Bolivia news briefing (BIF)

Bolivia Information Forum, Link to briefing covering December 2012 to January 2013

1. Conflicting reports as TIPNIS consultation ends

Map shows planned route of road through the TIPNIS

Map shows planned route of road through the TIPNIS

The controversy over the proposed construction of a highway through the TIPNIS indigenous territory and national park looks set to continue after several reports into the recent consultation on the project offered very different conclusions.

According to the government, the communities consulted in TIPNIS strongly supported the development, with 80% in favour of the new road. Out of a total of 69 indigenous communities which participated in the consultation, only three expressed opposition, while eleven others boycotted the process itself. All but one of the communities rejected the current intangible status of TIPNIS, which impedes community development projects as well as the highway itself.

These findings were contradicted by the report on the consultation produced by a fifteen-member commission representing the Catholic Church, the Permanent Assembly of Human Rights in Bolivia (APDHB), and the International Federation for Human Rights (FIDH). The commission found that 30 of the 36 communities it visited rejected the project. Of the remainder, three were in favour of the highway, while another three only offered conditional support, and demanded further studies and a change to the proposed route. The commission also offered a number of strong criticisms of the consultation process conducted by the government. Its report concluded that the process had not met domestic and international standards on prior consultations, and said its integrity had been compromised by the promise of development and material goods for indigenous communities who supported the construction.

Rolando Villena, the Ombudsman, took an equally critical stance on the TIPNIS consultation, which he described as ‘authoritarian and colonialist’ as it had failed to respect the constitutional rights of indigenous communities. He also argued that the consultation process did not achieve the agreement between all parties required by the Plurinational Constitutional Tribunal, which would call into question its constitutionality.

However, the report of the Supreme Electoral Tribunal (TSE), which undertook the consultation on behalf of the government, formed the basis for  government findings on levels of support for the highway. Nonetheless, such support was usually dependent on various conditions, such as the requirement for a study into the environmental impact of the construction and changes to the proposed route. Other communities demanded investment in water and sanitation infrastructure.

An official report on the consultation by the Executive is still to be released, as are the findings of a mission sent by the Organisation of American States.

2. Corruption scandal hits MAS government 

The MAS government has been hit by a corruption scandal that has seen several leading officials arrested and accused of running an extortion ring. According to an official three-month investigation, the perpetrators demanded payment from prisoners in return for their freedom, most significantly in the case of US citizen Jacob Ostreicher, who was imprisoned without charge in 2011 over an alleged money-laundering scheme.

The ringleaders are said to be Fernando Rivera and Denis Rodas, senior legal advisors in the Interior Ministry. Findings accuse Rivera and Rodas of demanding US$50,000 from Ostreicher in return for his liberty, and of pressuring judges to ensure that Ostreicher remained in jail in Santa Cruz. The official report said that over 80 other allegations of extortion were made against a number of government and judicial figures. The initial seven arrests in November also included inspectors and officials from DIRCABI, the government body that manages goods confiscated from drug traffickers, and Jose Manuel Antezana, an official at the Ministry of the Presidency. Over the following weeks further high-level figures were implicated in the network, leading to the arrest of Boris Villegas, former head of Internal Affairs at the Interior Ministry, while two Santa Cruz magistrates connected to the Ostreicher case have been suspended from their positions pending further investigation.

Several current ministers have been called upon to give evidence in the case, including Carlos Romero, Interior Minister, Juan Ramon Quintana, Minister of the Presidency, and Nardi Suxo, Minister for Transparency. Allegations that implicated Suxo were strongly denied by the minister. The Bolivian ambassador to the UN, Sacha Llorenti, who was previously Interior Minister, also gave evidence to prosecutors.

The case has taken on international dimensions with actor Sean Penn acting on behalf of Ostreicher.

3. Spanish electricity companies nationalised 

Electric grid nationalization in 2012 (Credit: Fernando Cartagena, La Razón)

Electric grid nationalization in 2012 (Credit: Fernando Cartagena, La Razón)

The Bolivian government is negotiating a compensation package with Spanish energy giant Iberdrola after it nationalised four electricity distribution and service companies belonging to the firm. President Morales said he had taken action to ensure equitable electricity tariffs in La Paz and Oruro departments, and to establish a uniform quality of service for rural and urban areas. Since 2006, the MAS government has nationalised companies in a number of different industrial sectors, including telecommunications, hydrocarbons and mining.

Until the nationalisations, Iberdrola owned Empresa de Electricidad de La Paz (Electropaz), and Empresa de Luz y Fuerza de Oruro (Elfeo), which supplied electricity to over half a million customers in the two departments. The government also took charge of two companies that provided services to Electropaz and Elfeo, and deployed around 700 police officers to occupy offices and installations in both Oruro and La Paz.

Vice-President Garcia Linera said that the government would pay a fair price for the companies, which would be valued by an independent consultancy appointed by the state electricity company, ENDE. According to the presidential decree that sanctioned the nationalisation, compensation will be paid within six months. The Spanish government had expressed its regret at the ‘unexpected’ nationalisation, while the European Commission suggested it sent a negative signal to the global business community.

However, Iberdrola described an initial meeting with Bolivian officials in La Paz as ‘very satisfactory’, with the Spanish firm ruling out international arbitration. This stands in contrast to Red Electrica, a Spanish power grid operator which is seeking arbitration by the World Bank following the nationalisation of its assets by the MAS government in May 2012.

4. Karachipampa smelting plant opened after 28 years lying dormant

After 28 years of inactivity, the Karachipampa smelting plant, located just outside the city of Potosí has been opened by Comibol, the Bolivian state mining enterprise. The furnaces were ignited at an opening ceremony during which President Evo Morales urged the local authorities to support the project, as the re-activation of the plant has been a central demand of the Civic Committee of Potosí (COMCIPO) for several years (see BIF Bulletin No. 16).

Karachipampa was constructed during the 1980s, but despite nearly US$200 million being invested by the government of the time, the plant never became operational. In 2005 a joint-venture contract was signed between Comibol and the Canadian mining firm Atlas Precious Metals (APM) to develop Karachipampa, but this was terminated in 2010 after the government accused APM of failing to demonstrate its commitment to the project.

The plant will have a processing capacity of up 51,000 tonnes of concentrate, and will smelt lead, zinc, silver and gold, amongst other minerals. It currently has around 250 workers, a figure expected to rise to 400 once the plant is fully operational. According to Mario Virreira, minister for mining, Karachipampa will bring in around US$50 million per year once it reaches its production capacity. The government hopes that the re-opened plant will be central to the development of the Potosí region.

5. Evo Morales announces 13-point agenda for 2025 Bicentenary 

President Evo Morales (credit: Dario Kenner)

President Evo Morales (credit: Dario Kenner)

During a speech to mark the third anniversary of the Plurinational State, President Morales set out thirteen key challenges to be met in time for Bolivia’s bicentenary celebrations in August 2025.

According to Morales, the first of these is to eradicate extreme poverty, which he described as ‘an insult to the country’. He hoped this would be achieved in part by meeting the second goal, which is to ensure universal basic services such as drinking water, sewerage, electricity, gas and telecommunications. Such services, Morales reminded his audience, were enshrined as human rights in the constitution and must not be privatized. The third fundamental challenge for Bolivia was to improve the provision of education and health services to the population.

The president’s agenda for 2025 also included gaining sovereignty in a number of key areas, including natural resources and food production ‘in harmony with Mother Earth’.  Morales also stressed the need to promote the development of science and technology in the country, stating that Bolivia ‘has to be an innovating country, breaking the chains of dependency’. Other goals include transparency in public service, under the principles of ‘not stealing, not lying, and not being lazy’, and the enjoyment of Bolivian music, festivals, and natural landscapes. Last but not least, according to Morales, was the goal of gaining access to the sea.

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