Saturday, October 16

Energy reform: López Obrador threatens with a constitutional reform if his electricity law runs aground in the courts

Andrés Manuel López Obrador, this Wednesday at the National Palace.
Andrés Manuel López Obrador, this Wednesday at the National Palace.Presidency of Mexico / EFE / Presidency of Mexico

The courts will not stop the implementation of the statist electricity model to which Andrés Manuel López Obrador aspires. The president has affirmed this Wednesday that he will present a constitutional reform if the modifications to the Electricity Industry Law are declared unconstitutional by the Supreme Court of Justice after the appeals presented by the affected companies. Faced with that possibility, the president threatens to activate his last card in the deck and introduces another workhorse in the campaign for the June elections, which will determine if his party has the two-thirds majority in parliament necessary to take that step.

To justify an eventual reform, López Obrador has used his usual attacks on the liberalization of the energy sector promoted in the previous administration, which he considers a source of corruption. “I am sure that the reform is not unconstitutional, but if judges, magistrates, ministers determine it and that it is unconstitutional and cannot proceed, I would send a reform to the Constitution, because I cannot be an accessory to theft, robbery, that is affect the popular economy and especially of the poorest. They dedicated themselves to looting, stealing, in the case of the electricity and oil industry I have no doubt ”, he declared at his morning press conference. The new framework challenged in court strengthens the Federal Electricity Commission (CFE) at the cost of limiting private participation in the sector.

The threat of a constitutional reform represents an important turn in López Obrador’s speech. After his victory in 2018, the president promised that the contracts already signed would be respected and that the energy reform of his predecessor, Enrique Peña Nieto, would not be modified. That position, an attempt to calm the nerves of the private sector after some controversial decisions such as the cancellation of the new international airport in Mexico City, has been changing in recent months. The Government has tried to administratively modify the current model, a strategy that has failed in the courts due to the presentation of dozens of appeals by affected companies and a constitutional controversy of the Federal Commission for Economic Competition (Cofece).

The debate on a possible modification to the Magna Carta opens in full swing between the president and the Judiciary. Last week, López Obrador attacked the judge who admitted the protection of a photovoltaic company and temporarily suspended the effects of the new law one day after its entry into force. The president requested by letter to the president of the Supreme Court and the Council of the Judiciary, Arturo Zaldívar, that the judge’s actions be investigated and that he review his competence to resolve the case. Zaldívar took note of the president’s request, but defended the autonomy and independence of the Judiciary.

The district judge who suspended the effects of the rule, Juan Pablo Gómez Fierro, has summoned the parties to a hearing this Thursday in which he will decide whether to maintain the suspension permanently for the duration of the trial. At the same time, the Ministry of Energy has appealed the provisional suspension decreed by the judge before a collegiate court specialized in economic competition. Even if that court reverses the provisional suspension, Gómez Fierro can still grant the definitive suspension to the complaining company.

If carried out, this would not be the first constitutional reform of the six-year term, but it would be the most controversial. Early in his administration, the president proposed the creation of a new security force, the National Guard, to address the escalation of violence in the country. On that occasion, the proposal had enormous parliamentary support, including from parties such as the PAN and the PRI, and in the Chamber of Deputies it was approved by 463 votes in favor and one against. Now, on the other hand, the opposition has been very critical of the changes to the electricity model, considering that they negatively affect private investment and damage the environment.

The government’s ability to bypass the opposition will depend on the results obtained by Morena, the president’s party, in the June elections, when the Chamber of Deputies is renewed. With this judicial and political push for the electric model, López Obrador adds another in front of some key elections. “What do we need two-thirds? But for the people to decide, it is also good that elections are coming, because that is why they are betting that we will not have a majority in the Chamber of Deputies, to continue maintaining privileges and continuing to maintain the corruption regime, ”said the president.

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