SP Development Spokesman joins Bolivia investment treaty protest

25 January 2008

SP Development Spokesman joins Bolivia investment treaty protest

SP Member of Parliament Ewout Irrgang took part this morning in a protest meeting outside the Ministry of Economic Affairs against an Italian telecommunications corporation which is demanding millions of euros in compensation from Bolivia, one of Latin America's poorest countries. Eurotelecom Italia is attempting, by establishing a 'postbox company' in the Netherlands, to use the Netherlands-Bolivia investment treaty as a basis for the claim. Following the protest, Irrgang met with the Bolivian ambassador to the Netherlands to discuss the matter.

The Italian corporation is demanding millions of euros in compensation for losses incurred as a result of Bolivia's change of policy on privatisation. The conflict surrounds a shadowy construction used in a dispute over the Bolivian telecom firm ENTEL, of which Eurotelecom Italia owns 50% of the shares. In order to make the claim, a company was established in the Netherlands which was in reality no more than a postbox. The aim was to enable recourse to an investment treaty between the Netherlands and Bolivia, a treaty which facilitates taking actions to the World Bank's International Centre for Settlement of Investment Disputes (ICSID). Irrgang, together with SP foreign affairs spokesman Harry van Bommel, recently put questions to the government on the matter, but the two MPs have yet to receive an answer.

During his afternoon meeting with Bolivian ambassador Roberto Calzadilla Sarmiento, Irrgang discussed the new government's policy on privatisation which provoked the Italian firm's action. Reversal of previous administration's privatisation policies has already resulted, in the case of natural gas production, in a more than six-fold increase in income to the state, money which can be used to address extreme poverty in Bolivia.

The two men also talked about the Netherlands' involvement in Eurotelecom Italia's claim. Bolivia has recently withdrawn from ICSID, the ambassador explaining that while Bolivia was not opposed to such arbitration, it had found ICSID to be biased and wanted to establish an alternative system under its investment treaty.

“The Netherlands gives Bolivia around €30 million a year,” said Irrgang. “It would be counterproductive if at the same time we allow foreign multinationals to use a Dutch postbox to claim damages against the country for its deprivatisation policies.”

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