Background on the Calica Case
The dispute over the Calica case in Playa del Carmen is expected to have negative repercussions for Mexico during the mid-year review of the Tratado México-Estados Unidos y Canada (T-MEC). This prediction was made by Ildefonso Guajardo, former Secretary of Economy and head of the negotiating team for the North American trade agreement.
The Calica Controversy
The Calica case began in 2018 due to government actions dating back to 2009, when the Solidaridad municipal council altered the Program of Ecological Land Use (POEL). Calizas Industriales del Carmen, SA de CV (Calica) is a Mexican subsidiary of Vulcan Materials Company, established in 1986. Originally jointly owned by Vulcan Materials Company and Grupo ICA, Vulcan Materials Company bought Calica from Grupo ICA in 2001.
Calica produces construction aggregates for the Mexican and primarily U.S. markets, as well as providing marine terminal and loading services for the regional industry at Punta Venado wharf. The Federal Prosecutor for Environmental Protection (Profepa) first shut down Calica’s rock calcium exploitation below the groundwater level in January 2017 following a topographic survey for suspected non-compliance with the first, fourth, sixth, eleventh, and twelfth terms of its environmental impact authorization.
In 2022, both the mine and Punta Venado wharf were completely shut down, from where the stone material was exported to the United States.
U.S. Senators’ Intervention
By the end of 2023, U.S. Senators Bill Hagerty and Tim Kaine sent a letter to then-President Andrés Manuel López Obrador, urging him to cease actions “harmful to U.S. companies,” referring to the closure and seizure of Calica-Vulcan open-pit mine in Playa del Carmen and Punta Venado wharf.
In subsequent communications, U.S. legislators warned that if the lands and Punta Venado wharf are confiscated by the Mexican government, they would consider all available resources “to ensure that no entity or individual benefits from the theft of this property.”
Parallel Arbitration
Vulcan Materials initiated the international arbitration case against the International Centre for Settlement of Investment Disputes (ICADI) due to Mexican government actions hindering Calica’s operations in Playa del Carmen.
The 2018 dispute originated from government actions dating back to 2009, when the Solidaridad municipal council changed the POEL and altered the land use of La Adelita and El Corchalito properties, two of Calica’s four sites in Playa del Carmen. This change prevented the company from conducting extractive activities on these properties since then.
Vulcan also initiated the international arbitration due to the closure of another site, El Corchalito, in 2017, before filing a $150 million lawsuit against the Mexican government. Additionally, Calica’s La Adelita site was shut down in May 2018 by Profepa, and permits for operating Punta Venado wharf were canceled, from where Calica shipped stone material to the U.S.
Vulcan sought and received an expansion of its claim from ICADI, raising the demanded indemnity from the Mexican government to $1.9 billion.
Key Questions and Answers
- What is the Calica case about? The Calica case involves a dispute between Vulcan Materials Company and the Mexican government over land use changes, closures of mining sites, and export restrictions that have affected Calica’s operations in Playa del Carmen.
- Who is Ildefonso Guajardo? Ildefonso Guajardo is a former Mexican Secretary of Economy and head of the negotiating team for the North American trade agreement (T-MEC). He predicted negative implications for Mexico in the T-MEC review due to the Calica case.
- What is Vulcan Materials Company’s role in this case? Vulcan Materials Company, the parent company of Calica, initiated international arbitration against the Mexican government due to various actions that have hindered Calica’s operations.
- What are the potential consequences for Mexico in the T-MEC review? The potential consequences include negative repercussions due to U.S. legislators’ dissatisfaction with Mexico’s handling of the Calica case, which may impact the ratification process in Washington.
