Mexico Bill Requires Indigenous Consent for Projects
A proposed federal law would require free, prior, and informed consent from Indigenous and Afro-Mexican communities for major projects, imposing new due diligence, cost, and benefit-sharing obligations on developers.
Mexico's executive branch has introduced a sweeping legislative proposal that would create a national framework for consulting with Indigenous and Afro-Mexican communities on development projects. The bill seeks to implement a constitutional reform by establishing a mandatory process for free, prior, and informed consent before projects in key sectors like mining, energy, water, and infrastructure can be authorized. If consent is not obtained for projects deemed to have significant impacts, they cannot proceed unless modified to eliminate those impacts.
For companies and investors, the law would impose significant new obligations. Project proponents would be required to bear the full cost of the consultation processes, conduct human rights due diligence, and negotiate benefit-sharing agreements that could include royalties or equity stakes. The proposal also introduces new corporate criminal liability for offenses such as ethnocide and theft of cultural heritage, with provisions that could allow for piercing the corporate veil. Any private agreements with community representatives made outside the formal process would be void.
The bill is currently in a public consultation phase, after which a final version will be submitted to the Mexican Congress. Companies with current or planned projects in Mexico should begin assessing potential impacts and strengthening their community engagement and compliance mechanisms.