20.11.1. The excess monetary amount shall be adjusted by the IGP-DI or any other index that may replace it. Penalty for Failure to Respect the Local Content 20.12. Failure to respect the Local Content shall subject the Concessionaire to a penalty, which shall be calculated on the defaulted monetary amount, in the following percentage, as the case may be: a) If the percentage of the Unused Local Content is below sixty-five percent (65%) of the Minimum Local Content, the penalty shall be forty percent (40%) of the amount of the Unused Local Content. b) if the percentage of the unused Local Content is equal to or higher than percent (65%), the penalty shall begin at forty percent (40%), reaching seventy-five percent (75%) of the amount of the Minimum Local Content, in case of 100% unused Local Content, according to the formula: M (%) = NR (%) 25%. – where, M(%) is the percentage of the penalty to be calculated on the defaulted monetary amount; and NR (%) is the percentage of unused Local Content. 20.13. In case of simultaneous failure to honor more than one commitment for the referred to in paragraph 20.1.4, the amount of the penalty shall correspond to the sum of the penalties for each Macro-Group. 20.14. The amount of the penalty shall be adjusted by the IGP-DI up to the date of the effective payment. SECTION TWENTY-ONE OPERATIONAL SAFETY AND ENVIRONMENT – Environmental Control 21.1. The Concessionaire shall have a safety and environment management system that complies with the Best Practices of the Oil Industry and the Applicable Laws and Regulations. 21.2. Among other obligations, the Concessionaire shall: a) ensure preservation of an ecologically balanced environment; b) mitigate the occurrence of impacts and/or damages to the environment; c) ensure safety of the Operations for purposes of protecting human life, the environment, and the Federal Government’s heritage; d) ensure protection of the Brazilian historical and cultural heritage; e) recover degraded areas;
20.11.1. The excess monetary amount shall be adjusted by the IGP-DI or any other index that may replace it. Penalty for Failure to Respect the Local Content 20.12. Failure to respect the Local Content shall subject the Concessionaire to a penalty, which shall be calculated on the defaulted monetary amount, in the following percentage, as the case may be: a) If the percentage of the Unused Local Content is below sixty-five percent (65%) of the Minimum Local Content, the penalty shall be forty percent (40%) of the amount of the Unused Local Content. b) if the percentage of the unused Local Content is equal to or higher than percent (65%), the penalty shall begin at forty percent (40%), reaching seventy-five percent (75%) of the amount of the Minimum Local Content, in case of 100% unused Local Content, according to the formula: M (%) = NR (%) – 25%. where, M(%) is the percentage of the penalty to be calculated on the defaulted monetary amount; and NR (%) is the percentage of unused Local Content. 20.13. In case of simultaneous failure to honor more than one commitment for the referred to in paragraph 20.1.4, the amount of the penalty shall correspond to the sum of the penalties for each Macro-Group. 20.14. The amount of the penalty shall be adjusted by the IGP-DI up to the date of the effective payment. SECTION TWENTY-ONE – OPERATIONAL SAFETY AND ENVIRONMENT Environmental Control 21.1. The Concessionaire shall have a safety and environment management system that complies with the Best Practices of the Oil Industry and the Applicable Laws and Regulations. 21.2. Among other obligations, the Concessionaire shall: a) ensure preservation of an ecologically balanced environment; b) mitigate the occurrence of impacts and/or damages to the environment; c) ensure safety of the Operations for purposes of protecting human life, the environment, and the Federal Government’s heritage; d) ensure protection of the Brazilian historical and cultural heritage; e) recover degraded areas;