aba • section of international law • mexico committee ... 46_mexico...at the 2015 montreal fall...

Message from the Co-Chairs by Ben Rosen The 2015 S IL Spr ing Mee t ing in W ash in g ton , DC wa s a succe ss fo r t he Sec t ion a t l a rge and ou r Co mmi t t ee . More than 900 l awyer s f ro m a round the g lobe inc lud i ng ma ny Mex ic o Co mmi t t e e me mber s desc end ed u pon the cap i t a l o f t he Un i t ed S ta t e s t o sha re th e i r knowledg e on an a r r a y o f pub l i c and p r iva t e i n t e rna t ion a l l aw i s sue s . The Mex ico Co mmi t t ee hos t ed a nu mber o f even t s and g a the r ing s , i nc lud ing a we l l - a t t en ded and cu t t i ng -edge p a ne l on the cons t i t u t ion a l r e fo r ms to Mex i co ’ s ene rgy sec t o r ( s ee a r t i c l e page 3 fo r de t a i l s ) . In add i t i on , mor e than 40 l awy er s a t t ende d ou r Co mmi t t ee ’ s s igna t u re “ a f t e r hour s” cock ta i l pa r ty he ld a t a t ru ly DC Speakeasy , and ou r co mmi t t ee b reak fas t and d in ne r mee t ing s f i l l ed the t ab l e s w i t h l i ve ly conve r sa t io n and deba te . Spec ia l t ha nks to p rog ra ms v i ce -c ha i r s S u s a n Bu rn s fo r he r even t o rgan iz ing e f fo r t s and R e n e A l v a fo r r epo r t ing on the ene rgy pane l , a s we l l a s t o L a u r a N a v a fo r p inch -h i t t i ng fo r s en io r adv i so r and d iv i s i o n cha i r C a r l o s V e l a zq u e z and my c o -cha i r E r n e s t o V e l a r d e a s ene rg y pane l co -mo dera to r .

A t t he 2015 Mont rea l Fa l l Mee t in g f rom Oc t obe r 20 -24 a t t he Fa i rmo n t Quee n E l i zabe th , t he S IL wi l l t ake i t s road show to The C i t y o f S a in t s , wh ich p ro mises t o be fu l l o f g rea t CLE p rogra mmin g and au then t i c F renc h-Cana d ian cu l tu re and hosp i t a l i t y . Mon t réa l i s ho me t o ove r 60 in t e rna t iona l o rgan iza t io ns and has a t h r iv ing and d ive r s i f i e d econo my tha t i nc lude s a subs t a n t i a l ae rospa c e indus t ry , deep roo t s a s a cen t e r fo r f i lmma k ing and a v ib ran t v ideo ga min g ind us t ry . W el l e s t a b l i sh ed a s an a cade mi c powerh ouse , Mont r éa l i s ho me to seve ra l r enowne d un ive r s i t i e s , i nc lud ing McGi l l Un i ve r s i ty . Mo n t réa l has a l i ve ly cu l tu ra l l i f e and a maz in g go ur me t d in in g , wh ich th e Sec t ion a i ms to ex p l o re du r ing ou r even in g r ecep t ion s , i nc lud ing e ven t s a t The Be lved e re a t t he Mont réa l Sc i enc e Cen t re an d Da lhou s i e S ta t ion , head qua r t e r s o f C i rque É lo i ze .

Our co mmi t t ee i s p r i ma ry sponso r o f two p rog ra ms in Mo nt rea l–on e on Ca nad i a n FDI in Me x ico ’ s a e ro spac e indu s t ry and ano the r on l e ga l e th i c s i n t he f i l m indus t ry . W e a re co - spo nso r ing p ro g ra ms on T h e Cha l l e nge s in Condu c t ing Cross -Border Rea l Es ta t e Tra nsa c t ion s and o the r s . Ea r ly B i rd r eg i s t r a t i on i s now open , and th i s h i s to r i c ho te l w i l l su re ly f i l l up soon , so con s ide r book ing y our roo m and r eg i s t e r in g now.

Movin g on t o the Amer i cas Fo ru m, unof f i c i a l word i s t ha t i t w i l l be he ld in Miami in Februa ry 2016 and o u r co mmi t t ee wi l l p l ay a l ead ing ro l e , so s t ay tun ed . And to those o f y ou in t e re s t ed in pu t t i ng on a b rown-bag lunch o r non-CLE even t i n y our a rea , o r i n hav ing the Mex i co Co mmi t t ee a s a coope ra t in g en t i ty o f ano the r eve n t y ou may be o rgan iz ing , p l ea se l e t u s know, and we wi l l he l p y ou se t i t up and ge t t he word to Co mmi t t ee me mber s an d the Sec t io n a t l a rge .

P rog ra mmin g oppor tun i t i e s awa i t y ou fo r t he New York C i ty Apr i l 2016 Spr ing Mee t ing . W e wi l l accep t pane l p roposa l s un t i l Ju ly 27 , 2015 fo r t he th i s me e t ing . I f y ou have idea s fo r a pane l and wou ld l i k e a s s i s t anc e in pu t t i ng i t t oge the r , p l ea se con t a c t a Co-Ch a i r .

F ina l ly , E rnes to an d I , on beha l f o f ou r news l e t t e r ed i to r s P a t r i c k d e l D u c a and Y u r i x h i G a l l a r d o , i n v i t e a l l co mmi t t ee me mb ers and r eade r s o f t he M EXICO U PDATE to send us y our a r t i c l e s fo r cons id e ra t i on fo r t he nex t ed i t i on . Re me mber , a r t i c l e s t ou ch ing on 20 15 l ega l an d r egu la to ry deve lop me n t s and cou r t ca ses a re t y p ica l ly pub l i sh ab le no t on ly in M EXICO U PDATE bu t a l so i n the Sec t ion o f In t e rna t iona l Law’s Y E AR IN R EVIEW, t he h ig h l y r ega rded l ega l j ou rna l c i r cu la t e d to ou r en t i r e Sec t ion and much o f t he in t e rna t io na l l ega l co mmu ni ty .

Au revo i r j u squ ' à Mon t réa l !

Mexi co Co mmi t t ee Co- Cha i r s , B e n R o s e n , E r n e s t o V e l a r d e D a n a c h e

I s s u e 4 6 J u n e 2 0 1 5

M e x i c o ’ s E n e r g y R e f o r m

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N A T L A W L a u n c h e s N e w S e r v i c e f o r F i l i n g S e c u r i t y I n t e r e s t s i n t h e M e x i c a n R U G

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M e x i c o ’ s J u n e 7 , 2 0 1 5 E l e c t i o n s : O b s e r v a t i o n s o f a V i s i t a n t e E x t r a n j e r o

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J u d i c i a l P r e c e d e n t s o n t h e N e w C o l l e c t i v e A c t i o n

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M e x i c o A n t i t r u s t D e v e l o p m e n t s

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M e x i c o ’ s N e w F e d e r a l R e g u l a t i o n o f O c c u p a t i o n a l H e a l t h a n d S a f e t y

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P r o g r a m o n C o m p a r a t i v e P e r s p e c t i v e s o n B i d P r o t e s t R e g i m e s i n N o r t h A m e r i c a : A R e v i e w

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MEXICO UPDATE ABA • Sect ion of Internat ional Law • Mexico Committee

© 2015 ABA all rights reserved.

About the Mexico Committee

MEXICO UPDATE

Upcoming Events — Save the Date

D I S C L A I M E R The materials and information in this newsletter do not constitute legal advice. MEXICO UPDATE is a publication that is made a v a i l a b l e s o l e l y f o r informational purposes and should not be considered legal advice. The opinions and comments in MEXICO UPDATE are responsibility solely of each author/ contributor and do not necessarily reflect the view of the ABA, its Section of International Law, the Mexico Committee or the Universidad Panamericana.

Anchored by coordinators in cities in Mexico and the United States, the Mexico Committee seeks to grow its members’ involvement in dialog on current and potential developments of Mexican, United States and other law relevant to their practice of law and to the establishment of sound policy. Current substantive focuses of the Committee’s work include arbitration, antitrust law, criminal procedure reform, data privacy, environmental law, legal education, secured lending, and trade law. The Committee contributes to the annual Year In Review publication, is developing its newsletter in partnership with a leading Mexican law faculty, maintains its website, and actively organizes programs at the spring and fall meetings of the International Law Section.

The Mexico Committee’s membership is its most important asset. We encourage all Committee members to be involved in Committee activities and to communicate freely their suggestions and ideas.

The Mexico Committee holds periodic monthly calls. Keep an eye on the committee listserve for circulation of bridge number and agenda information.

Section Leadership Retreat 2015

Chicago, Illinois July 29-31, 2015

JOIN COMMITTEE LEADERS!

Seventh Annual Conference on the

Resolution of International Business

Disputes Moscow, Russia

September 18, 2015

Join us at the Section of International Law

2015 Fall Meeting Montreal, Canada

October 20-24, 2015. featuring panels on

Canadian FDI in Mexico’s aerospace industry

Film industry legal ethics Language/cultural

challenges in cross-border real estate transactions

2015 Asia Forum Beijing, China

November 16-17, 2015

2016 Spring Meeting New York City

Please reach out to the Committee Co-Chairs with

your proposals.

M e x i c o C o m m i t t e e L e a d e r s h i p

2 0 1 4 - 2 0 1 5

C o - Ch a i r s B e n R o s e n E r n e s t o V e l a r d e D a n a c h e

V i ce - Ch a i r s R e n e A l v a S u s a n B u r n s L u i s P e r e z - D e l g a d o P a t r i c i a E s q u e r M e l i n a J u á r e z A l e j a n d r o S u a r e z

S t e e r in g G r o u p B a r b a r a A l d a v e E l i C o n t r e r a s K i m G o i n s A u r e l i a n o G o n z a l e z - B a z A l o n s o G o n z a l e z V i l l a l o b o s M a t t H a n s e n M a n u e l R a j u n o v J o a q u í n R o d r i g u e z J a y S t e i n O l g a T o r r e s

I m me d i a t e P a s t Ch a i r L e s l i e A . G l i c k

S e n io r A d v i s o r s P a t r i c k D e l D u c a J u a n C a r l o s V e l á z q u e z d e L e ó n O b r e g ó n



I s s u e 4 6 3

MEXICO UPDATE

M e x i c o ’ s E n e r g y R e f o r m R e n e A l v a a n d B e n R o s e n

At the Section of International Law 2015 Spring Meeting, the Mexico Committee presented The Opening of Mexico’s Energy Sector to International Investment: A Practical, Legal Analysis of the Constitutional Reforms and Secondary Legislation. David Enriquez (Senior Partner of Goodrich Riquelme y Asociados), Beatriz Camarena-Maney (Managing Director, OFS Cap, LLC) and John Padilla (Managing Partner, IPD Latin America), provided legal and business analysis of the reforms and how the first round of bidding for oil & gas risk contracts is unfolding. Our Co-Chair Ben Rosen (Managing Partner of Rosen Law) and Laura Nava of McKenna Long & Aldridge, LLP (soon to be Dentons) moderated. Ben and Co-Chair Ernesto Velarde chaired the program, which attendees and conference organizers gave rave reviews.

The panel, held before a packed house, offered 90 minutes on developments as Mexico opens its oil & gas sector to private investment consequent to the recent reforms to its federal Constitution, laws and regulations. The panel centered on the possibilities for, and conditions under which, national and foreign investment is participating in this industry in Mexico.

With the vast experience that each of the panelists has in their own field within the oil industry, they explained, not only the new regulations, but also real and practical issues faced by the investors while they evaluate and participate in the bid process.

John Padilla, a leading oil & gas consultant for energy companies doing business in Mexico and Latin America, focused on the business aspects of Round One bidding and the model contract, highlighting challenges and opportunities experienced by potential bidders. Indeed, although the reforms do allow joint ventures between PEMEX and international oil companies, production sharing contracts and the “booking of reserves” by the private investor,

they did not go as far as a l l o w i n g private oil companies to o w n t h e

mineral rights outright or for true concession contracts. The Mexico Committee webpage posts Mr. Padilla’s presentation.

David Enriquez, one of the top Mexican energy lawyers and partner of our committee’s Vice-Chair Luis Perez-Delgado, addressed the new institutional framework , which will result in PEMEX competing for contracts with private oil companies for the first time since President Lazaro Cardenast nationalized the industry in 1939, as well as the creation of several new agencies so as to ensure a transparent, level playing field among participants and between them and the Mexican government.

Beatriz Camarena, formerly Pemex in-house counsel and now managing director for OFSCap, LLC and General Counsel for Producers Energy, LLC, entertained the audience with success stories and practical analysis on do’s and don’t’s of energy investment in Mexico. Ms. Camarena emphasized that investors should feel confident regarding prospects for a good profit in Mexico. And despite questions raised during the panel about the near-term upside for private investors due to the recent sharp decline in oil prices, Ms. Camarena asserts that the the Mexican government—including the National Hydrocarbons C o m m i s s i o n (CNH) and P e m e x — i s indeed a well-paying client and partner.

The take-away from the panel appeared to be that although some tweaking in the subsequent bid processes and model contract business terms might be required to attract big international oil companies , the prospects for long-term production and profits in Mexico is unquestionable. Overall, the audience left with a much better sense of what the newly created oil industry in Mexico is; how the players coming into Mexico for this purpose are facing the challenges that this represented, not only to the investors but to the authorities as well, and provided a general overview of what this industry can achieve in the near future.

DISCLAIMER The materials and information in this newsletter do not constitute legal advice. MEXICO UPDATE is a publication that is made available solely for informational purposes and should not be considered legal advice.

C o n t r i b u t o r s t o t h i s i s s u e :

R e n e A l v a B r y a n G o n z á l e z y G o n z á l e z B a z M é x i c o , D F

S e r g i o B . B u s t a m a n t e C o u n s e l o r s I n t e r n a t i o n a l A b o g a d o s C i u d a d J u á r e z

G e r a r d o C a l d e r ó n V i l l e g a s B a k e r & M c K e n z i e M é x i c o , D F

P a t r i c k D e l D u c a Z u b e r L a w l e r & D e l D u c aL o s A n g e l e s

L o r i n H e r z f e l d t C h a p m a n U n i v e r s i t y O r a n g e , C a l i f o r n i a

I s i s I s u n z a N a t i o n a l L a w C e n t e r f o r I n t e r - A m e r i c a n F r e e T r a d e T u c s o n

E d u a r d o M o e l M o d i a n oU n i v e r s i d a d P a n a m e r i c a n a G u a d a l a j a r a

B e n R o s e n R o s e n L a w S a n J o s e d e l C a b o

E l i z a b e t h P o c o c k

N a t i o n a l L a w C e n t e r f o r I n t e r - A m e r i c a n F r e e T r a d e T u c s o n


I s s u e 4 6 4

MEXICO UPDATE

RUG’s purpose is to allow lenders and other creditors to file standardized financing statements of their security interests in movable (personal) property collateral assets in Mexico, thereby perfecting these interests as well as establishing their priority against other secured creditors and purchasers.

Since public notice is essential for the perfection of a security interest, the RUG operates as a single electronic

database that can only be accessed online through the RUG website. This feature allows those interested in searching for filed forms against grantor-debtors to rely on a single search and location (the electronic database) instead of having to search for such interests in the different Commercial Public Registry offices located throughout Mexico that cannot be accessed online.

While the search of RUG files is free and is available to anyone with an account within the RUG, persons interested in filing an initial registration, modification, cancellation or extension form relating to a security interest must do so through the use of an electronic signature approved by the Ministry of

the Economy. Currently, the Ministry of the Economy only accepts three types of electronic signatures:

(1) the FIEL, a signature issued by Mexico’s Tax Authority (SAT) that can be applied for by all Mexican citizens and legal entities established in

N A T L A W L a u n c h e s N e w S e r v i c e f o r F i l i n g S e c u r i t y I n t e r e s t s i n M e x i c o ’ s R U G

I s i s N . I s u n z a a n d E l i z a b e t h P o c o c k

The National Law Center for Inter-American Free Trade (NatLaw) is a non-profit research and legal reform institution based in Tucson, Arizona that promotes economic development and commercial law reform in developing countries throughout the world under the direction of its Founder and Executive Director Dr. Boris Kozolchyk. Since its establishment in 1992, NatLaw has worked continuously with Mexico to promote secured transactions reform and the development of a registry of security interests in personal/movable property. NatLaw is now pleased to announce the launch of its new program, NatLaw RUG E-Submit Services, which enables anyone who contemplates granting credit to Mexican borrowers, or foreign borrowers, with assets located in Mexico, to file standardized electronic forms to perfect their security interests (garantías mobiliarias) in the Mexican Registry of Security Interests on Personal Property or the “RUG” (Registro Único de Garantías Mobiliarias) in a manner similar to the filing of a UCC-1 financing statement in the United States.

These services were made possible by the recent modernization of the Mexican secured transactions law that began in 2000 and has continued with a number of legislative enactments, the latest of which was promulgated in 2014. The RUG was created as a section of the Public Commercial Registry under the aegis of the Mexican Ministry of the Economy (Secretaría de Economía). It began operations in October 2010 and is governed by the Commercial Code and the Regulations of the Commercial Public Registry. The

NatLaw RUG E-Submit Services enables anyone who contemplates granting credit to Mexican borrowers, or foreign borrowers, with assets located in Mexico, to file standardized electronic forms to perfect their security interests (garantías mobiliarias) in the Mexican Registry of Security Interests on Personal Property or the “RUG” (Registro Único de Garantías Mobiliarias) in a manner similar to the filing of a UCC-1 financing statement in the United States.

DISCLAIMER: The materials and information in this newsletter do not constitute legal advice. MEXICO UPDATE is a publication made available solely for informational purposes and should not be considered legal advice. The opinions and comments in MEXICO UPDATE are those of its contributors and do not necessarily reflect any opinion of the ABA, their respective firms or the editors.

The RUG was created as a section of the Public Commercial Registry under the aegis of the Mexican Ministry of the Economy...


I s s u e 4 6 5

MEXICO UPDATE

Assignment of a security interest (Transmisión)

Amendment due to mistakes within existing registration (Rectificación por Error)

Cancellation of an existing registration (Cancelación)

Recent statistics available since the RUG’s implementation show that it has been largely embraced by the lender community and that it has had a significant

impact within Mexico. As of July 2014, there were four times more registrations of security interests than existed before the RUG’s implementation. The

assets registered as collateral include inventory, receivables, machinery and equipment, and agricultural products among others and 97% of these registrations are for loans under US$ 1 million. It is for these reasons that NatLaw hopes to expand the RUG’s use to U.S. and other lenders outside Mexico by providing the means to register forms related to security interests in the RUG through the NatLaw RUG E-Submit Services. The hope is that third parties will appreciate the value of this

electronic service, thereby facilitating and expanding finance between the U.S. and Mexico and possibly beyond.

For more information on the NatLaw RUG E-Submit Services and to view the service user terms and conditions, instructions and other related information, please visit the NatLaw RUG E-Submit Services homepage at http://www.natlaw.com/e-submit or email NatLaw directly at [email protected], attention Elizabeth Pocock, NatLaw Supervising Research Attorney and Development Director and Isis Isunza, NatLaw Research Attorney. 1 These entities are authorized by the Ministry of the Economy according to the procedure established by the Mexican Commercial Code (see articles 100 – 113).

2 Mexico’s Ministry of the Economy, July 2014 (on file with NatLaw).

Mexico from the SAT’s office;

(2) a certificate and signature issued by the Ministry directly to notaries public, commercial notaries public, administrative authorities and judges; and

(3) a certificate and signature issued to a party by certain authorized certifying entities as determined directly by the Ministry of the Economy.

This electronic signature is required during the submission of such forms to the RUG’s website and is recorded as part of the electronic record for each filing. Natural persons and legal entities that do not have an authorized electronic signature can request filing services from a person authorized by the Ministry to file the authorized forms. The Ministry of the Economy, through an authorized certifying entity, has granted NatLaw the electronic signature required to file all the electronic forms associated with the initial registration, amendment and cancellation of security interests in the RUG.

Accordingly, the NatLaw RUG E-Submit Service provides standardized electronic fillable forms, based on the requirements of the RUG input fields, to users (e.g. lenders in the United States or in other countries outside of Mexico) and once the proper data is inserted, NatLaw then files these forms with the RUG on the user’s behalf for a fee. Once the registration is complete, NatLaw provides the certification receipt issued by the RUG’s system in pdf to the user. Currently, NatLaw is the only institution outside of Mexico with a RUG electronic signature and this type of access.

With its electronic signature, NatLaw can file the following forms in the RUG on behalf of third party users:

Initial registration of a security interest (Inscripción)

Preliminary notice of the intent to file an initial registration (Aviso Preventivo)

Amendment of an existing registration (Modificación)

The Ministry of the Economy . . . has granted NatLaw the electronic signature required to file all the electronic forms associated with the initial registration, amendment and cancellation of security interests in the RUG.

Currently, NatLaw is the only institution outside of Mexico with a RUG electronic signature and this type of access...

http://www.natlaw.com/e-submit�

mailto:[email protected]�


I s s u e 4 6 6

MEXICO UPDATE

M e x i c o ’ s J u n e 7 , 2 0 1 5 E l e c t i o n s : O b s e r v a t i o n s o f a

V i s i t a n t e E x t r a n j e r o P a t r i c k D e l D u c a

Mexico continues to advance its legal framework to achieve elections that are fair and perceived as such. To this end, its electoral law provides for visitantes extranjeros–foreign visitors, to observe elections. This note lays out my impressions as such a foreign visitor, invited by Mexico’s Federal Electoral Court, to observe the June 7, 2015 federal elections to renew Mexico’s 500 member Chamber of Deputies, accompanied by elections in several of Mexico’s federal entities to elect governors, state legislators and municipal officials.

Many organizations availed themselves of the opportunity to observe Mexico’s June 2015 elections in ways much more comprehensive than my individual observations. The Organization of American States, for example, visited several hundred polling places with the benefit of a delegation led by Laura Chinchilla, a former President of Costa Rica. The delegation’s initial report, generally favorable (President Chinchilla observed after the election: “Esta elección constituye un triunfo de la institucionalidad democrática del país” (This election constitutes a triumph of the democratic institutionalization of the country), is available through the OAS web page. Other observers that I had the occasion to meet included electoral officials from countries in the Americas, Africa and Europe, as well as a senior representative of The Carter Center.

To facilitate the observations of the foreign visitors, Mexico’s Instituto Nacional Electoral (National Electoral Institute) publishes a 136-page pamphlet entitled ASPECTOS RELEVANTES DEL RÉGIMEN ELECTORAL MEXICANO Y EL PROCESO ELECTORAL FEDERAL 2014-2015, also available in English in abbreviated form as MAIN ASPECTS OF THE MEXICAN ELECTORAL REGIME AND THE 2014-2015 FEDERAL ELECTORAL PROCESS. The pamphlet lays out the reforms that established the Instituto Nacional Electoral as the successor to the Instituto

Federal Electoral, such that the June 7, 2015 elections are the first to be conducted through the Instituto Nacional Electoral.

The Instituto Nacional Electoral organized the federal elections, and collaborated with the analogous electoral entities of Mexico’s 32 federal entities (31 states and its Federal District) in those 16 entities that held concurrent elections. Although the new regime is that federal elections and those of the federal entities are held on the

same days and the Instituto Nacional Electoral provides the overall electoral framework, the agencies of the federal entities have the ability to posture themselves as laboratories of innovation within the federal system, perhaps not in the full sense of the “novel social and economic experiments” contemplated by Justice Brandeis, but nonetheless advancing local priorities. Thus, for example, the

electoral agency of the Federal District notes with pride in the recent election its particular efforts to facilitate voting by disabled and senior citizens.

Also to facilitate the observations of the foreign visitors, the Instituto Nacional Electoral, the Tribunal Electoral del Poder Judicial de la Federación (the electoral court), and the Fiscalía Especializada para la Atención de Delitos Electorales (the prosecutor’s office specialized in electoral crime) organized a Foro de Intercambio Informativo (Forum of Informational Exchange), comprised of several days of presentations by Mexican and foreign electoral officials and experts, addressing specifics of both Mexican elections and foreign elections in a comparative perspective. Highlights of those presentations included the head of Mexico’s Instituto Nacional Electoral, Lorenzo Córdova, affirming “no hemos solicitado el auxilio de la fuerza


Election Night, media center, Instituto Nacional Electoral

Mexico continues to advance its legal framework to achieve elections that are fair and perceived as such.


I s s u e 4 6 7

MEXICO UPDATE

pública por no considerar conveniente militarizar las elecciones, lo que nos ha complejizado el trabajo de campo, pero no lo ha impedido” (we have not requested the help of the public force by virtue of not considering to be convenient to militarize the elections, which complicated the work in the field, but did not prevent it). This comment, made just a few days in advance of the elections, received much press coverage in the face of concerns of potential violence around polling in several locations, notably in the state of Guerrero in the vicinity of Iguala, the town where 43 college-age students from the Escuela Normal Rural “Raul Isidro Burgos” in Ayotzinapa were killed September 26, 2014 in incidents implicating local government officials and police and their relationships with organized crime. Another highlight of the presentations, unambiguously inspirational, was that by Jasna Omejec, President of the Constitutional Court of Croatia, who provided an overview of European electoral law, within the frameworks of the European Union and of the Council of Europe, using her own country as an example. Notwithstanding the technical dimensions of many of the presentations, the forum conveyed clearly the importance of fair elections,

perceived as such, in recovering from and preventing violence, civil war and repression, highlighting tangible examples including not just Mexico and Croatia, but also countries such as Bolivia, Colombia, Honduras, Nigeria and South Africa, among others.

On election day, I had the opportunity to visit nine polling stations, seven in the morning including as some

of them were opening, and two at the end of the day as they closed and counted the ballots.

Mexicans vote at polling places in their neighborhoods, from 8 am to 6 pm. The polling places that I visited were in locations such as an elementary school, a court house, the offices of a notary public, and a parking garage. The neighborhoods ranged from working class

to some of Mexico’s most elite. As an example of the latter, one of the polling stations was located in the pedestrian entry to a parking garage across the street from Mexico City’s lycée français, next to a Maserati dealership and in front of a Chili’s restaurant.

A polling place (in Mexico called a casilla) is not assigned more than 750 voters and includes a check-in table, a polling booth to mark ballots in private, and ballot boxes. It is staffed in two ways. First, volunteers registered to vote in the neighborhood are selected some weeks in advance through a recruitment lottery to run the polling place and to count the votes at the end of the day. In the election that I observed, each polling station was to have a president, two secretaries, three vote counters, and three general alternates. After acceptance of the lottery-generated offer to serve, the volunteers attended a number of training sessions in preparation for election day. Second, each of the recognized political parties had the opportunity to have one or more representatives present at the polling station. Of the ten parties competing in the June 2015 elections, representatives of four to eight of them were present at each of the various polling stations that I visited. These representatives were themselves volunteers, not necessarily from the neighborhood, but apparently so in most instances that I observed.

Each of the political party representatives and the volunteer poll workers had lists of the registered voters that included the voters’ names and pictures. As a voter checked into the polling station, the poll workers would take the voter’s photo identification card, verify the voter

Polling station established in a tire and brake repair garage

volunteers registered to vote in the neighborhood are selected some weeks in advance through a recruitment lottery to run the polling place and to count the votes at the end of the day.


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on the list and call out the voter name or identification number so that the political party representatives could likewise verify the voter on the list. The system of voter photo identification cards is impressive, with various technological safeguards built into the card itself to prevent forgery and a sophisticated system of issuance of such cards to assure correct identification of the voter. Having left the voter identification card in the hands of the poll workers, the voter would then in a private booth mark three paper ballots, one for the federal election for the Chamber of Deputies, one for the deputies to serve in the Federal District’s legislature, and one for the local municipal officials. In the elections in federal entities other than the Federal District, the local ballots would correspond to the local offices contested in that federal entity. After marking the ballots, the voter would fold the paper ballots and then stuff each into the corresponding ballot box. The voter would then return to the check-in table to have the voter’s right thumb marked with an indelible dye, after which the voter’s identification card was returned to the voter. At the end

of the day, the poll workers emptied the ballot boxes onto the table at which they had been receiving voters through the day, and then, in the continuous presence of the political party representatives, counted the ballots. Prior to submittal of the count, the poll workers and the political party representatives would sign confirmations, noting any contested aspects of the count. I saw no disputes of the count.

The neighborhood quality of the polling stations and the modest number of voters assigned to them results in scenes such as the following:

Parents bring their children, asking them to help stuff the parent’s marked and folded ballots into the ballot boxes.

Neighbors greet each other, as an arriving voter meets an acquaintance working at the poll.

One of the polling stations that I visited was to have been located at a community center. Unfortunately, the poll workers found the door locked upon arriving early on election day to set up. Efforts to find a key bore no fruit. Solution: the polling place moved to a nearby covered driveway of the home of one of the volunteer poll workers, this with the blessing of having checked with the Instituto Nacional Electoral and the posting of a sign on the locked door with directions to the new location.

When a visually impaired man arrived to vote, he was offered materials in Braille. When he declared not to know Braille, but rather preferred assistance from his sister, he was accommodated until his sister finished her own voting so as to be free to assist her brother. All this was approved both by the poll workers and by the representatives of the political parties present.

One of the polling stations that I visited, located in a pre-school entrance hall, awaited the arrival in order to vote of Mexico’s President, from Los Piños, his nearby official residence. The director of the school was present to welcome her country’s President, as were television cameras. My personal hope for the director

A voting booth. The clear plastic ballot boxes are on the table.

Each of the political party representatives and the volunteer poll workers had lists of the registered voters that included the voters’ names and pictures.


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and her students was that the strong odor of fresh paint would dissipate before the children returned to school the next morning.

The first results of voting were delayed until the final closure of Mexico’s polls, at 6 pm in Mexico’s most western time zone, corresponding to 8 pm in the Federal District. I spent the evening at the headquarters of the Instituto Nacional Electoral, in a center organized to diffuse results and a preliminary vote count as available. This center was amply furnished with computers and broadcast equipment to support journalism in all media and celebration of the conduct of the elections. The evening’s broadcasts included first a report from the head of the Instituto Nacional Electoral on the successful operation of all but a tiny fraction of the approximately 150,000 polling stations spread across the country. As the television commentators filled the air time, I appreciated historian and journalist Lorenzo Meyer’s quick observation, Presidente mata comentador (President trumps commentator) as an announcer cut him off in mid sentence to make way for an address by the President proclaiming the completion of the day’s voting as a complement to the country’s democracy.

Mexico has a long history of electoral disputes, in both the nineteenth and twentieth centuries, including allegations of vote-buying, governmental breaches of impartiality, stolen elections, and political violence. For example, Carlos Salinas was declared the winner of the 1988 Presidential election over Cuauhtémoc Cárdenas, after the government announced, “se cayó el sistema” (the system crashed), to explain the election day failure of the IBM computer used to count the votes. Andrés Manuel

López Obrador vigorously asserted that his narrow loss of the Presidential elections to Felipe Calderón in 2006 was due to fraud. Even following the most recent Presidential election, that of President Peña Nieto in 2012, claims were made that his party was improperly advantaged by excessive campaign spending.

A key thread in the struggle to achieve fair elections has been the constitutionalization of election law, an aspect of contemporary Mexican society that like many others has roots in the nineteenth

century development of modern Mexico. José María Iglesias, then Chief Justice of Mexico’s Supreme Court, concluded a manifesto of October 28, 1876 with the words:

Sobre la Constitución, nada (Above the Constitution, nothing)

Sobre la Constitución, nadie (Above the Constitution, no one).

As Justice González Oropeza, judge of the Upper Chamber of Mexico’s Federal Electoral Tribunal, explains, Iglesias’s manifesto is a plea for the rule of law, as he rejected the legislature’s ratification of one Presidential contender’s election through a voting process clearly an insult to popular sovereignty because of the flaws and fraud in its conduct, and simultaneously declined to participate in the political machinations of another Presidential contender who sought to acquire power through a maneuver that would have passed through Iglesias as Chief Justice temporarily acting as President to preside a further election. See Manuel González Oropeza, Prólogo, MANIFIESTO DEL PRESIDENTE DE LA CORTE DE JUSTICIA DE LA NACIÓN: JOSÉ MARÍA IGLESIAS (Tribunal Electoral del Poder Judicial de la Federación, 2015). Iglesias’s impassioned defense of his Court’s review and invalidation of a vote rigging arrangement asserts an implicit power of his Court to uphold the constitutional order, echoing the interpretive courage of the US Supreme Court in asserting the power of constitutional review of laws in its decision of Marbury v. Madison. The poignancy of Iglesias’s manifesto for the rule of law in the conduct of

Mayan influenced imagery on the pyramid at Cacaxtla, far from the Mayan heartland

A key thread in the struggle to achieve fair elections has been the constitutionalization of election law, an aspect of contemporary Mexican society that like many others has roots in the nineteenth century development of modern Mexico.


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elections is that it did not prevent the coup through which the Porfiriato commenced. However, although the dictatorship of that period is an antithesis of the constitutional rule of law that Iglesias valued, the spirit of his manifesto flourishes in the current placement of Mexico’s system of electoral justice as central to the achievement of fair elections.

Another thread of Mexico’s approach to constitutional law is reflected in the placement of the collection of the vote in the hands of citizen volunteers selected by lottery and their collaboration on election day with party representatives. This embrace of faith in the value of social collaboration is an aspect of more modern constitutions such as the progressive Spanish Constitution of 1931 and the 1948 Constitution of Italy, that followed upon older liberal constitutions such as the 1787 Constitution of the United States. These views of the rule of law vary from those attributing significance to the Magna Carta and its focus on limitation of the sovereign’s power against those governed, whether understood in an English sense of Parliamentary supremacy or as American distrust of the state, including as a threat to individual liberties. As Daniel Hannan, a member of Britain’s Conservative

Party, recently wrote, “There was a divergence between English and American conceptions of Magna Carta. In the Old World, it was thought of, above all, as a guarantor of parliamentary supremacy; in the New World, it was already coming to be seen as something that stood above both Crown and Parliament.” Daniel

Hannan, Magna Carta: Eight Centuries of Liberty, WALL STREET JOURNAL (May 29, 2015). But even in the United States, the conception of the Magna Carta as articulating the rule of law carries with it the emphasis on

the protection of the governed against the government, a

concept distinct from the embrace of principles of social democracy in the twentieth century constitutions, including Mexico’s Constitution of 1917.

Key articles of Mexico’s Constitution pertinent to electoral matters now in force are its Articles 41, 99 and 134.

Article 99 of the Constitution provides for the Federal Electoral Court, with an Upper Chamber and regional bodies. The Electoral Court is designated to be the entity that definitively resolves electoral disputes,

understood in the broad sense to include not only challenges around the casting and counting of votes, but also “actos y resoluciones que violen los derechos político electorales de los ciudadanos de votar, ser votado y de afiliación libre y pacífica para tomar parte en los asuntos políticos del país” (acts and resolutions that violate the political-electoral rights of citizens to vote, to be voted, and of free and peaceful affiliation to take part in the political issues of the country). Constitution Article 99 (V). Further, Article 134 concludes with its section VI, contemplating as the purposes of the system of electoral justice to guarantee the principles of “constitutionality and legality of electoral acts and

Cathedral in Tlaxcala

Library Palafoxiana in Puebla

The poignancy of Iglesias’s manifesto for the rule of law in the conduct of elections is that it did not prevent the coup through which the Porfiriato commenced.


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resolutions”, including through the nullification of elections for “serious, deliberate, and determining violations” in cases of exceeding the campaign expenditure ceiling by 5%, acquisition of radio and television coverage in excess of legal limits, and use of illicit or public resources in campaigns.

Article 41 of the Constitution is a lengthy code of electoral provisions, including the supremacy of federal law, the position of political parties as “entidades de interés público” (entities of public interest), the mandate to all political parties to “garantizar la paridad entre los géneros, en candidaturas a legisladores federales y locales” (guarantee parity between the genders, in candidacies for federal and local legislatures), public funding of national

political parties and the prevalence of their public funding over private funding, public funding of campaigns, limitations of campaign expenditures, and provision and limitation of media access. Indeed, consistent with Article 41, political campaigns in Mexico are publicly-funded through the registered political parties (although in the June 7, 2015 elections independent candidates were permitted for the first time, and indeed one won the governorship of the State of Nuevo León), and binding legal rules establish when and how campaign activities can be conducted. In the run up to the June 7, 2015 elections, for example, the Electoral Courts imposed significant penalties on the Partido Verde (Green Party), as it breached these rules in its eagerness to collect votes so as to position itself to be a key minority party in the formation of a majority coalition in

the Federal Chamber of Deputies.

From November 2007 amendment, Article 134 of Mexico’s Constitution clearly imposes the principles of impartiality and equity in the conduct of elections, further enriching the tool kit of the electoral court system. Pursuant to authority of Article 1 of Mexico’s Constitution following June 2011 amendment, the interpretive tools employed by the Federal Electoral Court (and other Mexican courts) also include principles such as that of assuring the observance of human rights, specified in Mexico’s constitution and the international treaties ratified by Mexico, notably the InterAmerican Convention on Human Rights, using the expansive interpretive criteria of “pro persona”, that is, interpretation so as to assure the greatest protection of the person.

One path into understanding of the Electoral Court’s development of this constitutional dimension of its jurisprudence is a compendium of its 2014-2015 holdings, COMPENDIO TEMATIZADO DE JURISPRUDENCIA Y TESIS: PROCESOS ELECTORALES FEDERAL Y LOCALES 2014-2015. As an example of one of the Court’ holdings affirming the power of local electoral courts to conduct review of the constitutionality of laws (and reminiscent of rulings of European courts working through the relationship between European and national law), under the key IV/2014 appears the holding :

. . . one who is without books is in a sol i tude without consolation, in a mountain without company, in a path without exit, in fog without guide . . . This has given me the desire to leave the library that I have collected since I serve Your Majesty that is of the greatest that I have seen in Spain, accessory to these Episcopal houses and in public room and form and such that it can be useful to all kinds of professions and persons. Juan de Palafox y Mendoza September 6, 1646


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“Órganos Jurisdiccionales Electorales Locales. Pueden inaplicar normas jurídicas estatales contrarias a la constitución política de los estados unidos mexicanos y a tratados internacionales.” (Local Electoral Courts. They can disapply State legal norms contrary to the Constitution of the United Mexican States and to International Treaties).

Alexis de Tocqueville in his examinations of the United States offered a chapter on the “Nécessité d’étudier ce qui se passe dans les états particuliers, avant de parler du gouvernement de

l’Union” (Necessity of studying what happens in the individual states, before speaking of the government of the Union). His methodology of studying the parts before attempting to understand the whole inspires my reflections about Mexico and its still evolving electoral system. That system cannot be appreciated without an understanding of just how large and rich are Mexico and its long and complex history.

In my brief period as a Visitante Extranjero to observe the June 7, 2015 elections, my encounters with Mexican culture outside the confines of the electoral process include three vignettes that convey some of the complexity of the dimensions of Mexico in time and across at least a slice of its territory. First is passage on a rainy Saturday afternoon through the multi-floor, luxury department store of one of the Federal District’s largest malls, jammed with shoppers perusing high end global fashions, expensive crockery, and a small army of elegantly-uniformed clerks distributing samples of fragrances. Second is a visit to the eighteenth century premises of the Biblioteca Palafoxiana in Puebla, founded with the 1646 donation of 5000 books by Bishop Palafox y Mendoza, a Spaniard who played a key role in the culture and affairs of state and church in New Spain. Third is the privilege to have climbed, traversed and admired the pre-Columbian pyramids and their surroundings at Cacaxtla in Tlaxcala State, constructed and lived for centuries, clearly presenting the influences of distinct cultures over time and notably of Maya

influences in a region far from the Maya heartland. See, e.g., Claudia Brittenham, THE MURALS OF CACAXTLA: THE POWER OF PAINTING IN ANCIENT CENTRAL MEXICO (Austin: University of Texas Press, 2015).

In this march from contemporary materialism back to the foundations of European influences in Mexico and still further to the ferment of pre-Columbian Meso-American cultures, I see some of the threads of the tapestry that is contemporary Mexico. Are these threads present in neighbors who run a polling station, a federal entity that seeks to facilitate voting of the disabled and the elderly, an electoral court that applies principles of constitutional review not just to counting votes, but also broadly to the conduct of elections, and a country whose authorities invest immensely in the transparency of its elections to its own people as well as to other countries, its peers? I believe that they and many others are very much present. They help to understand why the issues of the conduct of Mexican elections are so different than the hot topics of the conduct of elections in my own country (e.g. discriminatory impact of photo voter identification card requirements, accuracy of vote counts, easing voter registration, absentee balloting, and relatively unrestricted campaign finance), perhaps even as exotic as the wonders of the United States were to de Tocqueville, but their exotic character notwithstanding, or even because of their novelty, worthy of respect and admiration.

I thank my Mexican hosts for the privilege of visiting not simply to watch the mechanics of voting, but also to learn how Mexico, even in the face of real challenges, is driving the consolidation and development of its governance as a dynamic democracy with a future in the world fully as important as its past.

Are these threads present in neighbors who run a polling station, a federal entity that seeks to facilitate voting of the disabled and the elderly, an electoral court that applies principles of constitutional review not just to counting votes, but also broadly to the conduct of elections, and a country whose authorities invest immensely in the transparency of its elections to its own people as well as to other countries, its peers?

In this march from contemporary materialism back to the foundations of European influences in Mexico and still further to the ferment of pre-Columbian Meso-American cultures, I see some of the threads of the tapestry that is contemporary Mexico.


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MEXICO UPDATE

Judicial Precedents on the New Collective Action

Eduardo Moel Modiano Collective actions are the exercise of:

“derechos que tiene determinado grupo social (consumidores, usuarios de servicios, afectados en cuestiones económicas y ambientales, etc.) para solicitar a una autoridad competente, principalmente jurisdiccional, que resuelva una controversia que afecta sus derechos” [rights held by a specific social group (consumers, users of services, those affected in economic and environmental matters, etc.) to solicit a competent authority, principally judicial, to resolve a controversy that effects its rights.]1

In Mexico collective actions are of recent creation: the DIARIO OFICIAL DE LA FEDERACIÓN of July 29, 2010 published their inclusion in the Constitution. Various laws were amended August 30, 2011, with effect as of February 29, 2012, notably the FEDERAL CODE OF CIVIL PROCEEDINGS, to regulate and offer framework for collective actions.

Like the majority of i n s t i t u t i ons and actions in the field of law, each time that one decides to insert a new idea in society, it is subject to constant defenses and attacks from its respective advocates and critics. This battle of lines of thought must continue to the point that the scope of the institution is clarified. The collective action finds itself in this continuous and inchoate process, and even though it is already in our legislation, much yet remains to be said about it in the judicial field.

So that a legal institution, such as the collective action, be useful to society, it must pass judicial scrutiny. It must be put to the test in a specific case so as to determine not only its practical utility, but also its correct regulation and that it be inserted in the legal framework in full respect and congruency with the further rights and principles that already regulate the legal system. It is the Judicial Power of the Federation that has this noble and delicate task, that consists not only in interpreting the laws, but also in making known to the Legislative or Executive Power, according to the case, that the norms issued comply or not with the

possibility of integrating themselves into the existing legal system.

It is usual that the first step of judicial scrutiny over new institutions, such as the collective action, be a review of the elements to proceed, such as:

Who has the right to exercise the action?

What elements must the complaint state?

What can be object of the action?

In principle the FEDERAL CODE OF CIVIL PROCEEDINGS is clear concerning the elements for the collective action to proceed. The referenced law establishes that the action only proceeds concerning relationships of consumption and environment, two very broad rubrics that surely in the future the Judicial Power of the Federation will have to define and bound. Concerning who is legitimated to initiate the action, the law indicates that it must be a collectivity, that may be determinate, indeterminate but determinable, and

inclusive when it is a question of individual rights. It will be the task of the courts to determine

when in the presence of a determinate collectivity, an indeterminate but determinable one, and when an individual interest has collective incidence. The characteristics of a collective action in strict sense, diffuse or homogeneous, are also defined in the law, but it will be only the Judicial Power that can provide the scope of each definition.

The judicial process referenced above has already begun to have its first results, there existing already decisions of federal tribunals that interpret the scope of the norms that regulate the collective action. Thus, there is a holding that establishes that the collective actions are not exclusive to the federal courts, but also that state laws may regulate the same objectives.2 3

The Judicial Power of the Federation has already ruled that the proceeding where one exercises the collective action is distinct from the individual action, and the

So that a legal institution, such as the collective action, be useful to society, it must pass judicial scrutiny...



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interpretation of the norm concerning these proceedings must be distinct from those of individual nature. In the key part of the holding, it states that:

“De una interpretación sistemática del referido precepto y de los objetivos de dichas acciones se colige que debido a las particularidades que diferencian los procesos colectivos de los individuales, los juzgadores deben propiciar que estos procedimientos sean cada vez más ágiles, sencillos y flexibles en aras de que las pretensiones de la colectividad gocen de un efectivo acceso a la justicia. Lo anterior implica que los juzgadores sean proclives a dar trámite a dichas acciones y se abstengan de adoptar los modelos hermenéuticos tradicionales empleados para los procedimientos individuales.” [From a systematic interpretation of the referenced precept and of the objectives of said action, one gathers that due to the particularities that differentiate the collective proceedings from individual ones, those judging must facilitate that these proceedings be each time more agile, simply and flexible so that the claims of the collectivity enjoy effective access to justice. The foregoing implies that those judging be encouraging to give attention to said actions and that they abstain from adopting the traditional interpretive models employed for individual proceedings.]4

The federal tribunals have also started to define and distinguish between a diffuse and a collective interest. The definition given in the law is not sufficient to leave clear what is each one; thus the judicial function is necessary. It is through a holding that one makes clear the distinction of the two concepts, as follows:

“los intereses difusos se relacionan con aquellas situaciones jurídicas no referidas a un individuo, sino que pertenecen a una pluralidad de sujetos más o menos determinada o indeterminable, que están vinculados únicamente por circunstancias de hecho en una situación específica que los hace unificarse para acceder a un derecho que les es común. Mientras que los colectivos corresponden a grupos limitados y circunscritos de personas relacionadas entre sí debido a una relación jurídica, con una conexión de bienes afectados debido a una necesidad común y a la existencia de elementos de identificación que permiten delimitar la identidad de la propia colectividad.” [Diffuse interests are related with those juridical situations not referred to an individual,

but rather that pertain to a plurality of subjects more or less determinate or indeterminate, that are bound only by circumstances of fact in a specific situation that makes them unify themselves to accede to a right that is common to them. However, the collective interest corresponds to limited and circumscribed groups of persons related among themselves due to a juridical relation, with a connection of goods affected due to a common necessity and to the existence of elements of identification that permit to bound the identity of the specific collectivity.]5

In the limited space available, it is not possible to address all the themes that are placed under judicial discussion in the matter of the collective action, but the object of this

modest essay is to make known that the collective action, as means to repair damage, for the efficient utilization of resources, and access to justice in Mexico, has already initiated its most important step for its consolidation as a legal institution in the Mexico legal system. It is in the Judicial Power of the Federation that the legal norm that is the collective action will wither or thrive, according to the path that it takes. For now, that of which we are already certain is that the collective action has arrived to fill important gaps in the Mexican legal system. 1 Ruiz Munilla, Jesús. Las Acciones Colectivas en el Derecho Mexicano. Ed. Tirant Lo Blanch. México. 2013. P. 13. 2 Registro: 2002285. Instancia: pleno tipo de tesis: jurisprudencia fuente: Semanario judicial de la federación y su gaceta, libro xv, diciembre de 2012, tomo 1 materia(s): Constitucional Tesis: P./J. 39/2012 (10a.) Página: 159. Denuncia popular en materia ambiental. El artículo 124 de la ley de desarrollo forestal sustentable del estado de Nuevo León, no vulnera el derecho de acceso a la tutela judicial efectiva. 3 Época: décima época registro: 2008233 instancia: Tribunales Colegiados de Circuito. Tipo de Tesis: Aislada fuente: Semanario judicial de la federación y su gaceta, libro 14, enero de 2015, tomo III materia(s): Administrativa Tesis: xi.1o.a.t.37 a (10a.) Página: 1760. Acciones colectivas. La competencia para resolverlas corresponde al tribunal de justicia administrativa del estado de Michoacán, cuando la pluralidad de actores lo eligieron libremente para conocer de su demanda, en atención al criterio de prevención contenido en el artículo 104, fracción ii, de la constitución federal. 4 Época: décima época registro: 2005802 instancia: primera sala tipo de tesis: aislada fuente: Semanario judicial de la federación y su gaceta, libro 4, marzo de 2014, Tomo I materia(s): Civil Tesis: 1a. LXXXIV/2014 (10a.) Página: 531. Acciones colectivas. Obligación de los juzgadores al interpretar las normas que rigen el procedimiento colectivo. 5 Época: Novena Época Registro: 161054 Instancia: Tribunales Colegiados de Circuito Tipo de Tesis: Aislada Fuente: Semanario Judicial de la Federación y su Gaceta Tomo XXXIV, Septiembre de 2011 Materia(s): Común Tesis: XI.1o.A.T.50 K Página: 2136. Intereses difusos o colectivos. Su tutela mediante el juicio de amparo indirecto.

...collective interest corresponds to limited and circumscribed groups of persons related among themselves due to a juridical relation..


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Mexico Antitrust Developments Gerardo Calderón Villegas

A. Legislative developments

A new competition law came into force in July, strengthening the Federal Economic Competition Commission’s (“Cofece”) powers, and introducing new powers and novel legal concepts, some of which are controversial.

The law contemplates:

(i) strengthened dawn raid powers (allowing access to any place, storage or electronic device, or other source of evidence and compelling explanations regarding any document or information obtained during the raid) and coercive measures (Cofece may order the arrest of individuals for obstructing an investigation);

(ii) decisions to initiate an investigation will no longer be published in the Federal Official Gazette; and

(iii) Cofece will have powers to file a claim or complaint regarding presumed criminal conduct in antitrust matters, with no need to wait until a final resolution is issued by the Plenary in the administrative stage.

New offenses have been created:

(i) the exchange of information between competitors, when resulting in, or having the purpose of, price fixing, allocation of markets, restricting output or rigging bids, has been incorporated as an independent cartel violation; and

(ii) companies with a dominant position may not restrict or grant discriminatory access to “essential inputs” or engage in conduct resulting in a margin

squeeze. Additionally, Cofece will have authority to order measures to eliminate “barriers to free competition”, to conduct studies to look for market power, and to order divestitures.

For mergers:

(i) filing thresholds were modified so that only annual sales originating in Mexico or assets in the

Mexican territory are taken into consideration;

(ii) mergers cannot be completed until clearance is obtained, making Mexico’s a suspensory regime;

(iii) the time for assessing mergers increased from thirty-five to sixty business days (plus an additional forty days in complex cases); and

(iv) Cofece is obliged to inform the parties of any possible risks to competition that may result from a transaction, in order for the parties to submit remedies or conditions proposals.1

B. Mergers

Cofece resolved over eighty-five concentrations, all of which were authorized (four with conditions).

Significant authorizations included:

(i) the acquisition of Merck’s consumer care business by Bayer;

(ii) the acquisition of Farmacias

Strengthened dawn raid powers New offenses Mergers cannot be completed until clearance is obtained, making Mexico’s a suspensory regime

Cofece initiated only one new investigation for abuse of dominance conduct, in the market for air gases...


...Cofece will have powers to file a claim or complaint regarding presumed criminal conduct in antitrust matters...


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Ahumada by Alliance Boots; and

(iii) the clearance of the alliance between Toyota and Mazda to jointly manufacture a new compact car.2

C. Cartels and other anticompetitive practices

Cofece initiated six investigations for cartel conduct in:

(i) healing materials;

(ii) airport ground transportation;

(iii) cranes and dragging services in Guerrero;

(iv) maritime transportation in Quintana Roo;

(v) music rights licenses; and

(vi) latex products.3

As of December 31, there were fourteen ongoing investigations.4

Furthermore, Cofece sanctioned diverse real estate agents (companies and individuals) for a total amount of approximately US$4 million for price fixing of commissions.5 Cofece sanctioned five appliance companies for approximately US$14.7 million for price fixing in the market for hermetic compressors.6

D. Abuse of dominance

Cofece initiated only one new investigation for abuse of dominance conduct, in the market for air gases. Specific conduct being investigated includes tying agreements, exclusivity, and raising of rivals’ costs.7 As of December 31, there were eight ongoing abuse of dominance investigations.

1 Decreto por el que se expide la Ley Federal de Competencia Económica y se reforman y adicionan diversos artículos del Código Penal Federal [Decree on the Federal Antitrust Law amending and supplementing the Federal

Penal Code], Diario Oficial de la Federación [DO], 23 de mayo de 2014 (Mex.).

2 Comisión Federal de Competencia [Federal C o m m i s s i o n o f Competi t ion] , Bayer

Aktiengesellschaft/Merck & Co., Inc., Report No. CNT-045-2014; Comision Federal de Competencia [Federal Commission of Competition], AB Acquisitions Holdings Limited/Alliance Boots GMBH/Walgreen Co./Walgreen Scotland Investments LP/Walgreen Swiss International GMBH, Report No. CNT-082-2014; Comision Federal de Competencia [Federal Commission of Competition], Mazda Motor Manufacturing de Mexico, S.A. de C.V./Toyota Motor de Mexico, S. de R.L. de C.V., Report No. CNT-052-2014.

3 Comisión Federal de Competencia [Federal Commission of Competition], Mercado de materiales de curación de polietileno adquiridos por el sector salud en el territorio nacional, Report No. DE-020-2014; Comision Federal de Competencia [Federal Commission of Competition],

Servicios de arrastre de vehiculos, Report No. DE-023-2013; Comision Federal de Competencia [Federal Commission of Competition], De los servicios de transporte marítimo de pasajeros en el estado de Quintana Roo, Report No. DE-

002-2014; Comision Federal de Competencia [Federal Commission of Competition], Otorgamiento de licencias para la comunicación o utilisación pública de obras musicales, sus interpretaciones o ejecuciones, de fonogramas y videogramas en el territorio nacional, Report No. DE-025-2013; Comision Federal de Competencia [Federal Commission of Competition], Producción, distribución y comercialización de productos de látex adquiridos por el sector salud en el territorio nacional, Report No. DE-024-2013.

4 Note that as of July 7, 2014 Cofece no longer publishes decisions to initiate investigations and therefore additional investigations might have been initiated.

5 Comisión Federal de Competencia [Federal Commission of Competition], Servicios proporcionados por asesores en bienes raíces, corredores, agentes, administradores y, en general, profesionales del ramo inmobiliario, Report No. DE-019-2007.

...Cofece sanctioned diverse real estate agents (companies and individuals) for a total amount of approximately US$4 million ...

mergers cannot be completed until clearance is obtained, making Mexico’s a suspensory regime;


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MEXICO UPDATE

Mexico’s New Federal Regulation of Occupational Health and Safety

Sergio B. Bustamante

Constant social change drives changes in the labor and health and safety rules that govern work. Changes in technology; manners of thinking; and accessibility to media and electronic information, among others, do not permit to stay still; therefore, society evolves, and consequently adaption of the rules that govern such relationships is required to maintain social peace.

The Ministry of Labor and Social Welfare (“STPS”) is responsible to draft the mechanisms (Laws, Regulations, Standards, et cetera) to govern such relationships, as well as to update them in accord with the necessities of society and to review the conformity of such rules with the purpose of guaranteeing the development of the country through equilibrium of the factors ofproduction.

Accordingly, and in conformity with Mexico’s Constitution and the Federal Labor Law (“LFT”) and with the purpose to achieve the objectives set forth in the National Development Plan 2013 - 2018, Mexico’s New Federal Regulation of Occupational Health and Safety was adopted.

This New Regulation will impact operation in Mexican facilities as the New Regulation is stricter for Employers, in respect of seeking to: a) assure conditions that prevent hazard in the Workplace; and b) guaranty workers their right to perform their activities in environments that ensure their life and health.

Within this New Regulation and corresponding NOMs, the number of legal provisions to be respected by subject matter are: i) Occupational Health 107; ii) Safety 168; and iii) Organization Provisions for both Occupational Health and Safety Areas 62; totalling 337 provisions.

Mexico’s New Federal Regulation of Occupational Health and Safety, effective throughout Mexico February

14, 2015, is of public order and social interest. It establishes provisions relative to workplace health and safety, to prevent hazards and to guarantee workers, within the framework of LFT, the right to perform their activities in environments that assure their life and health. Its application and enforcement oversight is responsibility of STPS, assisted for activities under state jurisdiction by the labor authorities of Mexico’s states and the Federal District.

The Regulation introduces new concepts such as:

Assessment of workplace occupational health and safety, understood as identification of unsafe or hazardous conditions, physical, chemical or biological agents, and ergonomic or psychosocial

risk factors affecting the conditions of the work environment and the associated dangers, as well as applicable legal requirements pertaining to occupational health and safety;

Favorable Organizational Environment, understood as a sense among workers of belonging to the organization, adequate training to perform their tasks appropriately, specific definition of individual responsibilities, proactive participation and

communication among team members, adequate distribution of work responsibilities, with regular labor shifts, and promotion of evaluation and review of performance;

Ergonomic Risk Factors, understood as factors that may cause physical stress and repetitive movements or forced postures in work performed, with consequent fatigue, errors, occupational accidents and illness associated with design of facilities, machinery, equipment, tools or job position;

Psychosocial Risk Factors, understood as factors that from the work performed may cause anxiety disorders,


Regulations will impact the operation in the Mexican facilities since they are stricter for Employers...

[The regulation] establishes provisions relative to workplace health and safety, to prevent hazards and to guarantee workers, within the framework of LFT, the right to perform their activities in environments that assure their life and health...


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non organic disorders of the sleep-wake cycle, and serious stress and adaption disorders derived from nature of the work, position or functions, the type of work shift and exposure to traumatic events or acts of labor violence;

Workplace, understood as places such as buildings, establishments, installations and areas where activities of exploitation, utilization, production, commercial distribution, transport and warehousing or rendering of services, are performed and those where individuals subject to a labor relation work;

Workers with Disability, understood as those who, for reasons congenital or acquired, present one or more deficiencies of physical, mental, intellectual or sensorial character, permanent or temporary; and,

Labor Violence, understood as acts of harassment, sexual harassment or bad treatment of a worker that may damage the worker’s integrity or health.

The Regulation requires an Employer to:

have an Occupational Health and Safety Assessment, as well as risk studies and analyses required by the Regulation and corresponding Standards;

implement an Occupational Health and Safety program based on the Assessment;

prepare specific programs, manuals and procedures, to guide performance of labor activities and processes, under safe and emergency conditions;

promote establishment of a Health and Safety Commission and guarantee provision of Preventive Occupational Health and Safety Services in the workplace;

include in visible workplace locations, warnings or signs and colors to inform, warn and prevent risks;

conduct assessment, evaluation and control of workplace contaminants, to maintain workplace

environmental conditions within exposure limits. apply the Occupational Health and Safety measures

contemplated in the Regulation and the Standards. order medical examinations for occupationally exposed

personnel as required by the Regulation and Standards; provide workers personal protective equipment

commensurate with risks to which their work exposes them;

inform workers of risks related to their duties; qualify and train workers on risk prevention and attention to emergencies; qualify workplace personnel serving on the Health and Safety Commission and the Occupational Health and Safety Preventive Services, and, when applicable, support

updating them; obtain the authorizations for performance of hazardous

activities or tasks detailed in the Regulation and specific Standards;

maintain administrative records, printed or electronic, as the Regulation and Standards require;

provide written or electronic notice of labor accidents, as well as work-related deaths, within 72 hours of knowledge of them;

file notices related to pressurized vessels, cryogenic containers and steam generators or boilers,

contemplated in the Regulation; maintain official documents, reports of results and compliance certificates in matters of

occupational health and safety; supervise that contractors comply with occupational

health and safety measures, when performing tasks within their installations; and,

authorize and facilitate the Labor Authority’s exercise of the duties of inspection and oversight.

Employee obligations include to:

observe the preventive measures of occupational health and safety provided in the Regulation and Standards, as well as those established by employers;

submit to medical examinations pursuant to the Regulation and Standards; and,

Labor Violence, understood as acts of harassment, sexual harassment or bad treatment of a worker that may damage the worker’s integrity or health...

The regulation requires an employer to… qualify and train workers on risk prevention and attention to emergencies...


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participate in relevant qualification and training provided by the employer and its designees.

The Regulation establishes general provisions concerning safety in various matters, including:

buildings, premises, sites, installations and work areas;

fire prevention and protection; utilization of machinery, equipment and tools; handling, transportation and storage of materials; handling, transportation and storage of hazardous

chemical substances; driving motorized vehicles; working at heights; working in confined spaces; containers subject to pressure, cryogenic and steam

generators or boilers (To operate containers subject to pressure, cryogenic containers and steam generators or boilers covered by the Standard, an employer must give written notice to the STPS before operation that such equipment meets required safety conditions, together with certificate of conformity issued by an accredited and approved verification unit, as contemplated by the relevant Standard);

static electricity and prevention of atmospheric discharges;

welding and cutting activities; and,

maintenance of electrical installations. The Regulation establishes general provisions for workplace health in respect of:

noise; vibrations; illumination; ionizing radiation; non-ionizing electromagnetic radiation; elevated or chilled thermal conditions;

abnormal environmental pressures; chemical agents capable of altering health; biological agents capable of altering health;

ergonomic risk factors (implicating employer preparation of

analysis of ergonomic risk factors of relevant work positions and disclosures to employees); and,

psychosocial risk factors (implicating to identify and analyze work positions with psychosocial risk based on nature of their functions or the type of work shift, and to identify workers subject to severe traumatic events or acts of labor violence, and evaluate them clinically, all with reference to: i) hazardous conditions inherent to a job; ii) performance under unsafe conditions; iii) demands for heightened responsibility or prolonged, intense consideration and attention.

Organizational requirements relative to occupational safety and health include the following:

establish workplace Health and Safety Commissions; establish occupational health and safety preventive

services; conduct an occupational health and safety

assessment; provide preventive services of labor medicine; provide preventive services of occupational

medicine; provide for selection and use of personnel protective equipment;

provide occupational health and safety signs and identification of risks from fluids in piping;

identify and communicate hazards and risks from hazardous chemical substances, including to have safety data sheets in Spanish (SDS or MSDS) available to workers for all hazardous chemical substances used in the workplace;

safely organize critical processes and equipment where hazardous chemical substances are handled, and,

provide written or electronic notice of labor accidents, as well as work-related deaths, within 72 hours of knowledge of them...

The Regulation establishes general provisions concerning safety in various matters...


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promote a favorable organizational environment and prevention of labor violence, including employer definition of relevant policies.

Targeted subject matters for workplace health and safety include:

Protection of Pregnant or Nursing Women–The provisions seek to protect the physical integrity and health of pregnant or nursing women, and the child, prohibiting assignment of a pregnant or nursing woman to perform various activities harmful to the pregnancy or nursing. Immediately upon knowledge of pregnancy, a woman performing such work must inform the employer so that the employer can temporarily re-assign the woman;

Protection of Minors Workers–The Regulation seeks to protect the physical and health integrity of minor workers, from ages 15 through 18, with a maximum workday of six hours;

Protection of Workers with Disability–In any workplace with a disabled worker, the employer must perform an analysis to determine the requirements of the relevant job. In workplaces of over fifty workers, the employer must assure facilities for disabled persons to perform;

Field Workers–To protect physical and health integrity of field workers in agricultural, ranching, aquaculture, forest and mixed activities, an employer must provide safety instructions in the workers’ language or dialect, or through graphic images and pictograms; and,

Workplace Promotion of Health and Prevention of Addictions–The STPS will provide guidance on actions and programs to promote health and prevent addictions required as part of an Occupational Health and Safety Program, including by issuing and updating a Guide of Recommendations to Promote Workplace Health and Prevent Addictions.

Criteria are established to update the table of

occupational illnesses and evaluation of permanent disabilities resulting from work risks, including with respect to eleven categories of illnesses labeled

“Mental disturbances”. Employers must notify within 72 hours, the STPS, in writing or electronically, of work

accidents as defined by the LFT. Should the employer not do so, the employee, or if unable to do so, family members, should give the notice to the public institution of social security with which the worker is affiliated, and they may further notify the STPS.

The Regulation contemplates that STPS make available programs to employers to facilitate knowledge of and compliance with workplace occupational health and safety requirements, including those related to i) identification of relevant Mexican official standards; ii) identification and control of personal protection equipment; and iii) Programs for Self-Management of Occupational Health and Safety. Programs for Self-Management should allow voluntary participation and extend the possibility of such participation to the contractor companies that perform work related to the principal activities of the employer within the employer’s facilities.

STPS may adjust the tabulation imposed in setting penalties and fines for violations to the provisions established in the Regulation. Potential fines currently range from 50 to 5,000 days of the general minimum daily wage in force in the Federal District, corresponding at recent exchange rates to: 3,505 pesos (approximately 250 dollars); 350,500 pesos (approximately 25,000 dollars).

Finally and from the review of the aforementioned new Regulations, we can conclude that there are additional obligations that will have to be satisfied, and a “diagnostic” would need to be performed in each workplace to determine which will apply. Those Employers who do not comply with the Regulations will be imposed sanctions higher than the ones established in the abrogated Regulations.

Organizational requirements… include… safely organize critical processes and equipment where hazardous chemical substances are handled...


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MEXICO UPDATE

P r o g r a m o n C o m p a r a t i v e P e r s p e c t i v e s o n B i d P r o t e s t R e g i m e s

i n N o r t h A m e r i c a : A R e v i e w

. L o r i n H e r z f e l d t

The International Procurement and Aerospace & Defense Committees of the ABA’s Section of International Law presented a panel of speakers discussing comparative perspectives in government contract bid protest regimes. Chapman University’s Dale E. Fowler School of Law hosted the panel event on Tuesday, March 31, 2015, with a larger group participating remotely through the internet. Mexico Committee members present included Javier Gutiérrez Becerril who spoke, Fernanda de Hoyos Walther, Fernando Navarro Sánchez, and senior advisor Patrick Del Duca. This panel featured speakers from the United States, Canada, and Mexico, and each speaker provided insight on how bid protest processes are practiced in each respective jurisdiction. Dawn Stern, Brenda Swick, and David Goodwin, respectively co-chair, immediate past co-chair and vice chair of the International Procurement Committee organized the event. Panelists were Dawn Stern of DLA Piper, Paul Lalonde of Dentons Canada, and Javier Gutiérrez Becerril of Mexico’s Comisión Federal de Electricidad. David Ginsberg, a partner in Crowell &

Mooring’s Government Contracts Group, moderated the panel and guided audience participation throughout the evening. Tom Campbell, Dean of Fowler School of Law, convened the panel with some opening remarks on the topic and what it meant for Chapman to have the pleasure of hosting the ABA. Lic. Gutiérrez was asked the first question of the evening, whether bid protests are a dangerous route to travel, because in essence, bid protests require suing the government. His answer detailed how usually the process is complicated only when the bid protest is not actually grounded. He provided some background into the bid protest process in Mexico, including its “formalistic” character associated with Mexico’s embrace of the civil law tradition. He also discussed some of the hardships caused by bid protests from the perspective of a

government official, touching on the motivation of some protestors simply to interrupt the process, without valid reason to protest. He was careful to mention, however, the value of protests for legitimate reasons,

to resolve real issues in the government contract bidding process. Lic. Gutiérrez noted that bid protests are an issue of constitutional right, raised through judicial recourse, and are addressed by focus on government transparency, fairness, and economic efficiency. Mr. Lalonde was then asked to provide some background on the current bid protest process in Canada. He described it as “a unique and odd system,” because Canada does not have detailed general laws and regulations for procurement. Instead, the relevant department requesting a bid has discretion to dictate the process, and the guidelines that are followed in most instances stem from a series of international trade agreements. He said that usually, a valid protest claim is birthed from a contested deviation from the trade agreements by either another bidder or the government official reviewing bids. Ms. Stern was up next, and was asked how she advises clients concerned about litigating with the U.S. DISCLAIMER: The materials and information in this newsletter do not constitute legal advice. MEXICO UPDATE is a publication made available solely for informational purposes and should not be considered legal advice. The opinions and comments in MEXICO UPDATE are those of its contributors and do not necessarily reflect any opinion of the ABA, their respective firms or the editors.

...bid protests are a dangerous route to travel, because in essence, bid protests require suing the government...

Dean Tom Campbell, David Ginsberg, Javier Gutiérrez Becerril, Dawn Stern, Lorin Herzfeldt and Paul Lalonde


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MEXICO UPDATE

Government. She advised that it is of course “a situation where you do tread carefully,” but honed in on the fact that bidders have a “statutory right to protest.” She discussed how it is important to do a thorough analysis of the potential for success before protesting, and also focused in on how critical it is to act with civility so as not to harm future opportunities to work with the Government and other contractors.

The discussion turned to discussion of how many bid protests, on average, each jurisdiction faces per year. Ms. Stern said there are about 2,500 cases per year filed at the U.S. Government Accountability Office (GAO), with only about 500 that are ultimately decided on the merits. The remaining cases are usually dismissed; because often the challenged government agency takes corrective action soon after the protest is filed or the case is dismissed for lack of jurisdiction. She observed that in 2014, about 13% of GAO bid protests were sustained in favor of the bidder/contractor. Mr. Lalonde noted there are about 80 to 130 cases in his jurisdiction per year, and about 50% of those not valid claims; with only about 12.5% total that are ultimately found valid and issued corrective orders by the tribunal. Lastly, Lic. Gutiérrez said that there are on the order of 1,000 to 2,000 cases per year, but that Mexico does

not have a specific agency in which these proceedings are concentrated; rather, the challenging bidder must invoke rights of constitutional protection in the Mexican courts.

There was lively discussion and participation from the audience throughout the panel, and some of the

questions focused on how to help a client make the decision as to where to file, and if there is a “Question and Answer” aspect of the procurement and bid protest

process to help contractors with the proposal process. Ms. Stern helped to break down the three choices for filing in the U.S.–the Agency Level, GAO, and the U.S. Court of Federal Claims; and described the pros and cons of each choice. She also discussed the Q&A process for filing bid and protests.

The last topic of the night dealt with confidentiality protection, and how each jurisdiction handles keeping the confidential information of the prospective bidders or protestors out of the eyes of other bidders or competitors, and out of the eye of the public if a bid ends up in litigation. Mr. Lalonde detailed that in Canada, there are two versions of a bid protest complaint filed, one for the Tribunal, and one for the public. He said there are up to $1 million in fines for breach of a

confidential agreement in a bid process or protest. In the U.S., there are protective orders filed, and also the

GAO or the court has the discretion to keep certain things from the public eye. Finally, Lic. Gutiérrez explained that Mexico has some issues assuring confidentiality throughout the process, but that in theory, a contractor or bidder may request certain information stay confidential during a protest.

Overall, this was a very interesting event, and Mr. Ginsberg did a great job facilitating by asking relevant

questions that allowed the panel to cover a wide range of topics on the bid protest process. He was able to include the audience throughout, and the program afforded a great comparison of the three jurisdictions’ take on the procurement bid protest process. Attendees had the opportunity to continue their conversations at a reception following the panel.

...there are up to $1 million in fines for breach of a confidential agreement in a bid process or protest….

Mexico Committee members Fernanda de Hoyos Walther, Javier Gutiérrez Becerril, Fernando Navarro Sánchez and Patrick Del Duca.

...some of the questions focused on how to help a client make the decision as to where to file...

The Mexico Committee continuously seeks qualified professionals prepared to contribute their time and talents to continue developing a more active Committee. This is a prime opportunity to become involved with a community of lawyers that share an interest in Mexico and Mexican law, who are fellow American Bar Association members.

The Mexico Committee welcomes any suggestions, ideas or contributions to enhance this periodic publication. The current submittal deadline for contributions to the next issue is July 15, 2015, but please do not wait until the deadline. Rather, be in touch now with any member of our Editorial Committee with your offer of help, be it as an editor or a contributor. We can offer topic suggestions and provide translation and editing as needed.

If you are interested in participating actively with the Committee and in joining its steering group, please contact any member of the Committee leadership.

ABA ● Sect ion of Internat ional Law ● Mexico Committee

MEXICO UPDATE American Bar Assoc iat ion

Sect ion of Internat ional Law

Mexico Committee ©

Editorial Committee: Mexico Committee

Ben Rosen, Editorial Board Chair Patrick Del Duca, Alejandro Suárez

Juan Carlos Velázquez de León Obregón Ernesto Velarde Danache

Facultad de Derecho, Universidad Panamericana, Guadalajara campus

Maria Isabel Álvarez Peña, Vice-Dean Yurixhi Gallardo Martínez, Academic Head

Romina Guarneros Galaz, Editor Gabriela García Escobar

María Eugenia Flores Chávez María Fernanda Lazcano Arregui

Eric Coufal Leaño


Members of the MEXICO UPDATE editorial team at the Facultad de Derecho, Universidad Panamericana, Guadalajara campus Eric Coufal Leaño, María Fernanda Lazcano Arregui, Romina Guarneros Galaz, María Eugenia Flores Chávez and Gabriela García Escobar.

Mexico Committee WEBSITE:

http://apps.americanbar.org/dch/committee.cfm?com=IC845000

aba • section of international law • mexico committee ... 46_mexico...at the 2015 montreal fall...

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