Act No. 12,815/13 – New Port Regulatory Framework – Conversion Of Provisional Measure No. 595/12

Further to our Newsletter of December 2012, this is to bring to your attention that the Brazilian Government formally announced that Act No. 12,815/13 ("Act 12,815/13") has reached its last step of Executive analysis and has been released by President Dilma Roussef. Act 12,815/13 stems from the conversion of Provisional Measure No. 595/12 ("MP 595/12") into law and, as such, is now part of the statutory bodies of law that regulate port activities in Brazil.

Act 12,815/13 faced intense legislative analysis, under which its original text - as conceived by the task force formed by President Roussef to craft the new legal framework - received over 645 proposed amendments while being processed before both the House of Representatives and Senate. It was also subject to 13 straight vetoes from President Roussef.

The main changes introduced by Act 12,815/13 can be summarized as follows:

Organized Ports and Leased Terminals

Act 12,815/13 excludes the express possibility of the partial granting of the operation and management of Organized Ports (public ports ran by state-owned companies or private concession holders), and establishes the new criteria for public bids for new concessions and lease agreements of public terminals. The main features of the new rule are, in a nutshell, the highest capacity of the operation (having volumes of cargo as the key reference), the lowest tariff to the end consumer or the shortest handling time at the dock (an important tool to unlock the current logistic bottleneck around the Brazilian coast and waterways).

All the bidding procedures, invitations and tenders will now, by the delegation of powers from the Government, be assigned either to the state-owned companies that run the public ports or, in some cases, and subject to formal delegation agreements, to the states or to the municipalities where such public ports are located.

Act 12,815/13 has also introduced some ancillary new features to the Brazilian port system:

At the request of the concession holder, the Government may authorize the expansion of a leased area to any contiguous area, so long as (i) such area falls within the boundaries of the predefined area of the public port (public ports in Brazil have a "map" approved by Decree with the firm contours of its boundaries); and, (ii) if such expansion of the concession results in improvements to the efficiency of the port activities and increases capacity; and The current 25-year concessions can apply for...