Supreme Court Endorses Allocation of R$2.5 Billion Petrobras Penalty

RIO DE JANEIRO, BRAZIL – Federal Supreme Court (STF) Justice Alexandre de Moraes ratified on Tuesday, September 17th the agreement to allocate R$1 billion (US$250 million) for the preservation of the Amazon, and R$1.6 billion for the area of education.

The funds originate from a penalty paid by Petrobras to Brazilian authorities following an agreement with the US government.

With this approval, Moraes authorized the “immediate” transfer of funds, which are deposited in an account with the Caixa Econômica Federal, to the National Treasury’s single account.

Of the total of R$1 billion allocated to the Legal Amazon, R$430 million should be transferred by the federal government to the states of the region, taking into consideration the deforested area and the number of fires in each state, among other factors such as land area and estimated population.

The concept of allocating part of the money paid by Petrobras for the preservation of the Amazon was put forward by the Steering Committee of the lower house and also by the Prosecutor General, Raquel Dodge, after the international repercussion with the increase in the number of fires in the Amazon Rainforest.

Initially, the prosecutor general and members of Congress advocated that the entire amount be paid to the federal treasury, to be applied in the areas of education and science.

On September 5th, an agreement sealing the allocation of resources for the Amazon and education was signed by the prosecutor general, by the presidents of the Chamber of Deputies and Senate, as well as by Solicitor General André Mendonça, and the general counsel of the National Treasury.

“The defense of the Amazon, which is Brazilian heritage, is very important, and it now has the funds for agriculture, technical assistance, land tenure regularization, fire prevention and also forest regeneration,” said Raquel Dodge after the agreement was signed.

Fund

Justice Alexandre de Moraes is the rapporteur of two lawsuits, which deal with the allocation of more than R$2.5 billion that Petrobras has committed to passing on to Brazilian authorities after the agreement signed with the United States Department of Justice.

With Petrobras agreeing to pay the amount, the US authorities pledged not to sue it for damages sustained by shareholders due to the corruption uncovered by Operation Lava Jato.

Initially, a second agreement between Petrobras and the Lava Jato task force in Paraná provided for the money to be allocated to a foundation to be managed by the Paraná Federal Prosecutor’s Office (MPF), but Justice Moraes, after being notified by the Prosecutor General’s Office, considered that such an allocation would be illegal,, and blocked the amount by a temporary restraining order issued in March.

According to the STF Justice, the agreement signed between Petrobras and the Federal Prosecutor’s Office in Paraná “disrespected the fundamental precepts of separation of powers, respect for institutional leadership, unity, the MPF’s operational and financial independence and the republican principles and administrative legality and morality, since both parties to the agreement had no legitimacy to sign it”.

Amazon

Of the R$1.06 billion allocated to the Legal Amazon, it was determined that the funds should necessarily be invested in “prevention, inspection and fighting deforestation, forest fires, and environmental crimes”.

Of the money earmarked for the Amazon, in addition to the R$430 million to be transferred to the region’s states, R$630 million must be used by the Federal government in operations to guarantee law and order in the region, to be carried out under the supervision of the Ministry of Defense; in liability actions to be instigated by the Ministry of Environment and the Brazilian Institute for Environment and Renewable Natural Resources (IBAMA); and in land tenure, to be implemented by the Ministry of Agriculture.

Education

The portion of R$1.6 billion earmarked for education shall be employed by the federal government as follows: R$1.001 billion to early childhood education to be carried out by the Ministry of Education; R$250 million in early childhood development, through the Happy Child program, managed by the Ministry of Citizenship; and R$100 million for social-educational actions in cooperation with the states, preferably through the Ministry of Women, Family and Human Rights.

(Source: Agência Brasil)