On September 27, 2017, the Mexican Senate passed a bill that amended Mexico’s main environmental law, the General Ecological Balance and Environmental Protection Law, first enacted in 1988 (the “General Law”), as well as other related provisions.

One of the most relevant amendments deals with fines for environmental violations. These will increase substantially if the bill passes. Currently, the maximum fine that may be imposed is equivalent to 50,000 times an UMA (measurement and updating unit), which amounts to $4,050,000.00 pesos Mex Cy (around $225,000.00 dollars). The new maximum fine amount will be 7.5 million times an UMA, which will be roughly equal to $566,175,000.00 pesos (approximately $31 million dollars).

The bill also introduces new rules for conducting regulatory inspections, simplifying and consolidating in one single inspection the procedures contained in several environmental laws dealing with wastes, forest development, national assets, biosafety, wildlife and climate change, as well as guidelines for administrative procedures which will become more in tune with the Federal Environmental Liability Law. New criteria on how companies may be liable for environmental harm will also be introduced.

This bill will be sent to the House of Deputies (the Lower Chamber of Congress) for review. It is very likely that it will be approved prior to the end of 2017, becoming law 180 days after publication in the Official Gazette.

Because of the substantial increases in fines for environmental violations and the introduction of new penalties and remediation obligations that will result from failing to meet permitting and compliance obligations, now more than ever it will be important for industrial sites to conduct a thorough review of their environmental performance, prior to facing regulatory inspections.