AMLO’s constitutional reform package: one last attempt to finish the job

Just months before ending his six-year term in October, Mexican President Andrés Manuel López Obrador sent a package of 20 constitutional reforms to congress, aimed at bolstering social programs, weakening autonomous agencies and passing the laws, decrees and reforms the supreme court nullified during his administration.

Other initiatives could impact the private sector in areas such as rail transport, mining, power generation and water concessions.

“There is serious concern about the content and impact that these reforms may have on the private sector,” constitutional expert Mariano Calderón, partner at law firm Santamarina & Steta, told BNamericas. 

According to the expert, the reforms can be divided into two blocks. 

The first concerns social programs. 

“The first big question is how they plan to finance all these projects. By establishing them in the constitution, the aim is to elevate them to universal rights for all citizens of the country without saying where the budget items are going to come from,” he said. 

“The second block of reforms has a high impact on legal certainty, the rule of law and private investment, rail lines, electricity, national water concessions, the mining industry and, most importantly, the judicial branch,” Calderón said. 

"I believe they generate great uncertainty and concern because they seek to increase the discretion of the executive branch, return to an absolute presidentialism where the only thing that matters and governs in the country is the word of the executive, eliminating the importance and function of autonomous agencies," Calderón said.

He added that these agencies "fulfill a physical function and reason to promote the rule of law, respect the guarantees established by the constitution and establish counterweights and technical bodies that govern based on technical criteria and not political decisions." 

KEY REFORMS

One reform seeks to constitutionally establish that power utility CFE is a strategic public company and not a state productive enterprise, as defined in the 2013 energy reform. Another seeks to “ban genetically modified corn and the extraction of hydrocarbons through fracking in the national territory” and outlaw concessions for open pit mining. 

Using the 18,000km of rail concessions for passenger rather than cargo transport is also proposed. 

On the upside, one initiative states the government must guarantee internet access in all communities, including with help from private companies, and another proposes granting water concessions in drought-stricken areas. 

The constitutional reforms need to be approved by two-thirds of the lower house and the senate, a majority the president’s Morena party and its allies do not have, in addition to the approval of 17 local congresses.

Mexico will hold presidential elections on June 2 and the 500 seats in the lower and 128 in the upper house are up for grabs. López Obrador and the Morena party aim to obtain the majority needed in the elections. 

In terms of social programs, AMLO proposed reducing the minimum retirement age from 68 to 65 while increasing pensions, in addition to outlawing minimum wage increases that are below annual inflation.

Regulatory reforms are raising most concerns, as they are affecting transparency institute INAI, competition watchdog Cofece, telecom regulator IFT and energy and hydrocarbon regulators CRE and CNH. 

AMLO also proposed a judicial reform to allow supreme court judges to be popularly elected and an electoral reform to weaken watchdog INE and reduce the number of lower house legislators from 500 to 300, and from 128 to 64 in the case of senators. 

PROPOSALS

1. "Prioritizing indigenous peoples and communities and the Afro-Mexican minority because they are the oldest but most neglected demographics. They must be consulted when works that may affect their life or environment are being planned and should receive legal legitimacy to obtain funds from the public budget.

2. Senior citizens older than 65 would gain the right to a pension that increases annually. Citizens classified as disabled would receive a universal pension.

3. Scholarships for low-income students at all levels of schooling.

4. Comprehensive universal medical care.

5. A right for workers to own a home.

6. Prohibit animal mistreatment or cruelty. 

7. Ban genetically modified corn and fracking and prohibit concessions for open-pit mining.

8. Declare water scarcity in certain areas, where water concessions can be authorized for exclusive human consumption.

9. Ban the trade of vaping devices and chemical drugs such as fentanyl. Severely penalize extortion and tax crimes.

10. The minimum wage must rise at least in line with annual inflation.

11. The minimum salary for full-time basic education teachers, as well as for police officers, national guards, soldiers, sailors, doctors and nurses, may not be lower than what workers registered with the public social security system receive on average.

12. Reverse the 1997 and 2007 pension reforms and implement a seed fund of 64.6bn pesos (US$3.79bn) as of May 1 to repair the damage done by the reforms.

13. Guarantee a right to education and work. 

14. Farmers cultivating fruit and timber trees will have a secure, fair and permanent wage, similar to the provision under the Sembrando Vida program. 

15. The 18,000km of rail tracks currently earmarked for cargo transportation will be used for passenger trains. The State will be obliged to guarantee a right to internet services, whether with a public company or through concessions for private companies.

16. CFE’s status as a strategic public company for the benefit of domestic consumers and the national interest will be restored, as it was before the privatization period.

17. Electoral reforms contemplate the reduction of expenses allocated to campaigns and political parties, the reduction in the number of municipal councilors, avoiding excessive bureaucratic electoral structures, and the elimination of multi-member candidacies. Congress will be made up of 300 lower and 64 upper house lawmakers.

18. Judges will be elected directly and not proposed by the executive and appointed by legislators.

19. To prevent corruption in the national guard, it is proposed that this institution becomes part of the defense ministry with strict respect for human rights.

20. Convert austerity into state policy.

21. Eliminate all onerous agencies and organizations that are supposedly autonomous but serve private rather than public interests."