Doing Business in Brazil

17. Regulatory law


17.1. Introduction


In the last two decades, Brazil has been adapting to a new form of role of the State based on a mediation and regulatory system. In fact, as from the 90s, the country’s economic rules have become more flexible, enabling the deregulation of certain fields and the initiation of a privatizing process.

The change in the State’s profile from interventionist to regulator gave rise to the regulatory agencies, one of the main features of the new system. Through this new model, services that were recently an exclusive monopoly of the State were transferred to the private sector, subject to the control provided by the regulatory agencies.

This gave rise to Regulatory Law, which consists of the combination of public, constitutional, economic and administrative legal rules that govern the regulatory agencies and their relations with concessionaires, authorized contractors and users of the public services.

In this new system, the State is no longer the only party to finance investments for its development.. The supply of services and works that were previously exclusively attributed to the State, was transferred to private enterprises, with the State having the plain role of controlling and regulating the services provided by the concessionaires.

The State no longer has an exclusive monopoly, for example, in the fields of exploitation of crude oil, generation and distribution of electric power and telephone services.

However, it must be remarked that it is salutary for the agencies to improve their relations with the authorities that handle the consumers’ interests.

Consequently, the regulatory agencies are an important part of the new structure of the Brazilian economy. However, adjustments are still needed in order to achieve their full potential.

17.2. Regulatory agencies

The constitution of the regulatory agencies derives directly from the decentralization process, that is, the State’s withdrawal from the economy. Accordingly, the agencies were constituted with the purpose to survey, establish rules and regulate the public service sectors that were delegated to private enterprises, aiming for stability and harmony in the relations between the State, users and the concessionaires.

The regulation is based on the concept that it is a state intervention in the private sector, jointly or separately, to impose standards of conduct in order to achieve the welfare of the community.

The regulatory agencies are provided with political, financial, regulatory and management autonomies, with powers of mediation, arbitration and to draw guidelines and statutes.

Several federal regulatory agencies were established over recent years in Brazil with different purposes and involving different fields. Today, there are ten federal regulatory agencies in Brazil which are listed bellow:

Agência de Energia Elétrica – ANEEL (Electric Power Agency)

The National Electric Power Agency was created by Law 9.427 of 26 December 1996 and is a special agency of the Ministry of Mines and Energy.

The main duties of this agency are to regulate and control the production, transmission, distribution and commercialization of electric power. In addition, the agency act as a mediator in the conflict of interests between the agents of the electric power sector and the consumers, hearing their complaints, in order to develop the market of electric energy with balance between the interests of the agents and of the society.

Furthermore, ANEEL is engaged in the authorization of electric power facilities and services, determining investments based on the needs of the consumer market, encouraging competition between the operators and ensuring an universal service for the benefit of the Brazilian community.

Agência Nacional do Petróleo – ANP (National Oil, Natural Gas and Biofuel Agency)

The National Oil Agency, which was constituted as a body of the Ministry of Mines and Energy, has the attributions to regulate, contract and perform surveillance of the economic activities comprised in the oil, natural gas and biofuel industry.

The agency was created by Law 9.478/97, later changed by Law 11.097 of 13 January 2005, which establishes the duties to be fulfilled by this agency, namely, the protection of the environment, to enforce proper conservation practices, the rational use of oil, of oil by-products, natural gas and biofuel, preserving the environment.

Agência Nacional de Telecomunicações – ANATEL (National Telecommunications Agency)

The National Telecommunications Agency was created by Law 9.472 of 16 July 1997, a special agency of the Ministry of Communication, acting as independent administrative authority.

The National Telecommunications Agency’s main purpose is to develop the telecommunications field in Brazil, modernizing and expanding it in order to provide access to the entire community to a service of quality service with a fair and available price. Therefore, this agency is responsible for implementing the National Telecommunications Policy, proposing the institution or elimination of types of services, elaborating the General Plan of Concessions and the targets for the high coverage of the telecommunications services.

The Agency is also responsible for the control and penalization of violations to the economical order in regard to telecommunications. Furthermore, it is also engaged in the defense of the consumers’ rights and in settling the conflict of interests between the service providers and the formers, establishing restrictions, limits or conditions to the corporate groups for the grant and transfer of concessions, permits and authorizations, so as to ensure fair competition and prevent market concentration. The Agency is responsible for establishing the fees in each type of service provided.

Agência Nacional de Vigilância Sanitária – ANVISA (National Health Surveillance Agency)

The National Health Surveillance Agency was created by Law 9.782, from 26 January 1999, being a special agency of the Ministry of Health.
The Agency’s main purpose is to provide health care to the population through the control of the wastewater system of the production and trade of products and services which are submitted to the wastewater system surveillance, including of the installations, the processes, the raw materials and of the technologies related to these products and services. Furthermore, the Agency controls the ports, airports and frontiers, together with the Ministry of Foreign Relations foreign institutions in order to deal with international affairs in the area of health surveillance.

Agência Nacional de Saúde Suplementar – ANS (National Ancillary Health Agency)

The National Ancillary Health Agency was created by Law 9.961/2000, being also a special agency of the Ministry of Health.

The Agency’s purpose is to promote the defense on the public interest in the ancillary health assistance, to regulate the sector operators – including regarding to its relations with consumers and suppliers – and to contribute for the development of the countries’ health system.

Agência Nacional de Águas – ANA (National Water Resources Agency)

The National Water Resources Agency is a special agency created by Law 9.984 of 17 July 2000 that has administrative and financial autonomy, being a body of the Ministry of the Environment.

It is responsible for implementing the National Policy of Water Resources, for establishing rules to its act, its administrative structure, being also a fount of resources. Thus, through the law on water resources (Law 9433/97), Brazil created an ambitious model for the management of the use of its rivers.

By creating the technical conditions for the implementation of the Waters Act, in a first instance ANA will contribute in an attempt to solve two serious problems in Brazil: the long drought seasons, especially in the Northeast region, the facing of which does not depend only on increasing the offer of water, but also in the management of the demand, including adopting rationing measures; and the pollution of the rivers when the action to be taken must be convened at the level of the water basin, covering more than one state.

Agência Nacional do Cinema – ANCINE (National Film Agency)

The National Film Agency was created in 6 September of 2001 through the Provisional Measure nº 2228, being an independent agency in the form of a federal autarky, bound to the Ministry of Culture in 13 October 2003.

The Agency’s purposes are the promotion, regulation and supervision of the film and music industries, being attributed with financial and administrative independence for it.

Agência Nacional de Transporte Aquaviários – ANTAQ (National Maritime Transportation Agency)

The National Maritime Transportation Agency was created by Law 10.233, being a special agency of the Ministry of Transports.

The Agency’s purposes are: (i) the implementation of policies elaborated by the Ministry of Transport and the National Council of Policies’ Integration in Transports – CONIT -, according to the principles and guidelines established in Law 10.233/2001; and (ii) to regulate and supervise the activities of rendering of services regarding maritime transports and of exploitation of the ports’ infra-structure, exercised by third parties (i.e., private sector).

Agência Nacional dos Transportes Terrestres – ANTT (National Agency for Land Transportation)

The National Agency for Land Transportation was also created by Law 10.233, being a special agency of the Ministry of Transports.

The main areas of regulation of the Agency are the railway and highway sectors, also regulating terminals and multimodal transportation. In the railway and highway sectors, the Agency mainly acts in the exploitation of the infra-structure from both sectors, and in the rendering of public service of transports of goods and passengers through railway and highway. Additionally, the Agency is responsible for providing the habilitation for the ones who wants to operate as with multimodal transportations and also for the development of terminals and routes.

Among the Agency’s capacitance are: the concession of highways and railways for the development of its infra-structure; the permission for the rendering of public transportation of passengers through highways and railways which are not associated with the developments in its infra-structure; and the authorization for passenger transportation for tourism agencies under the chartering system, for the international carriage of goods, and for multimodal transportation.

Agência Nacional de Aviação Civil – ANAC (National Civil Aviation Agency)

The National Civil Aviation Agency, the newest of the agencies, was established by Law 11.182 of 27 September 2005 and is a special agency of the Ministry of Defense.

Its purposes are to regulate and supervise the activities of civil aviation and adopt necessary measures to consider the public interest. Moreover, their mission is to encourage and develop civil aviation, the aeronautics infrastructure and airports of the country.

As so, the Agency should preserve the balance of economic-financial public and private actors responsible for different segments of the system of civil aviation, as well as ensuring the interests of users and consumers.

17.3. Conclusion

As of the 90s, the role played by the State in Brazil changed significantly. In line with a trend that has occurred in several other countries, Brazil structured many changes aiming to mitigate the areas in which the State played a role.

Accordingly, the State has delegated to private enterprises certain works and services which until recently were its exclusive attribution. In this new reality, the State figures as a controller instead of a provider thereof.

In the last two decades, Brazil exited an extremely inference phase and entered the new millennium consolidating a new model of a Regulating State, bringing with it the regulatory agencies.

In this context, pursuant to having patrimonial, administrative and financial autonomy, the regulatory agencies vest critical importance to carry out the countries’ economical activities.

However, they must adapt and attend in a more satisfactory manner, the purposes for which they were created, namely, the regulation and surveillance of the public utility services that are provided by private enterprises.

In this sense, it is worth noting that at present, a Project of Law nº 3337/04 is proceeding before Brazilian National congress, ready to be analyzed by the Plenary Sitting, which brings changes to the Law on the regulatory agencies such as the implementation of adjusts in its financing and in attributions of the agencies. What is expected is that this new Law enables a better operational system for the agencies, for instance, matching its activities of regulation with the legislation of Biddings.

Authors: Ana Carolina Rochedo and Denise Sá de Medeiros

Noronha Advogados
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