Bechtel Strikes Back at Bolivia
By Jim Shultz, Pacific News Service
November 11, 2002
Sometime in the next few weeks, behind closed doors at the World Bank
headquarters in Washington, D.C., panelists in a secret trade court will
decide if the people of South America's poorest country will have to pay $25
million to one of the world's most wealthy corporations.
The stakes in this case – Bechtel Corporation vs. Bolivia – are high, and
not just for the poor families who may ultimately pay the bill. The
principle of local control in an era of unchecked economic globalization is
at risk.
The Bechtel vs. Bolivia case is round two of a fight over something basic:
water. Two years ago Bechtel took over the public water system of Bolivia's
third-largest city, Cochabamba, and within weeks raised rates by as much as
200 percent, far beyond what families there could afford. When the company
refused to lower rates, the public revolted. Widespread protests eventually
forced Bechtel to leave.
In November 2001, Bechtel filed a demand of $25 million against Bolivia,
seeking to recover the money it says it invested, as well as a portion of
the profits the corporation expected to make.
"We're not looking for a windfall from Bolivia. We're looking to recover our
costs," explains Michael Curtin, the head of Bechtel's Bolivian water
company.
But the company didn't invest anything close to $25 million in Bolivia in
the few months it operated there. Furthermore, the $25 million prize Bechtel
now seeks is equal to what the corporation earns in half a day. For the
people of Bolivia, that sum is the annual cost for hiring 3,000 rural
doctors, or 12,000 public school teachers, or hooking up 125,000 families
who don't have access to the public water system.
More importantly, Bechtel vs. Bolivia could portend future global battles.
Trade officials from 34 countries are currently working to draft a "Free
Trade Act of the Americas" (FTAA), a new economic constitution which would
rule from Alaska to Argentina. President Bush and other supporters hope to
see the pact put in place by 2006. One of the FTAA's most controversial
provisions is the establishment of a system of secret trade courts, in which
multinational corporations can sue local, state and national governments –
behind closed doors – to overturn laws or extract payment for actions that
block their access to local markets.
The prototype for these secret courts is the very one where Bechtel has
brought its case against Bolivia: the World Bank's International Centre for
the Settlement of Investment Disputes (ICSID).
Under the FTAA, secret courts like these could force the repeal of
environmental laws in California, health regulations in New Hampshire and
worker protections in Venezuela – all in the name of knocking down barriers
to trade. For these reasons, the Bechtel vs. Bolivia case has become an
international symbol and rallying point.
Last August more than 300 citizen groups from 41 different countries –
environmentalists, peasants, labor leaders, women's groups, indigenous
leaders and others – joined to file an International Citizens Petition with
the World Bank, demanding that the doors of its secret trade court be opened
to public scrutiny and participation.
"The actions of Bechtel in Bolivia left a city of more than 600,000 people
in turmoil for four months," the groups wrote. A young boy died, hundreds
were injured, and public access to water was threatened. The international
group protested that the case was about 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," they wrote.
Under World Bank rules the process is so secret that Bank officials won't
say when the tribunal in the case will meet, won't reveal who testifies
before it or what they say, and won't let any members of the media or public
in the room. Bechtel has already lied on the public record about its
Bolivian water rate increases. It isn't likely to be any more honest behind
closed doors.
The World Bank's role is also suspect. Though it represents itself as a
neutral judge, World Bank officials directly appointed the president of the
tribunal hearing the case. And it was the Bank that forced Cochabamba's
water into Bechtel's hands to begin with. Two years prior to the water deal,
Bank officials directly threatened to withhold $600 million in international
debt relief if Bolivia didn't privatize Cochabamba's public water system.
Secrecy serves privilege and lies. Public participation and public scrutiny
are instruments of democracy and truth. In choosing closed doors, Bechtel
and the World Bank have made clear which method they prefer. Now the public
must demand that the rules of globalization be debated and implemented in
the light of day. Bechtel vs. Bolivia is exactly where that battle should
begin.
Jim Shultz is executive director of The Democracy Center, lives in
Cochabamba, Bolivia, and is the author of "The Democracy Owners' Manual"
(Rutgers University Press).
http://www.alternet.org/story.html?StoryID=14525
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"We are not in the construction and engineering business.
We are in the business of making money."
--Steve Bechtel Sr.
http://www.nv.doe.gov/about/bn.htm
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