Joel González
Partner
ALN Abogados
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View from the Top

The Legal Scope Across a New Mining Landscape

Wed, 10/16/2019 - 17:56

Q: What added value does ALN Abogados provide to the mining industry in Mexico?
A: Our firm has achieved the consolidation of a group of professionals specialized in providing exclusive attention to all areas of the mining industry, mainly related to social license, environmental permitting, and land ownership. We have strengthened our environmental practice with specialized technical personnel who have developed expertise in the industry. This has allowed us to provide an integral service that meets all of our clients’ legal needs.  
Q: How has the change in administration transformed your clients’ service requirements?
A: Social licensing has become a major issue as a result of the focus on human rights. The industry has a direct impact on vulnerable communities and indigenous groups due to the location of projects. Mining activities should be developed alongside support for communities that lack opportunities outside the industry. We have tried to strengthen social licensing and the environmental framework because we believe that company requirements in these two areas will increase in the future.
Q: How can the public and private sectors work together to modify the Mining Law to benefit both?
A: We have participated in several international forums to discuss public consultations, an emerging international trend. The mining industry’s problem with the proposal for the Mining Law was the sequence of the process. Free, prior and informed consultation, should be conducted before the environmental permitting and social license are granted, it is the only way that stakeholders can receive in a timely manner the knowledge and information on the environmental, and social impact of the project. The proposed format establishes that free, prior and informed consultation be executed prior to the start of exploration activities, upon granting of the mining concession title, which is impossible because companies need to know how a project will be developed to assess its social and environmental impact. Authorities need to understand how the industry works. In other countries, legislators, stakeholders, companies and chambers work together to define clear regulations that provide certainty for project development. Consultations on projects that lack development knowledge and information discourage investment.
Q: How has your firm’s involvement in the mining sector evolved in regions outside Sonora and Chihuahua?
A: There are many projects in the country in nontraditional mining states. This year, we are involved in Oaxaca and last year, we had a lot of work in Jalisco.  We have found Oaxaca and its government have been very open despite the state’s lack of a mining tradition. This can be seen in Oaxaca’s openness to exploration and operational projects. We also planning to open a liaison office in Vancouver. This decision is the result of our commitment to excel in providing first hand service to our clients and provides us with the business opportunity to promote our firm in that region.
Q: What challenges have you encountered in non-mining states?
A: Most procedures in the mining industry are related to federal offices in each state. In theory, the legal framework should be the same across all regions, but different criteria are applied for the granting of licenses. Non-mining states require local authorities to understand the way in which the industry operates for them to apply the legal framework with the required certainty that mining companies expect. In terms of infrastructure, Oaxaca presents a higher level of complexity since it has over 700 municipalities. This poses a challenge because most of the time, Public and Agrarian property records are not always updated and lands are not clearly delimited. Mining entities need to work across many governmental institutions to normalize processes. This inconsistency also results in variable complexity levels for paperwork, especially for non-mining states. The problem with this is that the industry needs short-term results.