Amparo Trials Against the Mining Law Reforms

As previously reported on this platform, on May 8, 2023, a decree containing a series of amendments to Mexico's Mining Law, National Water Law, General Law of Ecological Equilibrium and Protection of the Environment, and General Law for the Prevention and Comprehensive Management of Waste regarding mining and water concessions was published in the Mexican Official Gazette of the Federation. These reforms, proposed by the Federal Executive Branch, aim, among other things, to reduce the validity of mining concessions from 50 to 30 years.

Beyond the amendments to the validity of mining concessions, the reforms denote a radical shift in the Mexican mining sector's legal and operational landscape. The industry's response was swift, since even before the reforms entered into force and faced with the imminent threat of losing previously acquired rights, mining concessions titleholders implemented a constitutional and legal defense against such reforms.

As part of this strategy, a series of constitutional trials (amparo lawsuits) were filed against the amendments, in which, petitioners argued several inconsistencies in the legislative process leading to the reforms, rendering them unconstitutional and therefore unenforceable, as well as a violation of the human rights granted by the Mexican Constitution.

In respect to the legislative process, key violations included the semi-presential parliamentary sessions originally instituted during the COVID-19 pandemic but no longer in effect during the approval of the reforms, the failure to publish the draft decree in the Official Gazette for the Congress' scrutiny, the improper categorization of the matter as “urgent resolution,” and the alarming inclusion during the voting session of two operational building workers as supposed senators who lacked the faculties and authorization to participate and vote during the referred parliamentary session.

As of today, the first rulings issued in these constitutional trials have already been issued, in which several federal courts granted the petitioners Amparo and Protection from Federal Justice, acknowledging the irregularities during the legislative process as sufficient grounds to declare the amendments unconstitutional and, consequently, unenforceable, meaning that the petitioners which obtained amparo and federal protections are exempt from complying with any legal provisions contained in the amendments and relieving them of obligations that would otherwise diminish benefits or impose excessive burdens. Consequently, Mexican authorities face challenges to apply the provisions of the reform to such petitioners.

This also implies that the existing laws governing mining, water usage, ecological balance, and environmental protection in general are deemed adequate for responsible exploitation of the nation's minerals and natural resources.

Before the amendments entered into force, the mining industry operated under regulations imposing a series of social and environmental obligations, particularly in the areas of water resource disposal, proper handling of hazardous and non-hazardous waste, management of flora and fauna, and control of atmospheric emissions, among other crucial obligations.

However, the aforementioned amendments introduce new rules that, instead of promoting environmental protection and improving the mining industry, hinder foreign investment and represent a setback for the sector's development. The reforms bring about a radical change in how the industry operates in Mexico, restricting rights and imposing obligations that only a small fraction of the titleholders can withstand, leading to operations with little profitability and jeopardizing mining activity and development in Mexico.

The obtained rulings in the Amparo lawsuits set a significant precedent for the pending lawsuits before federal courts. It is expected that this outcome will be replicated across all ongoing proceedings.

It is noteworthy that, to date, 192 parliamentary representatives from the PAN, PRI, and PRD political parties have filed a constitutional challenge before the Supreme Court of Justice of the Nation. This challenge, already accepted for processing by Minister Alberto Pérez Dayan, could, if successful, broadly reverse the effects of the amendments in favor of all titleholders of mining concessions.

However, the expected resolution time for these constitutional challenges does not align with the pace of mining industry operations, as this form of constitutional control can take up to two years to completely resolve this constitutional challenge. Consequently, until the Supreme Court of Justice of the Nation issues a resolution on such a constitutional challenge, the current Amparo lawsuits remain the fastest and most effective option in developing defense strategies against the aforementioned reforms.

The legal landscape of the mining industry in Mexico is distinguished by the tension between the proposed reforms and the industry's resistance. While recent court rulings in favor of companies provide relief, the resolution of constitutional challenges will determine the ultimate fate of these reforms. Nevertheless, even if the constitutional challenge is not favorably resolved by the Supreme Court of Justice of the Nation, the petitioners who obtained the Amparo and Protection from Federal Justice will be relieved to comply with the provisions of such reforms. 

In this context, the mining industry faces crucial challenges that will require careful consideration and continuous dialogue within the mining industry.