The suspended legislation prohibits the granting of benefits to companies that have committed to limiting agricultural expansion
The minister of the (Supreme Federal Court) suspended a law in Mato Grosso that prohibits the granting of benefits to companies that have committed to limiting agricultural expansion. The decision, which will still be confirmed by the plenary, was taken in the ADI (Direct Action of Unconstitutionality). Here is it (PDF – 199 kB).
According to this suspended legislation (), the State could not grant tax benefits or public land to companies that signed commercial agreements to limit activity in areas not protected by specific environmental legislation.
The action was filed by PC do B, Psol, Rede and PV. According to the parties, the Mato Grosso law aims to retaliate against companies that participate or that will participate in multisectoral agreements, such as the so-called “Soy Moratorium”. Since July 2008, grain trading companies have entered into voluntary agreements, committing to implement internal policies to avoid purchasing soybeans from deforested areas in the Amazon.
The 4 parties are also authors of , which questions a similar law in Rondônia. They claim that multisectoral agreements encourage better use of land, optimize its use and increase productivity. They also state that these agreements, by restricting the uncontrolled expansion of agriculture into areas with native vegetation, promote environmental preservation and fulfill the social function of the property.
Free competition
In the decision, Dino considered that Mato Grosso’s law appears to contravene the constitutional principle of free enterprise. For him, the rule could create an environment of unfair competition, as companies that avoid products from deforested areas or suppliers with illegal practices would be excluded from the tax and economic benefits offered to competitors who do not adopt these commitments.
However, the minister stated that each company is free to establish its purchasing policy and cannot be punished for exercising this freedom related to property rights.
Deviation of purpose
According to Dino, the law also shows signs of misuse of purpose, as it uses the tax rule as punishment. In his assessment, by prohibiting tax incentives and benefits for companies that adopt sustainable purchasing policies, the standard penalizes those that voluntarily choose suppliers committed to environmental preservation.
The minister also noted that the immediate revocation of tax benefits by law may contradict , which prevents the free suppression of tax exemptions, granted on a costly basis. This understanding aims to protect legal certainty and good faith in relations between the State and companies.
For the minister, the immediate revocation of these benefits destabilizes acquired rights and discourages responsible business practices.
Request for information
At the end of the decision, Dino requested information from the president of the local Legislative Assembly and the governor of Mato Grosso within 30 days. The process will then be forwarded to the AGU (Attorney General’s Office) and the PGR (Attorney General’s Office) so that they can respond, successively, within 15 days each.
With information from .
