Defense of protection in the Local Content Policy of the oil sector
The relationship between the Court of Auditors, the sector regulator and the competition authority
Silvano Domingos Yevela[1]
[1] Master's student and Professor at the Faculty of Law of the Agostinho Neto University; Postgraduate in Regulation and Competition; Lawyer; and Technician of the Legal and Litigation Department of the Competition Regulatory Authority.
Abbreviations and Acronyms
AMN: National Maritime Agency
ANAC: National Civil Aviation Authority
ANPG: National Agency of Petroleum, Gas and Biofuels
ANRM: National Agency of Mineral Resources
ANTT: National Land Transport Agency
ARC: Competitor Regulatory Authority
ARSEG: Insurance Regulatory and Supervisory Agency
BNA: National Bank of Angola
CMC: Capital Market Commission
CRA: Constitution of the Republic of Angola
DP: Presidential Decree
E&P: Exploration and Production
IHSMA: Hydrographic Institute and Maritime Signaling of Angola
IMPA: Maritime and Port Institute of Angola
INACOM: Angolan Institute of Communications
INAVIC: National Institute of Civil Aviation
INCFA: National Institute of Railways of Angola
INOP: National Institute of Public Works
INRH: National Institute of Water Resources
IRCCOP: Regulatory Institute of Civil Construction and Public Works
IRCOP: Regulatory Institute of Construction and Public Works
IRDP: Petroleum Derivatives Regulatory Institute
IRSEA: Regulatory Institute for Electricity and Water Services
ISJ: Institute for Gaming Supervision
LDC: Competition Act
RLDC: Regulation of the Competition Law
MINFIN: Ministry of Finance
SONANGOL: National Fuel Society of Angola
TC: Court of Auditors
ABSTRACT
The general purpose of this article is to analyse the defence of competition in the Local Content Policy of the oil and gas sector, provided for in Presidential Decree no. 271/20, of 20 October, and Instruction no. 6/21, of 4 November, of the National Agency of Petroleum, Gas and Biofuels (ANPG).
The analysis is based on the Angolan cultural, social, political and economic reality. Within this context, the article addresses the challenges of the Local Content Policy (PCL), analyzing some adverse effects of this policy, highlighting the possible existence of: (i) regulatory barriers, (ii) absence of an analysis of the costs and benefits of PCL and its anticompetitive effects; (iii) lack of validity of this policy; and (iv) the absence of regulation of the waiver instrument by the ANPG.
As a result of these effects there is the possibility of increased administrative costs, and, in some cases, incentives for profit-seeking behaviors, market closure to national competitors, corrupt practices and legal uncertainty for oil operators. Therefore, in the context of the discussion on the relationship between concomitant supervision of the Court of Auditors "TC", sectoral regulation and competition defense, it is necessary to adopt mechanisms of cooperation and institutional harmonization in order to intensify the participation of ARC and TC in the operationalization of the PCL, without replacing the decision of the ANPG, as regulator.
Those entities, when concluding the existence of avoidable adverse effects of PCL, should fix and recommend the parameters that should be observed by the ANPG in the future. This study is of a qualitative and bibliographical nature, having used data and public information from ANPG, ARC, TC and other entities of the sector, allied to a review of literature and the laws and regulations that guide the functioning of the sector in Angola and in the world.
Keywords: National Agency of Petroleum, Gas and Biofuel; Court of Auditors; Competition Regulatory Authority; Local Content.
1. Introduction
The purpose of this Article is to examine the protection of competition in the local content policy of the oil and gas sector; promote the action of the Court of Auditors "C" and strengthen the participation of the Competition Regulatory Authority "ARC" in the Local Content Policy "PCL" in the oil and gas sector, provided for in Presidential Decree No. 271/20, of 20 October, and in Instruction No. 6/21, of 4 November, of the ANPG.
The Angolan Constitution of 2010 "CRA" established a model of a market economy, based on the values of healthy competition, based on the regulatory role of the State, free economic and business initiative, respect and protection of private property and initiative, consumer and environmental protection, article 89.
Since 2017 we have witnessed a process of change in the relationship of the State with the economy, characterized by a lack of intervention of the State. There are three factors that are at the basis of the State's disintervention process: (i) intensification of privatizations – Law no. 10/19, of 14 May, (ii) strong approval and restructuring of the Sectoral Regulation Entities (governmentalized), and (iii) approval of a competition defense regime (Law no. 5/18, of May 10, Competition Law; DP no. 240/18 of 12 October and DP no. 313/18 of 21 December).As for economic regulation, in Angola there is a lack of definition in the regulatory universe, expressed in the diversity of organizational models and in the evident degrees of dependence on the President of the Republic "PR"[1].
With regard to the regulation of the oil sector, in 2013 the Regulatory Institute of Petroleum Derivatives "IRDP" was created and in 2019 the ANPG, which aimed to dissociate the functions of operator and concessionaire that were concentrated in SONANGOL.
By DP No. 133/18, of May 18, the IRDP assumed the function of regulator of the petroleum products sector (Midstream and Downstream), while by DP No. 49/19, of February 6, the ANPG assumed the function of regulator and concessionaire of the oil and gas exploration activity (Upstream).
2. Local Content Policy
2.1 Overview
The state may intervene in the market to correct market[2] failures in a certain sector of economic activity to generate efficiency gains.
The market failures normally listed are four and result from the existence of (i) natural monopolies; (ii) externalities, especially negaitva externalities; (iii) information asymmetries; and (iv) the existence of public goods (non-rivalry and non-exclusivity)[3].
In order to maximize the social and economic benefits arising from oil extraction (insert the national business and workforce, incorporate the national raw material), oil-producing countries adopt PCL.
The paradigm of successful PCL is the Norwegian experience, implemented in the early 70s, "as a stimulus package to the local economy, which faced fierce competition from foreign companies". [4]
PCL has been implemented in numerous countries such as the United Kingdom, Nigeria, Brazil, Kazakhstan. Initially, they emerged as express restrictions on imports into the sector and aimed at direct job creation and short-term rent generation.[5]
The PCLs are part of a broader category of political intervention called productive development policies. It is an instrument of industrial policy that aims at the participation of the national productive sector on a competitive basis[6].
Two approaches to the use of CL can be identified. One for and one against the use of PCL. In a liberal view, it is rejected for being a vertical policy and, as such, would tend to generate distortions in productive development, particularly for allegedly creating a market reserve for lower quality products and higher prices, which translates into misallocation of resources and/or externalities. [7]
Further, arguments are presented against the use of PCLs according to which they create a misalignment between instruments and political objectives, international regulation[8] and institutional frameworks (propensity to be captured by lobbies to maintain benefits indefinitely)[9].
In a pro-use approach, three broad categories of advantages are presented: increased value-added, correction of market failures/externalities and social objectives.[10]
In this approach, the CL serves to correct market failures, as the market itself would not be able to ensure increased participation of domestic firms in the face of expanding demand, due to inefficiencies in its functioning. From such a perspective, PCL would help create efficient markets. Still, from a development perspective, the challenge would go far beyond correcting market failures and would be linked to the catch-up effort. There would be a structural problem that would require a strong commitment from the State to ensure the use of the opportunity for industrial investments, generating scale, going through the learning curve and appropriating technological capacity.
In this sense, it offers the opportunity for diversification (to combat the so-called "resource curse"), employment, compensation for the adverse socio-economic impacts of oil and gas activities on local communities and vulnerable groups.[11]
3. Some PCL challenges in Angola
The ANPG is the entity responsible for the operationalization of the PCL in Angola. It has regulatory activity and purpose (essentially technical and economic regulation), but it is a government-owned regulator, considering that it is under the PR's oversight power..
The three main principles defined by the World Bank on the division of the PCLs are the Channel, Nature and the Instrument[12]. The present study is limited to a presentation and analysis of arguments that have implications for the normal play of competition in Angola's PCL.
The PCL presupposes a state intervention, which aims to increase the supply of goods and services to the local economy, generate added value in the sectors of domestic provision and services, create local employment opportunities and increase ownership and control.
The rationale behind this intervention is to generate efficiency gains and correct market failures. However, this policy may cause unwanted adverse effects.
Among the main adverse effects are: (i) regulatory barriers, (ii) absence of an analysis of the costs and benefits of PCL and its anticompetitive effects; (iii) lack of validity of this policy; and (iv) the absence of regulation of the waiver instrument by the ANPG.
These identified distortions can lead to increased administrative costs, and, in some cases, incentives for profit-seeking behaviors, market closure to competitors, corrupt practices and legal uncertainty.
The regulatory barriers identified consist of the existence of (i) limitation of foreign companies, and (ii) the existence of requirements for entry (registration and certification) by domestic companies.
The limitation of foreign companies restricts the constitutional principle of free competition, free private initiative, equality between domestic and foreign suppliers, and the autonomy of the will of operating companies to contract.
DP no. 271/20, of 20 October, establishes the limitation of supplies to international companies, with the provision of three regimes on the supply of assets and services in the oil industry: (i) competition regime; (ii) preference and (iii) exclusivity. In accordance with paragraph 1 of article 11 of that diploma, the assets and services included in the exclusivity regime must only be provided by Angolan companies (registered and certified).
The assets and servicesincluded in the preference regime must be provided by national companies, provided that they have the same quality compared to imported products and have a price up to 10% (ten percent) higher than the cost of international acquisition (paragraphs 3 and 4 of article 11).We believe that the requirement of entry requirements (registration and certification) by national companies is exaggerated, in that it does not attack the correct regulatory problem. From a regulatory point of view, the requirements for entry are justified by the existence of a market failure (adverse selection), which translates into the fact that the consumer is not able to assess the quality of the goods and services provided.
Operating companies in the oil sector are able to assess the quality of the goods and services provided. Thus, despite the importance of the PCL for economic and social development, we believe that there is the possibility of improvements in the PCL.
On this point, ARC issued recommendation no. 1/2021, On Competition in the Process of Operationalization of the Legal Regime of Local Content in the Oil Sector: "In the context of the registration of companies for Local Content, the certification process should be deprecated or simplified as much as possible, to avoid duplication of procedures, leaving the purposes linked to certification assured, in each public tender, and that operators define the standards and guarantees for the supply of goods or provision of services in the specifications and terms of reference and inform themselves by their own means about them, protecting themselves through well-informed decisions between registered companies, under the scrutiny of the ANPG'.[13]
On the other hand, there is an absence of public data on an analysis of the costs and benefits of PCL.[14] PCL has the potential to induce, in the long term, the development of the national industry. However, if it is not clear and consistent in its objectives, it can impose on the production chain burdens not corresponding to the desired social benefits and operate contrary to its objective of conferring special protection on a specific sector, such as oil and gas.[15]
In this sense, there is a need to evaluate the regulatory costs and competitive impacts of the PCL, through cooperation and institutional harmonization between the ANPG, the Competition Regulatory Authority and the Court of Auditors.In addition, the absence of a term of validity of the PCL has the risk of providing a market reserve for national companies. Angolan and Angolan companies benefiting from this policy, aware of the protection offered to them, may tend to accommodate, and not to encourage imprisonment in search of future competitive autonomy.[16]
Another distortion identified is the absence of regulation of the waiver instrument by the ANPG, provided for in paragraph 4 of article 11 of DP no. 271/20, of 20 October, article 27 of Law 10/04, of 12 November and in points a) and b) of paragraph 5 of Clause 15 of the Model Production Sharing Contract.
The waiver instrument[17] consists of the exoneration, exemption or exemption from compliance with the local content commitment requested from the ANPG, upon presentation of the study and documents referring to the contest held (paragraphs 5 and 6 of article 11 of DP no. 271/20, of 20 October).
Notwithstanding the provision of waiver in the contracts, the corresponding clause does not define the limits of what is considered qualities "similar to those available on the international market" or that "are available for sale and delivery in due time, at prices not exceeding more than 10% of the cost of imported articles including transport costs, insurance and customs charges due."
However, this "regulation" gap in "regulation" "brings legal uncertainty and lack of transparency to the sector, which already involves very high risks"[18]. Thus, it is recommended to regulate this matter to ensure predictability on the part of the operating companies.
The description of these unwanted adverse effects in the PCL recommends institutional alignment, between the ANPG, the Court of Auditors "TC" and ARC, to correct them and find coordinated solutions that promote the best realization of the public interest.
4. Relationship between concomitant supervision of the TC, sectoral regulation and defense of competition in the PCL: conflict of institutions?
4.1 Relationship between regulator and CT
So far there is no public information on the ECA's intervention in the PCL of the oil sector.
The attributions and competences of the ANPG and the TC show that there is, in principle, no overlapping of competences: the ANPG regulates the oil and gas sector and the TC supervises its activities, article 1 of Law no. 13/10, of July 9, with the amendments made by Law no. 19/19, of August 14.
However, the amendment of the Organic Law and the Court of Auditors' Procedure extended the scope of jurisdiction of the TC, allowing the performance of concomitant supervision, through audits, investigations and investigations, articles 9-A and 71-A.
This intervention of the TC is capable of generating reflections in the regulatory environment and may even induce changes in the formulation of public policies, pursuant to paragraph d) of paragraph 1 of article 9-A.
Considering the adverse effects identified in the PCL, it seems to us that there is a space for CT intervention, to establish the parameters on which the ANPG can operationalize the PCL.
However, in this intervention the CT cannot replace the regulator. It should only set the parameters of economy, efficiency and effectiveness of the PCL by means of audit and exercise control of the activity of the regulatory body, in a perspective of collaboration, and not exercise the regulation itself.[19]
Therefore, the ANPG must be given the final word regarding decisions in the performance of the regulatory function, and the TC must only be a collaborative watchdog of regulatory policy in the PCL.
4.2 Sectoral regulation and competition protection in the PCL
Competition authorities and sectoral regulators serve the same purpose of market intervention: to order the economy, for an efficient functioning of the market, a better allocation and distribution of resources and the increase of welfare levels. [20]
But they are different in the direction of their respective intervention: "competition authorities seek to ensure that competition is maintained as a process. Instead, sectoral regulatory authorities are geared towards replacing market forces.'[21]
Therefore, in the process of market intervention the relationship between regulatory authorities and competition authorities brings the possibility of the existence of competences that compete in a given specific case.
It is common for regulators to adopt four different types of postures, the effectiveness of which will depend on the specific case: "(i) explicit competition, when there is a dispute so that the competence of one prevails over that of the other; (ii) implicit competition, when it ignores the possible portion of competence that belongs to the other agent and acts in a customary manner, regulating what it understands to be its right; (iii) abdication of his competence in favor of the other; and, finally, (iv) mutual coordination."[22]
Among us, and in the specific context of the oil sector, the ARC has had interventions at various levels: in certain legislative measures; in the process of operationalization of the PCL and in mergers of companies[23]. This is how ARC participated in the draft DP 271/20 of 20 October, where it issued its technical assessment of the potential anti-competitive effects resulting from the excessive competitive advantage attributed to national companies.
As part of the PCL operationalization process, alignment meetings were held between ANPG and ARC, and the latter also issued Recommendation No. 1/2021, "On Competition in the Process of Operationalization of the Legal Regime of Local Content in the Oil Sector".
Regarding this aspect, it is important to highlight that there was an important participation of the ARC in coordination with the ANPG. In fulfilling its tasks of ensuring the efficient and balanced functioning of the markets, ARC issued the technical assessments on the anti-competitive effects of the PCL, with a view to correcting them and finding coordinated solutions that promote the best realization of the public interest.
However, there was no absolute replacement or suppression of one ordering sphere by another. What has happened is a residual reception, not very expressive, of the technical appraisals of the ARC. This situation led to the maintenance of the adverse effects of PCL:
(i) regulatory barriers, (ii) absence of a cost analysis; (iii) absence of term of validity; and (iv) the absence of regulation of the waiver instrument by the ANPG.
These identified distortions can lead to increased administrative costs, and, in some cases, incentives for profit-seeking behaviors, market closure to competitors, and corrupt practices.
Therefore, coordinated solutions must be found to ensure the harmonisation of situations affecting both competition law and regulatory law.
There must be dialogue and confluence of wills available in the public interest, which can be achieved by (i) submitting draft regulatory rules and decisions that have the potential to directly affect competition to prior testing by competition authorities; (ii) conclusion of cooperation agreements between the entities; (iii) holding 'regular meetings or the joint adoption of rules of good practice or codes of conduct, which undertakings should be aware of and on which they have hopefully given their views'; (iv) or the establishment of regulatory forums[24], in which sectoral and competition authorities participate, to keep them in regular contact, harmonize interpretations and strengthen their cooperation and coordination.[25]
Angolan legislation provides for specific cooperation and coordination mechanisms: for example, the LBEAI provides for the need for cooperation between Independent Administrative Entities; in the context of practices restricting competition, Article 31 of the LdC establishes the need for the ARC to communicate to the regulatory authority whenever a certain event occurs in the field of sectoral regulation and vice versa; Article 12(3) of the RLdC establishes the obligation for ARC to request the pronouncement of regulatory authorities in merger proceedings.
However, within the framework of the PCL there must be dialogue and confluence of wills at the disposal of the public interest, which can be achieved through institutional dialogue. This conclusion is applied to the interactions between the ANPG and the Direct Administration, the Legislative Power and the Judiciary and should extend specifically to the interaction between ANPG, the TC and the ARC, which can become problematic if there is an overlap of functions (for example, when, eventually, the TC and the ARC end up replacing the role of the regulator).
However, it is concluded that the control carried out by the ECA and the antitrust procedure by the ARC do not entail the substitution of the ANPG's decision. Those, when concluding the existence of avoidable adverse effects of PCL, should fix and recommend the parameters that should be observed by the ANPG in the future.In fact, it is not for the TC and the ARC to institute the regulatory policy of the local content of the oil sector. But, rather, to fix, within the scope of the concomitant supervision, the normative guidelines that must be observed by the ANPG, namely: economy, efficiency and effectiveness. And, the ARC should recommend, in the context of the protection of competition, measures to ensure an adequate, efficient and protective competitive environment for the well-being of the consumer.
5. Conclusion
For the foregoing, we are in a position to present an assessment of the PCL in the oil and gas sector in Angola, from the perspective of competition, seeking to respond to the proposed objectives on the promotion of the Court of Auditors' action and the strengthening of ARC's participation with a view to its improvement.
A first conclusive aspect is the fact that PCLs constitute mechanisms of State intervention, which, guided by positive economic and social objectives (generation of efficiency gains and correction of market failures of the local economy), can cause unwanted adverse effects.
The main adverse effects identified in the PCL are summarized in: (i) existence of regulatory barriers, (ii) in the absence of an analysis of the costs and benefits and their anticompetitive effects; (iii) in the absence of this policy; and (iv) in the absence of regulation of the waiver instrument by the ANPG. These identified distortions enable increased administrative costs, and, in some cases, incentives for profit-seeking behaviors, market closure to national competitors, corrupt practices and legal uncertainty for operators.
A second conclusive aspect, resulting from the previous one, is that in the PCL there is a space for intervention of the TC and the ARC, which should lead to the establishment of mechanisms of dialogue and confluence of wills at the disposal of the public interest.
The TC, within the scope of the concomitant inspection, made through audits, investigations and investigations, provided for in articles 9-A and 71-A of the Organic Law and the Process of the Court of Auditors, which has extended its scope of jurisdiction, may define the normative guidelines that must be observed by the ANPG, with regard to economy, efficiency and effectiveness.
And the ARC can recommend, in the context of the protection of competition, measures to ensure an adequate, efficient and protective competitive environment for the well-being of the consumer.
However, it should be borne in mind that the control carried out by the ECA and the antitrust process by the ARC do not entail the substitution of the ANPG's decision as regulator. Those entities, when concluding the existence of avoidable adverse effects of PCL, should fix and recommend the parameters that should be observed by the ANPG in the future.
Thus, the ANPG should be given the final pa¬lavra regarding the decisions in the performance of the regulatory function and the TC be only a supervisor-collaborator in the regulatory policy of the CL. Whereas with the ARC it is recommended not only that there be prior rules for cooperation, but that they act jointly in cases of positive conflicts of competence, giving uniqueness and harmony to the order and greater stability and security to economic agents.[26]
Bibliography
1. ARC, Resolution no. 2/2019 – Merger: Total & Sonangol, available in https://arc.minfin.gov.ao/PortalARC/#!/controlo-de-concentraçoes/decisoes-da-arc
2. ARC, Resolution No. 7/2021 – Merger: Trafigura & Puma, available in https://arc.minfin.gov.ao/PortalARC/#!/controlo-de-concentraçoes/decisoes-da-arc
3. ARC, Resolution no. 9/2021 – Merger: Sonangol & Puma Energy, available in https://arc.minfin.gov.ao/PortalARC/#!/controlo-de-concentraçoes/decisoes-da-arc
4. ARC, Recommendation no. 1/2021, On Competition in the Process of Operationalization of the Legal Regime of Local Content in the Oil Sector.
5. CALVETE, Victor, The similarities and the differences: regulation, competition and all that jazz, in JUDGE - No. 9 – 2009, consulted on March 4, available on http://julgar.pt/wp-content/uploads/2015/11/073-095-Regula%C3%A7%C3%A3o-concorr%C3%AAncia-allt-that-jazz.pdf
6. CONFRARIA, João, Falhas do mercado e regulação independente, in Revista de Regulação e Concorrência, Edições Almedina, Ano 1, Number 1, July-September, 2010, consulted on March 10, 2022, available on https://www.concorrencia.pt/sites/default/files/imported-magazines/CR_03_Joao_Confraria.pdf
7. CRUZ, José Neves, Economics and politics. A dialectical choice of public choice, Coimbra Editora, 2008
8. DANTAS, Bruno; CALDAS, Evandro; MARTINS, Fernanda. The local content system and the cooperation between TCU and ANP: an important step towards regulatory coherence. Journal of Legislative Information: RIL, Brasília, DF, v. 58, n. 230, p. 11-27, abr./jun. 2021. Available in: https://www12.senado.leg.br/ril/edicoes/58/230/ril _v58_n230_p11
9. FERREIRA, António Eduardo Guimarães, Local Content Policies: Economic Growth and Rule of Law, Rio de Janeiro, 2014, retrieved March 15, 2022, available on https://bibliotecadigital.fgv.br/dspace/bitstream/handle/10438/13897/TCC%20ANTONIO%20EDUARDO%20GUIMAR%c3%83ES%20FERREIRA.pdf?sequence=1&isAllowed=y
10. FERREIRA, Rui & ARAÚJO, Raúl, "Angola, Law, Democracy and Citizenship".
11. JOÃO, Domingos Francisco, Lições de Direito Económico de Angola, Luanda: ZOE Publications, 2018.
12. MOREIRA, Vital, Program of the Discipline of Public Law of Regulation, Coimbra: Faculty of Law of the University of Coimbra, 2012, consulted on March 10, 2022, available on https://estudogeral.uc.pt/bitstream/10316/24548/1/Programa%20da%20disciplina%20de%20Direito%20p%c3%bablico%20da%20regula%c3%a7%c3%a3o.pdf
13. MORENO, Natália de, "Defense of Regulated Conduct in Antitrust Procedures: the interface between Regulatory Agencies and Competition Authorities", CEDIPRE Online Publications – 15 http://www.cedipre.fd.pt Coimbra, April 2013.
14. OECD, Guide to Competition Assessment: Volume 2 – Guidelines, 2017. Disonivel in www.oecd.org/competition/toolkit.
15. PAZ FERREIRA, Eduardo, Around economic regulation in times of change, in Revista de Regulação e Concorrência, Ano 1, Number 1, January-March, 2010, consulted on March 10, 2022, available on https://www.concorrencia.pt/sites/default/files/imported-magazines/CR01_-_Eduardo_Paz_Ferreira.pdf
16. SCHUTTE, Giorgio Romano, The political economy of local content in the oil sector of Lula and Temer, in Economy and Society, Campinas, Unicamp, v. 30, n. 1, consulted on March 15, 2022, available in https://periodicos.sbu.unicamp.br/ojs/index.php/ecos/article/view/8665611/26657
17. SILVA, Miguel Moura e, Modalities of cooperation and coherence between Competition Authorities and Sectoral Regulators, Lisbon, 2005
18. SILVA, Olavo, Autonomia do Banco Nacional de Angola, Edições Almedina, 2020.
19. TEIXEIRA, Carlos, A intervenção do Estado na Economia em Angola, in Revista do Direito de Língua Portuguesa, Instituto do Direito de Língua Portuguesa, Ano 1, Número 1, January-June 2013.
20. TOLEDANO, Perrine & MANDELBAUM, Jacky, (Org), Local Content – Angola, Columbia Center on Sustainable Investment, 2014.
21. TORDO, Silvana, Michael WARNER, OSMEL E. Manzano and YAHYA Anouti. Local Content Policies in the Oil and Gas Sector. World Bank Study. Washington, DC, 2013. Retrieved March 8, 2022, available on https://elibrary.worldbank.org/doi/abs/10.1596/978-0-8213-9931-6.
22. XAVIER JUNIOR, Carlos Eduardo Ramos, Local Content Policies in the Oil Sector: the Brazilian case and international experience, Text for Discussion, No. 1775, Institute of Applied Economic Research (IPEA), Brasília, 2012.
Legislation consulted
1. Constitution of the Republic of Angola of 2010, Revised by Law no. 18/21, of 16 August.
2. Decree no. 12/99, of 25 June, approves the creation of INACOM.
3. Decree no. 4/02, of 12 March, approves the creation of the IRSE Electricity Sector Regulatory Institute.
4. Decree no. 4/05, of 19 January, approves the creation of INAVIC.
5. Decree no. 63/04, of 28 September, approves the organic statute of ISS.
6. Decree no. 66/07, of 15 August, approves the creation of IMPA.
7. Decree no. 9/05, of 18 March, approves the creation of the CMC.
8. Presidential Decree 313/20, of 10 December, approves the National Development Plan 2018-2022.
9. Presidential Decree no. 133/13, of September 5, approves the creation of the IRDP.
10. Presidential Decree no. 144/10, of 16 July, approves the creation of the INCFA.
11. Presidential Decree no. 161/20, of May 5, approves the creation of the ANRM.
12. Presidential Decree no. 21/11 of 18 January approves the creation of the IHSMA.
13. Presidential Decree no. 240/18, of 12 October, RLdC.
14. Presidential Decree no. 250/19, of 5 August, approves PROPRIV 2019/2022.
15. Presidential Decree no. 253/10, of 16 November, approves the creation of the INRH.
16. Presidential Decree no. 271/20, of 20 October, Local Content Regime in the Oil Sector.
17. Presidential Decree no. 290/14, of 14 October, approves the creation of the ISJ.
18. Presidential Decree no. 308/14, of 21 November, approves the creation of the IRCCOP
19. Presidential Decree no. 313/18 of 21 December, Organic Statute of the ARC, as amended by Presidential Decree no. 110/19, of 16 April.20. Presidential Decree no. 4/15, of 02 January, approves the creation of the INTR.
20. Presidential Decree no. 44/21, of 19 February, updates PROPRIV.
21. Presidential Decree no. 49/19, of February 6, approves the creation of the ANPG.
22. Presidential Decree no. 90/18, of April 9, approves the creation of INOP.
23. Decree-Law no. 4/98, approves the organic statute of MINFIN.
24. Order no. 127/03, of 25 November, General and regimental framework of the contracting of services and goods of national companies by companies in the oil sector
25. Instruction no. 6/21, of 4 November, of the ANPG, defines the procedures for implementing local content.
26. Constitutional Law of 11 November 1975.
27. Constitutional Law no. 12/91, of 6 May.
28. Law no. 10/04, of 12 November, Law on Petroleum Activities, with amendments to Law no. 5/19, Law on Petroleum Activities.
29. Law no. 10/19, of 14 May, establishes the Legal Regime of Privatizations.
30. Law no. 10/94 of 31 August, Law on Privatisations.
31. Law no. 13/10, of 09 July, as amended by Law no. 19/19, of 14 August.
32. Law no. 13/78, of 26 August, Regulatory Law on Petroleum Activities.
33. Law no. 27/21, of 25 October, Basic Law of Independent Administrative Entities (LBEAI).
34. Law no. 5/18, of 10 May, Competition Law.
35. Law no. 8/03 of 18 April, amendment of the Law on Privatizations.
36. Organic Law of the BNA, Law no. 4/91, of 20 April.
[1] PAZ FERREIRA, Eduardo, Around economic regulation in times of change, in Revista de Regulação e Concorrência, Ano 1, Number 1, January-March, 2010, p. 33.
[2] Nomenclature consecrated by Musgrave
[3] CRUZ, José Neves, Economics and politics. A dialectical choice of public choice, Coimbra Editora, 2008, p. 28.
[4] FERREIRA, Antonio Eduardo Guimarães, Local Content Policies: Economic Growth and Rule of Law, Rio de Janeiro, 2014, p. 1.
[5] SCHUTTE, Giorgio Romano, The political economy of local content in the oil sector of Lula and Temer, in Economy and Society, Campinas, Unicamp, v. 30, n. 1, pp. 115-140, 2021, p. 118.
[6] Thrush, Silvana, Warner Michael, Osmel E. Manzano and Yahya Anouti. 2013. Local Content Policies in the Oil and Gas Sector. World Bank Study. Washington, DC, p. 18.
[7] SCHUTTE, Giorgio Romano, ob. cit. p. 117.
[8] Compliance with international regulations overseen by the World Trade Organization (WTO). The most relevant agreements among WTO members with implications for the PCLs include the General Agreement on Tariffs and Trade (GATT), the Agreement on Trade-Related Investment Measures (TRIMs), the General Agreement on Trade in Services (GATS), and the Agreement on Government Procurement (GPA).
[9] Thrush, Silvana, Warner Michael, Osmel E. Manzano and Yahya Anouti, ob. cit., p. 26.
[10] Thrush, Silvana, Warner Michael, Osmel E. Manzano and Yahya Anouti, ob. cit., p. 23.
[11] SCHUTTE, Giorgio Romano, ob. cit. p. 117 and Tordo, Silvana, Warner Michael, Osmel E. Manzano and Yahya Anouti, ob. cit., pp. 24-26.
[12] For further development see Tordo, Silvana, Warner Michael, Osmel E. Manzano and Yahya Anouti. 2013. Local Content Policies in the Oil and Gas Sector. World Bank Study. Washington, DC, p. 18.
[13] ARC, Recommendation No. 1/2021 on Competition in the Process of Operationalization of the Legal Regime of Local Content in the Oil Sector, p. 9.
[14] For further developments see OECD, Guide to Competition Assessment: Volume 2 – Guidelines, 2017, p. 21 et seq., available in www.oecd.org/competition/toolkit
[15] DANTAS, Bruno; CALDAS, Evandro; MARTINS, Fernanda, The local content system and cooperation between TCU and ANP: an important step towards regulatory coherence, Revista de Informação Legislativa: RIL, Brasília, DF, v. 58, n. 230, p. 11-27, abr./jun. 2021. Available at: https://www12.senado.leg.br/ril/edicoes/58/230/ril, v58, no. 230, p. 22.
[16] DANTAS, Bruno; CALDAS, Evandro; MARTINS, Fernanda, ob. cit., p. 22.
[17] The waiver clauses were provided as an alternative to situations in which the goods produced in the domestic market present inferior quality, price or delivery time higher than those contracted abroad and in which there is no technology or supplier in the country, see DANTAS, Bruno; CALDAS, Evandro; MARTINS, Fernanda, ob. cit., p. 21
[18] DANTAS, Bruno; CALDAS, Evandro; MARTINS, Fernanda, ob. cit., p. 21.
[19] DANTAS, Bruno; CALDAS, Evandro; MARTINS, Fernanda, ob. cit., p. 19.
[20] MORENO, Natália de, "Defense of Regulated Conduct in Antitrust Procedures: the interface between Regulatory Agencies and Competition Authorities", CEDIPRE Online Publications – 15 http://www.cedipre.fd.pt, Coimbra, April 2013, p. 4.
[21] MARQUES, Maria Manuel Leitão; SIMÕES DE ALMEIDA, John Paul; FORTE, André Matos, Competition and Regulation -- The Relationship between the Competition Authority and the Sectoral Regulation Authorities, Vol. 6, Public Law and Regulation, Coimbra: Coimbra Editora, 2005, taken from SILVA, Miguel Moura and, Modalities of cooperation and coherence between Competition Authorities and Sectoral Regulators, Lisbon, 2005, p. 3 and 4.
[22] DANTAS, Bruno; CALDAS, Evandro; MARTINS, Fernanda, ob. cit., p. 17.
[23] On merger processes see: Resolution no. 2/19 – Total & Sonangol; Resolution no. 7/2021 – Trafigura & Puma; and Resolution No. 9/2021 – Sonangol & Puma Energy, available in https://arc.minfin.gov.ao/PortalARC/#!/controlo-de-concentraçoes/decisoes-da-arc
[24] On May 26, 2022, the National Forum of Regulators took place.
[25] MORENO, Natalia de, ob. cit., pp. 34 and 35.
[26] MORENO, Natalia de, ob. cit., p. 36.