If you work in the public or private sector, you probably already know that there are great market opportunities when it comes to the sanitation sector, especially when we talk about concessions in the basic sanitation sector.

To give you an idea, as CNN points out , since the enactment of the New Basic Sanitation Framework (Law 14.026/20), this market has already generated more than 70 billion reais in investments.

It is worth mentioning that one of the main objectives of the Legal Framework for Sanitation is for 99% of the Brazilian population to have access to drinking water and 90% to sewage treatment and collection by 2033, which is a major challenge for professionals working in the field.

Therefore, in-depth knowledge of the sector is essential for a technical and assertive performance. It's worth noting that professionals who seek to specialize and stay up-to-date on sanitation issues will have a great chance of success in this market niche.

Here on the IDP blog, we've already discussed the new framework for basic sanitation . At that time, I mentioned that the law itself defines basic sanitation.

According to the letter of the law, sanitation is defined as "the set of public services, infrastructure, and operational facilities for the supply of drinking water, sewage disposal, urban cleaning and solid waste management, and drainage and management of urban rainwater."

In this text, in particular, I want to discuss with you some specific aspects of concessions in the sanitation sector.

Ownership of the sanitation sector

This is an important topic! Although the basic sanitation law is national in scope, the ownership of basic sanitation services belongs to the municipalities and the Federal District (when matters of local interest are involved).

It is worth mentioning that states and municipalities share operational facilities, whether in metropolitan regions, urban agglomerations, or microregions, which will be established by state complementary law, where they will exercise joint ownership in cases of common interest.

If you wish to delve deeper into issues related to the ownership of basic sanitation services, please note that the regulatory provisions can be found in Law 11.445/07 , in articles 8 and 9 of said legislation.

The characteristics of basic sanitation services

In general terms, basic sanitation services are classified as essential services, and are therefore subject to the principle of continuity. 

Since this is a public water supply service that, as a rule, is provided by public service concessionaires, it must be adequate and continuous, as stipulated in Article 6, §1 of Law No. 8.987/95 (Concessions Law) and Article 43 of Law 11.445/2007 (General Guidelines Law for Basic Sanitation).

In the legal text of the General Guidelines Law for Basic Sanitation, we can find that the provision of services will meet minimum quality requirements, including regularity, continuity, and those related to the products offered, among others.

In your capacity as a lawyer, whether working for the concessionaire or even defending consumers harmed by poor public service, you will need to be familiar with these regulatory guidelines.

It is also recommended to read both pieces of legislation, namely Law No. 8.987/95 (Concessions Law) and Law 11.445/2007 (General Guidelines Law for Basic Sanitation).

Sanitation services and concession contracts 

The provision of basic sanitation services depends on the signing of concession contracts, through prior bidding, in accordance with article 10 of Law No. 11.445/2007.

Therefore, by legal determination, the possibility of entering into program contracts, agreements, partnership terms or similar arrangements is prohibited, making prior bidding necessary.

Mandatory clauses in the concession contract

It is also worth mentioning that the concession contract will have mandatory clauses, according to article 23 of Law No. 8.987/1995, some of which relate to:

• to the object, area and term of the concession;
• to the manner, form and conditions of service provision;
• to the criteria, indicators, formulas and parameters that define service quality;
• to the price of the service and to the criteria and procedures for adjusting and revising tariffs;
• the conditions for extending the contract;
• regarding the mandatory nature, form, and frequency of the concessionaire's accountability to the granting authority.

Specific clauses for the granting of basic sanitation concessions.

In addition to the mandatory contractual clauses, the basic sanitation services concession contract will include specific clauses. 

In particular, those relating to goals for expansion, quality and efficiency in service delivery; risk sharing between the contracting parties; alternative revenues for the production of reclaimed water, among others.

For the drafting of the concession contract, the content of article 10-A of Law No. 11.445/2007 must be observed, which sets forth, in its subsections, the specific clauses for said contract.

Regulation of basic sanitation services

When we talk about regulatory activity, we can see that it will be carried out by the National Water and Basic Sanitation Agency (ANA).

The agency is responsible for establishing reference standards that regulate public basic sanitation services ( article 1, Law No. 9.984/2000 ).

In its regulatory activity, ANA must observe the principles of regularity, continuity, efficiency, safety, timeliness, generality, tariff moderation, rational use of water resources and universalization of services (article 4-A, § 3, I, Law No. 9.984/2000).

Consequently, the Interministerial Committee for Basic Sanitation (CISB), a collegiate body established by the New Legal Framework (article 53-A, Law No. 11.445/2007), will be responsible for ensuring the implementation of the federal basic sanitation policy.

Therefore, after the issuance of sanitation regulations by ANA, it will be the responsibility of CISB to ensure the implementation of the federal basic sanitation policy.

As a legal professional, you should pay attention to the new regulations and guidelines issued by ANA (National Water Agency) in order to understand the current legislation in our country, as well as to alert your clients about possible innovations in the sector.

Free materials from IDP about the sanitation sector.

Here at IDP, in addition to our postgraduate, master's, and doctoral programs, we also offer completely free materials on the Sanitation Sector. I'd like to make a suggestion!

To learn more about our Ebook on the New Basic Sanitation Framework . In the material you will find the main changes made by the New Legal Framework, especially the relevant innovations for the sector in Brazil.

An unmissable tip for those who wish to deepen their knowledge in the sanitation sector, with the quality of education offered by IDP.

Discover IDP's MBA program in sanitation!

With the IDP Online MBA in Sanitation and Structuring New Businesses in the Sector, you can study from anywhere in Brazil, including exchanging ideas live with the country's most renowned professors.

This will greatly facilitate your learning journey, because you will have the assistance of the leading professionals in the field. 

Also, if you enjoyed this article, be sure to subscribe to our newsletter! 

By subscribing to our newsletter, you'll have first-hand access to IDP articles, including the latest news from the legal world, free IDP materials, and recommendations from market experts!