Brazil’s Supreme Court sends soy moratorium case to conciliation center.

The Brazilian Supreme Court (STF) decided to refer two cases to the Consensual Conflict Resolution Center (Nusol) that discuss the validity of state regulations that restrict the granting of tax incentives and public land to agribusiness companies participating in trade agreements that limit agricultural expansion, such as the “soybean moratorium”. The measure was adopted this Thursday (19), after the reading of the reports and oral arguments in Direct Actions of Unconstitutionality (ADIs) 7774 and 7775. With the referral, the judgment was suspended, and it will be up to Nusol, with the support of the economic advisory of the Court's Presidency, to seek a consensual solution between the parties within 90 days, extendable at the discretion of the rapporteurs. The rapporteur of ADI 7775, Minister Dias Toffoli, highlighted the need to avoid the multiplication of litigation on the subject in the lower courts. “Regardless of the decision we may make here in the abstract, endless demands may arise in the ordinary courts,” he stated, proposing the search for a consensual solution. :: Soy Moratorium The so-called “soy moratorium” is a voluntary agreement that restricts the commercialization of the product originating from deforested areas of the Amazon after July 2008. In ADI 7774, reported by Minister Flávio Dino, several political parties are challenging Mato Grosso State Law 12.709/2024, which prohibits the granting of tax incentives and public land to companies that adhere to the agreement. The process is in the stage of referendum on the preliminary injunction already granted by the rapporteur, which suspended judicial and administrative proceedings on the subject until the final judgment. :: Agricultural Expansion In ADI 7775, which is being judged on its merits, the same authors contest the constitutionality of Rondônia State Law 5.837/2024, which removes tax incentives from agro-industrial companies that participate in agreements that impose restrictions on the expansion of agricultural activity in areas not protected by specific environmental legislation. :: Oral Arguments For the Brazilian Association of Vegetable Oil Industries (Abiove), lawyer Guilherme Silveira Coelho defended the unconstitutionality of the state laws. He argued that the laws create a "prohibition on access to tax benefits for those who protect the environment," reversing the constitutional logic of encouraging environmentally responsible conduct. For the Attorney General's Office (AGU), lawyer João Pedro Antunes Lima da Fonseca also defended the unconstitutionality of the Rondônia law and the suspension of judicial and administrative actions until the Supreme Federal Court (STF) makes a final decision. According to him, the Rondônia law improperly uses the extra-fiscal function of taxes by "punishing" companies that adopt higher environmental standards and "rewarding" those that only comply with the legal minimum. Lawyer Lauro Rodrigues de Moraes Rêgo Júnior, representing the Green Party, one of the parties that filed the lawsuits, defended the constitutionality of the soy moratorium as a legitimate environmental protection agreement and criticized state laws that punish those who adopt higher standards. He argued that there is no competitive illegality and that the state law represents a setback. :: Interested parties admitted For WWF Brazil, lawyer Danilo Ferreira Almeida Farias argued that the moratorium is an effective collective instrument to combat deforestation and is part of environmental public policies. Farias defended maintaining the injunction and the unconstitutionality of the laws, highlighting that the agreement "contributed to dissociating the expansion of soy production from the advance of deforestation." The Brazilian Association of Soybean Producers (Aprosoja Brasil) and the Mato Grosso State Association (Aprosoja-MT), represented by lawyer Sidney Pereira de Souza Júnior, criticized the moratorium. Sidney stated that it harms producers who operate legally and creates trade barriers, and defended the continuation of investigations and compensation actions. According to him, the agreement violates sovereignty, free competition, and the producer's right to produce. Lawyer Amanda Flávio de Oliveira, representing the Confederation of Agriculture and Livestock of Brazil (CNA), argued that the moratorium is not an environmental policy, but a private agreement with anti-competitive effects. Defending the constitutionality of the state laws, she stated that they "have nothing to do with environmental protection" and classified the agreement as a "classic cartel." For Greenpeace Brazil, lawyer Ângela Moura Barbosa argued that the state laws punish voluntary environmental initiatives. According to her, the moratorium strengthens climate commitments and reduces deforestation. "The regulations have the clear objective of punishing those who do more than environmental legislation dictates," she stated. Lawyer Vivian Maria Pereira Ferreira, from the Climate Observatory, pointed out weaknesses in state control of deforestation and highlighted the role of the moratorium as a complementary mechanism. In her assessment, the laws encourage deforestation, reduce environmental protection, and "penalize those who do more for the environment." Representing the Instituto Centro de Vida (ICV) and the Socio-environmental Observatory of Mato Grosso, lawyer Nauê Bernardo Pinheiro de Azevedo presented economic and environmental data to support the importance of the moratorium and the risks of its weakening. He defended maintaining the injunction and the validity of the action. He emphasized that "doing more than the law allows cannot be a bad thing" and invoked the precautionary principle. 

This text was translated by machine from Brazilian Portuguese.