bolivia: privatization gone bad in
cochabamba
david
waskow, foe united states
protests against
Cochabamba privatization in the Netherlands
and in Bolivia.
Even after protests in Cochabamba
finally led to the departure of Bechtel’s
subsidiary, Aguas del Tunari, the company
snuck back like an unwelcome cat. In
February 2002, almost two years after
leaving Cochabamba, Bechtel/Aguas del
Tunari filed a suit against Bolivia under a
bilateral investment treaty, demanding
US$25 million in compensation for what it
claims are its lost future profits from the
water privatization scheme.
Even though Bechtel is a major US
multinational, the case is being brought
under an investment agreement between
Bolivia and the Netherlands. Since Bolivia
and the US do not have an investment
agreement, Bechtel appears to have
registered its consortium in the
Netherlands solely in order to have this
investment treaty available for such a
suit.
The case is being heard by a tribunal
operating under the auspices of the
International Center for the Settlement of
Investment Disputes (ICSID). ICSID is
situated at the World Bank, which pressed
Bolivia to privatize Cochabamba’s water
system in the first place, and World Bank
President James Wolfensohn picked the chair
for the tribunal for the case when Bechtel
and Bolivia couldn’t agree who should fill
the seat.
The case may be conducted in almost
complete secrecy. In August 2002, more than
300 citizens’ groups from 41 countries
presented an international citizens’
petition to ICSID and the tribunal,
demanding that it allow public
participation in the case.
This case should set off a major alarm
about the serious and harmful consequences
of investment agreements for the public’s
right to decide about how it wants its
water delivered. The Bolivia-Netherlands
agreement is very similar to the
Multilateral Agreement on Investment (MAI).
And while the MAI is dead for now, similar
proposals are part of the proposed Free
Trade Area of the Americas (FTAA/ALCA) and
numerous regional and bilateral trade
agreements. At Cancun in September 2003,
the WTO will consider whether to launch its
own global negotiations on investment
rules.
Meanwhile, bilateral investment treaties
are being used when companies are unhappy
that water privatization didn’t turn out
their way. Another recent example:
Argentina has been sued over a failed water
privatization plan by Enron’s water
subsidiary, Azurix.
more information:
read
about
the privatization and social unrest
read
the interviews
with Osvaldo Parejo and the recent
developments
International petition:
www.democracyctr.org/bechtel/international_petition.htm
Friends of the Earth US:
www.foe.org
