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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):
mailto:[EMAIL PROTECTED],[EMAIL PROTECTED]
Please also "cc" us at: [EMAIL PROTECTED]
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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