Mexico Getting Tough on Environmental Liability

Oil Slick on Water

There have been many different legal, regulatory and political initiatives to address environmental damage and liability issues in Mexico over the past 15 years or so.  But in early June of this year, Mexico has grown some serious “teeth” with the enactment of a new federal law on environmental liability (in Spanish).

This new law now provides more legal “muscle” for environmental restoration, compensation, and exemplary fines against individuals and companies.  It’s a significant step toward environmental protection and is based upon the “polluter pay” principal, which could result not only in cleanup/remediation obligations for responsible parties but also in new lawsuits and litigation (similar to what we have in the U.S. under CERCLA and in the EU for Natural Resource Damages via the Environmental Liability Directive).

What to do

As with any new environmental regulation or law, property owners and risk managers should keep abreast of these developments, contemplate their exposures and manage their risk accordingly.  Companies with operations or properties in Mexico who have historically felt somewhat immune to environmental liabilities and/or consequence may now want to consider alternative measures to assess and address these exposures and risks—such as:

  • Ensuring each facility is in compliance with all environmental permits
  • Have engineering controls and contingencies in place to prevent accidental releases/spills of contaminants
  • Perform comprehensive environmental site assessments before taking title to any new properties, etc.

The good news is that, in addition to prudent risk management strategies, there are cost-effective insurance and risk transfer solutions available in the environmental insurance marketplace.

About Anthony Wagar

Anthony is a Executive Vice President and the National Sales Leader for Willis' Environmental practice based in New…
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