New Environmental Law in Mexico: Presidential initiative proposes reshaping the federal environmental framework

I. New regulatory architecture and environmental concepts. The Initiative does not merely reorganize the current LGEEPA but also significantly expands the catalogue of environmental concepts that would serve as the basis for interpreting and applying regulatory obligations and administrative acts.

Among the new concepts included are, among others: adaptation; environmental compensation; substitution of fines; economic valuation; and strategic environmental assessment.

The incorporation of these concepts could modify the way authorities assess projects, impose conditions, value environmental damage and interpret regulatory obligations.

II. New regulatory and environmental policy instruments. The Initiative incorporates several new instruments and strengthens existing ones.

A. Strategic Environmental Assessment. One of the most relevant changes is the incorporation of strategic environmental assessment as a planning and environmental management instrument for plans, programs and national infrastructure projects considered to be of public interest and of major significance for development.

Unlike the traditional environmental impact assessment focused on specific projects, this mechanism seeks to identify and assess significant, cumulative, synergistic and residual impacts at early planning stages.

B. Environmental distinction. The Initiative also incorporates the concept of an environmental distinction as a recognition mechanism for individuals or legal entities that demonstrate environmental benefits resulting from prevention and improvement measures in goods, products, services or processes.

III. Changes to environmental impact assessment. The Initiative preserves the general environmental impact assessment framework but substantially expands its scope.

Among the most relevant changes are the express incorporation of significant, cumulative, synergistic and residual impacts; the inclusion of prevention, mitigation, compensation and environmental restoration measures; new exemption scenarios; new procedural rules; and specific mechanisms to regularize works and activities developed without environmental authorization through ex post schemes.

These changes could modify the technical and documentary scope of environmental impact assessments.

IV. Biodiversity and natural resources. The Initiative strengthens the biodiversity component through new instruments and institutional structures.

A. The National Biodiversity Strategy is incorporated as a guiding public policy instrument for conservation, restoration and sustainable use.

B. Likewise, the National Commission for the Knowledge and Use of Biodiversity ("CONABIO") would cease operating under its current framework and would instead be expressly regulated as a decentralized public entity with its own assets and organizational structure.

C. The proposal establishes a National System of Protected Natural Areas and strengthens coordination and conservation mechanisms.

D. The Initiative incorporates specific rules for the sustainable use of natural elements and resources under broader environmental criteria.

V. Highly hazardous activities. The Initiative incorporates a new mechanism for determining highly hazardous activities through criteria related to hazardousness, potential impacts and associated risks.

This could result in significant modifications to existing regulatory frameworks.

VI. Strengthening of inspection, investigation and enforcement procedures. One of the most relevant changes consists of strengthening environmental enforcement and administrative liability powers.

A. The Initiative incorporates an Environmental Offenders Registry through which sanctioned individuals or entities could become subject to additional regulatory restrictions.

B. The proposal incorporates specific procedures for investigating violations, including mechanisms for voluntary acknowledgement of facts, alternative dispute resolution mechanisms and mechanisms for determining environmental damage.

C. Authorities could impose anticipatory measures to prevent environmental risks or potential damage, in addition to expanding and strengthening existing safety measures.

D. The Initiative extends certain procedural deadlines, including the period for submitting arguments.

E. The proposal substantially increases penalties, establishing fines of up to 7.5 million Measurement and Update Units (approximately MXN $880,000,000).

F. The Initiative expressly regulates procedures and requirements for replacing fines through projects or investments generating environmental benefits.

G. Finally, a specific mechanism is incorporated to determine and economically quantify environmental impacts and damage.

VII. Transitional regime. The Initiative provides for a transitional regime intended to allow for the gradual implementation of the new regulatory framework. Among the most relevant aspects, it establishes the repeal of the current LGEEPA; the temporary continuation of regulations and official Mexican standards that do not conflict with the new law; the continuation of ongoing procedures, environmental impact assessment applications and administrative appeals under the legal provisions in force at the time they were initiated, unless applicants voluntarily choose to be subject to the new regime; as well as the subsequent harmonization of secondary regulations, state legislation and the gradual implementation of the Environmental Offenders Registry.

Authored by Mauricio Llamas, Mauricio Villegas, and Sofia de Llano.