Fernando Flores
Director General
Energy Fuels /SIFRAP
Expert Contributor

Streamlining Regulatory Processes for Faster Business Results

By Juan Fernando Flores Ruiz | Mon, 06/15/2020 - 09:21

The Energy Sector Regulators System, made up of the National Hydrocarbons Commission (CNH), the Energy Regulatory Commission (CRE) and the Security, Energy and Environment Agency (ASEA) created the Coordinated Assistance Office of the Energy Sector (ODAC), whose objective will be to guide companies in the procedures they will have to carry out before any of the regulatory bodies. 

Normally, when the regulator has to request a permit from one of the regulators and if it does not correspond to their areas or they do not know the subject, they have to answer you with a letter attached to the law where they mention that it is not within their competence, and they suggest you to do the consult with another agency or regulator. This problem could be solved with the ODAC, since by having a single window for the energy sector, these types of obstacles would cease to exist and facilitate the regulatory processes that are key to the development of business in the sector.

The proposal to create the ODAC is supported by 12 initiatives that are based on five strategic objectives to contribute to business development in the energy sector. These are the five pillars: facilitate the development of the Mexican energy sector; provide long-term regulatory certainty conditions; operate systematically and in a coordinated manner; have the cutting-edge technical and financial capacity that allows the operation of the regulatory system; and lastly, be recognized as a benchmark by society and the market at the national and international level.

There are business lines in the energy sector in which more than one regulator intervenes for approval, therefore, each of the bodies opened an virtual ODAC office at its facilities by putting up a sign indicating the existence of ODAC and to keep its regulated entities informed about procedures and other information. Despite the fact that regulated entities may request information on their procedures and status from at least two and in some cases the three regulatory agencies, the ODAC system will be available in turn via the official website to monitor it at all times. Thus, the ODAC office is created to accompany the regulated entities throughout the procedures they carry out and help them generate business in the energy sector

Let's mention a simple example where two regulators intervene to obtain an oil transport permit. This requires the intervention of ASEA and CRE. Currently, the process must be carried out in each office of the corresponding Regulator, through the Official Parts Office (OPE) and the process must be carried out separately, in addition to physically delivering the documents to each of them and in some cases, they are the same documents

The ODAC should be a virtual and physical office where the request for any permit, study or transmission that is required to be made on any activity in the sector is entered, so the following can be done:

  • Enter your virtual procedure in a single window.
  • Deliver the physical documents at said window.
  • ODAC shod send the procedures internally to the regulators involved.
  • The ODAC will be in charge of monitoring it on its digital platform so that the regulated entity can see its procedures from its entry to its approval.
  • As ODAC is involved in the entire value chain, it will be able to answer questions regarding the type of procedure required for specific activities, the costs of payment for the use of each one, the official response times and any questions that may arise about each one.
  • Deliver the permits of all the regulators involved for a single activity.

The result of implementing the ODAC would be the simplification of regulatory procedures that leads to a concentration of the flow of information and procedures, reducing procedures that are carried out in each of the corresponding areas and acting as a single office to visit to consult on regulatory processes.

It is no longer necessary to create new infrastructure and recruit new personnel, since each of the regulators has qualified personnel. They will even be in charge of selecting the personnel necessary to create a staff that will be in charge of receiving and providing information on the procedures.

Finally, it is important to mention that these are not the only regulatory organisms that participate in obtaining all the necessary regulation. Other organizations such as SENER, SCT and SEMANART can be integrated.