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, in force since 1988 (the “General Law”), as well as other related provisions. We expect the Chamber of Deputies to approve this same bill during the current legislative period.

One of the most relevant amendments deals with fines for environmental violations. These will increase substantially. 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).

Companies will be liable for any environmental harm caused by their legal representatives, directors, managers, officers or any other employee having responsibility over their day to day operations , if they are negligent or if they willfully carry any act that causes environmental harm or violates a law, regulation or standard.

Individuals that cause environmental harm, or that through their actions breach an environmental requirement, may also be subject to fines ranging from 300 to 50,000 UMAs.

Other interesting aspects of the bill are the following:

  • When conducting regulatory inspections, environmental agencies must apply the presumption of innocence principle; the burden of proof regarding acts or omissions that may cause environmental harm or that may violate laws or regulations will shift to regulatory agencies;
  • If two months have passed since the date of an inspection and the inspected party has not been notified of a document detailing the alleged violations detected during the inspection, the entire procedure will lapse becoming null and void.
  • Agencies will have the power to order the demolition of buildings or installations if they failed to secure a prior environmental impact permit.
  • New rules will be introduced 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, as well as new guidelines on how to submit complaints against parties that cause or that may cause environmental harm.

Once the bill is approved, it will become effective 6 months after it is published in the Official Federal Gazette.

Because of the substantial increases in fines for environmental violations and the introduction of new penalties and remediation 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 and facing penalties.