ADI 6932 (Eletrobras Privatization)

Summary:

In July 15, 2021, several political parties (PSB, PSOL, Rede, PT, PDT and PCdoB) filed a Direct Action of Unconstitutionality, with a request for precautionary measures, in the Brazilian Supreme Court. The action challenges Law 14.182/2021, which deals with the privatization of the national electricity company Eletrobras and promotes changes in the Brazilian electricity sector regime. The law derived from a provisional measure, which can only be adopted in exceptional circumstances. The plaintiffs argue that the provisional measure, which was then turned into the law in question, lacked the requirement of urgency, circumventing the regular legislative process. They claim that, when considering the conversion of the provisional measure, the National Congress approved amendments that resulted in substantial changes to Brazilian energy planning. The final wording of the provisions reveals an undue attempt to prevent a possible veto by the President of the Republic. The Law, under the terms approved, requires the mandatory contracting of energy from small hydroelectric power plants and natural gas thermoelectric plants. The plaintiffs argue that such a requirement makes the necessary decarbonization of the Brazilian energy matrix more distant and will lead to an increase in annual greenhouse gas emissions (GHG), in breach of the commitments made under the Paris Agreement and by the President of the Republic at COP26. The plaintiffs point out that the enactment of the Law violates the legal and constitutional order since it is contrary to the duty to act in favor of the protection of intact and stable climatic conditions. The Law also authorizes the Federal Union to start the construction of the Linhão de Tucuruí (transmission line), disregarding the administrative processes of environmental permitting and consultation and affecting indigenous groups.

The plaintiffs request (i) that a precautionary measure be granted to determine the immediate suspension of the effectiveness of Law 14.182/2021 or, alternatively, the suspension of specific articles and, (ii) on the merits, that said law be declared unconstitutional in its entirety or, alternatively, the unconstitutionality of specific articles.

The Chief Justice of the STF determined, due to the relevance of the matter, that the decision be taken definitively by the Court, through the adoption of an abbreviated rite.

At Issue: Whether a law privatizing a national electric company and making changes to the electricity plans in Brazil is unconstitutional.