Environmental audits have been carried out in Mexico for many years. In 1992, the Federal Bureau of Environmental Protection (PROFEPA) introduced a voluntary audit program to allow industry subject to federal oversight on environmental matters
This audit program continues to this day, but it is now governed by an Environmental Audit Regulation, in force since 2010
According to that regulation, an environmental audit is defined as a “methodological examination of the processes of a company with respect to environmental contamination and risk; compliance with applicable law, international parameters and good operating and engineering practices, including self-regulation processes to determine its environmental performance on the basis of the requirements established by terms of reference and, as the case may be, the preventive and corrective measures necessary to protect the environment.”
The most important aspects of an environmental audit are: finding out how a company is affecting the environment; determining if it is complying with environmental laws; and, based on the findings, implementing the necessary corrective actions.
Conducting an environmental audit is therefore an important way to find out if actions or measures should be implemented to improve the environmental performance of a company or a site.
Following are three important reasons for conducting an environmental audit in Mexico.
I. An audit as a means to determine if laws are being met
Many companies are subject to a number of comprehensive environmental requirements and an audit is a useful tool to find out if they are in compliance. The most important areas that environmental audit should cover are environmental impact, air emissions, wastewater, hazardous waste/soil pollution, occupational health and safety, and compliance with regulations.
Environmental Impact
Prior to undertaking an activity that could generate significant environmental effects, it is necessary to secure an environmental impact authorization either from the Ministry of Environment and Natural Resources (SEMARNAT) or from a state environmental agency.
The Federal Environmental Law
Activities not expressly listed in the Federal Environmental Law are subject to state jurisdiction in the area of environmental impact permitting.
It is not only important to evaluate whether a facility secured environmental impact authorization prior to initiating operations, but also to ensure that it is valid and in force and that subsequent authorizations have been secured if there have been expansions or if new industrial processes have been introduced.
Certain activities also require forestry land use change approval from SEMARNAT. For example, a mining company must secure this approval if it plans to conduct exploration activities in areas that are located outside cities and townships. Carrying out industrial activities at a woodland area without forestry land use change approval is a federal crime in Mexico.
Air Emissions
Stationary air emission sources that emit or discharge gases, vapors, compounds or particulate matter into the atmosphere must ensure that they meet the maximum allowable pollutant limits established by applicable Mexican official standards. In addition, they must secure an air emissions license either from SEMARNAT or from the corresponding state environmental authority.
Stationary air emission sources subject to federal oversight include the chemical, oil and petrochemical industries, paint, automobile and cellulose industries, the metal works and glass industries, power generation, and hazardous waste treatment and disposal activities.
An audit could help determine if air emissions are within the norm, based on yearly reports, and whether the required licenses have been secured and are in force.
Wastewater
Wastewater discharges are required to comply with applicable water-quality standards. If they do not, they must be subject to treatment prior to their discharge.
An audit will help determine the constituents contained in wastewater and whether a treatment system must be put into place. Also, the audit will determine if a wastewater discharge permit has been secured and is in force.
Wastewater discharges into municipal or urban sewage systems are subject to the oversight of state or municipal authorities. Discharges into rivers, lakes, natural or artificial waterways or into soils are regulated by Mexico’s National Water Commission (CONAGUA).
Hazardous Waste/Soil Pollution
Hazardous waste
In addition, they should hire only licensed hazardous waste transportation and disposal companies. Failure to do so could make them liable if there is a contingency or spill while the waste is being transported and environmental harm is caused.
An audit also could help determine if there is soil pollution at a site. Under Mexican law, an owner or occupier of a contaminated site is jointly liable for its remediation, regardless of fault.
If there are hydrocarbons or heavy metals in the soil in concentrations that exceed the limits established by Mexican official standards, then a remediation program plan must be prepared and submitted to SEMARNAT for approval.
In addition, if possession of a contaminated site is to be transferred, then the purchaser must be informed of its environmental conditions prior to the transfer and an agreement should be in place defining who will be responsible for its remediation.
Under Mexico’s Waste Law
Occupational Safety and Health
Mexico’s Ministry of Labor and Social Welfare (STPS) oversees all regulatory aspects of workplace safety and health.
Throughout the years, the country has enacted a considerable number of official standards on workers’ health and safety, including new federal regulations that became effective in February.
Companies should become familiar with new requirements in place to protect the safety and health of workers and employees and a good way to start is by conducting an environmental as well as a health and safety audit covering the following aspects:
- fire and accident prevention;
- exposure to hazardous chemicals;
- work performed in abnormal environmental conditions;
- safety signs and equipment;
- personal protection equipment;
- transportation and handling of hazardous materials and chemicals;
- protection of pregnant and nursing women employees;
- protection of employees with disabilities;
- psychosocial risk prevention.
STPS has in place its own health and safety audit program titled “Safe Company” (Empresa Segura). In some cases, it is possible to carry out an environmental and health and safety audit involving PROFEPA as well as STPS.
6. Compliance
The National Agency of Industrial Safety and Environmental Protection of the Hydrocarbons Sector (ASEA) is a new federal environmental agency created to oversee the oil and gas industry. It replaces SEMARNAT and PROFEPA oversight by undertaking a dual role as a regulatory and enforcement agency in the case of oil and gas activities, such as onshore and offshore oil exploration, drilling, transportation, petrochemical operations, gasoline refining as well as natural gas exploration, exploitation, transportation, distribution, regasification or liquefaction, import and export.
Any company intending to carry out industrial activities relating to oil and gas in Mexico now has to secure any and all environmental authorizations, licenses and permits from ASEA and are subject to ASEA’s oversight in the area of industrial safety and environmental compliance.
II. An audit as a means to avoid environmental liability
According to Mexico’s Federal Environmental Liability Law, environmental harm is defined as “measurable and adverse loss, change or deterioration, of habitats, ecosystems and their elements, natural resources and their chemical, physical or biological conditions, their interaction relationships, and the environmental services they provide.”
This law grants legal standing to any citizen (living in the location where harm has been caused), environmental authority or member of a nongovernmental organization to file a civil action against a party that has caused environmental harm.
The lawsuit may be an individual one or a collective action (acción colectiva), similar to a class action in the U.S. or Brazil, and its main purpose is to restore things to the way they were prior to the environmental harm having been caused.
If this is not possible, then a judge could order compensatory measures—in some cases monetary compensation—that could be as high as an amount equal to 600,000 times the minimum wage in Mexico City
It is important to mention that according to Article 20 of Mexico’s Federal Environmental Liability Law, the monetary compensation, in the case of environmental harm, may be reduced by one-third if the party in question can provide proof that for at least three years prior to the harm having been caused it has had in place an internal control mechanism dedicated to verifying on a permanent basis compliance with applicable environmental laws or an environmental audit certificate issued in accordance with the Federal Environmental Law and its regulations.
Based on this, there is a powerful incentive for carrying out a government-sanctioned environmental audit, since it could help a company that causes environmental harm to demonstrate that it has been properly evaluated, thereby reducing the risk of receiving a steep economic penalty.
An audit also could help a company avoid criminal liability. According to Mexico’s Federal Criminal Code
A key component of an environmental audit is to ensure that companies hired to transport and dispose of hazardous waste have all of their environmental authorizations and licenses in place, that all of them are in force and that they expressly cover the type of waste being transported and disposed of. The audit also offers an opportunity, if necessary, to modify transportation and disposal agreements by incorporating adequate indemnity language.
III. An audit as a means to improve environmental performance
An environmental audit also can be a useful tool to evaluate a company’s overall environmental performance, outside a strictly legal compliance scope.
For example, an environmental audit could help evaluate whether a site could improve its energy efficiency or reduce waste through recycling and treatment. In the case of certain hazardous and nonhazardous waste streams, the audit also could help determine the viability of implementing take-back programs.
Overall, an environmental audit helps companies decide whether there is room for improvement in the area of sustainability and in doing so, it is a good way to give something back to the community and improve a company’s “green” standing.
Finally, it is worth noting that environmental audits are not mandatory in Mexico. Regulators have been reluctant to impose auditing obligations over companies because it is better for companies to perceive an audit as a useful evaluation tool than as a legal requirement.
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