Sanitation milestone: STF resumes judgment; Fachin votes against parts of the law

The Supreme Court (STF) resumed, on Thursday (2), the judgment of the actions that question the New Legal Framework for Basic Sanitation with the vote of minister Edson Fachin, who voted for the unconstitutionality of parts of the law.

Fachin was the first minister to open a divergence in relation to the understanding of the rapporteur, Minister Luiz Fux. Ministers Nunes Marques and Alexandre de Moraes followed the rapporteur’s vote. The score, so far, is 3 votes to 1 for the constitutionality of the legal framework. The ministers Luís Roberto Barroso, Rosa Weber, Carmen Lúcia, Ricardo Lewandowski and Gilmar Mendes remain to vote.

Fachin’s main divergence was in relation to the so-called “program contracts”, an instrument that allows municipalities to transfer the execution of certain services to another federative entity. The new legal framework defined that the current contracts may be renewed for another 30 years, as long as a negotiation is formalized by March 2022 and there are goals for the universalization of water and sewage services for the population.

Fachin stated that the New Legal Framework interferes with the contracts in force and establishes rules that were not included in the agreements initially agreed upon. “As for the contracts in force, here too, I ask my respect to disagree with the rapporteur’s understanding and the votes that preceded me. I understand that the provision of new requirements for the maintenance of current program contracts by federal legislation in a mandatory manner and without foreseen agreement of the holder of the public service violates the Constitution,” said Fachin.

“The new legislation, in my view, promotes an interference in the program contracts in force, establishes conditions that were not included in the previous agreements and all this against the consent of the entity that holds the ownership of the service provided”, he argued.

what the authors ask

In one of the actions, for example, the PDT alleges that provisions of the legal framework can create a monopoly of the private sector in water supply and sanitary sewage services. The party states that “the new law provides for the possibility of exploration by blocks, where there would be areas of greater and lesser economic interest jointly auctioned, the company that wins the event has to assume the universalization targets in the entire area”.

“However, assuming the commitment is not enough to believe that the private sector or public company will be able to explore these regions efficiently and without charging excessive tariffs as a way to compensate for the investment in cities with little infrastructure to receive the service, for example” , argues.

“The need for subsidies in the sanitation sector is undeniable. The stormy issue brought about by the new legislation is that there are no incentives to induce private companies to serve the poorest, noting that these companies want to maximize profit”, he adds.

In another case, PT, PSol, PCdoB and PSB claimed that the law that changed the legal framework for sanitation represents a risk of imminent damage to the public administration’s duty to offer everyone access to essential goods in accordance with the principle of universality of services public. The National Association of Municipal Sanitation Services argues in its action that the new legal framework represents an imposition by the Union on the autonomy of municipalities.

The association also says that the law would transform basic sanitation into a business counter, excluding the poor and marginalized population. Finally, the Brazilian Association of State Sanitation Companies claimed to the STF that the new framework, through the end of the program contracts, ends the shared management of the basic sanitation service by a public consortium or cooperation agreement, imposing the concession as only model of delegating the service.