Funds belonging to the Mexican state oil monopoly, Pemex, have paid in recent years for liposuction treatment for the wife of the company’s chief executive, a presidential candidate’s campaign, contracts with firms facing legal action, and the whims of trade union leaders who are not required to account for their expenses.
“Pemex is a can of worms. If you do something right, they come after you; if you shut up about some irregularity, they reward you; and if you take part in the corruption, you profit,“ a Pemex worker told IPSNews.
“I’m not saying everything is like that--there are also honest people,“ added the worker, whose name is withheld for his safety.
The employee said that after he replaced several worn-out parts of a gas valve, a group of internal auditors criticized his work, saying they had found “too many foreign parts,“ and ordered him to put the originals back in place.
He said that when his boss protested, he was accused of a bias in favor of a private supplier and an investigation against him was launched.
The 70-year-old Pemex, the biggest company in Latin America, which employs 154,761 people, 125,523 of whom belong to the powerful oil workers union, is facing severe financial difficulties and is in dire need of upgrading its technology infrastructure. Moreover, Mexico’s proven oil reserves are expected to run out in nine years.
Billions of dollars are lost to corruption which, according to observers, is deeply rooted in an opaque administration choked with red tape, and in political and economic vested interests.
In April, the conservative government of Felipe Calderon proposed reforms of the company, which would include the creation of an audit committee in charge of ensuring transparency, and would give Pemex greater freedom with respect to making decisions on managing its budget, making purchases, reinvesting earnings in production and exploration and contracting out to private companies.
However, the leftwing opposition parties are fighting the reforms, which they consider privatization in disguise.
Opacity & Corruption
According to a prominent Mexican nongovernmental organization, Fundar--Centro de Analisis e Investigacion (Center for Analysis and Research), the government’s proposed reforms would “encourage opacity and corruption.“
“The proposal paves the way for possibilities for associations with private parties in a wide range of activities in the industry, without the parallel creation of precise mechanisms to guarantee transparency and accountability,“ while giving the executive branch “excessive discretionality in running Pemex,“ says Fundar, which is dedicated to promoting citizen participation and the rule of law.
Legislators have agreed to hold a wide-ranging debate from May 13 to Jul. 22, on overhauling Pemex, a symbol of nationalism and national sovereignty in Mexico.
Documents from the Auditoria Superior de la Federacion (Federal Audit Office), which were seen by IPS, show that in 2006 alone--the last year for which information is available--157 million dollars were detected in expenses in exploration and the payment of services that had not been duly approved and explained, and which have not yet been clarified.
Truth Commission
Lawmakers from the opposition Progressive Broad Front, an alliance of leftwing parties, are calling for the creation of a “truth commission“ to carry out an in-depth investigation of causes of corruption and specific cases in Pemex before any reform can be approved.
Political scientist Aroldo Romero said that in Pemex, any financial movement, contract or purchase, even of small tools, is fraught with red tape, with the final decision almost always lying with the Finance Ministry.
The draft law submitted by the Calderon administration would incorporate independent experts without conflicts of interest on Pemex’s board, which is currently made up of representatives of the government and the oil workers union.
The government argues that the reforms, which oil industry experts say must be discussed urgently due to the country’s rapidly diminishing reserves and the growing imports of fuel--40 percent of domestic consumption is covered by imports--are aimed at giving the company greater autonomy to sign contracts with foreign firms better equipped to carry out deep-water drilling and exploration.
But Fundar says the initiative actually runs counter to that stated purpose, because “the executive branch would be in charge of appointing the four new members to the Pemex board of administrators, as well as a commissioner, under the apparent premise that the president is ultimately responsible for adequate oversight.“
Furthermore, “the board would be presided over by the energy minister, who forms part of the executive branch,“ adds Fundar.
The government is not proposing, however, a modification of the constitution, which establishes that the country’s oil belongs to all Mexicans, and prohibits direct private investment in Pemex.
