Bechtel Group Inc. has a long history of profiting at the expense of people and the environment. Bechtel is involved in troubling operations in the water, nuclear, energy and public works sector. Their track record documents a trail of environmental destruction, disregard for human rights and financial mismanagement of projects that have affected communities all over the world. The several multi-million-dollar contracts awarded by the U.S. government to reconstruct devastated Iraq covers key elements of that country’s infrastructure, including water and wastewater systems. These contracts do not bode well for the people of Iraq.

In Bolivia, South America’s poorest country, angry residents in Cochabamba kicked out Bechtel in 2000 after eight months of highly problematic service and severe rate increases which left people unable to pay for water. Licking its wounds, Bechtel filed a $50 million lawsuit (for claims of lost future profits) against the government of Bolivia in the World Bank court called ICSID (International Centre for the Settlement of Investment Disputes). Bechtel had made investments for less than $1 million. The case was settled in 2005 giving a significant breakthrough in a court where the corporations usually win. Faced with protests, barrages of e-mails, visits to their homes, and years of damaging press, Bechtel executives finally decided to surrender, walking away with a token payment equal to thirty cents. This retreat sets a very important global precedent. The international support from activists like you has helped to make this victory possible!

Bechtel v. Bolivia

U.S. Corporation Demanded $50 million After Provoking Social Unrest

In the late 1990s, the World Bank forced Bolivia to privatize the public water system of its third-largest city, Cochabamba, by threatening to withhold debt relief and other development assistance. In a process with just one bidder, U.S.-based Bechtel was granted a 40-year lease to take over Cochabamba’s water through a subsidiary called Aguas del Tunari.

Within weeks of taking over the water system, Aguas del Tunari imposed rate hikes on local water users of more than 50 percent on average, according to the Cochabamba-based Democracy Center. Families living on the local minimum wage of $60 per month were billed up to 25 percent of their monthly income. The rate hikes sparked massive citywide protests that the Bolivian government sought to end by declaring a state of martial law and deploying thousands of soldiers and police. More than a hundred people were injured and one 17-year-old boy was killed. In April 2000, as anti-Bechtel protests continued to grow, the company’s managers abandoned the project after the government warned that it could not guarantee their safety.

Aguas del Tunari retaliated by filing an ICSID claim for compensation and lost profits under a Dutch-Bolivia bilateral investment treaty. At the time there was no such pact between the United States and Bolivia, and so although Bechtel is a U.S. corporation, it established a post office box presence in the Netherlands. Even the Dutch government was ambivalent about whether the corporate shell created by Bechtel should be entitled to take advantage of the treaty, but the ICSID tribunal accepted jurisdiction anyway.

Bolivian “Water Warriors” joined forces with supporters in the United States and elsewhere to pressure Bechtel to drop the lawsuit. In San Francisco, activists occupied the lobby of the corporate headquarters, while the City Council passed a resolution criticizing the company’s legal action. Earth Justice, along with a Center for International Environmental
Law and Friends of the Earth, drafted a legal petition on behalf of Bolivian civil society leaders demanding that they be allowed to participate in the lawsuit proceedings. The Democracy Center helped organize a sophisticated international media strategy and, along with the Institute for Policy Studies, helped coordinate a citizen sign-on letter in support of the legal petition that was endorsed by people in more than 40 countries.

Click here to learn more about Bechtel’s demand for $50 million in compensation after it raised water rates and provoked social unrest.

Read More

• Read the corporate profile on Bechtel.
• Check out the briefing paper, Bechtel vs. Bolivia, in which the people win an international trade battle.

• Read the report, Bechtel's Dry Run: Iraqis Suffer Water Crisis.