AUGUST 2014 MEXICO VIOLENT RISK OUTLOOK - IHS … · second half of 2014 MEXICO VIOLENT RISK...
Transcript of AUGUST 2014 MEXICO VIOLENT RISK OUTLOOK - IHS … · second half of 2014 MEXICO VIOLENT RISK...
© 2014 IHS
IHS ECONOMICS & COUNTRY RISK
MEXICO VIOLENT RISK
OUTLOOK
AUGUST 2014
Carlos Cárdenas, Deputy Head of Latin America
Country Risk Analysis and Forecasting
+442082764710
© 2014 IHS
MEXICO VIOLENT RISK OUTLOOK/ AUGUST 2014
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Mexico Violent outlook: Issues to monitor
• Key Actors, evolving wars, and
dynamic Hotspots • Army, Navy, Local Police
• Drug Cartels and Criminal Gangs
• Self-Defence Groups
• Leftists Guerrillas (dormant)
• Protests groups (business disruption)
• Attack type-armed capability Varies by Actor)
• Heavy weapons, small scale IEDs, grenades
• Extortion, arson, murder, kidnaping,
• Theft (including cargo, pipeline, individuals,
vehicles, scrap metals)
• Kidnappings
Targets: Intention to profit/damage (Varies by Actor and hotspot)
• Government, police and security forces
buildings (hotspots).
• Retailers, bars, petrol stations, super-
markets, restaurants
• Cargo, mining, energy, manufacturing,
• Employees (Collateral Damage) +
kidnapping and extortion risks
IHS-Foresight Security Planning
IHS-Foresight Location Analytics
© 2014 IHS 3
Intentional homicides on a downward trend since 2011
0
5,000
10,000
15,000
20,000
25,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total Intentional Murders (SESNSP)
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Intentional homicides downward trend continues under
new government extending through 2014
0
500
1,000
1,500
2,000
De
c-1
2
Jan
-13
Feb
-13
Mar
-13
Ap
r-1
3
May
-13
Jun
-13
Jul-
13
Au
g-1
3
Sep
-13
Oct
-13
No
v-1
3
De
c-1
3
Jan
-14
Feb
-14
Mar
-14
Ap
r-1
4
May
-14
Jun
-14
Total Intentional Murders (SESNSP)
Security Strategy:
• Continuation of former government’s policy
• Army Deployment in key hotspots:
Tamaulipas, Michoacán, Mexico state.
• Navy operations against top cartel bosses
• Enhanced intelligence
• Pending:
• National Gendarmerie
• Throughout local policing reform
• Reform of Justice System
• Weak institutions at state level
• Army overstretched
• Defence as % of GDP = 0.44%
vs. 3.35% Colombia and 1.39% in
Brazil
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War for the control of drug corridors throughout Mexico
constantly evolving
Turf wars in 2010
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Murder hotspots in 2013: Guerrero, Sinaloa, Chihuahua
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Murder rate
per 100,000
inhabitants
(2013)
© 2014 IHS 7
Murder Trends: Murder rate increase vs decrease (2010
vs 2013) Murder Rate per
100,000 inhabitants
2013
59.22 Guerrero
41.2 Sinaloa
39.69 Chihuahua
31.85 Morelos
27.54 Durango
25.49 Colima
22.32 Coahuila
20.17 Sonora
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Total murders: Increase vs decrease first half 2013 vs
first half 2014 Total Murders first half 2014
1131 EDOMX
780 Guerrero
669 Chihuahua
668 Michoacán
591 Tamaulipas
567 Sinaloa
514 Jalisco
402 Baja
California
Likely to worsen in
second half of 2014
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Proliferation of self-defence groups increase risk of
confrontations and armed opposition to projects
Self-Defence Group Michoacán, January 2014
Self-Defence Group Michoacán, July 2013
• Presence: • About 77% located in Michoacán,
Guerrero, Chiapas, others spread through
Colima, Chihuahua, EDOMX, Guanajuato,
Hidalgo, Jalisco, Morelos, Oaxaca, Puebla,
Tabasco, Veracruz
• Risk of Cartel Retaliation:
• January 2014, arson to commercial
establishments in Apatzingán, including:
• Two Oxxo stores owned by Mexican
retail conglomerate FEMSA.
• A Coppel Canadá shop
• 10 vehicles nearby a Coca Cola
facility
• October 2013 arson of 18 electricity
substations, petrol stations, water
treatment plant
• Additional Risks • Extortion, opposition to projects, road check
points
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Diversification of criminal groups leading to rising
kidnapping and extortion (reported incidents)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Kidnapping Extortion
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Figures likely to be under-reported nationwide, but
specially in violent hotspots
0
100
200
300
400
500
600
700
Reported Extortion (1st Half 2014)
0
50
100
150
200
250
Reported Kidnappings (1st Half 2014)
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Rising extortion risks can potentially affect –directly or
indirectly- large corporations • Targets:
• Retailers, supermarkets, auto-repair
shops, petrol stations
• Local services providers
• International firms not primary target,
though there are exceptions
• Key Events:
• 30 July 2014, FEMSA shuts down plant in
Guerrero following arson attack on trucks
• American Chamber of Commerce reporting its
members have been harassed by extortionists
• In 2013, three large Mexican conglomerates
demanded protection from extortionists
• In 2012, four warehouses and 40 vehicles
belonging to PepsiCo's Sabritas in Guanajuato
and Michoacán (companied denied it was
extortion)
• In 2012, Arson attack against small hotels in
Acapulco, Guerrero.
• In 2011, Casino Royale arson attack in Monterrey
Arcelia, Guerrero, High Risk
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Mining has been heavily hit by organised crime, but also
other sectors Mining: • Extortion in Michoacán, but also
Coahuila and other states
• Cargo Theft
• Illegal Mining
• Theft at sites
Targets:
• Gold
• Iron Ore
• Steel and Iron Chamber CANACERO
claims organised gangs stole:
• 10m tonnes of Iron Ore
(USD1bn) in 2013
• USD300m Iron Ore (cargo
theft)
Oil, Gas, Pipelines
Mining
Cargo
Industry-Manufacturing
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Risks to Energy Sector
Pipeline theft hotspots
Jan-October 2013
0-50
50-99
100-199
200-450
Estimated Incidents
18 electricity assets owned by
state-run CFE targeted in Oct 2013
Security Threats: • Criminal organisations
• Pipeline Theft
• Extortion
• Kidnapping
• Cargo & Equipment theft
• Issues to monitor:
• Dormant EPR rebel group,
FAR-LP rebel group.
• Surface Rights Ejidos
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Cargo Theft Risks
Cargo Hotspots: Secondary roads and highways connecting to main ports
Modus Operandi:
Interception, Blockades,
Checkpoints, Extortion
Targets: • Food, Electronics,
Medicines, Cigarettes, auto
parts, construction material
• Metals
• 3,372 road cargo theft
incidents in 2013 (up 18%)
• Monthly average of rail
cargo theft from 44
incidents in 2012 to 129 in
2013 (Ferromex)
• Narco-road block
(downward trend)
• Cargo Disruption (protests)
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Additional Risks: Environmental Activism, union and
local unrest
Selected civil unrest
incidents (protests,
blockades) affecting
Pemex in 2013 in
proximity of the pipeline
network
Common Grievances : Local groups: Oil Spills, pollution, water contamination, social investment demands, compensation (relocation/damages)
Modus Operandi: Protests, blockades, legal action, Vandalism rare (but likely to rise) Case Study: Blockades at Campo
Sen and Terra onshore fields in
Tabasco (USD3m per day)- compensation demands
Unions: No strikes affecting PEMEX but private firms likely to face labour unrest
Civil Unrest risks against natural resources projects currently on an upward trend
MEXICO VIOLENT RISK OUTLOOK/ AUGUST 2014
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