Publications

Category: Labor and employment

The new text of Regulatory Standard 1 (NR-1) entered into force on 3 January 2022 and brought several amendments to the old text. In this article, we will discuss the main ones and their impacts on companies.

NR-1 provides for the application, terms and definitions regarding occupational safety and health, occupational risk management guidelines and requirements, and occupational safety and health prevention measures.

Among the novelties, we highlight the inclusion of Operational Risk Management (GRO). The GRO, through the Risk Management Program (PGR), aims to prevent and manage occupational risks and replaces the Environmental Risk Prevention Program (PPRA). Therefore, currently there is no longer the requirement to prepare a PPRA, but the PGR.

The document should be adopted by the company in an establishment where it develops its activities, that is, if the company has subsidiaries, in addition to the headquarters, the document should also be implemented for each subsidiary. In addition, at the company's discretion, the implementation can be done by operating unit, sector or activity of the establishment.

The PGR should be composed of plans, programs, schedules and other documents provided for in OSS legislation, including those described in the other Regulatory Standards (NRs), in order to include the management of all types of existing risks (physical, chemical, biological, ergonomic and accident), as provided for in NRs 15 and 16.

According to NR-1 updates, companies must:

• avoid occupational risks that may arise at work;
• identify hazards and possible injuries or health problems;
• assess occupational risks, indicating their level;
• classify occupational risks to determine the need for prevention measures;
• implement prevention measures in accordance with the risk classification and in the order of priority established; and
• control of occupational risks.

In order to identify occupational risks and evaluate them, NR-1 determines that the company must consider the provisions of the NRs and other legal requirements of safety and health at work, conducting a preliminary survey of hazards. This survey should be made before the start of operation of the establishment or new facilities, for all existing activities and in case of changes and introduction of new activities.

When, in the preliminary hazard assessment phase, the risk cannot be avoided, the company should adopt a process of hazard identification and occupational risk assessment.

At the company's discretion, the preliminary hazard survey step may be included in the identification stage, which should include:

• description of hazards and possible injuries or health problems;
• identification of sources or circumstances; and
• indication of the group of workers subject to risk.

When assessing and identifying risks, the company shall determine and inform all preventive measures so that such risks are eliminated, reduced or controlled. For each identified risk, its level of occupational risk should be informed, which is the result of the combination of the possibility of injury or health injury with the chance of its occurrence.

To verify the gradation of the probability of occurrence of injuries or health problems, account should be taken of:

• the requirements set out in the NRs;
• the preventive measures implemented;
• the requirements of the work activity; and
• the comparison of the occupational exposure profile with reference values established in NR-09, according to annexes I and III of the standard.

And for the gradation of the severity of injuries or health problems, account should be taken of the magnitude of the consequence (according to technical evaluations) and the number of workers possibly affected.

The company shall draw up a document, the Action Plan, in which all preventive measures to be introduced, improved or maintained by it will be indicated. The Action Plan should contain the schedule for the implementation of prevention measures, as well as ways of monitoring and measuring their results. In the event of a negative result, prevention measures shall be corrected.

Furthermore, the company may have to establish, implement, train and maintain response procedures to emergency scenarios, depending on the activities developed. These procedures should provide for the means and resources necessary for first aid, referral of injured and abandonment plan, if necessary, with the necessary measures for major emergency scenarios.

The PGR shall contain:

• Occupational Risk Inventory: includes the characterization of processes, work environments and activities, description of hazards and possible injuries or injuries to workers' health, with the identification of sources and risks and indication of groups of workers subject to risks and description of prevention measures implemented; preliminary analysis data on exposures to physical, chemical and biological agents, including the ergonomics assessment provided for in NR-17, and criteria adopted to assess risks and make decisions.
• Action plan.

The preparation of these documents, which must be dated and signed by the person who prepared them, is the sole responsibility of the company, respecting the provisions of the other NRs, being certain that they must be dated and signed by the person who prepared them.

Both the Occupational Risk Inventory and the Action Plan should be available to workers, their representatives and the Labor Inspectorate. The Occupational Risk Inventory must be kept up-to-date and its history kept for at least 20 years or for the period established in a specific standard.

The PGR should be reviewed every two years or after the following situations:

• implementation of prevention measures for the assessment of residual risks;
• innovations and modifications in technologies, environments, processes, conditions, procedures and work organisation that pose new risks or modify existing risks;
• inadequacies, weaknesses or ineffectiveness of prevention measures have been identified;
• occurrence of work-related accidents or illnesses;
• change in applicable legal requirements.

If the company has certifications in SST management systems issued by the National Institute of Metrology, Standardization and Industrial Quality (Inmetro), based on ISO 45001, the review period of the PGR may be three years.

In the event that several companies develop their activities in the same place, they must carry out integrated actions to implement prevention measures, with the aim of protecting all workers exposed to occupational risks.

In the case of outsourced services, the PGR of the contracting company may optionally include the preventive measures that should be adopted by the contracted companies when operating on their premises. However, the contractor is obliged to provide contractors with information on occupational risks that may affect their activities. In the same sense, contractors must provide the contractor with the Occupational Risk Inventory specific to their activities carried out in the contractor's premises or in a place previously agreed in contract.

The Individual Microentrepreneur (MEI) is exempted from the preparation of the PGR, but this exemption does not apply to companies that hire individual microentrepreneurs. The company that hires the MEI must include it in its prevention actions and in its PGR when it uses the contractor's premises.

Micro enterprises (ME) and Small Businesses (EPP) that are not obliged to constitute SESMT and choose to use risk assessment tools provided by the Special Secretary of Social Security and Work (SEPRT) may structure the PGR considering the report produced by these tools and the action plan.

The MEs and EPPs will be exempt ed from elaborating the PGR provided that they are framed as degrees of risk 1 and 2, no exposures to physical, chemical and biological agents are identified in the preliminary hazard survey and declare the information digitally, as provided for in NR-1 itself. In the same case, MEIs, MEs and EPPs are free to prepare the Occupational Health Medical Control Program (PCMSO), but not to perform medical examinations and issue Occupational Health Certificates (ASOs).

The exemption from preparation of the PGR for MEIs and, eventually, MEs and EPPs does not exempt them from the fulfillment of the other obligations provided for in the NRs.

The new text of NR-1, in Annex I, also brought the concepts of biological agent, physical agent, chemical agent and dangerous event.

All changes in the obligations relating to NR-1 came into force on January 3 of this year. Therefore, it is extremely important that companies analyze changes and regularize their situation immediately.

The theme of health and safety at work is of paramount importance and deserves the attention of companies. To ensure greater legal certainty and avoid health and safety problems and penalties for non-compliance with the standards, it is necessary to comply with the criteria stipulated and comply with the technical requirements set out in the NRs, with an impact assessment that considers the need of each company.

Category: Labor and employment

The Interministerial Ordinance MTP/MS 14, published on January 25, amends Annex I of the Joint Ordinance 20/20, and updates the measures to be observed to prevent, control and mitigate the risks of transmission of covid-19 in work environments.

Among the main changes, the following stand out:

• updating the concepts of confirmed and contacting cases;
• reduction of the period of leave of workers;
• exclusion from sorting at the entrance of establishments;
• recommendations on remote work;
• ventilation in the work environment;
• mandatory supply of PFF2 masks to risk groups; and
• increase from three to four hours of mask change time.

In the comparative table, we indicate the main changes:

The other measures remain in force and must be fully observed by companies in order to minimize the risks of transmission and contagion among workers. We highlight below the main measures provided for by the ordinance:

Guidance measures

— Mandatory to disseminate informative guidelines or protocols to workers, indicating the necessary measures for the prevention, control and mitigation of the risks of transmission of covid-19. The guidelines should include:

• prevention measures in work environments, in common areas, such as in cafeterias, bathrooms, changing rooms, rest areas and in the transportation of workers, when provided by the employer;
• actions for early identification and removal of workers with signs and symptoms compatible with covid-19;
• procedures for workers to communicate, including remotely, signs or symptoms compatible with covid-19 or possible contact with confirmed case of covid-19;
• instructions on hand hygiene and respiratory label; and
• forms of contagion, signs, symptoms and care needed to reduce transmission in the workplace and in the community.

The organization should extend this information to outsourced workers and other organizations that enter the facility.

Instructions to workers can be transmitted during training or through security dialogues, physical or electronic documents, posters and internal regulations, avoiding the use of pamphlets.

Conduct that should be adopted in confirmed, suspected and contacting cases

— Immediately remove workers with confirmed cases, suspected cases and contacting cases close to cases confirmed for covid-19 from face-to-face work activities for a period of ten days.

For the purposes of the period of removal:

• in confirmed cases, the day following the onset of symptoms or molecular method test collection (RT-PCR or RT-LAMP) or antigen test should be considered;
• in suspected cases, the day following the onset of symptoms should be considered; and
• in cases of close contactants, it should be considered from the last day of contact with the confirmed case.

The period of leave may be reduced to seven days in the following cases:

• confirmed – provided they have been without fever for 24 hours, without the use of anti-thermal medication, and with remission of respiratory signs and symptoms;
• close contactants – provided molecular method test (RT-PCR or RT-LAMP) or antigen is performed from the fifth day after contact, if the test result is negative; and
• suspected – provided they have been without fever for 24 hours, without the use of anti-thermal medicine, and with remission of respiratory signs and symptoms.

— Guide workers away on the need to remain in their residence, maintaining remuneration during the period of leave.

— Establish procedures for identifying suspected cases, including communication channels for workers to report the appearance of compatible signs or symptoms and contact with confirmed or suspected case of covid-19.

— Collect information on contactants, activities, the workplace and common areas frequented by the suspected or confirmed worker of covid-19.

— Guide contactants close to suspected cases of covid-19 about contact and the need to report immediately to the company the emergence of any signs or symptoms related to the disease.

— Keep record up to date with the following information:

• workers by age group;
• workers with clinical conditions at risk for the development of complications related to more severe conditions of covid-19 (no specification of the disease, preserving confidentiality). Clinical conditions at risk for the development of complications of covid-19 are considered: severe or decompensated heart diseases (heart failure, infarcted, revascularized, patients with arrhythmias, decompensated systemic arterial hypertension); severe or decompensated pneumopathy (oxygen-dependent, moderate/severe asthma patients, Chronic Obstructive Pulmonary Disease – COPD); immunosuppressed; advanced-stage chronic renal patients (grades 3, 4 and 5); diabetics, according to clinical judgment, and high-risk pregnant women;

• suspected and confirmed cases;

• close contactants on/who were on leave; and

• measures taken to adapt working environments to prevent covid-19.

— Forward suspected cases to the organization's medical outpatient clinic, when available, in order to carry out appropriate evaluation and follow-up. The care of symptomatic workers should always occur separately from the other workers, providing masks to all those present in the outpatient clinic.

— When the activities of a given sector or of the establishment itself are stopped as a result of covid-19, the following procedures shall be adopted before the return of activities:

• ensure the adoption of the preventive measures provided for in the annex to the Ordinance and the correction of situations that may have favoured the contamination of workers in the working environments;
• sanitize and disinfect the workplace, common areas and vehicles used;

• strengthen communication to workers; and

• strengthen the monitoring of workers to ensure the removal of confirmed, suspectedand contacting cases close to confirmed cases of covid-19.

Hygiene and cleanliness of the environments

— Sanitize and disinfect workplaces frequently, by cleaning the surfaces of tables, countertops and chairs in the interval between shifts or whenever there is the designation of one worker to occupy the job of another. The cleaning and disinfection of keyboards, handrails, door handles, payment terminals, elevator buttonens, tables and chairs should also be cleaned and disinfected.

Hand hygiene and respiratory label

— Guide employees to frequent hand hygiene, with the provision of resources for this purpose close to workplaces, including water, liquid soap, disposable paper towel and trash can (with manual contact-free opening) or hand-appropriate sanitizer, such as 70% alcohol.

— Advise on not sharing towels and personal products.

— Procedures should be adopted to ensure that, as far as possible, workers avoid touching surfaces with high frequency of contact, such as lift buttons, door handles and handrails.

— Workers should be instructed to avoid touching the mouth, nose, eyes and face with their hands and to practice respiratory label, including wearing disposable handkerchief for nasal hygiene, covering the nose and mouth when sneezing or coughing and sanitizing their hands after sneezing or coughing.

— Specialized Services in Safety Engineering and Occupational Medicine (SESMT) and the Internal Commission for Accident Prevention (Cipa) should participate in the prevention actions implemented by the organization.

Social distancing

— Adopt measures to increase distance and reduce personal contact between workers and between them and the external public, with guidelines to avoid close contacts such as hugs, handshakes and unnecessary conversations.

— Establish a minimum distance of one metre between workers and between workers and the public. If the physical distance of at least one meter cannot be implemented to reduce the risk of transmission between workers, customers, users, contractors and visitors, it should be:

• for activities carried out in fixed work posts, maintain the use of surgical mask or fabric and adopt waterproof partitions or provide facial protection of the type plastic visor (face shield) or goggles; and
• for other activities, maintain the use of surgical mask or tissue.

— Adopt measures to limit the occupancy of elevators, stairs and restricted environments, including sanitary facilities and changing rooms.

— Demarcatise and rearrange the places and spaces for queues and waits at least one meter away between people.

— Take measures to avoid agglomerations in working environments.

Personal Protective Equipment (PPE) and other protective equipment

— Create and review procedures for the use, hygiene, packaging and disposal of PPEs and other protective equipment used, and employees are oriented on the use, cleaning, disposal and replacement of masks, hand hygiene before and after their use and even limitations of their protection against covid-19.

— Provide surgical or tissue masks for all workers, with required use in shared environments or in those where there is contact with other workers or the public (it is mandatory to use the masks and replace them every four hours or when they have been dirty or damp).

— Professionals of the medical service of the organization, when any, should receive PPE or other protective equipment, according to the risks, including respiratory protection mask type PFF2 (N95), in accordance with the guidelines and regulations of the Ministry of Labor and Welfare and the Ministry of Health.

Ventilation of workplaces and common areas

— Natural ventilation in workplaces or measures should be taken to increase the number of air exchanges in the enclosures as much as possible, bringing clean air from outside and avoiding the recirculation of air conditioning.

— When split-type air conditioning system is used, it is recommended that doors and windows be kept open or that an air renewal system be added, in view of technical or operational feasibility.

— The exhaust systems installed must be kept in operation during office hours.

Risk groups

— Workers aged 60 years or older or presenting clinical conditions at risk for the development of complications of covid-19 should receive special attention, and telework or remote work may be adopted at the employer's discretion.

— Surgical masks or masks of type PFF2 (N95) or equivalent shall be provided when not adopted telework or remote work.

Common areas of the company

For the common areas, the published Ordinance updated the obligations and recommendations to be followed by employers, ranging from cafeterias to the transportation offered to workers.

Lunchrooms

— The sharing of glasses, plates and cutlery without sanitization is sealed.

— Self-service should be avoided or, where it cannot be avoided, control measures such as:

• hand hygiene before serving or supplying disposable gloves;
• hygiene or frequent exchange of kitchen utensils for shared use, such as shells, handles and spoons;

• installation of salivary protector on self-service structures; and

• use of masks and guidelines to avoid conversations during the service.

— Provide frequent cleaning and disinfection of the surfaces of tables, countertops and chairs, as well as adopt in the cafeterias minimum spacing of one meter between people in line and on the tables, guiding compliance with respiratory etiquette recommendations and the need to avoid conversations. When the frontal or transverse distance is not observed, a physical barrier should be used on the tables with a height of at least one and a half meters in relation to the ground.

— Distribute workers at different times at the places of meal.

— Deliver set of sanitized utensils, packed individually.

— Inclined jet drinkers should be adapted so that water consumption can only be used with the use of a disposable cup or individually used container.

Locker rooms

— Avoid crowding of workers at the entrance, exit and during use of the dressing room.

— Guide workers to keep the distance of one metre from each other during their use.

— Guide workers on the order of deparamentation of clothing and equipment, so that the last protective equipment to be removed is the mask.

— Provide a sink with water and liquid soap, as well as disposable towel or hand-appropriate sanitizer dispensers, such as 70% alcohol, at the entrance and exit of the changing rooms.

Transportation offered by the employer

— Implement procedures for communication, identification and removal of workers with symptoms before boarding, thus preventing the entry of symptomatic or contacting patients close to confirmed cases of covid-19 in the vehicle.

— Lay down the obligation to wear protective masks when boarding workers in the vehicle and use throughout the stay.

— Guide workers to avoid crowding in the boarding and disembarkation of transport, with the implementation of measures to ensure minimum distance of one meter between each person.

— Comply with the maximum capacity of passengers, limited to the number of seats of the vehicle.

— Maintain natural ventilation inside vehicles and, where the use of the air conditioning system is necessary, air recirculation should be avoided.

— Seats and other vehicle surfaces most often touched by workers should be sanitized regularly.

— Drivers should frequently sanitize their hands and their workstation, including the steering wheel and surfaces most often touched.

— Keep a record of workers using transport, listed by vehicle and travel.

Category: Infrastructure and energy

Law 14,301, of January 7, 2022 (Cabotage Law), passed with vetoes by the President of Brazil, establishes a new regulatory framework for cabotage in Brazil with different innovations and performance alternatives within the shipping  sector.

Since the first half of 2019, the Brazilian shipping industry has been following the development of the agenda around the BR do Mar project, prepared with the purpose of increasing the use of cabotage in Brazil. With an extensive coastline, Brazil has only 11% of cargo transported between Brazilian ports.^[1]

Initially prepared jointly by the Investment Partnerships Program (PPI), the Ministry of Economy, and the Ministry of Infrastructure, the BR do Mar Project brought together technical studies, responses from the sector, and administrative decisions that pointed to the need to establish new guidelines for the cabotage sector. Regulatory inefficiencies, high operational costs, and low competitiveness were pointed out as factors that limited investments and restricted the diversification of the Brazilian logistics matrix, which is substantially based on road transport.

The measures contained in the Cabotage Law intend to expand the supply and improve the quality of cabotage transport in Brazil, encourage more competition in the sector, and stimulate the development of the cabotage naval industry. According to studies by the Logistics and Planning Company (EPL), linked to the Ministry of Infrastructure, it is expected that this set of changes will be able to provide reductions of more than 15% in the cost of cabotage freight in Brazil. We highlight some of the changes brought in by the law:

Fleet

Chartering of foreign vessels. The Cabotage Law expanded the possibilities for chartering foreign vessels provided for in Law 9,432/97 (Waterway Transport Regulation Law).

With the Cabotage Law, foreign vessels were added to the list of possibilities for chartering, regardless of authorization by the National Waterway Transport Agency (Antaq):

• chartering in the modalities by time or by voyage, to operate in cabotage shipping, in substitution for a vessel of similar type, own or chartered, that is under jumbling, conversion, modernization, docking, or repair, be it in Brazil or abroad, limited to up to 100% of the deadweight tonnage; and

• the chartering of foreign vessels on bareboat, regardless of other requirements, up to the initial limit of one foreign vessel for cabotage shipping, which will progressively increase until, as of the 48th month of the Cabotage Law, there is no longer a limit for chartering foreign vessels on bareboat.

The main consequence of the changes in the charter rules is that Brazilian Shipping Companies (EBNs) will be able to operate without their own vessels, since it will no longer be necessary to link charters of foreign vessels to Brazilian vessels.

Subsidiaries abroad for fleet. According to the Cabotage Law, EBNs that qualify for the Cabotage Transportation Incentive Program (BR do Mar) will be able to charter vessels from wholly-owned subsidiaries abroad or wholly-owned subsidiaries of other EBNs abroad. A time charter of the foreign vessels of wholly-owned subsidiaries abroad can be carried out in five cases:

• increase in the deadweight tonnage of its own vessels, in a proportion still to be defined by an act of the Federal Executive Power;
• replacement of vessels of similar type under construction in Brazil in the proportion of up to 200% of the deadweight tonnage of the vessel under construction for a period of 6 months extendable to 36 months;

• replacement of a vessel of similar type under construction abroad in the proportion of up to 100% of the deadweight tonnage of the vessel under construction for a period of 6 months, extendable to 36 months;
• exclusive service for long-term transportation contracts, a case to be regulated by the Federal Executive Power; and
• exclusive provision of regular operations for the transport of cargoes in type, route, or market that do not yet exist or are not consolidated in Brazilian cabotage, for a period of 36 months, extendable for up to 12 months, as regulated by the Federal Executive Power.

The qualification of the EBNs interested in the Incentive Program for Cabotage Transport (BR do Mar) will be carried out by an act of the Minister of Infrastructure and will depend on the regulations to be issued.

EBN-i. The Cabotage Law provides for the creation of the Empresa Brasileira de Investimentos em Navegação (Brazilian Shipping Investment Company - EBN-i), exclusively for chartering vessels to EBNs or foreign shipping companies.

Tax benefits

Tax incentives. Although the Tax Arrangement for the Incentive for Modernization and Expansion of the Port Structure (Reporto) has not been determined, the Cabotage Law created a tax benefit specifically for foreign chartered vessels authorized to operate in cabotage transport. These vessels will automatically be submitted to the temporary admission arrangement, without registration of the import declaration, with total suspension of different taxes: Import Tax (II), Tax on Industrialized Products (IPI-Import), PIS/Pasep-Import, Cofins-Import, Contribution for Intervention in the Economic Domain levied on the import and sale of oil and its derivatives, natural gas and its derivatives, and ethyl alcohol fuel (Cide-Fuels), and the Additional Freight for the Renovation of the Merchant Marine (AFRMM).

AFRMM

Use of the AFRMM. Some of the most relevant changes in the Cabotage Law are related to the procedures and rules for using the funds collected by AFRMM, which, according to a report prepared by the National Bank for Economic Development (BNDES) at the end of 2021, amount to about R$585 million deposited into escrow accounts in the name of EBNs and R$24.9 billion in the credit portfolio of the Merchant Marine Fund (FMM).^[2]

The Cabotage Law made more restricted the possibilities of using AFRMM financial resources for vessel acquisitions or construction. The credits can be used for the purchase or construction of vessels of the same type that originated the AFRMM funds deposited in the EBN's escrow account. Thus, an EBN operating in cabotage shipping can no longer use the AFRMM funds collected in this activity to finance vessels that will operate in other modes of shipping (for example, port support and maritime support).

On the other hand, the Cabotage Law now allows the use of AFRMM funds to perform maintenance and overhaul services by specialized companies, a possibility that was previously restricted to shipyards. The AFRMM funds deposited into escrow accounts may be used to provide a guarantee for the construction of a vessel in a Brazilian shipyard and annual reimbursements of amounts related to insurance and reinsurance purchased to cover hulls and machinery of own or chartered vessels.

AFRMM and incentives for port infrastructure. The Cabotage Law now also allows the use of AFRMM funds by the FMM for financial support by granting loans in financing and contracting engineering works services by port authorities, lessees, and terminals for private use, up to 100% of the approved project.

Partial vetoes

Although the above changes were passed and approved by the President of Brazil, there was a partial veto to the bill that had been approved by the Brazilian Congress. With this, the part of Bill 4,199/21 passed and published in the Cabotage Law is already in effect, while the issues vetoed are still to be addressed by senators and representatives in a joint session and may return for presidential sanction, if the vetoes are rejected by an absolute majority of congressmen.

Among the vetoes of major importance are the following:

Reporto Veto. The Reporto, established by Executive Order 206/04 and with successive extensions, was in force until December 31, 2020. According to the wording of the bill of the Cabotage Law project was approved in Congress, the Reporto would be back in force for the period from January 1, 2022, to December 31, 2023, suspending federal taxes such as II, IPI-Import, PIS/Pasep-Import, and Cofins-Import for the import of machinery, equipment, and spare parts for the modernization and expansion of port structures. However, the President of Brazil vetoed the new Reporto's validity, and the benefit will no longer apply.

Changes in AFRMM rates. The bill approved by Congress provided for changes in the AFRMM rates applicable to long haul and cabotage shipping. On the remuneration for waterway transport, the rates of 40% would be applied in river and lake shipping, in the case of liquid bulk transport in the North and Northeast regions, and 8% in long haul, cabotage, and river and lake shipping, in the case of solid bulk transport and other cargoes in the North and Northeast regions.

Requirement of 2/3 of the crew as a minimum quantity of Brazilian seafarers on vessels. As a measure to preserve jobs for Brazilian crewmembers, the bill provided that foreign vessels of EBNs qualified under the BR do Mar program should be required to have:

• crew composed of, at least, 2/3 Brazilians in each technical level of the officer corps, including senior or junior officers, and in each branch of activity, including deck and engine, on a continuous basis; and
• Brazilian captain, coastmaster, chief engineer, and engine driver. In cases where there are not enough Brazilian seafarers to make up the minimum proportion required, the qualified company may apply to Antaq for authorization to operate the specific vessel with a foreign crew, on a temporary basis, for a fixed period, not exceeding 90 days, or in a single operation, in the event that the execution requires more time than the maximum period established. The discussions around the minimum quantity of Brazilian seafarers on foreign vessels enrolled in the BR do Mar program was one of the main points of controversy among government technicians, congressmen, union representatives, and businessmen from the sector.

The Cabotage Law went into effect on January 7, 2022, the same date it was passed and published. In addition to the new rules applicable, the EBNs should evaluate whether they consider it pertinent to qualify for and join the BR do Mar program, an optional part of the Cabotage Law that will offer greater flexibility in chartering foreign vessels from subsidiaries abroad. As for the presidential vetoes, they are expected to start being processed soon after the end of the parliamentary recess in February of 2022. Considering the public responses regarding these topics, it is possible that there will be various debates before a new definition is provided.

^[1] Source: TKU of Inland, Cabotage and Long-haul Shipping on Inland Waterways - 2019. Brasília: Antaq, 2020. Available at: http://sophia.antaq.gov.br/index.asp?codigo_sophia=28203. Accessed on: Jan. 3, 2022.

^[2] Source: https://www.bndes.gov.br/wps/wcm/connect/site/c359b9a0-3595-4694-a1df-3a5c1f6d5566/Relat%C3%B3rio+financeiro+do+FMM+3+tri+2021+Internet.pdf?MOD=AJPERES&CVID=nTzd5Tk. Accessed on January 11, 2022.

Category: Intellectual property

The trial of the special appeal 1881149/DF,^[1] which dealt with the validity of the franchise contract without signature of the parties, exposes the weight that some principles expressed in the law may have in the resolution of legal disputes.

The contract dealt in the special appeal was signed under the old Franchise Law (Law 8,955/94), which was in force until March 26, 2020, when it was replaced by the new Franchise Law (Law 13,966/19). For this reason, the old law was used to resolve the dispute.

Article 6 of Law 8.955/94 required the franchise to be written and signed by the parties in the presence of two witnesses. Although the principle of freedom of form in the Brazilian legal system is in force, thus admitting verbal contracts in which the consent of the parties may be issued tacitly or even by silence – as per Article 107 of the Civil Code – the law may expressly require special form (e.g. in private writing or public instrument), as law 8,955/94 did and Law 13,966/2019 does.^[2]

In the case in question, at the beginning of 2016, the franchisor forwarded the contractual document so that the franchisee would sign it, which was not done. Nevertheless, the parties put into practice the provisions of the contractual instrument and, at the end of that year, agreed on a contractual amendment, which was also not signed. The relationship between the parties remained being executed until the judgment by the local court, which recognized the contractual default of the franchisee, declared the termination of the contract and ordered the franchisee to pay the franchisor the amount of R$ 57,500.00, referring to the contractual fine.

The contractual fine was reduced to 50% of the amount provided for in the contract, because it was understood that the franchisor contributed to the establishment of a franchise relationship in verbal form, thus justifying the fine reduction.

The franchisee appealed to the Superior Court of Justice (“STJ”) seeking to declare the contract null and void. At the trial, the court sought to ascertain:

• the existence of a tacit manifestation of the parties' willingness to conclude the contract, despite the defect of form resulting from the absence of signature; and
• provided there was this tacit will, if there is a rule in the Brazilian legal system that justifies overcoming the defect of form.

The judgment ended up being based on two main aspects:

• the tacit declaration of the will of the franchisee; and
• the prohibition of contradictory behavior, in full observance of contractual good faith. The principle of contractual good faith, provided in Article 422 of the Civil Code, imposes on contractors the duty to act correctly so as not to frustrate the legitimate expectations of the contractual parties.

The decision states that the expression of will of the franchisee occurred in a tacit manner, with a behavior opposite to what would constitute the "non-acceptance" of the contract. This occurred through the opening of subsidiaries, use of the licensed trademark and the fulfillment, by the franchisee, of contractual obligations, until the violations that led to the lawsuit were found.

The STJ understood that the claim of formal defect by the franchisee, with the aim of achieving the nullity of the contract, pursuant to Article 166, item IV, of the Civil Code, was not sustained, given its behavior contrary to the principle of contractual good faith.

It is worth noting that the judgment was not intended to validate null contract, but to keep the business, understanding that, in the present case, the franchisee gave reasons to the franchisor to trust the agreement that both parties had signed.

Despite the understanding of the Superior Court of Justice, which denied the invalidity of the franchise contract due to lack of signature, it is important that the parties formalize their contracts in writing to ensure greater legal certainty. The measure shall be taken where necessary by legal requirement or if the contracted operation involves risks or complexity. In this way, the parties may have greater predictability on what they have agreed upon and are able safeguard their interests in the face of non-compliance or other adverse contractual situations.

^[1]STJ - Resp 1881149 DF 2019/0345908-4. Rapporteur: Minister Nancy Andrighi, date of publication: DJ 02/02/2021.

^[2]The new Franchise Law, however, no longer provides for the need to sign two witnesses (Article 7, I).

Category: Digital Law

Data Protection Day was established by the Council of Europe in 2006. It is celebrated on January 28th, when the signatures to the Council of Europe Convention No. 108/1981 on the protection of individuals with regard to automatic data processing were opened. Closing out the global initiative of Personal Data Protection Week, the date is celebrated to encourage and foster a culture of data protection around the world.

This is a great opportunity to discuss important points about the subject and to identify the main issues that companies will have to face in 2022. Starting with business, many companies are already in a new phase with regard to the topic. They have gone through the initial stage of implementing legislation, in particular the General Personal Data Protection Law (LGPD), and now need to maintain a privacy and data protection management system that is consistent with and capable of meeting the requirements of the law.

What Data Protection Day reminds us is that the task can be made simpler if a culture of privacy is actually implemented. The topic is alive. More than well-defined policies and goals, the adoption of daily activities in favor of privacy is a must.

In the current phase, privacy by design becomes even more relevant. In addition to reviewing and updating risk matrices and records of processing activities, or even seeking a greater level of detail in contracts, personal data protection is expected to be a hallmark of every initiative. Decisions about the purpose of the use of personal data, identification of what data is needed, ways to achieve maximum transparency with the data subject, and ways to establish high levels of security are good examples. To do this, privacy professionals need to be involved from the beginning of each action.

The role of Data  Protection Officer (DPO) is becoming more and more established. Parameters on how to structure the exercise of the function become clearer every day.

The sanctions applied in Europe in the last few months may have important consequences in Brazil. In addition to cases of non-appointment of the professional,^[1] sanctions have confirmed the importance of the foreman being sufficiently involved in the matter. They also recommend that there should be no accumulation of functions or situations of lack of administrative structure and autonomy. Potential conflicts of interest should also be avoided.

For example, in December, the Belgian data protection authority (APD) recognized the conflict of interest and imposed a fine of 75,000 euros to a financial institution because the DPO appointed was also head of the department to which the DPO should report. In another case, the Luxembourg authority (CNPD) imposed a fine of 15 thousand euros due to the DPO's lack of involvement in all matters related to personal data, his lack of autonomy in the exercise of the function, and the fact that the professional had not received adequate training to perform his activities.

The year also tends to bring in an increasingly active National Data Protection Authority (ANPD). The ANPD is expected to issue new guidance guides with nuances of its interpretation of the LGPD, along the lines of what was done with the Processing Agents and Data Protection Officer Guide and the publication Information Security for Smaller Processing Agents.

Moreover, in yet another commendable pedagogical stance, the Authority began its first monitoring cycle in January of 2022, with a review of companies' compliance and regulatory risks and adoption of practices to curb irregularities and foster a culture of data protection.

Of particular note is the fact that 2022 is also an election year. It becomes very relevant to understand the protection of personal data in this context, considering that the political and electoral process involves the circulation of a large volume of personal data and will be the first in the country after the LGPD came into effect, which must be fully complied with.

It is fundamental to understand the main points to be considered by all the key players in this process (candidates, political parties, etc.). To help in this task, the ANPD and the TSE have jointly launched the guide on the Application of the General Personal Data Protection Law (LGPD) by Data Processors in the Electoral Context. Among other points, the publication explores the scenario, the main legal bases that support operations, and accountability guidelines for channels to exercise data subject rights and for prevention and security.

Compliance with the LGPD in the election context involves defining the role of the processing agent (whether controller, operator, or co-controller). Political parties and groups that carry out party political campaigns are structured in many different ways, and the roles of the agents must be precisely defined in order to know what must and must not be fulfilled.

It is also important to be aware of the use of personal data in political campaigns if this data has been collected before for other purposes (for example, data present in collective petitions - indicated below - on a given issue). In such cases, care must be taken to avoid the risk of misuse of purpose. Data may be used only in situations where the purposes are closely related to the reasons for the collection or where the data subject has consented for campaign purposes.

Another sensitive issue is profiling by political parties or candidates. This is when voters are classified into different groups or sectors, through the use of algorithms that identify relationships between different behaviors and characteristics of personal data subjects. This allows one to target political advertising much better.

The situation is not forbidden, but it is relevant that the processing agent adopt safeguarding and compliance measures. Among them, it is important that one review one’s policies to make the situation very clear to the data subjects, pay attention to the correctness of the data used, not collect data beyond what is necessary, and not keep it longer than necessary for that purpose.

The foreign experience also provides interesting guidelines on the topic. Noteworthy, for example, are the UK data protection authority (ICO) guidelines and the recent Opinion 2/2022 of the European Data Protection Supervisor (the European Union's independent data protection authority) on the subject.

Another increasingly relevant topic that is directly associated with the purpose of Data Protection Day is privacy incidents. Depending on the profile, it is better known as data leakage, but it represents any situation, of low or high significance, in which the confidentiality, integrity, or availability of personal data is compromised.

With the growth in the number of situations in the last year, it is highly relevant that companies adopt preventive measures, not only regarding information security, but also regarding governance, having an incident response and remediation plan that is able to mitigate the risks and contain the damage.

Well-defined roles in identification and response, simulation exercises, pre-hired service providers for crisis management, and a correct assessment of the severity of the incident based on reliable criteria are some of the measures increasingly adopted.

Topic affects all new technologies

Data Protection Day also reminds us of one of the most relevant features of the topic: its general applicability in relation to all new technologies and practices. This is the case, for example, with the increasing use of mechanisms that make use of artificial intelligence and that have personal data as raw material. If personal data is processed, the LGPD will need to be respected, especially by defining the precise purpose of the operation, the use of only the data necessary for the purpose, and the understanding of the legal justification supporting the use of the tool.

The preparation of specific Personal Data Protection Impact Reports, with risks and safeguards adopted, can be very useful, demonstrating the company's concern and diligence on the topic. Furthermore, it is important that automated decision processes that make use of personal data have mechanisms for reviewing the decision, since this is a right of the holder of the personal data involved, pursuant to article 20 of the LGPD.

There is also the risk of abusive or illegal discriminatory practices arising from the automated processing of personal data, which is prohibited by article 6, IX, LGPD. This requires definition of frameworks for such mechanisms, as well as supervision not only of the data collected or reported to the tools, but of the entire processing. The recent ISO IEC 24.027:2021 standard brings about important parameters to mitigate the risk of biased results.

Let us celebrate the culture of personal data protection in the best way: by remembering its importance and understanding its moment for business.

^[1] Available at: https://www.aepd.es/es/documento/ps-00231-2021.pdf. Accessed on: January 24, 2022;

Category: Tax

The covid-19 pandemic intensified the adoption of remote work, through which the employee performs his duties without physically attending the company. From the perspective of social security contributions, the place where the employee performs his/her duties is of little relevance, as long as this place is in Brazil. However, if the employee resides in another country and there develops his activities, the situation requires additional attention.

As a general principle, social security contributions should be required only in the country in which the employee provides his services. After all, it is in this country that he will probably seek access to the benefits of social security, funded by the contributions. However, Law 8,212/91, which establishes and regulates these contributions, does not bring any exception as to the country in which the services are provided. Therefore, a preliminary analysis indicates that social security contributions are due if the professional has a job relationship with a Brazilian company, regardless of the place in which he/she performs his services.

Brazil, however, has a broad network of international treaties concerning social security. These agreements regulate from access to security benefits, including total contribution times for those who have made contributions in more than one country, to the imposition of social security contributions on wages received by employees residing abroad. While there may be controversy as to the nature of these agreements and their status before domestic law, Article 85-A of Law 8,212/91 determines their insertion as a special law. In other words, even if the Brazilian legislation has a general normative provision on the subject, if it is contrary to the provisions of the treaty, the treaty must prevail because it is a special rule.

As the page of the Secretariat of Social Security of the Ministry of Labor and Social Security indicates, Brazil has 18 international agreements in force that regulate these aspects and 6 more international agreements – on the same theme – in the process of ratification by the National Congress. Among the 18 agreements in force, some were established with countries that have a strong migratory relationship with Brazil, including the United States, Portugal and Spain. Also among these agreements are the Ibero-American and Mercosur conventions, which cover a multiplicity of countries.

Unlike treaties to avoid double income taxation, which have the UN and OECD model conventions as standard, social security agreements do not follow a pre-established standard. The analysis on a case-by-case basis, therefore, becomes more important, and it is necessary to verify, first, the country to which the employee moving and, also, how long this employee will reside there. As a general rule, treaties signed by Brazil that the employee is subject to social security legislation (which, in our view, may include the obligation to pay social security contributions) of the country in which he/she performs his/her work.

This general rule is, for example, article 9 of the Ibero-American Multilateral Convention on Social Security, promulgated in Brazil by Decree 8,358/14:

Article 9 General rule

Without prejudice to Article 10, persons to whom this Convention applies shall be subject exclusively to the social security legislation of the State in whose territory they are active, dependent or independent, which allows them to be included in the scope of that legislation.

From this provision, it is possible to understand that the employee and his employer must contribute to the social security of the country in which the employee carries out his activities.

At a domestic level, however, there may be doubts as to the imposition of social security contributions due by the employer on the wages paid to that employee. This is because Article 22, items I and II, of Law 8,212/91 does not seem to distinguish between people who carry out their activities in Brazil and people who carry out their activities abroad. Notwithstanding, Section 22 of Law 8,212/91 only determines the imposition of the contributions over wages paid to workers that are included in Brazilian social security. As the treaties usually determine that a worker must be included only in the social security system of its residence State, we understand that there are arguments to sustain that the person subject to this general rule should not be subject to social security contributions in Brazil.

Despite the relevance of the issue, there are no clear guidelines from th tax authorities or case law regarding the imposition of social security contributions due by the employer in the case of employees of a Brazilian company who carry out their activities outside Brazil. There are, however, answers to consultations issued by the Federal Revenue Service of Brazil (RFB) on the reverse scenario, in which the employee of a foreign company comes to work in Brazil. In these consultations, there are indications of the social security treatment to be applied in the case where the employee of the Brazilian company starts working abroad.

Issued by the Taxation Division of the Regional Superintendences of the Federal Revenue of Brazil (Disit), the SRRF06 76/13 Consultation Solution (SC Disit SRRF06 76/13), analyzed the case in which workers temporarily moved from Japan to Brazil. Similar to Article 9 of the Ibero-American Multilateral Convention on Social Security transcribed above, Article 6 of the treaty signed between Brazil and Japan, promulgated by Decree 7.702/12 (Brazil-Japan Agreement), provides, as a general rule, that the employee will be subject exclusively to the legislation of the country in which he carries out his activities. In Article 7, however, the Brazil-Japan Agreement provides special provisions, applicable to cases of temporary displacement, in which the employee remains subject to the legislation of his country of origin.

Because it is temporary displacement, tax authorities concluded that there should not be the imposition of social security contributions over the wages paid to them, provided that the requirements of the Brazil-Japan Treaty were met.

Based on The SC Disit SRRF06 76/13, it is worth highlighting two conclusions. The first is that the worker's subjection to the social security legislation of one of the countries implies the need to collect social security contributions in that country. The second, less obvious, conclusion is that both social security contributions due by the employer and by the employee are covered by the agreement. In other words, if the employee is subject to the social security legislation of only one of the countries, his employer must also collect social security contributions only to that country. Another highlight is that SC Disit SRRF06 76/13 also states that there is no imposition of contributions to third parties, based on the understanding that these contributions "must follow the same legal design given to social security contributions, because, in relation to this matter, there are no specific rules".

Subsequently, the General Coordination of Taxation (Cosit) issued Answer to Consultation 360/17 (SC Cosit 360/17), in which it analyzed the application of the social security treaty signed between Brazil and South Korea, promulgated by Decree 9.751/19 (Brazil-Korea Agreement).

The Brazil-Korea Agreement also includes the general rule that the employee must be subject to the social security legislation of the country in which he works and to exceptions regarding the temporary displacement of employees between the two countries. Thus, SC Cosit 360/17 also points out that, provided that the requirements laid down in the treaty are fulfilled, employees temporarily displaced from South Korea to Brazil are not subject to the collection of Brazilian social security contributions.

Like SC Disit SRRF06 76/13, SC Cosit 360/17 recognizes that contributions to third parties (specifically, salary-education and contribution to the National Institute of Colonization and Agrarian Reform – Incra) do not affect the case. However, the rationale is different: SC Cosit 360/17 states that such contributions cannot be charged because employees displaced to Brazil, in the case analyzed, are not included in the General Social Security System. In a very similar sense, Answer to Consultation 454/17, also issued by Cosit (SC Cosit 454/17), presented the same understanding.

SC Cosit 360/17 and SC Cosit 454/17, in addition to analyzing the case of the employee temporarily displaced to Brazil, are dealing with the possibility of requesting the refund of amounts unduly paid as social security contributions on the wages granted to these employees. In both answers, it was concluded that restitution may be authorised. Cosit's Answer to Consultation 278/18 (SC Cosit 278/18) confirms the possibility of offset of improperly collected employer contributions being made against debits of those contributions in later periods.

None of these manifestations of the tax authorities addresses the case in which the Brazilian company employee is moved abroad. They deal only with cases where employees of foreign companies temporarily come to provide services in Brazil.

We believe, however, that it is possible to extend its legal foundations to cases in which the employee of a Brazilian company starts to develop its activities abroad. As seen, Art. 22 only allows the imposition of social security contributions due by the employer in the case of workers who are included in the Brazilian social security. The answers to consultations, however, make it clear that the subjection of the exclusive worker to the social security legislation of one country excludes its link to the social security of the other country.

When the employee moves to a country that has a social security treaty with Brazil, we understand that there may be arguments not to collect social security contributions on the wages paid to that employee. This possibility, however, depends on the terms of the treaty with the country of destination. It should be checked, in particular, whether it contains the general rule of subjection to the legislation of the country in which the services are performed and whether there are exceptions applicable in the case.