DANGEROUS RESIDUES BETWEEN MEXICO AND SPAIN

CRUZ MARTÍNEZ LAURA ESTEFANÍA

ALTERNATIVE CONFLICT SOLUTION MECHANISMS

COOPERATIVE UNIVERSITY OF COLOMBIA

LAW SCHOOL

BOGOTÁ, D.C.

2019
 DANGEROUS RESIDUES BETWEEN MEXICO AND SPAIN

Increasingly internal conflicts occur in countries that require the intervention of external

agents arbitrate or mediate in various matters; due to the inability of certain institutions to process

them effectively. Within the methods of peaceful settlement of disputes, Spain submitted to the

international arbitration a controversy regarding the fundamentals of promotion and reciprocal

protection of investments subscribed with Mexico, while the latter, based on said controversy an

environmental responsibility regarding the treatment of industrial waste dangerous by Spain, so

the arbitration takes a very important position in the development of the context of the conflict,

for being the means par excellence in the world for employers to settle their disputes and in this

way it can be determined if the contested before You can be satisfied eloquently under all legal

security guarantees.

At the end of the 90s, there was a problem of insufficient infrastructure in Mexico to properly

treat dangerous residues generated in the country, a problem that remained until 2001, where

ABENGOA (Spanish Claimant Party) saw in these circumstances an opportunity of generating a

business with Mexico, thus planning the construction of a hazardous industrial waste stabilization

plant. Thus, on July 9, 2003, the State of Hidalgo and the Municipality of Zimapan signed a

Collaboration Agreement with Abengoa and after receiving the results of the technical studies,

Abengoa approved the Plant project and began to seek financing from through COFIDES

(Second Spanish Claimant Party) finally concluding in 2006 the Investment Agreement.

In this way, at the end of 2007 approximately 75% of the work had been completed and in

turn a civil association called “United for Zimapan” was created in Zimapan, an association that
was against the Plant and whose objective was to prevent final installation of this, because it

considered that it represented a risk for the population, therefore, they manifested themselves

through protests, which came on multiple occasions to produce altercations; that required

immediate police intervention. Following these incidents, the workers decided to temporarily

suspend the construction work of the Plant, however, the altercations did not cease and this led to

the extension of the Construction License not being carried out by the municipality, producing a

discord within of those linked in its construction.

In consequence, the Claimants alleged by arbitration before a court of the world Bank in

Washington that Mexico; It has violated its obligations of collaboration and has expropriated the

Claimants' investment, seeking to obtain full compensation for their damages, as well as accrued

interest. Otherwise, Mexico intervenes pointing out that “this land of Hidalgo is poisoned with

arsenic and lead thanks to the fact that Abengoa raised the plant just 500 meters from one of the

18 communities, which represent 20 percent of the population; along with the bodies of water

they dug long and deep, placing only a slight geomembrane to separate the waste […] built the

plant illegally, because it lacked municipal license and authorization ”(1) and also deals with one

of the most important businesses lucrative for the Spanish consortium that would be linked to the

Spanish crown, as the leachate, being highly dangerous; the government did not want them in

their territory, so they paid well to anyone who allowed them to be confined, of course, not in

their territories but in others such as Zimapan, and therefore, the damages alleged by the plaintiffs

must be reduced considering that they themselves contributed significantly to the loss suffered.

Therefore, the arbitral tribunal after examining the different factors demanded by the parts,

concluded in law that Mexico indirectly expropriated the investment of ABENGOA S.A. and CO

FIDES S.A in violation of the collaboration act and therefore had to make compensation for the
damages done to them. However, this arbitration presented as a fundamental pillar in its ruling

the guarantee of fair and equitable treatment; constituting the principle of good faith, so it should

be considered that this provision requires that the contracting parties to the agreement provide a

treatment for foreign investment in a consistent manner, devoid of ambiguities and always being

transparent, but despite this the award was exercised final under a legal judgment scheme,

leaving aside the environmental protection objectives, which although they were provided by the

defendant as a form of defense, were totally eloquent to be inspected and sanctioned in their

alleged violation, but at no time The procedure gave a stage of expertise, leading to the

supervision and control for the prevention and punishment of acts that threaten a healthy

environment were subsumed by decisions issued under the law and not under a technical outline

or equity.

Thus, it could be considered as a violation of the same guarantee, because, in the middle of the

arbitration phases, an opinion could have been given where the company was responsible for

remedying the damages caused and thus continue with the transit of the contract without

involving environmental damages , but finally, an award was given where the unfavorable

treatment of the plant would continue and would also be compensated, giving undoubtedly a

more favorable treatment to the detriment of equality in the process, “For the signatory

organizations this resolution is further evidence The power that multinationals have over the

social and environmental rights of local populations [...] such mechanisms have been criticized

for the fact that resolutions often fail in favor of multinationals and that their mere existence is a

constraint towards the countries involved so as not to improve environmental and social

legislation. ”(2)
Finally, the signatory organizations first showed solidarity with the Municipality of Zimapán, and

the “United for Zimapán” movement asking the plaintiffs to renounce the required money and

also the revocation of the Bilateral Investment Treaty signed by both countries, being the way in

fact, it resulted in the resolution in its favor even in the face of the seriousness of the infraction

that did not merit it, requesting in turn a supplementary decision of the same Court in the face of

said ruling, so that the impacts that it had were compensated in some way said contract for the

community.