What 3-18 means in Mexico: nationalistic day commemorating oil expropriation takes on greater significance as sector ponders a more open position.

March 18 is important as a secular feast day in Mexico, especially for the oil union, as it is an occasion to ratify the mystical bonds that have tied the union to the presidency of Mexico, dating back to March 18, 1938. For it was the union, in the months after the historic expropriation, that kept the refineries and oil wells in operation.

Hence, the body language of a presidential appearance at the annual ceremony is vital to the preservation of the most politically valuable folklore in the union's possession.

While Vicente Fox has served as president for three years, he has had the opportunity to attend the once-traditional March 18 Oil Expropriation Ceremony organized by Pemex on four occasions.

Has it been on account of circumstances--or by intention--that in 2003 and 2004 he did not attend this ceremony?

One version would interpret his absence as a long-overdue separation of the commemorative event and the overloaded symbolism of the oil expropriation of March 18, 1938, thus the significance of this day for both the office of the president and the country's secular feast days in general.

GATHERING OF THE POWERS

As recently as the presidential administration of Carlos Salinas de Gortari it was routine that on March 18, the full presidential cabinet would attend the ceremony. On one of these occasions even the aged Fidel Velazquez, considered the patriarch of organized labor, managed to show up for the ceremony held that year at Pemex's headquarters.

Prior to 1996, the routine was that the head of Pemex would speak first, then the head of the oil union. The address by the union leader would be routinely accompanied by cheers and applause of the several hundred union workers who had been detailed to attend the event (and bused in at Pemex's expense). Afterwards, at his option, the president would speak.

Speeches by the heads of Pemex and the oil union were always read, so as to be ready for printed distribution to the media afterward. The nationalistic and generally hyperbolic language used meant that few--possibly most--in the audience didn't bother to listen; no one on the presidium was ever seen taking notes during the addresses.

In his remarks at this event in 1993, then-President Salinas alluded to arguments about the need for strategic upstream associations with Pemex that, on March 1 of that year, had been published in an article in Oil & Gas Journal.

"Recently there have been renewed attempts to open the subject of international private investment in Mexico's oil industry," said Salinas. "Such arguments are wrong-headed, as Mexican oil will remain exclusively for Mexicans."

SHIFTING TIMES

Then, on March 18, 1995, after a tumultuous year in which the PRI presidential candidate had been killed, an unexpected change in the content and tone of voice occurred. Pemex CEO Adrian Lajous gave a passionate speech before then-President Ernesto Zedillo about the need to divest Pemex's chemical business.

"Let the private sector take this responsibility, and Pemex will return to its core business of exploration, production, refining and distribution," said Lajous.

The unexpected part came next: then-PRI Sen. Carlos Romero Deschamps (arguably one of the most effective political orators in Mexico) came to the podium with even more passionate arguments asking Zedillo to give oil union workers a chance to show that Pemex's chemical industry can be made internationally competitive without privatization.

"Give our union workers the training they need and you, Mr. President, will see the positive results that we will accomplish for the sake of Pemex and the nation," said the powerful senator.

The next year, and up through 2003, the order of speakers was changed. First came the oil union leader, then the head of Pemex. Otherwise, everything else was the same.

In 2002, at the height of the inquiry into allegations of electoral fraud in the presidential elections of 2000 (Pemexgate), the head of the oil union was presented in the national press as someone whose congressional immunity would be stripped and who would face criminal charges.

In his speech on March 18, 2002, union leader Romero Deschamps (now a federal deputy) wielded a veiled threat against Pemex top brass that increasing tensions between employees and management would lower Pemex productivity and possibly lead to a strike.

PAIN IN FOX'S BACK

In 2003, President Fox did not attend the commemoration of March 18 because of the politically convenient timing of a back operation that coincided with the final days of the American effort to enlist Mexican support in the United Nations for military action against Iraq.

At the time, at least one analyst predicted that no Mexican president would ever attend a March 18 ceremony again. Why? Because the message of an expropriation of the business assets of international investors in 1938 was not the message to be given in 2002.

To celebrate an expropriation of the property of international investors was off-message, an anachronistic--albeit populist--icon of national independence. (The expropriation on Feb. 28, 2004, of the property under negotiation with Marathon Oil in Baja California was an unfortunate reminder of the events of 1938.)

On March 18 this year, the ceremony was carried out without Fox, who had attended the inauguration of a new Pemex gas compression station near Reynosa just two days prior. Unexpectedly, the event at Pemex's headquarters was also missing the head of the oil union and his usual delegation of 300-plus union members, even though Romero Deschamps was on the program as of 24 hours before the event.

A last-minute change was also made to bring in Finance Secretary Francisco Gil Diaz as the ranking cabinet member to sit with Energy Secretary Felipe Calderon, flanking the Pemex chief at the presidium. Gil's name did not appear on the printed addresses of either the Pemex CEO or Calderon. Two congressmen listed on the printed text, Sen. Enrique Jackson and Dep. Juan de Dios Castro, did not appear at all.

SHADES OF POPULISM 

New on the event's program was an address by an energy secretary, memorable more for its populist tones than for its content. "Pemex will not be privatized or made the object of concessions," he said, perhaps leaving the audience to wonder if he was alluding to the multiple service contracts (a topic not mentioned in Pemex's address).

He, like the Pemex speaker, Raul Munoz Leos, did not mention the oil union by name; praise was given only to oil workers collectively--but not to their collective leadership.

A final word needs to be said about the singing of the national anthem. In some years, the anthem was sung both at the beginning and at the end of the ceremony. In 1995, the anthem was not sung at the end of the ceremony--"Perhaps because President Zedillo was uncertain of which anthem to sing, the Mexican or the American," said one Pemex manager jokingly in private, alluding to the so-called Clinton Rescue Package that had just been negotiated.

This year, the anthem was sung at the beginning of the ceremony. Were the political logic of the two years of presidential downgrading of this event to be applied consistently, the singing of the anthem would also be dropped in future events. Why? There is no business reason to mix a management report on performance and future programs of an oil company with the music, emotions and symbolism of the nation's political and cultural identity.

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Thus, at some future point, Pemex would be evaluated by reference to its business performance and its record of environmental and social accountability. No more, no less. March 18 (or another day of the president's choosing) could then be rebaptized Oil Accountability Day.

George Baker, a historian and former Fulbright visiting professor at the National Autonomous University of Mexico, is the editor and publisher of Mexico Energy Intelligence, based in Houston. He can be reached at [e-mail].

Analysis by George Baker