Image credits: Mathias Reding
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News Article

Vulcan Materials Questions Mexico’s UN Appeal

By Paloma Duran | Tue, 07/12/2022 - 14:13

Mexico’s federal government said it would file a complaint about Vulcan Materials to the UN for the alleged environmental damage that its Mexican subsidiary Sac-Tun is causing in Quintana Roo. The company said the government's decision is questionable because its accusations are unfounded and the UN is not equipped to deal with these conflicts.

Sac-Tun said it learned that the Mexican government filed the complaint against Vulcan Materials to the UN High Commissioner for Human through the press, despite its attempts to maintain a direct dialogue without resorting to arbitration facilitated by international organizations.

Sac-Tun reiterated that it is unaware of the specific complaints filed by environmental ministry SEMARNAT, since the Mexican government has not provided the company with a copy of the complaint. Sac-Tun highlighted that it has been operating in the country for more than 30 years, following environmental regulation and holding the necessary permits. In addition, it highlighted that for decades, the company’s operations have been supervised by SEMARNAT and PROFEPA, which have granted Sac-Tun clean industry certificates and had no complaints.

“What Mexico’s government falsely calls ‘environmental destruction’ is the same impact, which at the time, the government itself evaluated, authorized and expected to be acceptable. We will continue to defend our rights through the arbitration process under NAFTA, which is not affected by the alleged complaint of the government,” stated Sac-Tun in a press release.

In addition, the company criticized the government for filing a complaint with the UN because it is an organization that is not specialized in this type of issues and holds no authority in mining.

The Spat Between Vulcan Materials and the Mexican government

In 2019, Vulcan Materials requested arbitration against the Mexican government under USMCA regulation due to the revocation of its port concessions. The company asked for a US$1.1 billion compensation, stating that the government’s actions were taken unilaterally. In response, in February 2022, López Obrador proposed the company to withdraw the lawsuit in exchange for resources to transform the company’s limestone production facility into a tourism project.

Despite reaching an agreement in April 2022, López Obrador accused the company of not complying with it in May, as extraction activities continued even though the company allegedly no longer possessed the required permits. As a result, the president instructed SEMARNAT to stop all operations at the company’s facilities. The company declared it did have the required permits and considered to take again legal action against the Mexican government. On May 23, 2022, López Obrador met with Thomas Hill, CEO, Vulcan Materials, in an effort to reduce the escalating tension between the parties. However, no agreement was reached.

Last week, Minister of the Environment and Natural Resources María Albores announced that the Mexican government filed a complaint against Vulcan Materials. “This is the land of all Mexicans, to take care of it is our responsibility. We came here to defend nature and our sovereignty,” Albores added without providing further detail regarding the content of the document.

The data used in this article was sourced from:  
MBN, Sac-Tun
Photo by:   Mathias Reding
Paloma Duran Paloma Duran Journalist and Industry Analyst