BECHTEL VS. BOLIVIA
THE DEMOCRACY CENTER’S RESPONSE TO RILEY BECHTEL
In December, 2001 The Democracy Center, and more than 100 others from
throughout the world, wrote to Bechtel Enterprises CEO, Riley Bechtel,
calling on the company to drop its $25 million legal demand against
the people of Bolivia. In late December and early January, Mr. Bechtel
responded with a statement from his
public relations department. That statement, among other things,
asserted that the water rate hikes for the poor were no more than 10%,
that the company had no responsibility for the price hikes, and that
the civil unrest that resulted in Bechtel’s departure had to do
with illegal coca production, not water rates. Below is the response
to that statement sent to Riley Bechtel by The Democracy Center.
AN OPEN LETTER TO MR. RILEY BECHTEL
CHAIRMAN AND CEO
BECHTEL ENTERPRISES
SAN FRANCISCO, CALIFORNIA
January 16, 2001
Dear Mr. Bechtel,
In December, when I wrote to you concerning your company’s legal
actions against the people of Bolivia, I did so in good faith. I presumed
you to be a gentleman of integrity who would be willing to engage those
concerned in an honest discourse about the issues at hand. The response
released on your behalf by your public relations department makes it
clear that such is not the case. To the contrary, what is clear is that
Bechtel Enterprises is hoping to deflect this mater with deliberately
false and misleading statements about the facts at hand. To be clear,
this is not a difference of interpretation. What Bechtel has done in
this matter is provide both the public and the media with documentably
false information.
On The Price Hikes Imposed by Bechtel’s Affiliate – Aguas
Del Tunari
Here is what Ms. Gail Apps, your spokeswoman, claimed as fact, on your
behalf, in a statement issued on January 3, 2002:
“For the poorest people in Cochabamba rates went up little, barely
10 percent.”
“Unfortunately, water bills sometimes went up a lot more than rates.
That's because as Aguas del Tunari improved service, increasing the
hours of water service and the pressure at which it was delivered, people
used a lot more water.”
Enclosed you will find a detailed comparison analysis of water rates
carried out by the current public water company, using the very same
computer data that your company used to calculate its water rates and
bills. You will also find annotated copies of actual water bills issued
by your company at the start of 2000 which clearly show rate increases
for the poorest families in Bolivia not of 10% but of 60% and in some
cases much higher. In summary, this documentation demonstrates the following:
1) Based on the same identical rates of water consumption (not increases
as you claim) your company raised rates for the very poorest families
in Cochabamba, people living well-below minimum wage, by an average
of, not 10%, but 43%. In the next category, families that are still
poor, but perhaps earning a minimum wage, suffered rate increases of
40%. These are averages. In some cases the rates charged were even higher,
much higher.
2) In clear examples, documented with the enclosed before-and-after
water bills, these price hikes for individual families are made clear. Lucio Morales’ household,
classified among the very poorest in Cochabamba, had his water bill
raised from $4.15 to $6.63, a jump of 60% and a total bill amounting
to more than 10% of the monthly minimum wage at the time. This increase
was based on no change in water consumption. An identical price hike
by your company is shown for the Jose
Aramayo household, another classified as among the city’s
poorest.
3) In direct conflict with your claims that the price hikes were the
result of increased water use, enclosed are before-and-after water bills
for the household of Mr. Saturnino
Marin, in the category typical for families living at the minimum
wage - less that $60 at the time. Your company raised his monthly rates
from $14.75 to $21.96 (a leap of nearly 50%) even though his family’s
water consumption actually decreased by 18%.
4) According to a computer analysis using your company’s own pricing
data, your company’s forced departure from Bolivia and the restoration
of the prior water rates saved the residents of Cochabamba saved more
than $3.4 million in 2001, money left in the pockets of the families
that live here instead of paid out to your Bolivian water subsidiary.
On Bechtel’s Ownership of Aguas del Tunari
Again, on your behalf, Ms. Apps seeks to mislead the press and public
by minimizing Bechtel’s ownership role in Aguas del Tunari:
“We cannot speak for the seven different owners of the Aguas del
Tunari consortium…”
Let us be clear then about the facts of Bechtel’s shell game in
this matter. From the inception of the Bolivian water company through
this day, the controlling, majority stakeholder in the company (with
55% of all shares) has been International Waters Limited (IWL) of London.
That company, as you well know, was formed in 1996, wholly owned by
Bechtel. During the time in which IWL was negotiating with the Bolivian
government and in which it signed the contract to take over Cochabamba’s
water in September 1999, IWL was also wholly-owned by Bechtel. That
means that Bechtel, not some other company, is responsible for the debacle
the company instigated here. That means that you, not some other CEO,
must bear responsibility for it. To be clear even further, even though
Bechtel sold 50% of its interest in IWL after its takeover of water
in Bolivia, your company still retains 50% ownership in IWL. Translated,
that means that no other single company or investor has a larger stake,
even now, in Aguas del Tunari than you do. Pretending to just be a small
minority shareholder is just one more exercise in trying to avoid the
responsibility that Bechtel must bear.
The additional claims made on your behalf have no more credibility.
The widespread public protests that occurred here in Cochabamba in January
to April 2000 – in which police killed one youth and injured hundreds
of others to protect your contract – were not about coca growing
or police salaries, as you claim. They were about your water rates.
Bechtel’s feigned concern for Bolivia’s water problems is
no less transparent. If that concern were anything other than a cynical
public relations ploy, Bechtel would not now be trying to squeeze from
Bolivia’s poor $25 million you never invested, never earned and
are not entitled to receive.
One of the most important ways in which individuals and corporations
define their character is whether they tell the truth, and most especially
whether they tell the truth when it is hard. Bechtel Enterprises, the
company that bears your father’s name, has failed that test and
failed it gravely. Be assured that your company’s willingness to
falsify the facts in this matter will be shared appropriately with the
International Center for Settlement of International Disputes (ICSID),
the arbitration panel to which you have made your demand against the
Bolivian people. If Bechtel Enterprises is willing to make such false
claims in public, one can only wonder what it is wiling to claim in
a closed-door arbitration.
If integrity is of any value to you and your company, I strongly urge
you to drop your legal action against the Bolivian people and to issue,
not a demand for money, but an apology for the suffering and damage
your company’s presence has brought to the people and families
who live here.
Sincerely,
Jim Shultz
Executive Director
The Democracy Center
Cochabamba, Bolivia
Write To Riley Bechtel Today!
Bechtel Vs. Bolivia
The Democracy Center’s First Letter to Riley
Bechtel
Riley Bechtel’s Response
Cochabamba’s Water Bills From Bechtel
Bechtel’s Legal Action Against
Bolivia
The Bolivian Water Revolt