Potential Popular Referendum on Mexico’s Energy Reform

November 18, 2014
Potential Popular Referendum on Mexico’s Energy Reform

In August 2012, a decree of reforms to the Mexican Constitution on political matters was published in theOfficial Journal of the Federation to, among other things, recognize the right of citizens to vote in popularreferendums on issues of national importance. Since then, this mechanism of direct democracy has complementedthe representative democracy model shaped by Articles 39, 40 and 41of the Constitution.In terms of Article 35, section VII of the Constitution, popular referendums shall be called by Mexico’s FederalCongress at the request of the President of at least 33% of the members of each of its chambers, or the equivalentof a minimum of 2% of registered voters.Under the latter option, last April members of the National Regeneration Movement (Movimiento deRegeneración Nacional, or MORENA political party), presented a statement of intent before the Mexican Senateso that on the election day in July 2015 the following question would be posed to Mexico’s electorate: “¿Do youagree or not agree in granting contracts or concessions to private parties, whether national or foreign, for theexploitation of oil, gas, refining, petrochemicals and the electrical industry?”. Members of the DemocraticRevolution Party (Partido de la Revolución Democrática, or PRD) submitted a corresponding notice to theChamber of Deputies so that citizens could be asked the following questions: “¿Do you agree that the reforms toArticles 25, 27 and 28 of the Constitution in matters of energy should remain?”. Based on such initiative, the twomajor political parties on the left of the ideological spectrum dedicated themselves to collecting the signatures ofmillions of citizens that would support the referendum request, which results could reverse the constitutionalreform on energy that was enacted in December 2013.In an exceptional example of prior review of constitutionality in the Mexican legal system, according to article 35of the Constitution, Mexico’s Supreme Court of Justice (Suprema Corte de Justicia de la Nación, SCJN), shalldecide the constitutionality of the proposed referendum. Fundamentally, the high court must ensure that thepurpose of the popular referendum does not involve matters expressly forbidden by the Constitution, including,among others, the restriction of human rights, national security, electoral matters and government income andexpenditures.The Federal Public Referendum Law, which has been in effect since March of this year, puts the SCJN in chargeof deciding the constitutionality of this issue, in the case of those initiated by citizens, once the requiredsignatures have been obtained and certified with the National Elections Institute (Instituto Nacional Electoral,INE) . Additionally, the SCJN should review whether the question posed arises directly from the subject matter ofthe referendum; is not biased and does not contain value judgments; uses neutral, simple and understandablelanguage; and produces a categorical response, whether affirmative or negative.On October 30th, the SCJN held in a plenary decision that the subject matter of the referendum requested by thePRD and Morena was unconstitutional. The arguments of the majority of nine justices of the SCJN focused onthe direct relationship between the energy reform and government revenue. Some justices even emphasized thefact that a principal justification of the reform was the need to increase such revenue. Apparently, the justiceswere thinking only about revenue from the exploration and extraction of oil and gas, because it is not clear whatother energy sector activities are related in such a direct manner with the revenues of the Mexican government.The only dissenting justice was José Ramón Cossío, who argued that the majority’s opinion was undulyrestrictive on the exercise of fundamental and political human rights that were recently incorporated into theConstitution, based on an extremely broad definition of "income".Also based on being linked to government revenue, some days afterwards the SCJN declared unconstitutional thereferendumproposed by the members of the National Action Party (Partido Acción Nacional, PAN) aboutminimum wages. Similarly, it rejected the question posed by the Institutional Revolutionary Party (PartidoRevolucionario Institucional, or PRI) about reducing the number of deputies elected throughnominating slates,because that is an electoral matter.Therefore, in 2015 popular referendums will be held in Mexico. A long legal road ahead exists in order to definethe scope and limits of the rights provided by such popular voting instrument and, fundamentally, its effects. Onthis issue, the Federal Public Referendum Law provides that the results of these plebiscites may be mandatory forthe Executive and Legislative branches and the “competent authorities”. At some point in the future, it will bedefined as to whether this includes the Constitution’s reforming body, which recently amended Articles 25, 27and 28 of the Constitution on energy concerns. Someday, it will become clear what this constraint really meansand the consequences of ignoring it.For now, the energy reform has become final at the constitutional level and deadlines have elapsed forchallenging its laws by way of a constitutional controversy and the appeal action alleging unconstitutionality. Forpeople dissatisfied with the implementation of these norms, they may file an “amparo” appeal lawsuit. Mexico’sPresident has already issued the respective rules and decrees for the creation of new agencies. In this regard, therehave already been several appointments. In addition, Mexican regulatory agencies are beginning to issue somedocuments and rulings required by the transitory provisions. In short, the implementation of the energy reform isunderway.

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