THE
DEMOCRACY CENTER ON-LINE
" BECHTEL CORP. VS. BOLIVIA’S POOR "
Volume 41 - December 18, 2001
Dear Readers:
This holiday season many of us will once again see or read Charles Dickens’
“A Christmas Carol” and the tale of that symbol of selfishness
and greed – Scrooge. Below is the tale of a real-life, modern day
Scrooge – Bechtel Enterprises. Most of you will remember that two
years ago a Bechtel subsidiary took over control of the water system
here in Cochabamba. The company doubled and tripled water rates for
the poor and was finally forced to leave after a wave of protests that
left a 17-year-old boy dead and hundreds of others injured. Well, the
Scrooges at Bechtel are back for more. Last month the company initiated
a $25 million legal action against the people of Bolivia for what it
says are its losses from the Bolivian water revolt.
Below is
a letter which I am sending today to Mr. Riley Bechtel, the company’s
chief owner and CEO. I hope you will read it and pass it along. If you
feel moved to let Mr. Bechtel (and his public relations department)
know how you feel about the corporation’s latest action against
the poor of Bolivia, you can send him a quick note yourself at (just
click on the link below):
rbechtel@bechtel.com,
news@bechtel.com
Please also “cc” us at: info@democracyctr.org
Happy holidays to all!
Jim Shultz
The Democracy Center
An Open Letter To Mr. Riley Bechtel
CEO, Bechtel Enterprises
Dear
Mr. Bechtel,
Having heard from your public relations
department I have decided to write to you directly, from Cochabamba,
Bolivia, a city you know well. It was here two years ago that a Bechtel
subsidiary took over the public water system and, within weeks, doubled
and tripled water rates for some of the poorest families in South America.
Your company ordered mothers living on minimum wage of $60 per month
to pay $15 or more just to keep water running out of the tap. Faced,
quite literally, with a choice between water or food, people took to
the streets to demand that rates be lowered. Your company refused. The
Bolivian government sent soldiers into the streets to defend your contract.
A 17 year old, Victor Hugo Daza, was shot in the face and killed. More
than a hundred others were seriously wounded. I was there. I saw it
happen.
In the end, in April 2000, your company left. It had to. The protests and the government’s violent response wouldn’t end until you were gone. Your subordinates didn’t leave empty handed. They took the hard drives from the computers, the cash left in the company’s accounts, and sensitive personnel files from before their time. They also left behind an unpaid electric bill for $90,000. Now your company says it wants more. Last month you filed a demand of $25 million against the Bolivian people. Your lawyers are claiming as losses the millions of dollars in potential profits you had hoped to make and weren’t allowed to.
I understand
that, overlooking the glorious San Francisco Bay from your Beale Street
headquarters, you have a different perspective. Your company paid lawyers
some large, undisclosed sum to set up a company in the Cayman Islands
and then to represent you in a behind-closed-doors, one-bidder competition.
You then paid some water managers from England to come here and run
things. They served you more poorly than you can imagine, creating a
social crisis so severe that your company was forced to leave. Now Bechtel
and its affiliates want cash.
Imagine, if you will, how the situation appears to the Bolivians who
experienced it directly. Your company came here, charged people rates
they could never afford and which your company knew in advance would
create just the sort of violent convulsions that it did. As one of your
associates euphemistically said to me in a letter, “a rapid increase
[in water prices] would be difficult socially.” When asked reasonably
to lower rates, your company refused. When those rates sent the entire
city into a violent crisis, your managers hid out in a five star hotel,
content to let soldiers fire live rounds at those protesting your presence
here. Now, after all the death, harm and suffering it has already caused
here, Bechtel has the arrogance to add on to that a claim of financial
damages against these same people.
Few here
doubt that Bechtel is capable, through legal trickery and firepower,
of squeezing millions of dollars out of the Bolivian treasury. Once
again, you will sit down behind closed doors with Bolivian government
officials, this time in a World Bank-sponsored arbitration. The government
here has budgeted $50,000 to hire U.S. lawyers to represent them, probably
not quite what you have at your disposal. The Bolivian President, desperate
to look friendly to foreign investment, will be eager to write your
company a check and bring things to an end. Your losses, however you
may calculate them, are numbers on a ledger. Mrs. Daza’s loss is
buried in a cemetery. No one will be representing her in your arbitrations.
For Bechtel, with revenues of more than $14 billion annually, $25 million
is what you take in before lunch on any given workday. What does your
legal action mean for the people of Bolivia, for the families that already
suffered so deeply once because of Bechtel’s involvement in their
lives? Here in Bolivia $25 million is the annual cost to hire 3,000
rural doctors, 12,000 public school teachers, or hooking up 125,000
families who don’t have access to the public water system. Which
of these are you suggesting Bolivia should do without in order to pay
you?
Your public
relations department denies Bechtel responsibility in this matter, claiming
that you are only a minority shareholder in the subsidiary that did
business here. That is convenient. The whole company is owned by minority
shareholders. Bechtel, however, is the largest among them. Surely, one
of the most important lessons that we, as parents, try to teach our
children is about taking responsibility for our actions. Corporations
should be held to no less a standard. If the buck does not stop with
you Mr. Bechtel, the head of the corporation with the largest stake,
then who is responsible?
So, you have a choice. You can direct your public relations staff to
make glib statements about fairness, while your lawyers take aim at
Bolivia’s poor, or you can do something extraordinary. You can
decide that the Bechtel has already done enough damage here and you
can rescind your demand and your legal action. You could even do so
on condition that the Bolivian government agrees to dedicate that $25
million to directly serving the poor. From out my window, Mr. Bechtel,
I see the old man who has been bent over building a new street curb
all week. He couldn’t afford to pay your water rates and now he
and his children can’t afford to pay your demand for compensation.
Your corporate mission statement declares Bechtel’s commitment
to work with communities, “to help improve the standard of living
and the quality of life.” In Bolivia, by any definition imaginable,
Bechtel has failed that standard miserably. The decision is yours as
to whether to repeat that mistake again.
Sincerely,
Jim Shultz
Cochabamba, Bolivia
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