Canadian Lawyer InHouse

25 canadianlawyermag.com/inhouse october 2014 didn't hire professionals with expertise in those areas. "They go thinking that Mexi- can issues can be dealt with the same way that you deal with issues in Canada, from government issues to land issues," he says. Companies that come into confrontation with agrarian communities can face worse than just work stoppages — a small number of disgruntled ejidatarios have been known to resort to oil theft from pipelines. Be- tween 2012 and 2013, over 1,500 illegal oil taps caused around $1.1 billion of oil to be siphoned off. But while some ejidatario have been known to place ludicrous demands on cor- porations, most are looking for fair and reasonable comprises and many make their livelihood in extractive industries. If they want to be successful, oil and gas companies operating in Mexico will have to find ways to build relationships with these groups. While the reforms do provide greater incentives for ejidos to reach agree- ments with oil and gas operators, the funda- mental question of land ownership will re- main a thorn in the side of many companies. But Cruz Rico says there are some fairly simple solutions to these problems. He rec- ommends companies be forward-thinking when it comes to their corporate social re- sponsibility policies and make sure they're tailored specifically to Mexico. He also says it's imperative companies ensure they're fulfilling all promises made to landowners and that lease agreements are drafted cor- rectly the first time around. "If the approach to CSR changes, and Canadian and Mexicans would be able to sit and talk on the same level, things would be different," he says. "They are two different systems, two different ways to close deals. But at the end of the day, if you're able to create a clear channel of communication and both parties are on the same page, I think the sky is the limit." Solórzano agrees. "If you pay people, if you keep work go- ing, if you open a school, if you bring fresh water, they're not going to bother you," he says. "But if you don't, if you're greedy, you have issues." Mexico's oil and gas industry still faces a number of challenges ahead. The national hydrocarbons regulator, which goes by the acronym CNH, is being given massive new responsibilities, and it's unclear how they'll utilize them. Violence, while subsiding, is still a scourge on much of Northern Mexico where the most lucrative oil and gas deposits are believed to be. And though Peña Nieto's government was able to rally a large coalition of both houses of the legislature to pass the reforms, they're very unpopular amongst segments of the Mexican population. Protestors have taken to wearing masks of Lázaro Cárdenas, the populist Mexican President who nation- alized the energy industry in 1938. There's a danger the reforms could be rolled back if a new administration is elected in 2018 or if the rollout of the new regime is botched in any way. But while Cruz Rico acknowledges that difficulties are inevitable, he's optimistic about the potential. "If we would be able to get together and understand each other, this could be benefi- cial for both ends of North America." IH LIVE EVENTS DESIGNED FOR CORPORATIONS AND LAW FIRMS Thomson Reuters Legal Executive Institute is the leading provider of CLE events for the legal industry. Below you'll find upcoming live conferences that might be of interest to you and your team. You can register for yourself and any members of your department. Registration can be applied to anyone in your company – a different person could attend each event. Drafting Clearer Contracts October 30– Washington DC November 6 – New York , NY Decmeber 11 – San Francisco, CA $895 The 2014 Thomson Reuters Supply Chain Sustainability Summit October 15 – New York , NY $795 DISCOUNTS AVAILABLE Individual Discount – Receive 15% off any individual program. Use promo code 15CORPORATE at checkout. Group Discounts – We have great group discounts available for you and your colleagues. Call 1-800-308-1700 for more information or to register. The more events you purchase, the more you save: ȕ1VSDIBTFSFHJTUSBUJPOTHFUPGG ȕ1VSDIBTFSFHJTUSBUJPOTHFUPGG 2nd Annual Northeast M&A/ Private Equity Forum December 3rd - Boston, MA $595 4th Annual Institute for Corporate Counsel December 10 - New York, NY $295 2 WAYS TO REGISTER westlegaledcenter.com 2 1.800.308.1700 1 WestLegal_IH_Oct_14.indd 1 2014-09-10 11:49 AM

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