see below
Subject: BECHTEL VS. BOLIVIA - HOW YOU CAN HELP
August 19, 2002
Cochabamba, Bolivia
Dear Friends and Readers:
As most of you well know, The Democracy Center has
devoted a
good deal of our recent work to blocking the Bechtel
Corporation in its
ongoing efforts against the people of Bolivia. Today we
are asking you
to do something simple (and free) that can help.
It was Bechtel that, in early 2000, took over the
public water
system here in Cochabamba, raising rates far beyond what
poor families
could afford and setting off a citywide revolt. Only
after one 17 year
old boy was left dead and hundreds of other people left
injured, did
Bechtel finally leave, returning the water system to
public hands. Last
November Bechtel initiated legal action against Bolivia
in a secret
trade court controlled by the World Bank. The
billion a year
company now wants million more from Bolivia, a
portion of the
profits the corporation hoped to gain here but wasn't
allowed to.
To be clear, this fight is not just about Bolivia. The
World
Bank's secret court is the model for how all trade
disputes would be
settled under the proposed Free Trade Act of the
Americas (FTAA). What
Bechtel is doing to Bolivia is what all corporations
would be able to do
to local, state and national governments across an
entire hemisphere -
challenging , behind closed doors, the laws that protect
us as consumers
and workers and which defend our environment. Fighting
this case helps
put the spotlight on these plans and helps wage the
larger battle as
well.
The Democracy Center, along with a wide coalition of
groups
across Bolivia, the U.S., and the rest of the world, is
organizing a
campaign to stop Bechtel in its tracks. Step one is
filing a formal
demand with the World Bank that it open up its secret
trade court to
public scrutiny and participation. Below is the letter
we will be
sending to the World Bank late next week. It speaks for
itself and I
hope you will read it. What we need from you at this
point is nothing
more than support - your name to add to the letter.
Please note, that the letter is ONLY FROM
ORGANIZATIONS, not
individuals. So, if you represent an organization (an
environmental
group, a union, a nonprofit organization, etc.) please
consider
endorsing this letter by replying to this note with the
following
information (NO LATER THAN NEXT MONDAY, AUGUST 26TH):
Name
Title
Organization
Country
If you are interested in more background on this issue
and on
our efforts, please visit The Democracy Center Web site
(http://www.democracyctr.org) and click on the Bechtel
vs. Bolivia link.
Thank you for your support and we'll keep you posted on
what
happens next!
Jim Shultz
The Democracy Center
-----------------------------------------------------
THE LETTER TO THE WORLD BANK
James D. Wolfensohn, President, World Bank
Ko-Yung Tung, Secretary-General, ICSID
David D. Caron, tribunal president
Henri C. Alvarez, tribunal member
José Luis Alberro-Semerena, tribunal member
ICSID Dispute Resolution Panel
c/o International Centre for the Resolution of
Investment Disputes World
Bank 1818 H Street, NW Washington, DC 20433
RE: Demand for public participation
Aguas del Tunari S.A. (Bechtel) v. Republic of
Bolivia (Case No.
ARB/02/3)
Dear Sirs:
The signers of this letter represent more than [# to be
added]
civil society organizations and public leaders across
five continents.
We are writing to you out of our shared commitment to
the right of
people to participate in the public matters that affect
their
communities and nations. With this letter we
respectfully request that
you guarantee public participation in the arbitration
between Aguas del
Tunari/Bechtel Enterprises and the Republic of Bolivia,
a case that
directly implicates one of the most fundamental human
needs - access to
water. This case is the most visible and important
cases that has come
before a World Bank/ICSID tribunal - Aguas del
Tunari/Bechtel
Enterprises vs. Bolivia.
BACKGROUND
The history of this case is well-known worldwide.
Under direct
pressure from the World Bank, the Bolivian government
put up for private
lease the water system of its third largest city,
Cochabamba. In 1999,
following a process with just one bidder, a 40 year
concession was
granted to Aguas del Tunari, a majority-owned subsidiary
of Bechtel
Enterprises of California set up for that sole purpose.
Within weeks of
taking over control of the water system, the company
raised water rates
by an average of more than 50% and in some cases far
higher. Families
living on a minimum wage of per month (and often
less) were ordered
by the company to pay as much as 25% of their income
just to maintain
their water service.
The people of Cochabamba, unable to pay the bills
presented them
by the company and unable to get any satisfactory relief
from the
Bolivian government, were forced into massive and
widespread public
protests. To protect the company's contract the
Bolivian government
took extraordinary measures against its people,
including a declaration
of a state of emergency, the suspension of
constitutional rights, and
the violent repression of the protests, resulting in
more than 100
injuries and the death of one 17 year old boy, Victor
Hugo Daza. In
April 2000, with the government unable to stop the
protests, the company
abandoned its management of the water system and left
the country.
THE BASIS OF OUR DEMAND FOR PARTICIPATION
To be clear, in our view the World Bank/ICSID should
not be
handling this case to begin with. The World Bank/ICSID
system is one of
what the New York Times recently called "secret trade
courts" ("A Fairer
Trade Bill" New York Times editorial, July 25, 2002), in
which urgent
public matters are decided behind a shroud of secrecy,
without full
information and without any of the opportunities for
public vigilance
and participation that are
the basis for public legitimacy. Such public
involvement is essential
to
the legitimate resolution of disputes, like this one,
that directly
affect
issues of fundamental public concern.
Moreover, the World Bank/ICSID handling of this case is
even
more unjustified for two specific reasons unique to this
case:
First, the World Bank is by no means a neutral party in
this
matter. It is well-documented that it was the World
Bank itself which
directly forced the government of Bolivia to privatize
the water system
of Cochabamba, making that privatization a condition for
both debt
relief and funds for water system expansion and thereby
setting the
events of this case in motion. Additionally, during the
water revolt in
Bolivia in April 2000, World Bank president James
Wolfensohn personally
made public comments about the case, justifying water
price increases.
Further, despite the Bank's role in the history of this
case, Mr.
Wolfensohn violated one of the most important principles
of objectivity
when he directly appointed the President of the
arbitration tribunal
that will decide the case. These facts have created
strong and
well-justified public doubt that ICSID can resolve this
dispute fairly.
Second, Bechtel/Aguas del Tunari's claim of ICSID
jurisdiction
rests entirely on a bogus claim of being a Dutch
corporation (and
therefore benefiting from Holland's bilateral investment
treaty with
Bolivia which invokes ICSID as arbitrator of any trade
disputes between
the two countries). Bechtel/Aguas del Tunari moved its
registration to
Holland only after it signed its water contract with
Bolivia, in a
forum-shopping exercise already repudiated by the Dutch
government.
Given, however, that the World Bank/ICSID has acceded
to
Bechtel/Aguas del Tunari's request to take this case,
this makes it all
the more imperative that the process be opened to public
participation
and scrutiny, as laid out in this letter.
We would also note that Bechtel/Aguas del Tunari has
already
made plain their willingness to advance fraudulent
information about the
case. In response to widespread public and press
attention to the
company's rate hikes, a Bechtel Enterprises spokeswoman,
Ms. Gail Apps,
widely distributed the following statement to members of
the public and
the media inquiring abut the rate increases it imposed,
"For the poorest
people in Cochabamba rates went up little, barely 10
percent." Data
drawn directly from the water company's computers make
clear that the
rate increase in question averaged more than 50%.
If Bechtel/Aguas del Tunari is willing to assert
clearly
fraudulent information such as this on the public
record, one can only
imagine what misinformation the company will be willing
to provide to
the tribunal behind closed doors and away from public
scrutiny. For
this reason as well, civil society groups directly
knowledgeable about
the facts at hand must be able to participate actively
in the case, to
assure that the tribunal receives a complete and
accurate rendering of
those facts.
THE METHODS OF PARTICIPATION PROPOSED
For all these reasons, we propose that the Tribunal
adopt the
following
procedures:
1) Grant the Petition of Affected Individuals and
Organizations
to Participate in the Case
We call on the Tribunal to grant the petition to
participate
made by key Bolivian leaders, including Oscar Olivera of
The Coalition
for Water and Life; Father Luis Sánchez, a member of
Cochabamba's public
water company board of directors (SEMAPA); Omar
Fernández of the
Cochabamba Federation of Irrigators; and Congressman
Jorge Alvarado,
President of the Cochabamba delegation of the Bolivian
Congress. These
leaders, represented by able and experienced Bolivian
and U.S. counsel,
represent tens of thousands of people with a direct
stake in the case.
Their participation is essential to legitimate
resolution of this
dispute.
2) Publicly Disclose all Documents Filed with the
Tribunal
In order to provide for adequate public scrutiny of the
claims
made by the two parties, especially given the record of
misinformation,
we call on the Tribunal to place into the public record
all documents
filed with the
Tribunal.
3) That the Tribunal Members Travel to Bolivia to
Receive Public
Testimony
It is clearly within the purview of the tribunal to
come
directly to Cochabamba, Bolivia and receive testimony
from the people
directly affected by the case and who have important
information to
share with the tribunal:
"…the Tribunal may, if it deems it necessary at any
stage of the
proceedings…visit the scene connected with the dispute,
and conduct such
inquiries there as it may deem appropriate. [Convention
On The
Settlement
of Investment Disputes Between States and Nationals of
Other
States:
Powers And Functions Of The Tribunal, Section 3,
Article 43].
We call on the panel to invoke that power in this case
and to
travel to Cochabamba to receive appropriate public
testimony relevant to
the case.
4) That the tribunal hearings be made completely open
to the
public.
All tribunal hearings should be open to the public,
including
making all transcripts of the testimony public, as well
as all tribunal
decisions and awards.
CONCLUSION
No ICSID case has ever drawn the public attention that
this case
has and will continue to, and for good reason. The
actions of Aguas del
Tunari/Bechtel in Bolivia left a city of more than
600,000 people in
turmoil for four months. They left hundreds injured and
one young boy
dead, and jeopardize thousands of peoples' access to the
most
fundamental element of life. This case is about far
more than the calm
transfer of assets from one economic institution to
another. It is a
matter of deep importance to far more than the two
parties who now have
formal access to the process. We hope the Tribunal will
grant our
requests and the petition to participate, and will honor
the legitimate
right of civil society to also have an active and
constructive role in
this case.
Sincerely,
[list of names under development]
Bolivia
Oscar Olivera, Fedration of Factory Workers and
Coalition for the
Defense of Water and
Life (La Coordinadora)
Gabriel Herbas, Bolivian Forum on the Environment
Marcela Olivera, Coalition for the Defense of Water and
Life (La
Coordinadora)
Omar Fernández, Cochabamba Federation of Irrigators
Father Luis Sánchez, member boiard of directors, SEMAPA
(public water
company) Jorge Alvarado, President of the Cochabamba
delegation of the
Bolivian Congress Jim Shultz, executive director, The
Democracy Center
Tom Kruse, Center for Agriculture and Labor Development
Studies (CEDLA)
United States
Sarah Anderson, Institute for Policy Studies, Global
Economy Project
Nancy C. Alexander, Citizens' Network on Essential
Services Marie
Dennis, Director, Maryknoll Office for Global Concerns
Jerry Mander,
President, International Forum on Globalization Mark
Ritchie, Institute
for Agriculture and Trade Policy
Kevin Danaher, Co-Founder, Global Exchange
Cam Duncan, Inter-American Regional Secretary, Public
Services
International Anthony Arnove, Editor, South End Press
Lori Wallach,
Director, Global Trade Watch, Public Citizen
The Netherlands
Edith van Overveld, Latin America Centre, Netherlands
Berrie Jurg, Friends of the Earth, Netherlands
Canada
David Diamond, Headlines Theatre
Ghana
Rudolf Amenga-Etego, Integrated Social Development
Centre, Ghana Charles
Abugre, Integrated Social Development Centre, Ghana
Patrick Apoya,
Community Partnerships For Health and Development, Ghana
Denis
Chirawurah, Peoples's Actions For community
Transformation, Ghana
cc: Alejandro Escobar, ICSID general counsel
Claudia Frutos-Peterson, ICSID counsel