The Federal Supreme Court (STF) unanimously annulled a provision that forced insurers, reinsurers, open supplementary pension entities and capitalization companies to invest part of their resources in carbon credits.
The decision was taken in the trial of an action presented by the National Confederation of Insurance Companies (CNseg) and represents a setback for one of the most controversial measures included during the processing of the carbon market regulatory framework in Congress.
The rule determined that institutions should allocate at least 0.5% of their technical reserves and provisions to the purchase of carbon credits or shares in funds linked to these assets. The device had been incorporated into the text through an amendment presented by the president of the Chamber, Hugo Motta (Republicanos-PB).
The issue gained political repercussion because opposition parliamentarians and members of the Senate’s Economic Affairs Committee associated the measure with private interests linked to the carbon market.
Vorcaro family
Among the businesses mentioned during the discussions is Alliance Participações, a company that holds carbon credits generated by a rural property in the Amazon. The company is owned by Henrique Vorcaro, father of Daniel Vorcaro, controller of Banco Master, and Natália Vorcaro.
The matter was mentioned by senator Renan Calheiros (MDB-AL), responsible for conducting investigations into the Master case at the Economic Affairs Committee.
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At the time, the parliamentarian stated that the amendment included in the project was more serious than the so-called “Master amendment” attributed to senator Ciro Nogueira (PP-PI), precisely because it had been incorporated into federal legislation.
Undue intervention
Rapporteur of the action at the STF, Minister Flávio Dino concluded that the requirement created an obligation incompatible with the constitutional principles that govern economic activity.
According to the judge, the rule took away from financial institutions the possibility of evaluating the convenience and risks of investment, imposing a compulsory allocation of resources regardless of the characteristics of each company.
For Dino, the measure violated the principle of free enterprise by restricting the autonomy of entities in managing their portfolios and investment policies.
The minister also stated that the rule violated the principle of equality by imposing the charge precisely on sectors that are not among the main emitters of greenhouse gases.
Another point highlighted by the rapporteur was the lack of adaptation rules for the market. According to Dino, the requirement came into effect without a transition period and without mechanisms that would allow institutions to gradually adjust their investment strategies.
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The minister noted that the regulated carbon market is still in the development phase and presents relevant operational and regulatory uncertainties. For this reason, it understood that the change compromised legal security and the legitimate trust of economic agents.
Unanimous score
The understanding was followed by all the Court’s ministers in a trial held in the virtual plenary and concluded on Friday (29).
With the decision, there is no longer a legal obligation to direct part of insurers’ technical reserves to assets related to the carbon market.
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The remainder of the carbon market regulatory framework remains in force. The Supreme Court’s decision only affects the section that made the investment of resources from the insurance sector in this segment compulsory.
