entities

public business to be subject to a special management scheme, by

determined that does not exceed two years, under conditions set upon resolution of the

Council of Ministers.

2-A The resolution expected in the preceding paragraph determines the automatic cessation of the

functions of the holders of the governing bodies in exercise.

Article 31.

Plan of activities and annual budget

1-The projects of the activities plan, the annual budget and the plans of

annual and multi-annual investment and their sources of funding are drawn up

with respect for the macro-economic assumptions, the management guidelines

provided for in Article 11 and by the guidelines set out by the Government, as well as, when

where appropriate, by management contracts or by contracts-program, and shall be

remitted for approval, until November 30 of the previous year, to the Minister of

Finance and the minister responsible for the respective sector of activity.

2-In special cases, may the time limit referred to in the preceding paragraph be anticipated through

of joint dispatch of the Minister of Finance and Minister responsible for the sector of

activity.

Article 32.

Provision of accounts

1-Business public entities must draw up, with reference to 31 of

37

December of the previous year, the accountability documents, referring them to the

Inspectorate-General of Finance and the Directorate General of the Treasury, in the time limits in which they are

anonymous companies whether to make the provision of those documents available to the

shareholders.

2-The documents referred to in the preceding paragraph are approved by the Minister of

Finance and by the minister responsible for the business sector of each company.

Article 33.

Processing, merger and division

The transformation of business public entities as well as their respective merger or

division operate, in each case, through decree-law and in the special terms in it

established.

Article 34.

Extinguishing

1-Can be determined by decree-law the extinction of corporate public entities,

as well as the subsequent liquidation process.

2-General rules on dissolution and liquidation of companies shall not apply, nor

those of the special processes of recovery and bankruptcy, save to the extent expressly

determined by the decree-law referred to in the preceding paragraph.

CHAPTER IV

Final and transitional provisions

Article 35.

Amendment of the Statutes

1-When the statutes of public companies are approved or amended by act

legislative, should the same be republished in the annex to the said legislative act,

without prejudice to be able to be the subject of subsequent amendments in the legal terms

applicable.

2-A amendment of statutes of public companies in a society-shaped way may be

38

carried out pursuant to the commercial law, lacking prior authorization by

joint dispatch of the Minister of Finance and the Minister responsible for the sector of

activity.

Article 36.

Extension to other entities

1-The rights of a shareholder of the State or other state public entities to which

refers to this diploma, in the societies in which, even jointly, not

detain dominant influence are exercised, respectively, by the Directorate General of the

Treasure or by the governing bodies of the titular entities.

2-The societies in which the State exerts significant influence, whether by

detention of shares representing more than 10% of the social capital, whether by detention of

special shareholder rights, are to present in the Directorate General of the Treasury a

information intended for shareholders, on the dates on which they are to be made available,

in the terms of the legislation applicable to commercial companies.

3-The rights referred to in the preceding paragraphs may be exercised, indirectly,

in the terms set out in Article 10 (3).

4-At private companies in charge of the management of services of economic interest

general, by force of concession or the assignment of special or exclusive rights, is

applicable the provisions of Articles 9, 12 and 13 and Chapter II of this diploma.

5-They may be subject to the scheme established in this diploma, in whole or in

part, with the exception of the constant of its Chapter III, the companies in which the State or

other public entities have special rights, provided that the respective

statutes thus presee it.

Article 37.

Constitution of companies and acquisition or disposal of parts of capital

1-Without prejudice to the provisions of special legislation, the participation of the State or of

other state public entities, as well as public companies, in the constitution

of companies and in the acquisition or disposal of parts of capital is subject to authorisation

of the Minister of Finance, except in the procurements arising from dation in

compliance, donation, renunciation or abandonment.

39

2-For the purposes of the provisions of the preceding paragraph, the application for permission shall be

accompanied by a demonstrative study of the interest and feasibility of the operation

intended.

3-Failure to comply with the provisions of paragraph 1 determines the nullity of the legal business in

cause.

Article 38.

Strategic guidelines and management contracts

1-On the occasion of the ordinary general assemblies held in the year 2000 will be

approved the first strategic guidelines referred to in Article 11.

2-During the year 2000 they will be celebrating with the managers contracts of management

involving quantified targets.

Article 39.

Status of public managers

Until the legislation provided for in Article 15 is passed, the regime of the

status of public managers, constant of Decree-Law No. 464/82 of December 9.

Article 40.

Repeal

1-It is repealed the Decree-Law No. 260/76 of April 8, with the amendments that were

introduced.

2-The constant remissions of any diplomas, legal or regulatory, to the

regime of the Decree-Law No. 260/76 is understood to be made for the provisions of Chapter III,

without prejudice to the application, where the case may be, of the remaining provisions laid down in the

present diploma.

Article 41.

Entry into force

This diploma shall come into force on the 1. day of the month subsequent to that of its publication.