Mexico embraces oil, gas and mining transparency

Government, industry and citizens unite to promote transparency and accountability in the oil, gas and mining industries.

Wednesday 25 October - The EITI Board approved Mexico’s application to join the Extractive Industry Transparency Initiative (EITI) at its meeting in Manila on 25 October. The EITI is the global standard for the good governance of oil, gas and mineral resources.

Mexico’s admission to the EITI comes at a critical time, as the country opens up its oil and gas sector to private investment. These reforms have been contentious, and the need for greater transparency and accountability are key themes in the debate about the future of the industry.

Fredrik Reinfeldt, Chair of the EITI, said:

“This is an important milestone. Government, industry and civil society organisations have worked together for several years to prepare for implementation of the EITI, reaffirming Mexico’s commitment to international best practice in governance of the oil, gas and mining sectors. There is now a great opportunity to accelerate this work, to embed the EITI requirements into company and government reporting, and to ensure that the public has access to timely and comprehensive information about the development of Mexico’s natural resources”.

The EITI addresses a range of issues relevant to the outlook for the oil, gas and mining sectors, including license allocation, production data, tax transparency, the role of state owned enterprises, and the allocation of the revenues, including to the recently created Mexico National Oil Fund. The government has also committed to map and identify beneficial ownership of the companies operating in the country and explore the methodology and extent of contract transparency.

Subsecretary of Mining and Chair of the EITI multi-stakeholder group Mario Cantú said:

“The submission of Mexico’s EITI candidate application represents a progress on the generation of a joint scheme of work between the government, civil society and companies, through collaborative actions focused on the improvement of accountability and transparency, as well as integrated by an open and proactive dialogue.”

• See the video message from Mario Cantú to the EITI Board here.

The CSO representatives represented in the multi-stakeholder group jointly noted:

"Mexico's adherence to the EITI Standard can lead it to be a pioneer in the implementation of a work plan that incorporated social and environmental issues in a real way and that promotes the creation of a public registry of beneficial ownership based on the highest international standards".

They also noted:

"The adhesion and implementation of Mexico to the EITI Standard translates into high expectations, we hope it will be an exercise that will give the people and communities concerned, affected or not by the activity of the extractive industries, practical and useful elements for the defense and promotion of their rights. "

Consolidating transparency through the EITI

In 2013 Mexico passed a constitutional reform to allow, for the first time in almost a century, private investment in the Mexican oil and gas sector. One of the central aims of the reforms was to bring transparency to how the sector is managed. From awarding licenses to collecting revenues from the companies to the use of those revenues, the reforms sought to embed transparency in government practices and systems. Since 2016, Mexico has conducted a series of bidding rounds to allocate oil and gas blocks.

Alberto de la Fuente, President of the Mexican Hydrocarbon Association, highlighted:

"The EITI is a fundamental standard in our industry. The accession of Mexico to this initiative is a historical fact for the national energy sector. This tool will contribute to an informed, transparent and accountable public discussion for the benefit of Mexicans. The achievement that Mexico announces today is a result of the efforts and collaboration of authorities, companies and civil society; and at AMEXHI we are proud to be part of this effort. "

Gustavo Aguilar, PEMEX’s representative in the MSG said:

"Petróleos Mexicanos is committed to transparent and accountable management of all the activities of its value chain, at national and state level. Also, we are committed to keep society informed on social and environmental issues and to strengthening our knowledge in the performance of the sector. "

In the mining sector, Sergio Almazán, Director General of CAMIMEX and member of the MSG added:

"The Mining Chamber of Mexico recognizes the benefits that the EITI Standard should bring to Mexicans, in terms of accountability of the state's economic resources for the use of its hydrocarbons and minerals. EITI is a conciliatory mechanism, which will generate trust between the stakeholders and the actors involved in these issues. The process to prepare the candidature of Mexico has brought the parties closer to each other through the knowledge and exchange of information and points of view that would otherwise not have been possible."

The EITI Board’s decision in full:

The EITI admits Mexico as an EITI candidate country on 25 October 2017. In accordance with the EITI Standard, Mexico is required to publish its first EITI Report within 18 months of becoming a candidate (i.e., by 25 April 2019). Mexico is required to publish an annual activity report for 2017 by 1 July 2018. Validation will commence within two and a half years of becoming a candidate (i.e., by 25 April 2020).​

For more information about the EITI process in Mexico please visit the country page on eiti.org or contact the country manager, Francisco Paris [fparis@eiti.org]

Notes:

• The EITI is a coalition of governments, companies, civil society groups, investors and international organisations. Learn more at www.eiti.org
• EITI is chaired by former Swedish Prime Minister Fredrik Reinfeldt,
• 53 countries are now implementing the EITI Standard. See the list of countries at www.eiti.org/countries