Justice Flávio Dino’s injunction even halts antitrust actions; CADE plans to appeal.
Supreme Court Justice Flávio Dino has suspended all judicial and administrative proceedings concerning the legality of Brazil’s Soy Moratorium, including ongoing investigations by the Administrative Council for Economic Defense (CADE). The Supreme Court confirmed the injunction by a majority vote. The decision has raised hopes among companies and government officials that the agreement may survive with adjustments, though the antitrust agency intends to appeal.
The Soy Moratorium commits signatory trading companies not to purchase soybeans grown in areas of the Amazon biome deforested after July 2008.
In his ruling, Justice Dino ordered the suspension of two administrative cases at CADE, effectively halting the investigation launched on Tuesday (4) into possible antitrust violations by individual executives and directors of companies participating in the moratorium.
The injunction also froze a class action in progress at the Specialized Civil Court in Cuiabá, among other cases. All proceedings will remain suspended until the Supreme Court issues a final ruling. The injunction is scheduled for virtual plenary review between November 14 and 25.
CADE President Gustavo Augusto told Valor that the agency would comply with the order but plans to appeal once officially notified. “The ruling on Direct Action of Unconstitutionality (ADI) 7774 has no connection with the ongoing CADE investigations—they address separate matters,” he said.
The ADI challenges a Mato Grosso state law that withdraws tax benefits from companies participating in the Moratorium. On Tuesday, the Supreme Court upheld the law’s constitutionality by majority vote.
In his latest ruling, which suspended all other related proceedings, Mr. Dino wrote that the continuation of parallel cases could lead to conflicting rulings inconsistent with the Supreme Court’s position.
“That would amount to legal turmoil even before a final Supreme Court decision, with potential for severe economic consequences,”
he stated.
The minister further noted that the Soy Moratorium “has strengthened Brazil’s credibility in meeting international environmental protection commitments, reinforcing its role as a supplier of sustainable agricultural products to global markets,” and that, in principle, it has “not been marked by illegality.” However, he added, “this does not mean that the agreement cannot eventually be debated and renegotiated, given that nearly two decades have passed.”
Observers interpreted Mr. Dino’s remarks as an opening for renegotiation, a prospect welcomed by Agriculture Minister Carlos Fávaro. “A good agreement is better than a lengthy dispute,” he told reporters after an event at the Ministry of Agriculture.
“Any high-handedness is unhelpful. It’s essential to establish dialogue among producers, trading companies, and even environmental groups so they can reaffirm their commitment to environmental respect and good agricultural practices, which most producers already follow, but ensuring production within the law,”
Mr. Fávaro said.
According to the minister, trading companies now acknowledge that the moratorium has taken on “exaggerated” proportions and has become an obstacle to marketing soy produced legally under the Forest Code—affecting at least 1 million hectares in Mato Grosso.
“When the agreement was first established, no one could have foreseen its consequences 10 or 15 years later. In Mato Grosso, for example, about 1 million hectares legally converted for farming are now facing sales restrictions,”
he said.
Mr. Dino’s injunction was well received by trading firms, which view it as a step toward a consensus-based renegotiation of the moratorium under the Supreme Court’s oversight, while preserving its achievements to date. But soybean producers, still firmly opposed to the agreement, had been counting on CADE’s investigations to challenge the moratorium and potentially damage companies financially, and affect the reputation of their executives.
In a statement, the Brazilian Association of Vegetable Oil Industries (Abiove) welcomed Dino’s decision, saying it reaffirmed the sector’s position that CADE’s recent actions “were cause for concern.” The organization added that “the ruling once again recognizes the legality of the Soy Moratorium by suspending all judicial and administrative attempts to prove otherwise.”
Meanwhile, the Mato Grosso Soy Producers Association (Aprosoja-MT) said it “reaffirms its confidence in the institutions and in due legal process, certain that CADE’s technical work will help ensure free competition, equal treatment among producers, and compliance with Brazilian law.” The group said it “respects” the decision and “trusts that the Court’s plenary will uphold the antitrust authority’s technical findings so far.”
Recent moves by CADE had alarmed trading companies. After opening an investigation in September into signatory firms, the agency launched a second probe on Tuesday to determine whether individuals, executives and directors of companies bound by the agreement, had engaged in anti-competitive behavior.
Source: Valor International
