The Business Coordinating Council warned that this reform initiative would result in more expensive and polluting electricity and more subsidies, in addition to a drop in investment.
With the initiative to reform the Electricity Industry Law, the Mexican government intends to carry out an indirect expropriation that will result in more expensive, polluting electricity and more subsidies, said the Business Coordinating Council (CCE).
This will increase the drop in investment coming into the country, in addition to the fact that the “initiative attempts to arbitrarily prevent competition in the national electricity sector, violating the basic rights of free competition and legal certainty,” agreed the CCE and the Confederation of Industrial Chambers (Concamin).
On the one hand, the CCE said that it is “inexplicable” that there was no dialogue with the sectors that will be affected. In addition to the fact that the damages are enormous because it opens the doors to an indirect expropriation of private plants by generating a monopoly of the Federal Electricity Commission (CFE) in the dispatch of electricity, thus violating the Constitution.
“It goes against the commitments acquired under international treaties, both in commercial agreements and in the protection of investments and the environment,” which will provoke the initiation of panels, international arbitration, and complaints before various treaties.
On the other hand, it “violates the non-retroactivity of the law” because no rule can be executed retroactively to the detriment of individuals, which will drive away investments.
Likewise, it goes against the guarantees of legal certainty of due process and public procurement and even goes against the federal judiciary’s rulings.
“The CCE and the organizations that comprise it urge the legislative branch to a deep reflection and to reject this initiative, which would seriously affect Mexico, increasing the prices of products and services, and causing a further drop in domestic and foreign investment just at the time we require to maintain and generate jobs for economic recovery.”
For its part, the Concamin said that “forcing the consumption of higher cost electricity is not good for the Mexican consumer or Mexico.” Therefore, the proposal should be rejected.
If approved, it will “condemn Mexico to live in national and international litigation, slowing down the much-needed investment that the country requires.”
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