In 2009 the National Federation of Port Workers filed a notice with the Federal Accounting Court alleging irregularities in the activities of private terminals located in organised port areas.

According to the federation, by handling a small proportion of their own cargo in comparison with third-party cargo, some terminals were acting more as public terminals. However, by remaining as private terminals, they were not subject to the conditions of operation imposed by the Ports Act (8.630/1993), which requires the use of manpower controlled by the Manpower Management Entity (and thus results in higher costs than the simple application of the regime set forth in the labour laws). The federation argued that by taking advantage of the more favourable conditions for the operation of private terminals, but still offering port services to third-party cargo, this created unfair competition when compared to public terminals.

In 2012 the Department of Inspection, Privatisation and Regulation (the court's technical unit) issued an opinion noting the irregularities in the authorisations granted to some private terminals, on account of the imbalance between the volumes of own cargo and third-party cargo handled. However, the court decided by seven votes to one not to follow the technical opinion. In its decision it noted that the new regulatory landmark for the exploration of ports and terminals, established by Provisional Presidential Decree 595, does not require that a terminal's own cargo prevail over third-party cargo. Furthermore, it provides a timeframe for contracts that existed before the decree was published to be brought into compliance.

For further information on this topic please contact Godofredo Mendes Vianna at Kincaid | Mendes Vianna Advogados by telephone (+55 21 2276 6200), fax (+55 21 2253 4259) or email (godofredo@kincaid.com.br).

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