About

What are the most significant cases and/or transactions that your legal team has been involved with in the last two years?

In 2017 SUEZ were awarded a contract with the Ministry of Health of Panama to design, build and operate the second module of the Juan Diaz Wastewater Plant, which is the largest wastewater plant in operation in Panama that treats all the waste water produced in the metropolitan area of Panama City. The first module of the Juan Diaz Wastewater Plant is currently operated by SUEZ and the second module, once in operation, will double the Plant current treatment capacity. In 2018 SUEZ were awarded a contract with the Salvadorian Water Authority (ANDA) to revamp and increase the treatment capacity of Las Pavas Drinking Water Plant, which is the largest drinking water plant in El Salvador. These two landmark contracts have helped us to strength our position within the Central America region, consolidating our longstanding reputation as a reference company in the water treatment business.

What geographical area does the team cover and what challenges has it faced when covering multiple jurisdictions in the region?

Our team covers all Central America and the Caribbean. From a legal standpoint, the most relevant challenge we face is to understand all the different local regulations relevant to our business.

How does the team ensure it remains aligned to the company and its goals?

In our experience, a close and proactive interaction with other management divisions of our company, namely our technical, commercial, financial, HHRR, and supply chain colleagues, has been fundamental for our team to remain aligned with SUEZ strategic goals. Also, we keep in touch frequently with other Latin American legal teams in order to share and discuss experiences and thoughts.

Focus on… regulation

In September 2019, the Panamanian Government adopted the new public-private partnership legislative framework (PPP Law) to provide an option for developing major infrastructure projects based on private investment without requiring substantial short-term disbursements of public funds. Projects based on a PPP structure are not new in Panama, as there have been toll roads, water treatment plants, ports, telecommunications networks and energy projects based on this. However, due to the lack of a specific law, in some cases they were developed and managed under industry-specific legislation or, in another case, under the general public procurement Law enacted in 2006 (public procurement law). Article three of the PPP Law states that PPPs will be used in order to ‘create, develop, improve, operate and/or maintain public infrastructure for the provision of public services’. The law provides for a maximum contract length of 30 years, which can be extended for up to ten additional years, allowing for public institutions to enter into long-term partnerships with investors. Certain services and institutions have been excluded from contracting under the PPP framework. Recently the new government authorities have presented a new draft bill that seeks to modify the Public Procurement Law. The new public procurement law draft is expected to be discussed within the Panamanian Assembly of Deputies before the end of the year, and its intention responds to a campaign promise of the newly elected President Laurentino Cortizo aimed to adjust the public procurement procedure to shield it as much as possible from acts of corruption and to eliminate bureaucratic obstacles and speed up the public procurement procedure. The draft public procurement law presented by the executive implemented a limitation so that companies that have been convicted of acts of corruption are disabled to participate in tenders and public events in Panama. There are also modifications in the following relevant aspects: the promotion and incentives for small and medium enterprises (SMEs); the promotion of national and municipal public bids restricted only to national companies with a limitation of a maximum of US$7m improvement to the periods of admission, resolution, both in the General Directorate of Public Procurement and in the Public Procurement Court; the elimination of the obligation of suppliers to submit as part of their proposals documents issued by public entities; the Evaluation Commissions will be designed randomly from a system that will be administered by the Public Procurement Directorate and none of the Evaluation Commission members may be officials of the bidding entity; and encouraging of the use of technological processes in bidding processes, with the purpose of reducing the use of paper. This new PPP Law and the new amendment to the public procurement law come at a crucial time for Panama when there is a lot of social and institutional pressure for the new state authorities to make the necessary efforts to reinforce the public procurement and private investment legal framework, covering all existing legal gaps that in the permitted some cases of corruption in public projects. These new laws have also been adopted at a time when Panama, in conjunction with the region, experiences an economic slowdown that began in 2011 and that in recent years has begun to show its effects on economic growth rates. According to figures from the Ministry of Economy and Finance, foreign direct investment in Panama totalled US$1,648bn in the first quarter of this year, 18.2% more than in the same period of 2018, which reflects that even when the Panamanian economy is going through a deceleration process, foreign direct investment continues to grow reflecting that the perception of foreign investors regarding the business environment in Panama is still positive. Both legislative initiatives are of decisive importance in order to create the required security and confidence to attract local and foreign investment. In this regard an objective and safe legal framework is decisive for the planning and developing of the necessary services and infrastructure for Panama’s sustainable development. Although the PPP Law has explicitly removed water-related projects from its scope of application, it also constitutes the opening of potential opportunities in an important business branch for Suez, little exploited in the region, such as solid waste treatment. Likewise, for SUEZ, any improvement made to the public procurement law that allows a more transparent and objective process is very important. For SUEZ, as a foreign company focused on the development of infrastructure and public services in Panama and the region, both laws are extremely relevant.