Provisional Measure 844 of 2018 (“MP 844”) was published in the Federal Official Gazette on 07.09.2018, which (i) updates the legal framework for basic sanitation in Brazil, (ii) amends Law 9.984, of July 17, 2000. However, this provisional measure may have its constitutionality challenged in the Federal Supreme Court (STF).
More than 10 years after Federal Law 11,445/2007, which established the national guidelines for basic sanitation, almost 17% of Brazilians do not have access to water supply services and only 51.9% have access to sanitary sewage, according to data from 2016
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In this sense, one of the points brought in the MP has the scope of fomenting investments in the sector by increasing competition between state public concessionaires and private companies. The MP makes it mandatory to open a bidding process every time a municipality wants to carry out water and sewage works. Until now, competition was only required when a management wanted to hire a private company. If the option was to perform the work directly with a state public company, the procedure was not required.
Regarding regulation, the main change promoted by the MP was to make the ANA (National Water Agency) a regulatory agency for public services in basic sanitation, an assignment that until now was the responsibility of the Ministry of Cities. ANA was in charge of regulating the access and use of water resources within the Union, such as rivers that cross more than one state.
The Minister of Cities said that the new regulatory framework will bring legal security for private companies to invest in the sector. According to him, currently more than 90% of the basic sanitation investments in Brazil are made by state-owned companies and the idea is to promote competition between public and private entities.
The Government’s first challenge regarding PM 844/2018 will be precisely to prove that this new attribution given to ANA does not violate the constitutional distribution of competencies, since some institutions have already manifested themselves in the sense of the unconstitutionality of the Provisional Measure for precisely removing the competencies of the Municipality in sanitation matters.
On September 5, the Senate Committee on Regional Development and Tourism(CDR) discussed in a cycle of hearings, including in the states, the Provisional Measure on Basic Sanitation(MPV 844/2018). In the assessment of the president of CDR, Senator Fátima Bezerra, the MP privatizes the distribution of water and the treatment of sewage, and the neediest localities will not have access to these essential services
It should also be pointed out that the MP produces immediate effects, except in the case of a public call, whose effects were expressly established after three years from the date of its publication.
In any case, for it to become law, the MP depends on the approval of the National Congress, which will surely bring countless debates on the subject.
The DDSA’s environmental team is available for further clarifications and assistance in cases involving sanitation issues.