Category: Institutional

In its rhythm of continuous expansion, these promotions strengthen the firm’s Litigation, Corporate, Real Estate, Infrastructure, and Tax practices

Machado Meyer Advogados announces the appointment of nine new partners. The promotions, which are effective as of January of 2022, include Fernanda Cury Messias, Guilherme Azevedo, Mariana Meditsch, Paulo Henrique Carvalho Pinto, Marcos Costa, Bruno Eduardo Pereira Costa, Paulo T. C. Machado, Fernando Munhoz, and Virgínia Pillekamp.

"Machado Meyer is committed to creating internal opportunities for the professionals already on our team. These appointments reflect the continued importance of valuing our professionals, coupled with the firm's good performance throughout the year. Our intention continues to be to offer intelligent legal solutions, with a qualified team of excellence, acting assertively to meet the needs of our clients," says Tito Andrade, managing partner of Machado Meyer Advogados.

From now on, the Corporate area has new partners on its staff. Fernanda Cury Messias specializes in banking and debt capital market transactions, project finance, syndicated transactions, and debt restructuring. Guilherme Azevedo specializes in structuring public offerings of debt and equity securities and structured finance. Mariana Meditsch performs advisory work in structuring M&A transactions, negotiating and drafting purchase and sale agreements, investment agreements, shareholders' agreements, conducting due diligence, corporate restructurings, and advising foreign clients intending to begin activities in Brazil. Paulo Henrique Carvalho Pinto, a lawyer specialized in structuring corporate and M&A transactions, including the purchase and sale of equity stakes and assets, spin-offs, takeovers, transformations, mergers, and conducting due diligence. He also works with corporate law, succession planning, and advising foreign clients on investment and registration in Brazil.

The Litigation area now has Marcos Costa as a partner. An expert in civil procedure, consumer law, aviation, civil, arbitration, and corporate litigation, he practices in lawsuits, actions of great economic or business repercussion, arbitration, diagnosis of legal issues, preventive control of lawsuits, due diligence, contingency analysis, and legal opinions.

Bruno Eduardo Pereira Costa is specialist in real estate law and real estate business. He practices in agribusiness and agrarian contracts, in addition to having experience with transactions with real estate in general, structuring of real estate developments and subdivisions. He participates in the processes of real estate due diligence and risk evaluation in operations involving the acquisition and encumbrance of real estate in urban and rural areas. He is also active in crisis management projects and will be a partner in this area.

In the infrastructure practice, Paulo T. C. Machado has been appointed, whose specialty is project structuring, financing operations, and regulation of the electric power sector. His work involves all stages of the development, implementation, and operation of infrastructure projects, in particular the negotiation of construction contracts (EPC), the supply and operation of power sector assets, and the structuring of financing operations.

Finally, Fernando Munhoz is becoming a Partner in the Tax practice. He is an expert in administrative and judicial tax litigation, with extensive experience in conducting and managing strategic cases for domestic and foreign companies, with expertise in the food and beverage, pharmaceutical, telecommunications, mining, and retail sectors; and Virginia Pillekamp, a lawyer specialized in indirect taxes, customs regulations, and who practices in various tax matters, such as implementation of enterprises in Brazil, corporate or business model restructuring, obtaining special regimes, administrative litigation, and preparation of formal consultations with the tax authorities, advising industries, commercial companies, and Brazilian and foreign service providers.

About Machado Meyer Advogados

Founded in 1972, Machado Meyer Advogados is one of the most respected law firms in Brazil. It offers legal assistance to Brazilian and international clients, including large corporations from the most varied sectors of activity, financial institutions, and government entities. The firm is present in São Paulo, Rio de Janeiro, Brasília, Belo Horizonte and New York. www.machadomeyer.com

Access the Legal Intelligence Center, Machado Meyer’s vision of matters that impact on your business. Perceptions, analysis, and information from our lawyers on current legal issues.

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Category: Banking, insurance and finance

In line with the process of easing foreign exchange regulations implemented by the Central Bank of Brazil and with the principles of broad freedom to carry out foreign exchange operations, Resolution 4948 of the National Monetary Council (CMN), which will enter into force on January 3, 2022, brings good changes to derivative operations contracted abroad.

The new regulation will revoke CMN Resolution 3.312/05 – an exchange regulation that deals with derivatives – and will be applied to financial institutions as well as to legal entities and natural persons that contract or want to contract derivative transactions with a foreign counterparty. It provides in a simple, broad and objective way that financial institutions and other institutions authorized to operate by the Central Bank of Brazil may carry out derivative transactions abroad, of any modality regularly practiced in the international market.

Currently, the regulation does not support the contracting of cross-border derivatives for protection (hedge) of the variation of any foreign currency against the Brazilian Real. If a Brazilian company wants to contract a derivative operation to protect itself from the variation of the Brazilian Real against another currency, it has to hire it in Brazil with a Brazilian counterparty (local operation). In order to contract the operation abroad, that company needs to use meansoutside the country (an investment fund or other group company located abroad, for example).

This is because the wording of CMN Resolution 3.312 brings a subtlety. The regulation allows the contracting of international financial transfers linked to derivatives operations intended to hedge commercial or financial rights and obligations subject to  parity risks "between foreign currencies". By inserting the expression "between foreign currencies" in its wording, the resolution excluded from its scope the hiring of foreign exchange operations related to derivative transactions contracted between a Brazilian party and another party abroad that had parity with the Brazilian Real as one of its parameters.

CMN Resolution 3.312 establishes derivative transactions contracted between a Brazilian party and a foreign party that can exchange transactions to make payments from one party to the other. In addition to those involving parity between foreign currencies, this includes only transactions intended to hedge commercial or financial rights or obligations, subject to the risk of variation in interest rates or commodity prices on the international market. By the current regulation, therefore, only a few types of international derivatives operations can be contracted. In addition, such operations should always have the purpose of hedging.

With the enforcement of CMN Resolution 4948, all of this will be revoked. The restrictions on types of operations and the obligation to contract the operation exclusively for protection purposes will end.

The new regulation also amends Article 8 of CMN Resolution No. 3,568, which is one of the pillars of the Brazilian exchange rate system. This article provides that natural persons and legal entities may contract foreign exchange operations of any nature together with an agent authorized to operate in the foreign exchange market, in view of the legality of the transaction, based on the economic rationale and the responsibilities defined in the respective documentation.

CMN Resolution 4,948 inserted a paragraph in such Article 8, establishing that transfers relating to the trading of derivative financial instruments abroad, of any modality regularly practiced on the international market, must be made in authorized banks on the foreign exchange market. With this modification, the regulator makes it clear that the general rule applicable to foreign exchange operations provided for in Article 8 of CMN Resolution No. 4,948 becomes the one that will regulate foreign exchange transactions related to derivative transactions contracted abroad, without the ties of CMN Resolution No. 3,312.

The repeal of CMN Resolution 3,312 ends the requirement to register the derivative operation for the contracting of the exchange operations provided for therein – except for the registration of derivatives linked to loans between residents or domiciled in Brazil and residents or domiciled abroad carried out on the basis of Resolution 2,770. The registration of the derivative transaction, however, will continue to be a condition of the validity of derivative contracts, according to Article 2, §4 of Law 6.385/76.

All these changes brought by CMN Resolution 4,948 open new perspectives for the derivatives market contracted abroad. They can contribute to increasing competition and expanding the supply of sophisticated products to local customers.

Category: Litigation

Given the current economic scenario, the issue of contractual guarantees is increasingly in vogue in legal transactions conducted in recent years. To ensure faithful and full compliance with the signed contracts, parties have sought mechanisms to ensure the security of these instruments.

To enter into and perform a business deal, it is not enough just to believe that the debtor will honor its contractual obligations. It is necessary to guarantee that, in the event of breach of contract, the creditor will be able to enforce, quickly and efficiently, the guarantees that will be presented to it to compensate it for the losses that default will surely cause it. It can be said, therefore, that the existence of a guarantee is often what defines the completion (or not) of a deal. Hence its importance is obvious.

Sureties and guarantees are the most common contractual guarantees. Both are chosen in many situations in commercial practice, even though they do not tie the debt to a certain asset, precisely because they are personal guarantees, inasmuch as they originate from contractual relationships.

While surety is valid for contracts in general, a guarantee is a concept linked to the exchange law and can only be attached to negotiable instruments.

Although there is a difference between the concepts, contracting parties are rarely able to distinguish them easily. These types of guarantees are even confused with the situation in which, specifically, extension of joint and several liability is established (article 264, Civil Code). For this reason, it is common to find a mistake in the nomenclature of the type of guarantee indicated in the contract, a fact that may give rise to litigation regarding interpretation of the clause that stipulates it will be provided.

In other words, the intervening joint and several guarantor is not to be confused with the surety provider or guarantor. Nevertheless, the joint and several debtor and the guarantor are liable for the obligation under the same conditions, in the same way, and at the same time as the debtor who assumed the obligation (articles 275 and 899, Civil Code), not providing for, therefore, the benefit of discussion which the guarantor is given by operation of law.

Regarding the benefit of discussion, the creditor must first sue the principal debtor. Thus, the execution of the guarantor's assets (for the entire debt) starts only in the event that no assets of the original debtor have been found or due to insufficient funds. At any rate, if the contract indicates a waiver of the benefit of discussion, a possibility that is legally provided for and does not give rise to an abusive clause (Special Appeal No. 851.507), the guarantor, who previously was secondarily liable for the debt, now competes with the original debtor, as occurs in cases of joint and several liability and surety.

While surety is an ancillary and solemn contract (which must observe written form, article 819, Civil Code, and be executed by public or private instrument, or, further, in the body of the contract itself), the validity requirement of joint and several liability and sureties is unique: the signature of the joint debtor and the guarantor in the contractual instrument suffices.

On the other hand, although the joint and several liability and guarantees, unlike surety, have a substantially autonomous and independent nature (since they are not subordinated to the main  obligation), they are not to be confused with each other either, since guarantees are a specific concept for negotiable instruments.

It is also important to pay attention to the legal formalism related to the spousal consent, which prevents one of the spouses from assuming specific obligations without the prior authorization of the other spouse in order to avoid deterioration of the couple's assets. If, on the one hand, there is no legal provision providing for the need for spousal consent for the validity of the joint and several liability, on the other hand, there is a settled understanding that the “surety provided without the authorization of one of the spouses entails total ineffectiveness of the guarantee" (Precedent 332 of the STJ).

Although there is a provision in the law requiring spousal consent in order for a guarantee to have full effectiveness (article 1,647, III, Civil Code), a provision that is confirmed by the majority of the judgments that have decided on the matter, recent case law has taken the position that the interpretation of this article must be suited to the characteristics of the guarantee.

Considering that a guarantee gives more efficiency and agility to banking transactions, reducing, moreover, the costs of financial transactions, the law could not impose the need for a consent, at risk of condemning the very concept to failure.

And that is why recent judgments have taken the position that the need for spousal consent should be limited to cases in which the guarantee is provided on securities governed by the Civil Code (in consonance with article 1,647, III, Civil Code). It does not reach the nominated (typical) negotiable instruments, which are ruled by special laws, in which there would be no such requirement.

Having outlined the main differences between the concepts of joint and several liability, sureties, and guarantees, the importance of the distinction of nomenclatures and the correct use of such concepts by the contracting parties is noted. It is evident that, although there are similarities, the intervening joint and several guarantor, the surety provider, and the guarantor are distinct legal concepts and, therefore, they must be clearly defined in the contractual provisions in order to avoid application of a regime different from the will of the contracting parties.

Category: Real estate

In a recent ruling on an appeal against a decision that denied attachment of real property classified as family property (interlocutory appeal 2075933-13.2021.8.26.0000), the 16th Chamber of Private Law (CDP) of the São Paulo Court of Appeals (TJSP) decided, by majority vote, in favor of the exceptional possibility of setting aside the unattachability of family property (with a declared value of R$ 24 million), even if intended for housing of the debtor.

Applying the principles of proportionality and reasonableness, the judges ruled that the setting aside of the unattachability provided for in Law 8,009/90 is possible, provided that the objective of the law and the minimum equity for the debtor to maintain a decent life (in this case, set at 10% of the value of the original property) are maintained, for him to purchase another property for his residence.

The concept of family property aims at legal protection and preservation of a single property intended for the residence of the family entity that allows the concomitant exercise of the fundamental rights to housing, human dignity, and the existential minimum. In the event the family entity owns more than one property intended for its residence, the law determines that the protection indicated is restricted to the property of lesser value or to the one in whose enrollment the concept was registered, but without establishing a maximum value for the family property concept.

The protection of the right to housing provided for in the law constitutes a social right included in article 6 of the Federal Constitution and, further, is classified as protection of a fundamental right, and is not absolute, but may be weighed against other constitutional rights and principles. By loosening the legal rule, the understanding evidenced in the decision rekindled the discussion on the maintenance of the unattachability of one's own residential property or that of a family entity, regardless of its value.

According to the decision, a literal interpretation of Law 8,009/90 could lead to the understanding of maintaining the unattachability of the family property, regardless of value. However, according to most judges, the law should have an interpretation in line with the provisions of article 5 of the Law of Introduction to the Norms of Brazilian Law and article 8 of the Code of Civil Procedure, taking into account the social purposes for which the law is intended and the requirements of the common good, observing the principles of proportionality, reasonableness, legality, and efficiency.

The decision of the 16th CDP of the TJSP sought to give effectiveness to the aforementioned provisions, giving the magistrate the possibility of going beyond the application of the letter of the law and seeking the ultimate meaning of the legislation. To justify the decision, the judge responsible for the majority opinion posed rhetorical questions regarding the protection of the family property concept to extend to property whose fraction of value exceeds the total assets of most Brazilians, having understood that there is no need for property worth R$ 24 million to preserve the dignity and existential minimum of the debtor.

The understanding that prevailed, therefore, was that the protection of family property, when of a high value, should be mitigated to ensure the effectiveness of the creditor's right to receive the amount due. The debtor's right to housing and dignity must be safeguarded, however, by segregating a percentage of the proceeds from the future auction in order for him to purchase a new property, which cannot be attached pursuant to Law 8,009/90.

The interpretation favorable to the creditor still represents an isolated understanding, but in the long run may be part of a change in the case law of Brazilian courts, establishing a maximum limit on the value of the property to be protected by the family property concept. For greater legal certainty, however, the ideal situation is to settle the discussions involving family property by means of more precise regulations in law, whether to impose new limits, or to ensure that the protection of the concept does not encounter barriers beyond those provided for in the legal text.

Category: Labor and employment

Everyone knows that Brazil has an enormous number of labor claims. What perhaps a large part of the population is unaware of is that, as large as the number of labor claims in progress in Brazil are, the total amounts paid by companies to ex-employees are as large.

According to the research conducted by the Superior Labor Court (TST) itself, in 2020, about R$28 billion was paid to workers, an amount higher than the Labor Courts' own budget for the same year, of R$18.8 billion.

Leaving aside the reasons that lead Brazilian workers to sue their employers, the fact is that the Labor Courts move a lot of money, not only for the workers, but to the public coffers, since this is an important source of revenue.

With so much money floating around Brazil's Labor Courts, not a few saw labor claims as a form of investment. Thus, assignments of claims of their holders, claimants, to third parties began.

The TST was concerned about this indiscriminate assignment of claims, since it was increasingly common for claimants to assign claims to their own attorneys, which, in the view of the TST at the time, harmed the worker and the Judiciary itself.

In this context, Justice Emmanoel Pereira forwarded to the Federal Board of the Brazilian Bar Association (OAB) a consultation requesting that the entity pronounce an understanding on the assignment of claims from claimants to lawyers and, if it was allowed by the Statute and Code of Ethics of the OAB, whether it should be communicated to the Court in which the case where the assigned claim originated. The answer was simple and categorical: the acquisition of labor claims by the lawyer represented in the case violates the Code of Ethics of the Brazilian Bar Association, due to the privileged relationship that the lawyer has with his client, since, in general, he knows his client's financial condition, his expectations, and the peculiarities of the case he is representing.

The matter was then dormant for a while until it recently came back into the spotlight because of a decision handed down by the TST. In a judgment on a motion for clarification in a lawsuit that discussed the assignment of claims, Justice Douglas Alencar rendered the understanding that the assignment of labor claims is perfectly acceptable, provided that it is done in strict observance of the general requirements of validity of the legal transaction. That is, in the Justice's view, it can be done.

The decision was sufficient for big players in the financial market, previously wary of the practice, to feel more comfortable exploring the market and seeking some answers from their legal advisors. Investors' concerns are the most varied: how to map the lawsuits? How is the assignment effected? Must the judge of the case be informed of the assignment? Can the Labor Courts bar the assignment and annul the contract entered into between the parties concerned?

It is too early to have all the answers. However, we venture to opine that the greatest concern of labor judges regarding the good order of the process is, to a large extent, allayed by the professionalization of the assignment market.

Investment funds interested in Brazilian workers' claims have high levels of corporate governance, are supervised by regulatory agencies, and are subject to risk assessments and reputational damage for their practices. In other words, they have a lot to lose from dubious transactions.

As to the interference of the Labor Courts in the assignments of claims, we believe it makes total sense if performed in the form of ratification decisions with respect to the assignments. With this, not only the parties to the lawsuit win, but also those involved in the assignment of the claim and the Judiciary itself, since there will be a judicial declaration attesting to the good order of the assignment, the free and unimpeded will of the assignee, and the absence of harm to the litigating parties. The ratification procedure would be very similar to the one adopted in the evaluation of traditional agreements, with an evaluation of the terms of the agreement and ratification of the will of the parties.

It is clear that the issue will demand action by investors in the courts. A tête-à-tête with the judges will be fundamental to demonstrate the good faith in the acquisition of the claim, the benefits to the claimant party, and the importance, for the transaction, of the endorsement of the Judiciary on the assignment.

To the great litigants of the Labor Courts we send a message to tighten their belts, invest in prevention of labor violations, and take heart to endure some good battles with the funds, which will become the holders of their claims.

Category: M&A and private equity

Contracts for the purchase or sale of companies, whether drawn up by sellers or buyers, usually follow a market pattern. The difference relates only to certain requirements or to the intensity or manner of determining certain conditions, depending on which side drafts the first draft.

In general, the industry also sets certain conditions, because some issues usually affect all companies in the same operating segment to a greater or lesser extent. A frequent example is activities that have rules and legislation specific to the activity and are supervised by regulatory agencies, as is the case of concessionaires or permitholders of energy and telecommunications public services. In these cases, there are not only typical industry issues from the commercial point of view of customer and supplier relations, but also requirements of specific legislation.

Throughout the negotiation and, mainly, after the investigation of the situation of the company that is the target of the acquisition, other specific situations usually arise that must be addressed in the acquisition agreements and that, in fact, are situations of that particular company.

Although all these common conditions exist and various contractual clauses are considered "standard", in all acquisitions the contracts are obviously different, due to issues specific to the industry or to the legal, financial, and commercial situation of the company being acquired, as to the person of the sellers (whether a family that directly holds an interest in the company, a large conglomerate, or even the market, when it is a publicly traded company, with or without defined control). The topics addressed are the following:

• price and adjustment;
• conditions precedent or closing conditions;
• indemnity (what is indemnifiable by each party, what the limits are, if any, to the indemnity obligation, whether in time or in amount);
• closing acts; and
• general provisions and form of dispute settlement between the parties (arbitral or judicial proceeding, mediation, etc.).

In acquisition transactions in general, therefore, there is an entire legal framework to seek protection, on the buyer's side, in relation to possible contingencies, materialized or not, in relation to the company that are of concern because they may fall upon the buyer. After all, obtaining compensation for losses arising from acts or facts that occurred before the purchase was made can be complex. This is the biggest concern of those who acquire a business in Brazil. So much so that in many acquisitions, collateral is also provided or requested for the seller's obligation to indemnify the buyer after completion of the transaction.

The conditions precedent are certainly of concern, in addition to other possible situations or conditions of the deal, but it is undeniable that the indemnification clause is almost always the clause that usually causes the biggest discussions between the parties. It is usually the most stressful point for the buyer in acquisition transactions. These are consequences subsequent to the closing, to the actual acquisition, which in fact require a lot of dedication during the negotiation. The time between signing and closing is as short as possible, except in transactions that require prior authorization from the antitrust authority, regulatory agency, or shareholders in order to be concluded.

In judicial reorganizations, the concern changes

In one type of acquisition, especially, the focus of concern changes a lot: these are acquisitions of companies (or assets of companies) under judicial reorganization. In such cases, companies in financial difficulties can be more effective in paying their creditors and restoring their activities. It is a strict and supervised procedure whereby the indebted company is granted a term to continue operating while negotiating with its creditors, in compliance with the Reorganization and Bankruptcy Law (LRF or Law No. 11,101/05), as amended.

The process allows companies to renegotiate accumulated debts, with the objective of effectively enabling recovery of activities and avoiding closure, layoffs, and lack of payments. To this end, the company must present its reorganization plan showing that, even in the face of difficulties, it can get back on its feet, if it can renegotiate its debts to continue to be active with production.

By requesting judicial reorganization, the company obtains a moratorium, that is, payment to creditors is postponed or suspended, for it to be able to focus on paying employees, raw materials, and products essential to the operation of the business.

Article 60 of the LRF deals specifically with the sale of branches or Isolated Production Units (UPIs) of the company under reorganization. The sole paragraph of this provision assures the acquirer of the absence of succession:

Article 60. If the judicial reorganization plan approved involves the judicial sale of branches or isolated production units of the debtor, the judge shall order that it be carried out, with due regard for the provisions of article 142 of this Law.

Sole paragraph. The object of the sale must be free of any encumbrance and there shall be no succession in the debtor's obligations, including tax obligations, subject to the provisions of paragraph 1 of article 141 of this Law.

The UPI is not defined in the LRF, but it is understood as something close to the establishment, an organized set of assets through which a business activity is carried out (whether the UPI is a company and all its assets or only part of the corporate assets).

Although there is no legal definition, a UPI is formed when the judicial reorganization plan is approved by the judge and the creditors. It can be sold during the reorganization period. This possibility allows, in addition to renegotiation with creditors, the entry of financial or strategic investors and reestablishment of the business. For the world of mergers and acquisitions, it is therefore an excellent opportunity, although the operation here has its complexities.

And, amazingly, the complexity in these acquisitions does not lie in the risk of the buyer succeeding the seller with respect to the contingencies and liabilities of the company (or set of assets) that is the subject of the transaction. This is because the LRF provided that there is no succession in the debtor's obligations in sales made under reorganization and bankruptcy proceedings. The purpose was to allow the sale to generate funds that enable satisfaction of the creditors' interests, either by direct and immediate payment of their claims, or by using the proceeds of the transaction to boost the company's activities, in compliance with the judicial reorganization plan.

In other words, in contracts for the acquisition of UPIs, the potential problems and complex clause are not usually indemnification or guarantee of liability for existing liabilities or those that may arise later, but which arise from issues prior to the completion of the transaction, because in these cases there is no question of succession of the purchaser in relation to the liabilities of the debtor in possession. In these UPI acquisition situations, the major concern is in the acquisition procedure: formation of the UPI and its scope (validity and legitimacy of the formation of the UPIs); the formal process and compliance with the requirements of Law No. 11,101/05 and the respective judicial reorganization plan for consummation of the transaction; maintenance of the condition of the business and activities; and the least possible deterioration in the UPI's economic and financial situation.

In other words, in UPI acquisition processes, the concern is not with the phase after the closing and execution of the acquisition, but with the period before. Not only because the economic and financial situation of the businesses developed by a UPI is more delicate, or its deterioration more likely, but for all the other issues, which are detailed below.

To minimize the risks of the acquisition, even after the ratification of the judicial reorganization plan that contemplates the transaction and its main terms and conditions, it is important that the legal term for the filing of any appeal have elapsed. In the event an appeal is filed, no court decision shall be in force granting a stay of such appeal against the decision that authorized the sale of a UPI (in addition, of course, to the decision by CADE and regulatory agencies, as applicable).

The risk of occurrence of what in the jargon of acquisitions is called "material (or relevant) adverse effect" in relation to the business and the economic and financial situation of a UPI is greater due to the delicate situation of a UPI even before the acquisition, inasmuch as time is a determining factor for the success or failure of the operations. With this, the very conduct of the activities in their normal course and the necessary maintenance of the company's investments in its activities and in the preservation and updating of assets and client portfolio, as well as all the concerns of not deteriorating the activities, are much greater than in a company in a "normal" situation or one that is not under judicial reorganization.

It is also important to negotiate reasonable monitoring of financial information, to the extent permitted by law, so that the buyer can know and monitor the situation of the UPI up to the effective date of acquisition.

Another feature that gains importance when it comes to a transaction involving a UPI, although it is not very common in sale and purchase transactions of companies, is the so-called breakup fee or fine for termination of the purchase and sale agreement before the closing. In the case of a UPI, this is almost a mandatory rule to minimize the loss of investment opportunity, which, in cases of judicial reorganization, may be decisive for non-recovery of the UPI or the seller, as the case may be. A fine to be paid in favor of the seller becomes of utmost importance in this case.

Often, in UPI sale and purchase agreements, there is not even an obligation to indemnify sellers, or, even if there is, it cannot be relied upon. The risk in this case is only in relation to the costs of any legal defense, as the law itself protects the buyer from liability for prior liabilities of the UPI.

It is concluded that the absence of the greatest fear (mainly of foreign acquirers/investors, who sometimes have greater difficulty in understanding the risks of Brazilian businesses) in relation to the succession of known and/or hidden liabilities of the business after its effectiveness may not exist in the acquisition of a UPI. In this type of acquisition, the concern comes in the run-up to the actual acquisition.

So whether it is an acquisition of a company in a normal situation or a business in judicial reorganization, the legal, financial, and business challenge should never be overlooked. The question is only the "moment" at which there is the greatest risk: after or before the acquisition is done.

Category: Infrastructure and energy

The joint board of the National Civil Aviation Agency (Anac) approved sending for public consultation a draft resolution with new rules on airport coordination and allocation and monitoring of the use of airport infrastructure. The main reason for the proposal was the halting of the operations of Oceanair Linhas Aéreas S.A. in 2019, when Anac and the Administrative Council for the Defense of Competition (Cade) identified a possible increase in concentration in some airports, a fact that could cause impacts on the Brazilian air market.

Following a temporary redistribution of Oceanair's slots (airport infrastructure allocated to the air operator to perform a landing and takeoff operation at specific date and time), Anac identified the need to revise the existing regulation (Anac Resolution 338/21) to better address operational issues, minimize competitive impacts, and increase efficiency in the use of airport infrastructure.

One of Anac's greatest concerns is the criteria for slot distribution at airports with saturated infrastructure and the potential impediment to access by new operators. In revising Resolution 338/21, the agency found that the allocation criteria are not sufficient to promote market deconcentration and allow the operation of new airlines, making competition unviable and reducing the possible benefits for users.

To remedy the problem, the regulatory agency proposes to create a category of airport called "coordinated saturated airport - level 4", that which "has a level of airport capacity saturation that compromises any of the critical components (runway, tarmac, or terminal), as well as conditions that result in barriers to entry, with potential damage to the contestability of the market and effective competition", according to the wording of the draft of the new resolution.

By establishing new criteria, Anac intends to mitigate the problem of lack of infrastructure and seeks to offer better services to society. The technical note that supports the draft resolution indicates a series of technical arguments and international principles that help support the idea of a new regulation. The structuring principles of the new standard are as follows:

• Efficiency - optimizing the use of available airport infrastructure;
• Contestability of the market - establishing a regulation that no longer represents a barrier to new entrants and that allows for increased competition;
• Regulatory stability - alignment of Brazilian norms with international standards;
• Operational/administrative cost improvement - creation of methods to decrease the operational costs of airlines and Anac's administrative costs related to slot distribution and redistribution processes.

Another important point in the draft resolution, which may bring about significant changes for the dynamics of the Brazilian air market, is the regulation of slot transfers and exchanges, currently prohibited by Resolution 338/21. By removing the limit for the assignment and exchange of slots, Anac intends to enable the operation of companies that did not obtain slots due to lack of availability. By allowing the assignment or exchange of slots, Anac intends to increase access to the market and reduce the occurrence of corporate transactions conducted for the sole purpose of acquiring the right to use the slot. The slots still do not constitute assets of the air transport company and represent exclusively the right to use the airport infrastructure on a temporary basis. The maintenance of this right is linked to compliance with the criteria established in the resolution.

The exchange or assignment of slots will need to be approved by Anac, which will evaluate the characteristics of the operation of each of the parties involved and the airport’s capacity. An airline that gives up slots will be prohibited from receiving them from the slot pool for three equivalent seasons, except in cases where there are no other interested parties. In addition, only companies that have had a recognized slot history for three consecutive equivalent seasons will be able to assign slots. In cases involving saturated airports (level 4), only companies with a percentage equal to or lower than the percentage defined in a specific declaration submitted by the airport operator when preparing the coordinated airport declaration may receive slots.

If approved, the new resolution will cause significant changes in the planning of air transport companies. The text of the resolution is still subject to change and can be accessed on Anac's official website. Contributions to the draft may be made by any citizen or company until December 9, 2021, through the appropriate electronic form, also available on the official website of Anac.

Category: Labor and employment

Following up on our series on the Infralegal Labor Regulatory Framework, we will discuss in this article its impacts on the Certificate of Approval of Personal Protective Equipment (PPE), in accordance with the provisions of Art. 167 of the Consolidation of Labor Laws.

According to the Regulatory Standard No. 6, Personal Protective Equipment shall be considered as any device or product, for individual use used by the worker, intended to protect risks that may threaten safety and health at work.

Companies are legally obliged to provide employees free of charge with the risk-appropriate PPE, in perfect condition and operation, in the following circumstances:

• where general measures do not offer complete protection against the risks of accidents at work or occupational and occupational diseases;
• While collective protection measures are being implemented; and
• To respond to emergencies.

Article 167 of the CLT^[1] determines that the PPE can only be put on sale or used with the indication of the Certificate of Approval of the Ministry of Labor. By changing the device, the Decree 10,854/21 determines that, for the commercialization of PPE, the certificate must be requested exclusively by the manufacturer or importer and issued through a simplified electronic system by the Labor Secretariat of the Ministry of Labor and Social Security.

Through the Ordinance 672/21, the Minister of Labor and Social Security disciplined the necessary criteria for the issuance, renewal and alteration of the Certificate of Approval by the manufacturer or importer, and the technical requirements stipulated in Annexes I, II and III of the ordinance must be observed.

The standard expanded the responsibility of the manufacturer and importer, who responds technically, civilly and criminally to THE EPIs. In no event will this responsibility be transferred to the Ministry of Labor and Social Security, even if the Approval Office has been duly issued by the agency.

Although the company that acquires the effective PPE, as attested by the Certificate of Approval, has some legal certainty regarding the product, in case of possible ineffectiveness or irregularity of the PPE, it will be held accountable to the Labor Court for the consequences suffered by the employee, since the standard is expressed by removing the responsibility of the issuing body of the Certificate of Approval. Thus, the mere issuance of the certificate does not guarantee the full effectiveness and validity of the PPE. However, the liability of the employer acquiring the PPE to the Labor Court does not rule out any civil action of return in the face of the manufacturer or importer.

If the manufacturer or importer submits false declarations or documents for the issue of the certificate, it shall be subject to:

• imprisonment of two to six years and fine in case of falsification or alteration of public document;
• imprisonment from one to five years and fine in case of falsification or alteration of a private document; or
• imprisonment from one to five years and fine (if the document is public) or imprisonment from one to three years and fine, from five hundred thousand réis to five contos de réis (if the document is private), in case of omission or insertion of false or different statement that should be written, in order to prejudice right, create an obligation or change the truth about a legally relevant fact. Currently the fine is fixed in the sentence and calculated in fine days according to the economic situation of the defendant. The amount is at least ten to a maximum of 360 days-fine, and may not be less than one thirty of the monthly minimum wage in force at the time of the fact, nor more than five times that salary. Thus, considering the minimum wage of R$ 1,045.00, the fine ranges from R$ 34.83 to R$ 5,225.00.

The ordinance expressly determined that the analysis of the request for issuance of the certificate be made by the Labor Secretariat of the Ministry of Labor and Social Security, and no longer by Inmetro, through the General Coordination of Safety and Health at Work of the Subsecretariat of Labor Inspection of the Labor Secretariat. To this end, the test report issued by a national laboratory accredited by Inmetro to prove the effectiveness of ppe protection will be verified.

A test report has been allowed abroad, provided that the certifying body of the issuing country is accredited by a multilateral recognition agreement signatory body and that the test report is issued by a foreign laboratory also accredited by a multilateral recognition agreement signatory body provided for in the standard.

Thus, Brazilian companies are allowed to import any PPE, but the analysis and verification of the equipment will not be done by the Ministry of Labor and Social Security, which may eventually affect the quality and effectiveness of the product and, in a way, reduce the safety of the acquiring company.

The validity period of the PPE Certificate of Approval shall be five years from its date of issue if the test report has been issued less than one year ago, or from the date of the test report, if it is longer than one year.

The newly published ordinance also integrated the regulation of the Respiratory Protection Program – Recommendations, Selection and Use of Respirators to the measures to be observed for the use of respiratory protection equipment.

The standard unified and organized procedures, programs and conditions of safety and health at work, in addition to the infralegal standards for issuing the CERTIFICATE OF APPROVAL OF PPE, which should be made through a single system totally electronic, which makes the process and the supervision of the validity of the PPE more accessible and agile.

Once the criteria stipulated and observed the technical requirements provided for in Ordinance 672/2021, with an assessment of the impacts according to the needs of each company, will be possible to guarantee greater legal certainty and avoid penalties for the provision of PPE not validated by the labor authorities.

All changes in the obligations related to the issuance of the CERTIFICATE OF APPROVAL OF PPE become effective on December 11 of this year, 30 days after the publication of Decree 10.854/21.

In the coming weeks, we will continue to publish articles to explore, in a simple and practical way, the main changes brought by the decree, ordinances and normative instructions, clarifying the main impacts for companies.

Click here to read the other articles in the series.

^[1] Art. 167, CLT – Protective equipment may only be put up for sale or used with the indication of the Certificate of Approval of the Ministry of Labor.

Category: Litigation

Mediation and conciliation are alternative means of resolving conflicts in relation to the traditional state or arbitral jurisdiction. Both cases involve a third party who will act, in case of mediation, to facilitate dialogue and composition between the parties and, in case of conciliation, more actively, suggesting alternatives and mediating conversations. In both cases, the processes depend on the agreement of the parties. In addition to the legal requirement of voluntary submission, the success of these mechanisms certainly depends on the willingness and interest of the parties to submit their dispute to them.

The 2015 Code of Civil Procedure (CPC) has expressly included the institutes in the law to encourage their use aiming at better social pacification and relieving state justice - so burdened by the volume of lawsuits. In this sense, §§2° and 3° of Art. 165 of the CPC generically defined that the conciliator acts in cases in which there is no previous connection between the parties, assisting them in understanding the issues and interests in dispute. The mediator acts in cases in which there is a previous bond between the parties, seeking to facilitate the communication so that consensual solutions can be identified.

Also in 2015, Law 13.140 specifically addressed the mediation and its role in the resolution of disputes, providing as general principles of its practice the impartiality of the mediator (which would prevent the judicial trustee to act as mediator), equal treatment of the parties, orality and informality, the autonomy of the parties' will, confidentiality and good faith.

The use of mediation and conciliation in recovery proceedings faced some resistance at first, considering the volume of legal provisions involving the process that could not be modified or opted out by the parties. On the other hand, it is undeniable that the recovery procedure is a major negotiation, with a distribution of burden between creditors and debtors, and that it can benefit from a “multi-door” conflict resolution system.

Before the amendment of Law 11.101/05 promoted by Law 14.112/20, the matter had already arisen in some instances. Statement No. 45 of the First Journey of Prevention and Out-of-Court Settlement of Disputes of the Council of the Federal Justice (CJF) (I Jornada de Prevenção e Solução Extrajudicial de Litígios do Conselho da Justiça Federal), 2016, established that "mediation and conciliation are compatible with the judicial and extrajudicial recovery proceedings and bankruptcy of the businessman and the business company, as well as in cases of overindebtedness, provided that legal restrictions are observed".

In 2019, Recommendation 58/19 of the National Council of Justice (CNJ) proposed to magistrates "the use of mediation, in order to assist in the resolution of any and all conflicts between the businessman/company, in recovery or bankruptcy, and its creditors, suppliers, partners, shareholders and third parties interested in the process". More specifically, the recommendation mentions the use of mediation in the following cases:

• credit check incidents;
• negotiation of a judicial recovery plan;
• definition of the need of substantial consolidation;
• resolution of disputes between the debtor's partners/shareholders, between concessionaires/permitholders of public services and regulatory bodies; and
• situations involving creditors not subject to recovery.

In 2020, the Court of Justice of São Paulo began to offer two types of business mediation to mitigate the judicial crisis and the effects of the covid-19 pandemic: one for businessmen and business societies in relation to conflicts arising from the pandemic, under the CG Provision 11/20, and another for disputes related to judicial recovery and bankruptcies, in accordance with CG Provision 19/20.

Subsequently, the broad reform of the Recovery and Bankruptcy Law of 2020 expressly set forth the possibility of using conciliation and mediation in such proceedings and included arts. 20-A to 20-D in Law 11.101/05. The change intended to provide greater speed to recovery and bankruptcy proceedings and to unburden the judicial system, which, since 2004, according to data from the CNJ, receives more processes than it can finalize, generating a high congestion rate.^[1]

In short, the law has expressly set forth the possibility of using mediation and conciliation in all degrees of jurisdiction. They can be carried out in advance or in an incidental character to the recovery processes, not suspending the deadlines. Therefore, the recovery and bankruptcy law, as amended, reinforced the provision of Article 3, §3, of the CPC and brought greater clarity regarding the use of conciliation and mediation in the judicial and extrajudicial recovery and bankruptcy proceedings, including for related professionals, such as judicial administrators, companies in crisis, creditors and judges.

The law also indicated a list with examples of matters in which conciliation and mediation could be used, including, in addition to part of the hypotheses provided by the CNJ, the existence of credits excluded from the recovery proceeding (extraconcursais) against companies in recovery during the state of public calamity to ensure the continuity of the rendering of essential services. It is important to highlight that the legislator did not expressly indicate the collective bargaining of the judicial recovery plan as one of the hypotheses.

In the event of negotiation between the company in crisis and its creditors in advance, if the company meets the requirements to request recovery, it may apply for precautionary urgency by suspending executions for a period of 60 days to enable the attempt to resolve the conflict in proceedings before the Cejusc (Judicial Center for Conflict Resolution and Citizenship - Centro Judiciário de Solução de Conflitos e Cidadania) of the competent court or specialized chamber. If a request for judicial or extrajudicial recovery is made, the period of 60 days will be deducted from the legal stay period.

In addition, if a request for judicial or extrajudicial recovery is distributed within 360 days as of the agreement signed in the conciliation or pre-procedural mediation, the creditor will be returned to its prior position with the rights and guarantees under the conditions originally contracted, minus the paid amounts.

The law prevented the use of conciliation and mediation in relation to disputes about the nature and classification of the credits and voting criteria at creditors’ general meetings. The prohibition aims to protect the interests of other creditors, avoiding greater liens on debtor's assets.

Cases in which conciliation and mediation procedures are successful, the settlement agreement shall be approved by the competent judge.

Practical cases show that the use of mediation and conciliation in recovery proceedings – even before the amendment of the law – can be quite productive. An example of this was the first use in the case of Oi's judicial recovery,^[2] that enabled the conclusion of more than 55,000 agreements involving more than R$ 3 billion. Another paradigmatic case was the judicial recovery of Saraiva.^[3] Established in a preventive form in two phases, before the presentation of the judicial recovery plan and before the creditors’ general meeting, it helped the better adjustment of the plan to the interests of creditors and the company.

It is also worth mentioning that Art. 20-D allowed mediation or conciliation sessions to be held by virtual means.

Even with the recommendation of the CNJ and the amendment of the law, conciliation and mediation shall respect the limits of the rules applicable to recovery proceedings to secure, for example, that the principle of pars conditio creditorum pars is not violated. Provided that these limits are observed, mediation and conciliation can certainly help recovery proceedings to be more efficient, modern and effective, as already demonstrated in several concrete cases.

^[1] Data from the Justice reports in Numbers of the CNJ. Available at https://paineis.cnj.jus.br/QvAJAXZfc/opendoc.htm?document=qvw_l%2FPainelCNJ.qvw&host=QVS%40neodimio03&anonymous=true&sheet=shResumoDespFT, access on October 2, 2021.

^[2] TJRJ, Process 0203711-65.2016.8.19.0001, Dr. Fernando Cesar Ferreira Viana, 7th Business Court.

^[3] TJSP, Case 1119642-14.2018.8.26.0100, Dr. Paulo Furtado de Oliveira Filho, 2nd Bankruptcy and Judicial Recoveries Court of the District of The Capital.

Category: Infrastructure and energy

Fabio Falkenburger, Marina Estrella Barros, Pedro Amim, Vitor Guilherme da Silva Barbosa, Vittoria Psillakis Mickenhagen and Izadora Figueiroa Mastrangelli

Amidst the initiatives to regulate the activities of operation and administration of shared aircraft ownership programs, which began in 2020 with the inclusion of rules in Subpart K of Brazilian Civil Aviation Regulation 91 (RBAC 91), the National Civil Aviation Agency (Anac) issued Supplemental Instruction 91-013 (IS 91/13) in September. In general terms, IS 91/13 regulates the process for obtaining administrative specifications (EA) for legal entities wishing to provide shared property program administration services or for those that provide the services and need to adapt to the new rules on the activity.

EAs are documents issued by Anac that define, list, and establish facilities, management personnel, fleet, area of operation, specific operations authorizations and/or limitations, aircraft maintenance information, and exemptions or deviations related to a shared aircraft ownership program administrator. The characteristics of the administrator, therefore, are linked to the information contained in its EAs.

IS 91/13 establishes the process for obtaining or changing an EA, with estimated deadlines for each procedural phase, listing all the necessary documentation in each one of them.

Information has been included to assist the interested party in preparing the necessary documentation and infrastructure for presentation during the process. This is an important step towards the implementation of shared ownership programs in Brazil, aiming to create a regulated modality for provision of services, increase competitiveness in the airline industry, and, at the same time, ensure safety of operations for users/owners.

The process of issuing EAs has five stages:

• Phase 1 - Prior request;
• Phase 2 - Formal request;
• Phase 3 - Evaluation of documents;
• Phase 4 - Demonstrations and inspections; and
• Phase 5 - Issuance of EAs

This process has an estimated minimum duration of 120 days, depending on the agility of the submission of documents, accuracy of information, and the speed of responses from the interested party to any requests, inquiries, and non-conformities pointed out by Anac.

The process must be carried out through an electronic request via Anac's Electronic Information System (SEI). All interactions and communications between Anac and the applicant shall be performed by legal representatives appointed by the applicant, which may be the responsible manager, the persons appointed for personnel administration positions, or legally appointed attorneys.

What will be done in each phase

In the preliminary application phase, the applicant may request clarification related to the required documents and applicable procedures through an electronic platform. After the first contact via the Fala BR platform and if further clarifications are needed, the responsible manager or legal representative should draft and send a letter, via SEI, requesting a prior orientation meeting.

The purpose of the preliminary orientation meeting is to provide the applicant with information about the process, documents needed to form the formal application package, practical issues, procedures for demonstrating compliance with requirements, instructions for preparing the manuals, programs and the structure that must be presented during the process. The request for clarification letter should indicate the manager responsible for the company and other members of management, in accordance with the requirements under RBAC 91.

During the formal application phase, the applicant must submit a new letter requesting the formal opening of the case, containing information such as:

• corporate name of the organization;
• CNPJ;
• address of the operational headquarters;
• listing of the aircraft models to be used in the program;
• crew list;
• sample shared ownership program administration agreement;
• fleet management document containing up-to-date aircraft information;
• information on operations to be conducted on water;
• operational security document system;
• declarations of conformity;
• application for exemption from compliance with rules;
• contact information; and
• any other documents/manuals requested by Anac during the process.

In conjunction with the cover letter, other documents should also be forwarded such as:

• template(s) of program administration agreement;
• fleet management document containing updated information on the specific aircraft (nationality and registration marks) to be used for the program;
• sample list of quotaholders;
• registration of the required administration personnel;
• information on area of operation;
• requests for authorization for specific operations;
• requests for exemption from compliance with a rule; and
• other documents or manuals, at the discretion of the requesting organization or requested by the technical team, also throughout the process.

In the third phase (evaluation of documents), Anac will evaluate all required manuals, programs, and documents and notify the applicant by letter, if any document is considered incomplete, deficient, or not in compliance with the applicable rules. The deadline for Anac to approve the documents will depend on the satisfactory fulfillment of the deficiencies and non-conformities pointed out during the assessment phase. Upon completion of the assessments and approval of the manuals, programs, and other documents, a final compliance statement will be produced to ensure that each regulatory requirement applicable to the intended operation has been adequately addressed.

In phase 4 (demonstrations and inspections), the organization must file a letter confirming availability for demonstrations and inspections. Next, Anac will evaluate the effectiveness of policies, methods, procedures, and instructions described in the manuals and indicate any corrective actions necessary. As a result of the inspections carried out, in the event that deficiencies and non-conformities are found, they will be communicated to the applicant organization by means of an official letter. The corrections must be submitted by letter or official letter of reply within the period established by Anac.

In the last phase of the process, Anac will approve and issue the EAs of the new shared aircraft ownership program administrator, listing all the permits, approvals, limitations, and exemptions granted. The process will be formally closed by means of the publication of an ordinance in the Official Gazette of the Federal Government.

The regulation of shared ownership of aircraft fosters competition and facilitates access to private flights, in addition to providing greater safety and predictability for the user. The deadline to start issuing EAs is March of 2022, and the process must be completed by October 31, 2022.

Category: Labor and employment

Following up on our series on the Infralegal Labor Regulatory Framework, we will discuss in this article the impacts of the guidelines for the elaboration and revision of regulatory standards (NRs) for safety and health at work.

Established by Decree 10.854/21, the guidelines intend to guide the elaboration and revision of regulatory standards, giving greater uniformity and harmony to their texts and their structure, in addition to seeking to simplify, debureaucratize and allow the constant updating of their contents.

In general, the guidelines seek to align and balance infralegal labor standards for work safety and health with the needs and particularities of labor relations and economic activities.

The decree defines seven guidelines for the elaboration and revision of these standards:

• reduction of risks inherent to work, prevention of accidents at work and occupational diseases and promotion of occupational safety and health;
• dignity of the human person, social value of work, valorization of human work, free exercise of economic activity and pursuit of full employment;
• technical or scientific basis, timeliness of standards with the current stage of technological development and compatibility of Brazilian and international regulatory frameworks;
• harmonization, consistency, practicality, coherence and uniformity of standards;
• transparency, reasonableness and proportionality in the exercise of regulatory competence;
• simplification and debureaucratisation of the content of regulatory standards; and
• the State's subsidiary and exceptional intervention on the exercise of economic activities, including differentiated treatment of low-risk economic activity to health and safety in the workplace.

As already highlighted in our series, the desire for simpler and more unbureaucratic labor legislation has been manifested by both employees and employers and, in addition to serving as one of the guidelines for the drafting and review of regulatory standards for safety and health at work, has become one of the major pillars of the new Regulatory Framework Infralegal Labor.

The changes intended with the definition of the guidelines were consolidated with the edition and publication of Ordinance 672/21 of the Ministry of Labor and Social Security (MTP), which defines all procedures and steps to be followed and respected for the elaboration and review of regulatory standards of safety and health at work.

One of the most relevant aspects of the procedures for the elaboration and revision of these standards is the participation of members of the organizations most representative of workers and employers, as well as representatives of the federal executive branch, through the Permanent Joint Tripartite Commission (CTPP), established by Decree 9,944/19.

The CTPP, formed by members of the federal government, representatives appointed by the business confederations and the union centers, in the context of the preparation and review of NRs, has as one of its duties the elaboration of studies and participation in the process of elaboration and review of regulatory standards.

Ordinance 672/21 also provides for the mandatory updating of regulatory stock, at least every 5 years, which will ensure the periodic examination of the standards, again in compliance with the guideline that indicates the need to update them.

Before the publication of the Regulatory Framework, in the absence of specific and predefined procedures that would enable the revision of regulatory standards in a systematic and transparent manner, the infralegal labor legislation was limited and, consequently, lame in relation to the legal system as a whole, creating contradictions and legal uncertainty.

In this scenario, many of the legislative changes brought by Law 13.467/17, also known as Labor Reform, ended up not being accepted or understood in the texts of regulatory standards.

An example is the lack of harmony between the new rules of the telework regime and the evaluation of the number of employees for the dimensioning of the Internal Commission for Accident Prevention (CIPA) and specialized services in Safety Engineering and Occupational Medicine (SESMT).

This is because the lack of updating of NR-4 and NR-5 has left gaps in the obligations of companies that rely on teleworking professionals. Although duly registered as employees, these workers do not work in the company's premises, leaving doubt as to whether or not to compute them for the formation of CIPA and SESMT contingents.

In the same sense, we discuss the possibility of outsourcing the physician that composes the SESMT. NR-4 expressly provides that the physician should be employed, which is not reflected in the Labor Reform, which brought the possibility of outsourcing the activities end and a half.

Because it is still very recent and considering the procedure for the preparation and revision of NRs and their annexes, no appropriate changes have yet been made to regulatory standards. However, along with the definition of the structure and procedures for review and elaboration, Ordinance 672/21 also brought news in relation to toxicological examination and embargo procedures and interdiction of companies and machines.

As for toxicological tests, to which professional drivers are subject, according to Art. 168 of the CLT, there was a change, mainly, in the technical aspects, to follow the provisions of Conatran Resolution 691/17. Ordinances 116/15 of the Ministry of Labor and Social Security and 1,343/19 of the Special Secretariat of Social Security and Labor of the Ministry of Economy were consolidated and revoked through the ordinance.

In relation to the procedures of embargoes and interdiction of companies and machines, the previous wording was changed, mainly to update the procedures related to embargoes and interdictions for the electronic environment. The measure generally expedites the procedure of administrative proceedings, consolidating and updating the text of Ordinance 1,069/19, also repealed by Ordinance 672/2021.

It is important to highlight that the changes in the procedures related to embargoes and interdictions relate to the use of electronic tools both by the labor auditors, in the drafting and transmission of embargoes and interdictions, as well as by employers, through electronic petitioning, which will give greater speed to the administrative procedure.

Although they bring very positive innovations to the labor normative set, the procedures for elaboration and updating can still be quite bureaucratic, mainly because the topics addressed are eminently technical and usually require more careful analysis and deeper revisions in relation to their foundations.

The objective of the guidelines, however, is, in fact, to simplify and update labor standards of safety and health, facilitating their understanding and compliance. In this respect, the novelties brought by Decree 10.854/21 and Ordinance 672/21 are indispensable and promise to bring various benefits to labor relations.

The provisions of Decree 10,854/21, published on November 11, enter into force 30 days after its publication. Ordinance 672/2021, published on November 11, will be in force from December 10.

In the coming weeks, we will continue to publish articles with the aim of exploring, in a simple and practical way, the main changes brought by decrees, ordinances and normative instructions, in addition to clarifying the main impacts for companies.

Click here to read the other articles in the series.

Category: Labor and employment

Starting our series on the Infralegal Labor Regulatory Framework, we will discuss in this article its impacts on the Permanent Program for Consolidation, Simplification and Debureaucratization of Infralegal Labor Standards.

Established by Decree No. 10.854/21, this program was created to review, compile and consolidate infralegal labor standards (such as decrees, ordinances, regulatory standards, etc.). With it, the federal government intends to promote greater alignment of labor standards with government public policies – especially those of fostering job creation and economic recovery – through the issue of normative acts aimed at this end and the revision of existing ones.

The creation of the decree also aims to meet an old desire of those who benefit from labor legislation, whether employees or employers: to decomplicate and debureaucratize the set of rules currently in force, to leave them in agreement with the other rules that have been significantly changed since the Labor Reform of 2017.

Although it is still too early to have definitive conclusions as to its relevance and effectiveness (even by the expressive volume of revised acts), at first glance, the measure promoted by the Ministry of Labor and Social Security is very welcome. Considering the wide range of infralegal norms that guide not only judicial and administrative decisions, but mainly business activities, the simplification intended by the Decree is an encouragement for those who have to dive into an endless sea of norms, often contradictory, in search of simple answers to daily labor questions.

The program will compile and organize the infralegal labor standards according to the following topics (without prejudice to others that may be included in due course by the federal government):

• labor legislation, labor relations and public labor policies;
• safety and health at work;
• work inspection;
• procedures of fines and appeals of labor administrative proceedings;
• conventions and recommendations of the International Labour Organisation (ILO);
• regulated professions; and
• administrative rules.

Both periodic reviews on the themes– precisely so that the program does not lose its main purpose over time – and the edition of new standards are planned, which must meet the precepts of objectivity, clarity and simplicity that the program seeks to institute.

One of the biggest complaints regarding Brazilian labor law is that, even after the profound changes promoted by Law No. 13.467/17 (the Labor Reform), it still has contradictory points – in its infralegal norms and in the interpretation given to it in the administrative and judicial spheres – which end up leading insecurity to its application.

The revision and compilation of these rules, therefore, is seen with good eyes, since it aims to clear the principles that guide labor relations in Brazil through more objective concepts and easier to understand, even to make the rules more accessible and transparent to their recipients (workers, employers, unions and law operators). With the program, they will have at their disposal a platform on which they can participate more directly.

As for government public policies, the program seeks to improve the interaction of the Ministry of Labor and Social Security with its administered, through the integration of labor and social security policies that make the private sector more efficient and competitive, in addition to harmonizing labor and social security infralegal standards. Examples include the creation of the Electronic Labor Inspection Book (eLIT), which will replace the printed book, making communication between companies and work inspection more agile, and time-by-point marking, which tends to facilitate the daily life of the HR and Payroll sectors.

The Decree, however, does not shy away from criticism, mainly because of the vague way it addresses some points: it is undeniable that the Brazilian labor normative scenario is extremely fertile (so much so that the creation of the program is justified), but there is no mention of the scope and how the biennial reviews will be promoted (will a commission be created to do so? If so, how and by whom will it be composed?). Moreover, since there is no mechanism that binds the Ministry of Labor and Social Security to compliance with the standard, there is a risk that the entire revisional character of the program will fall apart if there is no commitment of the agency – which will depend, as the Decree itself stipulates, of the public policies that are on the agenda at the time.

Therefore, even if a continuous review and compilation of the infralegal acts on labour law is necessary, yet to keep it relevant and in accordance with the successive changes in the way of providing the work, the program lacks more incisive guidelines that ensure compliance by the public authorities, at the risk of falling into disuse and becoming another measure with good intentions, but which are not put into practice.

In the coming weeks, we will continue to publish articles with the aim of exploring, in a simple and practical way, the main changes brought by decrees, ordinances and normative instructions, in addition to clarifying the main impacts for companies.

Click here to read the other articles in the series.

Category: Labor and employment

Brazil is one of the most complex countries to do business and part of the problem stems from Brazilian labor legislation, composed mainly of the Brazilian Labor Law (CLT) and thousands of infralegal regulations that must be observed by companies.

The CLT, from 1943, only underwent substantial legislative changes in 2017, with the Labor Reform. The other updates implemented over the last decades have mostly been due to decrees, ordinances and normative instructions, generating a huge and complex tangle of norms.

Over the years, labor legislation has become unfunctional, with regulations often contradictory to each other. This creates legal uncertainty and high cost to employers, with a direct impact on business competitiveness and economic growth.

In order to provide a better business environment in Brazil, the federal government published, on November 10, Decree No. 10,854/21, which deals with the consolidation of the Infralegal Labor Regulatory Framework.

The intention is to make labor legislation more accessible and transparent, providing greater legal certainty to economic agents.

About 1,000 decrees, ordinances and normative instructions were revised and consolidated in 15 acts, generating great impact on labor relations. The decree addresses regulations involving the following main themes:

• Permanent Program for Consolidation, Simplification and Debureaucratization of Infralegal Labor Standards;
• Electronic Work Inspection Book - eLIT;
• Supervision of standards of protection to work and safety and health at work;
• Guidelines for the elaboration and revision of regulatory standards for safety and health at work;
• Certificate of approval of personal protective equipment;
• Electronic journey control record;
• Mediation of collective labor conflicts;
• Companies providing services to third parties;
• Temporary work;
• Thirteenth salary (Christmas Bonus);
• Individual and collective relations of rural work;
• Transportation vouchers;
• Citizen Company Program;
• Situation of workers hired or transferred abroad;
• Paid weekly rest and salary payment on holidays;
• Annual List of Social Information - Rais; and
• Worker's Food Program - PAT.

One of the most important aspects of the decree is the establishment of the Permanent Program for the Consolidation, Simplification and Debureaucratization of Infralegal Labor Standards, which aims at:

• promoting the reconciliation of labour standards and the right to decent work;
• seeking the simplification and debureaucratization of labor standards and the reduction of compliance costs of companies;
• promoting legal certainty;
• modernizing standards by achieving clear, simple and concise concepts;
• improving the business environment; and
• competitiveness and efficiency of the public sector.

The decree enters into force, for the most part, 30 days after its publication, that is, on December 11, 2021, with the exception of provisions on the Worker's Food Program, which enter into force within 18 months.

Ordinances regulating provisions of the decree have also been issued.

In the coming weeks, we will launch articles with the objective of exploring, in a simple and practical way, the main changes brought by the decree and its ordinances, and clarify the main impacts for companies.

If you want a specific topic to be covered throughout the series, send your suggestion by clicking here.

All articles released will be available on the Legal Intelligence portal and in this publication, below:

• Permanent program for consolidation, simplification and debureaucratization of illegal labor standards;
• Guidelines for the preparation and revision of regulatory standards for safety and health at work;
• Impacts of the infralegal labor regulatory framework on the certificate of approval of ppe.

Category: Infrastructure and energy

After the publication of Law 9.478/97 (Petroleum Law) and with the advance of the granting of exploration and production concession contracts by the National Agency of Petroleum, Natural Gas and Biofuels (ANP), an extremely relevant market for transactions involving the purchase and sale of stake in exploration blocks and oil and natural gas fields opened in Brazil. These transactions involve not only the direct transfer of participation from one company to another, but also increasingly sophisticated project financing operations, with guarantees over the share control of concessionaires and over the emerging rights of these concessions.

Despite the relevance of the theme and the significant values involved, for many years the assignment of participation and the establishment of guarantees on exploration and production concessions was regulated only by a few clauses contained in the concession contracts and, more recently, in the production sharing contracts (both the E&P contracts).

To guide the agents, ANP also published, a few years ago, a basic instruction manual for the organization of documents and conduct of assignment proceedings before the agency, which has been updated periodically (Assignment Manual). For all aspects that were not addressed in the E&P contracts or in the manual, the market depended on the issuance of opinions prepared by the ANP for each specific case that, in its almost entirety, remained inaccessible to other companies.

Although the debate on the drafting of a specific regulation on the subject had existed for a long time, only from 2016 the subject gained traction, after a combination of factors. Among them, the progress in Petrobras' disinvestment process and a succession of crises in the sector that reinforced the need for greater clarity on the right of creditors in relation to the assets of insolvent operators.

In 2019, after three years of public consultations, ANP published Resolution 785/19, which, for the first time, established a legal framework for the assignment of participation and the creation of guarantees on E&P contracts.

This resolution created a level of legal certainty for transactions involving E&P assets and presented several regulatory advances, such as clarification of applicable guarantees on emerging rights and the non-obligation of an assignment process for changes of control that do not involve replacement of parent company guarantee (a topic not yet regulated in many other sectors).

However, as the reality of the facts is inevitably more complex than any regulation is capable of capturing, the practical application of Resolution 785/19 has demonstrated the need to deal with some issues in more detail, especially with regard to:

• characterization of the de facto assignment (cessão de fato);
• precise definition of rules on joint liability between transferor and transferee after assignment; and
• approval of new development plans in the assignment of mature fields.

In this article, we present comments on some of these topics.

I. Assignment in fact

Article 29 of the Petroleum Law provided for the possibility of transferring E&P contracts, always upon prior and express approval by the ANP, which is required to prove that the new operator has the technical requirements necessary to operate the concession. A few years later, ANP published Ordinance 234/03, fixing a fine of R$ 500,000 for any assignment of participation in E&P contracts held without the agency's prior consent – a practice that was called "de facto assignment" – because such assignment could constitute a fraud to the duty to bid and the obligations present in the Petroleum Law.

None of these rules clarified in detail what acts could be understood as a de facto assignment, a point of great relevance, since the assignment processes in the ANP usually take many months to complete and it is in the legitimate interest of buyers or creditors to ensure the good management of assets during this period. Historically, the opinions issued by the ANP attorney's office converged to define that the assignment would actually materialize in the exercise of management power over the assets by a third party before the approval of the ANP.

As of 2015, however, ANP began to expressly include in E&P contracts the prohibition of any kind of influence of the transferee over the operations of the contract prior to the approval of the assignment. That same limitation was replicated in Resolution 785/19, which expressly prohibits buyers or creditors from exerting any kind of influence over the management or operation of the E&P contract (Articles 6 and 22).

The prohibition eventually brought even more uncertainty to the sector, as buyers or funders are reasonably expected to exert some kind of influence on asset management, although indirectly and typically limited to requiring the operator himself to maintain the operation in accordance with the normal course of business and industry best practices.

This type of influence is usually reflected in the fixing of contractual clauses by which the operator voluntarily undertakes to observe certain operating parameters during the transition period, including certain obligations not to do so (negative covenants).

It is quite reasonable, for example, that the seller undertakes not to relinquish the concession area or even not to drill new wells or abandon wells in use during the transition period. It is also reasonable for the parties to define that the making of certain investments will depend on the prior approval of the creditor or buyer.

Whatever the scope, it is not possible to conclude that such agreements imply the exercise of the management of assets by third parties, since:

• they involve commitments that the operator voluntarily undertook to observe during the transition period (i.e. the agreement reflects the operator's own will); and
• such commitments do not prevent the operator from taking a certain action, only mean that, in case of non-compliance, funders or buyers will have the right to apply certain contractual remedies, such as fines, early termination or indemnification.

In other words, even if an operator contractually undertakes to make or stop making certain operations, those commitments do not represent an obstacle to the operator's management power, since, at the limit, it remains the sole attribution of that operator the decision whether or not to comply with such commitments and, as the case may be, to bear the agreed contractual remedies. Non-compliance does not generate, to any extent, the transfer of the management of operations to buyers or creditors, giving them only the right to apply the agreed contractual remedies.

Resolution 785/19, by generally prohibiting "any influence" of third parties on assets, ultimately creates a criterion that, if applied literally, would significantly prohibit the rights of buyers and funders to ensure that the seller maintains good management and preservation of assets.

It would therefore be of great importance to clarify which types of agreements or actions would actually be covered by the concept of undue influence adopted by Resolution 785/19, recognizing that there is an interest and a legitimate right of buyers and financiers to set, together with the operator, certain operational standards, provided that they are focused on the good management and preservation of assets. The adoption of vague criteria, such as the concept of "influence", ends up increasing the perception of risk and limiting the partnership and financing operations that could contribute to the development of the sector.

II. Joint Liability

The joint liability among partners of an E&P consortium (intra-consortium joint liability) is a widely debated and somewhat well-settled issue. On the other hand, the residual joint liability of parties that have already withdrawn from an E&P contract remains a controversial issue, especially because it lacks clear legal reasoning and greater detail in the regulation of the ANP.

It is important to note that the Petroleum Law deals solely with joint and several liability between companies that are part of an E&P consortium, with no reference to the joint liability of the transferor after the conclusion of the assignment of its participation in an E&P contract.  In relation to the assignment procedures, the Petroleum Law only clarifies that the transfer of E&P contracts is allowed "provided that the new concessionaire meets the technical, economic and legal requirements established by the ANP". At no time did the law include any provision or condition requiring the transferor to maintain joint and several liability with the transferee.

The concept of joint liability between transferor and transferee arose only later, in the scope of the assignment clauses of E&P contracts. However, these provisions were rather vague, providing only that, in case of assignment, the “joint and several liability between transferor and transferee would be maintained in accordance with applicable legislation". It happens that, as stated before, there is no applicable provision in the legislation concerning joint liability between assignors and assignees.

Based on the provision of E&P contracts, the ANP began to demand, in the context of the assignment processes of participation in these contracts, that the Term of Assignment (document formalizing the transfer) would include express provision that the transferor would remain jointly and severally responsible with the transferee, without specifying the limits of such solidarity.

Resolution 785/19 represented the first opportunity in which the concept of joint liability between transferor and transferee came to be treated expressly in an infralegal norm. The resolution clarified that such joint liability is limited to obligations "constituted on a date prior to the transfer" and/or "resulting from activities carried out on a date prior to the transfer, even if constituted only at a later time". Although it seems obvious, such clarification has brought some minimal beacon on the limits of joint liability.

Despite the relative progress, Resolution 785/19 still fails to specify the legal basis of this joint and several liability or define fundamental issues to the concept, such as the type of obligations to which it refers, the scope of joint liability and the time limits.

It is not clear, for example, whether the ANP would be obliged to charge the current concessionaire first before recourse to the former concessionaire (order benefit). In a concession that has already had multiple dealers, it is also not informed whether the ANP should follow the chronological order of the assignments or whether it could charge the defaulted obligation of any of the former concessionaires.

Although it is an old theme, this uncertainty has taken even greater relevance with the maturing of the E&P industry in Brazil and with the heating of operations involving the sale of mature fields. Because these fields have a long history of operations, extensive infrastructure, and relevant abandonment liabilities, it is essential that operators interested in selling their stake know exactly what kind of residual liability they may still have after the transfer.

It is unreasonable for concessionaires who have already transferred their participating interest in a field many years ago to continue to monitor this field or maintain indefinite provisioning for as long as the E&P contract remains in effect.

Moreover, considering that the transferee is obliged to go through a strict process of technical, legal and financial qualification in the ANP before assuming the participation in the E&P contract (usually stricter than that originally required of the seller), it is to be questioned what would be the legal justification for the imposition of such joint liability. It is worth remembering that Resolution 785/19 also requires that the E&P contract be fulfilled at the time of assignment, which represents another prior control to reduce the relevance of solidarity.

In practice, more than ensuring the proper fulfillment of the E&P contract, the imposition of unrestricted joint liability of the transferors with the assignees ends up representing a double liability, without foundation in law, with requirements greater than those originally required by the ANP for the signing of E&P contracts.

The Petroleum Law correctly requires only that assignees submit to the same qualification criterion originally imposed for the signing of E&P contracts.  there is no legal or logical justification for the former concessionaire to be responsible for that concession after the transfer.

Furthermore, it is important to note that such joint liability is imposed solely in processes of direct assignment of participation in the E&P contract. Thus, a company may choose to sell its stake in a given field through a simple change of control transaction, in which case there would be no change of concessionaire and therefore the former controller would have no remaining liability with respect to that E&P agreement.

Therefore, based on the current legal framework, in particular the Petroleum Law, it is not clear the reasons that justify the maintenance of the provision of joint and several liability between transferor and transferee. If the ANP chooses to maintain this provision, it would be essential that the logical reason becomes clearer and, at least, that basic issues inherent in this concept were clarified, such as:

• whereas the joint liability is subject to a benefit of order, so that the liability of former concessionaires is conditional on the absolute default of the current concessionaire; and
• that joint liability is subject to the statutes of limitation provided for in the legislation.

III. Development plan

In the context of sale of participating interest in mature fields, considering the sharp decline in production that these fields usually present, it is very important that the buyer has the ability to implement their production recovery project with the maximum possible agility. These projects, commonly called redevelopment, require the approval of a new development plan (PD) by the ANP, in a long process that often requires many months of information exchange between the operator and the agency.

Recognizing the importance of this issue, the Resolution 785/2019 brought an important innovation by predicting that, in processes of assignment of mature fields, the transferee could submit the new PD to the ANP even before the completion of the transfer, to be approved by the agency simultaneously with the assignment process.

Resolution 785/19, however, did not address the difficulty of reconciling the schedule of the two processes (assignment and approval of the PD), which regulatorily have very different approval deadlines. While an assignment process can be completed within 90 days, the approval of a PD can traditionally take more than six months. The divergence ends up limiting the full use of this mechanism, since transferors and assignees cannot ignore the risk of delaying the assignment process if they link it to a PD approval process.

Although it is a remarkable advance brought by Resolution 785/19, the lack of a better detail on the deadlines of this mechanism ends up making its use limited.

To avoid this problem, the simplest alternative would be to provide for a shorter period for the approval of PDs sent in the context of transfer proceedings in order to reconcile the time limit for the two cases.

Another simple solution would be to clarify that, in the use of such a mechanism, the transferee could choose to submit only a proposal for revision of the PD, containing the central elements of the field redevelopment project, and making it clear that the full review would be presented only after the completion of the assignment.

There are precedents in which the ANP has already approved this type of proposal in the context of processes to extend the validity of concessions, setting a deadline for the concessionaire to submit the complete revision of the PD. This alternative would give the assignee greater security that his project will be approved by the ANP, while allowing a faster process.

CLARIFICATION OF THE ANP COULD SOLVE PROBLEM

It is important to note that most of the bases for the recommendations indicated above are already provided for in the regulation. Thus, a broad revision of Resolution 785/19 would not even be necessary. In practice, many of the recommendations could be implemented through the publication of mere clarification, as already adopted by the agency in relation to so many standards.

In the present case, it is emblematic that the Assignment Manual, referred to in the regulation itself, already act in this way, serving as a general regulation of the practical application of Resolution 785/19. Similar manuals can be found in several other ANP standards, such as the local content booklet (cartilha de conteúdo local) and incident reporting manual (manual de comunicação de incidentes). Therefore, the most practical solution would be to expand the Assignment Manual to include additional topics that address the topics mentioned above.

Category: Institutional

Camila Galvão, Ana Carolina Lourenço, Júlio Nunes, Maria Inácia Carvalho, Marcius Filipe Modesto, Sara Patriarcha, Thiago Percides and Victor Santa Cruz.

The law practice has as its most relevant goal to secure people's rights. It protects social interests and minimizes injustices in order to ensure the full functioning of the Democratic Rule of Law and our justice system. Although we live in a predominantly black country, the law practice takes place in a mostly white environment.

The prevalent white aesthetic induces the black professional to seek fitting in the Eurocentric standards, thus suffering a "whitening", which can lead him to move away from certain spaces, due to the certainty of non-belonging.

In this context, it is worth asking the question: is it possible to exist justice without black protagonism in advocacy? How many black lawyers do we need to do justice?

The gulf between black and white populations in Brazil is latent, and would be no different in the largest law firms. In 2019, CEERT (Center for the Study of Labor Relations and Inequalities), in partnership with the Legal Alliance for Racial Equity and the Getulio Vargas Foundation, listened to 3,624 people from nine of the largest legal offices in São Paulo. The research showed that black people accounted for 1% of the lawyers they hired.

The long-aforedreamed offer of promising opportunities in law still encounters racial barriers, and the chance to occupy prestigious spaces in law is predominantly restricted to white people. Factors such as the lower presence of blacks in renowned universities or even the lack of an English course add up to the skin color to exclude this group from so-called golden opportunities.

Although, currently, the laurels of law are mostly destined to a single portion of society, law has been and has been a huge ally in the fight against racism and the reflections of enslavement that lasted more than 300 years in Brazil.

Historical figures such as Esperança Garcia (1751 - ?), considered by the OAB-PI to Piauí's first lawyer, and Luiz Gama (1830 – 1882), who, with the help of law, managed to free hundreds of enslaved people and is popularly known as one of the greatest abolitionists in Brazil, are examples of resistance and the practice of advocacy by blacks as a tool for protection and guarantee of rights, at a time when the weight of racial inequality was even more brutal than today.

Historical evolution of racism in legal norms – racist and anti-racist laws

From the time when people, due to their color, were treated as private property, or moving goods, until the criminalization of racism, a long normative path was traveled, and the action of social movements and great lawyers, such as the aforementioned Luiz Gama, was paramount to enable change.

In addition to allowing slavery, the order guaranteed and strengthened the structures of power, upgrading to the category of law the privileges of the white population, in norms such as the Free Womb Law (1871), which in article 1 determined that "the children of a slave woman who were born in the Empire since the date of this law, will be considered free", but predicted that "[...] the mother's master will have the option, or to receive compensation from the State or to use the services of the minor up to the age of 21 years complete." The Sexagenarians Act (1885) granted freedom to enslaved people over 60 years of age, although life expectancy at the time was 19 years for the enslaved, in addition to forcing them to indemnify their slaveholders for a period of three years, due to their care.

The Aurea Act (1888), signed just over a hundred years ago, is known as the act that abolished enslavement. But its sanction was not enough for black people to be treated as human beings and subjects of law, since they only transferred these people from the slave quarters directly into poverty.  Indeed, from 1888 until today, it is impossible to leave the condition of enslaved if human dignity is and the most basic rights are not guaranteed.

After being transferred from the slave quarters to the streets, the enslaved were imprisoned. The power of the right continued to aim at the systemic maintenance of racism. At the same time, the project of whitening of the population prevailed, founded on the idea that white skin color was associated with progress. Law, as a mirror of society, reflected this image in norms that sought the marginalization of black people. Some examples:

• Criminal Code of the Empire of Brazil (1830): it was justified the crime of punishment to enslaved. Although the provisions contrary to the Aurea Act were repealed with the imposition of this rule in 1888, the code considered the insurrection for the freedom of enslaved, begging and loitering a crime. Thus, due to the last two typifications, those who were narrowed and began to be homeless began to be criminalized for their condition.
• Decree 528 of June 28, 1890: determined that the entry of people specifically from Asia and Africa depended on the authorization of the National Congress.
• Decree 145 of June 11, 1893: determined the arrest of strays, vagrants and capoeiras. Therefore, wandering around the city in idleness and holding cultural demonstrations were also crimes. Loitering is still considered a criminal misdemeanor, pursuant to Articles 13 to 15 of Law 3,688 of 1941.
• Decree-law 7.967/1945: it was set out in Article 2 that "it will be addressed, in the admission of immigrants, to the need to preserve and develop, in the ethnic composition of the population, the most convenient characteristics of their European ancestry, as well as the defense of the national worker".

However, if law can serve oppression and racism, it can also be an instrument of justice, its most intrinsic characteristic. The following norms are examples aimed at curbing racial discrimination in Brazil:

• Afonso Arinos Law (1951): included "[...] among criminal misdemeanors the practice of acts resulting from prejudices of race or color."
• 1988 Constitution: it has as its principle the repudiation of racism and has made the crime of racism unineable and unforecable.
• Law 9.459/1997: typified racial injury in the Penal Code.
• Law 10.639/2003: establishes the guidelines and bases of national education, to include in the official curriculum of the school system the mandatory theme "Afro-Brazilian History and Culture", and provides other measures.
• Law 12.288/2010, known as the Statute of Racial Equality: aimed at guaranteeing the black population the realization of equal opportunities, the defense of individual, collective and diffuse ethnic rights and the fight against discrimination and other forms of ethnic intolerance.
• Law 12.711/2012, known as the Quota Law: provides, in article 3, that "in each federal institution of higher education, the vacancies that art. 1 of this Law deals with will be filled, by course and shift, by self-declared blacks, browns and indigenous people, and by people with disabilities, in accordance with the legislation, in proportion to the total number of vacancies at least equal to the respective proportion of blacks, indigenous people and people with disabilities in the population of the Federation unit where the institution is located, according to the latest census of the Brazilian Institute of Geography and Statistics Foundation (IBGE)."

Therefore, that anti-racist laws end up reflecting, as a social phenomenon that they are, the social thought of their time. For example, the Quota Law, whose origin dates back to India in the 1930s and which has as beneficiaries the Dalits (considered the lowest caste in the country).

Such a law eventually influenced other countries, such as the United States in the 1970s, when a demand from the black civil rights movement eventually induced universities to adopt quotas as a social affirmative action policy, although there is no national law that requires them to do so.

It means that both social movements and the normative fight against racism are necessary, because they feed back and enable the creation of a context that allows more and more black jurists to move towards racial equity inside and outside the judiciary.

The laws mentioned, however, are not enough for us to have the justice we desire, because the application of justice, often selective, continues to reproduce the racism that exists in our society.

Our role as operators of law

As operators of law, in general, we are an integral part of the legal system, not only as passive recipients, but as instruments capable of bringing restlessness, change and development to the sector, since we are spokespersons for the people we represent and who yearn for justice and a response to their transgressed rights.

It is notorious that advocacy should combat institutionalized racism, both in the judiciary and in society in general. This can be done directly, with proposals for actions and demands aimed at this confrontation, or using theses and foundations of black and anti-racist jurists in actions that do not necessarily aim to combat racism, but whose concepts constructed by such jurists are used at least in the same proportion as those of white jurists.

According to Professor Adilson José Moreira, in his book "What is discrimination", the Brazilian legal system and most doctrinators only recognize the existence of direct discrimination,^[1] since the interpretation of the legal standard carried out by these jurists is intrinsically linked to the understanding that discriminatory acts offend the principle of formal isonomy. By this constitutional commandment centered on the notion of symmetrical justice, in order to configure a discriminatory act rejected by justice, there must be elements of intentionality and arbitrariness.

Justice advances in the recognition of racism and the punishment of direct discrimination. In a recent trial, the Supreme Court (STF) recognized racial injury as a kind of the genre of racism, in HC (habeas corpus) 154,248 in the case in which a black attendant in the Federal District (DF) was called disgusting ignorant and sassy. In this way, crime becomes unprescriptive and indefinable. In addition, ADI 6987 is in the process of being processed on the same issue, and the outcome of the action will be in effect erga omnes, i.e. it can be applied against everyone.

In order to prevent the practice of anti-discriminatory actions and for justice to punish and prevent these practices, it is necessary, however, that the same justice understands that there is more than one type of discrimination. In addition to direct, there is indirect, intergenerational, institutional, structural, intersectional and organizational discrimination.

By understanding and being able to identify the types of discrimination that exist, the law firm will be able to guide its theses and requests in a reasoned manner and, thus, instigate the legal system so that it also understands and applies such reasons in its decisions. This is one of the ways advocacy can contribute to combating racism and racial discrimination and other social groups so marginalized by society.

As operators of law, we can also act in the articulation and representation of groups to combat this system that excludes so many Brazilians. For example, we can cite the racial equality committees of the majority of the OAB's sections, the Legal Alliance for Racial Equity, the black collectives existing in undergraduate courses in legal sciences, among many other groups and entities that come together to promote a more egalitarian society in formal and material terms.

Articulating, influencing, and acting in various ways and in various public and non-public spaces of political, economic, cultural and social power is what makes advocacy a very important factor for change to happen.

The history of justice in Brazil will not be complete if there is no inclusion. For the little, but significant, advance to materialize, several social movements led by both anonymous and the first black lawyers, Esperança Garcia and Luiz Gama, were needed.

If the transformation movement is integrated by an expressive contingent, its strength will obviously be unquestionable. This means that, in order to do justice, it is necessary to have not only lawyers in the professional sense of the word, but also in the context of social movements, in the original Latin, ad.vocare (together with = interceding in favor of), that is, we need as many lawyers as enough to eradicate racism, a struggle to be embraced by all.

^[1] MOREIRA, A.J. What is discrimination. Belo Horizonte-MG: Literacy, 2017. Page 17 and 18.

Category: Environmental

A few days before the start of the 26th United Nations Conference on Climate Change (COP-26), the Federal Decree No. 10,846/21 established the National Green Growth Program that has in its essence the concern of uniting the application of strategies aimed at sustainable economic development with the generation of social welfare.

Its main objectives are to combine economic growth with the development of sustainable initiatives, improve the management of natural resources, create green jobs, promote forest conservation and biodiversity protection, stimulate the raising of public and private resources for the development of a green economy, reduce greenhouse gas emissions and encourage the development of studies that promote sustainable solutions.

Article 5 of the decree lists  12 guidelines of the program, which seek to encourage the development and adoption of sustainable initiatives and projects capable of strengthening the balance between the environment and economic development, expanding, for example, the creation  of smart and sustainable cities and the use of clean and renewable energies.

In order to provide technical and administrative support to the federal government in the implementation of the program, the Interministerial Committee on Climate Change and Green Growth (CIMV) was created, through Decree 10,845/21, on October 25.

Among the committee's competencies, the following stand out: establish specific criteria for meeting the program's objectives; coordinate the actions implemented under the National Green Growth Program with other public policies on the environment, innovation, productivity and competitiveness instituted by the federal public administration; and articulate with the federative entities with the objective of promoting the implementation of actions aimed at the development of the green economy.

The creation of the program and committee demonstrate a very significant evolution of the country in the effort to achieve the Sustainable Development Goals (SDGs) and meet the 2030 Agenda.