Lobbying in Mexico

1

March, 2014 OECD

Paris, France

Index

2

1. Facts of Lobbying in Mexico 2. Lobbying in Mexico 3. Background of Regulation 4. Achievement of Regulation 5. Scope of the Current Regulation 6. Preamble of Recent Modifications 7. Recent Modifications caused by Fiscal Reform (October 2013) 8. Is our Current Regulation enough? 9. Issues that need to be addressed 10. Course of Action 11.Draft Law on Lobbying in Mexico 12. Wrap Up

1. Facts of Lobbying in Mexico

258 lobbyists registered in the House

of Representatives

(Parliamentary Gazette, October 2012)

The Senate does not have a Lobbyist

Registry

23 associates to the National Association of Professional Lobbyists

(PROCAB)

Number of lobbyists registered

Estimated total annual profit of lobbying firms in Mexico : US$20 million dollars. (Robert Ehrman, founder of “Dynamis Consultores”)

3

House of Representatives (Regulated since 2011)

Lobbying is regulated only in the legislative branch, by the internal Rules of each House.

The registry of lobbyists as well as lobbying activities are controlled by the Board of each House.

Each norm foresees the application, reinforcement and sanctions in case of breach.

House of the Senate (Regulated since 2010)

4

Mexican Congress

2. Lobbying in Mexico

Trigger events

In 2005 a congressman alleged that the company British American Tobacco offered bribes to eight

legislators in return for their votes against the tax increase on cigarettes.

In 2013, during the debate of the Fiscal Reform, the media reported that the Soft Drink Industry offered gifts and

bribes to legislators and the agency

Obstacles in the policy-making process

2000-2006: The Federal Public Administration was unable to move forward on a number of structural reforms (such as fiscal, labour and energy reforms)

2001: fiscal policy reform was not passed due to the lack of political consensus

2002-2004: first initiative ballots relating to lobbying were submitted

Changes in Congress in 1997

Lack of a majority Multi-party forum

3. Background of Regulation

5

From 2002 to 2010, several initiative ballots and reform initiatives were proposed.

None of these initiatives and decree projects prospered during this period of time.

In 2010 the Rules of the House of the Senate came into force and in 2011, those of the House of Representatives.

6

4. Achievement of Regulation

House of Representatives: 4 pursued the creation of a law and

3 sought to pass amendments to the Rules.

Senate: 1 initiative ballot aimed at

drafting a new law and 3 decrees sought to amend the Rules.

Title IX Chapter IV

5. Scope of the Current Regulation

Title VIII Chapter III

• Defines Lobbying and lobbyist. • Requires registration of lobbying firms

and individuals. (Valid during a Legislature period).

• Bans participation of representatives and its close family.

• Restricts number of lobbyist working per commission.

• Prevents legislators from engaging with stakeholders interests.

• Prohibits legislators to accept gifts or payments.

• Documents regarding lobbying activity should be stored and published for public consultation. Requisits for lobbyist registration.

• The Board can revoke lobbyist registration in case of providing false information to Legislators

• Defines Lobbying activity.

• Legislators report lobbying activity to the Senate Board.

• Senators can’t accept gifts or payments from lobbyists. Sanctions apply.

Rules of the House of the Senate Rules of the House of Representatives

6. Preamble of Recent Modifications

On September 8th 2013 the Executive Branch presented the Fiscal Reform to

the House of Representatives

Meanwhile, two controversies regarding lobbying procedures arose in the media,

offers and bribes suggested from lobbying agents such as Price

Waterhouse Coopers and the Soft Drink Industry to congressmen in the House of Representatives if they voted according

to their interests.

This coverage and exposure of the corrupt practices and the lack of transparency, gave place to the

Decree that amends the Rules of the House of Representatives, published on October 18th .

• Increase of Income Tax (ISR) • Increase of Value Added Tax (IVA) • Increase of Special Production and

Services Tax (IEPS) Soft Drink Industry

• As well as new rules around universal social security (SSU), the universal pension and

unemployment insurance.

8

Amendments Rules of the House of Representatives

Registration quotas and sanctions for receiving gifts or

payments of any kind

Restrictions for public servants carrying out

lobbying activities

7. Recent Modifications caused by Fiscal Reform (October 2013)

9

1. House of Representatives

10

2. House of the Senate

The situation also triggered an initiative in the Senate to reform its internal Rules, in order to efficiently regulate the interaction of lobbyists and congressmen.

This Decree is being discussed to the date in the Commissions of Transparency and Parliamentary Practices.

7. Recent Modifications caused by Fiscal Reform (October 2013)

8. Is our Current Regulation enough?

The creation of a wider integrity framework might arise benefits as well as risks.

Possible reaction of stakeholders and pressure groups

Increase in public spending for the government

Improve transparency and integrity of the public decision-making process

Generate trust in goverment

Enhance good governance

Protect public interest

Grant equal access to all stakeholders and interests during the development and implementation of public policies

Fair market and industry participation and competition

Provide decision-makers with valuable insights

11

9. Issues that need to be addressed

Build and effective and fair framework that also includes the regulation of the Executive Branch.

Consolidate a governing authority averting the increase of government spending.

Create rules and guidelines in order to set standards of professionalism to lobbyists and a code of conduct for public officials who are lobbied.

Avoid and sanction the misuse of confidential information, conflict of interest and prevent revolving door practices.

12

Achieve a set of rules that regulate lobbying at local level that are consistent with the wider policy and regulatory frameworks.

Foster a culture of integrity, transparency and trust in government organisations and the decision making process.

Provide an adequate degree of transparency to ensure that public officials, citizens and businesses can obtain sufficient information on lobbying activities .

Reinforce strategies and practices to achieve compliance.

13

9. Issues that need to be addressed

Implement an integrity framework and extend it to the Executive Branch

Create a regulating authority external to the

Congress

Improve the effectiveness of the

Registry System

Mechanisms to sanction inappropriate influence-

by lobbyists

Policies for managing conflict of interest and

unbalanced representation

Disclosure and public availability of lobbying

information

10. Course of Action

14

On June 2013, Mexico participated at the "Forum on Transparency and Integrity in Lobbying" hosted by the OECD here in Paris, where we had the opportunity to acknowledge some of the best international practices on lobbying .

The case study of Lobbying Rules and Procedures that was put together, concluded that Mexico is located in a poor level of lobbying legislation in regard to the international experience.

We analyzed the efficiency of different frameworks, specially the Canadian model, which presents practical elements to be implemented in Mexico, in order to fill the gaps and optimize current lobbying activities in the country.

We have established contact with the Office of the Commissioner of Lobbying of Canada, in order to broaden our vision and enrich the forthcoming reforms that are to be made to the Mexican lobbying regulation system.

15

11. Draft Law on Lobbying in Mexico

11. Draft Law on Lobbying in Mexico

16

SUBSTANTIVE LAW

- Subjects to the Law – Requirements, obligations and prohibitions.

- Creation of an authority engaged with lobbying regulation

- Registration of lobbyists

- Types of lobbyists

ADJECTIVE LAW

- Duties and functions of the authority.

- Requirements and method for submission of documents and information.

- Registration rules, certification and documentation.

- Lobbyists’ Code of conduct

- Lobbyists’ Registrar System

- Offences and sanctions

Mexico suffered a democratic transition during the 90´s, giving way to a much more involved Congress and society in the policy-making process.

From 2002 to 2010, several ballot initiatives and decrees to regulate lobbying were proposed; however, didn´t succeed.

Emergence of the regulatory framework in the Legislative Branch in 2010 and 2011.

After having reviewed the functioning of the rules and guidelines related to lobbying, there is an evident need to make necessary adjustments in light of experience.

Currently, the Mexican Government is working on a Draft Law on Lobbying in order to adopt the best international practices and overcome the inefficiencies of the current regulation.

12. Wrap Up

17

Jorge Ortega González Director General of Legal Advisory, Contracts and Agreements Unit of Legal Affairs Ministry of the Interior of Mexico jortegag@segob.gob.mx segob.gob.mx

Thank you

18