Marco Chuquimia reports for El Deber:
THERE ARE APPROACHES WITH FOUR COMPANIES
Bolivia has eight arbitration for more than $687 million dollars
Analysts say that nationalization of the past pass bill on low foreign oil investment. The Attorney General’s Office hired foreign advisers for the trials.
The processes of international arbitration and investment facing Bolivia in foreign courts reaches eight, for a total of $687.6 million dollars, claiming that presented the demands to those arbitral bodies and enterprises that are consequence of nationalization and reversal of actions dating back to 2004.
According to the report of the Attorney general of the State, Hugo Montero, Guaracachi America Inc. and Rurelec Plc companies; Quiborax S.A. & Non Metallic Minerals; Abertis Infraestructuras SA; Pan American Energy LLC; Mallku Khota; Iberdrola; International electrical network and the Consortium BP Global Investments Ltd., BP International Limited and BP Asia Pacific Holdings Ltd are the eight companies that have arbitral proceedings against the Bolivian State as of October 14 .
Although in its report, Montero details are 13 prosecutions in total which he is responsible for, he explains that eight are “investment arbitration processes”, which are the listed companies.
Those who keep the processes, publicly declared the capital, which they invested and that framework establishes that Guaracachi America Inc. and Rurelec Plc ask altogether, $142 million; Quiborax S.A. & Non Metallic Minerals calculated investments in $40 million; Abertis Infraestructuras SA requires a million; Pan American Energy LLC asks $233 million; Mallku Khota, $25 million; Electric international, $91 million network; the Consortium BP Global Investments Ltd., BP International Limited and BP Asia Pacific Holdings Ltd, in total $30 million; finally the Spanish Iberdrola, which estimated its losses at $125.6 million; the sum of all these demands reach $687.6 million that, if lost at the arbitration, the Bolivian State will have to pay.
Separately, energy analysts agree that those nationalizations following negotiation will pass the invoice to Bolivia and is reflected in the low level of investment which companies do in the country.
Analyst Álvaro Ríos said that the absence of clear legal rules relegated foreign investment; while Carlos Miranda was harder and said that to attract foreign investment is required to change the Bolivian Constitution
1. According to the plan of operations of YPFB, nine foreign companies operating in the country will invest $812.2 million by 2013.
2. The PGE says there are conciliatory approaches with the companies: Iberdrola, mains, Global BP and Pan American Energy.
3 Dechert LLP and Gomm & Smith P.A. are the law firms who, in turn, the Government hired.
POINT OF VIEW
“The image of the country is affected” – Jorge Asbun Rojas – Constitutionalist
Alternative dispute solution mechanisms, as chosen by the companies that have been nationalized in various fields in the country, have gone to conciliation centers because, it is so permitted under the agreements signed by the Bolivian Government and companies that have exercised their right. This means that in the dispute decision, the resolution of the conflict is in the hands of the ICSID or another international agency.
Indeed, this has its cost. The image of the country is affected by the action of hostile decision of those companies; this is the moment of a breakdown of the relationship.
Conceptually, arbitration is short-term. In Bolivia, an arbitration lasts six months; in the ICSID may take more time, it may be two to three years, but this depends on that the parties will not suspending deadlines. I believe that investments are affected by how the Government treats companies.
Bottom line: unlike our neighbors we are unable to attract foreign investment, thus, generate long-term employment and reliable revenues to fight narcotraffick, corruption and poverty in Bolivia. The ruling ochlocracy is wasting the best time ever we had to generate sustainable development.