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Calderón vetoes corporate law change

In a rare use of his veto power, President Felipe Calderón vetoed a change in corporate law that would have allowed for single shareholder corporate entitities. The President vetoed the measure not because he opposed the substance, but because the legislation that emerged from Congress created a new category of entity, with special rules, rather than just eliminating the requirement for more than one shareholder.  “The Federal Executive power under my command has stated that it is in favor of a minimal regulation that gives agility to the mechanisms for setting up and operating companies; the legislation does not do this,” he said in his veto statement. The measure was originally submitted to Congress in March 2008 by the PAN and PRI and was quickly passed by the Senate, but has languished and been modified in the Chamber of Deputies. Congress can change the draft law based on the President’s observations, let the veto stand, or try to override the veto with a two-thirds majority. (Reforma 11/9)

Under the Volcano: Notes on Mexican Politics

Killing of ‘Tony Tormenta’ keeps Marines on top

Naval marines surrounded and killed the leader of the Gulf Cartel, Antonio Ezequiel Cárdenas Guillén, aka Tony Tormenta and four of his bodyguards in a pitched battle in the border city of Matamoros. Columnist Raymundo Riva Palacio called it the government’s “most paradigmatic success in the 47 month long war against drugs.” The operation, which left three Marines dead and another four wounded, cements the position of the Marines as the elite agency for strikes against drug kingpins. Two reporters were also killed in the crossfire. The Navy said the operation to trap Cárdenas began six months ago with intelligence derived from the capture of some of the Gulf Cartel’s paramilitary wing, the Scorpions. The U.S. DEA also reportedly provided intelligence that assisted in locating Cárdenas. The Navy said that Cardenas had evaded capture on two separate occasions in the last month prior to this final operation.  The Marines deployed 660 troops, 3 helicopters, and 17 vehicles in the operation, while the Army provided an outer ring of security to prevent cartel reinforcements from reaching their leader.  (Eje Central 11/8)

NPR’s John Burnett has an extensive report on the military operation, the struggle between the Gulf Cartel and Los Zetas, and the impact on Matamoros.

Under the Volcano: Notes on Mexican Politics

Long-delayed ‘incentivated contracts’ go to Pemex board

More than two years after the passage of the energy reform, one of its critical elements — the so-called incentivated or integrated service contracts for oil exploration by private sector contractors– appears almost ready. The Pemex board agreed yesterday to hold a special board meeting on the 16th to consider and give final approval to the new contractual mechanism. These contracts are viewed by the Government as critical for enlisting the support of third-party contractors for exploration and development of oil and gas fields, while respecting the constitutional prohibitions on risk contracts and production sharing agreements.  The incentivated contracts provide for two kinds of payments: one based on reimbursement of costs and the second based on the amount of petroleum discovered. This latter provision is being challenged as unconstitutional by the Chamber of Deputies and the matter is with the Supreme Court.

If the board endorses the contracts, the official in charge of the new contracts Sergio Guaso said Pemex expects to start awarding contracts based on the new mechanism in 3Q11.

Pemex plans to hold four bidding rounds using the new contracts.  The first will be to reactivate the mature Magallanes, Carrizo and Santuario fields in the southern region; the second for mature fields in the north; the third in the Chicontepec region; and finally, in the deep waters of the Gulf.

(Excelsior 11/11, Pemex 11/10)

Under the Volcano: Notes on Mexican Politics