With the recent bid rounds, companies such as Shell, Total, ExxonMobil and CNOOC are assuming a more important role in the Brazilian oil and gas market. Over the next few years, these and others oil operators will respond for an increasing proportion of national oil and gas production. The sector now has a clearer course with the end of Petrobras exclusive operation in the pre-salt, the bid rounds schedule and the definition of programs for refining, natural gas ("Gas to Grow" program) and biofuels ("Renew Bio" program), among others.

However, in order to generate more investment, we still need to tackle the essential structural reforms: simplify the tax system and labor legislation, promote a true education "revolution", and ensure legal stability, without which the positive effects of sectorial programs are not sustainable.

Another important aspect in the investor's assessment is the effectiveness of the court system, i.e., in case of contract breach, the quality of the legal system to resolve the dispute. In recent "Justice in Numbers" report released by the National Justice Council (CNJ), we have seen that the enforcement of a decision in Brazil takes an average of four years and six months, while a court decision-making process takes a year and four months, which is an absurd term that does not fit the urgency of the business world.

For this reason, companies and the public administration have been opting for alternative methods of dispute resolution (ADR´s), like arbitration, mediation and dispute boards. Although it ensures greater impartiality, speed and technicality in the solutions of controversies, arbitration has adversarial nature and high cost. Likewise the court system, the arbitral decision declares a winner and a loser, with the consequent disruption or corrosion of the relationship between the parties.

The current code of civil procedure, in force since March 2016, encourages the use of conciliation, mediation and other consensual methods to resolve conflicts. Before that, the resolution #125/10, issued by National Justice Council, had already institutionalized the self-settlement methods as public policy and the mediation law #13.140/15 has reinforced the regulatory framework.

The oil and gas sector, besides been regulated in Brazil, has specific features: a few closely related players, long-term contracts, complex technologies, high risks and costs. In case of contractual impasses, it is very rare that the parties cannot reach an agreement and solve their problems, as they already have a collaborative position due to the nature of the developed activities.

Direct negotiations may fail, however, and in this case, mediation is a very useful method to resolve the conflicts in this sector. The mediator guide the parties to "think outside the box", seeking solutions which are creative, "win-win", unimaginable within adversarial procedures. The process is flexible, agile, inexpensive and the resolution of the conflict may be reached in a few sections, after a short period of time, allowing the parties to maintain and even strengthen their relationship. The greatest advantage of the procedure is to promote solutions to differences on mutually acceptable basis, while keeping the commercial benefits of the relationship. How much does it cost to interrupt a production rig or a refinery? Time is of essence to resolve these sort of impasses, as well as confidentiality, not to harm the business, including company's value in stock exchange.

Following the good practices of public governance, administration must seek efficiency, adopting adequate conflict resolution methods. The principles of "access to justice", "reasonable length of time" and "efficiency", set forth in Brazilian Constitution, must guide the public agents, reinforcing the importance of consensual methods. Under current legislation, if mediation is in the contract (public or private), the parties must participate to the first mediation meeting – which is a great step to agreement – but they aren't forced to stay in the mediation procedure, under the principle of "autonomy of the parties".

In this context, ANP held a public hearing, on November 14, with the purpose of improving the arbitration clause in the exploration and production contracts. The current contracts provide for a conciliation and arbitration clause, in two stages. It is an appropriate time for ANP to adjust this conflict resolution clause, according to current legal framework, replacing conciliation by mediation as the suitable method for this type of contract. Without forgetting that the mediator must be an impartial third party and not an ANP agent, on pain of mischaracterizing the procedure, which presupposes total impartiality of the mediator.

In the same vein, the major operator Petrobras should also adopt mediation in its private contracts. Today, the state oil company is looking to standardize its drafts, in compliance with the new procurement system determined by Law n#13.303/16. Currently, some contracts establish arbitration, some court system. That is a wonderful opportunity to include mediation as a prior and preferential procedure to resolve the controversies in service, engineering, and most of the state oil company's contracts. Staggered mediation and arbitration (med-arb) or mediation and judiciary (med-jud) clauses would be welcome in the market. After all, who in the industry is interested in breaking the relationship with Petrobras?

The world is undergoing fast and urgent changes and Brazil cannot stay behind. The democratization of conflict resolution is a worldwide phenomenon, as people and companies are turning into subjects of the conflict instead of pieces of a conflict. It is not possible any more to be at the mercy of the traditional binomial favorable/unfavorable (by a judge or an arbitrator), mainly when facing complex controversies. Brazil has a consistent legal framework and is in a good position to become a world leader in the field of consensual resolutions of conflicts. It requires, however, a change in the mindset of business executives, lawyers, judges, public agents and the society as a whole, breaking dogmas, to allay the resistance and appreciation of polarization and confrontation. By changing the culture, people and companies will open space to collaborative processes, which will create positive and satisfying results to all.

Julia Mota is founding partner of Mota Itabaiana and mediator in Find Resolution Gestão Estratégica de Conflitos