Decree regulating the New Regulatory Framework for Basic Sanitation Published

The Brazilian Federal Government published Decree No. 10,588/2020, which regulates certain provisions of Law No. 14,026/2020, known as the “New Regulatory Framework for Basic Sanitation”. The Decree establishes the conditions for the technical and financial support that government will grant to states and municipalities for adapting basic sanitation services to the new Law. In general, the measures provided for in the Decree seek to (i) facilitate regionalization, as well as (ii) adhere to the guidelines established by the National Water and Basic Sanitation Agency (“ANA”), in its capacity as a sectoral regulatory agency.

See below the highlights of Decree No. 10,588/2020:

• Activities subject to technical and financial support from the Federal Government. The Decree establishes a list of activities whose execution may receive technical and financial support from the Federal Government, among which are: (i) the definition of regional basic sanitation units; (ii) the structuring of governance mechanisms for regionally provided vehicles; (iii) modeling the provision of services; (iv) the definition of the regulation and inspection entity for public basic sanitation services; (v) the drafting or updating of the regulation and inspection rules, in compliance with the reference rules issued by ANA; (vi) adaptation of existing contracts or preparation of new contracts, according to the standardization of the contract proposed by ANA.
• Conditions for the allocation of federal public resources and for financing with government resources. The Decree also establishes a series of conditions for the allocation of resources and the granting of financing, in addition to requiring compliance with the guidelines and objectives of the legislation of the basic sanitation services.
• Requirement of regionalized provision for the transfer of resources. The Decree provides that the requirement is considered fulfilled in the event of the existence of: (i) metropolitan region, urban agglomeration or micro-region, created by a supplementary law; (ii) regional basic sanitation unit adhering to the terms of governance established in the ordinary law; or (iii) reference block, created through a cooperation agreement or public consortium.
• Other aspects. Finally, it is worth mentioning that the Decree: (i) allows the Federal Government to allocate resources for contracting consultancies to support the formation of reference blocks and regional units until July 15, 2021, either autonomously or through partnerships; (ii) provides that technical support can also be provided through the publication of programs, projects and other best practices actions by ANA, the Ministry of Regional Development and the Ministry of the Environment.

Demarest’s Public Law team is available for any further clarification on this and other related topics.