Publications
- Category: Environmental
Polychlorinated biphenyls, known as PCBs, are synthetic substances formed by a mixture of 209 chlorinated compounds. The Stockholm Convention, of which Brazil is a signatory, has classified PCBs as one of the twelve types of persistent organic pollutants (POPs), which are extremely polluting substances, which pose serious risks to the environment and human health and which should be phased out, according to the convention.
In Brazil, PCBs were generally marketed in the form of ascarel and used as an electric fluid in transformers, capacitors, and other electrical equipment dispersed in businesses throughout Brazil.
Given the proven toxicity of PCBs and the international movement to promote their extinction, Brazil banned the commercialization and manufacture of PCBs through Interministerial Ordinance No. 19, of January 29, 1981. Subsequently, it gave effect to the Stockholm Convention, through Decree No. 5,472/2005, assuming the commitment to eliminate PCBs in the Brazilian territory by 2028.
However, the fulfillment of the obligations assumed internationally has been an immense challenge. One highlights as a factor of difficulty the fact that many transformers, although originally designed to use mineral oil, have been contaminated by PCBs due to improper maintenance. In this scenario, most owners of contaminated equipment are not even aware of the situation of their equipment and of their subjection to administrative and criminal sanctions, as provided for in Decree No. 6,514/2008[1] and Law No. 9,605/98.[2]
Considering that PCBs have an average lifetime of 60 years and were installed before the interministerial ordinance, these substances should already be at the end of their life cycle. Thus, equipment employing these substances should be properly stored or discarded. To handle them, it will be necessary to enter into contact with the environmental agency, since inappropriate disposal may cause contamination and subjects the responsible persons to remediation of the area, with significant costs and years of work.
To ensure compliance with the obligations assumed by the Stockholm Convention, the state of São Paulo already has its own legislation[3] to guarantee the elimination of PCBs in its territory. In addition, the Brazilian Congress is in the drafting phases of a bill[4] to regulate the obligations of users of equipment contaminated by PCBs.
However, there are still gaps regarding the regulation of appropriate forms of maintenance and disposal of these materials and there are few final destination units specialized in the management of PCBs and contaminated equipment in Brazil.
For all of this, the elimination of PCBs in Brazil represents a great challenge that must be faced by the Public Power and by businesses in the coming years, with the promotion of incentives for the creation of companies specialized in the management of PCBs and effective regulations that allow the compliance with the obligations and supervision by the competent bodies.
[1] Article 61. To cause pollution of any nature at levels that result or may result in damage to human health, or that lead to the death of animals or significant destruction of biodiversity:
A fine of five thousand Brazilian Reais (R$ 5,000.00) to fifty million Brazilian Reais (R$ 50,000,000.00).
Article 62. They incur the same fines as set forth in article 61 who:
VI - fail, those who have an obligation, to give an environmentally appropriate destination to products, by-products, packaging, waste, or substances when so determined by law or regulatory act;
[2] Article 56. Produce, process, pack, import, export, market, supply, transport, store, stock, warehouse, or use a product or substance that is toxic, dangerous, or harmful to human health or the environment, contrary to the requirements established by the law or in its regulations:
Penalty - Incarceration, from one (1) to eight (8) years, and a fine.
Paragraph 1 - They incur the same penalties who
II - handle, condition, store, collect, transport, reuse, recycle, or dispose of hazardous waste in a manner different from that which is established by law or regulations.
[3] State Law No. 12,288/2006.
[4] Bill No. 4,707/2012
- Category: Intellectual property
The Attorney General's Office (PGR) opined in October in favor of hearing and granting relief to Extraordinary Appeal (RE) 1037396, in order that article 19 of Law No. 12,965/2014, the Brazilian Civil Rights Framework for the Internet, be declared constitutional by the Federal Supreme Court (STF).
In March of this year, the STF recognized, via a majority opinion, the existence of a general repercussion of the issue raised in the RE regarding the constitutionality of article 19, which determines that internet application providers may only be held civilly liable for damages arising from content generated by third parties if, after a specific court order, they do not take steps to make unavailable content that is deemed infringing.
The RE was presented by Facebook after a decision by the Board of Appeals of Piracicaba (SP), which ruled out the applicability of the article and ordered Facebook to pay compensation for moral damages to the plaintiff due to its not having withdrawn content after being extrajudicially notified by the plaintiff.
The PGR maintains in its opinion that the objective of article 19 is to harmonize the application of the constitutional principles and rights of freedom of expression, inviolability of privacy, private life, honor, and image of persons.
It also explains that the objective of the article is to avoid compromising freedom of expression and free circulation of ideas, since if mere non-compliance with an extrajudicial notice submitted to the application provider demanding removal of content were sufficient for them to be held liable, the provider itself would be charged with carrying out a weighing and balancing of fundamental rights.
The PGR also points out that the Brazilian Civil Rights Framework for the Internet itself, in its article 21, makes exceptions to the rule of article 19, providing for situations in which withdrawal of the content dispenses with the need for a judicial decision in order for the provider to be held liable. Such situations are those in which celerity in removal of the content is fundamental and the filing of a judicial action is, therefore, dispensable.
The scenarios provided for in article 21 relate to the removal of content containing scenes of nudity or sexual acts of a private nature. In such cases, therefore, the internet application provider must remove the content under penalty of being considered civilly liable, in a secondary manner.
The PGR concludes its opinion in this sense, proposing to set the following theory for all other cases that deal with the constitutionality of article 19 of the Brazilian Civil Rights Framework for the Internet: “Article 19 of Law No. 12,965/2014 (Civil Rights Framework for the Internet) does not offend article 5, X and XXXII, of the Federal Constitution, which conditions breach of a prior and specific court order to remove content in order to establish the civil liability of an internet application provider for damages resulting from torts carried out by third parties."
The record of the RE is currently pending with the reporting judge, Justice Dias Toffoli, and as of now there is no date set for the trial decision.
If the STF declares the constitutionality of article 19 of the Brazilian Civil Rights Framework for the Internet, this will represent a great relief for application providers insofar as it will bring about greater legal certainty regarding the accountability of these companies in cases of removal of content from the air.
This is not the only article of the Brazilian Civil Rights Framework for the Internet whose constitutionality is debated. In 2016, the Party of the Republic (PR) filed a direct action of unconstitutionality (ADI 5527) requesting a declaration of unconstitutionality of items III and IV of article 12 of the Brazilian Civil Rights Framework for the Internet. These sections of the law deal with sanctions for temporary suspension of activities and prohibition on activities involving collection, storage, custody, and processing of records of personal data or communications by internet connection and application providers in which at least one of these acts occur in Brazilian territory, in the event of violation of certain provisions of the Brazilian Civil Rights Framework for the Internet. The record of the ADI is also pending with the reporting judge, who in this case is Justice Rosa Weber, and as of now there is no date set for the trial decision.
- Category: Labor and employment
Law No. 13,467/17 (the Labor Reform) inserted article 652, f, into the Consolidated Labor Laws (CLT), thus expanding the jurisdiction of the Labor Courts to decide on the ratification of extrajudicial settlements. However, even with this change, parties (companies and workers) are having difficulty having these settlements ratified at trial level, since the judges allege the supposed unconstitutionality of article 652, f, of the CLT.
This was what happened in April of 2018, in case No. 0010308-45.2018.5.03.0038, in which the judge of the 4th Labor Court of Juiz de Fora (MG) dismissed, without resolution on the merits, pursuant to article 485, VI, of the Code of Civil Procedure (CPC), an extrajudicial settlement entered into between a company and a former employee, on the grounds that article 652, f, of the CLT is unconstitutional: "Obviously, the new letter "f” of article 652/CLT is unconstitutional, since it makes this branch of the Judiciary a settlement-ratifying body, completely foreign to its constitutional mission."
Against this decision, the company appealed, and the Court of Labor Appeals (TRT) of the 3rd Circuit, unanimously, in October of 2018, granted relief to the Ordinary Appeal filed so as to recognize the constitutionality of article 652, "f", of the CLT, as well as to fully ratify the settlement between the parties.
In the opinion of the Judge writing for the Court, Appellate Judge Ricardo Marcelo da Silva, the legislature, in enacting Law No. 13,467/17, gave the parties the power to directly resolve the conflict themselves. In addition, the Judge of the case stated: "In fact, the restrictive interpretation suggested by the decision raised on appeal is pathological in that it advocates the need for judicial intervention to resolve any type of labor conflict, regardless of the levels of complexity and controversy involved. The obstacle to a direct and amicable conciliation between workers and employers in cases such as this one violates the principles of fraternity and legal certainty and the right to freedom, which are provided for in articles 3, 5, and 6 of the Constitution."
In our view, an understanding such as that handed down by the Judge of the 4th Labor Court of Juiz de Fora renders ineffective the self-conciliation so celebrated by the Judiciary, whose purpose is the valuing of spontaneous attempts at conciliation of the parties, in order to relieve the Labor Judiciary.
This is because, as highlighted by the reporting judge in the case in question, with extrajudicial conciliation, the parties chose this means to resolve the conflict and entered into a settlement by consensus, and the instrument drawn up has the nature of a perfect legal act, as provided for in article 5, XXXVI, of the Federal Constitution.
By permitting this modality of conciliation, the legislator granted the effect of general release, there being no plausible justification for invalidating a declaration of will manifested in the settlement, and it is the duty of the Judiciary to ratify it, under penalty of being compelled to violate the principle of objective good faith which should guide contractual relations and benefit the moral turpitude of one of the litigants.
There is no doubt that, in these types of settlements, there is a convergence of interests, as the out-of-court settlement reflects the will of both parties.
Even almost a year after the enactment of Law No. 13,467/17, there is great resistance on the part of judges to ratify extrajudicial settlements, whether based on a declaration of the unconstitutionality of this article of the CLT or due to the creation of internal norms, such as those of the Judicial Center for Dispute Settlement Methods of the Court of Appeals of the 2nd Circuit (Cejuscs-JT-2), which greatly hinders the parties' self-conciliation.
In any event, the TRT of the 3rd Circuit, together with many other courts of appeal, has correctly recognized that there is no longer any way to deny the possibility of ratification of extrajudicial settlements in the Labor Courts, since the aim of the legislature, with the enactment of the Law No. 13,467/17, certainly encouraged the parties' autonomy in self-conciliation, thus preventing litigation arising from the labor relationship maintained between them.
- Category: Infrastructure and energy
In September, BNDES approved four credit transactions for three different companies in the rail sector, totaling almost half a billion Brazilian Reais for the revitalization of lines, maintenance of equipment, and purchases of new railcars and machinery. This measure is in line with the new governmental policies and directives for the promotion of the railway sector, which, since 2007, when the North Section of the North-South Railroad was subject to a sub-concession, has been suffering from a lack of consistent privatization projects.
For example, the Logistics Investment Plan (PIL), launched in 2012, provided for R$ 91 billion in investments in a package of ten thousand kilometers of railway line to be built on 12 different routes. The model failed because of both the inability to prioritize and regulatory uncertainty: open access and separation of infrastructure and transportation activities, with take-or-pay remuneration by Valec, was not convincing, and therefore none of the projects got off the drawing board. PIL II, in turn, launched in 2015, was more conservative. Based on the previous model of vertical exploration concession, it provided for four thousand kilometers of rail lines concentrated in only four projects, which as of today have not yet been executed.
The Investment Partnerships Program (PPI), inaugurated by Law No. 13,334/16, incorporated the four priority projects of PIL II, but with important regulatory differences and differences in trajectory. Combined with Law No. 13,488/17 and the National Logistics Plan (NLP), approved in 2018, the PPI finally presented the minimum conditions for railway projects to be executed through administrative processes consistent with our legal system. Concern with the logistical diversification of means of transport, and especially with national railway development, intensified due to the recent truck drivers' strike, which, in turn, gave more traction those administrative processes.
Essentially, the PPI signals to the market the government's strategy to promote the development of the national rail network through investments in prequalified projects contemplated in PNL Scenario 2025, which proposes the construction of 3,200 kilometers of railroad lines provided for in the Advance Partnerships Program, which are:
- Sub-concession of the EF-151-Rail North South (FNS-TC) line, which links Estrela d'Oeste/SP to Porto Nacional/TO. The FNS-TC line was recently approved with some recommendations and determinations by the Federal Audit Court (TCU), which when met by the ANTT may trigger, in 2018, publication of the public bidding notice;
- Sub-concession of the EF-334-Rail West-East Integration Railway (FIOL) line, an important corridor for the southern part of the state of Bahia, which links Caetité/BA to Ilhéus/BA. Currently, the FIOL line is in the process of public consultation to receive support and contributions to the technical, legal, and economic and financial documents published by the ANTT; and
- The concession of the EF-170 (Ferrogrão) line, which links Sinop/MT to Itaituba/PA, and which was submitted for public consultation and now awaits the publication of a report by the ANTT.
At the same time, the PPI considered strategic the expansion of the capacity of railroads already granted via concession to the private initiative. In these terms, based on the terms of Law No. 13,488/17, the extension anticipated for some railroads whose concessionaires have requested extension of the term in return for additional investments is in an advanced stage. Such additional investments may occur not only in the network itself, but also in those of interest to the Public Administration, with the PPI and MTPA having made use of this legal permission to pre-qualify the Central-West Integration Railway (FICO) and the São Paulo Rail Beltline also as priority projects.
The strategic planning provided by the PNL, the system for prioritization of projects by the PPI, and the publishing of appropriate legal frameworks have raised the government's decision to promote the development of the national rail network through new investments, particularly private ones, to a higher level of viability and seriousness. In order for the pace not to be lost, the challenge for the next government will be to expand the range of railway projects, rather than to concretize those already pre-qualified, which will require schedule discipline, modeling quality, attractiveness to private investment, and, above all, commitment to Brazil's international competitiveness and participation.
- Category: Infrastructure and energy
The infrastructure financing sector in Brazil has undergone significant structural and strategic changes in the last two years. These changes were mainly focused on the strategic redefinition of the National Economic and Social Development Bank (BNDES), which has gradually withdrawn from its centralizing role in financing transactions to assume a profile more complementary to the capital market, with new financing conditions and the adoption of the Long-Term Rate (TLP), which replaced the Long-Term Interest Rate (TJLP).
This new scenario opened up a greater window of opportunity for the private sector to finance infrastructure projects through the capital market. However, the replacement of BNDES in financing transactions will not occur automatically. As long as the private sector has not found a long-term alternative, projects have tended to suffer from a lack of funding.
An alternative to traditional fund raising via capital markets is project bonds, already well known in the foreign market. They are generally tied to a longer maturity, between 20 and 30 years, and more standardized instruments, with high liquidity, easy circulation among investors, and fixed interest rates. With them, it is even possible to raise funds from ordinary investors, although institutional investors are traditionally still responsible for a larger share of the funding.
These credit instruments have as a source of payment the revenues generated by the projects to which they are linked. They are independent from a strong provision of guarantees by the developers and are traditionally based on the guarantees generated by the development itself. This gives them significant advantages over other forms of financing, in order to isolate the risk of a project's outcome, as well as the flexibility for placement in the market, guaranteed by the issuer itself.
In the Brazilian scenario, the main instrument that fulfills this role, and the one most in line with international examples, is the infrastructure debentures benefited by Law No. 12,431/2011.
Incentivized debentures are, in essence, the modality of the local market for project bonds, and stand out, since their establishment, in relation to all other instruments offered. Generally, the debentures are issued for the financing of long-term infrastructure projects and give investors tax benefits that make investment in domestic projects more attractive. However, the debentures depend on the ministry relevant to the sector to prioritize the candidate project for investment.
The year 2018 recorded records in the financing of infrastructure projects based on this kind of project bond. In the year prior, incentivized debentures in infrastructure had already been one of the investments with the highest degree of growth: more than R$ 9 billion placed to raise funds in the market. In 2018, there were another R$ 11 billion issued in sixteen transactions in the first half of this year alone.
The expectation is wide and abundant growth for the near future and, although there are still uncertainties in the market regarding the security of the new government's economic policy, more than 450 new projects have already obtained authorization through ministerial orders to raise funds in the market via incentivized debentures. These projects represent total investments in the R$ 250 million range, only through the Brazilian variation of project bonds.
More than half of the incentivized debentures issued in 2018 were linked to new projects, which represents a strengthening not only of the capital market, but of the infrastructure sector as a whole and encourages, as a basis, the growth of other alternative forms of financing, such as public offerings of promissory notes, real estate funds, financial bills, and CRIs.
The 2018 growth in issuances of debentures in infrastructure, which are supposed to exceed by the end of this six-month period more than three times the amount issued in 2016, was mainly driven by the federal government's commitment to promote the area, especially the portfolio in the energy sectors (a large flagship), transportation, and basic sanitation, and changes in policies established since September of 2016. The security of these sectors, which have become more stable by having more solid regulations, turns them into a priority for investors.
These measures generated a strengthening of the capital market, which occupied the space provided by BNDES in financing for infrastructure projects, in a trend very much sustained by the interest of common investors, especially individuals attracted by the new, more competitive, and healthy rate of interest for the market, for longer repayment terms of these project bonds and for tax benefits. With the increase in the demand by the market for incentivized debentures, the price for the issuance fell, which made it even more competitive.
It is evident that the Brazilian debt market is developing and strengthening and that in this process incentivized debentures in infrastructure have become the most favorable instrument for raising funds in the sector. Although in rapid growth, they account for just over one tenth of the total investment in infrastructure in Brazil. To gain relevance, these transactions still need to undergo improvements in terms of both volume and soundness.
- Category: Labor and employment
The extension of paternity leave and maternity leave for cases of birth of twins has generated recurrent discussion, although a bill on the subject was already rejected in 2009.
Currently, paternity leave is five days and can be extended for a further 15 days if the employer is enrolled in the Citizen Company Program, under the terms of paragraph 1 of article 10 of the Transitional Constitutional Provisions Act and article 1, II of Law No. 11,770/2008. However, such periods have been the subject of litigation before the Judiciary because they are considered insufficient in some special situations.
The Federal Circuit Court of Appeals of the Southern Circuit has been more flexible in this regard and has in some cases recognized the right to extend the period of leave to parents of twins. The decisions were based on the Principle of Integral Protection of Children, on the argument that two children need two parents at their disposal: if only one child has the mother available for 180 days, the second child would have the right to have the father available for an equal period of time.
Along the same lines, a judgment was recently handed down by the 1st Federal District Court of Florianópolis, in case No. 5009679-59.2016.4.04.7200/SC, filed against the Federal Attorney General's Office. After an analysis of the principles and history behind the institution of maternity leave, the federal judge granted an extension of paternity leave based on an analogical application of article 392-C of the Consolidated Labor Laws (CLT), which guarantees to employees who adopt or obtain legal custody for adoption purposes enjoyment of leave for the whole period of maternity leave.
There is, however, much controversy on the subject. In a similar case, the Judiciary of the State of Pernambuco rejected a request for extension of leave made by a future father of twins during the mother's pregnancy. It was argued that there was no legal basis for extending the leave, which led the father to reduce his work day and resort to the help of relatives and nannies.
His petition was reassessed and granted relief in a recent decision on appeal, when his daughters had already been born for ten months.
Demands such as these are still not frequent in the Labor Courts, but the precedents of the circuit courts of appeals of Santa Catarina and Pernambuco reveal a possible tendency in the extension of paternity leave in specific situations, such as when it is understood that there is unequal legal treatment of a single baby who has the mother at his full disposal, compared to twins who would share the mother's attention during the leave.
In cases of extension of paternity leave, employment agreements are suspended for the period, and the employee cannot be terminated.