[PEN-L:29970] Bechtel, Bolivia and Water

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FOR IMMEDIATE RELEASE
AUGUST 29, 2002
1:06 PM
 CONTACT:  Earthjustice
Martin Wagner, Earthjustice, Oakland, 510 550-6714, email:
mwagner@xxxxxxxxxxxxxxxx Washington, DC: Soren Ambrose, 202-285-5836, email:
soren@xxxxxxx Stephen Porter, CIEL, 202-785-8700 Cochabamba, Boliva: Jim
Shultz, The Democracy Center: tel: 011 591 4 429 0725, cell:
001-591-707-43631, email: jshultz@xxxxxxxxxxxxxxxx



Three Hundred Citizen Groups Call on Secret World Bank Trade Court to Open
Up Bechtel Case Against Bolivia: Case called a "Preview of the Free Trade of
the Americas"

WASHINGTON - August 29 - More than three hundred citizens groups from 41
countries presented a petition today to a World Bank-affiliated court,
demanding that it allow public participation in a controversial case in
which Bechtel Corporation is suing Bolivia for $25 million. (Petition and
support letter available at:
http://www.earthjustice.org/news/display.html?ID=435)

Bechtel is suing South America's poorest country for a portion of the
profits it wasn't able to earn after a public uprising in response to
Bechtel's water rate hikes forced the company to depart from the country in
April 2000. Bechtel's legal action is being heard by the International
Centre for the Settlement of Investment Disputes (ICSID), an international
tribunal housed at the World Bank that holds all of its meetings in secret.

"Bechtel is demanding $25 million dollars from some of the poorest families
in the world," said Oscar Olivera, a leader of the coalition of Bolivian
peasants, workers and others that formed in opposition to Bechtel. "The fact
that a World Bank court is preparing to hear this case behind closed doors,
without any public scrutiny or participation, is a clear example of how
global economic rules are being rigged to benefit large corporations at the
expense of everyone else."

A wide range of groups joined in the demand to open up the process. They
include trade union organizations (e.g., the 2.5 million-member Canadian
Labour Congress and Public Services International, which represents services
sector workers around the world); environmental groups (e.g., Friends of the
Earth); consumer organizations (e.g., consumers associations of Canada,
Japan and Zambia and U.S.-based Public Citizen); research groups (e.g.,
Institute for Policy Studies in Washington, Transnational Institute in
Amsterdam, and the Integrated Social Development Centre in Accra); and
numerous religious institutions (e.g., Maryknoll Fathers and Brothers in
Peru and the American Friends Service Committee); as well as noted authors
Naomi Klein, Maude Barlow and Vandana Shiva.

The groups called on the panel to make all of the documents and meetings in
the case public, to travel to Bolivia to receive public testimony, and to
allow Bolivian civic leaders to be an equal party to the case.

The citizen's letter will be accompanied by a formal "petition to
participate" by Olivera and other Bolivian civic leaders to the ICSID
tribunal hearing the case. The tribunal is comprised of one member appointed
by Bechtel, one appointed by the Bolivian government and a third, its
president, appointed directly by World Bank President James Wolfensohn. The
ICSID panel is scheduled to hold its first hearing sometime in early
September (though Bank officials say they are barred from disclosing exactly
when or where the hearing will take place).

The legal team representing the Bolivian petitioners includes Oakland,
CA-based Earthjustice and the Washington, DC-based Center for International
Environmental Law, both of which have been involved in attempts to intervene
in similar investor-state lawsuits filed under the North American Free Trade
Agreement.

AFTERMATH OF A REVOLT AGAINST WATER PRICE HIKES

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 last November, 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 and the
proposed Free Trade Area of the Americas. According to Sarah Anderson,
Director of the Global Economy Project at the Institute for Policy Studies
in Washington, DC, "There's been an outpouring of international support for
the Bolivian petitioners in this case. So many people have become familiar
with such investor-state lawsuits from the NAFTA experience and they see
them as one of the most extreme examples of excessive power granted to
corporations." According to Anderson, "The Bechtel v Bolivia case could be a
preview of what is to come if the FTAA is enacted. That agreement would give
foreign investors throughout the hemisphere the right to sue governments
directly over laws or regulations that might diminish their profits."

__________________________________________________

Corporate, World Bank and Bolivia contacts:

Bechtel Corporation:
Jock Covey
External Affairs Department
Bechtel Headquarters
San Francisco, CA
(415) 768 5444

ICSID:
Claudia Frutos-Peterson
Counsel handling the case
World Bank
Washington, DC
(202) 458-7930

World Bank
James Wolfensohn
President
Washington, DC
(202) 473-1000
[note: This is the World Bank's general #]

Government of Bolivia
Alberto Valdes
Charges d'Affaires in the Bolivian Embassy in Washington, DC
(202) 483-4410

__________________

Brian Smith
Western/International Press Secretary
Earthjustice
426 17th Street 6th Floor
Oakland, CA 94612-2820
PHONE: 510.550.6714
FAX: 510.550.6740
bsmith@xxxxxxxxxxxxxxxx
www.earthjustice.org


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