13 December 2022 –
A new civil society report authored by Derechos Humanos y Litigio Estratégico Mexicano (DLM) and Sociedad Mexicana de Litigio de Interés Público finds that while Mexico generally has a comprehensive constitutional, legal and regulatory framework that addresses most articles of Chapter II (Preventive Measures) of the UN Convention Against Corruption (UNCAC), there is a major problem with implementation in practice, some issues still need to be legislated, and high levels of impunity persist. There is an urgent need to develop a legal framework to effectively apply asset recovery provisions in line with Chapter V of the UNCAC. Furthermore, the current government’s aggressive rhetoric against anti-corruption advocates and human rights defenders has led to less transparency and accountability and has caused an even further shrinking of civic space. The CSO produced its report alongside with other Mexican organizations and specialists, which is intended as a contribution to the UNCAC implementation review process in its second cycle, with technical and financial support from the UNCAC Coalition.
Mexico has one of the most comprehensive anti-corruption regimes in the region. The general anti-corruption regime consists of the General Law of Administrative Liabilities, General Law of the National Anticorruption System, amongst other laws, the National Program to Combat Corruption and Impunity and to Improve Public Management 2019-2024, the National Development Plan 2018-2022, the Policy of Transparency, Open Government and Open Data of the Federal Public Administration 2021-2024, the National Anticorruption Policy and the Implementation Program of the National Anticorruption Policy. The anti-corruption laws, programs and policies are designed and should be enforced by the agencies and authorities that are part of the National Anticorruption System and the Local Anticorruption Systems (each State of the Federation has the obligation to install). However, their results and efficiency is inconsistent. Most of the institutions that are part of the National Anticorruption System and the local systems face obstacles to make their activities, strategies and results more efficient due to the budget cuts they have faced in recent years and the political interference and interests that have arisen.
Since the 2015 anti-corruption reform, several tools have been developed to improve the administration of public entities, strengthen access to information, promote citizen participation, combat bribery and smuggling, and promote anti-corruption strategies. Implementation has been slow, but progressive. However, impunity and the lack of compliance and enforcement of the law in practice are the reasons why the results of the fight against corruption in Mexico do not reflect the existing policies, nor have they proven to be efficient to date. The policies that do exist lack clear monitoring, evaluation and learning frameworks to assess their usefulness and adapt them as required. Moreover, there are still pending issues to be legislated, such as measures for the protection of corruption whistleblowers, incentives for whistleblowing, management of conflicts of interest, reparation for damage caused by acts of corruption and asset recovery.
The official UNCAC review process in Mexico was scheduled to begin in 2016/17. The country visit took place in May 2017, supposedly with the involvement of civil society organizations, though no information has been provided on which ones were involved. While the executive summary of the review is already on Mexico’s UNODC country profile page, the full country report is still being finalized. Despite having signed the UNCAC Coalition’s Transparency Pledge, the self-assessment checklist has not yet been published, making Mexico not compliant with the pledge to date.
Mexico is the first country in the world that is replicating the UNCAC implementation review mechanism at the state level, with the objective of strengthening the regulatory framework, programs and operation of state institutions in anti-corruption matters. The mechanism was launched in 2020 and is funded by USAID. As of the date of this report, neither the evaluation nor the final reports have been published; however, during the draws of lots and the review process, the participation of civil society was actively promoted and guaranteed.
The following are some of the main findings according to topic:
Public sector employment
Public sector employment is mainly regulated by three laws that regulate all institutions of the federal civil service and standardize entry through public competition and merit. However, their standards of transparency and access to information must be reinforced in order to strengthen citizen oversight. Similarly, the requirements for access to and evaluation of senior officials, who are currently freely appointed and removed, must be strengthened, and the arbitrariness that exists in the law with respect to their appointment and removal must be restricted. International standards should be adopted and standards of maximum publicity, transparency and citizen participation should be adhered to in the appointment of high-level positions in independent institutions such as the Special Prosecutor’s Office for Combating Corruption – the agency that prosecutes acts of corruption criminally.
Mexico constitutionally grants public financing to political parties, in accordance with a series of requirements. However, the transparency, accountability and financial management of political organizations is inefficient as many of them omit indicating expenses, the reports submitted by political parties are opaque and deficient, often hiding information and containing an endless number of irregularities in the obtaining, verification and use of resources. The amount of budget allocated to political parties is extremely high, as is the lack of verification of the allocation and destination of resources. The schemes of donations and contributions from supporters prevent the financing from being efficiently audited. Oversight, accountability and auditing measures need to be strengthened, and the functional and budgetary autonomy of the National Electoral Institute must be guaranteed as well as respected.
Codes of conduct, conflicts of interest and asset declarations
Mexico has a specific law on asset and interest declarations, a National Digital Platform for the registration and tracking of these declarations, as well as an asset evolution system and declaration forms for public officials. However, there is a need to strengthen transparency provisions in the law, and broaden its scope, both in relation to the declared content as well as in relation to the obligated actors, based on international standards that allow the constitution of effective control tools.
There are codes of conduct for public officials of all State functions, and the mandatory Code of Ethics of the Federal Public Administration has been published recently. Due to its recent publication, it is not possible to evaluate its application; however, the establishment of Ethics and Conflict of Interest Prevention Committees is noteworthy. These committees must ensure that there is adequate oversight of the codes’ compliance and that it is harmonized with codes of conduct at all levels.
With respect to conflicts of interest, Mexico lacks efficient regulations aimed at defining, preventing and managing them, as well as mechanisms for identifying, evaluating and acting upon the existence of such conflicts, whether in the process of appointing officials or in the realization of a conflict during their term of office. This is still pending and must be addressed urgently. While a Guide for the Identification and Management of Conflicts of Interest has been published recently, it is necessary to strengthen the mechanisms and procedures for identification and management, as well as to inscribe them into law and develop the necessary legislative procedures.
There is no specific law on whistleblowing in Mexico, but at the moment, there are bills pending discussion in the Mexican Congress. However, at the end of 2020, the Protocol for the Protection of Whistleblowers was published and the platform of the Internal and External Citizen Corruption Reporting System was enabled, which complements the Integral System of Citizen Complaints of the Federal Public Administration. The whistleblower platform allows for anonymous complaints, and requests for protection measures to be made which, according to the respective authority, have already been granted in the past.
Nevertheless, the current framework does not consider incentives for whistleblowers, specific actions to prevent retaliation according to international standards, or reparation of damages for acts of corruption, so a solid reform is required on whistleblower protection. Mexico’s approach to protection measures focuses on internal whistleblowers, confidentiality of identity, and incentives for effective whistleblowing. The context of insecurity and violence in Mexico reinforces the need for regulation with inter-institutional coordination processes oriented to achieving effective mechanisms that grant the necessary protection and guarantee the safety of whistleblowers –including human right defenders, activists and journalists.
Since 2017, Mexico has been using an electronic public procurement system called CompraNet. It has made an important qualitative leap in recent years, adopting international standards in procurement policies and open government. Notwithstanding the technical advances, the Compranet platform has registered technical and operational failures, and schemes of possible corruption in its operation have been reported. Opacity, direct awards, and triangulation with ghost companies continue to be the main scheme that fosters corruption in public procurement. The unjustified increase in direct awards during the current administration and as a result of the Covid-19 pandemic is exorbitant.
There is an urgent need for sustainable change in the system that has been involved in multiple major corruption scandals. The e-procurement strategy must be aligned with a comprehensive and coordinated reform program, work towards a more efficient, effective and transparent process, keep up-to-date with technological advances and ensure integrity in public procurement processes, especially since it has not made any notable progress as an anti-corruption measure.
Issues related to the General State Budget are mainly regulated in the Constitution and in the Federal Budget and Fiscal Responsibility Law. However, it is necessary to strengthen the National Auditing System to make the results of the audit of public accounts more efficient and to combat corruption in budget management. To date, the 2020 public audit has revealed millions of dollars in irregularities in key works and programs of the current government. Likewise, it is necessary to promote and facilitate spaces for real civic participation in the design and management of the budget. Despite the fact that corruption was publicized as a priority of the Federal Government, the number of resources allocated to mega-projects and social programs that have reported irregularities has increased and the budget of the main entities in charge of preventing and fighting corruption has been cut, preventing the efficient exercise of their different functions.
Independence in the judiciary
The mechanisms for sanctioning judges who have incurred in acts of corruption are not very transparent and there is a dependence of the body in charge of investigations in the Supreme Court, while the presidency of the Supreme Court and the Federal Judiciary Council reside in the same person. The external control mechanisms of the Federal Judiciary Council must be strengthened. The failure to appoint judges of the specialized anti-corruption chambers of the Federal Administrative Court of Justice –in charge of sanctioning administrative liabilities of public servants and private individuals related to the government– contributes to the backlog of corruption cases, leading to administrative impunity. Furthermore, the Attorney General’s Office’s lack of factual independence has been called into question both by the public and politically and has delegitimized the institution. The Specialized Prosecutor’s Office for Combating Corruption insufficient resources and lack of independence are also the cause of its inefficient fight against corruption, with very few cases prosecuted so far. The worst consequence of the corruption prevailing in Mexico’s law enforcement agencies is the high levels of impunity that exist. To a large extent, impunity is generated and protected by the corruption of the different agents involved in the system: the police, administrative and criminal prosecutors and judges.
Access to information and participation of society
Mexico’s access to information legislation ranks 2nd best on the Global Right to Information Rating. The constitutional transparency reform of February 7, 2014 strengthened the mechanisms of access to public information and protection of personal data in the country. An appeals mechanism is in place and the National Digital Platform and the National Transparency Platform have been a milestone in Mexico in terms of access to information by digital means; however, it is necessary to strengthen technological progress in order to avoid and prevent the multiple cyber-attacks and hacks that have occurred and that have caused the suspension of public information delivery.
The participation of civil society in Mexico is regulated both constitutionally and legally. The Citizen Participation Committee of the National Anticorruption System is the basis for citizen participation within the national anti-corruption framework. The Citizen Participation Committee presides the National Anti-corruption System. Progress has been made in defining mechanisms and instances of civil society participation. However, in practice, providing legal certainty and effective recourse to non-governmental organizations, citizen collectives, human right defenders and activists has not been a priority of the government nor of the judiciary. The current situation has fostered a restrictive and intimidating context for civil society organizations, journalists and human rights defenders. Mexican legislation has legal figures for citizen participation that constitute good practices in the region, but they are not implemented in practice and therefore need to be improved. The participation of civil society in the appointment of high-level officials has not been guaranteed, nor has public debate been encouraged in this regard.
Private Sector transparency
The Ministry of Public Administration has the legal power to collaborate with private sector companies in the establishment of self-regulation mechanisms for the implementation of internal controls and integrity programs, in which effective whistleblower tools must be considered. In general, private sector anti-corruption strategies are closely associated with corporate social responsibility practices that focus on internal measures implemented by individual companies. In order to strengthen transparency in the private sector, the Ministry of Economy has developed the Mexican Digital Business Information System (SIEM Digital), the Integral Registry Management System (SIGER) of the Public Registry of Commerce (RPC), the National Registry of Foreign Investments (RNIE), the System of Publications of Mercantile Companies (PSM), among other databases.
Mexico applies a risk-based approach to prevent money laundering. There are no identification mechanisms or any registry of beneficial owners to verify what is declared by clients. A serious concern is that the beneficial owner is identified only to a limited extent, systematically influencing the effectiveness of the entities in relation to the assessment and management of AML risks. Largely due to deficiencies in the legal framework, financial institutions seek to identify beneficial owners only in limited circumstances according to their faculties and legal liabilities. In this sense, amendments to the legislation are pending in order to strengthen due diligence and identification requirements for beneficial owners, and identification requirements for other financial service providers.
An issue to consider in the analysis of this phenomenon in Mexico is the lack of sanctions for corruption cases and corruption networks that have been uncovered. This is due to the fact that the National Anti-corruption System only considers crimes for acts of corruption, so it does not include the crimes of concealment and operations with resources of illicit origin or money laundering. Thus, when in Mexico we refer to the National Anti-corruption System and the fight against corruption, there is a distinction between illicit conducts, administrative offenses (minor and serious) and crimes for acts of corruption which, as mentioned, do not refer to the totality of conducts committed by public servants to the detriment of the good administration of public affairs and does not include or link the crime of money laundering.
The Mexican State provides legal assistance to other states on different international cooperation conventions and agreements on different matters. However, with regard to measures for the recovery, restitution and disposal of assets, confiscation tools and international cooperation, it is necessary to adapt national regulations and strategically develop a draft law based on indicators in order to comply with international obligations in the area of asset recovery.
In its report, Derechos Humanos y Litigio Estratégico Mexicano (DLM) and Sociedad Mexicana de Litigio de Interés Públicomake several key recommendations for priority actions to be taken to ensure the full implementation of the UNCAC in Mexico, for example:
- Eradicate impunity and corruption in order to contribute to the trust of citizens in the legitimacy of their institutions.
- Ensure the application of the law to guarantee the effective implementation of the National Anti-corruption Policy.
- Strengthen the structural and inter-institutional coordination of the National Anticorruption System as an institutional guarantee for the implementation of the anticorruption policy and an effective fight against corruption.
- Conduct an exhaustive analysis of what the institutions in charge of the fight against corruption are currently doing in contrast to what they should be doing to optimize results, based on indicators and risk assessment and monitoring models.
- Legislatively harmonize the processes for the appointment of high-level public officials to establish standards of transparency, citizen participation, conflict of interest analysis and accountability; and amend the suitability requirements/characteristics for these positions, giving priority to merit.
- Guarantee and undertake initiatives to promote and ensure the independence and autonomy of preventive bodies, control bodies, oversight bodies and law enforcement agencies, and protect them from political interference.
- Develop cooperation instruments with other national organizations, private sector entities and civil society for the implementation and enforcement of the National Anti-Corruption Policy and the National Auditing Plan.
- Stop the stigmatization of civil society, press and human rights defenders and guarantee efficient protection measures. Recognize their legal standing to challenge acts or omissions of the State.
- Implement a solid regulatory framework on whistleblower protection mechanisms and measures, conflict of interest management, asset recovery and identification of beneficial owners.
- Limit and regulate contracting through direct awards; streamline and strengthen digital mechanisms and tools for tracking, supervision and oversight in public contracting processes.
- Guarantee sufficient budgetary means for the authorities that make up the National Anti-corruption System so that they can conduct their functions in an effective and efficient manner.
- Legislatively harmonize the professional career service and reform it to reduce the high degree of discretion that still exists in the appointment of public positions.
- Improve the interoperability of databases and information generated by institutions such as the National Institute of Transparency, Access to Public Information and Protection of Personal Data, Tax Administration Service and the Attorney General’s Office in order to detect and punish acts of corruption related to bribery and money laundering in a timely manner.
- Develop and legislatively harmonize the responsibility of the State for acts of corruption, compensation for corruption damages and strengthen legislative, administrative and jurisdictional actions to recognize the victims of corruption.