September 2, 2002
NGOs protest "secret court' to decide on Bolivia water privatisation follow-up.
On 29 August non-governmental groups sent an angry letter to the World Bank Group demanding public access to its "secret trade court" which is to rule on a dispute between an American transnational company and Bolivia. The letter spells out concerns about the World Bank's role in a dispute over a water privatisation deal in which Bechtel took over the public water company in Bolivia's third largest city, Cochabamba.
Campaigners say that the World Bank faces clear conflicts of interest in this case and should open up the activities of its arbitration arm to public scrutiny. The International Centre for the Settlement of Investment Disputes, which will hear the case, is a little-known fifth arm of the World Bank Group which was founded in the 1960s to facilitate the settlement of investment disputes between governments and foreign investors. It operates from World Bank premises and is run by the World Bank's Senior Counsel who oversees the creation of ad hoc panels of experts to decide on each case brought before it.
The 300 organisations which endorsed the letter argue that "the World Bank/ICSID should not be handling this case [because] it was the World Bank itself which directly forced the government of Bolivia to privatize the water system of Cochabamba, making privatization a condition for both debt relief and funds for water system expansion". They point out that World Bank President James Wolfensohn directly appointed the President of the arbitration tribunal that will decide the case, undermining its perceived objectivity and independence.
The letter also argues that Bechtel's subsidiary Aguas del Tunari has taken its case to ICSID on the basis of a "bogus claim" that it was registered in Holland at the time of the deal. Furthermore the company's public statements about the Tucuman water concession are also "fraudulent", leading to campaigners demanding to see all documentation filed by the company to the panel.
Campaigners are demanding that the ICSID tribunal for the Cochabamba case:
- allow affected individuals and organizations to participate;
- allow the public disclosure of all documents filed with the tribunal;
- travel to Bolivia to receive public testimony;
- make hearings completely open to the public.
They complain that "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". In this they are echoing the sentiments in the World Bank's latest World Development Report which specifies that "competent institutions pick up signals about problems, balance interests fairly and efficiently in formulating policies, and execute policies in an accountable fashion. [They] fail when some groups, lacking assets and voice, are excluded from participation in society."
ICSID is set to have its first hearing on the case in mid-September. Depending on how rapidly and fully the World Bank Group respond to the protesters' demands this could prove to be one of the biggest issues at the World Bank/IMF annual meetings later that month. There is room for hope that, if its proceedings are conducted in the open, the World Bank panel may not make the taxpayers of South America's poorest country pay an estimated compensation following their protest actions which led to the company withdrawing from its contract. There is hope: two years ago ICSID dismissed the claims of another water company, Vivendi, following a mass non payment campaign by local residents in Tucuman, Argentina.
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