A new law was recently introduced that aims to provide a new regulatory framework for the Brazilian ports system. The legislation was initially introduced by way of Presidential Decree 595. After analysis by the legislative branch, the decree was submitted to presidential veto before being converted into law (Law 12.815/2013) on June 5 2013. However, several articles of the bill approved by Congress were vetoed by the president, including those concerning:
- the creation of an industry terminal that would handle only companies' own cargo;
- a prohibition against participating in terminal concession bidding for companies with an interest of more than 5% in shipping companies;
- intermediation by the labour management body in relation to the utilisation of complementary labour for the execution of operations where inland navigation vessels are used in ocean or coastal operations;
- the extension of contracts for customs stations and other public use customs-bonded terminals not installed in port or airport areas;
- the possibility to extend new leases and concession contracts for another 25 years without authorisation from the government, as long as the concessionaire or lessee (as applicable) makes the necessary investments for expansion and modernisation of port facilities;
- the obligation to use the port police for security and surveillance of the organised port;
- the requirement for labour management bodies to have a database of freelance workers at private ports, attesting to their professional qualification;
- the one-off mandatory extension of lease agreements entered into before Law 8.630/1993 was enacted, for a period not shorter than that set out in the respective contract;
- the possibility to extend contracts for the concession of public ports entered into by the federal government before February 25 1993, at the government's discretion and regardless of their term, for a one-time renewal of up to five years;
- the possibility to extend lease agreements currently in force that were entered into under Law 8.630/1993 only once and for the maximum period set under a contract, as long as the lessee makes the necessary investments for expansion and modernisation of port facilities; and
- the requirement that proof of exposure to hazardous agents be made by labour management bodies.
According to the justification given by the presidency, the vetoes to the legislative text aim to ensure that the main objectives of the new Ports Law are realised - namely, opening up the sector and bolstering the competitiveness of the Brazilian ports system, as well as eliminating any legal uncertainty in the interpretation of port legislation.
Government sources have stated that investment in infrastructure following the introduction of the new law is expected to reach R27 billion in 2013 alone, and R54.2 billion by 2017. A large portion of these funds is expected to come from the tendering of expired leases.
The presidential vetoes can still be overridden by Congress, which may therefore result in future changes to Brazilian port activities. Notwithstanding the above, on June 28 2013 the presidency enacted Decree 8.033/2013, which regulates the new Port Law (12.815/2013) and provides for the one-off extension of lease agreements and concession contracts for 25 years, and the assessment of public bids related to lease and concession agreements based on increased port traffic capacity, reduced prices and shortened time to load and unload goods from vessels.
Despite the uncertainty, the implementation of the changes brought by the new port law is keenly anticipated, with commentators expecting that private investment may improve ports' efficiency, leading to an increase in their handling capacity and a reduction in bureaucratic hurdles and costs for users.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.