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UNCLAS SECTION 01 OF 04 BRASILIA 000024 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR WHA/BSC 
DEPT PLEASE PASS USTR 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM KJUS SOCI EINV BR
SUBJECT: BRAZIL ENACTS FIRST WAVE OF SWEEPING JUDICIAL 
REFORMS 
 
REF: 04 BRASILIA 1076 
 
¶1. (SBU) SUMMARY.  Brazil's justice system does not enjoy the 
confidence of society, being widely-perceived as slow, 
inefficient and accessible only to the wealthy and powerful. 
But the failures of the courts are increasingly viewed as an 
impediment to social and economic development.  In December 
2004, Constitutional Amendment 45 --supported by President 
Lula, congressional leaders, and top judges-- became law.  It 
will streamline procedures in the Supreme Court and some 
lower courts, it strengthens human rights protections, 
introduces structural and professional reforms, and --most 
controversially-- it authorizes the creation of oversight 
bodies for judges and prosecutors.  Perhaps the greatest 
impact will come from the introduction of the principle of 
judicial precedent for the first time in Brazil (a civil code 
country).  A second bill to amend the Constitution and follow 
up on Amendment 45 is expected to pass in early 2005, and a 
third tranche of reform bills is not far behind.  These three 
measures are detailed below.  It is far too early to tell if 
the reforms will move the Brazilian judiciary towards 
efficiency, impartiality, and transparency, but judging by 
the political and public pressure, great attention will 
accompany them as they are put into practice.  END SUMMARY. 
 
TARNISHED REPUTATION 
-------------------- 
¶2. (SBU) A November 2003 survey by the Brazilian Bar 
Association found that the Brazilian judiciary is among the 
least trusted of the country's institutions: only 39% of 
respondents have confidence in the courts (by contrast, the 
press got 60% and Congress 34%).  Some 74% of respondents 
said they fully or partly agree with the common saying, 
"There is no justice for the poor, the black, or the 
prostitute".  One need only read the headlines to see why: 
high profile cases charging judges with corruption and 
influence peddling are common, and impunity seems widespread. 
 At the end of 2004, some 115 senior judges throughout the 
country were under investigation.  But the problem goes 
beyond corruption.  For years, Brazilian judges have been 
notoriously resistant to reform, criticism, and oversight, 
leading one government official to dub them the "black-robed 
mafia".  Judges are frequently in the press criticizing 
government policy, requesting raises, or avoiding jail. 
 
JUDGE JOBIM'S REFORM AGENDA 
--------------------------- 
¶3. (SBU) The public's perception is colored by the slowness 
of the legal system, caused less by  incompetence than by 
suffocating bureaucracy and outdated procedures.  A 2004 
study ordered by Judge Nelson Jobim, Chief Justice of the 
Supreme Federal Court (STF), found that at the end of 2003 
six million cases were in the federal courts alone (the 
volume in the state courts is five times greater), including 
2.7 million in the 3rd Federal District that includes Sao 
Paulo state.  The "congestion rate" in the federal courts was 
84%, meaning that for every 100 cases that entered the courts 
in 2003, whether newly-presented or carried over from the 
previous year, only 16 reached a resolution.  Judge Jobim 
took over as Brazil's highest judge in May 2004, replacing a 
bitterly anti-reform predecessor (ref A), and he has 
consulted closely with Congress and the administration as the 
various reform bills have been drafted and debated.  Jobim 
has criticized Brazil's law schools for turning out 
"philosopher judges" incapable of managing their courts 
efficiently, and he points out that the judiciary's legendary 
slowness has created a parallel gray-market justice system 
where parties may agree to settle for a fraction of damages 
rather than spend years tied up in various courts to reach an 
unpredictable conclusion.  For investors, foreign and 
domestic, the uncertainties created by this lack of 
transparency and predictability contribute greatly to the 
cost of doing business in Brazil.  The economic effects of 
this system are insidious, contributing, for example, to 
notoriously high loan spreads that Brazilian banks charge in 
order to cover the risk that courts will not enforce 
collection efforts. 
 
¶4. (U) A 2004 World Bank study using data from 2000 showed 
that (taking into account differences in purchasing power) 
Brazil's judicial system is the world's second most expensive 
(trailing only Italy) at US$33 per citizen per year, and that 
Brazilian judges are the second highest-paid in the world, 
trailing only the Canadians (U.S. judges are third).  The 
study also shows that as a percentage of government spending, 
Brazil's judiciary is the world's costliest at 3.66% of the 
total public budget. 
 
REFORMS -- TWELVE YEARS TO PASSAGE 
---------------------------------- 
¶5. (U) Soon after its passage in 1988, it became clear that 
Brazil's Constitution needed to be amended in order to 
modernize a lethargic and insular judiciary that had been 
left essentially unchanged for decades.  In 1992, a bill to 
amend the Constitution was introduced in the Chamber of 
Deputies, where it wallowed in various committees before 
finally passing a floor vote in 2000 and going to the upper 
house.  Its passage in the Senate was nearly as languid, and 
when it reached the floor in early 2003, President Lula da 
Silva, newly-elected and with his own reform ideas, sent it 
back to committee for changes.  In early 2004, a logjam broke 
as the Chief Justices of the two highest courts (STF and 
STJ), both of whom were bitterly opposed to the reforms, were 
coincidentally replaced by pro-reform Chief Justices.  On 8 
December 2004, the Senate formally approved two bills:  one 
with all the measures already approved in the Chamber that 
came into force immediately as Amendment 45 to the 
Constitution; and a second that includes new elements and 
must go back for a final Chamber vote in 2005. 
 
 
CONSTITUTIONAL AMENDMENT 45 
--------------------------- 
¶6. (U) Amendment 45 is now in force.  It includes reforms of 
the overburdened Supreme Court and certain lower courts.  It 
strengthens human rights protections and introduces 
structural and professional reforms, and --most 
controversially-- it authorizes the creation of oversight 
councils for judges and prosecutors.  Among its measures: 
 
SUPREME COURT REFORMS: 
- Limited Binding Precedent ("sumula vinculante").  Brazil 
has never used a precedent system, so its courts decide the 
same legal issues over and over, making the administration of 
justice both inefficient and unpredictable.  Chief Justice 
Jobim of the Supreme Federal Court (STF) once noted that this 
caused the high court to AVERAGE 85 decisions per day. 
Henceforth, STF decisions approved by at least eight of the 
11 justices must be followed by lower courts.  A study by the 
Getulio Vargas Foundation showed that in 2003, 17.3 million 
cases entered the judicial system (federal and state), 
meaning that each of Brazil's 13,000 judges averaged 1,300 
cases that year.  In the lower courts, some judges issue 300 
decisions per month.  These numbers could be significantly 
reduced as the precedent system take effect. 
 
- Supreme Court Discretion.  The STF must, by law, hear a 
wide range of cases, overwhelming its docket with procedural 
rulings.  Under the reform, the STF is accorded greater 
discretion to refuse to hear certain cases that lack "general 
significance". 
 
 
OTHER COURT REFORMS: 
- Special Land Courts.  Each court must create a special 
panel to hear land disputes. 
 
- Labor Courts.  The Superior Labor Court (TST) will gain ten 
new judges, for a total of 27.  At the lower level, if a 
locality does not have a Labor Judge, then an ordinary judge 
will be allowed to hear labor cases. 
 
- Circuit Riders.  Establishes circuit judges to address the 
grave problem of localities that go years without a judge. 
 
 
HUMAN RIGHTS REFORMS: 
- Federalization.  The Federal Prosecutor can step in and 
take over human rights cases from the states.   This is 
designed to overcome the not infrequent conflicts created 
when human rights violators are important local-level figures. 
 
- Treaties.  International human rights accords will have the 
weight of "constitutional law".  Amendment 45 also states 
that Brazil "submits itself to the International Criminal 
Court, whose creation it supported". 
 
 
STRUCTURAL REFORMS: 
- "Ombudsmen".  Each court will establish an independent 
ombuds office to hear complaints. 
 
- Procedural Rapidity.  Blocks promotion of judges who fail 
to decide cases in a timely manner. 
 
- Independent State Public Defenders.  State public defenders 
will have their own budgets and administrative autonomy.  In 
the past they were dependent on the state judiciary for 
resources and oversight, creating conflicts of interest. 
 
 
PROFESSIONAL REFORMS: 
- "Professional Quarantine".  Former judges and prosecutors 
are prohibited for three years from acting as lawyers in the 
courts where they previously worked. 
 
- Career Reforms.  Promotion decisions for judges and 
prosecutors will take into account their productivity.  At 
least three years' prior legal experience will be required of 
new judges. 
 
- "Collective Leave".  Courts must begin working as soon as 
the official recesses are over, ending the practice of the 
entire court taking personal leave to extend the recess. 
 
 
OVERSIGHT COUNCILS: 
- Within six months, two national-level oversight councils 
will be established over judges and prosecutors.  These 
so-called "external controls" were bitterly opposed by many 
of those affected and their professional associations.  The 
new National Justice Council (CNJ) will hear complaints and 
apply sanctions against judges and court employees.  It will 
have 15 members: 11 judges and prosecutors, two lawyers, and 
two members named by Congress.  The similar National 
Prosecutors' Council (CNMP) will be a 14-member body with 
oversight over federal and state prosecutors. 
 
 
SECOND BILL TO BE APPROVED BY CHAMBER IN 2005 
-------------------------------------------- 
¶7. (U)  A second set of reforms --also enshrined in a bill to 
amend the constitution-- passed the Senate in December and 
now goes back to the Chamber for a final vote.  It will 
follow up on Amendment 45 and is expected to become law in 
the first half of 2005.  It includes: 
 
- Blocking Appeals.  A sort of reverse precedent mechanism to 
combat wasteful appeals and to complement the precedent 
authority given to the STF in Amendment 45.  If lower courts 
issue rulings that coincide with prior decisions by the 
second and third highest courts --the Supreme Justice (STJ) 
and Superior Labor (TST) courts-- and if those higher court 
decisions are by two-thirds' majorities, then appeals are 
prohibited. 
 
- Independent Federal Public Defenders.  Comparable to the 
autonomy given to state defenders in Amendment 45. 
 
- Arbitration.  Brazil has few mechanisms for alternative 
dispute resolution (ADR).  The bill will allow parties to 
submit cases to an arbiter for a speedier decision.  It also 
creates new types of ADR including conciliation, mediation, 
and non-judicial arbitration. 
 
- Privileged Forum.  Currently, elected officials and cabinet 
members have the right to a "privileged forum", i.e., charges 
brought against them are heard by a high court rather than a 
common court.  Congress, not surprisingly, wishes to extend 
this benefit to former, as well as current, elected 
officials. 
 
- Nepotism.  Prohibits judges from hiring close relatives to 
positions under their authority. 
 
 
SUB-CONSTITUTIONAL REFORMS TO COME LATER 
---------------------------------------- 
¶8. (SBU) President Lula is already thinking about next steps. 
 On December 15, even as they celebrated the passage of 
Amendment 45, the heads of the three branches of government 
discussed so-called "infra-constitutional" (or 
"sub-constitutional") reforms.  This is a package of 23 bills 
--some new and some that have sat unmolested in Congress for 
years-- that the administration hopes to pass in the next 
year.  It is designed to increase efficiencies through 
changes in civil, penal, and labor law procedures.  It 
includes greater use of the principle of binding precedent, 
limitations on wasteful appeals, stricter adherence to court 
deadlines, and simplification of some family law procedures. 
Chief Justice Jobim is hopeful that the bills can be passed 
in early 2005, promising that "if that happens, by the end of 
the year some results will already begin to be felt". 
 
 
COMMENT - A LOT OF EYES ARE WATCHING 
------------------------------------ 
¶9. (SBU)  It is far too early to tell if these reforms will 
have the desired effect, but judging by the ambition 
reflected in their broad scope, by the solid support from 
President Lula, Congressional leaders, and key judges, and by 
the sense that Brazil's ossified judiciary has become a 
serious impediment to social and economic growth, there is 
reason to be encouraged that the reforms are at least a good 
first step.  But there remain resolutely anti-reformist 
pockets in the judiciary and others whose interests are 
threatened by a modern judicial system.  President Lula told 
the press in December that, "Society demands rapid, 
accessible, and adequate justice.  The broad constitutional 
reform that finally passed is a necessary condition for this 
to take place.  But it won't work on its own.  Now we need to 
put into practice the advances made in the reforms". 
Brazil's books are full of unenforced laws, but a combination 
of political pressure and support from the business community 
and the public suggest that many eyes are watching to see how 
these reforms are implemented --and to ensure that the 
judiciary becomes part of Brazil's solution rather than part 
of the problem. 
DANILOVICH