How indigenous reform may affect industry in Mexico

Hours before ending his term, Mexican President Andrés Manuel López Obrador signed two decrees, one focused on a reform of indigenous rights that could have implications for projects in various industries, including mining.

The reform, which was approved by 26 state congresses, guarantees the rights of indigenous and Afro-Mexican peoples and is part of the package of 20 initiatives presented by López Obrador in February as part of his so-called Plan C.

Following the changes approved to the Magna Carta, the country's pluricultural and multiethnic composition will be recognized, expressed in 70 indigenous peoples and the Afro-Mexican people, which in turn is made up of 7.3 million speakers of indigenous languages, 23mn who identify as indigenous and 2.5mn who identify as Afro-Mexican.

Article 2 of the Magna Carta, which considered indigenous peoples as subjects of public interest, was amended. They will now be recognized as subjects of public law.

The original February draft incorporated into the constitution the right of indigenous communities “to free, prior, informed, culturally appropriate and good faith consultation when legislative and administrative measures are to be adopted that may cause significant effects or impacts on their lives or environment, with the aim of obtaining their consent or reaching an agreement.”

The initiative also established “the obligation that, when a private individual benefits from any administrative measure subject to consultation, the cost must be covered by that individual. Likewise, when a profit is obtained from these measures, indigenous communities must be granted a fair and equitable benefit.”

The final decree with the definitive changes is to be published in the official gazette on Tuesday.

One of the reasons why Mexican industry must pay attention to this reform is that, given that urban areas are increasingly developed, industries, industrial parks and even tourist complexes must engage with rural communities in the places where they aspire to develop their projects.

In these rural areas, land is usually owned by so-called ejidos or agrarian communities, in many cases indigenous, which is of utmost importance in the opinion of mining lawyer Alberto Vázquez, as Mexico has been a party to ILO convention 169 since 1991.

Following ratification, Mexico amended its constitution to guarantee indigenous human rights, including the right to consultation, applicable to measures that may affect their collective rights, and whose obligation falls on governments and not on private individuals or companies.

However, Vázquez wrote on LinkedIn that neither congress nor the executive have issued the respective laws and regulations to implement ILO convention 169.

There is also no definition of what constitutes an indigenous community, nor is there a legal framework on how indigenous consultations should be carried out so that they can be freely informed, which has generated various conflicts for local and foreign investors, according to Vázquez.

The new constitutional amendment that makes indigenous populations subjects of law “is incorrect and will bring more problems than benefits,” he wrote after confirming that the senate approved the constitutional reform on Sunday.

Vázquez explained that “one thing is to respect, promote, conserve and protect ancestral and indigenous issues, and quite another is to politicize, make demagogic use of indigenous quality" and create a fourth power to which Mexico will be subject. With the creation of a fourth power, the expert is referring to NGOs being able to stop projects at will.

In an April interview with BNamericas about the presidential initiative for constitutional reform, Vázquez said that the indigenous issue was being used to stop projects.

“With this reform, [environmental] NGOs can have more strength to create communities with the intention of stopping productive projects... not just mining ones,” he warned.

According to Vázquez, although the reform seeks to give more rights and strength to indigenous and Afro-Mexican communities, which are also not clearly defined, in practice he believes that "it will lead to more abuses in the area of NGOs, not only in the mining sector."

"They would be giving many powers to indigenous and Afro-Mexican communities, but also to communities such as ejidos and agrarian communities," said Vázquez.