From: oneworld (oneworld@igc.org)
Date: Fri Apr 19 2002 - 22:56:12 EDT
THE BECHTEL CORPORATION IS SUING THE PEOPLE OF COCHABAMBA, BOLIVIA FOR $25M.
SUPPORT THE DEMONSTRATION HAPPENING AT THE BECHTEL HEADQUARTERS IN SAN FRANCISCO, THIS COMING TUESDAY, APRIL 26.
Local San Francisco organizers have planned a march to the Bechtel Corporate Headquarters, arriving for a 5 pm Rally and Press Conference, to demand that Bechtel drop their legal actions against the people of Bolivia.
** ACTION REQUESTED **
Let Bechtel know that people well beyond San Francisco and the US support this position. Email a letter to Bechtel DURING THE DAY OF TUESDAY, APRIL 26 (earlier in the day is better, so local organizers can know how many have been sent going into the press conference). Below is:
1. A draft letter (use this, add to it, or compose your own)
2. Contact information for Bechtel.
3. More information about this case.
Thank you for your solidarity.
**************
Dear Bechtel,
I am writing to express my strong objections to your company's legal actions against the Bolivian people. I am aware of the events of your company's time in Bolivia, and the adverse effects that your involvement there had on the poorest of Cochbamba. I am totally opposed to the notion that, after not investing a penny into the improvement of that city's water system, international trade mechanisms make it possible for you, an incredibly rich corporation, to file a suit for $25M against this incredibly poor nation. As you well know, the price of your suit would be paid by the very poorest of Bolivia.
I urge you to act with integrity and drop your $25 million demand against Bolivia.
Sincerely,
*******
Email this message to: rbechtel@bechtel.com, and news@bechtel.com, with a cc. to info@democracyctr.org (this organization has an ongoing Bechtel action campaign)
REMEMBER, SEND IT DURING THE DAY ON THIS COMING TUESDAY, APRIL 26.
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MORE INFORMATION ON THE BECHTEL SUIT AGAINST BOLIVIA...
*****************************
Details on the Bechtel suit against Bolivia... taken from the website of the
Democracy Centre, in San Francisco.
(http://www.democracyctr.org/bechtel/bechtellegalaction.htm)
BECHTEL VS. BOLIVIA
BECHTEL'S LEGAL ACTION AGAINST BOLIVIA
A brief summary and explanation of Bechtelıs 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 Boliviaıs 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. Bechtelıs 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 governmentıs violent response wouldnıt end until Bechtelıs company was gone. Fleeing corporate officials took the hard drives from the computers, the cash left in the companyıs 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 ³expropriated investment² the millions of dollars in potential profits it had hoped to make and wasnıt
allowed to.
Bechtelıs water takeover in Bolivia and the popular revolt against it has become an international poster child for the excesses of economic globalization. Now Bechtelıs legal action against Bolivia is becoming a poster child for how corporations are manipulating global trade laws to take further advantage of the worldıs poor.
Bechtelıs legal move in November 2001 came in the form of a ³request for arbitration² 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 ???? 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 Bechtelıs 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 subsidiaryıs 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 Bechtelıs 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 donıt have access to the public water system. Which one of these does Bechtel suggest be cut in order to pay them off?
Bechtelıs public relations department denies the companyıs 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 Boliviaıs poor, or it can do something extraordinary. It could decide that the Bechtel has already done enough damage to Boliviaıs 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. Bechtelıs corporate mission statement declares the companyıs commitment to work with communities, ³to help improve the standard of living and the quality of life.² 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.
******
San Francisco Bay Guardian
April 17, 2002
Opinion
By, Antonia Juhasz
BECHTEL V. BOLIVIA
Bechtel Corp. celebrated one of the most profitable years in its 100-plus-year history by suing one of the poorest countries in the world: Bolivia. After raking in $14 billion - nearly double Bolivia's entire gross domestic product - San Francisco's own multinational giant is suing the government of Bolivia for $25 million. For its part, Bolivia celebrated the new year with $3 billion in external debt and with two thirds of its population living in poverty.
The reason why Bechtel is suing Bolivia is probably familiar to most readers. How they are doing it is probably not. As a reminder: In 1999, at the behest of the World Bank and the International Monetary Fund, Bolivia's third-largest city, Cochabamba, privatized its water system. There was just one bidder: a consortium called Aguas del Tunari, whose controlling partner was International Water, a British firm that was then wholly owned by Bechtel (an Italian company later bought a half interest). Taking control of Cochabamba's water was part of Bechtel's plan to position itself as an
international leader in water privatization, which also includes forming partnerships with other global water giants and investing billions of dollars to acquire interests in water privatization companies around the world. Bechtel is already a partner on many U.S. municipal water projects, including managing the reconstruction of San Francisco's infrastructure. After privatizing Cochabamba's water, Aguas del Tunari raised fees. In a country where the minimum wage was less than $60 a month, many users received water bills of $20 a month and more. Families that had built and
used their water wells or irrigation systems for decades suddenly had to pay Aguas del Tunari for this water. The people of Cochabamba united to cancel the contract.
One of their leaders, Oscar Olivera, will be in San Francisco next week to receive a belated Goldman Environmental Prize and join a protest at Bechtel's headquarters Tuesday, April 23. After attempts at discourse with the government and the water company were ignored, the citizens non-violently shut down the city. The government declared a state of siege, sending more than 1,000 soldiers into the streets armed with live ammunition, which resulted in the death of a 17-year-old boy, Victor Hugo Daza. Eventually the people prevailed, and the government agreed to end its
contract with Aguas del Tunari and Bechtel. Most important, the workers, citizens, and local officials of Cochabamba are now running the water system themselves, while not perfectly, far more equitably and universally than before.
This could be our happy ending, but Bechtel wants its due. So it is using a Bilateral Investment Treaty (BIT) to achieve its goal. The BIT is the predecessor to the investment chapter, Chapter 11, of the North American Free Trade Agreement. It is under Chapter 11 that the state of California is
being sued for trying to protect our water from a cancer-causing chemical, MTBE, produced by the Canadian Methanex Corp. Because the Free Trade Area of the Americas is not yet law (and hopefully we'll keep it this way), Bechtel has no equivalent means to get at Bolivia. Fortunately for the company, it happens to have a holding company in the Netherlands, and the Netherlands just happens to have a BIT with Bolivia. Also conveniently, the BIT is argued at the World Bank's own International Court for the Settlement of Investment Disputes. Remember that it was the World Bank that opened the door for Bechtel's entry in to Bolivia in the first place. Negotiations to include similar investment provisions at the World Trade Organization are currently underway. Bechtel's suit gives us just one more reason to fight those agreements. Given the small amount of money involved in this suit - at least for Bechtel - we can only assume that it is meant as a warning to the people of the world, including San Francisco, not to follow the lead of Cochabamba's "water warriors." Are we going to listen?
Antonia Juhasz is project director at the San Francisco-based International Forum on Globalization. To learn more go to www.ifg.org or e-mail her at ajuhasz@ifg.org.
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