Daily Archives: November 26, 2011

Bolivian bilateral investment treaties

La Razon published yesterday interesting information regarding the existing differences among foreign public or private contracts with the Bolivian State. The settlement of differences is done at international forums like International Centre for Settlement of Investment Disputes (ICSID), the Tribunal in the Hague and the Chamber of Commerce of Paris and Stockholm, among others.

The chart above has the list of countries where Bolivia has signed treaties; the next column has the date of the signing and the last column is the date where it became effective. There is no information for Uruguay and Venezuela. This chart was produced by La Razon; the information source is from the Information System on Foreign Trade (SICE).

“There is a term to denounce these Bilateral Investment Treaties (BIT), but not to renegotiate them,” because “everyone has dates of validity, the diplomatic work has to be parallel”. However, “all (bits) are fit to be reviewed and subscribed again”, La Razón was informed by the Attorney General of the State, Hugo Montero.

PROCESS. The Attorney argued that the first reported BIT was signed with Italy and announced that there are in preparation similar measures with other countries. “The Foreign Ministry has begun this work with Italy and we will continue the work when appropriate”, said Montero.

The adoption of the free market model in Bolivia (1985) – private investment that gave a fundamental role in the economy, he recalled, allowed “to the World Bank (WB) the condition of a State, and by granting loans in exchange for the privatization of services and the subscription of BIT”.

These treaties “give private investment the full legal certainty to deprive our countries and suck our resources”, lamented Montero, yesterday during the first international meeting of procurators “Role of the Ibero-American Procurator and lines of mutual cooperation in the perspective of living well”.

Two completed trials

According to official information, Bolivia defused two of the 12 arbitrations that continue in international courts. The cases would be Rurelec and Swedfund.

Alba-Unasur would replace the ICSID in the region [you can take a look at ICSID’s website’s link below; and maybe have an opinion whether Alba-Unasur can be serious enough and have a long time future, presence or not. After all, both came to life not so long ago, mainly under the leadership of new populist governments]

The Attorney general of the State, Hugo Montero, proposed that the settlement of disputes between a public or private company from the region and the Bolivian State, should be carried out through an insert in the Alba-Unasur agreements system.

Although the international organizations were originally designed as impartial arbiters, institutions such as the ICSID twisted their purpose and were geared more towards protection of multinational companies, said the Attorney.

“The replacement of those bilateral investment treaties (bits) by a multilateral system inside Alba-Unasur for the treatment and solution of conflicts is more of a political fight than legal. Starts from the desire to jointly renegotiate all the bits and at the same time moving into a new system that is compatible with the development, protection of the environment and the recognition of social participation,” he said. [interesting approach, although social participation from country to country greatly differs; in our case it turns easily to anarchy or particular vested interests]

http://www.la-razon.com/version.php?ArticleId=141814&EditionId=2726

This is the link for ICSID:

http://icsid.worldbank.org/ICSID/Index.jsp