(Bloomberg) -- Outgoing President Andres Manuel Lopez Obrador is upending Mexico’s political landscape one more time, as the country inches closer to passing a controversial reform that would deeply transform the country’s judiciary.
Foreign governments, a weakened opposition party as well as local and international companies operating in Mexico have come out against the proposed reform, warning of threats to democracy and even drug cartels infiltrating the courts. The Mexican peso remains among the worst-performing currencies this year, in part because of Morena’s landslide win and the proposed judicial reform.
AMLO, as the president is known, leaves office Oct. 1. His party, Morena, and its allies used the broad two-thirds majority they won in the lower house of Congress in June’s election to approve the judiciary overhaul plan, which is now going to the Senate, where they’re just one vote shy of having the supermajority required to pass the plan. President-elect Claudia Sheinbaum, AMLO’s protégé, has backed the reform.
Why don’t critics like the judicial reform?
AMLO wants all judges, including those on the Supreme Court, to be elected by popular vote, something few other countries do. He has also proposed reducing judge’s terms, capping their salaries and creating a judiciary disciplinary body whose members would also be elected by popular vote.
The reform lowers the requirements for judges, making it possible for someone with a law degree but little experience beyond that to be elected judge.
There are also fears that the reform will open the door for cartels to influence the judicial system by placing their own candidates for election, or by pressuring inexperienced judges. Given Morena’s popularity and the likelihood its candidates will win many elections for judgeships, critics worry that the changes would eliminate a check on the dominant party’s power.
Who has come out against it?
Some of Mexico’s biggest trade partners. US Ambassador to Mexico Ken Salazar said the proposal would weaken the country’s rule of law and in turn drive away investors who need certainty. He also cited concerns about cartel influence and corruption. Mexico needs capable judges to deal with complex litigation surrounding extraditions and commercial disputes, he said.
His Canadian counterpart said he’s heard from investors who worry the reform could hurt their trust in the Mexican government.
Global Companies in Mexico, a group that includes Nestle SA, AT&T Inc. and MetLife Inc. among many others, said the bill being discussed by authorities could discourage investment. The group urged the government to amend the bill so it guarantees judicial independence and adheres to international trade regulations. The group is composed of more than 60 companies whose activities represent 10% of Mexico’s GDP, according to its website.
Employees of the court system have also rallied against the measure. During a nationwide strike on Aug. 20, workers said the reform has “serious implications” for the judiciary’s independence and Mexican democracy. Supreme Court justices decided on Sept. 3 to join the judiciary workers strike to protest against the plan.
Has the next president weighed in?
Sheinbaum has tried to calm concerns about the reform, saying that the election of judges won’t mean that they will be aligned with the president, and that the main objective of the changes is to end long-standing corruption in the judiciary.
Sheinbaum has also denied that the vote will lead to the election of partisan and unqualified judges, and has said that various expert committees will evaluate the suitability of the candidates before the popular vote takes place. The president won’t appoint Supreme Court judges, which will guarantee the autonomy of the judicial system, she added.
Before the lower house vote on Sept. 4, Sheinbaum said the plan won’t affect Mexico’s trade relations, or any domestic or foreign private investments. “On the contrary, there will be more and better rule of law and more democracy for all,” she said in a post on X.
What happens next?
Since the reform seeks to change the constitution, it requires a two-thirds majority in both houses of Congress to be approved. Now that it was comfortably passed in the lower house, the plan heads to the Senate where Morena needs only one more vote to reach another supermajority.
When he received the proposal with a few changes after the lower house vote, the new ruling party leader in the Senate, Gerardo Fernandez Noroña, told reporters that achieving the two-thirds majority won’t be an issue: “We don’t have any concerns in this regard.”
On Sept. 8, the Senate’s constitution and legislative committees will discuss, and most likely approve, the final draft of the judicial reform proposal. That’s the final step for the proposal to be debated in the floor.
On Sept. 11, the Senate will probably start the debate of the general text of the judicial reform. If the general text is approved, the next day senators will debate individual articles of the bill, probably adding some minor changes.
After the Senate’s approval, the proposal needs to be discussed in all Mexican states and Mexico City’s local congresses. If they pass it, the bill will be ready for AMLO to enact it.
What other key reforms are being proposed?
In addition to the judicial reform, there are other proposals presented by AMLO that have worried investors. There’s one seeking to eliminate autonomous regulatory bodies, such as the antitrust regulator and the transparency institute. An energy bill plans to diminish the role of private companies in the energy sector in favor of increasing the power of state agency Comisión Federal de Electricidad.
©2024 Bloomberg L.P.
