The US multinational giant, Bechtel, has backed down after a major international campaign and dropped a legal suit for $50 million against Bolivia. Instead the Bolivian Government will pay only 2 Bolivianos (14 pence) to end the case.

Bechtel together with Abengoa from Spain took over Cochabamba’s water supply in September 1999 as a condition for World Bank aid and debt relief. The corporations’ formed Aguas del Tunari which decided to put up water rates by more than 50% and to expropriate communal water systems caused a huge popular revolt that forced Bechtel to flee. The water utility was returned to the public sector.

But Bechtel quickly took its revenge. They filed a legal suit for $50 million in a secretive trade court hosted by the World Bank called the International Centre for Settlement of Investment Disputes (ICSID). They sued not just for investments made, estimated at less than $1 million, but for anticipated future profits.

Their action of suing one of Latin America’s most impoverished nations caused an avalanche of international protest against Bechtel including thousands of emails, scores of protests outside their headquarters and international media coverage. Sources directly involved in the settlement suggest that Bechtel’s decision to eventually back down was a result of international citizen pressure.

Jim Shultz, one of the principal organisers of the international campaign against Bechtel said: “This is the first time that a major corporation has ever dropped a major international trade case such as this one as a direct result of global public pressure.”

He warned the oil and gas companies, such as British Gas that are threatening to sue Bolivia for changes in Bolivia’s hydrocarbons law that the case “signaled that [the Bolivian social movements and international citizen groups] are able to battle these cases, not just in the closed-door forums favored by corporations, but also in the larger forum of world public opinion.”