In its 2016 report, the UN Working Group on Business and Human Rights highlighted the role of states as company owners stating they should to “lead by example” in protecting against human rights violations and enforcing human rights due diligence. Megaprojects such as Mexico’s Tren Maya and the growing impact of state-owned enterprises in essential sectors like infrastructure show that a legal regime that specifically targets these parastatal entities is crucial to ensure states comply with their human rights obligations also through state-owned enterprises.
Mexico’s megaproject
In 2020 Mexico’s President Andrés Manuel López Obrador initiated the works on his presidency’s megaproject: the Tren Maya.
The railroad which crosses five states in south-east Mexico is a key element of his plan to pay off the “historical debt with the south-east”. In charge of the operations of the railroad is Fonatur Tren Maya S.A. de C.V. (in the following referred to as “Fonatur Tren Maya”) – an enterprise owned by the Mexican state connected to its Ministry of Tourism (FONATUR). Also involved in the project as a shadow operator, is the Deutsche Bahn AG, another state-owned enterprise.
In 2023, it was partially inaugurated. Since the start of its construction critics have warned about its consequences for the rights of Indigenous Peoples and the environment in the area. Despite concerns by UN experts in light of its designation as a “national security project” construction is due to be finalized this year.
Development – but at what cost?
What once promised to revitalize the south-east has caused irreparable environmental damage to the second largest rainforest in America and has displaced around 3,000 households along the route – all with the help of state-owned enterprises. Both Fonatur Tren Maya, the Deutsche Bahn AG, and other enterprises involved, as well as the Mexican government, have been widely criticized for the lack of human rights due diligence throughout the construction works.
In 2019, before constructions started, the Mexican government conducted a consultation process with affected Indigenous Communities. According to Articles 10 and 19 of the United Nations Declaration on the Rights of Indigenous Peoples, Article 6 of the ILO Convention 169, and Articles 1 of both ICCPR and ICESCR, consultations must be conducted with the free, prior, and informed consent of the Indigenous Communities affected, if activities are due to be undertaken on their land.
In this case, however, during and shortly after the process was conducted, experts found the consultations were flawed and did not meet international human rights law standards. The Communities consulted were not informed equally of the positive and negative consequences of the project. Information provided by the relevant government authorities strongly emphasized the positive aspects and showed significant shortcomings, when addressing the negative impact the project would have on the environment and the households in the area. Additionally, translations into Indigenous languages were – if available – deficient, contributing to the information deficits.
Furthermore, the risks attached to constructions above the underground water chambers (cenotes) which are sacred sites of Mayan culture, continue to show Fonatur Tren Maya’s drive to finish the project regardless of its harm. Before the construction started, the investors failed to conduct sufficient research on the risks posed to the chambers during construction. As a result, the structures threatened to collapse and potentially endanger the Great Maya Aquifer, which supplies millions of Mexicans with drinking water.
Even after multiple court injunctions had suspended constructions due to missing evidence that Fonatur Tren Maya had complied with environmental standards, the works continued. This was due to the project’s designation as a matter of national security under Art. 25, 26, and 28 of the Mexican Constitution in conjunction with regulations from Mexico’s national security law.
The referendum
The consultation process concluded with a referendum conducted by the Mexican government amongst Indigenous Communities and the population in affected areas. Even though the referendum was not binding according to Art. 35 VIII 2 of the Mexican Constitution, its results were still of high importance as the president legitimized the project stating it was backed by the local population throughout the entire process.
While it ultimately received 89,9 percent of the voter’s approval, the overall turnout amounted to less than one percent of eligible voters. This was criticized by UN experts, as participation rates were particularly low amongst Indigenous women, information on the project was not impartial, and voting stations were not fully accessible to Indigenous Peoples and to large parts of the local population.
Ensuring compliance with international human rights law
Mexico has a long history with state-owned enterprises, which continue to play an important role in sectors like infrastructure, tourism, and the oil and gas industry. The nexus between economic goals and the human rights obligations of states through state-owned enterprises raises new issues. There continues to be a lack of clarity on whether they are classified as public or private actors. While this poses an issue in itself, it also affects the question of their obligations under international human rights law, as there is no appropriate legal regime for these entities.
In 2016, the UN Working Group on Business and Human Rights analyzed the obligation of states to protect against human rights violations by state-owned enterprises. Emphasizing the lack of attention paid to the human rights abuses of state-owned enterprises, it concluded that states must take “additional steps” to ensure their compliance with the state’s human rights obligations. This poses the question: If a state-owned enterprise (like Fonatur Tren Maya) commits human rights violations – could it at the same time constitute a violation by the state (like Mexico) under international law?
In international human rights law states are the primary duty holders. Even though state-owned enterprises are private actors, their connection to the state is crucial when discussing their human rights due diligence. An enterprise controlled by a state cannot as such be seen as a strictly private actor. Especially because most of them are reliant on taxpayer support or statutory authority. In the case of Fonatur Tren Maya, the Mexican state is the sole owner. The project is strongly reliant on taxpayer support, as in September 2023 the leading actors decided to switch from the previous partially private funding to being solely funded by state funds. In addition to that, the control over the operations switched from FONATUR to the Secretariat of National Defense as a result of the aforementioned declaration as a national security matter. Now the project is operated and led by the Mexican military.
Principle 4 of the UN Guiding Principles addresses the state-business nexus. If an enterprise is controlled by a state, then abuses of international human rights law by the state-owned enterprise can amount to a violation of the state’s human rights obligations. Consequently, when these entities lead or are involved in megaprojects such as Tren Maya, states have a responsibility to ensure that the operations and all preparations are carried out in line with international human rights law. In its institutional programme, Fonatur Tren Maya says their operations are carried out respecting human rights and Mexican constitutional guarantees. This has clearly not been the case.
The road ahead
The controversies surrounding Tren Maya are set to continue as the works reach their final stages. While in the short-term, the railway project could follow up on the outgoing president’s promise of around 492,000 jobs for the local population, its additional harm to the rights of Indigenous Communities and the environment has yet to unfold.
With the election of Claudia Sheinbaum as Mexico’s new president, López Obrador’s course regarding the megaproject is set to continue. Despite her background as an environmental scientist, she has been supportive of the project and has dismissed criticism, stating it “has a lot to do with politics and little to do with knowledge”.
Ultimately looking at Tren Maya as an example, it remains clear that soft law instruments are not sufficient to promote human rights and environmental due diligence by state-owned enterprises. An adequate legal regime is needed that more specifically targets these entities to ensure they act in accordance with international human rights law. This does not and should not imply that the duty to ensure human rights are protected is shifted onto companies. On the contrary, in the case of state-owned enterprises, states have to be held accountable regarding the fulfillment of their obligations under international human rights law – also through these entities.
Zitiervorschlag: Félix Padilla, Ivette, Leading by example? Mexico’s Tren Maya and Human Rights obligations of state-owned enterprises, JuWissBlog Nr. 64/2024 v. 24.09.2024, https://www.juwiss.de/64-2024/.
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