The Mexican Environmental Legal Framework comprises a set of both federal and local dispositions ruling the permitting regime. Being that natural resources and environmental protection is the subject of concurrent jurisdiction, as set forth in Article 73 of the Mexican Political Constitution, the federation, states and municipalities are empowered to rule and issue legal dispositions on different topics of said subject. The LGEEPA sets forth the topics and boundaries of the scope of action that the federation, states and municipalities have. In addition, all of the regulations regarding environmental protection, regarding the hydrocarbons sector, have been covered exclusively by ASEA; therefore, specific permits for the development of activities in such sector must be handled and obtained from ASEA.
In this regard, the main topics for which specific permits are required are the following:
- environmental impact;
- environmental risk;
- air emissions;
- hazardous waste;
- special handling and solid waste;
- water; and
- wastewater discharge.
There is an integrated permitting regime at the federal level for sources under federal jurisdiction that covers air emissions, national water consumption and wastewater discharge into bodies of water under federal jurisdiction, as well as generation of hazardous waste. This integrated permitting regime is covered by the sole environmental licence, which is granted by SEMARNAT on a permanent basis unless there is a modification to increase production, extend the facilities or change the corporate name.
Nonetheless, the activities executed by sources under federal jurisdiction must present activity reports on an annual basis. These reports are known as annual operating reports (COAs).Separate permitting regime
If an activity does not cover all of the above-mentioned topics, separate permits must be obtained to comply with the legislation:
- an environmental impact and risk authorisation;
- an accident prevention plan approval (for high-risk activities as set forth in the first and second lists of high-risk activities);
- registration as a hazardous waste generator;
- a hazardous waste-handling plan;
- a concession title to extract national waters; and
- a federal permit to discharge wastewater.
In addition, and as previously mentioned, states and municipalities have their own permitting regimes covering the subjects under their jurisdiction (i.e., local environmental impact and risk, special handling and solid waste, wastewater discharge into municipal drainage systems), except for those regarding environmental protection in the hydrocarbons sector, which is now being administered exclusively by the federal authorities (ASEA). Some states and municipalities do have integrated permitting regimes (i.e., Mexico City through the local sole environmental licence or the state of Mexico in several municipalities through the municipal environmental licence) while others grant separate permits for each subject.i Air quality
The Mexican environmental legal framework protects air quality from both fixed and mobile air emission sources. As set forth in Sections II and VI, both the federation and the states have power to regulate on the matter. The federation regulates the following activities and industrial sectors: hydrocarbons, chemical, painting and ink, metal, automotive, cellulous and paper, asbestos, glass, electric energy generation and hazardous waste treatment.
States are empowered to rule on fixed sources that are not part of the aforementioned sectors under federal jurisdiction as well as mobile sources located within their territories.
Fixed sources are compelled to secure the permits as follows.
Federal fixed sources must secure the federal sole environmental licence, which, as identified above (see Section VI), is granted by SEMARNAT on a permanent basis unless there is a modification to increase in production, facilities' extension or change in corporate name and is actually a comprehensive permit covering, in addition to air emissions control, topics such as environmental impact and risk, hazardous waste generation and national water extraction.
In addition, activities executed by sources under federal jurisdiction must present COAs annually.
Local fixed sources must secure local environmental licences that are commonly under a separate permitting regime and must be renewed on an annual basis. Since each state is autonomous, laws, permits and authorisations may vary from state to state.
At a local level, activity reports must also be submitted on an annual basis before the environmental agencies of the corresponding states.
Notwithstanding the foregoing, all fixed sources must comply with certain obligations, such as monitoring its air emissions and carrying out periodic analysis to confirm compliance with Mexican Official Standards that set forth the maximum permissible levels of pollutants that fixed sources are allowed to release.
Finally, and deriving from the United Nations Framework Convention on Climate Change, the Kyoto Protocol, the 2014 COP20 in Lima, Peru, and the 2015 COP 21 in Paris, in November and December 2015, the Mexican legal framework is also regulating said emissions by incorporating a national database of greenhouse gas emission sources, the National Emissions Registry, and by obliging said sources to present an annual report through the COA when generating greenhouse effect gases and compounds in amounts equal to or above 25,000 tons of carbon dioxide.ii Water quality
In accordance with Article 27 of the Constitution, bodies of water within the Mexican territory are national assets. In this regard, and as set forth in the National Waters Law, the primary regime for water consumption and water pollution, the following activities require authorisation from the National Water Commission:
- national water consumption (superficial and underground water);
- wastewater discharges into bodies of water under federal jurisdiction; and
- occupation of federal property.
To carry out said activities, concession titles must be obtained, which are granted to private entities and individuals interested in carrying out the activities enlisted above for periods commonly going from 10 to 30 years.
On 30 August 2017, SEMARNAT published the guidelines containing the general provisions and requirements to protect and preserve national waters and inherent public property during the exploration and extraction of hydrocarbons in non-conventional oilfields. These guidelines became effective on 31 August 2017. Such guidelines must be met and implemented by any individual or business entity engaged in the exploration and extraction of hydrocarbons in non-conventional oilfields, such as oil and gas in shales, compact rocks, methane hydrate, etc. These guidelines set forth further and additional requirements to those set out in the National Waters Law for granting such concessions and permits for other activities. For instance, individuals and business entities engaged in exploration and extraction of hydrocarbons in non-conventional oilfields must implement measures for environmental protection, including, among others, those that prevent: the infiltration of polluting substances in the underground and the aquifer by installing impermeable layers; and the drilling of wells for the hydrologic exploration and for the integration of local and regional monitoring networks, as well as for the determination of the base line of water, etc., in accordance with best international practices and the guidelines.
Once the holder of a concession title, there are certain obligations to be observed, as detailed.National water consumption
Quarterly consumption reports must be prepared and filed before the National Water Commission.
Governmental fees for national water exploitation must be covered on a quarterly basis.
If the concessionaire does not extract the total volume of water granted under concession for a period of two consecutive years, a non-cancellation guarantee fee must be covered and an application for a cancellation interruption certificate must be filed before the National Water Commission to avoid said authority cancelling the unexploited volumes.Wastewater discharge permit
To be granted a wastewater discharge permit it is necessary to comply with the Mexican Official Standards that set forth the maximum permissible levels of pollutants to be discharged into bodies of water under federal jurisdiction or with the specific discharge conditions imposed in the permit. On 5 January 2018, SEMARNAT published a draft for an updated version of the Mexican Official Standard NOM-001-SEMARNAT-1996 This new standard foresees new pollutants to be measured (Escherichia coli and faecal Enterococci) stricter maximum permissible levels of pollutants in wastewater being discharged and the proceeding to be followed to obtain the certificate of conformity with the standard. At the time of writing, this standard continues to be in the project stage.
Periodic analysis of the wastewater being discharged must be carried out and the wastewater must be treated prior to the discharge.
Government fees in the event of discharging wastewater with surplus pollutants must be covered and a COA must be filed on an annual basis.
With regard to water supply and sewerage and drainage services, permits and agreements must be obtained or entered into with the local authorities (either state or municipal organisms); however, obligations also arise as follows.Water supply
The terms and conditions of the water supply agreement must be complied with and the government fees for the water supply service covered.Local wastewater discharge permit
The Mexican Official Standards, which set forth the maximum permissible levels of pollutants to be discharged into sewerage and drainage systems, or the specific discharge conditions imposed in the permit must be complied with.
Periodic analysis of the wastewater being discharged must be carried out and the wastewater must be treated prior to the discharge.
Government fees in the event of discharging wastewater with surplus pollutants must be covered.iii Chemicals
SEMARNAT published in 1996 the First and Second Listings of High-Risk Activities, which set forth those activities that are considered as high-risk activities because of the use of hazardous substances and materials in amounts exceeding the thresholds foreseen in said listings.
Those wishing to engage in high-risk activities must secure various authorisations, approvals and insurances in order to comply with the applicable legislation and to work in preventing any potential hazard or damage to the environmental or to human health.
Those wishing to carry out high-risk activities must prepare, prior to starting operations, an environmental risk study and an accident prevention plan. Said plan must be submitted for SEMARNAT's review for it to determine if the actions foreseen within are sufficient to attend any accident, incident or contingency that may arise because of the handling of the hazardous substances and materials.
An environmental liability insurance policy must be hired to cover any accident, incident or contingency potentially arising from the daily activities and operations with hazardous substances and materials.
The aforementioned permits are independent from any other permit, licence, authorisation or record that the activity may require in regard to civil protection and safety in the workplace, which are subjects ruled on locally by the civil protection agencies and by the Ministry of Labour.
Finally, activities using hazardous materials and substances in amounts below the thresholds set forth in the First and Second Listings of High-Risk Activities will not be under federal jurisdiction, but nonetheless, they are regulated by state authorities and must secure the corresponding permits and authorisations from the environmental agencies on the jurisdiction where they are located.iv Solid and hazardous waste
Waste generation is ruled, in accordance with the General Law for the Prevention and Comprehensive Management of Waste and its Regulation, by both SEMARNAT and local environmental agencies as follows.
Hazardous waste is a subject under federal jurisdiction and as such all generators of hazardous waste must:
- register as hazardous waste generators;
- obtain hazardous waste handling plan approval (if the entity or individual generates 10 or more tons of hazardous waste per year); and
- have an insurance policy (if the entity or individual generates 10 or more tons of hazardous waste per year).
The aforementioned records and approvals may be secured through the sole environmental licence (see Section VI) or individually.
In addition, obligations are triggered to:
- keep a generation logbook;
- hire the services of companies authorised by SEMARNAT to provide the services of recollection, transport and disposal of hazardous waste;
- keep a record of recollection, transport and disposal of hazardous waste provided by the hired providers of services; and
- file the COA on an annual basis (if the entity or individual generates 10 or more tons of hazardous waste per year).
Solid and special handling waste is regulated by local authorities and, therefore, the permitting regime may vary from state to state; however, the most common permits and obligations for solid and special handling waste generators are as follows.Permits
It is necessary to register as a solid and special waste generator and to have a solid and special waste handling plan (when generating 10 or more tons of waste).
Obligations for permit holders are to:
- keep a generation logbook;
- hire the services of companies authorised by local environmental agencies to provide the services of recollection, transport and disposal of waste;
- keep a record of collection, transport and disposal of waste provided by the hired providers of services; and
- file on an annual basis the local annual operating report (if the entity or individual generates 10 or more tons of waste per year).
The subject of contaminated land with hazardous waste or materials is under the jurisdiction of SEMARNAT, the agency responsible for granting the authorisations required to clean up contaminated land, which works jointly with PROFEPA as the agency in charge of enforcing the provisions set forth either in the applicable legal provisions or in the authorisations themselves.
As a general rule, the party causing the pollution of land is responsible for implementing the necessary actions for its remediation; however, the fulfilment of these obligations can also be claimed from the owner or tenant of the polluted land, since they are jointly and severally liable for the fulfilment of this obligation by provision of law. When the pollution is not caused by the owner or tenant, they have grounds to claim from the polluter the reimbursement of the costs and expenses associated with the remediation actions; however, they cannot cast off from any responsibility before the authorities.
The party responsible for carrying out the remediation actions is obliged to file before SEMARNAT a remediation plan proposal for its review and approval. Once the plan is approved, the responsible party is authorised to implement it through a service provider duly approved by SEMARNAT. The execution of the remediation plan is supervised by PROFEPA.
To minimise the risk of acquiring the liability of remediating a polluted land by a third party, it is always advisable to conduct Phase I and II environmental site assessments, the later only if required, as part of the due diligence process for real estate transactions, complemented with strict environmental clauses in the corresponding agreements.
The reparation or compensation of the damage caused to the environment or any of its elements (i.e., atmosphere, water, soil, biodiversity, etc.) can be claimed under the provisions set forth by the Federal Law of Environmental Liability independently of any other liabilities that may arise.
The action ruled by the Federal Law of Environmental Liability can be filed before a judicial court by PROFEPA, the local environmental protection agencies, individuals who live in the community within or adjacent to the area where the damage occurred and Mexican NGOs focused on the protection of the environment, only when representing a member of the affected community.
Because of this action, the person responsible for causing the damage could be sentenced by the court, first and foremost, to repair the damage. Only when the damage cannot be repaired, either totally or partially, must the responsible person compensate it, totally or partially. In addition, when the damage derives from a wrongful wilful conduct, the court can impose an economic sanction that can add up to approximately US$2.4 million.