The recent publication in the Official Gazette of a decree issued by the National Agency of Industrial Safety and Environmental Protection in the Hydrocarbons Sector (ASEA) has shaken the foundations of the Mexican energy sector, as it introduces substantial changes in the “administrative provisions” regulating mandatory insurance for companies operating in the hydrocarbon and petroleum sphere.
However, more than just a regulatory adjustment, these modifications represent a radical shift in the way corporate responsibility is conceived in this sector.
One of the main novelties of this decree is the elimination of minimum coverage amounts for insurance policies. Until now, regulated companies were subject to predefined liability limits, which in many cases resulted in excessive financial burden.
By allowing companies to determine their own coverage limits, either in collaboration with insurance institutions or independently, they are provided with greater flexibility to adapt to their specific needs and circumstances.
However, this freedom does not come without its corresponding responsibilities.
In this regard, Marcial Díaz Ibarra, from QUA Energy, commented to T21 that “the relevant aspects of the decree are two, the obligation to have an insurance policy for the activity carried out and that the regulated entity is responsible for the risk generated even if the amount is greater than the one insured.”
Furthermore, he explained that these provisions are necessary “to provide certainty to the areas where the regulated installations are located. The State cannot do it alone, and it is the obligation of the regulated entity to cover the damages caused.”
He added that these provisions represent a significant change in the way regulated companies manage their risks and responsibilities.
“Previously, they were limited by the minimum coverage amounts established, which sometimes did not fully reflect the level of risk involved in their operations. Now, with the freedom to determine the liability limits in their insurance policies, these companies can better tailor their risk management strategies to the specifics of their activities. This gives them greater flexibility to mitigate risks and protect both companies and the environment more effectively,” Marcial Díaz noted.
Regarding future improvements in the regulatory framework of the sector, Díaz suggested the implementation of a one-stop shop for handling procedures, which would significantly reduce regulatory burden by avoiding the repetition of processes with different agencies.
These modifications represent progress towards a more efficient and transparent regulatory framework in the hydrocarbons sector in Mexico, with significant impacts on both company operations and environmental protection and operational safety.
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