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WASHINGTON - August 29 -
More than three hundred citizens groups from 41 countries presented a petition
today to a World Bank-affiliated court, demanding that it allow public participation
in a controversial case in which Bechtel Corporation is suing Bolivia for $25
million. (Petition and support letter available at: http://www.earthjustice.org/news/display.html?ID=435)
Bechtel is suing South America's
poorest country for a portion of the profits it wasn't able to earn after a public
uprising in response to Bechtel's water rate hikes forced the company to depart
from the country in April 2000. Bechtel's legal action is being heard by the International
Centre for the Settlement of Investment Disputes (ICSID), an international tribunal
housed at the World Bank that holds all of its meetings in secret.
"Bechtel is demanding
$25 million dollars from some of the poorest families in the world," said
Oscar Olivera, a leader of the coalition of Bolivian peasants, workers and others
that formed in opposition to Bechtel. "The fact that a World Bank court is
preparing to hear this case behind closed doors, without any public scrutiny or
participation, is a clear example of how global economic rules are being rigged
to benefit large corporations at the expense of everyone else."
A wide range of groups joined
in the demand to open up the process. They include trade union organizations (e.g.,
the 2.5 million-member Canadian Labour Congress and Public Services International,
which represents services sector workers around the world); environmental groups
(e.g., Friends of the Earth); consumer organizations (e.g., consumers associations
of Canada, Japan and Zambia and U.S.-based Public Citizen); research groups (e.g.,
Institute for Policy Studies in Washington, Transnational Institute in Amsterdam,
and the Integrated Social Development Centre in Accra); and numerous religious
institutions (e.g., Maryknoll Fathers and Brothers in Peru and the American Friends
Service Committee); as well as noted authors Naomi Klein, Maude Barlow and Vandana
Shiva.
The groups called on the
panel to make all of the documents and meetings in the case public, to travel
to Bolivia to receive public testimony, and to allow Bolivian civic leaders to
be an equal party to the case.
The citizen's letter will
be accompanied by a formal "petition to participate" by Olivera and
other Bolivian civic leaders to the ICSID tribunal hearing the case. The tribunal
is comprised of one member appointed by Bechtel, one appointed by the Bolivian
government and a third, its president, appointed directly by World Bank President
James Wolfensohn. The ICSID panel is scheduled to hold its first hearing sometime
in early September (though Bank officials say they are barred from disclosing
exactly when or where the hearing will take place).
The legal team representing
the Bolivian petitioners includes Oakland, CA-based Earthjustice and the Washington,
DC-based Center for International Environmental Law, both of which have been involved
in attempts to intervene in similar investor-state lawsuits filed under the North
American Free Trade Agreement.
AFTERMATH OF A REVOLT AGAINST
WATER PRICE HIKES
In the late 1990s the World
Bank forced Bolivia to privatize the public water system of its third-largest
city, Cochabamba, by threatening to withhold debt relief and other development
assistance. In 1999, in a process with just one bidder, Bechtel, the California-based
engineering giant, was granted a 40-year lease to take over Cochabamba's water,
through a subsidiary the corporation formed for just that purpose ("Aguas
del Tunari").
Within weeks of taking over
the water system, Bechtel imposed huge rate hikes on local water users. Families
living on the local minimum wage of $60 per month were given bills equal to as
much as 25 percent of their monthly income. The rate hikes sparked massive citywide
protests that the Bolivian government sought to end by declaring a state of martial
law and the deployment of thousands of soldiers and police. More than a hundred
people were injured and one 17-year-old boy was killed. In April 2000, as anti-Bechtel
protests continued to grow, the company's managers abandoned the project.
Bechtel filed the legal
action against Bolivia last November, demanding compensation of $25 million, a
figure that represents far more than Bechtel's investment in the few months it
operated in Bolivia. Bechtel's action also aims to recoup a portion of the company's
expected profits from the project. The company filed the case with ICSID under
a bilateral investment treaty between the Netherlands and Bolivia. Although Bechtel
is a U.S. corporation, it established a P.O. box presence in the Netherlands in
order to make use of the treaty.
The rules in the Dutch-Bolivian
treaty are similar to those in NAFTA and the proposed Free Trade Area of the Americas.
According to Sarah Anderson, Director of the Global Economy Project at the Institute
for Policy Studies in Washington, DC, "There's been an outpouring of international
support for the Bolivian petitioners in this case. So many people have become
familiar with such investor-state lawsuits from the NAFTA experience and they
see them as one of the most extreme examples of excessive power granted to corporations."
According to Anderson, "The Bechtel v Bolivia case could be a preview of
what is to come if the FTAA is enacted. That agreement would give foreign investors
throughout the hemisphere the right to sue governments directly over laws or regulations
that might diminish their profits."
__________________________________________________
Corporate, World Bank and
Bolivia contacts:
Bechtel Corporation:
Jock Covey
External Affairs Department
Bechtel Headquarters
San Francisco, CA
(415) 768 5444
ICSID:
Claudia Frutos-Peterson
Counsel handling the case
World Bank
Washington, DC
(202) 458-7930
World Bank
James Wolfensohn
President
Washington, DC
(202) 473-1000
[note: This is the World Bank's general #]
Government of Bolivia
Alberto Valdes
Charges d'Affaires in the Bolivian Embassy in Washington, DC
(202) 483-4410
__________________
Brian Smith
Western/International Press Secretary
Earthjustice
426 17th Street 6th Floor
Oakland, CA 94612-2820
PHONE: 510.550.6714
FAX: 510.550.6740
bsmith@earthjustice.org
www.earthjustice.org
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