Lessons for Mexico from Advanced Resource Governance Course

While considered by some to be a poor country, Mexico is doing well and advancing. We are almost always in the top 15 countries in terms of GDP, which accounts for USD 1.26 trillion. Our GDP per capita is around USD 10,000. Our biggest problems are socioeconomic inequality, corruption and some degree of national violence.
 
The country has always depended on its oil and gas sector for macroeconomic stability. But Mexico faces some challenges here: production and proven reserves are rapidly declining; oil derivatives domestic imports are increasing; and Pemex, the state-owned oil company, is less competitive. In response, Mexico passed a constitutional reform focused on energy in late 2013 and secondary laws in mid-2014 in a bid to attract new private-sector participants to the Mexican oil and gas sector.

Paul Sanchez, CEO at Ombudsman Energía México. Photo courtesy of author.

I attended the fourth edition of the Central European University School of Public Policy-NRGI course on reversing the resource curse to learn more about Mexico’s extractives challenges and parallels elsewhere. It struck me as an essential learning experience for natural resource practitioners, government officials and civil society representatives alike.
 
The two-week course included theoretical and practical modules of extractive industries and management, combining quantitative and qualitative methods with real and fictional cases. Difficult topics such as political economy, sovereign wealth funds and negotiation mechanisms between communities, companies and governments were explained so that practitioners rapidly grasped new concepts and methods of intervention.
 
More than 50 practitioners from around the world interchanged ideas, experiences and possible solutions for common problems. Both the course modules and the knowledge-sharing from other practitioners proved to be useful in the context of Mexico. For example, Eric Parrado’s session about Chile’s sovereign wealth fund pointed toward possible best practices for Mexico, such as a pricing committee that could be useful for the newly created Mexican oil fund. Parrado also said that spending ceilings for the budget process could improve the country’s macroeconomic stability.
 
Sessions on the shared use of extractive industries-related infrastructure provided guidance on designing local content regulations for new private sector participants. These guidelines included social sector monitoring, auditing local content plans and creating a certification system that has been mutually agreed on. One of the most creative sessions was focused on NRGI’s upcoming online interactive course. On the last day of the course, we were encouraged to put into practice what we had learned in our home countries—this made the biggest impression on me.
 
Currently, I am working on an action plan that has three main goals:

• Creating a social sector certification system for local content programs
• Promoting the benefits of setting up a pricing committee in the newly created Mexican oil fund
• Developing a mechanism for providing support in negotiations between land owners and private companies.

In order to develop a joint strategy for implementing this action plan and achieving these goals, I have been sharing these ideas (as well as my experience in the course) with key actors in the Energy Secretariat, the National Hydrocarbon Commission and civil society organizations who have expressed interest to help and support the action plan and its milestones.
 
Paul Sanchez is CEO at Ombudsman Energía México.