Environmental Focus a Key Differentiator

Q: How does Vera & Asociados stand out from other legal firms in Mexico?

A: Vera & Asociados has provided counsel for investments of around US$2.8 billion in energy and participated in the authorization of 3,800km of gas pipelines. Our specialization in environmental and energy law allows us to take on more cases than other law firms. These numbers and our case list are sent to our potential clients. They can see we obtain permits and authorizations, lobby for quicker processes and perform legal follow-ups and compliance work. We were also responsible for some due diligence procedures in Central and South America. We are a team of numerous professionals dedicated to and specialized in environmental matters. Few legal cabinets have pyramidal structures with more than a managing partner, two associates and four paralegals. With all the underlying issues, subjects and legal ramifications within Mexico’s energy sector, this structure falls short. We have more environmental lawyers in our law firm than in other law firms combined.

Q: How has the Energy Reform’s regulatory framework impacted social and environmental initiatives?

A: We have followed the reform’s legislative process closely. In our opinion, the creation of the National Agency for Safety, Energy and Environment (ASEA) and the separation of energy matters into hydrocarbons on one side and electricity on the other has generated a series of problems. When two separate authorities undertake the same issue, despite following the same law, both prioritize different criteria. The Ministry of the Environment and Natural Resources’ (SEMARNAT) objective is environmental protection, whereas ASEA’s mandate is to make the Energy Reform work. Comparing the legal framework for hydrocarbons and electric energy, regulations on social impact studies benefit hydrocarbon projects much more than electricity projects. If a company in the electricity sector files its environmental impact study without its social impact counterpart, it will be subject to sanctions. No sanction is foreseen if the same happens for hydrocarbon projects.

Vera & Asociados has carried out 35 social impact studies. Our firm has the particularity of being primarily composed of more technical and nonlegal professionals than actual lawyers. In addition, our social department covers indigenous matters. As a legal cabinet we have also been retained by the government to draft or revise a wide array of laws and regulations, including the General Law of Ecological Equilibrium and Environmental Protection (LGEEPA).

Q: How does social impact differ from environmental impact?

: Social impact is regulated by independent rules for each activity but evaluated by one authority: the Ministry of Energy. Companies need to present proof that consultations with indigenous representatives underwent evaluation simultaneously with an environmental impact study. Also, in Mexico, social impact studies are not equivalent to a permit. It is a resolution with recommendations, which are not financeable. While environmental impact reports are usually composed of seven chapters, we usually write nine to obligate authorities to adopt a socioenvironmental scope and provide conditions enabling the banks to finance both the social and environmental elements of the project.

Q: What are Mexico’s major regulatory challenges in energy?

A: Standardization and bureaucracy are the biggest hurdles. Laws should provide certainty for investors, with a clear legal framework for corporate responsibilities. Corporate responsibility is not currently commensurable in hydrocarbon or electric energy. ASEA should make the information and studies for all projects public five days after such a petition is received. Information and studies of very few projects have been made public within the stipulated five days after the petition is received. We conducted a study in which we found that a very high percentage of rulings are opposable by citizens because they do not comply with mandatory terms.