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

[email protected]

© 2014 IHS

MEXICO VIOLENT RISK OUTLOOK/ AUGUST 2014

2

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)


© 2014 IHS 4

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


© 2014 IHS 5

War for the control of drug corridors throughout Mexico

constantly evolving

Turf wars in 2010


© 2014 IHS 6

Murder hotspots in 2013: Guerrero, Sinaloa, Chihuahua


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


© 2014 IHS 8

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


© 2014 IHS 9

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


© 2014 IHS 10

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


© 2014 IHS 11

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)


© 2014 IHS 12

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


© 2014 IHS 13

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


© 2014 IHS 14

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


© 2014 IHS 15

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)


© 2014 IHS 16

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


© 2014 IHS. No portion of this report may be reproduced, reused, or otherwise distributed in any form without prior written consent, with the exception of any

internal client distribution as may be permitted in the license agreement between client and IHS. Content reproduced or redistributed with IHS permission must

display IHS legal notices and attributions of authorship. The information contained herein is from sources considered reliable but its accuracy and

completeness are not warranted, nor are the opinions and analyses which are based upon it, and to the extent permitted by law, IHS shall not be liable for any

errors or omissions or any loss, damage or expense incurred by reliance on information or any statement contained herein. For more information, please

contact IHS at [email protected], +1 800 IHS CARE (from North American locations), or +44 (0) 1344 328 300 (from outside North America). All

products, company names or other marks appearing in this publication are the trademarks and property of IHS or their respective owners. V2.0-29.04.14

Americas:

+1.800.IHS.CARE (+1.800.447.273);

[email protected]

Europe, Middle East, and Africa:

+44.(0).1344.328.300;

[email protected]

Asia and the Pacific Rim:

+604.291.3600;

[email protected]

Contact us

august 2014 mexico violent risk outlook - ihs … · second half of 2014 mexico violent risk...

Documents