Approved by the Legislative Power and sanctioned by the President after more than seven years in discussion, Federal Law No. 14,133/21 finally entered into force on April 1st 2023, replacing the previous Federal Law No. 8,666/93.

After two years of vacatio legis, it can be said that the legislator opted for the creation of an innovative law from an environmental standpoint. Although it could have promoted  greater advances in several points, in the environmental field Federal Law No. 14,133/21 reinforces and brings harmony to a complex system of environmental policies in Brazil, making them more effective and guaranteeing greater legal security.

In line with the objectives established in the Federal Constitution of 1988, which established the defense of the environment as a fundamental right and basic principle of Brazilian economic order, under the terms of its articles 225 and 170, item VI, the new norm addresses the environmental and sustainability issues in  in a practical way , since it determines more specifically the environmental aspects that must be taken into account during Brazilian bidding proceedings.

Among the main changes introduced by Federal Law No. 14,133/21, eight points deserve to be highlighted with regard to its environmental variable:

  1. In the preparatory phase, bidders must prepare a descriptive technical study of the possible environmental impacts and respective mitigating measures, including issues involving reverse logistics and consumption of energy and natural resources (article 18, paragraph 1, XII).
  2. It will be possible to require the bidder to obtain environmental licenses, provided that such a hypothesis is provided for in the public notice (article 25, paragraph 5, I).
  3. Priority will be given to the procedures for environmental licensing of engineering works and services before environmental agencies that are part of the National Environmental System – Sisnama (article 25, paragraph 6).
  4. The criteria of best sustainable price will be used [1] (art. 34, paragraph 1).
  5. It will be mandatory to comply with standards related to environmentally appropriate final disposal of waste, mitigation and compensation of environmental impacts and use of products, equipment and services that demonstrably reduce the consumption of energy and natural resources in bids for contracting works and engineering services (art. 45, I, II and III).
  6. It will be possible to establish variable remuneration in the contracting of works and services – including engineering – linked to the bidders performance based on goals, quality standards and sustainability criteria (art. 144);
  7. It will be allowed the exemption from the bidding proceedings of services of collection, processing and commercialization of recyclable or reusable municipal solid waste conducted by associations or cooperatives formed by low-income individuals; and
  8. It will be possible to justify delay in environmental licensing procedures – due to circumstances beyond the control of the bidder – to change the contract and restore its economic and financial balance or extinguish it (art. 124, §2 c/c art. 137, VI).

As for the last point, Federal Law No. 14,133/21 intends to pacify the recurring discussions in the Judiciary regarding the impracticability of execution of contracts and bidding schedules, due to the complexity of environmental licensing procedures in the country.

Departing from the generality of the previous rule[2],  Federal Law No. 14,133/21 – by placing environmental licensing as a determining variable in claims for economic and financial rebalancing or termination of contracts – adopts the majority understanding of the jurisprudence of the national courts, ensuring the balance of bidding contracts and the legal certainty of bidders.[3]

At first, the new Federal Law seems to have managed to achieve a tenuous balance between the guarantees of environmental protection and the needs of the public interest (be it economic, social, political or cultural).

Armed with a spirit that reflects the global trend of requiring enterprises and entrepreneurs to get closer and closer to environmental, social and governance criteria, Federal Law No. 14,133/21unveils a scenario in which enterprises that show interest in winning bidding proceedings must increasingly adapt to environmental legislation in order to ensure a healthier and more efficient panorama of public procurement.

 

[1] When dealing with the criteria for judging the bidding, it is established the possibility of giving preference to goods and services that have less environmental impact on the production process – provided that they are objectively measurable – to the detriment of the logic of the lowest price.

[2] Established by article 65, II, "d" of Federal Law No. 8,666/93.

[3] As a direct reflection of the new law, in bids whose responsibility for environmental licensing falls to the Public Administration, prior environmental licenses – when applicable – must be obtained by the public power before the disclosure of the notice (article 115, paragraph 4).