Weekly Report 60 by PRODENSA

GENERAL SITUATION IN MEXICO

Weekly Review # 60 I June 23, 2021

MANUFACTURING INDUSTRY

MEXICO ACCEPTS THE U.S. REQUEST TO INVESTIGATE AUTO PARTS PLANT FOR LABOR ABUSES The Mexican government informed this June 19 that it will investigate allegations of labor rights violations at an auto parts factory in the north of the country after the United States filed a complaint under the terms of the renewed North American trade agreement. The Secretaries of Economy and Labor informed that they accepted the U.S. request for a review of the Tridonex company in Matamoros to determine whether workers were denied their right to freedom of association and collective union.

Mexican authorities have until July 24 to present their findings to their U.S. counterparts, the statement added. The complaint was filed under the “Rapid Response Labor Mechanism” of the Mexico-U.S.-Canada Agreement (T-MEC), which allows for the review of specific labor issues and could result, in an extreme case, in restrictions on the importation of the plant’s products. Cardone Industries, the Philadelphia-based parent company of Tridonex, has said the allegations are inaccurate but will cooperate with the review process.

MANUFACTURING INDUSTRY

MODIFICATIONS TO FOREIGN TRADE RULES GIVE “UNDUE” PRIVILEGES TO PEMEX AND CFE, ACCUSES COPARMEX The modifications to the General Foreign Trade Rules (RGCE) made by the federal government -last weekprovide “undue” privileges to Petroleos Mexicanos (Pemex) and the Federal Electricity Commission (CFE), compared to private sector companies, in which they are allowed to import and export in places other than fiscal precincts, accused the country’s employers’ sector. The adjustments implemented by the Ministry of Finance, via the Tax Administration Service (SAT) and published in the Official Gazette of the Federation “violate the constitutional principles that protect equality among citizens, free competition and free enterprise,” said Jose Medina Mora, president of the Mexican Employers’ Confederation (Coparmex). We warn that this reform will limit private companies’ access to authorizations or extensions to have a Place Other Than Authorized (LDA) for the entry or exit of hydrocarbons.

“The measure will grant an exclusive and undue benefit to Petroleos Mexicanos (Pemex) and the Federal Electricity Commission (CFE), as opposed to other companies since they will be the only ones that will be able to import and export in places other than fiscal precincts.” With such modifications implemented since last year, the federal government has eliminated several prerogatives for export companies with “AAA,” “A.A.,” and “A” certification. Among the points that will have the greatest impact will be that certified companies will not be able to obtain their VAT refunds in preferential terms of 10, 15, or 20 days after filing their refund request.

Medina Mora affirmed that this “represents a damage to the investments committed in the country, to the generation of employment and reduces tax collection.” For this reason, he reiterated the need for clear and equitable rules that respect the legal framework, promote the healthy development of the economy, and the optimum functioning of the national energy sector.

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S Morning Press Conference June 16-22, 2021

HEALTH PULSE Dr. Jorge Alcocer Varela, Ministry of Health, announced that the vaccination of people over 18 years of age will begin in a few days. He also explained that 50, 288, 115 doses of vaccine have been received and mentioned that the Johnson and Johnson formula, which already has its health registration, was added to the vaccines. He pointed out that the registry of 30 to 39 years for vaccination has already been opened. FOREIGN POLICY STRATEGY AGAINST COVID Marcelo Ebrard, Secretary of Foreign Affairs, said that thanks to the strategy of the President of the Republic regarding his approach in the G20 of universal access to vaccines, the necessary instructions were issued to obtain the largest number of vaccines possible, entering into agreements with the governments of Argentina, China, the United States, Russia, and India. 2 million 970 thousand 550 doses of vaccines are expected to arrive this week. MEXICAN ECONOMY GROWTH Asked about the indicators of INEGI that show an increase of 24% in contrast between May 2020 and 2021, Lopez Obrador commented that May is a very complicated month, and now it is much better, and that is due to the growth, the country is coming out of the crisis, and the economy is growing. He hopes that the economy could be similar to how it was before the pandemic for the third quarter of this year.

SOURCE: https://www.youtube.com/channel/UCxEgOKuI-n-WOJaNcisHvSg

WELFARE MARKET The President reported that an administrative reform is about to be completed so that all confiscated merchandise can be delivered expeditiously to the people through a welfare market in the country’s most marginalized areas. He will report on this project soon. BACK TO SCHOOL Delfina Gomez Alvarez, Secretary of Public Education, spoke about the situation in the country regarding the return to face-to-face classes and the distance modality that some entities still have. He mentioned that the return to face-to-face classes will take place until the new school year. APPOINTMENT OF ROGELIO RAMIREZ DE LA AS TREASURER The President affirmed that the new Secretary of the Treasury is a professional in managing the economy. He explained that the same macroeconomic policy and inflation control will be followed to prevent product prices from rising.

MEASURES TAKEN BY STATES IN MEXICO

BAJA CALIFORNIA The State of Baja California continues to be considered in the low-risk tier or green light, except for the municipality of Mexicali, which is considered in the medium risk or yellow light due to no decrease in Covid-19 cases. Official reports confirmed that there are 314 active cases on a state level, with hospital occupancy at 24.6%, with 356 hospital beds available, as well as 239 respirators available for Covid-19 patients. With the vaccination campaign being more aggressive and open to the group of 18 to 39 years old, the number of vaccinated people has increased drastically, with a current total of 1,488,538 citizens vaccinated, from all groups starting at 18 years old and up, as well as pregnant women, medical staff and academic staff. Having vaccinated approximately 39% of the population, the next couple of days will continue to be of the intense vaccination campaign to get the most vaccinated people.

SONORA Continuing to see increases in Covid-19 cases, Sonora has the vast majority of its municipalities in medium risk tier or yellow light. Only 2 municipalities out of 72 in the low-risk tier and 4 municipalities in the high-risk tier or orange light. According to the official report on June 22nd, the State has 1,897 active Covid-19 cases, with 131 current hospitalized Covid-19 patients, with 81 patients are considered acutely ill and 31 critical patients using respirators. All these statistics showed an increase from the previous weeks, which led the State to change measures and request less mobility from its citizens. With over 308,000 people completely vaccinated (2 doses), Sonora has seen 6 fully vaccinated people that contracted the virus and lost their lives in the past weeks, for which the Health Secretary, Enrique Clausen, continues to request fully vaccinated people to continue practicing social distancing, respecting sanitary protocols and using facemasks.

MEASURES TAKEN BY STATES IN MEXICO

COAHUILA The Coahuila Health Secretariat revealed that during the last week, a child and a teacher were infected with COVID-19 after returning to semi-face-to-face classes on May 17. The authorities mentioned that they are prepared to reverse the semiface-to-face return of classes in case the contagions increase but minimized the possibility arguing that after months of progressive openings for the economic reactivation of the state, Coahuila at the moment registers three percent of hospital occupation.

TAMAULIPAS Due to the epidemiological traffic light change, Tampico will no longer participate in phase two of returning to face-toface classes. The state official mentioned that only the Hidalgo, Jaumave, Ocampo, and Tula campuses will remain in the phase.

NUEVO LEON The Vaccination Brigade announced that during this week, vaccination against COVID-19 will be developed in 6 municipalities in the state of Nuevo Leon to people between 40 and 49 years old and people remaining of other age groups. The municipalities are Escobedo, Cienega de Flores, Agualeguas, El Carmen, Sabinas Hidalgo, and Anahuac.

MEASURES TAKEN BY STATES IN MEXICO

STATE OF MEXICO Continues to be on the green light of the epidemiological traffic light.

CDMX Mexico City changed to yellow of the epidemiological traffic light due to increases in cases. 323 new confirmed cases were registered, and 7,185 suspected cases are waiting for confirmation.

VACCINATION PROGRESS

As of June 19, 27,753,807 people had received at least one dose of the COVD19 vaccine, of which 16,526,469 have the complete scheme (60%). Mexico City, Baja, California, and Zacatecas have the highest percentages of vaccinated populations. The national average is 31 percent of people over 18 years of age who have received at least one dose. From December 23, 2020, to date, Mexico has had 49,066,815 doses of packaged vaccines available. The vaccines applied in Mexico are Pfizer BioNtech, AstraZeneca, SinoVac, Sputnik V, and Cansino.

TOWARDS THE “NEW NORMAL”

DISTRIBUTION OF DEATHS PER STATE DUE TO THE PANDEMIC

INFORMATION UPDATED ON JUNE 14, 2021 AT 19:00 HRS LOCAL TIME.

NEW CASES REPORTED: 1,268

SOURCE: https://www.gob.mx/salud/

CONFIRMED CASES: 2,478,511

NEW DEATHS REPORTED: 57

CONFIRMED DEATHS: 231,244

INCREASE OF CONFIRMED CASES SINCE THE FIRST REPORT MAP WITH THE DISTRIBUTION OF THE INCIDENCE RATE OF ACCUMULATED CASES OF COVID-19 BY ENTITY OF RESIDENCE.

National rate 1921.77

0 to 500 (1 states) 501 to 1,000 (2 states) 1,001 to 1,500 (12 states) 1,5001 to 2,000 (8 states) >2,000 (9 states)

Elaborated by Prodensa with information from the Health Ministry of Mexico

PANDEMIC’S SITUATION IN THE WORLD • As of June 21, 2021, globally there have been reported confirmed 178,202,610 cases (336,450 new cases) of COVID-19 and 3,865,738 deaths (7,764 new deaths*). Lethal rate: 2.2%. • In the last 14 days, the number of new cases accounts for 3% (5,066,728) of the total of accumulated cases.

SOURCE: https://www.gob.mx/salud/

TOWARDS THE “NEW NORMAL” INCIDENTS OF CONTAGIONS IN THE POPULATION BY REGION AS OF JUNE 22

DEATH INCIDENTS IN POPULATION BY REGION AS OF JUNE 22

SOURCE: https://www.gob.mx/salud/

EHS

RECOMMENDATIONS CONSIDERATIONS TO MINIMIZE THE EFFECT OF POSTVACCINATION SIGNS AND SYMPTOMS ON EMPLOYEES AND THE WORKPLACE

• Encourage employees to get vaccinated as soon as they are eligible and to consider scheduling vaccination appointments 1–2 days before planned days off from work. • Stagger vaccination appointments so that you are not vaccinating all workers at the same time in a single department, service, or unit where continued operations are required. Staggering vaccination might be more important after receiving the second dose of an mRNA vaccine (e.g., Pfizer-BioNTech, Moderna), when symptoms after vaccination, like fever, are more likely to occur. • Inform employees about the potential for common side effects after vaccination and provide information about what to do if they experience side effects. • Provide or identify options for COVID-19 viral testing so it is accessible for employees with systemic signs and symptoms after vaccination. Consider implementing an approach to testing based on the guidance for select non-healthcare workplaces. Testing should have a rapid turnaround time from specimen collection to result reporting (<24 to 48 hours). • Offer flexible, nonpunitive sick leave options (e.g., paid sick leave) for employees with systemic signs and symptoms after vaccination.

DAVID ANTUNEZ Environmental, Health, and Safety Director.

PUBLIC AFFAIRS

RECOMMENDATIONS HOW TO INCREASE YOUR COMMUNITY ENGAGEMENT ON SOCIAL MEDIA?

The best way to be involved and engaged with the community through social media is to create one. It is not an easy task, but with the right mindset and intention and following some steps, you can turn your social media into a place where the community gathers to exchange experiences. 1. Be available, make it easy for people to communicate with you, and exchange with your audience. 2. Install a chat on your website and respond to private messages. Your community will appreciate it. 3. Use images and tell your story. Involve your community in your passion and values. 4. Share success stories of your people, clients, or about your company. 5. Connect with your audience through emotions. Make them smile! 6. Involve your audience, ask them questions in your stories and interact. Follow these steps and be more engaged with your community on social media. Learn to hear your community and connect with them. Keep monitoring your social platforms! In Prodensa, we are ready to guide you through your best social media strategy.

YOELLE ROJAS Public Affairs & Communications Director

LABOR

RECOMMENDATIONS HOW CAN HR AND COMPANIES ADDRESS THE CONCERNS THAT SOME WORKERS MAY HAVE ABOUT VACCINES? THE WORLD HEALTH ORGANIZATION (WHO) GIVES US CLUES Listen with empathy. When a person has doubts about vaccination, the effectiveness of vaccines, fear of vaccination, or any similar aspect, the first action to take is to activate empathetic listening by letting workers know that it is completely valid to have questions or interest in learning more. Ask open-ended questions. Do not ask questions that lead to a yes or no answer. Instead, ask questions that allow people to express themselves and allow us to learn about their concerns. An example: You can share with me what makes you skeptical about vaccines. Share verified information. Visit sites like the WHO and share information from valid and reliable sources. Vaccines save lives and help prevent the development of serious illnesses caused by the SARS-COV-2 virus. Unfortunately, in companies, we cannot demand vaccination, but we can promote access to official information and encourage trusting environments between workers and the company.

ALVARO GARCIA HR, Vice President