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17 February 2020
On 29 October 2019 the General Circular Economy Law initiative was presented to the Senate for discussion and approval. As of November 2019, the initiative was before the Environment, Natural Resources and Climate Change Commission and the Legislative Studies Commission for analysis.
On 28 January 2020 a Circular Economy Forum took place at the Senate, during which more in-depth discussions on what Mexico's circular economy scheme might look like took place. In addition, this forum identified additional aspects which should be taken into account to ensure a more robust initiative.
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.
One of the most relevant provisions of the initiative which involves governmental authorities is the obligation for municipal governments to formulate circular economy programmes for informal commerce groups that carry out recycling and waste reutilisation activities in an attempt to bring them into the formal tax-paying economy.
In addition to introducing new powers and responsibilities for various local and federal authorities, the initiative sets out a number of obligations for private parties.
The first such obligation would apply only to persons or entities which are dedicated to:
In order to carry out any of the above activities, a sustainable production certificate must be obtained from the Ministry of Economy.
In addition, persons or entities which carry out waste recycling will have to register with the Ministry of Economy and report on the volume of waste handled and recycled.
Further, the initiative introduces the concept of a 'shared responsibility plan' – a waste handling, management and disposal strategy for certain products that will apply to the producer, manufacturer and distributor, as well as consumers and the authorities. Under the initiative, any person or entity which is dedicated to the production, manufacturing or distribution of short lifecycle products, packaged products, product packaging, technology consumer products and technology-related consumables will have to develop and execute a shared responsibility plan.
Mandatory labelling obligations are proposed for certain products; these would have to be adhered to by all producers, manufacturers and distributors of:
Such labelling is intended to facilitate the classification and disposal or recycling of such products.
The initiative will exist independent of the General Law for the Prevention and Integral Management of Waste 2003. The main reason for this is to have two separate but complementary regulations – one which provides general provisions on waste handling and classification and the relevant responsibilities and one which enables Mexico to transition to a circular economy by regulating raw materials, manufacturing obligations, product labelling and other economic aspects that are not addressed from a waste perspective.
The initiative is still under discussion in the Senate and will require additional modifications following the discussions during the 28 January 2020 Circular Economy Forum. However, Congress is expected to approve the final draft by the end of 2020.
For further information on this topic please contact Brenda A Rogel Salgado, Jeanett Trad Nacif, Mario Jorge Yanez or Javier Camacho at Hogan Lovells BSTL, SC by telephone (+52 55 5091 0000) or email (firstname.lastname@example.org, email@example.com, firstname.lastname@example.org or email@example.com). The Hogan Lovells BSTL, SC website can be accessed at www.hoganlovells.com.
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