Brazil lost ‘last bastion’ with Judiciary crisis, Schalka says

The manifesto has already gathered more than 15,000 signatures from business leaders, academics and public figures. Among them is Walter Schalka, a board member at Suzano and an active voice in civil society mobilizations, such as the letter in defense of democratic institutions released in 2022 amid pre-election tensions. According to him, the new initiative arises because after “repeated scandals” across different governments, the country has also lost its “bastion,” the Judiciary.

Schalka criticizes the fact that justices do not recuse themselves from cases involving relatives or situations in which they themselves received funding. “The combination of concentrated power with single-judge decisions creates an imperialism of decision-making that is not part of a democratic nation,” he says. “What was supposed to be a constitutional court has turned into a criminal court,” he adds.

In Schalka’s view, today “the Judiciary wants to legislate, the Legislature wants to execute, and the Executive is financially exhausted.” Beyond “putting each branch of government back in its proper box,” he argues that Brazil must work to attract investment and ensure an education system capable of retaining young people who, without hope, are leaving the country.

He says he will work for a presidential candidate who offers an alternative to the polarization between President Lula and the “Bolsonaro clan.” Below are key excerpts from his interview with Valor:

Valor: What motivated the manifesto and the petition for a code of conduct at the Supreme Court?

Walter Schalka: Over recent decades, we have seen repeated scandals in the Executive and the Legislature. In both there are serious people, but we see many deviations in behavior. The bastion we had was the Judiciary, a sense of security that institutions would be safeguarded by a branch that was absolutely unquestioned. That is why we strongly support the initiative by Justice Fachin and others. It is also necessary to extend this to other levels of the courts to restore confidence that decisions are based on technical criteria, not lobbying or economic interests.

Valor: Some causes raised in the past led to larger mobilizations. Is this the case with this manifesto?

Schalka: We started with the manifesto, but we want to turn this into a broader movement of society. Unfortunately, Brazilians are losing something fundamental: hope. We constantly hear bad news, which erodes confidence in the long-term viability of society. It also creates a very serious problem, which is brain drain. Young people want to leave Brazil—those who can. It is urgent to begin reversing this trend. We need to prepare the country for future generations, leveraging Brazil’s advantages for global integration.

Valor: Are there international references in discussions about the code?

Schalka: Several countries have codes of conduct for the Judiciary—Germany and England, for example. They serve as a basis to make it very clear to society and to judges what is acceptable and what is not.

Valor: What most stands out among things a Supreme Court justice should not do?

Schalka: It is hard to accept that, as we are seeing, justices do not recuse themselves from cases involving relatives or situations in which they received funding for trips or events abroad.

Valor: But within the Supreme Court itself, a group resists creating a code of conduct…

Schalka: The next question is: why not have a code of conduct? Watching a debate with Luciano Sica, president of the São Paulo Bar Association, he made it very clear: one thing is to discuss what will be in the code. Blocking its creation presumes a freedom of action that cannot be the basis for the moral and ethical standards of the highest body of the Judiciary.

Valor: What impact can the loss of credibility of the Judiciary have on society?

Schalka: If the three fundamental institutions—legislative, executive and judicial—have low credibility with the population, we lack the foundation to believe in a society capable of transforming itself and carrying out necessary reforms. In the case of the Judiciary, there are single-judge decisions. This combination of concentrated power with such decisions creates an imperialism of decision-making that is not part of a democratic nation.

Valor: With a code, who would oversee this “bastion”?

Schalka: The only way to change the Supreme Court is through impeachment, which the Senate decides. But what criteria should be used? With a code of conduct, we can say that the code is not being respected by Justice A or B and thereby generate grounds for disqualification.

Valor: In your assessment, has the Supreme Court acted beyond the limits of its constitutional mandate?

Schalka: The Supreme Court was created to be a constitutional court, but today a relevant part of it has become a criminal court. People want to bring everything to the Supreme Court. One example is the Master case. Shouldn’t it be in the first instance? But it went straight to the Supreme Court on the claim that a federal lawmaker was linked to the case. There is not even proof. This raises a troubling issue: lobbying. Brazil is a country that unfortunately has, at its core, a very bad combination of patrimonialism and corporatism, which means interests are constantly serving some group or category.

Valor: Some experts say the National Organic Law of the Judiciary, already applied to other levels, would be sufficient to regulate the Supreme Court as well. Was this discussed?

Schalka: No, we did not discuss this because the problem exists at other levels too. We are seeing cases of appellate judges linked to corruption. So the issue is not only the Supreme Court. In the past, people would say: this law applies or it doesn’t. Now, we don’t know what will happen.

Valor: What is your view on the frequent presence of Supreme Court justices at events and in the media?

Schalka: Twenty years ago, I didn’t know who the Supreme Court justices were, maybe one or two. Today I know all of them by heart and their ideological positions. The court has become an entity tied to political and ideological issues, not to defending the Constitution. The court needs to adopt a more reserved stance.

Valor: Does the fact that the president appoints justices compromise the court’s independence?

Schalka: That is true, with exceptions. In the past, nominees were people of great legal knowledge and high reputation. We had fantastic Supreme Court justices. After appointment, they should be absolutely neutral, focused only on constitutional matters. I want to add a caveat: Justice Edson Fachin was appointed by [former] president Dilma Rousseff and is absolutely committed to constitutional issues. That is a positive example. We all have natural biases, it’s human. But today the Judiciary wants to legislate.

Valor: Can you give an example?

Schalka: Marijuana possession. They assigned a specific number of grams. Why not three times more or less? That is for the Legislature to decide.

Valor: So there are role reversals among institutions?

Schalka: Today the Legislature wants to execute through budget amendments, taking a significant share of public funds. It amounts to R$60 billion a year, a massive sum. The Judiciary wants to legislate, and the Executive is tied up because it lacks budgetary space and has entered financial exhaustion. It does not carry out the necessary reforms, and the country stalls. With reforms, Brazil would have a chance to gain presence and offer opportunities to new generations.

Valor: And which reforms are most urgent?

Schalka: One is administrative reform. The Brazilian state is inefficient—it collects a lot and spends poorly. All privatizations have shown this. We also need a new pension reform. Brazil cannot spend R$1 trillion a year on a pension deficit.

Valor: You mentioned young people wanting to leave the country. How do you assess education in Brazil?

Schalka: Brazilian education is almost universal, but of very low quality. We are rapidly losing ground in rankings and training our young people based on an economic reality from 20 years ago, even though they will enter the workforce in 15 or 20 years. That means a gap of 35 to 40 years compared with the rest of the world, and Brazil is not waking up to this.

Valor: For the productive sector, what is the impact of this scenario?

Schalka: Brazil needs a significant reduction in interest rates and in country risk, and it needs to attract investment to generate what is essential for the population: jobs. I strongly support social programs, but we cannot measure them by the number of participants. The goal should be to gradually reduce that number by placing people in the labor market. Saying unemployment is low is misleading. The figure is correct, but 40 million people are not looking for jobs because they are doing informal work. They work, but do not want formal contracts to avoid losing social benefits. A country cannot be driven by people selling brigadeiros [sweets] on street corners. I am not against it, but that is not what moves a country forward.

Valor: Does being an election year make decisions harder?

Schalka: The government will use all the fuel left in the tank this year to reach the election. Whoever is elected will inherit an extremely difficult fiscal situation and will have to make decisions, which always leads to the issue of raising taxes.

Valor: What are your expectations for the presidential election?

Schalka: If the runoff is Lula versus someone from the Bolsonaro clan, Brazil will be in a very bad position. Neither side will help attract investment. I will work to ensure that the runoff includes someone who can restore fundamental values such as ethics and morality. When you join a company, a CEO creates a plan and evaluates competitive advantages to transform it. Brazil needs the same approach.

Valor: Is there already a candidate you intend to support? A “third way”?