by Juan Manuel González | Sep 26, 2023 | Noticias-en
During the last year, discussions about sustainability have grown dramatically in the forums where competition defense policies are discussed. What do competition and sustainability have to do with each other? Much more than it seems.
The adoption of sustainable inputs, procedures or materials often requires the assumption of considerable risks and significant investments. To begin with, for a company, traveling the path of sustainability may require the use of more expensive inputs or the acquisition of expensive technologies. In turn, persuading consumers to purchase sustainable products or services (generally more expensive) is also difficult, and may require additional investments.
Many sustainability initiatives have a high degree of uncertainty; not only in terms of whether customers will accept the products or services, but also because many projects, for example to obtain more efficient or less polluting materials or inputs, can fail. A recent real-life example, analyzed by the Dutch competition authority, involves a project in which several competitors came together to transform off-shore gas pipelines located in the North Sea into CO2 emissions repositories for Dutch factories (the project includes the construction of a terminal, a pipeline and a compressor to transport CO2 to gas pipelines, and contemplates the joint marketing of a part of the CO2 storage service for a limited period). An initiative like this has high costs and risks.
Added to these difficulties is what can be translated as “first-mover disadvantage”: a company that adopts sustainable processes or inputs may be at a competitive disadvantage compared to competitors that do not do so. For example, products from a furniture manufacturer that buys wood from suppliers that reforest will likely be more expensive than those from competitors who do not. A company considering converting its business into a sustainable business may be discouraged by the prospect that consumers will prefer cheap products to sustainable ones. These kinds of dilemmas can discourage many sustainability initiatives.
Cooperation between competitors can help resolve these dilemmas: if a group of companies commits to modifying the characteristics of their inputs, products or processes to achieve sustainability goals, none of them will be at a competitive disadvantage. Cooperation, as the Dutch example illustrates, can also allow competitors to share the costs or risks involved in sustainability initiatives.
The problem with these types of solutions is that cooperation between competitors is problematic under antitrust laws, and often quickly comes into the crosshairs of the agencies in charge of enforcing those laws. For example, in recent months, many media outlets have reported on the “battle” that is being waged in different states of the United States between members of sustainability alliances (especially linked to initiatives to replace fossil fuels) and prosecutors who threaten to apply the competition defense laws.
As in other jurisdictions, some sustainability initiatives could raise legitimate competition concerns. An agreement like the one in the Netherlands example involves joint marketing of a portion of capacity and price coordination, and should be carefully analyzed. An agreement to stop using certain inputs in manufacturing processes (which can range from packaging to fertilizers to energy), or an agreement to stop marketing certain products, could have an indirect impact on prices. They could also limit consumer options. In some scenarios, these kinds of agreements could lead to supplier boycotts. If certain conditions are met, an agreement to modify product characteristics (for example to reduce fat or sugar levels in foods or beverages) could also have an impact on competition: it could affect quality or differentiation, two variables which in some markets may be relevant to compete.
In this context, the worst enemy of many sustainability initiatives is legal uncertainty: sanctions for violating competition laws usually have a high impact and, when in doubt, many companies will say “no” to sustainability so as not to run legal risks.
What is the status of the discussion? Today, the intersection between competition and sustainability faces two major challenges. The first is to find the legal tools that allow companies to move forward with this type of initiatives with acceptable levels of risk. The second is to understand how competition works in the context of each initiative, how it can be affected and the resulting social benefits, and determine whether the initiative in question can pass the “filter” of competition agencies to make it viable.
For more information contact:
Agustín Waisman | Partner Beccar Varela | awaisman@beccarvarela.com
by Juan Manuel González | Sep 25, 2023 | Noticias-en
The latest national energy balance report published by the Vice Ministry of Mines and Energy (“VMME”) in 2022 reveals that Paraguay’s energy matrix is made up of 74% renewable energy in the gross supply. However, there is a high dependence on petroleum derivatives in final energy consumption, which poses challenges in terms of sustainability.
According to the report on the energy sector in Paraguay published by the Inter-American Development Bank (IDB) in 2022, one of the challenges of the sector is to explore new alternatives to produce energy through the use of non-conventional renewable energies (“NCRE”). Furthermore, the report points out that unsustainable energy consumption patterns with a high dependence on petroleum derivatives reveal the need to take measures regarding energy efficiency.
Paraguay has abundant natural resources, which will play an important role in the diversification of the energy matrix, the mitigation of climate change and the economic growth of the country, in line with the Sustainable Development Goals (SDGs).
During this year, there have been legislative advances that seek to promote the development of renewable energies in Paraguay. On the one hand, in January 2023, Law No. 6977 “Which regulates the promotion, generation, production, development and use of electrical energy from non-conventional, non-hydraulic renewable energy sources” was enacted (the “Law of ERNC”). On the other hand, in March 2023, a bill was presented to Congress that aims to establish a legal framework for the use, storage, marketing, distribution, transportation and export of hydrogen (the “Hydrogen Bill”) .
Below, we summarize the most relevant aspects of the NCRE Law and the Hydrogen Bill.
The NCRE Law
This law aims to promote and regulate the generation and use of electrical energy from non-conventional, non-hydraulic renewable sources. NCRE are crucial to diversify the energy matrix and reduce greenhouse gas emissions.
Subjects
The production of electrical energy from NCRE sources can only be carried out by natural or legal persons domiciled in Paraguay. NCRE energy production licensees can be classified into: (i) self-generators, (ii) co-generators, (iii) exporters and (iv) generators.
License
The law establishes that the production of NCRE with a nominal capacity greater than one megawatt (MW) requires a license granted by the Ministry of Public Works and Communications (“MOPC”), through the VMME and a registration in the NCRE registry. The duration of the license is up to 15 years and can be renewed at the request of the licensee.
ERNC Autogenerators and Cogenerators
ERNC self-generators are those that have a license to produce electrical energy to meet their own consumption, and can inject their surplus energy into the National Interconnected System (“SIN”).
NCRE cogenerators are those that have a license to produce steam or other subsidiary energy for industrial or commercial use, along with electrical energy from NCRE sources, and can inject surplus energy into the SIN.
The law establishes the conditions and regulations for NCRE autogenerators and cogenerators, including supply limitations, remuneration rates, installation of measurement systems, connection and reinforcement works.
In the event that the NCRE autogenerator or NCRE cogenerator requires connection to the SIN, it must sign a contract with the National Electricity Administration (“ANDE”). This contract will be signed after obtaining the ERNC license.
NCRE Generators
Generators are those that have a license to produce electrical energy from NCRE sources to supply it to the ANDE. These generators cannot exceed the energy capacity allowed by the license and can subscribe to the contract for a maximum period of 15 years. The acquisition of energy from NCRE generators by ANDE must be carried out through bidding processes.
The ANDE may carry out tenders for the acquisition of electrical energy from NCRE generators, only when they are intended to cover internal demand and/or replace the energy to be produced by the ANDE.
NCRE Exporters
NCRE exporters are those that have a license to produce electrical energy from NCRE sources for export purposes.
ANDE must provide non-discriminatory access to the available capacity of its electrical energy transmission facilities in order to facilitate international interconnection, provided that the use of the transmission capacity does not put the supply to national consumers at risk.
The NCRE exporter must sign a contract with ANDE, in which the rights and obligations related to the transportation of electrical energy are established. In addition, the NCRE exporter will pay ANDE a toll for the use of the electrical energy transmission facilities, in accordance with the contracted available capacity. The value of the toll will be established by the MOPC, through the VMME, prior to the opinion and recommendation of the ANDE.
In case of lack of transport capacity, the exporter can carry out new works to the SIN for the purposes of expanding it, which will become the property of ANDE.
Incentives
The law determines a series of tax incentives established by law to encourage the production and use of renewable energies that are applied to the construction of equipment and works intended for the production of electrical energy from renewable sources. Beneficiaries must meet viability requirements and among the authorized projects are wind farms, solar installations and biomass plants, among others.
Fee
The MOPC, through the VMME, will receive a fee equivalent to 1% of the transactions carried out by the licensee, for which a sworn declaration of the income resulting from the commercial balance will be presented.
Hydrogen Law Project
The Hydrogen Law Project is still under study, and establishes the regulatory framework for activities related to the production, use, marketing, storage, transportation, distribution and export of hydrogen.
Application Authority
The MOPC is established as the application authority, through the VMME. The application authority is also the coordinator of the Interinstitutional Hydrogen Table (the “MIH”). The MIH will be made up of government institutions to coordinate and regulate activities related to hydrogen. In particular, the MIH will coordinate actions to establish quality and safety parameters.
Registry
A single registry is created for natural and legal persons that carry out activities in the hydrogen value chain. This registry will be implemented by the MOPC, through the VMME, in coordination with the Ministry of Industry and Commerce (MIC).
Authorization regime
The following facilities for: (i) hydrogen production, (ii) hydrogen transportation and distribution, (iii) hydrogen storage, (iv) hydrogen export, and (v) hydrogen marketing require administrative authorization. .
Tax incentives
Subjects dedicated to activities related to hydrogen may benefit from the tax benefits established in Law No. 60/90. Regarding hydrogen used as vehicle fuel, it will be exempt from the selective consumption tax.
Certification
The application authority, together with the Ministry of the Environment and Sustainable Development (MADES), will establish the conditions and certification scheme for hydrogen within the framework of the value chain. Low-carbon hydrogen and green hydrogen may be certified, and the incentives associated with such certification will be regulated.
Decarbonization promotion fund
The promotion fund is created to promote decarbonization and the development of hydrogen projects. This fund will be financed by resources from the National Fund for Public Investment and Development (FONACIDE) or the General Budget of the Nation, as well as by contributions from international organizations. You may also receive contributions, inheritances and donations from individuals, companies and national or international entities, both public and private. In addition, funds collected from fines will be allocated to this fund.
For more information contact:
Carla Arellano | Counselor Ferrere | carellano@ferrere.com
by Juan Manuel González | Sep 20, 2023 | Noticias-en
Through the new External Circular No. 100-000003 of September 11, 2023 (the “Circular”), the Superintendency of Companies issued the guidelines of the new Report 75 – SAGRILAFT AND PTEE, which unifies reports 50 – Risk Prevention LA/FT/FPADM (“SAGRILAFT”) and 52 – Transparency and Business Ethics Program (PTEE), as well as Report 58 – Compliance Officers.
The foregoing, considering that Chapter obliges all legal entities subject to inspection, surveillance and control to adopt a PTEE.
The reports indicated in the Circular are mandatory for the Obligated Subjects, and must be completed through the STORM USER web application, in the “Business Report Submission” Section.
REPORT 75 – SAGRILAFT AND PTEE
The Obligated Subjects in accordance with the provisions of Chapters (Report 50 and Report 52) as had been done in previous years.
This single report must contain the SAGRILAFT AND PTEE reports, and must be submitted annually in accordance with the last two (2) digits of the NIT of the Obligated Subject, without including its verification number. In this way, the corresponding dates are the following:
These deadlines cannot be extended.
Without prejudice to the above, and considering that these dates have already passed for the year 2023, the Circular has special deadlines to present Report 75 – SGARILAFT AND PTEE with a cut-off date of December 2022. These dates, also established in accordance with the two (2) last digits of the NIT of the Obligated Subject, not including its verification number, are the following:
It is reiterated that these dates have been set only for the 2023 cut-off report, and that in subsequent years the calendar presented in the previous point must be complied with.
REPORT 58 – COMPLIANCE OFFICER
In accordance with the provisions of Chapters In the event of appointment or change of the SAGRILAFT Compliance Officer and/or PTEE, the Obligated Subject must present Report
58 within fifteen (15) business days following the respective appointment or change, with a cut-off date corresponding to the date of the act. of appointment.
When sending Report 58, the following documents must be attached:
1. SAGRILAFT Compliance Officer:
to. Compliance Officer Resume
b. Certification of compliance with the requirements to be appointed Compliance Officer
c. A copy of the document that accounts for the registration of the SAGRILAFT Compliance Officer before the SIREL administered by the UIAF.
d. A copy of the extract from the minutes of the Board of Directors or Highest Social Body that records the designation of the Compliance Officer e. Document that accredits knowledge of ML/TF risk management or ML/TF/FPADM risk through specialization, courses, diplomas, seminars, conferences or any other similar matter.
F. Certificate of verification of disabilities and incompatibilities of the Compliance Officer signed by the legal representative
2. PTEE Compliance Officer:
to. Compliance Officer Resume
b. Certification of compliance with the requirements to be appointed Compliance Officer
c. Document that certifies knowledge of risk management
d. A copy of the minutes of the Board of Directors or Highest Social Body stating the designation of the Compliance Officer
e. Certificate of verification of disabilities and incompatibilities of the Compliance Officer signed by the legal representative. Report 58 will only be understood as received if it is accompanied by the presentation of all of the aforementioned documents.
For further information, contact:
Oscar Tutasaura | Partner Posse Herrera Ruiz | oscar.tutasaura@phrlegal.com
by Juan Manuel González | Sep 19, 2023 | Noticias-en
The Labor Inspection (IT) announced the criteria that it will use to control the Occupational Risk Plan (PRL). According to Decree 52/023, companies that employ between 5 and 50 workers must prepare the ORP carried out by a technician with a qualifying title (preventionist technician, occupational health technologist, among others), which must have the content indicated there.
The IT explains and develops the content that the PRL must have, in accordance with the following:
1. Description of the activities carried out by the company.
2. Hazard identification.
3. Risk assessment and its results by recognized and specific methods. The IT clarifies that it must be taken into account that prior to the risk assessment, an evaluation of compliance with the legal requirements that are applicable to the company and its activities should be carried out.
4. Proposed corrective measures.
5. Compliance schedule
6. Date of completion and date of the next scheduled review (minimum every six months).
7. In the document, the responsible technician must indicate whether or not he recommends the need to have a Greeting Prevention Service at Work regulated in Decree 127/014.
8. Signature and identifying data of the technician responsible for the document.
9. Signature of the owner or legal representative of the company in the PRL.
10. Proof of presentation and treatment of the ORP in the field of bipartite cooperation (Occupational Health and Safety Commission). If this bipartite scope was not established, the company must present a declaration in this regard and proof of communication to the PRL workers.
For more information contact:
Carla Arellano | Counselor Ferrere | carellano@ferrere.com
by Juan Manuel González | Sep 17, 2023 | Noticias-en
On September 15, 2023, the Plenary Session of Congress unanimously approved the Legal Opinion (hereinafter, the “Law”) that modifies sections d) and e) of article 58 of the Consumer Protection and Defense Code (in (hereinafter, the “Code”) in order to reinforce the prohibition of spam communications. It should be noted that the opinion of this norm had been observed by the Executive Branch, which is why it was finally approved at the insistence of Parliament.
In light of the above, with this modification of the Code, the use of call centers, systems for sending text messages to cell phones or systems for mass email sending for advertising purposes is prohibited, with the only exception being their sending to that consumer who has given prior, express, informed, and unequivocal consent. Previously, the legal proposal contemplated the possibility of obtaining such consent only when it was the consumer himself who contacted the company on his own initiative. However, the final wording of the Law allows the use of alternative methods to obtain such consent, such as a first contact communication or initial contact.
Finally, in no case may commercial proposals or visits be made between 8:00 p.m. and 7:00 a.m. or on Saturdays, Sundays and holidays, including those commercial proposals that have been previously consented to.
The approved opinion of the Law will soon be promulgated by the President of Congress and published in the Official Gazette El Peruano, from which it will come into force.
You can access the text of the final opinion of the Law here.
For more information contact:
Mario Pinatte | CPB Partner | mpinatte@cpb-abogados.com.pe
