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RPT-INTERVIEW-'Adapt to new era' - Mexico lawmaker seeks tougher rules for miners


Reuters
Updated: 16-01-2019 18:31 IST
RPT-INTERVIEW-'Adapt to new era' - Mexico lawmaker seeks tougher rules for miners

Mexico's mining companies, including copper giant Grupo Mexico, should prepare for new labor rules and new regulations over their operations, including the prospect of higher taxes, a veteran labor leader now in the Senate told Reuters on Tuesday.

Senator Napoleon Gomez Urrutia, who heads the labor committee and sits on the mining committee, unleashed epic union battles a decade ago before he left Mexico to fight corruption charges he says were politically motivated.

Asked whether Grupo Mexico and other miners run by Mexican billionaires should be more tightly controlled, Gomez Urrutia said years of loose regulation by such companies had led to inequality and a severe concentration of wealth in Mexico.

"They are going to have to review the policies and practices they have had," said senator, who as a union boss led multiple strikes over pay and conditions including at the nation's largest copper mine, owned by tycoon German Larrea's Grupo Mexico.

"We want them to do it in a voluntary and flexible manner, without conflicts. That's the goal, but they have brutally resisted," he said.

"They have not wanted to change their practices. They have not adapted to the new era."

Grupo Mexico declined to comment on the senator's remarks.

He said Mexico's mining tax should be reviewed and that there was room for companies to pay more.

"I know this hurts and creates uncertainty; nobody wants to pay more taxes," he said, adding that any such changes should be made gradually and ideally negotiated with the companies.

A 2017 study by PWC concluded that overall taxes for miners were high in Mexico compared to peers.

Other policies he said should change included rules that allowed companies to easily get mining concessions but made it hard to cancel them. He also mentioned indigenous consultations and labor and environmental rules.

The comments by Gomez Urrutia, who returned to Mexico late last year to take up his seat in Senate for the left-wing party of President Andres Manuel Lopez Obrador, follow declarations by others in the party seeking to tighten business regulation, roiling markets late last year.

Lopez Obrador has been more cautious in his remarks and has promised no new taxes in the first three years of his six-year term.

Following the senator's comments on Tuesday, Grupo Mexico shares weakened 2.35 percent. Shares in fellow Mexican miner Penoles fell 3.3 percent.

NORTH AMERICAN RULES

Labor provisions in a new North American trade deal should be enforceable in Mexico, he said, adding that lawmakers could pass new national labor rules within the next two months.

Gomez Urrutia said he would push for the stronger labor protections in the United States-Mexico-Canada-Agreement that replaces the 25-year-old North American Free Trade Agreement (NAFTA) to be made "obligatory."

The deal, known as USMCA, must be approved by the U.S. Congress and Canadian and Mexican legislators before becoming law. U.S. Democrat lawmakers may also push for making the deal's labor rules, which include minimum wages for some auto production, enforceable.

Gomez Urrutia said the current language of the text, which was signed by the presidents of the three countries on Nov. 30, made the labor chapter virtually voluntary. In the existing NAFTA, labor rules are not enforceable.

"I have insisted in hearings with the negotiators of this free trade agreement that they make the chapter on labor right obligatory; that it is not a recommendation, because otherwise, there will not be a major change," he said.

The senator also said the country's new labor law, aimed at increasing union democracy and possibly making it harder for companies to "outsource" workers to third parties, could be passed in late February or March.

Previously the new government of Lopez Obrador, which took office on Dec. 1, had aimed to pass the law by January. (Additional reporting by Frank Jack Daniel; editing by Michael O'Boyle, Jonathan Oatis and Cynthia Osterman)


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