Santamarina Steta

Legal Report Mexico 2021: Second Part

A health crisis or economic crisis?

Entering 2021, Mexico and the world faced a terrible dilemma: closing businesses or implementing stricter sanitary measures. A decision made at the door of a global economic crisis and with a greater need for resources for medical care.

With the clarity that the sanitary measures were going to continue, our labor and real estate specialists once again pointed out options for a productive society. They talked about modernizing labor relations through teleworking, about alternatives for converting offices into housing, and about the “dark kitchens” or “ghost kitchens” phenomenon, as new opportunities for the weakened restaurant industry.

Declared a state of a health emergency, not a contingency, because that single word would open the door to legalizing breach of contracts, collateral damage began to show: violations of environmental legislation, which also included the works of the Mayan train and the first indications of bankruptcies in the hardest-hit sectors.

It must also be said: there were signs of recovery of foreign investments in some states such as CDMX, Nuevo León, Querétaro, the State of Mexico, and Jalisco, but they ran into obstacles due to the paralysis in immigration procedures for foreign executives who accompany them.

An environment of constitutional controversies before the Supreme Court also grew, or at least Amparo, before bills such as the one on the electricity industry; the initiative to establish a cell phone registry, which threatened the protection of personal data; the increasingly remote legal certainty to promote investment in clean energy, such as hydrogen; and the nonsense of health regulation that have closed the doors to a true promise: the hemp industry. Our legislators continue to confuse marijuana, a variant with a psychoactive compound, for hemp, a non-psychoactive plant, which is used as a raw material to produce biofuel, textiles, cosmetics, and components for the construction industry, among others.

In the middle of the year, pressure again deprived due to the imminent entry into force of the outsourcing legislation, characterized by the lack of clarity of its regulations, which did not contemplate or calculate the complexity of labor relations and contracting of third parties for essential industries, like the automotive The foregoing coupled with the criminal tax threat that its non-compliance entails, a situation that our specialists pointed out to public opinion.

And to be fair, even with nonsense and legislative contradictions, the defense of the Constitution, the autonomy of essential institutions, and the rule of law were maintained. Just like defending the environment.

At the beginning of the year, the dilemma seemed clear: “society or economy”, “future or present”. Today, it fades. One of our partners said it before the media: "The productive society, with the wounds of the pandemic, will take savage capitalism out of the game." I would add that also statism and wild congresses, but that will be the subject of the next installment.

Jorge León Orantes

Partner and Chairman of Santamarina + Steta