One month into his first term, Brazilian President Jair Bolsonaro has taken his first swipe at the country’s minimum freight rates policy that was set up under the previous government to end an 11-day truckers strike in May of 2018.
In an official letter from the Economy Ministry to the Supreme Court Justice Luiz Fux, who is overseeing legal challenges to the new freight rates law, the new government called last year’s strike an “abuse of the right to strike” on the part of the trucking companies and labeled the truckers as “conspirators”.
The letter went on to say that former President Michel Temer was coerced into creating the policy of minimum freight rates to meet the truckers’ demands for them to end the strike last year.
“Fixing prices, protecting markets and guaranteeing economic benefits… for those in question in the process of price formation institutionalises a cartel,” the letter added.
Bolsonaro was elected in October 2018 with strong support from Brazil’s agricultural sector, which has opposed the minimum freight rates, saying they raise the sector’s transport costs by 100% or more in many cases.
The letter adds that “the legislation’s creation (of the minimum freight rates) was a private sector initiative, lacking public participation, to bring about the will of the conspirators.”
The letter to the high court also addressed Brazil’s anti-trust agency CADE and the Public Prosecutor’s Office, calling on them to investigate the alleged illegal conduct of the trucking industry and to impose sanctions and criminal penalties when justified.
Justice Fux is overseeing three principal appeals of the new freight rate law at the high court, which is due to decide on its constitutionality in the coming weeks to months.
As part of former President Temer’s concessions to the truckers to end the strike last year, the government granted subsidized discounts on the price of diesel, since the high price of the fuel was the main complaint of the truckers during the strike.
The new chief executive of the state-run oil company Petrobras, Castello Branco, also criticised the previous government’s decision to subsidise fuel prices saying it damaged the traded company’s image in investors’ eyes.
The subsidy ended on January 1.
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