Congress may favor pilotage – 12/04/2023 – Market

A bill from the Executive Branch that had the justification of modernizing the rules linked to pilots (pilots responsible for parking ships in ports) could further benefit these professionals in an old dispute against shipping companies.

This is the assessment of the Navy and sectors of the economy, such as oil and gas. They are opposed to associations that represent practitioners and part of the logistics companies, the main defenders of the proposal already approved in the Chamber and close to being endorsed in the Senate.

The pilot specializes in navigating vessels through narrow channels and parking them in ports. In Brazil, there are only 613 practitioners, whose monthly income varies from R$50,000 to R$300,000, according to sector associations.

Since the last century, the Navy has adopted the rotation model in pilotage. The military makes a monthly stopover with the names of all pilots, with the aim of ensuring that no ship arrives at ports without trained professionals to dock them.

This model, used in Europe, Asia and the Americas, is also intended to prevent ship owners from closing agreements with little practice and, due to professional fatigue, maritime safety being at risk — as ship accidents have a major impact environment and can affect the country’s import and export numbers.

The rotation schedule, however, requires shipping companies to sign contracts with the pilot designated by the Navy for that time — which prevents free competition for the service.

This model, according to the TCU (Federal Audit Court), creates a monopoly for the pilotage sector. According to the court’s technical area, the average cost of the maneuver in Brazil is around R$7,500 per hour. The price is 2.6 times that of the most expensive regulatory model in force in the United States.

“Given the characteristics of contracting and mandatory provision of this service, the existence of a monopoly situation was verified, with a price level higher than those practiced in international parameters”, concluded the court, in 2022.

To combat the monopoly, the Jair Bolsonaro (PL) government sent in 2022 the bill to establish that Antaq (National Waterway Transport Agency) would be responsible for carrying out the economic regulation of the sector, to curb abuses.

The Chamber, however, decided to transfer the attribution to the Navy and sideline the regulatory agency. The project is now in the Senate Infrastructure Committee and, if approved, will go to presidential approval.

The Director of Ports and Coasts of the Navy, Admiral Renato Salgueirinho, told Sheet that the approval of the text as it is in the Senate will cause damage to the Force.

“Economic regulation is important, but it needs expertise and data to establish a price system and check abuses. We are technicians to guarantee maritime security. We are not designed to carry out activities outside our responsibilities”, he said.

Salgueirinho states that the bill does not provide for access to the data that makes up the final value of the service, which are in private agreements between the parties. Therefore, the definition of prices would be restricted to the analysis of values ​​practiced in other contracts and the verification of the quality of the service.

“Without due transparency, the bill will not enshrine regulation. It will enshrine the setting of prices based on criteria that are the repetition of values ​​already practiced in previous contracts […]without observing the technicality of economic regulation.”

The IBP (Brazilian Institute of Oil and Gas) defended, in a note, that the Navy should not accumulate the roles of technical and economic regulator of the sector. “We understand that Antaq, due to its regulatory nature, has the legitimacy, vocation and expertise to carry out economic regulation effectively with continuous monitoring of the costs of waterway activities”, he adds.

“To benefit society, Parliament should prioritize regulation by a body with real economic capacity, under penalty of harming the domestic economy and foreign trade”, argues Abac (Brazilian Association of Cabotage Shipowners).

Associations linked to pilotage say that the Navy already carries out a type of economic regulation over the sector by being responsible for carrying out arbitration between pilots and ship owners.

They also highlight that a 1997 law gives the Navy the power to carry out price fixing in necessary cases to ensure that the service is not interrupted.

“The Navy has been taking care of pilotage for 215 [anos]. Yes, it already regulates the economy. Why won’t she obey the parliamentarian, representing the Brazilian people, saying what she has to do? It’s definitely not something new for them,” said the president of Praticagem do Brasil, Ricardo Falcão.

For Falcão, it makes no sense to separate technical and economic regulations because the two are interconnected. “When you have the norm [técnica] of the Navy, in which she tells how everything should work — size of the boat, the performance of the lookout [estrutura usada para apoiar o prático]—, she is talking about things that have an economic impact”, he added.

He also says that the withdrawal of Antaq’s economic regulation is related to an offensive by parliamentarians against regulatory agencies.

“When we had a meeting with the [presidente da Câmara, Arthur] Lira, with the senators, with the deputies, they are totally against any regulatory agency. They see that their system is bad, the way in which directors are appointed is bad and there is a perception by the National Congress of not establishing a regulatory agency because they represent economic interests”, reported Falcão.

The CEO of Logística Brasil (association of companies that use ports), André de Seixas, believes that the Navy is trying to transfer its responsibility for maritime security by handing over the economic regulation of Antaq.

“The Navy wants the beautiful duck, the pilotage that always gets it right, which guarantees maritime safety. The ugly duck wants to send it to Antaq. It is the Navy’s responsibility to regulate this sector as a whole. It is not like a wish basket, which the Navy chooses what to do and what not to do”, he said.

The Navy still demands that the Maritime Authority’s internal rules, such as the creation of a rotation scale, be included in the bill. According to the Force’s position, placing details of the sector’s regulations in legislation would remove the Navy commander’s discretionary power to make agile changes to pilotage.