On March 28, 2023, President Andrés Manuel López Obrador introduced three initiatives to reform different laws to the Chamber of Deputies. The first initiative seeks to repeal, reform and add different provisions to administrative laws mainly to protect the country's financial interests. This, the country will avoid payment of damages from the public treasury to private parties through, among other issues, setting forth various figures that impact acquisitions, services and goods of the State. The second initiative is mainly related to national security and aviation issues, and the third initiative relates to mining concessions and hydraulic issues. In summary, these are extensive reform initiatives that deserve a detailed analysis depending on the line of business or industry affected.
The main purpose of the initiatives, (the "Initiative") is to strengthen the Federal Public Administration ("APF") and provide it with the necessary tools to prevent acts of corruption and avoid harming the public interest.
Among the different proposals of the Initiative are:
- Define the trial of lesivity. The main purpose of this administrative process is to revoke an administrative act of the authorities that has been issued in error or that harms Mexico's fiscal interests. With the reform, this definition would be included in the Federal Law of Contentious Administrative Procedure ("LFPCA") and in the Organic Law of the Federal Court of Administrative Justice ("TFJA") and to have a clearer concept in any circumstance.
- To complement the figure of the nullity proceeding, specifically if the relevant act omits one of the elements of validity of the act itself, then it would be considered invalid and therefore not enforceable or rectifiable.
- The revocation of certain administrative acts due to supervening events affecting the public, general or social interest.
- To allow the purchase of goods and services in the international market as long as it provides better prices and quality conditions for Mexico without the need to exhaust the national public bidding procedure.
- To amend the Public Sector Procurement, Leasing and Services Law ("LAASSP") to include an early termination clause for reasons of public interest.
- To establish a limit on the amounts of indemnities obligated to be paid by judicial or arbitration proceedings related to the General Law of National Assets.
- Apply limits to the salaries and remunerations of public servants to save money for the government.
- To establish the "principle of trust" in the projects that are regulated through the Law of Public Works and Related Services ("LOPSRM") in order to carry out those projects that are of urgent need or required for national security reasons.
- Offer the possibility of providing larger advance payments of almost 50% of the final price for the acquisition of medical or security equipment in general if by paying in advance the equipment can be obtained at a lower price or with early delivery.
- The exploration, exploitation, benefit and use of lithium will be under the jurisdiction of the Energy Secretariat.
- The prohibition of the granting of mining concessions in areas without water availability, protected natural areas or where there is a risk for the population.
- It authorizes the Ministry of Economy to rule on the social impact studies related to the granting of concessions and to declare the nullity of such concessions.
The Initiative is currently with the joint commissions of Transparency and Anticorruption and Governance and Population of the Chamber of Deputies pending their analysis and opinion. We will follow up regarding any developments. In case you have any questions related to the Initiative or any other administrative issue, we will be glad to assist you.
Authored by: Julio Zugasti, Marino Castillo, and Reneé Penhos.