Mexico Update: A Proposed Referendum on Energy Reform

After years of political impasse, in December 2014 Mexico’s Congress and a majority of state legislatures approved a constitutional reform to expand private-sector participation in the country’s oil and gas development. The reform ends a 75-year monopoly by state-run company Pemex, while the president says it could lower energy costs and create 2.5 million new jobs. But the law inspired controversy; public opinion surveys show divided support for the reform. Now, a pair of opposition parties is pushing for a referendum to repeal the legislation.

On September 3, the Party of the Democratic Revolution (PRD) presented to Congress more than 2 million signatures of citizens in favor of the plebiscite. The following week, a new political party, the National Regeneration Movement (MORENA), presented another 2.7 million signatures to the Senate to reinforce the PRD’s petition. MORENA was founded by Andrés Manuel López Obrador, formerly of the PRD, and a two-time presidential candidate and a vocal opponent of the energy reform. First conceived in 2011, MORENA became an official party earlier this year.

This form of a national referendum, too, is new in Mexico. Intended to increase societal participation in public affairs, the Federal Law of Popular Consultation passed in March 2014. The legislation lays out the steps to organize referenda on public policies, and allows for a plebiscite convened by the president, one-third of either chamber of Congress, plus a majority of the other chamber, or the support of at least 2 percent of registered voters. However, the law establishes that policies related to human rights, national security, elections, and state spending cannot be subject to popular consultation.

Now, the proposed energy referendum will require electoral and judicial approval. After receiving the signatures, Congress forwarded them to the National Electoral Institute (INE) to confirm that they account more than 2 percent of registered voters. INE has 30 days to review the signatures and declare if the requirement has been met. Once the INE approves the petition, the Supreme Court of Justice is expected to rule on the constitutionality of the proposed referendum in the first half of November.

Public opinion polls reveal a majority support the plebiscite, as well as showcasing divisions over the energy reform. An August Buendía y Laredo poll found that 46 percent have a negative view of energy reform, and 55 percent would vote to repeal the energy reform on a referendum. In a Reforma poll conducted after the approval of secondary energy reform laws in July, 40 percent had a negative view of the reform, versus 34 percent with a positive view. The survey also found that 66 percent of interviewees support holding a referendum on energy reform. Along the same lines, pollster Parametría y Asociados published an August survey in which 46 percent of respondents said energy reform would have a negative impact on the country, versus 34 percent who say it will be beneficial.

But the referendum faces opposition from the government. The governing Revolutionary Institutional Party (PRI) says energy reform is not subject to popular consultation because it is directly related to state expenditures, as more than a third of the government revenues come from oil. Party representatives also argue that Article 135 of the Constitution establishes that constitutional amendments are only possible with a two-thirds vote in Congress and approval by a majority of state legislatures. Therefore, they say, a referendum is not a legal instrument to roll back the constitutional changes approved last year. Members of the National Action Party (PAN) and some observers also say the proposal lacks a legal foundation since it involves a change to the Constitution. “I think that the Supreme Court will agree,” writes Leo Zuckermann, a Mexican professor at the Center for Economic Research, in Excélsior.