Mexico, Governor Raises Stakes in Electricity Regulation Dispute

On 16 June the governor of Mexico’s Jalisco state, Enrique Alfaro, announced that his government will formally ask the supreme court (SCJN) to invalidate the changes to the country’s electricity market regulations recently introduced by the federal government on constitutional grounds.
Mexico Electricity Regulation Dispute

Analysis:

The announcement raises the stakes in the ongoing legal dispute over the controversial new regulations introduced by the government led by President Andrés Manuel López Obrador. The new regulations have been denounced as an illegal attempt to restrict private sector participation in the market by business organisations and as an effort to undermine the move towards cleaner renewable energy production, in violation of constitutional environmental protection provisions, by environmental groups. Various legal challenges have already been filed on these grounds in lower courts. Alfaro’s move would expedite the judicial process and bring the case directly to the SCJN, increasing the likelihood of an institutional clash should the SCJN rule against the government.

  • Alfaro, the current coordinator of the environmental and climate change commission at the national conference of governors (Conago), said that he has decided to take case to the SCJN for considering that the new regulation represents a “setback” for the country’s energy, climate, and public health policies. He said this will have environmental, social, and economic consequences that will affect all states which is why he had decided to challenge it in the courts.
  • According to Alfaro, the changes run counter to the ecological and environmental protection provisions contained in constitutional Art. 73. He said that he was confident that the SCJN would agree to hear the case and enforce the constitution to “prevent the federal government from continuing to compromise Mexico’s and the world’s future” by failing to protect the environment and undermine efforts to slow climate change.

Looking Ahead:

A member of the leftist opposition Movimiento Ciudadano (MC) party and part of the group of dissident governors that are publicly critical of the López Obrador administration, Alfaro said the decision to file the complaint is in line with an agreement reached on 5 June with governors from north-eastern and Pacific states. This gives the complaint added weight that could force the SCJN into analysing it.

In brief: Mexico dropped from Kearney’s FDI Confidence Index

* Mexico has been dropped from global consultancy firm Kearney’s 2020 Foreign Direct Investment (FDI) Confidence Index. The local media cites Kearney as saying that despite the ratification of the US-Canada-Mexico (USMCA) trade agreement, and the ‘nearshoring’ phenomenon of countries seeking nearby supply chains, Mexico needs to “refocus efforts to recover the confidence of foreign investors”. The only other year that Mexico was left off the index, which was first released in 1998, was in 2011. The index is based on a survey of 500 senior executives of the world’s leading corporations, to determine their likelihood of making a direct investment in a market over the next three years, in order to rank the top 25 most attractive countries for FDI. Mexico has also fallen three places in the ‘World Competitiveness Ranking 2020’ released by Swiss business school IMD, dropping from 50 to 53 out of the 63 places available.

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