Mexico oil privatization dispute rages

While the rest of Latin America moves left, Mexican President Felipe Calderon is pushing hard in the other direction with a thinly disguised plan to privatize PEMEX, the huge state oil company that provides 40 percent of the Mexican government’s revenues. But resistance to privatization is very strong.

PEMEX was created after 1938 when then President Lázaro Cardenas nationalized foreign oil companies’ holdings after these companies simply refused to obey Mexican labor laws.

PEMEX has certainly not been well managed in recent decades. There has not been enough investment in finding and exploiting new oilfields or even in maintaining existing infrastructure. Frequent accidents have damaged the environment, imperiled health and safety and outraged public opinion. Opponents of the government hint that this may have contained an element of deliberate sabotage to prepare public opinion for privatization.

In 1989, President Raúl Salinas of the Revolutionary Institutional Party (PRI) struck hard against the oil workers union, arresting and jailing the leadership on trumped up arms charges, then maneuvering to put pro-government union leaders in their places. At the time, commentators speculated that this was the first step toward privatization, since the union had been a strong force in support of maintaining public ownership. Public opinion in Mexico then and now, however, has been against such a move, especially if the privatizing agents include foreign corporations.

So Calderon’s radical privatization plan had to be dressed up as something else. Though, under his plan, the vast majority of corporate functions, including exploring new oilfields, drilling test wells, pumping, building and maintaining pipelines, transportation and storage would be contracted out to private industry, in some cases in exchange for a share of the profits of new wells instead of just for a fixed contractual amount as the law now requires, this was not really “privatization,” Calderon assured his countrymen, because PEMEX would still exist in name. But many aren’t buying this charade.

On April 10, legislators affiliated with the left wing of the Revolutionary Democratic Party (PRD) and allies, backed up by mass organizations including grassroots women’s collectives called “Las Adelitas,” seized the podium of both houses of the Mexican Congress and locked out the rest of the Senators and Congresspersons. Andrés Manuel López Obrador, the leader of the Broad Popular Front (FAP) to which this section of the PRD belongs, said they did this because they got information that Calderon’s National Action Party (PAN) and the formerly ruling Revolutionary Institutional Party (PRI) were cooking up a lightning dawn action (albazo, for “alba,” dawn in Spanish) to ram through the Calderon privatization plan before opposition could be mounted. The government denied this, but had called for a strictly parliamentary debate lasting 50 days, and vote on the Calderon plan by the middle of the summer. The FAP and Lopez Obrador, on the other hand, had demanded a much longer period of discussion, 120 days with mass public participation all over the country – basically, a massive referendum on the issue.

After two weeks, the occupation of the podia of the Congress was ended, and the details of the debate on the government’s energy reform program are now being worked out.

On May Day, which has traditionally been a mass labor event with government sponsorship in Mexico, President Calderon decided not to show his face to the workers, a glaring contrast with previous presidents. The topic of the privatization of PEMEX and other public entities, Calderon’s threatened “labor law reform,” and other reactionary and neo-liberal policies of the government came under sharp attack from union speakers, though many noted the complete absence of Petroleum Workers Union president Carlos Romero Deschamps, who has yet to speak out on the PEMEX privatization issue.

At the May Day rallies, Martín Esparza, head of the Mexican Electrical Workers Union, asked if they would allow “petroleum profits to be carried away by transnationals?” Rather, he said, Mexican labor should organize campaigns of civil resistance, because “if the energy reform is passed, they will also pass the labor reform” so as to destroy the unions and collective bargaining. Valdemar Gutiérrez Fragoso, secretary general of the Union of Social Security Employees, which has itself been having a long struggle against the government’s privatization efforts, pledged that his union would help to lead in the struggle to prevent privatization both of PEMEX and the electrical energy system.