We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
11 July 2016
The hydrocarbons sector has had a significant impact on the Mexican environment, largely through contamination caused by spills during the production process. In 2015 the hydrocarbons sector released 358.9 tons of contaminants into water bodies and the range of its contaminated sites increased to 1,161.93 hectares.(1) Further, 86% of oil spills in the hydrocarbons sector were a result of poor maintenance.(2) Such contaminations can contribute to the loss of marine life, onshore soil damage and human health complications.
In light of this, specialised environmental operational and safety guidelines are needed to address environmental risks and the corresponding mitigation measures that parties must undertake in regards to a hydrocarbons project. This is particularly true given the recent Mexican energy reforms, which have increased production in the hydrocarbons sector by extending extraction rights to private investors – a right that was previously held exclusively by Mexicans. Coincidentally, a more comprehensive set of environmental accountability mechanisms has been established for the hydrocarbons sector.
On May 13 2016 the General Administrative Provisions that Establish the Guidelines for the Conformation, Implementation and Authorisation of the Administration Systems for Industrial and Operational Safety and Environmental Protection Applicable to the Referred Activities of the Hydrocarbons Sector were published in the Federal Official Gazette and became binding on participants in the hydrocarbons sector.
Before their enactment, the National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector (ASEA) published a non-binding guide for the proper management of operational safety and environmental protection as a recommended basis for hydrocarbons project administration systems.
The new guidelines ultimately solidify the previous guide's need for environmental accountability in the hydrocarbons sector. Given the gravity of environmental harm that the hydrocarbons sector can cause – in addition to the need to ensure proper project maintenance and the recent increase in hydrocarbons sector activity resulting from the energy reforms – the timing of the guidelines' enactment is ideal.
The new guidelines apply to companies involved in the following hydrocarbons activities:
The guidelines also apply to contractors, subcontractors and any other person or company working under the instruction of a company undertaking regulated activities in the hydrocarbons sector. Thus, new private investors entering the hydrocarbons sector following the energy reforms must also comply with the guidelines. Such private investors must either abide by the administration system and implementation programme of the party executing the project or submit their own administration system to the ASEA for approval and registration.
Companies wanting to undertake a project in the hydrocarbons sector must:
When companies have secured a concession title, contract or permit authorising them to undertake a project, they must request from the ASEA authorisation of their implementation programme and other environmental permits and authorisations in relation to:
They must also obtain water permits and other authorisations from the National Waters Commission.
The implementation programme must address – among other things – the environmental risks posed throughout the complete lifecycle of the project, including during site abandonment and dismantling.
The implementation programme must also include:
To obtain approval of an implementation programme, interested parties must provide certain information, including:
Once an implementation programme has been authorised by the ASEA, companies must comply with a series of obligations, including the provision of:
These obligations will help to ensure that the project continues to comply with the policies in the implementation programme and thus help to mitigate environmental risks. The reporting and monitoring obligations are independent from those required for:
Companies that are active in the hydrocarbons sector before the guidelines were enacted must register their administration system before the ASEA within 120 business days of the guidelines' publication in the Federal Official Gazette and secure authorisation of their implementation programme within 120 business days of the issuance of their single regulated registry code.
It is hoped that the guidelines will enable the hydrocarbons sector to adopt more environmentally accountable mechanisms and mitigate the types of environmental harm that could occur in the future.
For further information on this topic please contact Juan Francisco Torres Landa, Mario Jorge Yanez, Brenda Rogel Salgado or Jeanett Trad Nacif 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.
(1) For more information please see www.sinembargo.mx/04-06-2016/3049723
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.