They lock the “revolving door” with stricter measures

Mexico will become the country with the strictest padlocks in the world, in case that public officers move to a strategic position in the private sector after leaving the public administration.

The Senate approved to shut down the “revolving door” to Federal Public Administration officials. This means that they will not be able to work in the private sector and vice versa, at least for a long period.

Article 24 of the Federal Law on Republican Austerity (Ley Federal de Austeridad Republicana) (approved on Tuesday) provides that senior public officcers: secretaries of state, undersecretaries, senior or equivalent officers, heads of unit, and general directors may not occupy positions in companies that “have supervised, regulated or for which they have had privileged information in the exercise of their public office”, for at least 10 years after the end of its term as public officers.

Initially, the law considered five years and did not detail at what hierarchical levels it would apply. However, with a few restrains the article was amended, the limitation period was increased. The General Law on Administrative Responsibilities (Ley General de Responsabilidades Administrativas) already provided a time of “cooling”, but only suggested that officials abstain for a year to be able to use “the revolving door”.

The new legislation only prevents officials who are detached from office (for any reason) from working in an organization related to their position in the public administration, but not in a company detached in the area that they have held.

The term “revolving door” refers to the fact that high-ranking public officiers move, after leaving public administration, immediately to work in a private company related to their area of expertise, producing a conflict of interest between the two areas.

Above average

Transparencia Internacional recommends a two-year period before changing from the public administration to the Private sector or vice versa. According to data from the Organization for Economic Co-operation and Development (OECD), the average “cooling period” in public service between the countries of the group is three years.

Spain, Japan, United Kingdom and Netherlands have two-year period. The United States and Canada contemplates a period of five years, in the latter country there is a strict code with 20 very specific recommendations to avoid conflicts of interest.

To avoid conflicts of interest, the OECD issues five recommendations:

  1. Regulate the entry, transit and exit of public officers through precise laws and codes.
  2. Establish cooling periods prior to and after public office, if you come from or go to the private sector.
  3. Enact strict codes governing conduct in the exercise of the public service to minimize the risks of abstract conflict-of-interest situations.
  4. Strengthen regulatory agencies and ensure their autonomy.
  5. Establish sanctions for non-compliances detected in the exercise of the public service.

Unconstitutional limitation

Carlos Ferrán, director of the labor area of the law firm Cuesta Campos, believes that it is good to implement a new policy to avoid the conflict of interest in the public service. However, the measures approved by the legislative branch disrupts the right to work.

“We cannot let go that regardless of whether they are public officers, they are people who work like anyone else in the country,” Ferrán muses.

Article 5 of the Mexican Constitution states that no person may be prevented from engaging in the activity of his choice, as long as it is lawful. No one can be deprived of his work, except by a judicial decision.

Oscar de la Vega, partner of De la Vega & Martinez Rojas,  warns that the “locks” imposed by the legislators of the political party Morena must be analyzed from a constitutional point of view because they exceed the principles of Article 5.

“The Constitution establishes a freedom of work for an individual to deal with any profession that is lawful,” De la Vega says.

Tin regard to the reduction of staff in public administrations, if the public officiers are not employed in private sector, then where they will be able to work, Carlos Ferrrán remarks.

The expert emphasizes the importance of combating the conflict of interest, but does not rule out that Mexico is falling into extremes that inhibit the right of public officers to hire themselves like any other Mexican employee.

“I think it’s good that there are these efforts, but they have to be proportionate and reasonable,” he says.

For Rubén Pacheco Inclán, president of the Interamerican Bar Association in Mexico (Barra Interamericana de Abogados), the 10 years of “cooling” posed by the new law become a penalty.

“When we talk about 10 years we certainly refer to a sanctioning mechanism and there is never a possibility that the public officcer will have the right be heard. Based on the simple reason of working as a public officer, you have an early penalty,” he says.

Specialists agree that the intentions are good, but the path is not adequate, at least not with the approach approved by the senators.

Talent crisis on the doorstep

The 10-year restriction discourages for high-level officiers to be employed the federal government, agrees Felipe Llaguno, managing partner of recruitment company Alder Koten, and Nicolás Domínguez Vergara, academic at the Universidad Autónoma Metropolitana (UAM).

It is not so easy to attract people with the necessary skills for relevant posts in the public administration, Llaguno said. With this restriction it will be difficult for the best talent to want to participate. As a result, citizens will be affected, as whoever makes key decisions will not always be the most empowered, he mourn.

Dominguez Vergara, considers that “perhaps the government is doing so as an exemplary measure, because there has been many abuses”. He set the example of Georgina Kessel former Ministry of Energy during Felipe Calderón government, who “almost immediately after she left the public administration, she was employed in private companies in the same sector”.

The UAM researcher, an energy specialist, explained that the source of the conflict is that many public officers have confidential information, which they could share with companies. “They know where to invest and where not, and how. And they’ve taken advantage of it without any respite.”

Both considered the measure “excessive”. For Llaguno, a two-year lock would suffice; Dominguez Vergara considers five years to be a prudent period.