About truckers and elections. The strike that stopped Brazil and its consequences

Autor: Diogo Ciuffo Carneiro
10/07/2018 Imprimir Enviar E-mail

Before the World Cup began, Brazilians were worried about one thing only: truckers. In a country were around 80% of the goods are transported by trucks (rather than trains, boats or airplanes), the recent strike initiated by truckers on May had direct impact in Brazilians daily life. Fuel started to run short on the gas stations, authorities enacted improvised holidays, classes were adjourned, empty shelves in supermarkets. A real nightmare.

The strike could not have caught the government in a worst time, as the October national elections were soon approaching and population approval was as low as it could be. Truckers drove the government into a tight corner and, to avoid further chaos, the government gave in to almost all of the truckers revindications. For instance, taxes were reduced on diesel (even if there was not enough money to cover for the governmental lost on revenue) and Petrobras was forced to reduce diesel price (which lead to a dump on the price of its shares and to the resign of the company’s CEO).

Another revindication granted by the government was the creation of a reference table of minimum cargo transport freight prices . But a systematic price table for a continental country such as Brazil, with highly different roads situations, in a market with more than 700.000 transporters, prepared in a few rushed days could not work properly. Distortions in the table were immediately identified. The price of the freight would be doubled or tripled in some cases. All types of industries or business were affected, from agrobusiness to salt industries, lumber to food industries, literally everyone. The government was shifting the costs of the negotiation with truckers to the industries and, obliquely, to consumers (although Brazilian society has not yet fully understood the consequences of this table).

The reaction was also immediate. In a few days, a wave of individual lawsuit and class actions floated throughout the federal court system and preliminary injunctions were granted to restrain the application of the table. Plaintiffs argued that this regulation was a violation of the “free market” guarantee set forth in the Constitution, which it is indeed.

Three ações direta de inconstitucionalidade (which is a specific suit to declare a legislation unconstitutional with binding effects to the government and to all courts) were filed before the Supreme Court. There was a request for a preliminary injunction to be granted in such ações diretas de inconstitucionalidade. Even before rendering a decision on the preliminary injunction sought, Justice Fux stayed each and every lawsuit that deals with the freight price table and summoned the parties to conciliations hearings, in which, as expected, the parties didn’t reach a settlement. A public hearing is scheduled to mid August, this year.

Meantime, the situation is unpredictable. No one knows what is going to happen. Companies are uncertain whether to pay the full price set forth in the government table or to risk paying less and facing litigation. The uncertainty is tangible and has already lead to reflex on the market. The new president will certainly have a huge challenge ahead of him, which will demand a swift and though decision, otherwise the economy will once again pay the price.




© 2014 Bichara Advogados

Luiz Gustavo A. S. Bichara

bichara@bicharalaw.com.br Idiomas

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Luiz Gustavo A. S. Bichara

bichara@bicharalaw.com.br Idiomas

Área de atuação

Consultoria e Contencioso Cíveis e Contratos

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Donec in ligula id sem tristique ultrices eget id neque. Duis enim turpis, tempus at accumsan vitae, lobortis id sapien. Pellentesque nec orci mi, in pharetra ligula. Nulla facilisi. Nulla facilisi. Mauris convallis venenatis massa, quis consectetur felis ornare quis. Sed aliquet nunc ac ante molestie ultricies. Nam pulvinar ultricies bibendum. Vivamus diam leo, faucibus et vehicula eu, molestie sit amet dui. Proin nec orci et elit semper ultrices. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Sed quis urna mi, ac dignissim mauris. Quisque mollis ornare mauris, sed laoreet diam malesuada quis. Proin vel elementum ante. Donec hendrerit arcu ac odio tincidunt posuere. Vestibulum nec risus eu lacus semper viverra.

Luiz Gustavo A. S. Bichara

bichara@bicharalaw.com.br Idiomas

Área de atuação

Consultoria e Contencioso Cíveis e Contratos

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