Modified Environmental Laws in Mexico City

On July 18, 2024, Mexico City's head of government took significant steps toward protecting the environment, enacting two major decrees published in the city’s Official Gazette:

(i) a decree establishing the new Environmental Law of Mexico City and repealing the Environmental Law for the Protection of the Land in Mexico City; and

(ii) a decree amending Article 65 of the Solid Waste Law for the Federal District, repealing various provisions of the previous environmental law and introducing the Environmental Liability Law.

In this edition of Cross-Cultural Conversations, we break down these critical changes, helping businesses navigate this evolving legal landscape and stay compliant.

I. Decree Issuing the Environmental Law of Mexico City

Purpose: This law solidifies Mexico City’s commitment to environmental protection by formalizing the constitutional right to a healthy environment, as outlined in Article 16 of the city’s constitution. It goes further by emphasizing the recognition and protection of nature as a collective entity - a concept that may seem abstract at first, but it highlights the city's vision of environmental stewardship for future generations.

What's changing? The decree replaces the previous law for land protection in Mexico City, making way for a more comprehensive framework.

Key Updates on Environmental Impact Assessment:

This law outlines a clear process for conducting environmental impact assessments, focusing on:

• Different types of required environmental studies.
• Works and activities that need environmental impact authorization.
• Criteria for submitting these studies.
• A crucial step: consulting the community on large-scale construction projects.

If your company is planning a major development, make sure you've got the local community on your side -- it's not just good practice, now it's the law.

The Single Environmental Assessment (MAU): The Single Environmental Assessment (MAU) is an important, straightforward tool requiring businesses to demonstrate that they're in line with environmental standards. Think of it as a report card for your company's environmental performance. It covers areas such as air emissions, solid waste management, water consumption, and wastewater discharge. Detailed steps and requirements for submitting the MAU are also outlined.

Water as a Public Asset: Article 159 of the law strictly prohibits the privatization of water and its related services. Water management in Mexico City must remain public and non-profit. For businesses, this means you won't be able to turn a profit off the city's water supply.

Sanctions for Non-Compliance: Chapter III specifies violations and penalties, with fines reaching up to MXP $10.85 million (approximately USD $635,000) for non-compliance.

Regulatory Timeline: The law is in effect now, but additional regulations are expected within 180 business days (of the enactment).

Transitional Provisions: Until the new regulations are issued, the provisions from the previous Environmental Law for the Protection of the Land in Mexico City will remain applicable, as long as they do not conflict with the new law.

II. Decree Amending Article 65 of the Solid Waste Law and Issuing the Environmental Liability Law

Amendments to the Solid Waste Law: This amendment makes it crystal clear: if you're generating or managing solid waste, you're responsible for ensuring it does not harm human health or the environment. The law now links poor waste management to the new Environmental Liability Law.

Repeal of Articles 221, 222, 223, and 224 of the Chapter VI of Title 7 of the Environmental Law for the Protection of Land in Mexico City and issuing the Environmental Liability Law of Mexico City

Issuance of the Environmental Liability Law (Liability Law)

Purpose: This new law is all about accountability. It defines what qualifies as environmental damage and holds businesses responsible for fully restoring any harm done. In simple terms: if you break it, you fix it.

Key Definitions: The law spells out what "environmental damage" means and even touches on indirect damage. This clarity is essential for businesses navigating the murky waters of liability.

Exclusions from Environmental Damage: Article 4 of the law lists cases where environmental impairments, modifications, or losses are not considered “environmental damage,” provided they do not have adverse effects.

Obligations for Environmental Damage: If your business's actions harm the environment -- whether it's ecosystems, habitats, or natural elements -- get ready to take responsibility. Article 10 requires full restoration of any damage, so it's important to assess your operations carefully.

Financial Penalties: Brace yourselves: the law sets financial penalties of up to MXP $5.42 million for individuals and MXP $65.14 million for legal entities. These penalties are in addition to the obligation to repair environmental damage. The exact fine will be determined based on the severity of the harm and guidelines established in Article 22.

Legal and Criminal Liability: Chapters 6 and 11 cover the legal and criminal ramifications for environmental violations. That means, in addition to fines, businesses could also face legal consequences for failing to comply.

Regulatory Timeline: The law is already in force, but as with the Environmental Law (above), more detailed regulations are expected to follow within 180 business days.

Conclusion

These sweeping legal changes signal a new era for environmental responsibility in Mexico City. Businesses must now take a close look at their practices to ensure they comply with the updated laws -- or risk facing serious financial and legal consequences. It's not just about staying out of trouble, though -- by aligning with these laws, companies can contribute to the city's long term sustainability goals and help protect the environment for future generations.

References

You can access the newly enacted laws in Mexico City, published on July 18, 2024, through the Official Gazette of Mexico City. These laws include the Environmental Law of Mexico City and amendments to the Solid Waste Law, which introduced the Environmental Liability Law.