Publications
- Category: Real estate
The rise of the dollar and the growing demand for commodities led to a significant increase in the General Market Price Index (IGP-M), an index calculated by the Brazilian Institute of Economics (Ibre) of Getulio Vargas Foundation (FGV). Although the Brazilian Lease Law does not determine which index should be used for adjust the lease agreements rental, IGP-M is traditionally used.
This significant increase in the IGP-M has triggered several discussions about the rightness of its application in lease relations and led tenants and landlords to negotiate the adoption of other indices, such as the Amplified Consumer Price Index (IPCA) – calculated by the Brazilian Institute of Geography and Statistics (IBGE) to "measure the inflation of a set of products and services in the retail market, referring to the personal consumption of families".
The IGP-M is measured monthly and seeks to stipulate the "variation in the prices of goods and services, as well as raw materials used in agricultural, industrial and construction production". It results from a weighted arithmetic average of three other indices:
- 60% of the Wholesale Price Index (IPA-M), which records the variation in prices in inter-business transactions between agricultural and industrial producers, such as commodities, and is especially impacted by the exchange rate;
- 30% of the Consumer Price Index (IPC-M), which registers the daily price variation of a fixed set of goods and services, reflecting the oscillations on the purchasing power of families; and
- 10% of the National Construction Cost Index (INCC-M), which measures the evolution of housing construction costs and is also impacted by the price of commodities, such as steel and cement.
Choosing IGP-M as an index for calculating the annual adjustment of rent values goes back to the hyperinflation period – before the Plano Real was implemented. At the time, the controlled exchange rate was adopted and the linking of the IGP-M to the exchange rate variation prevented the value of rents from being eroded.
The option for the IGP-M is also related to the fact that its disclosure is made in a cumulative and periodic manner in three distinct moments: previous projections of the first and second periods of ten days and final index. The first disclosure is based on information from the period from the 21st to the 30th day of the month preceding the reference month, while the second comprises the period of 21st day of the prior month and the 10th day of the reference month. The third disclosure is the value of the final index. Thus, the way of disclosure of the index offers another advantage: the assurance of greater predictability and transparency for contractors.
With the adoption of the Plano Real in 1994, the IGP-M and the IPCA began to reach similar levels, so that there were no risks to the maintenance to keep the IGP-M as the readjustment index of rental leases. However, when the variable exchange rates took place in 1999, the IGP-M index grown up fast, becoming, in general, higher than IPCA. Although, at times, the IGP-M reaches annual variations lower than the IPCA – including negative variations, such as in 2017, the year in which the IGP-M was -0.52%, while the IPCA was calculated at 2.95% – this change occurs in periods of a drop in the parameters used to calculate the IGP-M – negative exchange rate and/or reduction in commodities prices – which do not directly affect the calculation of the IPCA.
The calculation of the IGP-M is directly affected by the situation of the foreign market. Currently, with the rise in the price of the dollar, tied to the increase in demands for commodities there was a significant increasing in the IPA-M and, consequently, in the IGP-M (until July 2021 it accumulate over than 36.8% in the last 12 months). On the other hand, the IPCA reached the level of 9.38% during the same period.
Considering the current scenario, five bills of law (PL) were filed in the House of Representatives trying to solve the crisis. They are:
- PL no. 1,255/21, authored by congresswoman Renata Abreu (Podemos/SP), which aims to establish the maximum adjustment not superior to twice the annual IPCA;
- PL no. 1,447/21, authored by the congressman Aureo Ribeiro (Solidariedade/RJ), which intends to determine the IPCA as an index of adjustment for all lease agreements of urban properties, allowing the adoption of other lower indexes, except if a superior is expressly approved by the tenant, also prohibiting the adjustment until 12/31/2022;
- PL no. 1,538/21, authored by the congressman Carlos Veras (PT/PE), who aims to create a specific law establishing the IPCA as an index for residential leases of urban and non-residential property, provided that tenants are classified as micro-enterprises, small-sized companies, individual entrepreneurs or liberal professionals, including the possibility of judicialization review of the contractual for whose adjustment, as of March/2020,has occurred by the IGP-M;
- PL no. 2,554/21, authored by the congressman Cleber Verde (Republicanos/MA), to determine that the adjustment index cannot be higher than the arithmetic average obtained between the IGP-M and the IPCA; and
- PL no. 1,026/21, authored by the congressman Vinícius Carvalho (Republicanos/SP), which proposes that the adjustment index may not be higher than the IPCA, unless the collection of higher value is expressly authorized by the tenant.
Currently, the projects are attached to Bill of Law No. 1,026/21, which is being processed as a matter of urgency and awaits for the vote in the plenary of the House of Representatives. The projects received, on 06/14/2021, the opinion of the Constitution and Justice and Citizenship Commission, which, despite "recognizing good intention", voted to reject all of them, understanding that the effects resulting from the approval would be contrary to those intended.
In addition to the initiative in the House of Representatives, the Social Democratic Party (PSD) filed, on 07/21/2021, the Argument for Breach of Fundamental Precept (ADPF) No. 869. The ADPF intends that, according to the interpretation of Article 317 of the Civil Code and Articles 17 and 18 of the Brazilian Lease Law based on the Constitution, the adjustment of residential or non-residential lease contracts should occur through the application of the IPCA, replacing the IGP-M, even if contractually chosen. In a supplementary manner, the ADPF requires the application of the IPCA to readjust residential and non-residential lease contracts during the coronavirus pandemic, claiming the constitutional illegitimacy of the set of decisions that determines the application of the contractually established IGP-M.
On 08/19/2021, the Office of the General Counsel for the Federal Government expressed opposition to the request, arguing that the violation of the constitutional precepts indicated– Article 317 of the Civil Code and Articles 17 and 18 of the Brazilian Lease Law – was not demonstrated.
Regarding the decisions within the courts of justice, there is no peaceful understanding. There are favorable decision to non-judicial intervention in relations between private entities, as well as decisions determining the replacement of the rental readjustment index to ensure the balance between the contractual parties.
Considering the absence of a peaceful position in the courts and that the measures suggested by the Legislative and Executive have not yet been appreciated, the best way to solve the crisis generated by the application of IGP-M in lease agreements remains the negotiation between landlord and tenant.
References:
RIMOLI, Flavius Tambellini. The discharge of the IGP-M and the intervention of the Judiciary. Crumbs, July 27, 2021. Available in: <https://www.migalhas.com.br/depeso/349078/a-alta-do-igp-m-e-a-intervencao-do-poder-judiciario>.
MAGRI, Diogo. IGP-M explosion brings disproportionate increase in rent and reveals index that has aged. The country, April 15, 2021. Available in: <https://brasil.elpais.com/economia/2021-04-15/explosao-do-igp-m-traz-aumento-desproporcional-do-aluguel-e-revela-indice-que-envelheceu.html>.
CARNEIRO, Luiz Orlando. PSD requires the Supreme Court application of the IPCA in lease agreements. JOTA, July 21, 2021. Available in: <https://www.jota.info/stf/do-supremo/ipca-aluguel-stf-21072021>.
MENDES, Jaqueline. The disproportionate strength of the IGP-M. That is, August 13, 2021. Available in: <https://www.istoedinheiro.com.br/a-forca-desproporcional-do-igp-m/>.
IGP-M: Results 2021. Getúlio Vargas Foundation, January 4, 2021. Available in: <https://portal.fgv.br/noticias/igp-m-resultados-2021>.
IPCA - Broad National Consumer Price Index. Brazilian Institute of Geography and Statistics. Available in: <https://www.ibge.gov.br/estatisticas/economicas/precos-e-custos/9256-indice-nacional-de-precos-ao-consumidor-amplo.html?=&t=o-que-e>
General Price Index - Market (IGP-M). Value Consulting. Available in: <https://www.valor.srv.br/indices/igp-m.php>
- Category: Litigation
The Superior Court of Justice (STJ) concluded the trial of Special Appeal No. 1903273/PR, under the rapporteurship of Minister Nancy Andrighi, and decided that the public disclosure of messages exchanged on the social media WhatsApp constitutes an unlawful act.
The Third Panel of the STJ maintained the understanding of the lower and the appellate court judge and, therefore, the obligation to compensate moral damages related to the illegal disclosure of prints of conversations exchanged in a group of WhatsApp, under the premise that "(...) third parties may only have access to WhatsApp messages with the consent of participants or judicial authorization."
According to the STJ, the confidentiality of communications under article 5, item XII,[1] of the Constitution of the Federative Republic of Brazil (CF) aims to safeguard the right to intimacy and privacy of citizens and, although the item deals only with the inviolability of telephone communications, in view of the advancement of technology in recent decades and the consequent advent of new forms of communication, it must also applies, by symmetry, to conversations maintained through social medias such as WhatsApp.
Minister Nancy Andrighi pointed out that since 2016 WhatsApp uses encryption to prevent conversations maintained through the application from being accessed by third parties, thus protecting the communication maintained between its users. She also considered that the dissemination of the private content of messages sent through WhatsApp configures not only a breach of confidentiality but also a violation of "(...) legitimate expectation, privacy and intimacy of the issuer”, because, when using this specific social media as a means of communication, the sender expects that the message will be read only by the recipient (or recipients in the case of conversation groups).
The collegiate also reported to the analysis made by the lower and the appellate court judge on the evidential set, through which injury to the image and honor of the author of the indemnity action of origin was found, caused by the unlawful disclosure of the prints of the conversations held in a WhatsApp’s group. The punishment of the person responsible for the dissemination of the messages did not result from the simple finding of the illegality of such disclosure, but rather the verification, in the specific case, of violation of the author’s personality rights perpetrated by the disclosure of the messages.
For the ministers of the Third Panel of the STJ, the confidentiality of communications can only be raised:
- by judicial decision, in the case of necessary criminal investigation or procedural instruction (Article 5, item XII, CF);
- upon consent of the participants or
- in cases where "(...) the display of the messages is intended to safeguard the receiver's own right", and it is necessary to examine the specific case in order to consider whether the right to freedom of information or the right to privacy will prevail.
It is interesting to draw attention to the understanding of the Superior Court in criminal proceedings. The panels specialized in criminal law have established their own interpretation by the illegality of the evidence obtained from accessing messages exchanged through WhatsApp without judicial authorization , since the conduct violates the constitutional guarantees of intimacy and private life[2].
According to the Sixth Panel, "[e]ventual deletion of a message sent (in the option 'Delete only for Me') or a message received (in any case) leaves absolutely no trace, neither in the application, nor in the paired computer, and therefore can never be recovered for the purposes of evidence in criminal proceedings, and due to end-to-end encryption technology, not even the company that provides the service can store on any server the content of the conversations maintained on its platform ".[3]
Given the volume of information exchanged daily via WhatsApp, the understanding of the Third Panel of the STJ outlines and updates the concept of confidentiality of communications constitutionally assured, establishing an significant development in the protection of constitutional guarantees to the privacy and intimacy of electronic message issuers.
Notwithstanding, although it was not specifically addressed in the decision, the ministers of the Third Panel remarked that there are cases in which it will be necessary for the sender or recipient of messages exchanged via WhatsApp to use its content to defend its own right, in which case the confidentiality of messages will be raised, even without the authorization of those involved or judicial authorization.
In summary, the use of electronic messages as a means of proof still finds an unclear scenario to be delineated by the case law, such as the considerations brought by the Sixth Panel of the STJ on the possible absence of authenticity of the messages exchanged via WhatsApp and its complete invalidity as a means of proof. With the advances in communication technologies, it is expected that the judiciary will increasingly face issues such as those dealt with in this decision, which challenge the concepts defined by the legislator and lead to the need for the judiciary to interpret them.
[1] "XII – the confidentiality of correspondence and telegraph communications, data and telephone communications is inviolable, except, in the latter case, by authorization of a Judge, in the cases and in the form that the law lays down for the purposes of criminal investigation or procedural investigation;"
[2] Rcl 36.734/SP, rel. Minister Rogerio Schietti Cruz, Third Section, judged on 10.2.2021, DJe 22.2.2021; AgRg no AgRg nos EDcl no REsp 1842062/RS, rel. Minister Felix Fischer, Fifth Panel, judged on 15.12.2020, DJe 18.12.2020.
[3] RHC No. 99.735/SC, rel. Minister Laurita Vaz, Sixth Panel, judged on 27.11.2018, DJe 12.12.2018
- Category: M&A and private equity
Resolution modifies rules for trading with securities and disclosure of material acts and facts
Alessandra de Souza Pinto, Clarissa Freitas, Raphael Zono, Giuliana Pescarolli Spadoni, Gabrielle Pelegrini and Helena Avanzi Leonardi
The Brazilian Securities and Exchange Commission (CVM) published, on August 23, CVM Resolution No. 44, replacing CVM Instruction No. 358/02, which deals with the rules for disclosure of information on material acts or facts, restrictions on trading in securities, and disclosure of information on securities trading.
CVM Resolution 44, which is expected to become effective on September 1, 2021, is the result of analysis of proposals sent by market participants, as well as of discussions promoted by the CVM itself on the matter within the scope of Public Hearing No. 06/20.
The main novelty brought in by the resolution was the inclusion of an exclusive chapter to regulate the illicit use of privileged information, promoting an alignment between the regulations and the case law of the panel, so that the presumptions that have been used in trials of cases involving insider trading are clearly provided for in the regulations.
Supported by Decree No. 10,139/19, CVM chairman Marcelo Barbosa found that the creation of a new resolution and changes to the rule would be more efficient: "The change brings about more clarity and predictability for market agents. The scope and interpretation of the standard become less dependent on the knowledge of a body of decisions handed down in concrete cases over time and more directly accessible from the reading of its content".[1]
To establish the practice of illicit misuse of privileged information, article 13 of CVM Resolution 44 provides for a number of presumptions. The main ones are:
- The person who traded securities possessing material information not yet disclosed made use of such information in said trading.
- Controlling shareholders (direct or indirect), directors, and members of the Board of Directors and audit committee have access to all relevant information not yet disclosed. In addition, these persons, as well as those who have a commercial, professional, or trust relationship with the company, when accessing undisclosed material information, know that it is privileged information.
- An officer who leaves the company with material, undisclosed information is entitled to use such information if he trades in securities issued by the company within three months from the time he leaves the company (under the previous rule, former officers were prohibited from trading for six months).
- From the moment studies or analyses are initiated, the information on any transactions of corporate reorganization, business combination, change in control, cancellation of registration as a publicly-held company, and change in the environment or trading segment of the shares issued by the company, as well as on requests for judicial or extrajudicial reorganization and bankruptcy made by the company itself are relevant.
However, these presumptions are relative, which means that they admit evidence to the contrary, and may be used in combination, as the case may be. They must be analyzed in conjunction with other elements that indicate whether or not the illicit use of privileged information was in fact committed.
These presumptions do not apply:
- to cases of private trading of treasury shares, in the context of share-based compensation to which the company's officers and directors, employees, or service providers are entitled;
- trades involving repoed fixed income securities, under the conditions set forth in CVM Resolution 44; and
- the subscriptions of new securities issued by the company, without prejudice to the application of the rules on disclosure of information in the context of the issuance and offer of such securities.
The inclusion of the presumptions that had already been applied in the new resolution, addressing both their respective contents and the applicable subjects, provides a clearer picture for their application in concrete cases. Thus, the consolidation of CVM's own understanding and case law on the new resolution is beneficial, as it provides more transparency and clarity to market players.
Among the other changes brought about by CVM Resolution 44, the following stand out:
Trading by exclusive investment funds
The new standard also provides that trades of exclusive investment funds are presumed to have been decided under the influence of the shareholder, admitting evidence to the contrary. This presumption does not apply to exclusive investment funds whose unitholders are insurers or open-ended supplementary pension entities and have as their objective investment of funds in free benefit generating plans (PGBL) and free life benefit generating plans (VGBL) during the grant period.
Autonomous blackout period
CVM Resolution 44 maintained the prohibition against the company, controlling shareholders, officers, members of the board of directors, and audit committee from trading in securities issued by the company during the 15 days preceding the disclosure of quarterly financial information and annual financial statements.
However, the rule now makes it clear how the 15-day period is to be calculated (excluding the day of disclosure, with trading permitted on that day only after disclosure of the financial statements) and that the prohibition applies regardless of knowledge of the contents of the quarterly financial information and annual financial statements by such persons. In other words, this is now an objective prohibition, which does not depend on proof of whether or not such persons held relevant information not yet disclosed to the market.
The members of technical and advisory committees were excluded from the prohibition, although the general restriction on trading in securities issued by the company remains in place in the event of knowledge of material information not yet disclosed to the market.
The prohibition does not apply in cases of:
- trading involving repoed fixed income securities, under the conditions set forth in CVM Resolution 44;
- transactions aimed at fulfilling obligations assumed before the blackout period arising from securities lending and exercise of put or call options by third parties and forward sale and purchase agreements; and
- trades carried out by financial institutions and legal entities that are members of its economic group, if performed in accordance with the company's trading policy and in the normal course of business.
Disclosure policy
The policy for disclosure of material acts or facts, the adoption of which was mandatory for all publicly-held companies, will now be mandatory only for companies that, cumulatively:
- are registered with the CVM under category "A";
- are authorized by a market operator to trade securities on a stock exchange; and
- have outstanding shares (free float) issued by the company, understood as all shares that are not held by the controlling shareholder and persons related to it, as well as those held by company officers and directors and those held in treasury.
Thus, under the new standard, companies registered in category "B" or registered in category "A" without shares admitted for trading and free float are not required to approve a formal disclosure policy.
[1] Ministry of Economy. "CVM updates rule on material facts". https://www.gov.br/cvm/pt-br/assuntos/noticias/cvm-atualiza-norma-sobre-fatos-relevantes
- Category: Infrastructure and energy
The Ministry of Mines and Energy (MME) published, on August 16 of this year, Normative Ordinance No. 19/GM/MME (PN MME 19/21) to regulate the classification of pipeline projects in the oil, natural gas, and biofuels sector and infrastructure for production and processing of natural gas in the Special Arrangement for Incentives for Infrastructure Development - REIDI, established by Law No. 11,488/07.
PN MME 19/21 revokes prior ordinances that dealt with the matter. They are Ordinance No. 404/GM/MME, of October 20, 2009, and Ordinance No. 406/GM/MME, of October 20, 2009.
In order to facilitate identification of the modifications introduced by PN MME 19/21, we have prepared a comparative table among the three. We adopted as a reference the new ordinance, correlating it with the provisions of the prior ordinances that dealt basically with the same subject. We highlight in yellow some relevant points that were changed, but other issues should be evaluated according to the specific projects.
The table below can also be accessed by clicking here.
REIDI - This is the Special Arrangement for Incentives for the Development of Infrastructure.
Comparison between Normative Ordinance No. 19/GM/MME/21 and MME Normative Ordinance Nos. 404/09 and 406/09
| Normative Ordinance No. 19/GM/MME, of August 16, 2021 |
MME Normative Ordinance No. 404, of October 20, 2009 |
MME Normative Ordinance No. 406, of October 20, 2009 |
| Establishes the procedures for the approval of pipeline projects for the oil, natural gas, and biofuels sector and for natural gas production and processing infrastructure for the Special Arrangement for Incentives for Infrastructure Development - REIDI, instituted by Law No. 11,488, of June 15, 2007, and sets forth other provisions. | Establishes the procedures for the approval of projects for pipelines for the flow, transfer, and transport of oil, natural gas, oil byproducts, and natural gas or biofuels and for pipelines for the distribution of local piped gas services, for the Special Arrangement for Incentives for Infrastructure Development - REIDI, instituted by Law No. 11,488, of June 15, 2007, and sets forth other provisions. | Texto do corpoEstablishes the procedures for approval of investment projects in natural gas production or processing infrastructure, for the Special Arrangement for Incentives for Infrastructure Development - REIDI, instituted by Law No. 11,488, of June 15, 2007, and sets forth other provisions. |
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The MINISTER OF MINES AND ENERGY, Deputy, in the use of the powers conferred upon her by article 87, sole paragraph, subsections II and IV, of the Constitution, in view of the provisions of Law No. 11,488, of June 15, 2007, Decree No. 644, of July 3, 2007, article 4, sole paragraph, of Decree No. 10,139, of November 28, 2019, and what is contained in Case No. 48001.003991/2009-00, resolves:
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The MINISTER OF MINES AND ENERGY, in the use of the powers conferred upon him by article 87, sole paragraph, subsections II and IV, of the Constitution, in view of the provisions of article 1 of Law No. 11,488, of June 15, 2007, article 5, subsection V, and article 6 of Decree No. 6,144, of July 3, 2007, resolves: | The MINISTER OF MINES AND ENERGY, in the use of the powers conferred upon him by article 87, sole paragraph, subsections II and IV, of the Constitution, in view of the provisions of article 1 of Law No. 11,488, of June 15, 2007, article 5, subsection II, item “b”, and article 6 of Decree No. 6,144, of July 3, 2007, resolves: |
| Article 1. The private legal entity, owner of an infrastructure project in the oil, natural gas and their derivatives, and biofuels sector, may request inclusion of the respective project in the Special Arrangement for Incentives for Infrastructure Development - REIDI. | Article 1. The private legal entity, owner of a pipeline infrastructure project for the flow, transfer, transport of oil, natural gas, oil byproducts and natural gas or biofuels or pipeline infrastructure project for the distribution of local piped gas services, interested in qualifying for the Special Arrangement for Incentives for Infrastructure Development - REIDI, shall request of the National Agency of Petroleum, Natural Gas and Biofuels - ANP classification of the respective project in the aforementioned Arrangement. | Article 1. The private legal entity, owner of an investment project in natural gas production or processing infrastructure, interested in being included in the Special Arrangement for Incentives for Infrastructure Development - REIDI, shall request of the National Agency of Petroleum, Natural Gas and Biofuels - ANP classification of the respective project in the aforementioned Arrangement. |
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1. The infrastructure projects referred to in the head paragraph should be subject to permission, authorization, or concession, under the terms of current legislation and regulations, and fit into one of the following categories:
I - fuel transportation pipelines;
II - fuel transfer pipelines;
III - gas pipelines under regulation of the National Agency of Petroleum, Natural Gas, and Biofuels - ANP;
IV - pipelines for the provision of local piped gas services;
V - production of non-associated natural gas; and
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Article 2. For approval for the REIDI, the pipeline projects must fit into one of the following categories:
I - flow or transfer pipelines;
II - authorized transport pipelines;
III - granted transportation pipelines; and
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| 2. For the purposes of this Ordinance, a project is defined as a work or set of works related to the same venture, with a defined deadline and scope. | Article 1, paragraph 1. For the purposes of this Ordinance, a project is defined as a work or set of works related to the same venture. | Article 1, paragraph 1. For the purposes of this Ordinance, a project is defined as a work or set of works related to the same venture. |
| Paragraph 3. The legal entity that executes the project, incorporating the infrastructure work into its fixed assets is considered the owner of an infrastructure project. | Article 1, paragraph 2. The following are considered to be owners of the pipeline project:
I - the legal entity that executes the project, incorporating the infrastructure work into its fixed assets; or
II - in the case of a project executed in a consortium, alternatively:
(a) the legal entities participating in the consortium, in which case all of them shall submit the required documentation; or
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Article 1, paragraph 3. The following are considered to be natural gas production or processing project owners:
I - the legal entity that executes the project, incorporating the infrastructure work into its fixed assets; or
II - in the case of a project executed in a consortium, alternatively:
a) the legal entities participating in the consortium, in which case all of them shall submit the required documentation; or
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Article 2. The request for classification of the project must be done:
I - with the ANP, in the case of projects from the categories of article 1, paragraph 1, subsections I to III, V, and VI; and
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| 1. The request referred to in the head paragraph shall be made by means of the Form in Exhibit I completed and signed by the legal representatives with management powers, according to the articles of incorporation of the legal dentity owner of the project, by the technical manager and the accountant of the legal entity owner of the project, accompanied by the following information and documents:
I - of the legal entity that owns the project:
a) business name;
b) registration number in the National Register of Corporate Taxpayers - CNPJ; and
c) name and Individual Taxpayers’ Registry (CPF) number of the legal representatives, the technical manager, and the accountant;
II - the infrastructure project:
a) name of the venture;
b) the category it falls into, among those indicated in article 1, paragraph 1;
c) act of granting permission, authorization, concession, or equivalent administrative act issued by the competent body;
d) location of the venture: Municipalities and States of the Federation;
e) description of the project, with dimensions, general characteristics and main constituent elements of the venture;
f) physical and financial schedule for implementation of the project;
g) indication of the start and end date of implementation of the project;
h) form of Exhibit I of this Ordinance, signed by the legal representatives, technical manager, and accountant of the legal entity owner of the project; and
i) in the case of pipelines to be classified in article 1, paragraph 1, subsection IV, because they are pipelines with contracts regulated by the State Public Power, declaration of the competent body, representing the state granting power, confirming that the positive impact of the REIDI benefit will be considered in the definition of the piped gas distribution tariffs, in the form of Exhibit II of this Ordinance, for the purposes of the provisions of article 6, paragraph 1, subsection I, of Decree No. 6,144, of July 3, 2007;
III - estimates of the project's investment and the amount of tax suspension resulting from the REIDI, pursuant to articles 2 and 3 of Decree No. 6,144, of 2007, based on the month prior to the date of submission of the request referred to in article 2, in the manner set forth in the Exhibit I of the present Ordinance, containing the following information:
a) investments in goods (machinery, equipment, and construction materials), third-party services and others to be acquired with levy of the Contribution for the Social Integration Program and the Public Servants' Equity Formation Program - PIS/Pasep, of the Contribution for the PIS/Pasep-Import, of the Contribution for the Social Security Funding - Cofins and of Cofins-Import during the period of enjoyment of the Special Arrangement; and
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Article 1, paragraph 3. The request referred to in the head of this article must contain:
I - the business name of the legal entity owning the pipeline project to be analyzed, as well as its registration number in the National Register of Corporate Taxpayers - CNPJ;
II - the description of the pipeline project, including:
a) name of the venture;
b) number of Construction Authorization, issued by the ANP, if the pipeline is for the flow, transfer, or transport of oil, natural gas, or oil by-products and natural gas, or a copy of the equivalent administrative act, issued by the competent state or municipal agency, if the pipeline is for the distribution of piped gas;
c) copy of the Installation License, issued by the competent environmental agency, in the event the pipeline is for biofuels;
d) location of the venture: Municipalities and States of the Federation;
e) dimensions and general characteristics of the venture;
III - indication of the option referred to in article 1, paragraph 2, subsection II, of this Ordinance, in the case of projects executed in a consortium.
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Article 1, paragraph 4. The request referred to in the head of this article must contain:
I - the business name of the legal entity that is the owner of the natural gas production or processing project to be analyzed, as well as its registration number with the National Register of Corporate Taxpayers - CNPJ;
II - a description of the project, comprising:
a) name of the venture;
b) number of the Construction Authorization, issued by the ANP, related to the natural gas production or processing project;
c) name of the field and number of the ANP Board of Directors Resolution that approved the Development Plan, if the request refers to a natural gas production field;
d) location of the venture: Municipalities and States of the Federation; and
e) dimensions and general characteristics of the venture;
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| Paragraph 2. In the case of a project executed in a consortium, only the lead legal entity shall make the application and submit the required information and documentation. | ||
| Paragraph 3. The legal entity that owns the project may request of the ANP the REIDI classification simultaneously with the request for Construction Authorization of the project to be classified in article 1, paragraph 1, subsections I to III, V, and VI, cases in which the requirement of article 2, paragraph 1, subsection II, letter "c", shall apply to close the analysis, pursuant to article 3, paragraph 4. | Article 1, paragraph 4. The legal entity or the interested consortium, when applicable, may request of the ANP inclusion in the REIDI simultaneously with the request for Construction Authorization of the pipeline infrastructure project, in which case the requirement of letter "b" of subsection II of paragraph 3 of this article shall not apply. | |
| Paragraph 4. For the purposes of the provisions of article 6, paragraph 1, subsection I, of Decree No. 6,144, of 2007, the approval of transport gas pipeline projects, to be classified in article 1, paragraph 1, subsection III, is conditioned on the ANP's declaration that the REIDI benefits were considered in the calculation of the transportation tariff. | Article 2, paragraph 2. Because they are pipelines with contracts regulated by the Federal Public Power, approval of the projects referred to in subsection III of the head paragraph of this article is subject to the declaration by the ANP that the REIDI benefits were considered in the calculation of the ceiling price of the annual revenue used as a parameter in the bidding for the concession of the right to operate the pipeline. | |
| Article 3. In the case of article 2, subsection I, the ANP shall analyze the appropriateness of the application to the terms of Law No. 11,488, of June 15, 2007, and Decree No. 6,144, of 2007, as well as the conformity of the documents submitted. | Article 3. The ANP shall analyze the appropriateness of the request to the terms of Law No. 11,488, of June 15, 2007, and Decree No. 6,144, of 2007, as well as the conformity of the documents submitted. | Article 2. The ANP shall analyze the appropriateness of the request to the terms of Law No. 11,488, of 2007, and Decree No. 6,144, of 2007, as well as the conformity of the documents submitted. |
| In the event that a deficiency is found in the supporting documentation for the application, the applicant shall be notified, preferably by means of the e-mail addresses stated in the application, to regularize the deficiencies within twenty days, as of the date of notice, under penalty of the proceeding being shelved. | Article 3, paragraph 1. In the event that insufficient information is found in the application, the applicant shall be ordered to remedy the deficiencies within twenty days from the date of notice. | Article 2, paragraph 1. In the event that insufficient information is found in the application, the applicant shall be ordered to remedy the deficiencies within twenty days, counted as of the respective knowledge. |
| In the analysis referred to in the head paragraph, the ANP shall opine on the adequacy of the claim, the conformity of the project, and the documents submitted, including the reasonability of the estimates of the investments and the value of suspension of taxes and contributions resulting from Reidi. | ||
| Paragraph 3. The ANP may hear the Energy Research Company - EPE as to the reasonability of the estimates of the investments. | ||
| Once the analysis referred to in the head paragraph is completed, the ANP shall submit documents relevant to the Case and forward it to the Ministry of Mines and Energy, reporting, in the Letter sent, the data and the list of documents submitted, as provided for in article 2, paragraph 1, and the classification category of the project in accordance with article 1, paragraph 1. | Article 3, paragraph 2. Once the analysis referred to in the head paragraph is completed, in the event the appropriateness of the request is confirmed, the ANP shall issue an Official Letter to the Ministry of Mines and Energy - MME, suggesting approval of the project. | Article 2, paragraph 2. Once the analysis referred to in the head paragraph is completed, in the event the appropriateness of the request is confirmed, the ANP shall issue an Official Letter to the Ministry of Mines and Energy - MME, listing the documents submitted, reporting the data indicated in article 1, paragraph 4, of this Ordinance and suggesting its approval. |
| Paragraph 5. In the case of article 2, subsection II, one applies the provisions of this article to the Bureau of Petroleum, Natural Gas, and Biofuels of the Ministry of Mines and Energy, where applicable. | ||
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Article 4. The project shall be considered classified into the REIDI upon publication of an Ordinance of the Ministry of Mines and Energy, which shall state:
I - the business name and CNPJ registration number of the legal entity that is the owner of the approved project;
II - the description of the project, specifying the category of the classification pursuant to article 1, paragraph 1;
III - the estimates of the investments and the suspension of taxes resulting from the Reidi, of the exclusive responsibility of the legal entity owning the project; and
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Article 4. The project shall be considered approved to request registration with the REIDI upon publication, in the Official Gazette of the Federal Government, of a specific MME Ordinance, which must state:
I - the business name and CNPJ registration number of the legal entity that is the owner of the approved project, which may request registration for the REIDI; and
II - a description of the project, specifying the sector in which it fits, as defined in the head paragraph of article 5 of Decree No. 6,144, of 2007.
III - if the documents provided for in article 1, paragraph 5, of this Ordinance have been submitted.
(Revoked by MME Ordinance No. 127, of February 23, 2011)
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Article 3. The project shall be considered approved to request qualification with the REIDI upon publication, in the Official Federal Gazette, of a specific MME Ordinance, in which the following shall be stated:
I - the business name and CNPJ registration number of the legal entity that is the owner of the approved project, which may request registration for the REIDI; and
II - a description of the project, specifying the sector in which it fits, as defined in the head paragraph of article 5 of Decree No. 6,144, of 2007.
III - if the documents provided for in article 1, paragraph 5, of this Ordinance.
(Revoked by MME Ordinance No. 127, of February 23, 2011)
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| Paragraph 1. The technical changes or changes in ownership of projects approved under this Ordinance shall not give rise to the publication of a new Ordinance of approval, provided that such changes have been authorized by the ANP or the Ministry of Mines and Energy and do not imply disqualification of the venture. | ||
| Paragraph 2. In the case of projects in the category of article 1, paragraph 1, subsection IV, one applies the provisions of paragraph 1, provided that the changes have been authorized by the competent state body, and the owner of the project must forward to the Ministry of Mines and Energy a copy of the authorization documentation. | ||
| Paragraph 3. After publication of the Ordinance referred to in the head paragraph, the qualification of the legal entity owning the project shall be requested of the Brazilian Internal Revenue Service, pursuant to article 7 of Decree No. 6,144, of 2007. | ||
| Paragraph 4. The benefits of the REIDI may be enjoyed in the period and under the conditions established in article 3 of Decree No. 6,144, of 2007. | ||
| Article 5. The Ordinance that approves the classification of the project into the REIDI, pursuant to this Ordinance, shall be rendered ineffective and the project considered not implemented in the event of extinguishment of the granting of authorization or concession, pursuant to article 2, paragraph 1, subsection II, letter “b”. | ||
| Article 6. The project owner shall forward to the Ministry of Mines and Energy and to the Brazilian Internal Revenue Service a copy of the Operation Authorization or equivalent document issued by the ANP or by the state regulatory agency, as the case may be, within thirty days of its issuance. | ||
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Article 7. The provisions of this Ordinance apply to the projects for which classification into the REIDI was requested, based on Ordinances No. 404/GM/MME, of October 20, 2009, and No. 406/GM/MME, of October 20, 2009, and which were not approved by the date of publication of this Act, subject to the following:
I - for the projects provided for in the head paragraph, which fall under the terms of this Ordinance, the legal entity owning the project shall resubmit the respective application in accordance with the provisions of articles 1 and 2, within a period of up to sixty days as of the publication of this Ordinance, for the purpose of complementing the analysis and instruction of the Case as provided for in article 3, under penalty of the Case being closed; and
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| Article 8. After the approval or rejection of the applications for classification into the REIDI, the respective Cases shall be returned to the ANP. | ||
| Sole paragraph. In the case of pipelines classified under article 1, paragraph 1, subsection IV, the respective Cases shall be completed at the Ministry of Mines and Energy. | ||
| Article 9. The ANP, within the scope of its powers, shall verify and certify the completion and start of operation of the venture, for the projects classified in article 1, paragraph 1, subsections I to III, V and VI, and in conformity with the documents presented at the time of authorization of construction or with their modifications previously approved by it. | ||
| Article 10. The ANP shall inform the Ministry of Mines and Energy and the Federal Revenue Service of Brazil of the occurrence of situations that evidence non-implementation of the project classified in the manner set forth in an Ordinance. | ||
| Article 11. After publication in the Official Gazette of the Federal Government, the Ordinances regarding classification of projects into REIDI shall be available on the website of the Ministry of Mines and Energy | Article 5. The records of the analysis process of the project shall be filed and available at the ANP for consultation by whomever is so entitled, as well as for inspection by the MME and the Control Bodies. | Article 4. The records of the analysis process of the project shall be filed and available at the ANP for consultation by whomever is so entitled, as well as for inspection by the MME and the Control Bodies. |
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Article 12. The following are repealed:
I - Ordinance No. 404/GM/MME, of October 20, 2009; and
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| Article 13. This Ordinance shall enter into force on the date of its publication. | Article 6. This Ordinance shall enter into force on the date of its publication. | Article 5. This Ordinance shall enter into force on the date of its publication. |
- Category: Restructuring and insolvency
Since the enactment of Law No. 11,101/05, legal scholars and case law have been trying to find a fair balance between the principles that govern bankruptcy law and the necessary protection of workers' rights. More recently, the case law has been revisiting issues pertinent to the treatment of labor creditors in reorganization and bankruptcy proceedings. At the same time, legislation has also challenged old formulas and sought new perspectives, especially with the advent of Law No. 14,112/20.
In the discussions prior to the approval of Law No. 11,101/05, the need to incorporate into the legislation a new vision that would break with the old paradigm of absolute inflexibility of workers' rights was already perceived, in order to reconcile the interests of the working class with the need to preserve the company. This was emphasized in an opinion by Senator Ramez Tebet when the text of the law was presented in the Federal Senate: "What is intended is to provide conditions for viable companies to remain active. Clearly, profound administrative reorganizations will often be necessary. But the important thing is that workers are not victimized by the most deleterious social effect of bankruptcies: the unemployment that arises from the pure and simple disintegration of bankrupt companies."
Although there is still some resistance, one notices that the case law tends to give labor claims a more suitable treatment to protect the business activity and even the interests of the workers themselves. In addition to the need to ensure effective conditions for the viability of business, a balance is sought so that the legislation’s mechanisms for protection do not turn into damage precisely for those whom the law sought to protect.
As an example, there is the recent judgment of REsp No. 1.924.164/SP, which discussed the starjting point of the one-year term provided for in article 54 of Law No. 11,101/05 for payment of labor claims. In this case, with Justice Nancy Andrighi writing for the court, the Superior Court of Appeals (STJ) reversed the decision of the São Paulo Court of Appeals (TJSP) to define that the starting point for the payment of workers is the date of ratification of the plan, and not the date of the end of the period of suspension of actions against the debtor in possession, as indicated in Ruling I of the Group of Chambers Reserved for Business Law of the TJSP. In her written opinion, the Justice pointed out that "[...] maintenance of the solution granted by the appellate decision at issue may result in losses for the creditors to whom the Law sought to grant special treatment, given that, in view of the limited financial resources of the debtor in possession, they may be compelled to accept even greater discounts due to having to receive the amounts prior to the beginning of the company's reorganization."
The TJSP, which in the aforementioned judgment was more conservative with respect to the term for payment of labor creditors, has on other occasions been more flexible in this regard, as in the case of Interlocutory Appeal No. 2134208-86.2020.8.26.0000, for which the reporting judge was Appellate Judge Grava Brazil. Considering the peculiarities of the specific case, the São Paulo court admitted in this judgment extension of the one-year term established by article 54 of Law No. 11,101/05. This same appellate decision also addressed another recurring topic in the discussions related to control of the legality of the judicial reorganization plan, which is the possibility of applying a discount on labor claims, admitting, in this case, a discount of 50% from the claims.
Also noteworthy is the recent case of the judicial reorganization of the Renova Group, in which the chief judge of the TJSP granted staying effects to the special appeal filed by the debtor in possession in Interlocutory Appeal No. 2026269-13.2021.8.26.0000, suspending the effects of a decision that, based on Ruling I of the Group of Chambers Reserved for Business Law of the TJSP, established the starting point of payment of labor claims as of the end of the stay period.
Such is the importance of these issues that the reform promoted by Law No. 14,112/20 introduced paragraph 2 into article 54 of Law No. 11,101/05. Firm in the purpose of seeking a vision that conciliates the protection of labor creditors with a margin of availability that benefits effective restructuring, paragraph 2 of article 54 provides for the possibility of extending the payment period for labor creditors by up to two years, provided that:
- sufficient collateral has been provided;
- the proposal has been approved by the majority of the labor creditors; and
- full payment of the labor claims is guaranteed.
In cases involving qualified labor creditors, the TJSP has also indicated the possibility of establishing discounts and limitation on amounts for the payment of labor claims, as illustrated by Interlocutory Appeal No. 2231529-24.2020.8.26.0000, taken from the in-court reorganization of Odebrecht.
Negotiation initiatives involving labor claims are not restricted to the scope of the plan: in some cases there are campaigns for out-of-court settlements involving labor claims, as in the judicial reorganization of the Atlântico Sul Shipyard - case number 0000162-07.2020.8.17.2730, in progress before the 1st Civil Court of the Judicial District of Ipojuca/PE.
Another very significant example of this new vision incorporated into the treatment of labor creditors is the possible assignment of claims derived from labor legislation. This is an option that opens new horizons for labor creditors, with possible gains in liquidity, which acquires relevance in the midst of the pandemic and in times of economic recession.
Although Law 11,101/05 did not prohibit assignment of the claim, the (now repealed) article 83, paragraph 4, pertaining to bankruptcy, but sometimes applied by analogy to judicial reorganizations, represented a true disincentive for the practice, by providing that labor claims assigned to third parties would be considered unsecured. This condition resulted in damage to the labor creditors themselves, since it devaluates the claim of those who, in an inferior position, many times had in the assignment of their credits the opportunity to carry out faster recovery of funds. Law No. 14,112/20 repealed this provision, which should attract the increasing appetite of investors for receivables, considering the priority of labor claims in the competition of creditors, now maintained even after assignment.
In this regard, it is also worth mentioning the very recent decision by the Superior Labor Court (TST) in the judgment of AIRR - 820-23.2015.5.06.0221, rendered by Justice Douglas Alencar Rodrigues, which indicates the possibility of assignment of labor claims. Although in this case the claim of the purchaser of the receivable was not granted, due to merely procedural issues, the Justice pointed out that "the assignment of labor receivables is fully possible," referring to the innovation introduced by Law No. 14,112/20. This represents a great advance if we consider the strong reservations that the labor courts have always maintained in relation to this type of negotiation.
Another quite innovative aspect of Law No. 14,112/20 is the possibility of labor claims being submitted to out-of-court reorganization, which was prohibited in the original wording of article 161, paragraph 1, of Law No. 11,101/05. There is, therefore, one more vote of confidence given by the legislator to private negotiations involving labor claims, including in an environment subject to greater freedom, if compared to the judicial reorganization and bankruptcy arrangements. It is important to remember, however, that the negotiation with the workers in the scope of the out-of-court reorganization requires participation by the labor union of the category.
It is noticeable that the legislation and case law have been proposing a general change of paradigm that projects new perspectives for in-court and out-of-court reorganizations and bankruptcies in the treatment of labor claims under Law No. 11,101/05. Although it is still too early to assess the practical result of all these innovations, it is certain that this movement results from a perception by operators of the law that the traditional structures were not sufficient to solve the complex conflicts that emanate from relations between employees and insolvent companies. In any case, it seems clear that the trend is to get everyone, including those who did not do so or who did so with greater limitations, to actually be brought to the table to negotiate concrete solutions for the recovery of their claims.
- Category: Labor and employment
Uncertainty about the return to face-to-face work and the flexibility provided by remote work have popularized the anywhere office, an English term that designates the work done from anywhere.
In practice, the employee performs his activities wherever he wants, without limiting himself to his original home address. At his sole discretion, he can work from another city or even from another country.
Second research conducted by the McKinsey Global Institute, 50% of the executives interviewed believe that their companies will adopt, after the pandemic, models in which up to 50% of the work will be carried out remotely. Only 10% of executives believe that more than 80% of the work will be done in person.
In this context, more and more companies have adopted strategies to improve remote work, in order to make it more attractive, healthy and productive for employees, thus benefiting both parties (employee and employer). More and more people have also rethought the need to continue living in large metropolises and work only from one place.
This is the case, for example, of employees who are from the capital and choose to rent houses in land or on the coast for seasons, or who choose to work from various places for certain periods, renting apartments or houses for short periods.
However, as a result of the change in the employee's residence and depending on the place chosen, the anywhere office may characterize transfer. This is because, according to Article 469 of the Consolidation of Labor Laws (CLT), the change in the workplace that results in the change of domicile of the employee is considered transfer.
In this case, it is the company's responsibility to bear all the costs of change. In the event of a provisional transfer (characterized when the employee has the prospect of returning to the original place of service), an additional transfer equivalent to 25% of the employee's monthly salary will be due.[1]
Would the anywhere office then lead the payment of the costs of the moving and the additional transfer by the companies?
Labor legislation only provides for hypotheses in which the transfer takes place at the employer's initiative and not for the employee's exclusive interest. Accordingly, the case-law is that, when the transfer takes place at the request of the employee, the company is not obliged to pay the additional transfer.[2]
Therefore, in case of change of the place of provision of the services made by the employee, in its sole discretion, the additional transfer would not be due and the company would not be responsible for the costs arising from the change of the workplace. However, the theme is recent and may give different interpretations if the circumstances of the change in the workplace are not demonstrated in case of questioning.
Thus, for companies that want to enable the anywhere office, it is essential that the remote work policy establishes the procedures and conditions to be observed by the employee who, by his/her will, wishes to change his/her workplace.
In addition, by agreeing with the anywhere office, the company may not require the employee to return immediately from the place where he/she is providing the services. It will be necessary to grant a minimum period of 15 days for the employee to return to the original place, in addition to providing for this period and the conditions of return in the company's policy on the subject.
The formalization of the rules and the express record of the employee's choice (and not the determination of the employer) are the main arguments of the company to mitigate risks in case of legal questions related to payments arising from the change of the workplace.
[1] Jurisprudential Guidance No. 113 of the SDBI-1 of the Superior Labor Court (TST).
[2] RR-Ag: 0001567-88.2012.5.09.0028
RR-Ag: 0021680-38.2015.5.04.0015
RO: 0011580-72.2017.5.03.0147