BR do Mar goes to sanction; project seeks to stimulate coastal navigation

This Wednesday (15th), the Chamber approved a bill that creates the so-called BR do Mar, an initiative that seeks to encourage navigation between national ports (cabotage). One of the goals is to reduce Brazil’s dependence on road freight transport.

Deputies accepted some of the amendments made by the senators and rejected others. The final text goes to the sanction of President Jair Bolsonaro.

The BR do Mar project is one of the government’s bets on the infrastructure area and involved great articulation by minister Tarcísio Gomes de Freitas.

The proposal was approved by the deputies in December of last year, but faced resistance from the senators. There were also differences within the government on some points, opposing the Ministry of Infrastructure to the team of Minister Paulo Guedes, of Economy, due to fiscal disputes.

The bill that creates the BR do Mar seeks to make some rules for navigation between national ports more flexible and increase the fleet of vessels. The government hopes in this way to stimulate competition in the maritime cargo transport sector, increasing the possibilities of renting vessels from other countries.

Currently, only vessels connected to the so-called EBNs (Brazilian Navigation Companies) can carry out coastal shipping. These companies may have entirely foreign capital, but they must have their own vessels. Authorization from Antaq (National Waterway Transport Agency) is also required.

The approved bill increases the possibilities for EBNs to charter vessels without the obligation to own their own vessels.

By removing the obligation for the company to have its own fleet, the intention is to reduce costs and speed up the market. It would be possible for an authorized company to operate in cabotage transport without having to invest heavily in the construction of a ship, for example.

The senators had made a change in relation to the crew of foreign vessels and reduced the minimum number of Brazilian workers from two-thirds, as approved by the Chamber, to one-third. Deputies took back the two-thirds.

Another item of the project foresees the creation of the Brazilian Investment Company in Navigation, which should build a fleet and charter the vessels for EBNs to operate. This eliminates the need for EBNs to invest in their own fleet.

The point of disagreement within the government refers to the extension of the Reporto, a special tax regime that relieves investments in port terminals and railways. Reporto was in effect until December 31 of last year.

However, in a victory by Tarcísio Freitas, the special regime will be resumed from January and will be valid until the last day of the year 2023. The deputies maintained the extension of the benefit.

The deputies rejected an amendment made by the senators that provided that employment contracts for Brazilian crew members operating in a chartered foreign vessel would be governed by legislation
Brazilian labor force.

According to the text approved by the Chamber, the international rules established by international organizations regarding the protection of working conditions, safety and the environment on board vessels, and by the Federal Constitution will apply to contracts.

Deputies also rejected another change made by the senators. The text approved by the Chamber doubled the number of ANTAQ directors from two to four. The senators had taken over the number of two directors. Deputies rejected the change. With that, Antaq gains two more directors.