Imminent Risk of Additional Blood Shed in Bolivia Due to the Imposition of a Business Deal with Bolivian Gas.

Currently, Bolivia is experiencing many social conflicts that could easily be aggravated in the following days and whose possible consequences are unpredictable. (see annex: "Demandas Sociales" from October 3, 2003)

The conflict's central point is that the majority of the Bolivian public and it's social organizations are conscious that gas, as important national resource, has been removed from their power; and that the new mega-project, Pacific LNG, is a multi-million dollar business that favors multi-national corporations.

This project predicts that 7 trillion cubic feet of natural gas will be marketed (primarily to Chile) in the next 20 years. The current business conditions will result in a loss of $4500 million for Bolivia, meanwhile the consortium Pacific LNG, composed of North American SEMPRA Energy (subsidiary of ENRON), the English's British Petroleum and British GAS, and the Spanish REPSOL, will take 95% of the project's earnings. The consortium carries no risk and works with the support of the rulers in the World Bank and IMF.

In the middle of a growing economic crisis and alarming poverty - reflected by the last edition of the UNDP Human Index Report that says 75% of the Bolivian population endures extreme conditions of poverty--the Bolivian population looks to defend its Hyrdorcarbons. It is privatization policies imposed by the current president, Sánchez de Lozada, since his first term in 1996, which have removed from the Bolivian population their property rights over natural resources, and in turn favoring the transnational oil corporations while worsening poverty in the country.

Few times in Bolivia's history has such indignation and protest been seen in the streets, towns and countryside. Men and women, Farmers, miners, factory workers, artisans, indigenous, state employees, teachers, university students, bus drivers, neighborhood organizers, professionals, merchants, senior citizens, butchers, bakers and many other sectors all have united their efforts in order to protest against this new and unjust economic aggression in the poorest country of the Southern Cone.

Within this framework, we, the below signatories and representatives of the social organizations listed at the end of this document, ask that the international community diffuse and denounce the following:

Sánchez de Lozada, in his last term, integrally changed the Hydrocarbons Law in April of 1996. Also just prior to his departure from the presidential office in 1997, he imposed the Supreme Decree 24806 that placed control of hydrocarbon ownership into the hands of the State. This event violates the State's Political Constitution, which inalienably recognizes hydrocarbon ownership to the Bolivian population.

Currently, the Bolivian population is suffering from the unlucky consequences of privatization policies:

1. Already we are Not the Owners of our Energy Resources.

Bolivia lost property rights over gas and petroleum, including the calculated reserves worth more than $100,000. We have only received "investment promises" in exchange for the following prices: one barrel filled with petroleum is $29 and every thousand cubic feet of gas (see source: H. Muller 2002)

With the new legal framework regarding of hydrocarbons, we, the Bolivians, will loose $100,000 million in the next years, and already have lost the ownership of our resources, and have returned to the position of TRIBUTARY for multi-national corporate oil wealth.

2. We pay International Prices for our own Hydrocarbons.

Before 1996, prices were calculated according to the costs of national production. Now we buy from multi-nationals to support our own consumption, "our" gas and petroleum is now pried at the high oil rates in the United States, as if we as a nation were importing hydrocarbons. While the costs of production (including internal transport) per barrel of petroleum does not exceed $7. Currently, the Bolivian State recognizes to the oil producers a price of $29 per barrel of petroleum.

3. Reduction of the Duty Tax.

With the new Hydrocarbons Law, currently more than 95% of the hydrocarbon fields in Bolivia have been declared illegally, "new fields", and the businesses that exploit those fields, only pay a small tax to the state ofF 18% over the value of crude extraction (duty tax that is among the world's lowest). This situation generated a drastic reduction in the Bolivian State's income, which prior to this new law was receiving a total of 50% of its revenue through taxes, a large part of which came from foreign businesses.

Before the New Hydrocarbon Law and the privatization (poorly referred to as "capitalization") of the hydrocarbon, the sector annually generated an average of $350 million. In recent years, 26 multi-national oil companies that have operated in the country have left an average of $120 million per year (including the exportations of gas to Brazil since 1999).

4. The Project "Pacific LNG" is a Multi-million Dollar Failure for Bolivia.

This project--rejected by the majority of Bolivians-- the government reports, is planning to "export 7 trillion cubic feet of gas in 20 years at the approximate rate of $0.70 per thousand cubic feet of crude oil extraction. The gas leaves the south of Bolivia from Tarija (from Margarita's private property) for the United States, via through Chilean pipeline and shipped by sea to Mexico."

Nevertheless, according to serious national and international studies, the gas from the Tarijeño field will have Chile as its principle market, which desperately needs Bolivian gas and where Pacific LNG already has executed international business by importing natural gas from Argentina. This example illustrates that the integral actors of this consortium (SEMPRA, REPSOL, BRITISH GAS, etc.) would be in charge of industrializing and distributing gas and thermoelectric energy to all Chile, and in turn generate multimillion-dollar earnings. Consequently, the discourse of "gas for United States" only serves to lower the price of gas in crude extraction and decrease the pretext of the far-away destiny of "our" gas.

Under the current Hydrocarbon Law, multinational earnings in this gigantic project will produce approximately $1000 millions every year, whereas according to Edward Miller, president of British Gas in Bolivia, the income for Bolivia from this project will not will not pass $50 million per year. According to previous government data from Tuto Quiroga's administration, a report states that, "State Policy about the use of Natural Gas" (see annex 2), calculates a tax of only 18% over the extraordinary low extraction tax (some $0.70 per thousand cubic feet of gas--the lowest price in the region).

This large business of exporting gas to Chile, now in the hands of the multinationals, could have benefited Bolivians if Sánchez de Lozada had not privatized hydrocarbons. Prior to 1994, before privatization and the new Hydrocarbon Law, there existed already a Letter of Intentions for selling 5 trillion cubic feet of gas to Chile. This sale, using the current prices that Chile pays Argentina ($1.25 per Mpc), as well as a 50% income tax, would had given to Bolivia in 20 years approximately of $5000 Million, that is 5 times more than the current private business would leave to the country.

The government continues to misinform the Bolivian public about the true business of this new transnational project.

They speak to us, the Bolivian people, about the "gold business" of exporting gas to the United States, they speak to us that this is "the last resource that God gave us that can be used to invest in education"; they tell us about an assumed "competition with Peru", of a business of "gas through the sea", of the necessity to "act quickly" and of "not loosing business", etc.

5. Campaigns of propoganda.

The World Bank loaned to the government $9 million in order to fulfill "400 short courses" and to push public campaigns about the "goodness of the project" through the mass media, meanwhile the same government already has manifested that "they will not consult with any consulters" and that they make their own "policy decisions", without taking into account the public's opinion.


The gifting policy of the current and past government that is complacent with the oil multinationals aggravates the profound crisis that the country lives and is principally responsible for the current social conflict.

Sixty dead this year leave their blood on the government of Sánchez de Lozada; the same whom, despite these dead pronounces "dialogue," but in reality is implementing repressive policy, is militarizing the main cities and countryside, and threatening and intimidating those social and professional organizers encompassed with the defense of gas.

With these circumstances, we ask for an intervention by the international pubic opinion in order to avoid the imposition of this shameful, World Bank supported, mega-project of the oil multinationals, and finally to protect the lives and economic rights of the Bolivian population.

Currently we are analyzing a series of proposals suggested by the social organizations that go would annul the Hydrocarbons Law and the Decree 24806, and recuperate the property of the hydrocarbons, the restoration of 50% of the taxes over the brute production of oil and the execution of Industrialization plans that benefit all citizens and regions of this country.

Your letter of support, your adherence, your physical presence in Bolivia, your study, your rejection and your diffusion will help to stop this situation of conflict, opening routs so that Bolivians will benefit fully from over the use of our own energy resources.

October 2003

Mobilized Sectors in Bolivia, September 2003

COB Rejection of gas exports to US markets through Chilean ports.

Renunciation of President Gonzalo de Lozada.

Source: COB Protest Program

Undergoing an indefinite hunger strike since Monday, September 29

The different affiliated sectors are holding marches and mobilizations in different cities throughout the country.

CSUTCB Rejection of gas exports.

Fulfillment of the 72 points of the agreement signed with the government in 2001 on the Island of the Sun.

Liberation of all the detainees from the mobilizations.

De-militarization of the highways.

Nullification of the Citizens' Security Law.

Dialogue with the government in Warisata.

Source: CSUTCB national list of demands.

Maintaining a blockade of the principle highways on the High Plateau since September 15.

Holding a voluntary fast since September 10 in Radio San Gabriel offices in the city of El Alto.

COR of El Alto Renunciation of president Gonzalo Sánchez de Lozada.

Rejection of gas exports.

Source: News related to the COR of El Alto

Various sectors affiliated with the COR El Alto are marching from EL Alto towards the city of La Paz.

A civic strike is on-going, impeding the free circulation of vehicles.

Urban Teachers Rejection of gas exports.

Salary increases.

Nullification of the Ministerial Resolution which calls for a budgetary reduction for the sector.

Nullification of the New Tax Code.

Source: Teachers in the mobilizations.

Undergoing indefinite strike since September 30.

Marching in the streets.

Migrants from La Paz Rejection of gas exports.

Opening of a branch of the Cotapata-Santa Barbara highway.

Nullification of the Citizens' Security Law.

Compliance with the agreement signed with the Departmental Prefect.

Creation of a legal market for coca leaves.

Source: Migrant mobilizations in the news

Maintaining a blockade of the highways located north of La Paz and the Beni since September 15.
Gas Coalition Rejection of gas exports.

Rejection of the FTAA.

Nullification of the Citizens' Security Law.

Nullification of the New Tax Code and its Regulations.

End to the eradication of the coca leaf in the Chapare and Yungas of La Paz.

Withdrawal of the military from conflict zones.

Source: The Gas Coalition in the news.

Marched from Cochabamba towards Warisata; march could not be completed because of militarization of the area.

Holds regular public meetings with their membership.

UPEA Rejection of gas exports.

Modification of Law 2115 which created the UPEA.

Source: The UPEA in the news.

Daily marches in the streets for the past week.
Inter-provincial Transport Support the demands made by the peasants and migrants. Holding strikes and road blocks since September 8.
Federation of Meat Workers of El Alto. Renunciation of president Gonzalo Sánchez de Lozada.

Rejection of gas exports.

Support the measures demanded by the COB.

Reducing supplies of meat to the market indefinitely since October 1.
Miners Economic re-activation.

Rejection of gas exports.

Source: Miners in the news.

Joining the COB strike.

Announced their joining of the road blockades.

Holding voluntary fasts in certain regions.

MST (Landless Persons' Movement) Titling and distribution of land.

Rejection of gas exports.

Renunciation of the current director of INRA.

Source: MST in the news.

Confiscating land in certain regions within the department of Santa Cruz and the south of the country.
Retired Persons Nullification of the Decree which decreases their pensions.

Maintaining voluntary fasts.

Source: Retired persons in the news.

Holding marches and mobilizations daily in spite of their advanced age, setting up and maintaining human carpets for hours.
Rural Teachers Rejection of gas exports.

Joining the indefinite strike declared by the COB.
Health Workers Rejection of gas exports.

Source: Health workers in the news.

Maintaining a 48-hour work stoppage.
Social Security Workers Rejection of gas exports.

Source: Social security workers in the news.

Joining the indefinite strike declared by the COB.

Holding marches and mobilizations.

Coca Growers from the Yungas of La Paz. Rejection of gas exports.

End to the eradication of the coca leaf.

Today they began a blockade of the highways in Santa Barbara.
Professionals of Bolivia Rejection of the New Tax Code.

Rejection of gas exports.

Announced their participation in the protest marches in solidarity with the COB.
Trade Unions Rejection of gas exports.

Oppose the patent/license scale (regime? Scheme?).

Renunciation of president Gonzalo Sánchez de Lozada.

Holding daily marches in the city of El Alto and at around government buildings.
Federation of Peasants of Santa Cruz Rejection of gas exports. Announced the initiation of marches and blockades with or without the help of the COD-Santa Cruz.
CSUTCB of Román Loayza Rejection of gas exports.

Nullification of the Citizens' Security law.

Announced a national blockade of roads beginning October 6.
Juntas Vecinales of La Paz and El Alto Supports the demands of the COB and CSUTCB.

Renunciation of the Minister of Defense, Carlos Sánchez Berzaín.

Fejuve El Alto is engaging a voluntary fast in Radio San Gabriel.

Maintaining a civil work stoppage.

Fejuve La Paz is holding mobilizations.

Students of the Warisata School Re-opening of the school's academic activities.

Rejection of gas exports.0

Holding marches towards the Ministry of Education.
Bread- makers Supports measures taken by the COB. Considering suspension of the sale of bread beginning from the following week.

DDHH en Bolivia

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Este documento ha sido publicado el 15oct03 por el Equipo Nizkor y Derechos Human Rights