Government must stop abuse of Bolivia investment treaty by Italian multinational

11 January 2008

Government must stop abuse of Bolivia investment treaty by Italian multinational

De SP is seeking to prevent the Netherlands being misused by an Italian telecoms corporation which is attempting to claim millions in compensation from one of South America's poorest countries, Bolivia. Eurotelecom Italia has established a 'postbox company' in the Netherlands – a sham corporation which in reality consists of nothing but an address from which mail can be forwarded – with the intention of taking advantage of an investment treaty between the Netherlands and Bolivia.

The Italian corporation is attempting to extract millions of euros from the Bolivian state as compensation for what it claims are losses resulting from changes in the country's policy on privatisation. A shadowy construction is being used to further a conflict between the Italians and the Bolivian telecom firm ENTEL, of which the Italian firm own 50% of the shares. The corporation is claiming damages for losses, using a 'postbox company' in the Netherlands, which unlike Italy has a bilateral investment treaty with Bolivia, in order to file a claim with the settlements commission of the World Bank's International Centre for the Settlement of Investment Disputes (ICSID).

Two SP members of Parliament, development specialist Ewout Irrgang and foreign affairs spokesman Harry van Bommel, today called on Secretary of State for Economic Affairs Frank Heemskerk and Development Minister Bert Koenders to take action to stop the abuse.

“This recalls the Cochabamba affair of 2002, when a consortium of multinationals lodged a massive damages claim following the reversal of water privatisation by the Bolivian state. Global resistance at that time prevented the multinationals from getting their way at ICSID. I've asked the Minister and Secretary of State if they don't see similarities in this affair. They must not give their permission for the Netherlands-Bolivia investment treaty to be abused in this way by Eurotelecom International. We don't want to see a repeat of Cochabamba.”

The SP sees this as a matter of urgency, moreover. Action must be taken before the Italian claim succeeds, making telecommunication services unaffordable to the Bolivian people, many of whom depend on them to keep in touch with family and friends working abroad.

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