Two days before the Mexican government unveiled draft regulations for its ambitious opening of the state-run energy sector to private participation late last month, Oscar-winning director Alfonso Cuarón published a letter posing ten questions to Mexican President Enrique Peña Nieto.  “The reform will result in multimillion-dollar contracts” for private companies, wrote Cuarón. “In a country such as ours with a weak (and often nonexistent) rule of law, how can large-scale corruption be avoided?”  To the surprise of some, the President’s office issued a point-by-point response just a week later, naming a spectrum of anti-corruption measures adopted in the new regulations such as public bidding and agreements, disclosure of contractor expenses, a commissioner code of ethics, and institutional and procedural checks and balances unified under the oversight of the Secretary of Energy.  (Full text in Spanish here.)

The project to reform Mexico’s energy sector – particularly the state oil company PEMEX, which generates one-third of all government revenue and is bestowed of both a powerful workers union and tremendous symbolic importance in Mexican history – was always going to be controversial.  President Peña Nieto’s success in getting the law passed in December 2013 has been his signature achievement, lauded by the Washington Post as turning Mexico into “the Latin oil producer to watch — and a model of how democracy can serve a developing country.”

But both critics and many supporters of the reform recognize that corruption is an elephant in the room. Continue reading →