Luis Rubio
First they approved the constitutional laws, now all efforts are concentrated on secondary laws, the so-called implementing legislation. Then will come the most important part, the tertiary laws: reality. Says the eminent philosopher James Morris, “One of the nice things about reality is that it is what is, no matter what anybody says it is.” He could have been talking about the Mexican legislative process: in the past months, the Coordinator of Teachers, a union of dissident teachers, CNTE, showed how effective –and transcendent- this third stage is. This perspective should be incorporated into the drafting process of the implementing legislation on energy…
Reality has distinct dimensions. The most obvious, because it’s in the public light, at least in form, is the one that takes place in the legislative process itself: at least in theory, this is where all the positions, vested interests and relevant actors turn up. In a serious country the process would begin and end there. In Mexico’s case, that dynamic is going to be very distinct as compared with last year: for those who count –those who would be affected or benefited by the new legal schema, the constitutional laws can change the context, but what really matters are the specific regulations and it is there, this year, that all the “inside” interests will make their weight felt.
Another dimension of the reality is what takes place after the process: in the streets and in the plants, that is, in the mundane reality. That is the true test of the viability of a law. The bureaucrats, unions, contractors, mafias and other actors in each of the sectors affected can be as obstreperous as the CNTE or as subtle as a bureaucrat finessing the control of a neuralgic asset, but both have the same effect: paralyzing or “adapting” the reform in practice. In a certain manner, the CTNE was an anomaly during this last year due to the “formal” union’s decapitation. Its strength would have been much less under the status quo ante bellum.
Whatever might have been, in 2014 we are witnessing two processes: the legislative and the real one, “the tertiary law”, and the latter tends to be much more relevant and transcendental than the wishes of the keenest and most resolute reformer. Once again, the example of the CNTE is useful simply because of the enormous weakness of the State: if it can’t even guarantee peace, how can it be expected to attain, in the exquisite designation of bureaucratic lingo, to rule over the economy (rectoría del Estado in Spanish).
One need not proceed too far afield to imagine how complex what is coming is and, within it, the vast number of opportunities for paralyzing a reform such as that of energy. Without knowing much about the sector, some obvious key areas are: bidding for public contracts, regulation, credibility of the regulator, interconnection (ducts, cables, electricity grid), competition. In the past there has been an infinity of bidding for diverse-type contracts in PEMEX that, although formally international and transparent, end up being monopolized by two or three engineers because the bidding rules are so skewed that only these personages could satisfy them. Obviously this did not happen by chance.
This year will be crucial for the country. After the constitutional monsoon of last year, what is to come will define what type of economy Mexico will have and, doubtlessly, what kind of country it’ll construct. The transformation that, at least potentially, has been legislated is so enormous that the secondary laws will require great care in handling and, at the same time, will be subject to interminable pressures on the part of all of the actors: from the reformers with no particular interest but who often assume more than they actually know, which leads to many, often serious errors in the law, to the dozens of individuals and groups whose interests are on the line. To top all of this off the ideological actors will appear who, in the pose of safeguarding the Republic, will incorporate all manner of restrictions in the guise of baroque terminology that later will give the lawyers and courts a wide berth.
To complicate the matter, for obvious reasons of the country’s history, in Mexico there is no major experience in energy affairs from the legal perspective because the reality would not require it. This fact is neither good nor bad in itself, but implies that, whatever emerges from the legislative process will thence comprise the platform employed to settle lawsuits when these arise. Given the very abrupt manner in which the constitutional reform was approved, Mexicans’ proclivity for producing unintelligible legislative after pains (and deliberately saturated with confused wording designed to grant discretional powers to the authority), and the arbitrariness with which things are decided upon on a day-to-day basis, the potential for conflict is infinite. If the objective is to attract foreign investment, inevitably long-term in this sector, everyone should know that litigants will be poised one step behind every decision, all ready to pounce.
In a word, the reality will impose itself independently of the preferences of all involved. The tertiary law is always definitive and brutal and, worse yet, as Machiavelli said in his Florentine histories, “winners have no shame, no matter how they win.” To those who can emerge winners or losers, their lives will be spent in whatever surfaces in the reform; thus they will do everything possible to impede the reforms, adjusting their needs to or neutralizing them. The CNTE may be very obvious and crude in its ways and proposals but no one can be blind to their unmistakable win in the terrain that counts, that of reality.
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