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by Excelsior Thursday, Aug. 22, 2002 at 7:38 AM

see below


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


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


The Democracy Center, along with a wide coalition of


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


individuals. So, if you represent an organization (an


group, a union, a nonprofit organization, etc.) please


endorsing this letter by replying to this note with the







If you are interested in more background on this issue

and on

our efforts, please visit The Democracy Center Web site

( and click on the Bechtel

vs. Bolivia link.

Thank you for your support and we'll keep you posted on


happens next!

Jim Shultz

The Democracy Center



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.


Dear Sirs:

The signers of this letter represent more than [# to be


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


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


Enterprises vs. Bolivia.


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.


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


the legitimate resolution of disputes, like this one,

that directly


issues of fundamental public concern.

Moreover, the World Bank/ICSID handling of this case is


more unjustified for two specific reasons unique to this


First, the World Bank is by no means a neutral party in


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


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


Given, however, that the World Bank/ICSID has acceded


Bechtel/Aguas del Tunari's request to take this case,

this makes it all

the more imperative that the process be opened to public


and scrutiny, as laid out in this letter.

We would also note that Bechtel/Aguas del Tunari has


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


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.


For all these reasons, we propose that the Tribunal

adopt the



1) Grant the Petition of Affected Individuals and


to Participate in the Case

We call on the Tribunal to grant the petition to


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


2) Publicly Disclose all Documents Filed with the


In order to provide for adequate public scrutiny of the


made by the two parties, especially given the record of


we call on the Tribunal to place into the public record

all documents

filed with the


3) That the Tribunal Members Travel to Bolivia to

Receive Public


It is clearly within the purview of the tribunal to


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


of Investment Disputes Between States and Nationals of



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


All tribunal hearings should be open to the public,


making all transcripts of the testimony public, as well

as all tribunal

decisions and awards.


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


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.


[list of names under development]


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


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


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


David Diamond, Headlines Theatre


Rudolf Amenga-Etego, Integrated Social Development

Centre, Ghana Charles

Abugre, Integrated Social Development Centre, Ghana

Patrick Apoya,

Community Partnerships For Health and Development, Ghana


Chirawurah, Peoples's Actions For community

Transformation, Ghana

cc: Alejandro Escobar, ICSID general counsel

Claudia Frutos-Peterson, ICSID counsel

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