Water, National Sovereignty and Social Resistance: Bilateral Investment Treaties and the Struggles against Multinational Water Companies in Cochabamba and El Alto, Bolivia

Article excerpt


Over the last 20 years, bilateral investment agreements (BITs) have become an important part of the neoliberal 'free trade' agenda to open markets to foreign investment and protect the corporate 'right' to profit over the human right to water. Drawing on two case studies of urban water privatisation in Bolivia, this article argues that BITs act as conditioning frameworks that restrict the ability of governments to meet the demands of citizens for rights such as access to water. Recently, however, Bolivian social movements have launched successful resistance strategies and won important victories against neoliberal globalisation: two private water contracts with multinational corporations have been cancelled. This article analyzes the lessons learned from these two Bolivian cases for social movements elsewhere, especially the importance of international solidarity in pressuring multinational corporations to drop lawsuits.


Urban Water Supply Privatisation, Bilateral Investment Treaties, International Court for the Settlement of Investment Disputes, World Bank Group, Human Right to Water

1. Introduction

'They could never take away our right to water, because they could never take away our thirst.'

--Eduardo Galeano, Uruguayan writer and environmental activist In one of his last speeches to the nation on March 6, 2005, the soon-to-be-toppled President Carlos Mesa warned Bolivian citizens in a televised address that they could not exercise their democratic rights to decide the future of their nation's natural resources. Should the gas and water companies that were privatised be expropriated, Mesa warned, the Bolivian state would have to pay millions of dollars to the multinational corporation that had invested in Bolivia's privatised water, gas, and oil companies. Mesa's threat was not a hollow one. Indeed, over the last 20 years, neoliberal administrations in Latin America and elsewhere have slowly dismantled policies that provided a degree of national, democratic control over economic policy, creating legal mechanisms that entrench the corporate 'right' to property and profit in their place.

As the tide has turned against neoliberalism in Bolivia, these policies are being challenged by a powerful social movement that aims to return natural resources to public hands. The recent cycle of social protests was sparked by the victory of Bolivia's first 'Water War' of April 2000, when the local population of Cochabamba succeeded in throwing out the US-based multinational corporation, Bechtel, which had been granted control over the municipal water system only six months before. Over the next five years, protests proliferated and spread across the country, eventually succeeding in throwing out two Presidents within two years and pressuring the government to cancel the second private water contract in La Paz and its poor, satellite city El Alto. The election of Evo Morales, who campaigned on a promise to nationalize natural resources and reverse the damage to the nation's indigenous people wrought by over two decades of neoliberalism, is also one of the fruits of this struggle.

One of the many challenges facing President Morales and his government, however, is the legacy left by a series of neoliberal administrations which have entrenched the Bolivian state into series of binding agreements that protect foreign investors' rights to property and profit. More specifically, Bolivia is party to 24 bilateral investment treaties (BITs) that have helped to create an international legal system that seeks to create a world in which capital flows freely across borders while labour remains locked in place.

The purpose of this essay is to discuss the political effects of BITs and how they have been challenged by the Bolivian social movement for water justice fighting the corporate agenda of water privatisation. We argue that the international legal system of investor protection that has been created by BITs is fundamentally undemocratic in two basic respects. …