[Marxism] Bechtel to Drop World Bank Trade Case Over Water Revolt

["Richard Fidler" <rfidler@xxxxxxxxxx>]

>From the Democracy Center's website (www.democracyctr.org):

Bechtel to Drop World Bank Trade Case Over Water Revolt

It is official.  On Thursday, representatives of the Bechtel
Corporation and its co-investor, Abengoa of Spain, will be in
Santa Cruz to sign an agreement ending their four year effort to
sue Bolivia over the Cochabamba water revolt.  Bechtel and Abengoa
have been seeking $50 million in damages and lost profits before a
secretive trade court (International Center for the Settlement of
Investment Disputes) operated by the World Bank, the same
institution that coerced Bolivia to privatize its water to begin
with.

Bechtel and Abengoa will sign an agreement dropping the case for a
token payment of 2 bolivianos, about 30 cents.   For a couple of
weeks I have been communicating back and forth between Bechtel,
the Bolivian government, and water activists here in Cochabamba,
trying to force disclosure of the agreement details.  As of last
night, we have the last of those in hand.

This is a huge victory for activists worldwide who have fought
this case on five continents.  It is a huge precedent for the
growing Web of legal cases in which the world's most powerful
corporations seek to tie the hands of people and governments to
shape their own economic futures.  We know of no other case in the
world where a major corporation like Bechtel has dropped its
action in response to global citizen pressure.

BACKGROUND ON THE CASE:

In the late 1990s the World Bank forced Bolivia to privatize the
public water system of its third-largest city, Cochabamba, by
threatening to withhold debt relief and other development
assistance.  In 1999, in a process with just one bidder, Bechtel,
the California-based engineering giant, was granted a 40-year
lease to take over Cochabamba's water, through a subsidiary the
corporation formed for just that purpose ("Aguas del Tunari").

Within weeks of taking over the water system, Bechtel imposed huge
rate hikes on local water users.  Families living on the local
minimum wage of $60 per month were given bills equal to as much as
25 percent of their monthly income.  The rate hikes sparked
massive citywide protests that the Bolivian government sought to
end by declaring a state of martial law and the deployment of
thousands of soldiers and police.  More than a hundred people were
injured and one 17-year-old boy was killed.  In April 2000, as
anti-Bechtel protests continued to grow, the company's managers
abandoned the project.

Bechtel filed the legal action against Bolivia in 2001, demanding
compensation of $25 million, a figure that represents far more
than Bechtel's investment in the few months it operated in
Bolivia.  Bechtel's action also aims to recoup a portion of the
company's expected profits from the project.  The company filed
the case with ICSID under a bilateral investment treaty between
the Netherlands and Bolivia.  Although Bechtel is a U.S.
corporation, it established a P.O. box presence in the Netherlands
in order to make use of the treaty.

The rules in the Dutch-Bolivian treaty are similar to those in
NAFTA, the proposed Free Trade Area of the Americas, and dozens of
bilateral investment treaties,


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