The Brazilian government issued Provisional Measure No. 844/2018 ("Medida Provisória" or "MP") with the purpose of reformulating the main norms that regulate the basic sanitation sector. The government's aim with the measure is to create a climate of greater legal certainty for new private sector investments, especially through public-private partnerships.

In broad terms, the new regulation seeks to centralize the regulation of the sanitation sector under the provisions of a sole regulatory agency—the National Water Agency ("Agência Nacional de Águas" or "ANA"). ANA is expected to provide general standards and guidelines for basic sanitation public services, such as: service levels, tariff regulation and competition rules, among others. Therefore, the regulation provided by ANA must consider the particularities and characteristics of each region in which the sanitation services are rendered. In addition, ANA may act as a mediator and/or arbitrator in relation to conflicts involving agents for the sector and public entities.

The Sanitation Law (Law No. 11,445/2007) has also been revised as a result of the provisions of the MP. Municipal and district-level legal competence to render basic sanitation public services has been reaffirmed, except where such services are provided at the regional level (e.g. inter-municipal consortia or metropolitan regions). Although there is jurisdiction at the local level, there are instruments available that encourage compliance with the new directives issued by ANA, such as access to federal public resources for investments in the sector.

The MP is a provisional regulation which must be approved by the Federal Legislative Power (both Senate and House of Representatives) in order to become Law. If the measure is not approved within 120 days, it will be extinguished.

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This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.