Understand what the sanitation framework is and what changes if Congress overturns sections modified by Lula

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Classified as the first defeat of the Lula government in Congress, the Chamber overturned devices that make the legal framework for sanitation more flexible. Leader talks about reorganizing political articulation. The Chamber of Deputies approved on Wednesday night (3) the overthrow of devices modified by President Luiz Inácio Lula da Silva (PT) in the legal framework for basic sanitation. The project will now be analyzed by the Federal Senate. Lula’s decrees, which are already in effect, make points of the current rules for granting and operating sewage collection and water treatment services in Brazilian cities more flexible. The changes were criticized by parliamentarians and industry associations. Since April, mobilizations in Congress for the overthrow of the amendments have grown. The effort, which even included direct criticism of the decrees of the mayor, Arthur Lira (PP-AL), led to the first defeat of the Lula government in Parliament last Wednesday. Lula signs a decree that changes the legal framework for sanitation. Reproduction Understand below what the possible overthrow of the sections modified by Lula will mean: What is the legal framework for sanitation? The legal framework is a law that modifies a series of norms in the basic sanitation sector in Brazil. The text was sent by then President Jair Bolsonaro (PL) in 2019 and approved by Congress in 2020. The framework provides for mechanisms to expand, at rates close to 100%, the drinking water supply and sewage collection network throughout the country by 2033. It also establishes incentives for the presence of the private sector. According to the most recent data from the National Sanitation Information System, 84.2% of the Brazilian population has access to potable water. Coverage is even lower for sewage collection: less than 56% have the service at home. What changes were made by Lula? Lula’s decrees changed devices dealing with: proof of the economic capacity of public companies: Initially, the framework approved by Bolsonaro provided that the companies responsible for current service contracts should prove economic and financial capacity to continue with the activities and goals established of universalization until December 31, 2021. Without the delivery of documentation, companies would become irregular, which could lead to replacement processes. With Lula’s text, the deadline for proving financial capacity is extended to December 31, 2023. The regularization of service provision should occur by December 31, 2025. from the formation of blocks of municipalities for the concession of services: Lula extended the deadline for municipalities to form regional blocks to attract investors. The original text established the formation of blocks until March 31, 2023. Now, municipalities will be able to articulate the formation until December 31, 2025. sanitation services without bidding in metropolitan regions, urban agglomerations or micro-regions. Originally, the sanitation legal framework prohibited municipalities and state sanitation companies from signing contracts without bidding. The text established that all new contracts should undergo competition between the public and private sectors. the limit for public-private partnership contracts (PPP): The sanitation legal framework established a limit of 25% of the revenues of a company providing sanitation services for signing public-private partnership contracts (PPP). Lula’s decree does away with this limit. and the criteria for federal transfers to concessions: The decree also encourages bids to adopt the value of the tariff to citizens as a selection criterion. Federal incentives will be prioritized for locations that follow this criterion or targets to anticipate the universalization of the public sanitation service Were the decrees well received? Sanitation sector associations and parliamentarians criticized the edition of the decrees, especially in relation to the legal uncertainty created by the new rules. Sanitation companies in Minas Gerais, São Paulo and Rio Grande do Sul even announced the disaffiliation of the Brazilian Association of State Sanitation Companies (Aesbe), which defends the changes promoted by Lula. In general, as journalist Ana Flor’s blog at g1 showed, only the end of the limit for PPPs was positively received. In Congress, 11 proposals were presented to suspend parts of the decrees. The mayor, Arthur Lira, said, still in April, that he viewed the changes with “great concern”. On another occasion, he stated that the decrees brought “setbacks that need to be evaluated”. What did the House approve? With the commitment of the opposition, parts of the decrees were overturned by 295 to 136 votes. The Chamber decided to remove provisions that: allowed contracts without bidding by state-owned companies in metropolitan regions, urban agglomerations or micro-regions; and that extended the deadlines for proof of financial capacity. Deputies approved a legislative decree that overturns excerpts from the presidential decree on the legal framework for sanitation. Bruno Spada/Chamber of Deputies What is the assessment of parliamentarians? The parliamentarians classified the approval as the first defeat of the Lula government in Congress and an example of the lack of articulation in the Chamber. With more than 4 months, the federal government still does not have what congressmen call a “solid base”, mainly in the Chamber. In the vote on the proposal this Wednesday, three parties with ministries, for example, voted heavily for the overthrow of the excerpts: MDB: 31 votes in favor (out of 32); PSD: 20 votes in favor (out of 27); and União Brasil: 48 votes in favour. For months now, deputies allied with the government have been repeating that Lula must return to the Planalto’s political efforts in the Chamber of Deputies. The assessment goes through negotiation problems with the head of the government’s political articulation, Minister Alexandre Padilha (Institutional Relations), and lack of dialogue with leaders in the House. The day before the vote, on Tuesday (2), Lula heard from Lira that the government’s political articulation needs to improve and that there were flaws in the commitment to distribute parliamentary amendments. In the wake of the approval of the overthrow in the House, the leader of the government in the House, José Guimarães (PT-CE), went so far as to say that the result would lead the government to “reflect on relations within here”. “These leaders were intransigent not to dialogue with the leader of the government to vote on this matter Tuesday or Wednesday. I have never seen this here in Parliament,” he said. What are the next steps? As the project began to be processed by the Chamber, it must now be analyzed by the Senate. There, the text will need a simple majority to be approved – that is, a majority of the votes of the senators present at the session. Even with the assessment that there is more traffic in the Senate, the government will need to realign the base so as not to have the texts overturned. The opposition leader in the Senate, Rogério Marinho (PL-RN), said he had asked the President of the House, Rodrigo Pacheco (PSD-MG), to move forward with the text. According to him, Pacheco should forward the project to the Infrastructure Commission. The expectation is to take the proposal to the main plenary of the House in three weeks. With the approval of the Senate without changes, the text is transformed into a legislative decree without passing President Lula’s sanction. According to the text approved by the Chamber, it would come into force on the date of publication.

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