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The Democracy Center works globally to advance social justice through investigation and reporting, training citizens in public advocacy, and leading international citizen campaigns.

THE BOLIVIAN WATER REVOLT

The Bechtel Letters

After the Democracy Center began publicizing Bechtel’s role in the Bolivian water takeover, Bank officials complained in writing. Below is their letter and the response from the Democracy Center’s executive director, Jim Shultz. Later Bechtel wrote to the public, challenging The Center’s assertions about its water price hikes. The Democracy Center responded once again and that exchange is also below.

BECHTEL’S LETTER TO THE DEMOCRACY CENTER FOLLOWING ITS EXPULSION FROM BOLIVIA

April 25, 2000

Jim Shultz

The Democracy Center

Dear Mr. Shultz:

I am writing in response to your e-mail message of April 9. I want to provide you with more comprehensive information than you may have had access to previously, including the nature of the concession held by Aguas del Tunari.

As you certainly know, Cochabamba is the third largest town in Bolivia with an estimated 600,000 people. The city’s rapid increase in population is due mostly to the migration of citizens from the neighboring poor rural areas. This migration has created significant social problems that the city has been unable to address.

These problems include the lack of appropriate low cost housing, equal access to education, a growing gap between the rich and the poor, and, generally a lack of access to public services. These problems are unfortunately extremely common in developing countries. Some of them can also be found in the more developed world.

On a matter I am quite familiar with, many of the cities in the developing world lack an appropriate water distribution network, not to mention wastewater collection and treatment systems. Cochabamba is no exception and the situation is even worse, as the raw water sources have been progressively exhausted. This particular situation is widely acknowledged and many engineering studies have been performed in the last ten years or so to identify various solutions to this pressing problem. To date, no action has been taken as the solutions all carry a very expensive price tag. The municipal authorities have been deferring any action, hoping that some kind of subsidy or state financing could avoid passing on these costs to local ratepayers.

Such an approach is understandable but, unfortunately, has created a difficult situation for the municipal water company (Semapa) from a technical and financial point of view. The Semapa network is barely able to supply partial water coverage to less than 60% of the population. Most of the households have to survive by buying water from truckers at a price several times the official tariffs. In short, water, as delivered by Semapa, is cheap, particularly for large users, but is so scarce that people, predominantly the poor, have to buy it from private entities at a price obviously not regulated. This water, trucked into the city, is mostly drawn from the water table which, unfortunately, cannot be replenished. Needless to say this parallel water market is a very profitable industry and well drillers, truckers and merchants of all kinds have become prosperous by selling a non-sustainable resource at exorbitant prices. A number of government officials over the years have been alarmed by this situation and have tried to figure out how to provide some relief to water-starved Cochabamba. One of the solutions was to identify new sources of water outside the region and build a system to transport this water to the city. To do so would require additional financial resources that the national and local governments do not have. In addition to a new supply of water, it also became obvious to the national government and the local municipality that it was necessary to improve the water system through private management. Such a public/private partnership could help increase operating efficiencies, repair leaks and discourage pilferage. It would also accelerate the implementation of the building program without using national or municipal debt.

A first attempt to find a concessionaire to manage the Cochabamba water distribution system was made in May 1997 by the previous government. An international call for tender was initiated at the same time that the La Paz water privatization was occurring. Unfortunately, the Cochabamba call for tender was cancelled. At that time, the municipality was very much opposed to the tender because it was not taking into account the Misicuni project. This project is a long-standing effort to construct a dam (to store the water during the rainy season) a tunnel, (to carry the water across a mountain ridge) and an aquaduct (to bring the water to the city). There were other solutions to bring water to Cochabamba, including extracting water from the existing Corani dam, but Misicuni had been supported time after time by the local officials, contractors and people of influence.

After cancelling the tender for the concession, the new government, in a gesture of good will, decided to build a portion of the Misicuni project and negotiated a sole-source contract for the tunnel section with a local contractor and a major European company. This was obviously risky as the financing of the whole project was not secured and there was a high probability that the scheme would remain uncompleted and useless, after the government had spent a large amount of money for tunnel construction. In order to mitigate this risk, the government decided to revive the concession tender and include in its scope not only the distribution system, but also the Misicuni project. The State utilized a financial advisor (Banque PARIBAS) very familiar with water issues to estimate and arrange for the most suitable legal and financial structure. The terms of reference were prepared and the tender was advertised at the beginning of 1999, at approximately the same time that the construction of the tunnel started.

International Water decided to follow the tender and we associated ourselves with Abengoa (of Spain) and four Bolivian companies including ICE, a major Cochabamba contractor and builder of the new airport and Misicuni tunnel. The joint venture, called Aguas del Tunari (AdT), submitted its bid in April 1999. To our great surprise, none of our competitors submitted a bid. Even the two French water giants, Vivendi and Lyonnaise des Eaux, declined to submit a price. We understood that Vivendi, which had to abandon its Tucuman (Argentina) concession a few months before, was very cautious about entering into a potentially similar situation. We never understood why LdE, having won the La Paz concession in 1997, did not submit a bid.

At this point it must be stressed that many international water companies had expressed concerns about the feasibility of the Misicuni scheme that was supported by local municipal and economic interests. The questions were mostly focussing on the feasibility of the dam and possibility of attracting sufficient financing to the project, given the poor records and economic condition of Semapa, the municipal water company.

In Aguas del Tunari’s bid, we also stressed these points and insisted on an alternative, consisting of a later implementation of the dam portion of the project. We were certain that the tunnel could not be built in two years and consequently that the construction of the dam could be deferred by several years. By deferring the construction of the dam, the initial upfront expenditure would have been diminished, thus allowing for a much lower and progressive increase in tariffs. We also proposed to focus our first year’s effort on repairing the existing network, where the leakage factor was in excess of 60%. As a matter of fact, 60% of the water pumped in the network was either lost or pilfered, which means that it was possible to delay the construction of the dam by making better use of the existing raw water supply.

Unfortunately we could not convince the government’s “Negotiating Committee” that this approach was the most reasonable to pursue. The Misicuni dam had become a collective obsession and the municipality (which was participating in all negotiations) insisted that the dam be built during the first two years of our contract. Consequently we used our financial model, under the supervision of the advisory bank, to calculate the tariffs necessary to get financing from the multi-lateral banks (the IDB, IFC, and the CAF) as well as the pension funds in Bolivia, all of whom had already been approached by AdT.

A close examination of these tariffs persuaded us that such a rapid increase would be difficult socially, without modifying the tariff structure. In fact the pre-existing tariff structure of Semapa was not in line with the usual international water agency practices. Generally, in order to protect scarce raw water sources, you try to force consumption down by applying a rising unit cost. This means that the more water you use, the more you pay per unit; consequently commercial and industrial users are driven to save water and the small consumers are charged a nominal amount. Semapa tariffs are the other way around; in a country where water is scarce the more water you use the less you pay per unit. We proposed that the municipality implement a tariff structure that would put no or few increases on poorest citizens and increase substantially the bill for the large users, which happen to be the wealthy. This structure was reluctantly accepted.

During the course of the negotiations, we were unsuccessful in obtaining amendments from the state or the municipality that would have allowed for a lower increase in tariffs. For instance, the municipality wanted us to repay Semapa’s previously accumulated debt and roll that cost into the rate structure. Similarly, the municipality insisted that we sign and execute the construction contract of a treatment plant with OTV (a subsidiary of Vivendi) that we thought excessive in price and not necessary. Also, the state decided that AdT pay for using the tunnel under construction and the municipality decided to charge AdT for the existing Semapa assets. In short, we had to reflect in the tariff increase all the increases that had never been implemented before. When you add these requirements to the early building of the Misicuni project, we estimate they account for more than 50% of the tariff increase, each of these was not necessary and done against our advice.

After several months of negotiation with the municipality and the state, assisted by their financial and legal advisors, the concession contract was finally signed by the State Water Regulator in the presence of the President, the Mayor and all the Ministers in charge. In our contract the tariff structure and the level of services to be delivered by AdT were very precisely defined as well as were all other customary clauses in such a contract. While the main portions of the contract were published in the press, we strongly recommended to the municipality to engage in an information campaign in order to inform the population of the changes that were to be implemented. For reasons beyond our understanding, this action was never taken.

On November 1, 1999, the concession was finally handed over to us. The new tariffs had been made public by the Regulator and were enforceable starting on the first of January 2000, as agreed in the contract. We began to operate, with the immediate goal to reduce the losses in the network and to get as much water as possible from existing sources. This action proved to be effective, as we were able to deliver water to more consumers for more hours of the day and at a higher pressure. Many consumers expressed their satisfaction and our employees were developing a new mode of operation and pride in their work. We were confident that we could implement this program in a shorter period of time than the one required by the contract.

Unfortunately in mid-January, opposition to the contract emerged, first from the Civic Committee and then from a newly created entity, the Coordinadora, presenting itself as the protector of the interests of the people of Cochabamba. Very quickly it became apparent that the Civic Committee wanted a renegotiation of the contract and that the Coordinadora wanted the termination of the contract. It also became apparent that the Coordinadora was mostly composed of people and organizations having an interest in the parallel water market or being part of the most affluent sector of the population. In a sense it was logical to see them strongly against our contract. What was disturbing was to see this group manipulating small farmers from the surrounding countryside and organizing them into violent action against a contract that had nothing to do with them whatsoever. Several wealthy interests paid poor people – many bussed in from outside the area – to demonstrate against the concession.

Moreover, national water legislation (unrelated to the Aguas del Tunari concession) placed restrictions on new wells – particularly unpopular with small farmers and wealthy landowners. Opposition to the proposed new water law also came from coca leaf growers who, the state asserted, were supported by their cocaine connection.

As the demonstrations evolved, we asked the Water Regulator to instruct us on a course of action and he did so by rolling back the tariff to previous levels. While this was a clear beach of our contract, we decided to continue to operate the company in order to allow time for the municipality and the state to find a solution and work with the Civic Committee and the Coordinadora in helping them understand our contract and responsibilities. Unfortunately, neither the municipality nor the state was able to convince the Coordinadora to refrain from misleading the community.

Unfortunately this situation has had a tragic ending. Aguas del Tunari managed the water network until the lives of our employees had been threatened and the concession contract terminated by the Regulator. We can understand why the State, unable to control the violent action of some local and national economic interests, decided to terminate our contract. Nevertheless AdT shareowners have had their property expropriated, the lives of their employees and their families have been threatened and they have been wrongfully held partially responsible for tragic events that have nothing to do with them. Our loss is important but what is more important for us is the sadness of these events and the criticism of all our efforts to find a good and fair solution to the problem of water in Cochabamba. Today, Semapa is back to its previous style of operation. The poorest part of the population will continue to subsidize the wealthiest and the industries. The water truckers have regained their thirsty customers, and nothing has been resolved.

We trust that you will help in avoiding this status quo from continuing and refrain from spreading misinformation about our activities and motives. It may serve your purposes, but it will not help the people of Cochabamba solve their water problem.

Sincerely,

Didier Quint

Managing Director

International Water LLC

MY RESPONSE TO BECHTEL

April, 29, 2000

Mr. Didier Quint
Managing Director
International Water LLC

Mr. Riley Bechtel
Chairman and CEO
Bechtel Enterprises

(via e-mail)

Dear Mr. Quint and Mr. Bechtel:

This letter is in response to Mr. Quint's April 25th e-mail to me and his letter to the San Francisco Examiner, regarding the civil uprising over water prices in Cochabamba. While I appreciate your effort to share your views on this matter, it is disappointing to see the extent of your misunderstanding of the basic facts and your unwillingness to accept any responsibility for your actions here. From your offices in London and San Francisco I am sure you had to rely on your companies' local representatives for information. It is clear they have briefed you very, very poorly.

To be clear, most everyone in Cochabamba would agree with your assessment about the need for more and better water. Cochabambinos are anxious to solve their water problems and many once had high hopes that your company would help to do this. You are also not alone in your questioning of the Misicuni dam project. Your account of your secret negotiations with the Bolivian government provides much more detail then had been available publicly and I have shared it with civic leaders and journalists here.

Most importantly, your account confirms what water rights leaders here have been saying for months - that the contract agreed to by the government was a failure from the start, a virtual guarantee that thousands of poor families would be hit with water rates they could ill afford. But let's be clear on one other point. While you complain bitterly about that contract, you are just as much a party to it as the Bolivian government. You negotiated it, you signed it, and you implemented it, knowing well the injustices and social eruptions it would cause. You did not enter into that contract as an act of public spirit. You saw an opportunity to make a profit here and you took it. One additional point you left out of your summary - your companies also demanded and won a provision in that same contract guaranteeing you, come hell or high water, an average 16% annual return on your investment (contract annex #5), leaving Bolivia's poor to bear all the financial risk.

That said, let me now address your profound misstatements of fact about the public protests and your water price hikes that triggered them:

You state, "Several wealthy interests paid poor people - many bussed in from outside the area - to demonstrate against the concession." Apparently your local representatives failed to inform you that, during the seven days of protests here in early April, protesters blockaded all highways in and out of Cochabamba. There was no bus service, commercial or otherwise, or any other ground transportation entering or leaving the city. Not even bicycles were allowed through without having their tires flattened. If you have any doubt about my account you should consult with the Bolivian government, which specifically cited the blockades as a reason for its declaration of a "state of emergency" on April 8. Before you make this claim again I suggest your provide your proof. I spoke personally with many who came here from the rural communities, on foot from as far as 40 miles. No mysterious unnamed interests paid them to do so. They came to reclaim control of their water.
You state: "The Coordinadora [the civic alliance that led the protests] was mostly composed of people and organizations having an interest in the parallel water market or being part of the most affluent sector of the population." The Coordinadora's affluence will certainly be news to its members. The coalition is led by the union that represents minimum wage factory workers. Its members also include organizations of peasant farmers, environmentalists, youth, and others. Could you explain which of these groups you count as affluent?
You state, "Opposition to the proposed new water law also came from coca leaf growers who, the state asserted, were supported by their cocaine connection." It seems hypocritically convenient that you would so blatantly criticize the Bolivian government on the one hand and yet so readily parrot their false political spin on the other. I have shared your charge in the past few days with many people here who participated in the protest and I think the best response comes from Franz Pedrazas, a local taxi driver. You raised his water rates last January from $10 per month to $20, an increase equal to more than what he earns in a day driving a cab for 12 hours. Regarding your charge that nacrotraffickers were behind the protests he says, "It's a big lie. I'm not a narcotrafficker. If I were why I would I be driving a cab? The farmers aren't narcotraffickers either."
Finally, you state: "The typical rates for water and sewage services rose 35%. Low income residents were to pay 10% more and the largest hikes (106%) were reserved for the highest volume users, the most affluent." After four months I am still looking, with no success, for someone here who had a rate hike of just 10%. I have interviewed dozens and dozens of families about their rate hikes. Even among the poor, rate increases of at least 100% were the most common and many people suffered increases much higher. Your claim will be big news to Mr. Pedrazas, the cab driver, to Tanya Paredes, a mother of five who knits baby clothes for a living (her increase was 300%), and thousands of others. If you don't wish to believe my account I would gladly send you copies of the local newspaper investigations that also confirm the extremity of your rate hikes.

As a parent, one of the lessons I have tried to teach my children is the importance of telling the truth and of accepting responsibility, rules that should apply as well to large corporations. The people of Cochabamba have suffered four months of upheaval because of your conduct here. A 17 year old boy is dead. Two youths are blinded. More than 100 are injured. Those who opposed you had their homes ransacked in the dark of night and were flown off to a remote jail in the jungle in an effort to silence them. In your defense you rely on lies and seek to blame everyone from peasants to well-drillers. Whatever credibility you had left has only been tarnished all the more.

I tried, as did many other journalists here, to reach your local representative, Mr. Geoffrey Thorpe, for comment during the uprisings. Neither my calls nor anyone else's were returned. In fact, on several occasions, he hung up on those few reporters who managed to reach him. You may also find it of interest that, while the people of Cochabamba were having their blood spilled on the streets, your subordinates were busy taking away the water company's computers and financial and personnel records. Your subordinates also left behind bank accounts that were empty and more than $150,000 in unpaid bills. On top of all this suffering and damage you now have the audacity to demand a compensation payment of $12 million from the Bolivian people.

I am afraid that the misconceptions in this matter are not mine, but yours. Despite your apparent views to the contrary, the people of Cochabamba are not stupid, nor are they misled. It may not be the public relations message you would like to project, but the facts speak for themselves: You came here to make a profit, agreeing to a contract that insured water rates far beyond what people could afford. You implemented those rates, provoking exactly the social eruption you anticipated. Even as people here died demanding that you leave you refused to go and hid behind the violent repression provided for you by your partners in the Bolivian government.

I assume your letter was intended to make you and your actions sound reasonable to a public audience. If you actually want to have your behavior be reasonable I encourage you to stop spinning misinformation, return what you have taken, reconcile your unpaid bills, and withdraw your demands for $12 million from those so ill-able to afford it. I will share this response publicly, as you have your letter to me.

Sincerely,

Jim Shultz
Executive Director
The Democracy Center
Cochabamba, Bolivia

RILEY BECHTEL SPEAKS ON HIS LEGAL CASE AGAINST BOLIVIA

After receiving more than 100 e-mails from all over the world calling on Bechtel to drop its legal action against Bolivia, Mr. Bechtel directed his public relations spokeswoman, Gail Apps, to respond. The letter contains documentably false and misleading claims about Bechtel’s water price hikes, described in detail in Jim Shultz’s response (also below).

Message from Bechtel, December 21, 2001

Thank you for your message. We cannot speak unilaterally for the seven different owners of the Aguas del Tunari consortium, but we want to respond to your note with some key facts. We also invite you to visit the Web site of International Water at www.iwltd.com <http://www.iwltd.com>.

The Bolivian government turned to Aguas del Tunari two years ago for its ability to effectively manage water and wastewater systems and to deliver capital for development. The need was obvious: Cochabamba's water systems were inadequate, unhealthful, and poorly run. The local utility had operated at a loss for years and provided ever-declining service. More than 40 percent of the population lacked water and sewage connections. The rates were inequitable -- higher-volume users (mostly the well-to-do) were paying the lowest unit costs.

Aguas del Tunari increased the water supply by 30 percent during its first two months of operation and persuaded the government to reverse the rate structure, so that those who used the least water would pay the least per unit. It was the government, however, that set the rates. It was also the government that insisted that those rates be increased to cover not only operating costs, but years of accumulated utility debt as well as certain unnecessary capital projects.

It is important to understand the difference between water rates (the unit rate paid for water) and water bills, which depend on the amount of water actually used. For the poorest people in Cochabamba rates went up little, barely 10 percent. This is in contrast to the figures of 200 or 300 percent that some have claimed. Unfortunately, water bills sometimes went up a lot more than rates. That's because as Aguas del Tunari improved service, increasing the hours of water service and the pressure at which it was delivered, people used a lot more water. Unfortunately, a campaign to inform residents of the changes and improvements to the service failed to prepare them for the shock of higher bills.

At the time the Cochabamba concession took effect Bolivia faced widespread political turmoil, including a nationwide crackdown on illegal coca production, police salary protests, and a controversial new national water law that had nothing to do with the concession. We are deeply saddened by the civil unrest that gripped much of Bolivia at that time, and the ensuing violence that occurred in Cochabamba.

Ever since the Bolivian government rescinded its concession contract last year, Aguas del Tunari has sought to negotiate a settlement while publicly reserving the option to pursue arbitration should negotiations with the government not be productive.

Aguas del Tunari applied in November 2001 for arbitration at the International Centre for Settlement of Investment Disputes. ICSID has jurisdiction over this dispute according to a bilateral investment treaty between Bolivia and the Netherlands, where International Water has been registered since 1999.

This action is not a lawsuit. Resolving this issue in an orderly way through an independent body such as ICSID preserves both the rule of law and the incentive for governments to honor agreements. Such a resolution would not only be fair to investors but would help maintain the ability of governments such as Bolivia's to attract foreign investment that can improve the quality of life for their citizens.

Regretably, since Aguas del Tunari's forced departure last year, Cochabamba returned to allocating inadequate and unclean supplies of water, leaving 4 out of 10 people to fend for themselves and pay water truckers 10 or 20 times as much as water distributed directly to homes in pipes.

THE DEMOCRACY CENTER RESPONSE TO BECHTEL

January 16, 2002

Mr. Riley Bechtel

Chairman And Ceo

Bechtel Enterprises

San Francisco, California

Dear Mr. Bechtel,

In December, when I wrote to you concerning your company’s legal actions against the people of Bolivia, I did so in good faith. I presumed you to be a gentleman of integrity who would be willing to engage those concerned in an honest discourse about the issues at hand. The response released on your behalf by your public relations department makes it clear that such is not the case. To the contrary, what is clear is that Bechtel Enterprises is hoping to deflect this mater with deliberately false and misleading statements about the facts at hand. To be clear, this is not a difference of interpretation. What Bechtel has done in this matter is provide both the public and the media with documentably false information.

On The Price Hikes Imposed by Bechtel’s Affiliate – Aguas Del Tunari

Here is what Ms. Gail Apps, your spokeswoman, claimed as fact, on your behalf, in a statement issued on January 3, 2002:

“For the poorest people in Cochabamba rates went up little, barely 10 percent.”

“Unfortunately, water bills sometimes went up a lot more than rates. That's because as Aguas del Tunari improved service, increasing the hours of water service and the pressure at which it was delivered, people used a lot more water.”

Enclosed you will find a detailed comparison analysis of water rates carried out by the current public water company, using the very same computer data that your company used to calculate its water rates and bills. You will also find annotated copies of actual water bills issued by your company at the start of 2000 which clearly show rate increases for the poorest families in Bolivia not of 10% but of 60% and in some cases much higher. In summary, this documentation demonstrates the following:

1) Based on the same identical rates of water consumption (not increases as you claim) your company raised rates for the very poorest families in Cochabamba, people living well-below minimum wage, by an average of, not 10%, but 43%. In the next category, families that are still poor, but perhaps earning a minimum wage, suffered rate increases of 40%. These are averages. In some cases the rates charged were even higher, much higher.

2) In clear examples, documented with the enclosed before-and-after water bills, these price hikes for individual families are made clear. Lucio Morales’ household, classified among the very poorest in Cochabamba, had his water bill raised from $4.15 to $6.63, a jump of 60% and a total bill amounting to more than 10% of the monthly minimum wage at the time. This increase was based on no change in water consumption. An identical price hike by your company is shown for the Jose Aramayo household, another classified as among the city’s poorest.

3) In direct conflict with your claims that the price hikes were the result of increased water use, enclosed are before-and-after water bills for the household of Mr. Saturnino Marin, in the category typical for families living at the minimum wage - less that $60 at the time. Your company raised his monthly rates from $14.75 to $21.96 (a leap of nearly 50%) even though his family’s water consumption actually decreased by 18%.

4) According to a computer analysis using your company’s own pricing data, your company’s forced departure from Bolivia and the restoration of the prior water rates saved the residents of Cochabamba saved more than $3.4 million in 2001, money left in the pockets of the families that live here instead of paid out to your Bolivian water subsidiary.

On Bechtel’s Ownership of Aguas del Tunari

Again, on your behalf, Ms. Apps seeks to mislead the press and public by minimizing Bechtel’s ownership role in Aguas del Tunari:

“We cannot speak for the seven different owners of the Aguas del Tunari consortium…”

Let us be clear then about the facts of Bechtel’s shell game in this matter. From the inception of the Bolivian water company through this day, the controlling, majority stakeholder in the company (with 55% of all shares) has been International Waters Limited (IWL) of London. That company, as you well know, was formed in 1996, wholly owned by Bechtel. During the time in which IWL was negotiating with the Bolivian government and in which it signed the contract to take over Cochabamba’s water in September 1999, IWL was also wholly-owned by Bechtel. That means that Bechtel, not some other company, is responsible for the debacle the company instigated here. That means that you, not some other CEO, must bear responsibility for it. To be clear even further, even though Bechtel sold 50% of its interest in IWL after its takeover of water in Bolivia, your company still retains 50% ownership in IWL. Translated, that means that no other single company or investor has a larger stake, even now, in Aguas del Tunari than you do. Pretending to just be a small minority shareholder is just one more exercise in trying to avoid the responsibility that Bechtel must bear.

The additional claims made on your behalf have no more credibility. The widespread public protests that occurred here in Cochabamba in January to April 2000 – in which police killed one youth and injured hundreds of others to protect your contract – were not about coca growing or police salaries, as you claim. They were about your water rates. Bechtel’s feigned concern for Bolivia’s water problems is no less transparent. If that concern were anything other than a cynical public relations ploy, Bechtel would not now be trying to squeeze from Bolivia’s poor $25 million you never invested, never earned and are not entitled to receive.

One of the most important ways in which individuals and corporations define their character is whether they tell the truth, and most especially whether they tell the truth when it is hard. Bechtel Enterprises, the company that bears your father’s name, has failed that test and failed it gravely. Be assured that your company’s willingness to falsify the facts in this matter will be shared appropriately with the International Center for Settlement of International Disputes (ICSID), the arbitration panel to which you have made your demand against the Bolivian people. If Bechtel Enterprises is willing to make such false claims in public, one can only wonder what it is wiling to claim in a closed-door arbitration.

If integrity is of any value to you and your company, I strongly urge you to drop your legal action against the Bolivian people and to issue, not a demand for money, but an apology for the suffering and damage your company’s presence has brought to the people and families who live here.

Sincerely,

Jim Shultz

Executive Director

The Democracy Center

Cochabamba, Bolivia