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Related: About this forumBolivia Shows How To Dismantle Corporate Sovereignty Provisions In Treaties Without Losing Foreign I
Bolivia Shows How To Dismantle Corporate Sovereignty Provisions In Treaties Without Losing Foreign Investment
by Glyn Moody
Tue, Jul 15th 2014 12:23am
As Techdirt has reported, corporate sovereignty chapters in TAFTA/TTIP and TPP have emerged as some of the most controversial elements in those agreements. Meanwhile, countries that already have bilateral investment treaties (BITs) with investor-state dispute settlement (ISDS) mechanisms are looking for ways to get rid of them in order to avoid the loss of sovereignty they imply. One nation that already has considerable experience in this area is Bolivia. A new report provides fascinating background information on exactly how it has gone about this (pdf), with valuable lessons for others looking to do the same.
Things began back in 2000, during what was called the "Water war." After Aguas del Tunari, a subsidiary of the US company Bechtel, had taken control of water supplies in the central Bolivian city of Cochabamba, it raised prices to such an extent that the poorest citizens struggled to pay for drinking supplies. This led to demonstrations in the streets, with many people injured (original in Spanish.) Control of the water company was removed from Bechtel, which demanded $50 million compensation for the loss of its investment. The case was finally settled in 2006, when Bechtel agreed to sell its shares in the water company to the Bolivian state -- for 2 Bolivianos (then about $ 0.30).
That experience led the Bolivian people to give their new president of the time, Evo Morales, a mandate to withdraw from all investment agreements and tribunals that allowed claims to be made against the country. Here's how he did that:
The Evo Morales government rejected the Investor-State Dispute Settlement mechanism from the outset. This was reflected in the countrys withdrawal from ICSID -- the most widely used Investor-State Dispute Settlement forum -- in May 2007. In addition, the new [Bolivian] Constitution prohibits the state from settling investment related disputes with foreign investors in international tribunals.
Cont'd....
https://www.techdirt.com/articles/20140712/10031927860/bolivia-shows-how-to-dismantle-corporate-sovereignty-provisions-treaties-without-losing-foreign-investment.shtml
Louisiana1976
(3,962 posts)company for about 30 cents.
Joe Shlabotnik
(5,604 posts)chickens have now come home to roost. Countries promoting BIT's are now also being sued in forums such as ICSID as well as other tribunals, sometimes by their own investors. Unfortunately, the economic crisis in Europe has led some countries to take measures affecting foreign investments and they are now being sued. This means that the conversation with some European countries is now different.
I wonder what relevance Bolivia's new constitution has with regard to international treaties, since other countries aren't bound by each others constitutions. Is Bolivia being let off the hook (for now), or perhaps does the benefit of foreign investment in Bolivia (without Investor protection) outweigh the missed opportunity of not investing in Bolivia.