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Lack of dredging impacts liquid bulk operations in Santos Port

The operation of liquid bulk in the Port of Santos, in the brazilian state of São Paulo, has been hampared, following the reduction of the operational draft limit in the berths of Alemoa and Barnabé Island. Piers are interdicted, increasing the waiting/queue of vessels. At least 14 cargo ships cancelled calls at the Santos port and proceeded to other ports.

The lack of constant maintenance dredging, combined with the siltation of the channel, forced the reduction of the operational draft limit in three berths intended for operations of liquid bulk. The contract to perform the sediment removal service on the waterway ended in April, but the Companhia Docas of São Paulo (CODESP), company that runs the port, thought there was no risk of restrictions on incoming ships.

Unfortunely, in Alemoa there was a reduction of 70 centimeters in a bething point. From 10.9 meters to 10.2 meters. On Barnabé Island, the berth in which the draft limit was 10.2 meters, suffered a 1.2 meters reduction. The draft is of only 9 meters now. Also, the docking pier that allowed operations of ships withs drafts of up to 10.4 now only receives vessels with 9.5 meters below the waterline.

The berths of Alemoa and Barnabé Island concentrate the liquid bulk operations at the Port of Santos.

The Union of Maritime Navigation Agencies of the State of São Paulo (Sindamar) expressed concern. The main fear revolves around rising demurrage costs, given the longer waiting times for larger ships to berth.

For the President of the Brazilian Association of Liquid Terminals (ABTL), Carlos Kopittke, the situation is complicated and the solution should take some time. According to him, Alemoa pier 1, used by Transpetro (a subsidiary of Petrobras), is limited and only ships up to 230 meters can operate safely. In this case, the solution may take up to 10 months, as it is necessary to hire a company that specializes in the maintenance of dolphins.

Codesp rules out emergency hiring

Codesp said in a statement that the reduction of the operating draft in some berths was ordered due to the identification of depth loss at these points, attested by bathymetries performed by Codesp.

Regarding the defense of the wharfs 1 and 2 of Alemoa, “the recovery has already been contracted and in mobilization for the immediate start of the services, with 15 days to complete the first and another 15 days to complete the second”.

CODESP also announced that, next year, it should start construction of a new pier on Barnabé Island and, with the public bidding of the STS 08 area, the Port will gain two more berths for liquid bulk.

Regulatory review announced will impact Comex and Shipping

Brazilian Comex and Shipping Players know how difficult is to be in compliance with all the rules imposed as a way of “controlling” the activity.

Recently a decree was issued stablishing a revision of federal rules and regulations. The laws currently in force will be repealed, simplified and republished within 18 months.

The measure is being called, behind the scenes, “Revisaço” and aims to reduce costs with unnecessary burocracy and regulations in between 160-200 billion reais.

The review will update, simplify and consolidate the regulations. The idea is to eliminate outdated rules and simplify the regulatory landscape, ensuring greater legal certainty for entrepreneurs and investors.

On Comex, we currently have importers and exporters who must comply with regulations that are published, almost daily, by each of the various agencies involved in foreign trade.

Players are subject to heavy penalties (fine, cargo forfeitur, closure of the company, among others) if they fail to comply with all accessory obligations.

On the other hand, we have the entire Shipping chain that has the obligation to provide numerous information, since the arrival of the ship, operation, departure, port of origin, port of final destination, being required to feed SISCOMEX Cargo and Port without Paper. They are also subject to various penalties. Among them, the fine of R$ 5,000 that worries maritime agents and, although illegal is one of the great reasons for the “Brazilian Cost”!

It is obvious the importance of the public agencies regulation and that the sectors have some kind of control.

However, the great truth is that players in the industry suffer from the numerous obligations created over the years.

Therefore, the “Revisaço” demonstrates the Government’s concern with the players wishes to reduce bureaucracy and the costs of foreign trade.

The final result of the consolidation is expected to come out in 2021. After the end date, taxpayers will no longer be subjected to fines based on outdated rules.

The process of review and consolidation of the rules can be suggested by any interested party, through the Federal Executive Branch Ombudsman System.

Our team will prepare suggestions for revision of the regulation update, especially with regard to the regulations of Brazilian Federal Customs Office and the accessory obligations that shipping players are required to carry out in SISCARGA and ANTAQ’s regulatory framework for shipping and port sectors.

Thus reaffirming our mission to strive for greater legal certainty in the sector.

Cabotage gains new incentive with cost reduction

The Federal Government reduced the import tax for vessels destined for cabotage operations in Brazil. With this, the expectation is to reduce by 40% the cost to import a specific vessel for this segment. The measure is part of ‘BR do Mar’, a plan that aims to boost maritime cargo transportation along the Brazilian coast.

Today, the import tax rate for vessels is 14%. But with the plans to encourage cabotage, which should be revealed with the disclosure of the BR do Mar, the issue has been analysed by the Foreign Trade Chamber (Camex), which approved the elimination of the tax.

The measure was announced and celebrated by the Minister of Infrastructure, Tarcísio Gomes de Freitas. For him, the Government’s decision is “a huge nod to those who are willing to invest in the sector, create jobs, move the entire production chain and contribute to expand the participation of the cabotage matrix in Brazil’s transport matrix”.

For port consultant Fabrizio Pierdomenico, the measure is also welcome. “This is the first step in making cabotage an important modal. I always say that it competes directly with the road mode. So as long as it is not cheaper, faster, more efficient, more competitive with freight and road documentation, cabotage will be at a disadvantage”.

On the other hand, the consultant points out the risk of the measure having side effects. The idea, according to Pierdomenico, is that the tax exemption lasts from 12 to 24 months.

“The problem is to stop using Brazilian shipyards to manufacture these vessels. But I don’t see how not to do that in the short term”, said the expert. He points out that the measure is valid since, “if the intention is to give a supply shock in lines, it is necessary to have ship”.

Other measures

Pierdomenico believes that BR do Mar has to resolve other issues to boost cabotage. One of them is the issue of bunker oil, the fuel of navigation, considered one of the obstacles to the development of the modal. “The bunker represents a huge cost. There has to be different treatment for cabotage”, he said.

The BR do Mar may be published through a bill or a Provisional Measure (MP).The idea is that ships carrying cargo through cabotage will have a differentiated treatment, which can guarantee a reduction in bureaucracy and agility compared to long-haul shipping, which will not have a revision of standards and regulation.

Statement from Navy Authority regarding the recent Oil Spill

Below is the recent statement given by the Brazilian Navy Authority:

“From the joint and coordinated work between the Brazilian Navy and the Federal Police, with the support of national and foreign institutions, it was possible to advance the investigations into the cause of the appearance of oil spills that reached the northeastern shores, since August 30.

Studies carried out by the Navy Hydrography Center, together with universities and research institutions, made it possible to determine an initial area of possible occurrence of oil disposal, guiding the initial research efforts.

From this initial area, and with data on maritime traffic obtained from the Integrated Maritime Safety Center (CISMAR), the Brazilian Navy reached a number of 1,100 vessels, with a subsequent refinement of 30 tankers.

At the same time, the Federal Police (PF), through geointeligence, identified a satellite image of July 29, related to an oil spill located 733.2 km (about 395 nautical miles) east of the state of Paraíba. This image was compared with images from earlier dates where no spots were identified.

The oil collected on the shore of the north-eastern coast has been subjected to various analyses in laboratories that have proven to originate from oil fields in Venezuela.

This information was supplemented by verification of other parameters such as cargo, port of origin, travel route and shipowners’ information.

Of the 30 suspected vessels, a Greek-flagged tanker was navigating the spot, on the date considered, carrying crude oil from Venezuela’s “SAN JOSÉ” to South Africa. Satellite images, associated with the above data, point this ship as the prime suspect.

CISMAR’s follow-up attests that the vessel kept its monitoring systems powered (Automatic Identification System – AIS) and there was no communication to the Brazilian Maritime Authority about the spill in question.

During the investigation, vessels that did not transmit their location systems (AIS), known as “Dark Ships”, were also evaluated. However, after verification of satellite images, they were not correlated with this occurrence.

Investigations continue to identify the circumstances and factors involved in this spill (whether accidental or intentional), the dimensions of the original oil spill, as well as to measure the volume of oil spilled, to estimate the likelihood of residual oils, and to ratify the pattern of spill observed dispersion.

The unprecedented occurrence required the establishment of its own research protocol, requiring the integration and coordination of different organisations and sectors of society.

The Brazilian Navy, the Federal Police, and other collaborators will continue to conduct the investigation until all issues involved are clarified”.

Oil spill on Northeast Brazil beaches reach 9 States

For over one month now (44 days), an unprecedented extensive area along the shoreline of Brazil’s Northeast Region has been hit by an oily substance in the form of lumps of black tar, which origin remains unknown.

Substantial oil slicks were first spotted since at least 30 August 2019, but it was only weeks later they realised that the pollution was widespread and gradually reached the entire shoreline along the northeastern coast of the South Atlantic Ocean, heading south.

According to the federal environmental agency IBAMA, more than 70 municipalities in the nine Northeastern states – Alagoas, Bahia, Ceará, Maranhão, Paraiba, Pernambuco, Piaui, Rio Grande do Norte and Sergipe – have been reached by the oil spill in the course of recent weeks. The affected area spans over 1,370 nautical miles across sandy beaches, mangroves, reefs, and rocky coasts and varied fauna and flora, extending from Cururupu in the state of Maranhão to Arempebe in Bahia soon to reach the metropolitan area of Salvador, Northeast’s largest city, and beyond.

To date, more than 130 tonnes of oil waste has been collected on the many affected beaches, while oil-soaked sea turtles are being washed on the shores of the north-eastern coast, many of them already dead. Fish contamination and mortality and even dolphin are also being reported.

Petrobras stated that representative samples of the substance were tested, and it was concluded that the product that currently pollutes the pristine north-eastern beaches is crude oil, neither produced nor imported by Brazil.

A study by the Institute of Geosciences of the Federal University of Bahia (UFBA), in partnership with the Federal University of Sergipe (UFS), points out that the oil is of Venezuelan origin.

According to the Brazilian environment minister Ricardo Salles, based on an alleged match between the samples tested and Venezuelan crude, it is likely that the product in question actually came from Venezuela, possibly carried on a vessel sailing near the Brazilian coast that accidentally or otherwise discharged it.

Official investigations Brazilian Navy’s Directorate of Ports and Coasts (DPC) has opened an administrative enquiry to determine the source of the oil spill. The procedure includes analysis of maritime traffic data, information collected by naval ships and aircrafts passing or patrolling the area.

Navy’s Integrated Maritime Safety Centre (CISMAR) is investigating maritime traffic in the region, comprising an area of about 36,000 square nautical miles in Brazil’s exclusive economic zone, with an emphasis on oil tankers. In just one month, CISMAR identified 140 tankers, some of which are being notified by the maritime authority to provide information.

The maritime authority – DPC – is also assisting the environmental agencies in the pollution response and conducting sea and air patrols; however, so far, no trace of oil has been found in the open sea, only in the coastal area near the beaches.

In accordance with the International Convention on Civil Liability for Oil Pollution Damage (CLC/1969) and the International Convention on Oil Pollution Preparedness, Response and Cooperation (OPRC/1990), both signed by Brazil, the fines for oil pollution can reach R$ 50 million, without prejudice to other administrative and criminal sanctions and the polluter’s strict responsibility to fully repair environmental damage.

Year by year the shipping industry has been adopting good practices which consequently results in a substantial reduction of oil spill incidents. The industry is adopting measures aimed at the reduction of the environmental impact, such as IMO 2020.

The truth is that maritime transport is a matrix with less environmental impact than road transport that is so largely used in Brazil. Obviously it is necessary to investigate and identify the polluting source.

Bill releases companies from hiring 2/3 of Brazilian Seafarers

The Committee on Economic Development, Industry, Commerce and Service of the House of Representatives approved Bill No. 2.456/19, which puts an end to the compulsory reserve provided for by law, that requires companies operating in Brazil to hire 2/3 (two thirds) of Brazilian employees.

The approved Bill also establishes differentiated treatment to companies established in the country that hire Brazilian workers. It also revokes part of the Consolidation of Labor Laws (CLT), putting an end to the obligation to fire foreigners before Brazilians.

The Congressman supporting the Bill justifies that the Brazilian Constitution privileges free enterprise and free trade. For this reason, the national legislation must guarantee equal treatment between Brazilians and foreigners. The Congressman also argues that the proposed project is in line with the most dynamic and globalised economies, stimulating competitiveness, freedom of choice and establishing favorable treatment for those who willingly establish reserve policies for national workers.

Our partner, Mariana Félix, especialised in Labour Law explains that if this bill is approved by the National Congress and sanctioned by the President, it will bring direct consequences for local and foreing shipowners operating in Brazil. Because, according to the terms of the Bill approved by the Committee of the Chamber of Deputies, it will no longer be necessary for shipowners to hire Brazilians to compose 2/3 (two thirds) of the crew in order to operate in Brazilian waters.