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Tuesday, 07 April 2020 01:32

Looking south

In February, law firm Orrick, Herrington & Sutcliffe hired Christina Maccio, a firstchair trial lawyer and leading litigator for the energy sector, and who is a fluent Spanish speaker with extensive experience representing companies in Latin America and Europe, as a partner in its Houston office, as part of the law firm's efforts to maintain its market-leading Latin America focus.

Christina Maccio of Orrick“From the start, Orrick’s strategy has been to build our Texas office around areas where the firm is market-leading globally. It’s working. Last year was our best year ever in Texas in terms of revenue growth, innovative client engagements and collaboration with Orrick teams worldwide,” Dahl Thompson, leader of Orrick’s Houston office, said regarding Christina Maccio’s hiring. “Adding Christina, a rising-star, first-chair trial lawyer with deep experience in oil & gas, is a reflection of this strategy and momentum,” he said at the time.

Christina, who joins Orrick from DLA Piper, brings a proven record at trial, on appeal, and in US and international arbitration venues on behalf of US and global energy companies to Orrick, including publicly traded energy companies, independent oil companies, state-owned oil companies, oilfield services firms and oilfield suppliers. She also has guided high-stakes commercial litigation in the financial, technology and other sectors in matters involving business torts, foreign sovereign immunity, contract disputes, restrictive covenants and trade secret protection. Christina spoke with The Latin American Lawyer about the opportunities and challenges for law firms active in the region.

Q: As Orrick expands its Latin America practice and focus, where does the firm see the biggest opportunities, in terms of sectors and countries? Are there also new sectors that are emerging as new sources of work in Latin America?

A: As a firm, we focus on serving the energy and infrastructure, technology, and finance sectors globally. Each of these sectors is experiencing enormous growth in Latin America, with notable expansion in countries such as Mexico, Brazil, Colombia, Argentina, and Panama. Due to the rapid increase in Internet connectivity in South America, for example, technology companies, including fintech companies, are committing significant resources in the region to building infrastructure to grow their market, innovate, and develop products for an increasing customer base. As you note, privacy and data protection are of increasing importance, and companies will need guidance on how to navigate privacy laws in the region, as lawmakers examine and amend existing laws, in some instances to mirror the EU’s data protection regulations (GDPR). Energy companies are making extensive investments across Latin America in renewables, power, and oil and gas sectors. Overall, we are watching Latin America closely, including changes in countries’ laws and geopolitical developments, to anticipate and identify issues that our clients will need to address as they expand in the region and assess risk exposure. We also work with lawyers across our offices worldwide to help Latin American clients pursue expansion strategies and obtain capital in the international markets.

Q: While Mexico had seen an increase in energy deals since the reforms to the sector in 2013, with a marked increase in foreign investment in the renewables and oil and gas sectors, has that now slowed as a result of President Andrés Manuel López Obrador's cancelling of the renewable energy auctions?

A: Overall, it has. The reforms of 2013 were a promising moment for foreign investors, renewable energy companies, especially wind and solar, and IOCs. However, President López Obrador’s decision to cancel renewable energy auctions as well as additional oil-field auctions effectively ended—or, at a minimum, sharply curtailed—the reform, with the intended result of consolidating power in Pemex and the Federal Electricity Commission over Mexico’s energy sector. The impact of these changes on the oil and gas sector has been a halting of additional inbound foreign investment into Mexico. Instead, the Mexican government is entertaining bids from oilfield services companies for exploration and production projects and other infrastructure projects. Mexico has tried this approach before. In the past, however, it has not yielded a level of investment or production that made a significant economic impact in the country. Perhaps, with advances in technology, the administration is optimistic that the results this time will be different. In the renewable energy sector, prior to President López Obrador’s announcement, Mexico had been one of the top 10 markets in the world for renewable energy investment and was considered a top producer of wind and solar energy. Following the change in its policy, Mexico’s continued dominance in renewables such as wind and solar in Latin America may fade due to local risks—which have caused delays in project completion—as well as the federal government’s change in priorities in the sector. As a result of all these factors, foreign investment in renewables in Mexico, like investment in oil and gas, has slowed. Without question, however, Mexico remains one of the largest economies in Latin America. To what extent foreign investment may play a role in shaping the Mexican economy and its energy infrastructure going forward is a decision that remains in the hands of the Mexican government.

'AN EXCITING AND DYNAMIC REGION'

Q: Are there any sectors or countries that present particular challenges?

A: Latin America is an exciting and dynamic region. Rather than focus on specific sectors or countries, speaking in very general terms, for companies examining an investment in Latin America or operating a current one, it is important to keep in mind that in some sectors, energy especially, you may not be dealing with purely commercial enterprises on the other side. You may be dealing with a sovereign, and by its own nature, a sovereign entity has its own motivations and institutional and political incentives, which may or may not be aligned with a purely commercial interest. Companies need to be aware of that reality when examining future investment or managing a current investment in Latin America, as that fact more than any other will impact the risk profile of any potential or current investment. 

Q: What are the challenges for a law firm engaging as counsel and litigator in Latin America?

A: As recent political and legal changes throughout the region demonstrate, the laws under which a company has been operating in a certain jurisdiction may change rapidly. US law firms advising clients operating in Latin America and lawyers handling disputes arising out of Latin America need to be aware of that fact. They need to stay current on political conditions in each country where they are advising clients as well as geopolitical developments in the region, as those conditions and developments undoubtedly provide context for a dispute in which a client may become involved—and, in certain instances, may even give rise to the dispute itself. They need to consult with and work closely with counsel on the ground in that jurisdiction and maintain a network of contacts in the business and government sectors in those jurisdictions. Finally, lawyers advising clients on investments in Latin America need to anticipate that disputes may arise. A company or firm contemplating an investment in the region needs to plan with corporate counsel the structure of the investment in a way that ensures that any investment protection treaties to which the host country may be a signatory will apply. It is imperative for an investor to have a neutral dispute resolution provision in their agreement, in case an act of the host government would hinder or limit the transaction or investment or result in an expropriation. Fullservice firms like Orrick have the knowledge and experience to recommend this optimum structure by involving both disputes and transaction teams to advise clients on any potential transaction or investment.