Home » Uncategorized » Economic Globalization vs. Human Rights: Lessons From The Bolivian Water Revolt

Water is a limited natural resource and a public good fundamental for life and health. The human right to water is indispensable for leading a life in human dignity. Water, and water facilities and services, must be affordable for all.

–UN Committee On Economic, Social and Cultural Rights, November 2002

For more than half a century the world has been involved in the noble effort to establish human rights as a matter of international law. In accords such as the Universal Declaration of Human Rights, the International Covenant on Economic Social and Cultural Rights, the Convention on the Rights of the Child, and others, nations have agreed that our basic human dignities include not only civil and political protections (against torture, unfair jailings, and the like) but also economic, social and cultural rights. Among these are the right to food, shelter, health, education and, very clearly, the right to water.

At the same time, however, a very different set of global rules is under construction, aimed at binding the people of the world to a collection of economic policies that often violate human rights. These rules can be found in international trade accords such as the World Trade Organization (WTO), the North American Free Trade Area (NAFTA), the proposed Free Trade Area of the Americas (FTAA), and in the economic commands issued to poor countries by international financial institutions such as the World Bank and the International Monetary Fund (IMF).

The Bechtel Corporation’s 2000 takeover of the public water system of Cochabamba, Bolivia and the civic revolt that ended it, in addition to being an inspiring story of local people taking courageous action, is also a cautionary tale of how global economic rules have the power to reduce international human rights law into nothing but pretty words on paper.

A Deliberate Step Backwards in the Right to Affordable Water

International human rights law recognizes that nations, especially the poorest, are not going to bring economic, cultural and social rights to life overnight. Human rights law lays out a path toward the securing of those rights known as “progressive realization”. Governments are required to have a clear plan for moving forward on these rights and are expressly prohibited from taking any “deliberate steps backwards”.

By any definition imaginable, the privatization of Cochabamba’s water was a deliberate step backwards in making water affordable for the city’s poorest people. The Bechtel Corporation, after taking over the water system, increased water prices for the poorest by 40%-50%, and in some cases by more than double. Families were literally forced to choose between feeding their children or paying their water bills. By forcing this “step backwards” in making water affordable, Bechtel, the Bolivian government, and the World Bank, the three main actors in the water debacle, each acted in a way that contributed to the violation of international human rights law.

Three Actors: Bechtel, the Bolivian Government, and the World Bank

The Bechtel Corporation violated Bolivians’ human right to affordable water explicitly by raising prices far beyond what poor families could ever afford. They did this in part to finance an enormous 16% profit rate which the corporation managed to include in its 40 year contract. The Bolivian government violated its people’s economic right to affordable water when it negotiated and signed the Bechtel contract and approved the giant water price hikes. Later, when the Bechtel contract came under fire, the government violated its people’s basic political and civil rights. When Bolivians sought to exercise their right to peacefully assemble the government sent armed troops into the streets to break the protests. More than 170 people were injured and one 17 year old boy, Victor Hugo Daza, was shot in the face and killed. Protest leaders were arrested in their homes in the middle of the night and flown to a remote jail in Bolivia’s jungle. In the era of economic globalization, these are the lengths to which poor governments feel compelled to go in order to protect the interests of foreign corporations.

The World Bank implicitly violated Cochabambinos’ right to affordable water by coercing Bolivia into water privatization to begin with (though the Bank argues that it opposed the ultimate deal because it included a dam project that the Bank did not favor). In 1996 Bank officials told Cochabamba’s mayor that privatization of the city’s water was a condition of assistance for water development. In 1997 Bank officials told the Bolivian President that privatizing Cochabamba’s water was a condition of the country receiving $600 million in international debt relief.

Did the Bank push for privatization knowing the dramatic effect that it would have on prices for the poor? If it didn’t it should have. Corporations do not come to poor countries like Bolivia to provide charity. They come to seek a profit (and in Bechtel’s case an excessively high one). Bolivia’s government was notoriously both incapable and uninterested in negotiating a deal that would protect the poor and it was no surprise when the contract signed by the government failed to do so. The World Bank only made matters worse in 1999 when it told the government, in the midst of its negotiations with Bechtel, “no public subsidies should be given to ameliorate the increase in water tariffs in Cochabamba,” a policy that virtually guaranteed higher rates for the poor. In short, the World Bank backed Bolivia into a corner where dramatically higher water prices and a violation of the right to water was a predictable result.

Today these same three actors are engaged in a new dance with one another that could once again threaten the right to affordable water in Cochabamba. Bechtel is suing the government of Bolivia for $25 million, a portion of the profit the corporation had hoped to make and didn’t. The case is being heard by a secret trade court operated by the World Bank (the International Centre for the Settlement of Investment Disputes). The process is so secret that no members of the public or media are permitted to attend, or even to know when meetings are held, where, who testifies or what they say. If the Bank panel grants Bechtel’s demand, those costs will fall directly on Cochabamba water users, forcing a dramatic increase in water prices once again.

Economic Globalization vs. Human Rights – Shifting the Balance

For poor governments, faced with a choice between honoring human rights accords or complying with the commands of international economic institutions, the choice is sadly clear. If they violate human rights, governments may face complaints or at worst international investigation. In contrast, the World Bank and IMF can cutoff millions of dollars in aid. Decisions by international trade courts can extract hard cash. Such actions reduce the resources that governments have available to fulfill the economic human rights of their people. In Bolivia, under pressure from the World Bank and Bechtel, the government probably never gave the human right to affordable water a second thought.

To be clear, even if outgunned by economic accords and World Bank/IMF commands, international human rights accords are vital. They give profound global legitimacy to the inherent belief that all human beings are endowed by birth with certain fundamental rights. However, the real defense of those rights lies not with legal process, but with the willingness of people and communities to take action to demand those rights.

The Bolivian water revolt captured world attention as a tale of a humble people rising powerfully to win back their right to water. To do so they faced down soldiers, bullets, tear gas, a declaration of martial law, and one of the most powerful corporations in the world. It is, however, also a powerful tale of how the citizen defense of human rights went global, something that will become even more crucial as these rights come under increasing pressure from the countervailing winds of economic globalization.

In the early months of 2000, when Bechtel took over Cochabamba’s water system, the Democracy Center sent news of the events in Bolivia worldwide through its e-mail newsletter. These dispatches were then published in newspapers and magazines across the US, Canada and in the UK. Project Censored named the Center’s reporting top story of the year and these articles inspired additional reporting by major media such as the New Yorker, PBS and the BBC.

The next task was to investigate and expose the role of the two main international actors that had pushed Bolivia into the crisis – the Bechtel Corporation and the World Bank. Bechtel, the California engineering giant, had come to Bolivia under an assumed name, Aguas del Tunari. Few people anywhere knew that it was actually Bechtel that owned a 55% controlling interest in the Cochabamba water company. The Democracy Center researched the Bechtel/Bolivia connection and publicized it worldwide, furnishing our readers with the personal e-mail of Bechtel’s CEO, Riley Bechtel. Within hours he received hundreds of messages from all over the world demanding his company’s withdrawal from Bolivia.

We also documented the role of the World Bank in coercing Bolivia to privatize its water. The Cochabamba water protests took place during the same week that thousands of people in the US were preparing to travel to Washington, for protests against World Bank and IMF economic policies. As the Democracy Center’s dispatches spread, the water revolt quickly became a popular example of the effects of the World Bank’s push for privatizing water and other services. Days after the water revolt ended its most visible leader, Oscar Olivera, was invited to Washington, retelling the Cochabamba story to thousands of people.

The world does need rules to protect human rights and also to guide the actions of the new global economy. The issue is what will those rules value most – the right of the poor to water they can afford, or the right of a corporation to maximize its return on investment – human rights or investor rights? The answer to that question lies in our willingness and our effectiveness to demand that human rights come first. The Cochabamba water revolt provides a model for how we can do that, a combination of street pressure, solid analysis, and creative strategies for removing the anonymity of the corporations and institutions responsible, and for making a local issue into an international story.

“Many people say it is impossible to fight against these policies,” says Leny Olivera, a Cochabamba university student who was actively involved in the water protests. “But we showed that you can, not just in Bolivia but in the world. The humble people are the majority and are more powerful than multinational corporations.” Bolivia, that little-thought-of country in the Andes gives us an inspiration about what is possible.

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Jim Shultz is the executive director of the Democracy Center (www.democracyctr.org) in Cochabamba, Bolivia and author of The Democracy Owners’ Manual from Rutgers University Press.