Accessibility links

Mexico's Supreme Court Rules Out Private Participation in Energy Industry - 2002-04-26


Mexican President Vicente Fox is facing another setback in his efforts to reform his nation's energy sector. The Mexican Supreme Court on Thursday ruled unconstitutional a presidential decree from a year that allowed some private participation in the state-run industry. Obstructionist opposition parties in the congress have also blocked any hope of achieving a change in the constitution.

The 8-3 vote in the Supreme Court struck down President Fox's backdoor measure to allow an increase in energy production by permitting limited private sector participation. His decree allowed private generators to sell up to 50 percent of capacity to the Federal Electricity Commission. It also allowed the government agency to enter into contracts with private companies in order to meet demand.

But the court ruled that only congress has the power to alter energy regulations.

This ruling was welcomed by opposition legislators, including the Secretary of the Congressional Energy Commission, Rosario Tapia of the leftist Party of the Democratic Revolution.

She says alternative energy reform proposals would also allow some private investment and participation in energy production.

But members of President Fox's party, the National Action Party are lamenting the decision. They say the court ruling combined with this week's senate rejection of a sweeping reform proposal first introduced two years ago by then-President Ernesto Zedillo puts Mexico in a vulnerable position. They say the nation could face energy shortages and rolling blackouts in the near future since the state-run industry is incapable of meeting demand without increased private sector participation.

Political analysts see the actions of the opposition parties in congress as an effort to block most major proposals supported by President Fox. Some opposition figures have openly said they oppose President Fox's efforts to open the energy sector because they fear a foreign takeover of the industry. Mexico nationalized its oil industry in 1938 and put the electricity generating industry under state control in 1960.

XS
SM
MD
LG