Date : Fri, 19 Apr 2002
URGENT ACTION: supports demands that Bechtel drop suit against Bolivia

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.

*****************************
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 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 ???? 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.

******
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.

Cochabamba Water Battle | bolivia | IMF Struggles | www.agp.org (archives) | www.all4all.org