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Coalition Warns of risk to the Forest Code in Adopting the Criterion of Ecological Identity for Legal Reserve Compensation

The Brazilian Coalition on Climate, Forests and Agriculture expresses its concern over the ruling on motions for clarification in Direct Unconstitutionality Actions (ADI, in Portuguese acronym) on the Forest Code. The motions for clarification address the application of “ecological identity” as a criterion in the procedures foreseen in the law for compensating Legal Reserves. However, this concept will have serious implications for the Forest Code’s implementation, impacting on state administrations, land tenure regularization of conservation units (CUs) and producers whose Legal Reserves have already been regularized via compensation.

Enacted in May 2012, the Native Vegetation Protection Law, known as the Forest Code, established a framework for the protection and recovery of Brazil’s natural heritage. To this day, however, its implementation faces a series of challenges. In 2013, several provisions were questioned by means of Direct Unconstitutionality Actions (ADI) presented to the Supreme Court, such as the compensation of Legal Reserves for the environmental regularization of properties with rural areas consolidated before 2008. 

In 2018, the Court ruled in favor of the constitutionality of Legal Reserve compensation but presented a contradictory vote in relation to Environmental Reserve Quotas (CRA). The Court diverged on article 48, paragraph 2, by establishing that it is necessary to interpret it in accordance with the Federal Constitution for compensation by means of CRA, specifying that it must be done in areas with the same “ecological identity”, rather than the same biome. However, the possible change to “ecological identity” conflicts with the parameters established in article 66, paragraphs 5 and 6, for the other Legal Reserve compensation methods, upheld as constitutional by the Supreme Court. Due to this incongruity, which generated uncertainty and doubt about the Supreme Court’s decision, a motion for clarification was filed by the Federal Attorney General’s Office (AGU) and the Progressive Party, seeking clarification.

Six of the STF’s 11 ministers have cast their votes, but the vote is suspended due to Ministry Luís Roberto Barroso’s request for a review. This moment provides an opportunity for the members of the Supreme Court to deepen their analysis taking into consideration the perspective of professionals involved in the Forest Code’s implementation, renowned scientists, and jurists, along with leaders from business, agribusiness, and Brazilian environmentalism. 

The law restricted the possibility of compensation between properties located within the same biome, leaving state governments with the prerogative to analyze each case and decide whether to accept the proposed compensation. A decision that establishes a new criterion for Legal Reserve Compensation mechanisms, 11 years after the law was enacted, without modulating the effects of this decision, will result in a series of negative impacts on the implementation of the Forest Code, among which we must highlight:

The Coalition recommends that there should be no changes in the understanding of what has been exhaustively discussed in the National Congress, to move forward with the implementation of the legislation. This will mainly guarantee the environmental regularization of rural properties, the fight against illegal deforestation and the achievement of the goal of restoring 12 million hectares of native vegetation, which is essential to meet the Paris Agreement targets. 

The Forest Code’s implementation is crucial for people’s welfare and the competitiveness of Brazilian agribusiness. It is a strategic measure for the country to boost sustainable development, achieve its climate goals, conserve its biodiversity, and develop a low-carbon economy based on nature-based solutions. It’s time to overcome the political, technical, and operational challenges that have delayed the law’s implementation for almost 12 years.

¹  There are currently 18 state forestry regulations in force concerning Environmental Regularization Programs (PRA), providing for the same biome as a compensation criterion for regularizing Legal Reserve liabilities (FGVAgro – OCBio, 2023)

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