The Brazilian Congress approved last Thursday, May 16th, the new regulatory landmark of exploitation of ports in Brazil, approving the legislative bill which converted the Provisional Presidential Decree(MP) no. 595 of December 6th, 2012 into law, and creates a new regulatory landmark for the Brazilian port system, revoking the Law no. 8630 of February 25th, 1993 (Ports Law).
The Provisional Presidential Decree´s processing started with the analysis of referred law by the Brazilian Congress Mixed Committee which approved the referred measure on April 17th, inserting several alterations in the measure, and finally transforming the Provisional Presidential Decree into a Conversion Bill (PLV) no. 9 of 2013.
The original Provisional Presidential Decree received 645 amendments, having several out of these amendments been incorporated into the PLV.
Among the alterations made in the Committee, stand out the following:
- The authorized party´s property whose authorization thereof be terminated will not be transferred to the Union.
- The Industry Terminal figure has been created only handling own cargo, which is waived from public call and selection process, provided that does not unduly interfere with the organized port;
- The concession of port facilities for companies holding ownership interest in shipping companies superior to 5% shall be prohibited.
- Lessee´s obligation to handle third party ´s cargo at private use terminals shall be under exceptional cases.
- Authorized and Concessionaires are contingent on ANTAQ disciplining the conditions of access of third parties to the port facilities
- New rules for definition of the organized port area have been established;
- The public services necessary for import and export must be centralized by the public administration in all organized ports. The port operations necessary for import and export must be made in shifts, including Saturdays, Sundays, and Holidays.
One of the most controversial themes addressed in the PLV concerns the extension of existing lease agreements.
The lease agreements entered into prior to the Law 8630 of February 25th, 1993, must be renewed for an additional single period, not inferior to the period stipulated in the respective agreement.
The concession contracts of public ports to private companies entered into by the Federal Government prior to February 25th, 1993, may, at the contract-letting agency´s exclusive discretion, independently of their term of effectiveness, be renewed only once for a period of up to five years.
The lease agreements currently in force entered into under the Law no. 8630 of 1993 containing an express provision of extension not yet made, may have their extension anticipated, at the contract-letting agency´s sole discretion, as long as the lessee undertakes the obligation of making investments, according to a plan established by him (lessee) and be approved by the contract-letting agency.
As regards to labour related aspects, there were no significant alterations in relation to the rules governing the port work in Brazil. The obligatoriness of using the Manpower Management Agency (OGMO) at Public Terminals will remain, being the private terminals authorized to freely hire their labor.
In general terms the text approved by the Committee was in consonance with the Federal Government ´s interests. However, the alterations brought to the rules of renewal of contracts and agreements entered into prior the Ports Law do not meet the Government´s interests.
The Provisional Presidential Decree needed to be approved both in the House of Representatives and Senate no later than May 16th, as should it be otherwise, it would lose its validity.
The vote in the House of Representatives Plenary Session was marked by intense debates. Several new amendments have been created, both due to the situation and due the opposing members, who considerably altered the government ´s original proposal. However, at the end of extensive House of Representatives Sessions, the Government´s interest prevailed and that managed to approve the bill with few alterations in relation to the text approved by the Mixed Committee. The bill was then forwarded to the Senate, which in a quick session approved the bill sent by the House of Representatives.
The legislative bill approved by the Congress was forwarded for President Dilma Rousseff´s sanction. There are expectations that the alterations that included the renewal of concession contracts be vetoed. The Congress, by its turn, may refuse the President´s vetoes.