Power sector reforms launched in Mexico

10/04/2021

Source: World Nuclear News

In a press conference at Cuernavaca on 1 October, López Obrador said that reforms put to the Chamber of Deputies on 30 September would give CFE its rightful place in the power system. They would effectively undo reforms made in 2014 intended to increase competition.

Obrador said that private companies had been encouraged to enter the Mexican power market at CFE’s expense. He said they had been able to generate power and make money while CFE power plants were required to be idle, and were able to use the national power grid for no cost.

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Mexican business council blasts ‘unilateral’ labor reform push

12/02/19 – Reuters

By David Alire Garcia and Lizbeth Diaz

Mexico’s main business lobby sharply criticized a ruling party senator for what it described as a “unilateral” move to schedule a Tuesday vote on a labor reform that it described as a ban on subcontracting.

The Business Coordinating Council (CCE) said in statement issued late on Monday that Sen. Napoleon Gomez, a member of leftist President Andres Manuel Lopez Obrador’s MORENA party, had scheduled a committee vote on the measure without any dialogue with business leaders.

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Mexico’s Clean Energy Sector Gets Renewable Credit Win

11/29/19  – Bloomberg

By Justin Villamil

Mexico’s clean energy industry was handed a big win on Thursday after a federal court reversed an earlier decision on a renewable credits rule change that critics said would have been damaging to the sector.

After clean energy companies, including American power generator AES Corp. and Italian utility giant Enel SpA, filed for injunctions in courts across Mexico, a federal judge in Mexico City reversed a lower court decision of the rule change on Thursday, according to people familiar with the case who asked not to be identified as the information isn’t public.

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In Mexico City, Comedians Punish Society’s Scofflaws With Humiliation

3/3/2016 New York Times

Acting on a tip from a disgruntled neighbor, two comedians dressed as drag queens confronted parking officers in broad daylight.

The pair wanted to know why the officers, who so ruthlessly enforced parking limits, had never so much as given a warning to the local fruit salesman, whose battered Ford Explorer sat illegally parked all day, everyday, in the upper-class neighborhood of Polanco.

“So apparently, this car is protected by the god of fruits,” yelled Arturo Hernández, the founder of the Supercívicos, an activist group of comedians whose mission is to embarrass the bad actors of Mexican society with punishing humor. “My, what healthy corruption we have going on here,” he said.

The comedians, who brought a camera crew with them, had every intention of making a scene. One of the officers laughed in response, until she was reminded that the video would be uploaded and watched by, at last count, nearly 200,000 people.

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Mexico: From a Drug War to a War Against Corruption

2/16/2016 Mexico Institute, The Expert Take

By Viridiana Rios

Frustration. Such is the feeling that permeates Mexican citizens who have seen corruption and security scandals breaking one after another, year after year.

Cases like the disappearance of 43 students at Ayotzinapa, the release of private audios showing government contractors describing corruption operations in infrastructure developments, and the identification of millionaire government funds poured into programs without proper evaluations of impact, have all contributed to the founded belief that corruption is one of the most daunting problems Mexico is facing currently.

The Mexican government has proven unable to diminish such frustration, and thus is paying a brutal toll in terms of its credibility. Corruption scandals have been the main ingredient behind the sharp reduction in popularity of Mexico’s President, Mr. Peña Nieto. During the six months after Ms. Carmen Aristegui broke the news about him inhabiting a luxurious home that had not been declared as part of his assets, approval of the president fell 20 percentage points, sharply decreasing from 59% to 39%, according to Parametría, one of Mexico’s major polling companies.

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New Report on Judicial Reform by Justice in Mexico

By David A. Shirk and Octavio Rodriguez Ferreira, Justice in Mexico

October 8, 2015

On October 8, 2015, Justice in Mexico launched a new report that provides a deep analysis of the current process of judicial reform in Mexico. The Criminal Procedure Reform in Mexico 2008-2016, by authors Octavio Rodríguez Ferreira and David A. Shirk, analyzes the process of implementing judicial reform in Mexico as well as the impacts of the reform on the federal and state level, as well as some of the past, present and future challenges to implementation efforts. Overall, the authors find that despite obstacles to the reform’s implementation, significant progress has been made and will continue in the years to come.

In 2008 the Mexican Congress approved an eight-year process to improve the criminal justice system, in a reform known as the New Criminal Justice System (Nuevo Sistema de Justicia Penal, NSJP). The NSJP will replace the traditional mixed inquisitorial justice system with a more efficient adversarial model. The new system will be operational throughout the country by June 18, 2016.

Read the report…

Mexico’s Oil Auction: short-term disappointment v long-term progress

7/16/2015 Beyond Brics, The Financial Times

By Duncan Wood, Director, Mexico Institute

On Wednesday July 15, Juan Carlos Zepeda, the president of Mexico’s National Hydrocarbons Commission (CNH), announced the results of bidding for exploration contracts in 14 shallow water blocks in the Gulf of Mexico, the first time in over 75 years that production-sharing contracts have been awarded in the country. The results were eagerly awaited by energy industry analysts the world over. As the envelopes began to be opened, the president’s office and the CNH tweeted an inforgraphic stating that the process would be deemed a success if four to seven contracts were successfully awarded.

In the end, only two blocks were awarded, both to a consortium formed by Sierra Oil of Mexico, Talos Energy of the US and Premier Oil of the UK. The government received offers from just nine bidders (five individual companies and four consortia), a pitiful tally given that 49 companies each paid $365,000 to enter the data rooms and 25 of those companies pre-qualified to bid. Of the majors, only ENI and Statoil made bids, leaving most of the big names on the sidelines.

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Mexico Energy Reform Starts with Thud in Offshore Oil Auction

7/15/2015 BloombergBusiness

Mexico’s first auction of offshore oil leases fell short of the country’s expectations as several majors decided not to participate.

Only two of the 14 shallow-water blocks released on Wednesday received qualifying bids. Exxon Mobil Corp., Chevron Corp. and Total SA passed on the country’s sale of territory in the Gulf of Mexico, 77 years after the country nationalized crude. The 14 percent success rate was less than half the 30 percent to 50 percent goal that the government said would be its minimum for judging the event a success…

“This has to be crushingly disappointing for the government,” Duncan Wood, director of the Mexico Institute at the Woodrow Wilson International Center for Scholars in Washington, said Wednesday. “It has to be seen as a very clear message that they need to do a lot more to make the oil and gas opening a success.”

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Historic Mexican Oil Tender Fails to Attract Investors

7/16/2015 Financial Times

Crestfallen Mexican officials admitted that the historic tender to open the country’s oil sector to private investors for the first time in 80 years had fallen well short of expectations after only two of the 14 exploration blocks on offer were awarded.

In spite of government hopes of attracting an array of companies and netting some $18bn in investment if all blocks had been awarded on Wednesday, the same consortium comprising Mexican group Sierra Oil & Gas — Talos Energy of the US and Premier Oil of the UK — scooped both of the blocks…

….But as Duncan Wood, director of the Mexico Institute at the Wilson Center, noted, officials had been stressing all along that the only tenders likely to be impacted by the price fall were those for shale prospects, not those in cheap-to-develop shallow waters. “I think that has to be seen as an excuse,” he said. “The blocks on offer just weren’t particularly attractive.”

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New Publication | A Mandate for Mexico

By Lucy Conger

It was not so long ago that Mexico teetered on the brink of bankruptcy following a short-lived oil boom and a wild run of government spending. And, until quite recently, Mexico, despite sharing a 2,000-mile border with the United States, kept foreign goods out and gave domestic industries nearly exclusive access to a country-sized captive market.

Free trade has made Mexico a powerful manufacturing platform, a top global automobile assembler, and has radically diversified the economy, sharply reducing dependence on oil exports. The paradigm shift that unfettered Mexico’s protected and closed economy has been highly successful in creating a stable economic and policy environment and in making Mexico a marketfriendly global super-trader. But formidable challenges remain. Economic growth has slowed and consistently falls short of the level needed to create enough jobs to absorb the expanding domestic labor force.

Mexico is at a critical juncture. The record shows that the first wave of reforms that began 30 years ago failed to deliver the desired boost to economic growth and competitiveness. The reforms now underway promise even bigger changes for the economy, particularly by opening up the long closed petroleum industry. Looking ahead, can the new wave of reforms move Mexico into a higher gear, stimulate increases in productivity and economic growth, lubricate the economy with more credit, establish and enforce genuine competition in strategic sectors, and train the work force in modern skills? Or, three decades hence will we look back and say the Peña Nieto reforms were inadequately implemented and Mexico remains a low-growth, low-productivity economy?

This is a timely moment for reviewing Mexico’s success with deep economic reforms and asking what is required from here on in to make the new wave of reforms successful so that Mexico and Mexicans can enjoy the benefits of higher growth and productivity. This study offers a qualitative analysis of the deep economic reforms undertaken in Mexico during the past 30 years, the progress made and informed opinions on what is needed today to boost economic growth, enhance competitiveness and, hopefully, increase employment. The study summarizes the views about the successes and failures of the first wave of reforms as seen by a select group of former cabinet members and other prominent policy makers, consultants to government, opinion shapers in policy centers, and thought leaders in academia.

Download the report here.