Legal solutions to drive business development.


Rough seas

By Alessander Lopes Pinto*

There is no calm in the seas when it comes to BR do Mar. After a rough period of debates led by important market representatives, the Law that established the Cabotage Transport Stimulus Program – dubbed BR do Mar (Law nº 14,301/2022,) – was finally signed into law early January by the president, with vetoes on important topics for the sector.   

The analysis of the vetoes by Congress, on March 17th, did not completely abate the storm that had been brewing. Among the vetoes analyzed by the congressmen, the veto that obliged the shipping companies authorized by BR do Mar to hire a certain number of Brazilian seafarers for their chartered vessels was accepted. 

It was immediately presumed that the protection of the employment of Brazilian maritime professionals was being neglected. In addition to this reaction, doubts are being raised about the rules that will apply to the composition of the Brazilian crew on board foreign vessels chartered by companies qualified by BR do Mar. 

BR do Mar initially set specific rules to be observed by shipping companies, determining that two thirds of the crew of chartered vessels be Brazilians, at every technical level of officers, including higher and lower ranks, and in every sector of activity, including the deck and engine, in a continuous basis. 

With Congress accepting the presidential veto that struck the legal provision that obliged the crew of foreign vessels chartered under the law that established BR do Mar to be composed mostly of Brazilians, the legislation that was previously in force should prevail and should be observed. Normative Resolution No. 06, of 2017 (RN 06), issued by the National Immigration Council (CNIg) – requires that the crew of foreign-flagged vessels used in cabotage navigation in operation in Brazil, have a percentage of Brazilian seafarers and professionals on board, depending on the length of stay in the country.  

Thus, foreign vessels operating in cabotage navigation in Brazilian waters for a period exceeding 90 consecutive days must have one fifth of Brazilian seafarers and professionals on board, and one third of nationals after 180 days of operation in the country.  

However, there is no obligation under RN 06 or any other legal provision in force to offer Brazilians specific positions on foreign vessels used in cabotage navigation in operation in Brazil. The law that established BR do Mar, in its article 9 (item III) expressly provides that those foreign vessels chartered by shipping companies qualified in the program will have, compulsorily, as Brazilian crew: the master, cabotage master, chief engineer and engine technician. 

By imposing this obligation, the law preserved, for Brazilian maritime officers, important positions on board foreign vessels chartered by companies qualified by BR do Mar. However, the law failed to observe any possible conflict of rules as a result of a similar obligation, usually imposed by the flags of the countries of those chartered foreign vessels.  

Accepting the presidential veto allowed the current rules to be preserved, applicable to cabotage navigation in general and also to chartered vessels in accordance with the law that established BR do Mar, avoiding the overlapping of rules and allowing the chartered vessels ” via BR do Mar” to hire a greater number of Brazilian seafarers compared to what is already provided for in the existing legislation. The fact is that the employment of Brazilian seafarers will continue to be mandatory on foreign vessels chartered “via BR do Mar”, with the additional advantage of the obligation to offer Brazilians relevant hierarchical positions on board. 

Additionally, in relation to the employment of Brazilian seafarers, we must welcome the provisions of the law that established BR do Mar, which imposed a significant encouragement for the training and qualification of Brazilian maritime professionals, driving shipping companies to offer opening for cadets on board, both on Brazilian and foreign vessels chartered as demise charter or time of operation. It is still up to the Federal Government, however, to regulate the minimum number of opening for cadets for each type of vessel and operation. 

No calm is expected when it comes to BR do Mar, especially by representatives of maritime professionals, dissatisfied with Congress accepting the veto. A lot remains to be done before the regulation of the BR do Mar can actually come into force and achieve the goals expected by the entire sector and by Brazilian society.  

*Law firm founding partner of Lopes Pinto Advogados (LPLaw) 

The extensive agenda for the regulation of BR do Mar

By Alessander Lopes Pinto

The challenge now is to make it possible for the objectives set by the BR do Mar — among others, to expand the offer and improve the quality of cabotage transport, with the promotion of competition in this modal and expansion of the fleet used in cabotage navigation and encourage the training and qualification of Brazilian maritime professionals — to be effectively achieved. 

For now, it is still necessary to regulate several key provisions of the Law. The fact is that an extensive regulatory review must be carried out by Antaq, especially those applicable to maritime navigation under their scope, such as Normative Resolutions No. 01/2015 — which establishes the procedures and criteria for chartering vessels by a Brazilian shipping company — and nº 05/2016 — which establishes the criteria and procedures for granting authorization for Brazilian companies (EBNs) to operate in cabotage navigation. 

The point is that some of these normative changes can only be carried out by Antaq, after the Acts of the Federal Executive Branch, as an example, the one provided for in BR do Mar, article 15, which provides for the Act of the Federal Executive Branch to be responsible for the rules, criteria and the power to establish the maximum limits of tolerance for the identification of the equivalent weight capacity of vessels. Only after the enactment of such Act may Antaq, if it chooses to do so, review its normative provisions related to this matter. 

The Federal Government’s agenda is extensive. It was up to the Ministry of Infrastructure to prepare the draft of the decree that will regulate most of the provisions of the law, as well as to prepare the administrative rule that will regulate the way in which interested Brazilian shipping companies can qualify for the program. 

Law No. 14,301/2022 expressly stipulated that the provisions in article 14 should be regulated by Antaq, which is responsible for defining, as a rule, the criteria for the classification of the charter vessel as operating, that is, effectively used in transport, navigation of cabotage, and belonging to the same economic group. Taking the lead before the measures concerning the regulation of BR do Mar, Antaq opened public consultation on the rule that aims to set such criteria. Interestingly, however, the agency proposed to maintain EBN’s obligation to keep the vessels, owned or demise chartered, with flag suspension, ready and in commercial operation. However, it does not seem to be the purpose, as seem in item I of article 14 of the law that set forth the BR do Mar, to have the criteria for classifying shipping companies qualified in BR do Mar regulated by Antaq, but rather, only to regulate the criterion for the classification as effectively operating the vessel object of the charter. 

The proposition of regulation brought forward by Antaq does not consider in its normative proposal the possibility of chartering foreign vessels in the time modality, provided for in article 5 of BR do Mar. Should we conclude, then, that foreign vessels chartered by time by EBNs qualified in BR do Mar are not subject to preserving their status as effectively operating? 

The regulation regarding the criteria for the classification of the chartered vessel as belonging to the same economic group (Art. 14, II of BR do Mar) was proposed by Antaq via the inclusion of new provisions in Resolution No. 62, dated 2021. The aim of such resolution is “to establish the rules on the rights and duties of users, intermediary agents and companies operating in maritime support navigation, port support, cabotage and sea-going, and to set administrative violations”. At first analysis, it does not seem relevant to define the criteria for the classification of foreign vessels chartered by EBNs qualified in BR do Mar as belonging to the same economic unit in this resolution, considering that this is not its primary purpose. This definition should, indeed, be inserted in the same rule which establishes the criteria concerning the effectively operating vessel. 

It is a fact that both situations of classification of the chartered foreign vessel – whether it is effectively operating or belonging to an economic group – are exclusively relevant to shipping companies authorized in the scope of BR do Mar and, for a regulatory environment more agreeable to the market, it would be better if they were dealt with via a specific rule, along with other topics exclusively proper to qualified shipping companies, and not through innovations to the current rules, scope of which extends well beyond BR do Mar. 

With a view to a clear, efficient and unequivocal regulation of the provisions brought by BR do Mar and which will significantly modify the cabotage navigation in the country, it seems better that the normative adjustments to be done by Antaq should be proposed jointly and simultaneously, even though they only occur after the regulation by the Federal executive branch. This broad regulatory review is unavoidable and essential to adapt the currently existing regulation to the changes brought by BR do Mar. 

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