The Mexican president will focus his efforts on the imminent nationalisation of lithium, creating a state company to extract, produce and market it

López Obrador accuses Congress of committing "an act of betrayal of Mexico" after rejecting electricity reform

REUTERS/HENRY ROMERO - Mexican President Andrés Manuel López Obrador addresses the nation at the National Palace in Mexico City

Mexican President Andrés Manuel López Obrador appeared on Monday accusing the opposition of defending the interests of foreign companies over Mexico, after Congress rejected the constitutional reform of the electricity sector proposed by the Mexican executive.

"Yesterday an act of betrayal of Mexico was committed by a group of legislators who, instead of defending the interests of the people, of the nation, instead of defending the public, became defenders of foreign companies that are dedicated to profiteering, to stealing, and these deputies supported them, the looters, it is very regrettable what happened," said the Mexican president.

The main objective of the government's proposed reform of the electricity sector was to undo the liberalisation promoted by the previous government of Enrique Peña Nieto. In this way, they asked to reserve 54% of the Mexican market for the control of the state-owned company Comisión Federal de Electricidad (CFE), which implied a limitation of private companies and the possibility of cancelling contracts that were already in place.

Andrés López Obrador's alternative was put to a vote after nearly 12 hours of debate, and only managed to achieve 275 votes in favour out of the 334 votes needed. This rejection of the reform was led by opponents from the PRI, PAN, PRD and Movimiento Ciudadano parties.

"It was even embarrassing to see the PRI as the PAN's palero, I don't know if you imagined that this would happen. Unfortunately, the party that emerged with the Revolution, is now the PAN's palero, and the PAN, as we have said on other occasions, has some justification, because that party emerged to defend foreign companies," López Obrador argued forcefully.

Vista general de la Cámara de Diputados de México
Failure of the electricity reform

The rejection of the reform proposal is a blow to López Obrador's government, which had won the support of the Supreme Court of Justice, which declared the requested changes constitutional.

The refusal of Congress has caused the president to publicly renounce resubmitting the electricity sector reform, "I am not going to resubmit another electricity reform initiative; no more because I have two years left in five months and those who come after me must try (...) we have to recover the assets that the oligarchs handed over to foreigners", he said.

Despite this, López Obrador has other reform proposals in the pipeline, including the nationalisation of lithium. His alternative envisages the creation of a state-owned company to manage and control the commercialisation of this raw material.

"I call on the legislators and I make a respectful appeal to the senators so that if possible today or tomorrow lithium is protected and we begin to structure the company like the CFE that will manage everything related to it and with the support of the research centres that exist in the country," said the president.

Una vista general muestra las líneas eléctricas de alta tensión propiedad de la empresa estatal de electricidad de México conocida como la Comisión Federal de Electricidad (CFE), en Santa Catarina, en las afueras de Monterrey
A triumph for the private sector

After learning of Congress' resolution on the proposed reform, the Business Coordinating Council (CCE), whose members represent 60% of the country's electricity system, praised the work of the deputies who rejected the proposal "so that Mexico has sufficient, cheap and clean energy to combat climate change and ensure that the economy grows", according to its communiqué.

"The business sector stresses that it will continue to act with full respect for the law, in support of the inclusive and sustainable development that the country requires," it added. "In the electricity sector, the participation of all is required: government, regulators, public and private companies, to achieve the effective benefit of Mexican families," the CCE said.

On the other hand, the Confederation of Employers of the Mexican Republic (Coparmex) criticised the government's reform, pointing out that it "went against the economy of families, the environment, free competition, and compliance with international treaties contracted by Mexico in economic and environmental matters".

America Coordinator: José Antonio Sierra.