WB Refuses to Discuss Bolivia Failure at Water Conference

50 Years listserv
Mar 4, 2003
by Earthjustice / CIEL / Public Citizen / Democracy Center

For Immediate Release: March 4, 2003

Contact: Martin Wagner, Earthjustice (Oakland, CA)
Marcos Orellana, Center for International Environmental Law (Washington,
DC)
Sara Grusky, Public Citizen (Washington, DC)
Jim Shultz, The Democracy Center (Bolivia) jshultz@democracyctr.org

WORLD BANK PRIVATIZATION CONFERENCE
REFUSES DISCUSSION OF FAILED WATER PROJECTS

Bank-Led Water Fiasco in Bolivia Left Off “Water Week” Discussion

“Glaring Omission” Follows Bank-Hosted Tribunal’s Denial of
Media & Citizen Access to $25m Bechtel vs. Bolivia Legal Case

Washington, DC—The World Bank, convening an international conference on
water issues this week in Washington, has conspicuously left off the list of
discussion topics the Bank’s most notorious failure in its push for privatization
of water around the world – Cochabamba, Bolivia. Three years ago, under
direct pressure from the World Bank, the government leased the public water
system of its third largest city to a subsidiary of the San Francisco-based
Bechtel Corporation. When Bechtel charged poor consumers rates far
beyond what they could afford, citizens rebelled and forced Bechtel to return
the water system to public hands. A 17-year-old boy was killed and more
than one hundred others injured in the anti-Bechtel protests.

“The World Bank believes in water privatization as a matter of theology,” said
Jim Shultz, executive director of The Democracy Center, based in
Cochabamba. “Bank officials forced that theology onto Bolivia by directly
threatening to withhold up to $600 million in debt relief if the government
didn’t privatize the water. Now Bank officials would like to keep the Bolivian
water fiasco from coming up at their Washington cheerleading session for
privatization. After the international attention Cochabamba received, it’s a
glaring omission.”

“The Bank is no doubt wary of including the whole story because it’s such a
delicate time for proponents of water privatization,” added Sara Grusky of
Public Citizen. “With the recent failure of projects in cities as far apart as
Manila, Buenos Aires, and Atlanta, putting a happy face on water privatization
at this conference will depend a great deal on what is left out. Far from
providing access to clean and affordable water, privatization has meant rapid
increases in consumer water rates, public health crises, job losses, secret
deals, and weak regulation.”

The World Bank has invited water officials from all over the world to the three-
day conference starting Tuesday on “Water and Development.” Featured
topics include “Beyond the Public-Private Debate” and “New Approaches to
Private Sector Participation” (a full program can be viewed at
www.worldbank.org/water). The director of Cochabamba’s new public water
company, Gonzalo Ugalde, was invited less than two weeks before the
session was to open – and only as an observer. There is no scheduled forum
for talking about the Bank policy of forced privatization or notable failures
such as in Cochabamba.

In a letter to World Bank officials, Ugalde and other Cochabamba water
officials demanded that the forum take up the devastating impact of water
privatization undertaken in response to World Bank pressure. “We think this
is a critical opportunity for water officials to look at the real experience of
privatization in Cochabamba.”

The World Bank’s water conference comes just weeks after the
announcement by a secret World Bank trade tribunal that it would not allow
the public or media to participate in or even witness proceedings in which
Bechtel is suing the government and people of Bolivia for $25 million. The
panel, whose chair was appointed by World Bank President James
Wolfensohn, rejected an international citizens petition calling for an opening
of the case, endorsed by more than 300 citizens groups from more than 43
countries. (A release issued by the petitioners at the time of the decision can
be found at www.ciel.org/Ifi/Bechtel_Lawsuit_12Feb03.html).

Oscar Olivera, a leader of the coalition of Bolivian peasants, workers and
others that formed in opposition to Bechtel, said, “The World Bank is not only
imposing its ideas and programs on us, it is also preventing the people
affected from participating in a case that directly affects our lives. This is
profoundly undemocratic.”

Bechtel's legal action is being heard by the International Center for the
Settlement of Investment Disputes (ICSID), a tribunal administered by the
World Bank that holds all of its meetings in secret. Bechtel is suing Bolivia for
the profits it claims it would have made from the water privatization scheme
had the rate hike protests not led to its unplanned departure from the city of
Cochabamba in April 2000. (See background story at http://www.pbs.org/
frontlineworld/stories/bolivia/).

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