BECHTEL VS. BOLIVIA
BECHTEL’S LEGAL ACTION AGAINST BOLIVIA
A brief summary and explanation of Bechtel’s
legal demand filed with the arbitration arm of the World Bank (ICSID)
[Syndicated by Pacific News Service on December, 19, 2001]
Two years ago a Bechtel subsidiary took over control of the water system
of Bolivia’s third largest city, Cochabamba. Within weeks, the
company doubled and tripled water rates for the poor. Mothers living
on minimum wage of $60 per month were ordered to pay $15 or more just
to keep water running out of the tap. Faced, quite literally, with a
choice between water or food, people took to the streets to demand that
rates be lowered. Bechtel’s representatives refused and the Bolivian
government called out soldiers to protect the contract. One 17 year
old, Victor Hugo Daza, was shot in the face and killed. More than a
hundred others were seriously wounded. I was there. I saw it happen.
Eventually, in April 2000, the company left. It had no choice, the
protests and the government’s violent response wouldn’t end
until Bechtel’s company was gone. Fleeing corporate officials took
the hard drives from the computers, the cash left in the company’s
accounts, and sensitive personnel files. They also left behind an unpaid
electric bill for $90,000. Now the company says it wants more. Last
month it filed a demand of $25 million against the Bolivian people,
claiming as an “expropriated investment” the millions of dollars
in potential profits it had hoped to make and wasn’t allowed to.
Bechtel’s water takeover in Bolivia and the popular revolt against
it has become an international poster child for the excesses of economic
globalization. Now Bechtel’s legal action against Bolivia is becoming
a poster child for how corporations are manipulating global trade laws
to take further advantage of the world’s poor.
Bechtel’s legal move in November 2001 came in the form of a “request
for arbitration” to the little-known International Centre for Settlement
of Investment Disputes (ICSID) an arm of the World Bank -- the same
institution that pressured the Bolivian government into privatizing
its water system in the first place. ICSID was set up in 1966 to arbitrate
disputes between corporations and governments, related to treaties to
which both are parties. Like the negotiations that produced the Bechtel
contract, the arbitration will be held in complete secrecy, with no
opportunity for Bolivians to review a case that could potentially force
them to fork over millions of dollars to the same company that threw
them into violent crisis last year.
Even Bechtel’s access to this arbitration was the result of clever
legal manipulation. As Bechtel admits, the only reason it can force
Bolivia into such an arbitration is under terms of a treaty between
Bolivia and Holland. How did a company based in California get itself
covered by a trade treaty between Bolivia and Holland? Just as the company
was setting up shop in Bolivia two years ago it quietly filed papers
to shift its subsidiary’s corporate registration to Holland, apparently
in anticipation of exactly the sort of fiasco it ended up creating.
The Bolivian President, desperate to look friendly to foreign investment,
may well be eager to write the company a check just to bring the conflict
to an end.
For Bechtel, with revenues of more than $14 billion annually, $25 million
is about what the company takes in before lunch on any given workday.
For the people of Bolivia and the families that have already suffered
so deeply once because of Bechtel’s involvement in their lives,
$25 million means much more. Here that is the annual cost to hire 3,000
rural doctors, 12,000 public school teachers, or hooking up 125,000
families who don’t have access to the public water system. Which
one of these does Bechtel suggest be cut in order to pay them off?
Bechtel’s public relations department denies the company’s
responsibility in this matter, claiming that Bechtel is only a minority
shareholder in the subsidiary that did business in Bolivia. This too
is a convenient manipulation. The fact is that the Bolivia subsidiary
only has minority shareholders, but Bechtel is, quite clearly, the largest
among them. Just we strive hard, as parents, to teach our children the
importance of taking responsibility for our actions, so Bechtel should
be held to no less a standard.
The corporate giant has a choice. It can direct its public relations
staff to make glib statements about fairness, while its lawyers take
aim at Bolivia’s poor, or it can do something extraordinary. It
could decide that the Bechtel has already done enough damage to Bolivia’s
poor and rescind its legal action. It could even do so on condition
that the Bolivian government agrees to dedicate that $25 million to
directly serving the poor. Bechtel’s corporate mission statement
declares the company’s commitment to work with communities, “to
help improve the standard of living and the quality of life.” In
Bolivia, by any definition imaginable, Bechtel has failed that standard
miserably. Now the corporation must decide if it wants to repeat that
same mistake again.
Bechtel Vs. Bolivia
Write To Riley Bechtel Today!
Riley Bechtel’s Response
The Democracy Center’s Response To Riley
Bechtel
Cochabamba’s Water Bills From Bechtel
Bechtel’s Legal Action Against
Bolivia
The Bolivian Water Revolt