PROVISIONAL MEASURE OF PORTS – LAST UPDATE
President Dilma Rousseff signed last June 5th the new Ports Law with ten (10) vetoes.
The biggest controversy is the different cost conditions that may occur between terminals, public ports and private ports. The ban on automatic renewal of contracts signed from 1993 is considered harmful by some and may postpone investments.
Below are described the main vetoes and its consequences:
a) Automatic renewal of contracts signed after 1993
Veto Reason – text pulled from the Federal Government the power to evaluate the convenience and opportunity of each extension, complicating management gains.
Consequence – there are 117 contracts from different companies after 1993 with possibility of extension. In this context, the Executive takes the power to negotiate with the companies on this renewal.
b) Mandatory renewal for up to 17 years of the contracts signed until 1993
Veto Reason – the proposal would give advantages to current tenants, “wounding”, according to the Federal Government, the Principle of Equality.
Consequence – there are fifty-two (52) contracts signed before the Ports Act 1993, who wanted to gain a time to adjust to the new standard.
In this context who wins are the companies who want to enter or expand their participation in the sector, taking advantage of the existing infrastructure.
c) Creation of the terminal industry competition dispense ports that move just loads of particular group
Veto Reason – the concept of terminal industry constitutes an impediment to the wide opening of the sector and would create legal opportunities for questioning.
Consequence – the losers are the producers and agribusinesses minerals and steel and who would win is any company that wants to work with new ports and leases.
d) To limit participation of companies shipping up to 5% in bidding terminal
Veto Reason – rule would be harmless because these companies are not regulated in Brazil. In addition, limits may best be applied to each bid.
Consequence – who loses in this context are the port operators who wanted to ensure prevention of cross-holdings of shipping companies in the industry. Who gains are agribusinesses and others that have, among its affiliates, shipping companies.
e) The need for registration of temporary workers joined in attesting their qualification
Veto Reason – could be created a more accurate system through administrative measures, as promised by the Federal Government.
Consequence – in this context, those who lose are the Unions who would like to bring more power to the management bodies of manpower, which in Brazil is called “OGMO”
Who wins are the operators and customers of the port by avoiding a possible extra cost.