Last January 9, 2019, deputies of the Morena Parliamentary Group presented before the Permanent Commission of the Congress of the Union an initiative that amends, adds and repeals various provisions of the Law of Petróleos Mexicanos (the “Initiative”).
The objective of the Initiative is to “establish a legal framework that guarantees the Federal Executive, through the Director General of Petróleos Mexicanos (the “Director”), to operate in an integral manner when executing and complying with the objectives of exploration, exploitation and refining.” (Gaceta Parlamentaria, 2019)
The deputies proposed, mainly, to limit the powers of the Board of Directors of Petróleos Mexicanos (the “Board”), since, they mentioned that the regulation with which they operate today promotes the disintegration of responsibility at the time of making decisions, since the Law of Petróleos Mexicanos recognizes the Board to make decisions of an executive nature, arguing the position that in any company with a corporate structure, such decisions would correspond to the Director of the same. By virtue of the foregoing, they proposed to expand and grant greater powers to the Director for the strategic management and direction of Petróleos Mexicanos (“Pemex”) in accordance with the national energy policy instructed by the Federal Executive.
The deputies proposed to address, among others, the following premises:
- Establish a legal framework that guarantees and allows the Director to operate Pemex and the various companies that comprise it in an integral manner to execute and comply with the objectives of exploration, exploitation and refining;
- Limit the powers of the Board and give greater authority to the Director to lead and set the strategic direction of the company;
- Incorporate the Director to the Board as a permanent guest with voice, but without vote, providing that said governing body may not meet without his presence;
- A reduction in the number of committees, in order to concentrate the attention of matters in two committees to support the functions of the Board. Subsisting the Audit Committee and merging two committees to create the Investment, Acquisitions, Works and Services Committee, the latter would include the investment functions, as well as the analysis and recommendations of the Business Plan.
- Transfer to the Director the business plan, the central and strategic management of Pemex, its productive subsidiaries and affiliated companies, as well as any company in which Pemex directly or indirectly holds stock; likewise, appoint and remove Pemex executives who occupy positions in two hierarchical levels below the Director, as well as functions related to payroll and human resources, functions that currently correspond to the Board.
With respect to the proposed initiative, several media have expressed their opinion on the matter, pointing out risks if the text is approved as presented, since it promotes the centralization of decision making in the General Director of Pemex, a situation that is contrary to the best corporate practices in the market, and that slows down the efforts that have been made in the last 12 years for the institutionalization of this state-owned productive company. (México Evalúa, 2019)
Sources consulted:
Parliamentary Gazette, 2019. Reforming, adding and repealing several provisions of the Law of Petróleos Mexicanos, subscribed by deputies of the Morena Parliamentary Group. From the site: http://gaceta.diputados.gob.mx
México Evalúa, 2019. Risk in the reform of the Pemex Law: greater political interference, less checks and balances and exclusion of society. From the site:
https://www.mexicoevalua.org/2019/01/15/riesgo-en-reforma-a-ley-pemex-mayor-interferencia-politica-menores-contrapesos-exclusion-la-sociedad/
