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Mato Grosso State Law against the Soy Moratorium - decision

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In September 2024, the political parties Partido Comunista do Brasil, Rede Sustentabilidade, Partido Verde and Partido Socialismo e Liberdade (PSOL) filed a Direct Action of Unconstitutionality (ADI) with a request for a preliminary injunction, seeking the declaration of unconstitutionality of Articles 1, 2, 3, 4, 5, and 6 of Law 12,709/2024 of the State of Mato Grosso. The law came into force on January 1, 2025, and aims to terminate the sectoral agreement known as the "Soy Moratorium," recognized as one of the most successful programs reconciling the development of large-scale agricultural production with environmental sustainability. This agreement regulates the granting of tax incentives and the allocation of public land to agribusiness companies with internal purchasing policies to avoid acquiring agricultural goods (soy, corn, cattle, etc.) produced in recently deforested areas. The plaintiffs argue that, regarding formal unconstitutionality, the matter falls under the exclusive initiative of the Executive Branch. As for material unconstitutionality, they claim that the law penalizes legal entities that adopt sustainable purchasing policies and favors suppliers that promote the destruction of the Amazon Rainforest, which would violate the principles of equality and free enterprise enshrined in the Federal Constitution. It was also emphasized that this law violates the protection of acquired rights, perfected legal acts, the defense of the environment as a fundamental principle of the national tax system, the right to an ecologically balanced environment, the duty to protect the environment, and the principle of prohibiting setbacks in environmental protection. It was highlighted that this law represents a setback in the fight against climate change, considering the commitments made under the Declaration of the United Nations Conference on the Human Environment, the United Nations Framework Convention on Climate Change, the Kyoto Protocol, and the Paris Agreement, which hold supralegal status. The plaintiffs requested, as part of the preliminary injunction, the granting of the requested precautionary measure to suspend the effects of the aforementioned articles of Law 12,709/2024 of the State of Mato Grosso. In the final judgment, they seek a ruling in favor of the ADI to declare the unconstitutionality of the aforementioned articles of the Law.

In a preliminary decision, the Reporting Justice found that the legal plausibility of the request for urgent relief had been demonstrated and granted the precautionary measure to suspend the effectiveness of State Law 12,709/2024.

Mato Grosso State Law against the Soy Moratorium

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A tax advantage is an economic benefit applied to certain accounts or investments that are, by law, tax-reduced, tax-deferred, or tax-free. This can apply to investments in areas such as green energy projects or the agricultural sector, where tax advantages can help manage financial risks.

The activities of industries that transforms raw materials into finished goods through industrial processes.

Mato Grosso State Law against the Soy Moratorium - decision

Policy instrument

Risk

Economic sector

Finance