Hogan Lovells BSTL SC
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Environment & Climate Change
The Ministry of Environment and Natural Resources recently published the Environment and Natural Resources Sector Programme for 2020 to 2024, which is the nationwide policy on environment. The policy sets out five main objectives that will serve as a guide for all other federal and local environmental policies, strategies and decisions and includes various methods for determining the progress made on the implementation of its strategies and achieving the goals set for 2024.
The National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector recently published guidelines for dismantling hydrocarbon sector activities. The guidelines are mandatory for all hydrocarbon sector facilities that carry out closing, dismantling or abandonment activities.
In 2018 the New General Law for Sustainable Forest Development entered into force, introducing new legal definitions with regard to the forestry regulatory framework. In April 2020 a seemingly small yet quite relevant amendment to the law was published in the Federal Official Gazette, making various adjustments to the legal definitions set out in Article 7 of the law.
Given the current situation brought about by COVID-19 and the subsequent suspension of private and governmental activities, the National Waters Commission (CONAGUA) has been reconsidering its online procedures system, which was initially published in the Federal Official Gazette on 1 October 2018 but was not implemented until late 2019. CONAGUA's ultimate goal in this respect is the complete substitution of traditional in-person-initiated procedures with their digital counterparts.
The Ministry of Environment and Natural Resources and the National Ecology and Climate Chance Institute are continuing to help Mexico achieve its climate-change-related air emissions goals through data analysis, policy management and the implementation of the emissions trading system pilot programme. As such, now is an ideal time for actors in industry and service sectors to evaluate their air emissions obligations. Further, additional obligations may apply to certain facilities due to the COVID-19 pandemic.
In October 2019 the General Circular Economy Law initiative was presented to the Senate for discussion and approval. The initiative was prepared in response to Mexico's increasing waste generation and aims to coordinate the attempts of the municipal, state and federal authorities to address this problem. As such, the initiative proposes granting several new powers to each level of government in order to foster the creation of a circular economy in Mexico.
The preliminary bases for Mexico's emissions trading system (ETS) pilot programme were recently published in the Federal Official Gazette. The ETS is one strategy adopted by Mexico to meet its goals under the Paris Agreement. The pilot programme will determine whether the ETS is a viable scheme for reducing Mexico's greenhouse gas emissions. Companies should follow the results closely, as these will be paramount in determining the characteristics of the operational phase.
The production of single-use plastics has increased exponentially in recent decades and in Mexico the volume of single-use plastic waste now exceeds the country's recycling capabilities. In response to growing concern over the effects that plastic waste may have on the environment, a series of legislative changes have recently been implemented. Companies should keep track of any waste-related initiatives introduced at the state and federal levels and prepare for upcoming changes to their obligations.
The National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector recently published NOM-001-ASEA-2019 (NOM-001) in the Federal Official Gazette. NOM-001's main aims are to establish criteria to classify the special types of waste produced in the hydrocarbons sector and establish which of these must be subject to a management plan, as well as determine the contents of special management and hazardous waste management plans.
In view of recent policy changes relating to hydrocarbons and gasoline distribution via pipelines, liability for the remediation of soil and water contamination derived from hydrocarbon spills and leaks at storage terminals and pipelines has become a hot topic. These policy changes have largely been aimed at tackling criminal activities that have contributed to soil and water contamination, such as fuel and hydrocarbon theft.
President Elect Andrés Manuel López Obrador has already published his environmental agenda, which sets out the objectives to be met and the strategies to be implemented during his six-year term. Under the agenda, a number of regulatory changes regarding air emissions, environmental impact assessments and coastal and marine zones will be introduced. In addition, Mexico will keep working towards its goals under the Paris Agreement and its administrative offices will undergo significant changes.
In recent years, Mexico has seen the significant deterioration of its forest resources, making it one of the 10 worst countries in terms of deforestation. To combat this issue, the New General Law for Sustainable Forest Development was recently published in the Federal Official Gazette. The law is an attempt to focus Mexico's forestry regulation on better management of resources, while also safeguarding human rights and social involvement.
The Ministry of Environment and Natural Resources recently published a decree granting administrative benefits for the issuance of new concession titles for exploiting national waters to persons that hold a title which expired after January 1 2004. Notably, the decree allows for the issuance of new concession titles even if the zone or specific aquifer from which the original concession title was authorised to extract water is now considered a restricted or banned zone or aquifer.
The National Waters Commission recently submitted to the Federal Regulatory Betterment Commission its draft revision of the Mexican official standard which establishes the maximum permissible levels of pollutants in wastewaters discharged into national waters or properties. The draft aims to modernise the standard by including additional terms and definitions, pollutants and parameters regarding wastewater discharges into federal waters, as well as new sampling and reporting frequency obligations.
The National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector recently filed a draft emergency Mexican official standard before the Federal Regulatory Betterment Commission. The draft establishes the criteria for classifying types of special and hazardous waste derived from the hydrocarbons sector, determines which types of waste are subject to a waste management plan and details the procedures for formulating such a plan.
Following the expansion of shale oil extraction projects and the discovery of unconventional hydrocarbon deposits, the National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector recently commenced a public consultation process to enact applicable water protection guidelines. The draft guidelines provide a glimpse of the authorities' preliminary approach to shale oil projects with regard to water resources and environmental protection.
ASEA issues environmental and safety guidelines for ground transportation of oil and petrochemicals through pipelinesMexico | 29 May 2017
As part of its expansion of operational safety and environmental protection guidelines and administrative provisions, the National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector turned its attention to oil, gas and petrochemical pipeline transportation activities. Recently issued guidelines complement the environmental legal framework so that both environmental and personal safety are guaranteed during the lifetime of a pipeline project.
ASEA issues guidelines to identify root cause of environmental and safety incidents in hydrocarbons sectorMexico | 20 February 2017
In light of its concerns regarding environmental and operational accidents arising from hydrocarbons projects, the National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector recently published the Guidelines to Carry Out the Root Cause Investigation for Incidents and Accidents. The guidelines aim to identify the root cause of an incident and determine the maintenance and preventive mechanisms that must be implemented in order to prevent such events in future.
Two important instruments were recently published which have generated a number of new environmental reporting obligations for companies involved in the hydrocarbons sector. In addition to these obligations, parties that cause an incident or spill during the execution of a project must undertake all applicable measures and actions to contain, mitigate and repair the environmental damage and contamination caused.
The Mexican hydrocarbons industry is undergoing several regulatory changes, including the introduction of new guidelines which establish insurance requirements to ensure environmental accountability. The guidelines provide specific coverage requirements depending on the type of activity conducted, which should be a step forward in effectively controlling and responding to environmental damage resulting from natural and anthropogenic causes.
In May 2016 new guidelines were published to address the significant environmental risks posed by the hydrocarbons industry and provide corresponding mitigation measures. It is hoped that the guidelines – which are binding on participants in the hydrocarbons sector – will encourage more environmentally accountable mechanisms and mitigate the types of environmental harm that the hydrocarbons industry has already caused.
Over the past few years significant progress has been made in the establishment of a national climate change framework. Most recently, the government has promoted a series of instruments and measures to meet the goals set out in the General Law for Climate Change and the commitments made at the United Nations Climate Change Conference in Paris.
Three judicial precedents were recently published concerning the interpretation and application of the Federal Law for Environmental Responsibility. These precedents address issues relating to the statute of limitations for filing suit for environmental responsibility, the right of civil associations to file such suits and the ability of the legislature to modify the fundamental right of access to justice under the law.
Mexico's recent structural energy reform has resulted in the creation of the Agency for Safety, Energy and Environment (ASEA), a specialised, decentralised administrative body of the Secretariat of Environmental and Natural Resources, dedicated to the environmental requirements of the hydrocarbons sector. The ASEA internal regulations recently came into effect, marking the formal start of ASEA's activities.
The Maritime Spills Law seeks to control and prevent the pollution or alteration of the sea caused by spillages deposited in Mexican maritime zones and outlines the events that will be considered 'spills or dumping'. These events will either be authorised or penalised under the law. The law will come into force on July 16 2014.
The Federal Environmental Liability Law has entered into force. The law is based on constitutional amendments which expressly establish direct responsibility for parties that cause damage and degradation to the environment and natural resources of Mexico. Environmental liability is a new concept under the Mexican legal system, and is separate from civil, administrative and criminal liability.
The National Climate Change Strategy was recently published in the Federal Official Gazette. Providing guidelines and policies to address the effects of climate change in Mexico, it also seeks to promote an inclusive long-term environmental policy focused on green growth by aligning goals, institutions, programmes and resources for such purposes for the next 40 years.
The draft bill for the Federal Act for Environmental Responsibility, currently under consideration by the House of Representatives, seeks to regulate liability for harm to the environment and mandate restoration and compensation for such harm. The draft act also includes alternative dispute settlement options and sets forth the general rules and requirements to file civil actions.
The Mexican Stock Exchange Market has launched a sustainability index. The index allows investors to identify companies in terms of their commitment to sustainable causes and compliance with environmental laws. It also provides an incentive for companies to engage in sustainable practices or else risk losing value and investment capital.
Two draft official standards - on waste for special treatment and hazardous waste - are expected to be approved in the coming months and will create new obligations in respect of waste management programmes. Generators of waste and other parties involved in waste handling would be well advised to start work on their management programmes.
Mexico is moving forward on climate change. The Senate has debated and approved the General Climate Change Bill which would create - among other things - a national climate change policy and an independent climate change authority. It sets out significant provisions on adaptation and mitigation, and on accessing federal and international funds for carbon capture and greenhouse gas reduction.
A constitutional amendment allowing class or representative actions on environmental matters represents a big step forward for Mexico's environmental law. The change will inevitably lead to increased exposure for individuals and entities in performing activities and securing approvals under federal environmental legislation.
Tech, Data, Telecoms & Media
Mexico recently introduced a new digital services tax. Under the new rules, paid-for digital services provided via digital content or apps through the Internet or any other fundamentally automated network are subject to specific value added tax rules if the user of the service is located in Mexico. This article provides a general summary of the new tax rules.
When the COVID-19 pandemic arrived in Mexico in Spring 2020, the Federal Telecommunications Institute issued a decree to order the maintenance of telecoms and broadcasting network operations, enhance information and communication technologies to counteract the effects of the contingency measures and encourage preventive measures and avoid the spread of misleading information. This article examines these provisions in brief.
In December 2019 the Federal Telecommunications Institute issued draft rules for public consultation to further regulate net neutrality in Mexico. Further discussions are anticipated following the consultation period and the definitive rules are expected to be published in mid-2020. Nonetheless, the publication of draft rules to regulate net neutrality is a positive step which has long been awaited by both industry players and non-governmental organisations.
A new state-owned company has been established to provide free internet services to all citizens in Mexico. The company aims to provide telecoms services without charge and guarantee the right of access to information technologies and communication (including internet and broadband), particularly to people without access to such services in Mexico.
The administration recently issued its National Development Plan 2019-2024, which – despite the previous administration's plans – does not mention cybersecurity. Although there are still hopes that cybersecurity will be addressed in the soon-to-be-released Communications and Transports Sectorial Programme 2019-2024, it appears that the present administration has no intention of implementing a cybersecurity strategy.
The Federal Electricity Commission recently published draft terms of reference for a new tender procedure in which 50,000km of two strands of dark fibre will be allocated for the provision of free internet services to all citizens under the so-called 'Internet for All' project. Specialist opinions on the project's feasibility have been mixed, and the president has stated that if no winner is published in the near future, he will create a government agency to provide internet services throughout the country.
The Supreme Court of Justice recently declared that an article of the Federal Telecommunications and Broadcasting Law – which provided that the minimum fine for any violation of the law not otherwise expressly penalised in another law was 1% of the offender's annual income – to be unconstitutional. This declaration may signal that the court intends to participate more regularly in shaping Mexico's legal framework in order to rectify deficiencies created by Congress.
One of the first actions that the new federal government administration undertook after taking office in December 2018 was to prepare the expenses budget in accordance with the new president's austerity principles. After heated discussions, the budget was finally approved on 24 December 2018. Shortly after, the Federal Telecommunications Institute filed a constitutional challenge in which it claimed that the budget will affect its ability to perform its constitutional regulatory functions.
Mexico recently became the first country to liberate the 600MHz band after the Federal Telecommunications Institute approved the relocation of the last two channels that transmitted therein in order to free it up for 5G broadband services. This transition will enable Mexico to make the band available to the market through a bidding process and exploit international mobile telecoms applications for 5G mobile broadband services.
Federal Telecommunications Institute publishes new guidelines regarding accessibility of broadcast TV servicesMexico | 31 October 2018
In 2017 the Federal Telecommunications Institute published the General Guidelines for the Accessibility of Broadcast Television Services, which will take effect in December 2018. The guidelines establish requirements regarding the inclusion of Mexican sign language or hidden subtitles in certain programmes, which apply to concessionaires that use a signal to commercially transmit broadcast TV to more than 50% of the Mexican territory and federal public entities that are concessionaires of public broadcast TV.
The Ministry of the Interior recently issued the Guidelines for the Audiovisual Content Classification of Broadcasting Transmissions and Pay Television and Audio Services. The 2015 guidelines dramatically increased the hours during which a programme or ad can be broadcast depending on its rating, leading to legal disputes to protect child audiences. While the 2018 guidelines maintain the same broadcast times as the 2015 guidelines, they have increased the duration of the parental warning.
Telecomunicaciones de México recently issued a call inviting applicants to compete in the bidding for the Red Troncal project (ie, the National Backbone Network), which has been in the works since the 2013 constitutional telecoms reform. The winning party will enter into a public-private partnership for the design, financing, installation, deployment, operation, strengthening, maintenance and development of the network and the provision of wholesale telecoms services.
The president recently launched the Red Compartida (or Shared Network), which is one of the most important projects being undertaken in the Mexican telecoms sector. The project involves a new mobile broadband network in the 700 MHz band, which will provide wholesale services under a public-private partnership structure between Altán Redes and the government. The project aims to provide mobile broadband coverage to 92.2% of the Mexican population by 2024.
The Federal Institute of Telecommunications recently approved the final programme for the functional separation of Mexico's fixed incumbent companies as a consequence of the asymmetric regulation imposed on the América Movil Group (AMX). However, AMX has informed the Mexican Stock Exchange that it will challenge the approval of the programme and there has been some scepticism as to the results and practical consequences of the separation.
The Federal Institute of Telecommunications recently announced the auction of the 2.5 GHz band. The auction's purpose is to assign the commercial use and exploitation of 120 MHz of the 2,500 to 2,690 MHz band for the provision of wireless services. Four companies and one consortium are interested in formally participating in the auction process, which is expected to be completed by November 2018.