Legal solutions to drive business development.


The growing trend

By Alessander Lopes Pinto

Since the world maritime sector began to discuss, a few years ago, the plausibility of autonomous ships for the transport of goods by waterway, a disruptive transformation has shaken maritime and port activities at a global level. We are not far from the time when ships and ports can be operated without the human element. Automation is now at the center of the competition arena. 

The maritime world quickly understood how the implementation of technological innovations and artificial intelligence could accelerate the self-management of navigation and ports from the monitoring of equipment integrity and automation of mechanical and electrical systems, reducing the need for human interference and increasing the efficiency of operations. 

With an eye on the future, companies began to invest enormous resources in the development of technological innovations and stimulated the use of artificial intelligence concepts in systems on board ships, including radar sensors, cameras and satellite guidance, as well as security systems.  

Projects previously only imaginable in science fiction have now become reality. The ship Yara Bierkeland, known beyond the maritime industry for combining technology and energy efficiency, was a pioneer among autonomous ship projects, although it did not completely exclude the presence of a human team on board. Developed by the Norwegian company Yara International, it made its first test voyage in November 2021. 

Then it was Mikage’s turn, from the Japanese company Mitsui Lines, to cross the seas. The first fully autonomous ship to dock by herself, she made use of drones, at the end of the voyage, to release cables for the port workers. The transformation has just begun. Japan already has its second automatic ship, named Suzaku. The vessel made its first test voyage in February 2022. 

Brazil has been following this growing trend with due attention and, since 2020, has a technological platform – Brazilian Cluster of Artificial Intelligence for Ships – for the development of artificial intelligence for the maritime sector. The initiative brings together representatives from the government, academia, maritime companies and industrial leaders and seeks to promote projects and technological solutions, attract investments, bring together research centers that already work in the area and point out the new Brazilian bets for maritime transport and port activities to the national and international market. 

It is worth noting that technological innovation centers have been implemented in the main Brazilian port cities, with emphasis on the computerization and digitalization of port procedures related to the arrival of ships, their loading, unloading and clearance by the various competent authorities. Not least, the Brazilian program “Porto Sem Papel” (Paperless Port), in force for almost ten years, has brought efficiency to port operations, reducing bureaucracy and creating more agility and economy for operations. 

Note, however, that there are sensitive points to be considered at the current moment of this transformation. It should be noted that the expected efficiency for maritime transport will only be achieved with the integration of the entire logistics chain involved in the shipment of goods, from the collection at factories, storage, dispatch, transport, unloading and delivery to the final recipient. 

In this regard, the conflict between Ukraine and Russia lights up a red light for the intended change. In addition to all the humanitarian tragedy and consequent escalation of misery and delay on a global level, the integrity of ports, ships and communications infrastructure, not restricted to countries involved in the armed conflict, is a real risk. Likewise, the impacts suffered from cybernetic attacks, intensified during the war, cannot be ignored. Identifying and preventing threats to communication network operations, including the maritime and port sector, have required greater attention from cybersecurity development centers. 

The industry and the international maritime community must be prepared to deal effectively with any attack and protect the continuity and security of ports and ships. To this end, in the near future, a considerable effort must be made to carry out two tasks that today seem irreconcilable: the first is to seek a solution to the end of the war and its devastation; the second, closely associated with the first, is to advance the entrepreneurial agenda of a modern, efficient, intelligent and technological navigation.

The good moment for the maritime sector demands attention

By Raquel Guedes Sabb

The current Brazilian growth of the energy and oil and gas sectors has generated an exponential increase in the demand for national maritime labor. It is expected that market conditions will be created so that the necessary hiring is effectively carried out in the short and medium term, and that attention is paid to what is actually at stake: the recovery of the Brazilian maritime sector as well. 

Strongly impacted by the crisis in the oil and gas sector and the corruption scandals at Petrobras, the maritime sector has kept its doors closed to hiring since 2014. It is worth remembering that at the time of Lava Jato operation (Car Wash operation), which pointed out the misapplication in the oil company, the segment experienced, in the wake of the crisis, mass layoffs. Numerous contracts for the charter and services of Brazilian and foreign ships were terminated early by Petrobras, causing one of the most serious recessions, especially in maritime support navigation. 

The current revival of maritime support navigation and the use of a greater number of shuttle tankers – resulting from the growth of the oil and gas industry, the expansion of investments in gas thermoelectric projects, stimulating the use of floating storage and regasification units (FSRUs), and the government’s incentive for cabotage navigation, via BR do Mar, encouraging the arrival of more foreign ships in the country, has pressured the increase in the demand for maritime labor and, especially, for Brazilian crew. 

Also note the significant growth in wind power generation in the country and the prospect of advancing this energy matrix to offshore installations, starting in June, when the Federal government guidelines come into force. Large companies have already announced their interest in pursuing the generation of wind energy at sea, which will require the hiring of specialized vessels and, consequently, more crew. 

The expectation of all these events, which has already been heating up the sector, anticipates the need to pay attention to the availability of Brazilian crew members so as to meet the expected demand for maritime labor. Normative Resolution No. 06, dated of 2017 (RN 06), of the National Immigration Council (CNIg), primary objective of which is to protect the employment of Brazilian labor on foreign ships, whether maritime or not, requires that the crew of the vessels of foreign flags in operation in Brazil and employed in Cabotage and Maritime Support navigations and in FSRUs, for example, have a certain percentage of Brazilian professionals on board in proportion to the number of foreigners on board. The proportion of Brazilian professionals that these foreign vessels must have varies between one fifth, one third, half and up to two thirds, depending on the type of navigation and vessel and the length of time they remain in operation in the country. 

The good moment of the maritime sector and the requirements of RN 06 in relation to the employment of Brazilian professionals on board these foreign vessels operating in Brazil have, however, revealed a disturbing reality in relation to the low availability of Brazilian maritime labor, exposing a noticeable difficulty in the selection and hiring, for example, of Brazilian crew members, mainly Officers. 

The training of maritime professionals, balancing labor supply with market demand, needs to be prioritized with medium and long-term policies, in a continuous and effective way. The projected increase in the number of foreign vessels operating in Brazil, in the short and medium terms, makes it an issue even more worrying and urgent to tackle. 

There is no doubt about the good moment of the market and especially for the Brazilian maritime professionals, but the bottleneck that appears to be forming ahead regarding the availability of this maritime workforce exposes companies to a legal and regulatory risk, along with the natural difficulty they will already have to comply with concerning the normative provisions of RN 06. 

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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