News and Analysis: December 6-12, 2010

1 - WIKILEAKS DOCUMENT HIGHLIGHTS MEXICO-GUATEMALA BORDER
2 - CONVENTION ON CLIMATE CHANGE YIELDS LITTLE
3 - SUPREME COURT ALLOWS PARTIAL PRIVATIZATION OF PETROLEUM


1 - WIKILEAKS DOCUMENT HIGHLIGHTS MEXICO-GUATEMALA BORDER

A new State Department cable dated January 25, 2010 and released this week by Wikileaks details security problems at the Mexico-Guatemala border.  During a visit to three major border crossing points, US Embassy personnel were shocked to find a "steady flow of rafts transporting people and goods across the river illegally within sight of the legal border crossing."  At the Talisman crossing, officials "witnessed almost as many individuals crossing the border illegally as legally."  Embassy personnel described the border as "porous" and exhibiting "lax" controls.  This will come as no surprise to anyone who has crossed the border.  Even visitors inclined to cross legally may not encounter immigration officials to check passports, and full vehicle inspections are haphazard. While the cable is focused on illegal arms and drug trafficking, in part because the US appears to be a junior partner when it comes to Mexico's southern border, the cable manages to work in a discussion of "problems with illegal immigration."  In an effort to impress US officials, representatives from Mexico, Guatemala and Belize "highlighted internal controls that regulate the sale, distribution, and transport of weapons and ammunition, drawing attention to sanctions against the unlawful transport of weapons across any national boundary."  But the cable author laments "our visit to three border crossings between Guatemala and Mexico in Chiapas revealed neither country presently works seriously to enforce these laws."  Limited resources "undermine the efforts: while there are 30,000 U.S. CBP [Border Patrol] officers on the 1,926 mile Mexican/U.S. border, only 125 Mexican immigration officials monitor the 577 mile border with Guatemala."

2 - CONVENTION ON CLIMATE CHANGE YIELDS LITTLE

The United Nations Framework Convention on Climate Change concluded early Sunday morning in Cancun, Mexico,  despite objections from Bolivia on the final agreement, which establishes a general review process but avoids the more difficult questions of assigning emission reduction standards and raising funds to help vulnerable countries.  Mexico, the president of this year's talks, declared "consensus does not mean unanimity" and gaveled through the agreements over Bolivia's objection.  The details will likely be worked out at the next meeting of the Major Economies Forum on Energy and Climate, which includes only the world's largest carbon emitters - hardly a group that can be depended on to set serious limitations on greenhouse gas production.  The Cancun agreement includes adopting market mechanisms to achieve emission reductions and a process for reporting annual emissions for each country, and gives the World Bank control of the as yet unfunded Green Fund.

3 - SUPREME COURT ALLOWS PARTIAL PRIVATIZATION OF PETROLEUM

Last week, Mexico's Supreme Court permitted PEMEX, the State-owned petroleum monopoly, to award incentive-based service contracts to private companies drilling for oil.  The ruling shot down a challenge to the Calderon administration's 2008 energy reform.  Mexico's constitution bars private companies from owning or controlling any aspect of oil production, distribution or sales.  The energy reform measures were seen as a backdoor way to privatize energy production by awarding foreign companies a percentage of production depending on their level of success.  PEMEX provides about 40% of the federal budget, but has been under-funded in recent years leading President Calderon to call for foreign investment in energy production.  Production fell from 3.4 million barrels a day in 2004 to 2.6 million this year.  PEMEX had avoided the prohibitions on privatization through "long term multiple service contracts" issued to foreign companies like Halliburton, but now PEMEX plans to offer "integrated service contracts," in effect turning over a percentage of production to the foreign company by offering a per-barrel fee and reimbursement of a percentage of recovery costs.