bolivia: privatization and social
unrest
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Water privatization
protests in Cochabamba, Bolivia.
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Following years of pressure from the
World Bank, Bolivia’s government started a
process of privatizing water and wastewater
utilities in the city of Cochabamba in
1999. A fortyyear lease signed in that year
turned over control of the water and sewage
services of Cochabamba to Aguas del Tunari,
a subsidiary of the California-based
Bechtel Corporation. The company’s bid was
based on ‘full cost recovery’ and as of the
1st of January 2000, local water rates
increased on average between 35 and 51%
(the actual rate increases remain hotly
contested). Over half a million people were
affected, and prices were so steep that the
very poorest found themselves paying almost
one fifth of their monthly income just for
water. This meant cutting back on other
basic necessities.
Unsurprisingly, the people of Cochabamba
responded with massive protests. These were
met with military force and resulted in the
death of at least one person and the
wounding of 175. Nevertheless, as a direct
result of this uprising the Bolivian
Government eventually rescinded its
contract with Bechtel. Bechtel is now
endeavouring to use the World Bank’s
International Center for the Settlement of
Investment Disputes (ICSID) to sue the
people of Bolivia for US$25 million in
‘damages and lost profits’. Such action is
only possible because Bechtel has
transferred its Bolivian subsidiary to the
Netherlands in order to take advantage of a
bilateral investment treaty that exists
between the two countries.
In Cochabamba, attempts are still being
made to re-introduce water privatization
through the back door, by creating private
joint stock companies or “sociedades
anonimas” through the municipalities. In
response, social organizations are
campaigning for a legal framework that
ensures ownership of water remains public
and calling for the incorporation of
indigenous and campesino communities’
experience in traditional water
management.
news:
bechtel to drop cochabamba trade
case
The Bechtel Corporation and its
co-investor, Abengoa of Spain, have
officially ended their four-year effort to
sue Bolivia over the Cochabamba water
revolt. Bechtel and Abengoa were seeking
US$50 million in damages and lost profits
before a secretive trade court operated by
the World Bank, the same institution that
coerced Bolivia to privatize its water to
begin with. This is a huge victory for
activists worldwide who have fought this
case on five continents, and an important
precedent in the growing web of legal cases
in which the world's most powerful
corporations seek to tie the hands of
people and governments to shape their own
economic futures. This is the first known
case where a major corporation like Bechtel
has dropped its action in response to
global citizen pressure.
Please visit:
http://democracyctr.org/blog/
more information: Friends of the Earth
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