WEEKLY REPORT 14.6.24

June 8–14, 2024

AMLO’s Constitutional Reforms HOT TOPICS:

Last Friday, President Andrés Manuel López Obrador informed that he will push for the approval of his constitutional reforms Then, earlier this week, President-elect Claudia Sheinbaum met with AMLO to discuss issues regarding the transition, including the president’s constitutional reforms After the meeting, Sheinbaum highlighted the congress will prioritize three reforms: 1) the Judicial Power reform, which will involve an open discussion and a program to inform voters about the functions and integration of the judicial power; 2) the ISSSTE Law reform for the benefit of public education teachers; and 3) a reform to cancel re-election, which is currently allowed for legislative and municipal positions.

AMLO and his party, Morena, are putting a lot of emphasis in the judicial reform. Mario Delgado, the party leader, announced that during this weekend they will conduct three surveys, with the help of two polling companies, with the objective of evaluating what people think about the judicial reform Additionally, the president-elect said that next week she will reveal the members of her cabinet and she mentioned two new reforms: economic support for women aged 60 to 64 through a constitutional reform, and a universal scholarship for students in elementary and middle school It is important to mention that all these possible constitutional changes have been driving the peso down, as it has faced a depreciation of 10 5% against the USD since the elections

Source: Prodensa Intelligence, El Economista, and Expansión

RULE OF LAW INDEX

In Mexico, no state exceeds a score of 0 5, showing significant challenges nationwide, as the highest score is 1 The highest-scoring states are Querétaro (0 49), Guanajuato (0 47), and Aguascalientes (0 47), while the lowest are Estado de México (0 35), Morelos (0 35), and Quintana Roo (0 36) The study reveals ongoing stagnation, with only five states improving their scores, 13 decreasing, and 14 remaining unchanged from the previous edition Despite general stagnation, some states have shown progress since 2018, notably Querétaro, Guanajuato, Sinaloa, Baja California Sur, Tamaulipas, and Guerrero

Source: World Justice Project

SHEINBAUM MEETS WITH PRIVATE SECTOR

Kathryn McLay, President and CEO of Walmart International, met with Mexico's President-elect Claudia Sheinbaum on June 11 to discuss Walmart's planned investment of MXN 34 5 billion for this year This is part of Sheinbaum’s efforts to approach the private sector Last week she met with Black Rock and stated the investment fund will inject more capital into the country

The president-elect also met for the first time with envoys from the American government, specifically the Ambassador Ken Salazar and Elizabeth SherwoodRandall, President Joe Biden’s security advisor Although the meeting was informal, it emphasized both parties’ wishes to keep collaborating

Source: El Financiero, Forbes, and Milenio

PRD MIGHT LOSE REGISTRY

The PRD, a reference for the left in Mexico, is close to losing its registry as a political party The National Electoral Institute (INE) has begun a "prevention phase" because the PRD did not reach the required 3% of the national vote, achieving only 2 43% As a result, a temporal administrator will manage the party's finances, handling payroll and essential services. The PRD may retain its registration as a local party in states where it secured more than 3% and fielded candidates However, the Electoral Tribunal must certify the election by August before the new Congress takes office on September 1 If dissolved, the PRD plans to create a new party, aiming to become a citizen option

Source: El País

HOT TOPICS:

Election Results: Congress Final Composition

= 373

Qualified Majority : 334 votes are needed to approve constitutional reforms

Qualified Majority : 85 votes are needed to approve constitutional reforms. = 83

After the final count of the votes, it was determined that Morena did not hold an over-representation above what is established in the law in the Chamber of Deputies Still, Movimiento Ciudadano (MC) will challenge the distribution of proportional deputies, arguing that the current distribution is unfairly awarding seats to the “Sigamos Haciendo Historia” coalition However, it’s not clear this measure will have any effect on the results

Source: Prodensa Intelligence and Expansión

CHALLENGES TO THE ELECTIONS

The Electoral Tribunal has received 208 challenges to the presidential elections In total, 43 were presented by MC, 164 were presented by the PRD, and one by the PAN These challenges only apply to the votes in polling stations that were not subject to a recount, which are around 32%. The tribunal has before August 31 to evaluate all these challenges Xóchitl Gálvez also presented an objection to the elections, arguing AMLO wrongfully intervened in the electoral process Finally, in an attempt to increase their numbers of deputies, the PAN and PRD challenged the election, while simultaneously presenting an Inconformity Trial in each of the 300 electoral districts

Source: El Economista, Expansión, and Expansión

HOT TOPICS: Legislative and Regulatory issues:

LABOR

Amendment to Article 21 of the Federal Law to Prevent and Punish Trafficking in Persons was published in the Mexican Official Gazette (DOF)

This amendment introduces stricter penalties for labor exploitation, specifically targeting practices such as subjecting individuals to excessive working hours beyond legal limits

Under the revised law, perpetrators found guilty of exploiting individuals, especially those from indigenous and Afro-Mexican communities, can now face harsher penalties These include imprisonment ranging from 4 to 12 years and fines ranging from 7,000 to 70,000 days

Unlike inspections under the Federal Labor Law conducted by the Ministry of Labor and Social Welfare (STPS), which may involve other agencies, the Law to Prevent and Punish Trafficking in Persons specifies a distinct investigative procedure led by the Public Prosecutor's Office Thus, sanctions for offenses are determined through judicial investigation rather than administrative inspection If the STPS identifies instances of excessive working hours, they may refer the matter to the Public Prosecutor's Office for investigation under the Law to Prevent and Punish Trafficking in Persons

Citizen Initiative to Reform Various Provisions of the Potable Water and Sanitation Law for the State

Presented by : Congress of the State of Nuevo León

Purpose : Require that concessions involving investments exceeding one thousand quotas receive prior authorization from the State Congress and the First Water Advisory Council

Status : 2024-06-12 - Initiative referred to the Commission for report

INITIATIVE ADDING A SECOND CHAPTER TO TITLE SIX, ENTITLED "CYBERCRIMES," OF THE PENAL CODE FOR THE STATE

Presented by : Local deputy Alhinna Berenice Vargas García (NL - PRI)

Purpose : Establishing that a cybercrime is committed by anyone who:

• Discloses or improperly uses information, conversations, text messages, or voice files through identity theft

• Alters or causes loss of information on devices not protected by a security mechanism

• Without authorization, copies, modifies, destroys, or causes loss of information contained in computer systems belonging to the State and the Financial System

Status : 2024-06-10 - Initiative referred to Committee on Justice and Public Security for review

INITIATIVE TO THE CONGRESS OF THE UNION AMENDING ARTICLES 4 AND 108 OF THE ELECTRICITY INDUSTRY LAW

Presented by : Local deputy Iraís Virginia Reyes de la Torre (NL - MC)

Purpose :

• Establishing the necessary legal and market conditions for investment and development of infrastructure and clean energy generation

• Limiting CENACE's powers in:

• Allocation and dispatch of import and export programs to meet electricity demand

• Receiving bids and calculating electricity prices derived from the Wholesale Electricity Market

Status : 2024-06-11 - Initiative referred to Committee for review

DECREE REFORMING VARIOUS PROVISIONS OF THE STATE TAX LAW ON ECOLOGICAL TAXES

Presented by : Executive Power of the State of San Luis Potosí

Purpose :

• Subject(s): Physical persons, legal entities, federal, state, and municipal governments, decentralized organizations, majority state-owned enterprises, and relevant federal trusts

• Defines taxable emissions, including CO2, methane, nitrous oxide, black carbon, and various fluorocarbons

• Tax base: Measured in tons of pollutant emissions

• Fiscal incentives for environmental preservation, technological innovation, and clean energy use

• 100% incentives for new businesses, exemption for the first 25 tons emitted, and reduced tax rates

Implementation : Effective from July 1

Status : Published on June 10, 2024, in the Official Gazette

GUANAJUATO

DECREE REFORMING AND ADDING VARIOUS PROVISIONS TO THE CLIMATE CHANGE LAW

Presented by : Executive Power of the State of Guanajuato

Purpose :

• Include climate mitigation and adaptation criteria in environmental compensation measures

• Design measures to reduce greenhouse gas emissions focusing on the electric, industrial, waste, transport, and agriculture sectors

• The Secretariat of Sustainable Economic Development will work with the private sector on adopting circular economy practices and low-emission strategies

Status : Published on June 10, 2024, in the Official Gazette

NUEVO LEÓN

SAN LUIS POTOSÍ

NUEVO LEÓN

HOT TOPICS: Legislative and Regulatory issues:

HEALTH

Report for the Issuance of the Environmental Law of Mexico City

Presented by : Commission for Environmental Preservation, Climate Change, and Ecological Protection; Commission for Planning and Development

Purpose : The new Environmental Law of Mexico City aims to replace the 2000 law, set principles for environmental policy, and establish procedures for conservation, sustainable use, impact mitigation, and restoration It mandates environmental impact assessments for projects, allows self-regulation for compliant companies, and promotes efficient, low-emission technologies for vehicles It requires environmental audits for various establishments, enforces sustainable production, and bans unauthorized pollutant emissions and waste disposal in protected areas It prohibits water privatization, encourages the use of reused or treated water, and makes water availability a prerequisite for permits It also requires a Single Environmental Manifestation for local emission sources and restricts excessive emissions and the use of harmful agrochemicals in conservation areas

Status : Approved on 2024-06-13, passed to the State Executive Power

Report on the Amendment to Article 65 of the Solid Waste Law of the Federal District ; Repeal of Articles 221 , 222 , 223 , and 224 of Chapter VI of Title VII of the Environmental Protection Law in Mexico City ; and Issuance of the Environmental Responsibility Law of Mexico City

Presented by : Commission for Environmental Preservation, Climate Change, and Ecological Protection

Purpose : Hold any individual or entity responsible for direct or indirect adverse and measurable impacts on habitats, ecosystems, natural elements, and resources, including their chemical, physical, or biological conditions, interactions, and provided environmental services, accountable for comprehensive reparations

Status : Approved on 2024-06-13, passed to the State Executive Power

INITIATIVE WITH A BILL AMENDING SECTION VII OF ARTICLE 39 OF THE FEDERAL PUBLIC ADMINISTRATION ORGANIC LAW, AND VARIOUS PROVISIONS OF THE GENERAL HEALTH LAW AND THE NATIONAL HEALTH INSTITUTES LAW

Presented by : Sen Cora Cecilia Pinedo Alonso (Nay - PT)

Purpose :

• Empowering the Ministry of Health to create the Electronic Medical Record The National Health System aims to design an electronic platform to ensure interoperability, processing, interpretation, confidentiality, security, and use of standards and catalogs of health information records, named the Single Electronic Clinical Record, which must be promoted with mandatory compliance

• The Ministry of Health is responsible for issuing regulations governing the Single Electronic Clinical Record of the National Health System

• The transitional regime establishes that the Federal Entities, within their respective areas of competence, will establish physical and technological instruments and mechanisms to comply with the modifications of this Decree, within a period not exceeding 60 days from its publication in the Official Gazette of the Federation

Status : 2024-06-12 - Published in the Parliamentary Gazette

MEXICO CITY