The Commission for Admission to the Constitutional Tribunal has accepted the legal demand for unconstitutionality made by social movements against six bilateral investment treaties (BITS) signed by Bolivia with Argentina, Holland, France, Great Britain, UK, Spain and USA, as well as the Convention for Settlement of Investment Disputes.

The social organizations, led by Congressmen Wilson Magne are challenging the laws which ratified these treaties, because in the case of disputes with the Bolivian State, they grant investors rights to a private and external justice system that is placed above Bolivian law.

The acceptance by the Commission said that Deputy Magne had complied with the general requirements for a demand by demonstrating reasonable arguments for constitutional jurisdiction. The Tribunal now has to examine in depth the legal demand, says the constitutional edict 006/2006, issued on 4 January 2006 and signed by Magistrates Willman Ruperto Durán Ribera, Martha Rojas Alvarez and Felipe Tredinnick Abasto.

The demand will now be presented to those responsible for the law, which in this case is the President of the Senate, who will shortly be Vice-President Elect, Alvaro Garcia Linera. He will have 15 days to respond to the demand. Based on the two opinions presented, the tribunal court will then deliberate and make a judgement as to whether signing BITS was unconstitutional.

The legal demand presented by the social movements is centred on a key principle in the Bolivian Constitution, which states that every company that operates in the country and has a dispute with the State has to refer to national law and tribunals to resolve the conflict.

Article 135 expressly states: “All companies established for extraction, operations or business in the country are considered national companies and are subject to the sovereignty, laws and authorities of the Republic.” Article 228 rules that: “The Political Constitution of the State is the Supreme Law in terms of national jurisdiction. All tribunals, judges and authorities will apply its principles above other laws or other resolutions.”

These constitutional mandates have been undermined by the signing of international treaties, which under the pretext of attracting investments, allows other authorities that are not are national to resolve controversies between foreign investors and the State. Brazil which has a similar constitutional provision has up to now followed a very different path by refusing to sign either the ICSID convention, or any BITS or any free trade agreement that grants these privileges to foreign investors.

When they signed the ICSID convention in 1994, the Bolivian authorities unconstitutionally accepted that controversies that took place in Bolivia could be resolved before an external tribunal.

Additionally, they opened the door to a situation where the country could be judged by external authorities in conditions completely opposed to the interests of the country and its sovereignty. For example, panels at ICSID are formed in the majority by members who are not Bolivians, and in some cases by judges who acted as lawyers for companies in previous cases, and who deliberate in sessions that are not public. The Bolivian executive should not have signed, and the legislative should not ratified treaties which contradict the Constitution says the legal demand presented by Deputy Magne.

The social movements are calling for the reversal of laws 1593 which ratified joining ICSID, and the annulment of laws 1594, 1586, 1535, 1132, 2360 and 1897 which legalize BITS signed with Argentina, Holland, France, UK, Spain and US respectively.

Bolivian campaigners pointed out that BITs are just one damaging element in a proposed free trade agreement between Andean countries and the US. Pablo Solón, speaking on behalf of the movement against TLC (Andean Free Trade Agreement) and ALCA (Free Trade Agreement of the Americas) said: “The proposed Andean Free Trade Treaty will see an expansion of multinational investor rights, beyond what is already present in BITs. When people talk about TLC as if it is only about market access, they forget about all the other chapters in the agreements which will undermine our sovereignty in areas of intellectual property, agriculture and public services.”

“A Free Trade Agreement with the US will see Bolivia facing even more litigation by multinationals. We hope this legal challenge will send a warning shot to Bolivia’s politicians about the dangers of a Free Trade Agreement to our sovereignty.”