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| Law No. 8.987 | |
|---|---|
| Name | Law No. 8.987 |
| Long title | Law Regulating Concessions of Public Services |
| Enacted by | National Congress of Brazil |
| Enacted | 13 February 1995 |
| Citation | Lei nº 8.987, de 13 de fevereiro de 1995 |
| Status | in force (amended) |
Law No. 8.987 is a Brazilian statute that established the legal framework for the concession and permission of public services, shaping infrastructure delivery and private participation across sectors such as transportation in Brazil, telecommunications in Brazil, energy in Brazil, and water supply and sanitation in Brazil. Promulgated during the administration of Itamar Franco and approved by the National Congress of Brazil, the statute responded to fiscal pressures, international trends exemplified by Washington Consensus policies, and precedents set in countries such as United Kingdom, France, Chile, and Argentina. Its passage interacted with debates involving institutions like the Brazilian Development Bank, Central Bank of Brazil, World Bank, and International Monetary Fund.
The law emerged amid the 1990s reform wave alongside reforms such as the Real Plan and privatizations led by figures associated with Fernando Henrique Cardoso and policy teams connected to Ministry of Finance (Brazil), National Privatization Program (PND), and advisors influenced by reports from the World Bank and Inter-American Development Bank. Legislative deliberations in the Chamber of Deputies (Brazil) and the Federal Senate (Brazil) referenced contractual models observed in the United Kingdom privatization program, operational concessions like the London Underground arrangements, and regulatory practices from Ofwat, Ofgem, and Ofcom. Stakeholders included state-owned enterprises such as Companhia Brasileira de Saneamento (SABESP), Petrobras, and municipal authorities modeled on experiences in São Paulo and Rio de Janeiro.
The statute aimed to regulate the grant, duration, reversion, and enforcement of concessions and permissions for provision of public services, addressing relationships among grantors, concessionaires, and users. It sought to reconcile investor safeguards similar to protections under the Energy Policy Act of 1992 with administrative supervision mechanisms comparable to those used by National Telecommunications Agency (Anatel), National Agency of Petroleum, Natural Gas and Biofuels (ANP), and sectoral regulators inspired by Agency for Health Technology Assessment models. Objectives included promoting efficiency akin to reforms promoted by OECD, stimulating private capital aligned with Private Finance Initiative concepts, and preserving public interest doctrines articulated in decisions from the Supreme Federal Court of Brazil.
Core provisions defined contractual regimes, grounds for unilateral modification, tariff review mechanisms, and reversion clauses referencing administrative law doctrines prominent in rulings by the Supreme Federal Court of Brazil and legal scholarship from faculties such as University of São Paulo and Federal University of Rio de Janeiro. The law stipulated bidding procedures echoing procurement norms from the Federal Constitution of Brazil (1988), remedies for nonperformance akin to contractual forfeiture jurisprudence seen in cases before the Superior Court of Justice (Brazil), and provisions for compensation reflecting international arbitration practices like those in the International Centre for Settlement of Investment Disputes and ICSID precedents. It also delineated distinctions between concession, permission, and authorization categories informed by administrative doctrines debated in fora like the Brazilian Bar Association.
Implementation relied on municipal, state, and federal grantors coordinating with nascent regulatory agencies such as National Agency of Sanitary Surveillance-type bodies and sector regulators patterned after Anatel and ANEEL. Institutional design emphasized public procurement processes overseen by bodies comparable to the Federal Court of Accounts (TCU) and compliance with fiscal rules emanating from the Fiscal Responsibility Law (Lei de Responsabilidade Fiscal). Enforcement instruments included penalty regimes, contract renegotiation protocols inspired by New York Convention arbitration clauses frequently invoked by multinational firms like Siemens, Vale, and Itaipu Binacional in infrastructure contracts, and oversight by administrative courts and ombudsperson offices such as those in Ministry of Transparency, Supervision and Control.
The statute facilitated waves of concession contracts and private investment across airports, ports, roads, and utilities, influencing projects involving actors like CCR S.A., Ecorodovias, Rumo Logística and concessionaires operating in the São Paulo Metro corridors. Proponents cited improvements in service quality and influxes of capital comparable to outcomes in Chile and United Kingdom; critics raised concerns about regulatory capture echoed in analyses by Transparency International, fare increases contested in litigation before the Supreme Federal Court of Brazil, and distributional effects debated by scholars at Getulio Vargas Foundation and Institute of Applied Economic Research (IPEA). Empirical studies published by researchers affiliated with University of Campinas and Pontifical Catholic University of Rio de Janeiro debated welfare gains versus concession renegotiation costs experienced during crises such as the 2008 financial crisis and the Brazilian economic recession (2014–2016).
Since enactment, the framework has been amended and complemented by measures including regulatory refinements in sector-specific laws, provisions in the Public-Private Partnership Law and adjustments under the Brazilian Civil Law reforms and administrative adjustments considered by the National Congress of Brazil. Successive administrations and institutions like Ministry of Infrastructure (Brazil), National Council for Economic Policy, and regulatory agencies introduced interpretive regulations and templates influenced by multilateral guidance from World Bank toolkits and doctrinal shifts reflected in case law of the Superior Court of Justice (Brazil). Continued legislative and judicial evolution has maintained the law as a focal point in Brazilian infrastructure policy debates involving international investors such as General Electric, ACCIONA, and Abertis.