Bolivia: Constitution and hydrocarbons

Andrés Soliz Rada, ex Minister of Hydrocarbon

La Paz, Bolivia, 25/10/08. The setback between MÁS’ constitutional project, approved in Oruro, in December 2007, by the Constituent Assembly and the one agreed upon by a coalition of the governing party and neoliberal parties in the National Parlament last October 21, is monumental in regards to hydrocarbons.

The articles 359 and 362 approved in Oruro were inspired by the Nationalisation Decree of May 1, 2006, which only recognised contracts for the purpose of lending of services by private companies, in such a way that the state had definitive control over the reserves. Such precepts added that if companies did not abided by the contracts signed, would be declared null and void and the people who signed the contract, in the name of the state, would be put on trial for betrayal of the homeland.

The Nationalisation Decree was distorted by the joint production contracts signed with companies in October 2006, which allows them to be owners of a percentage of production, the reason why they consider themselves to be owners of substantial parts of the country’s reserves.

The MAS-neoliberal parlamentary coalition left articles 359 and 362 intact, but introduced a transitory article (No 8), in which, at the same time as indicating that the concessions over natural resources (which includes gas and oil), electricity, telecommunications and basic services have to be adapted to the new legal framework, it adds with a subtle hint of bad faith that the migration of these concessions to the new constitucional regime “IN NO CASES SUPPOSES THE NON-RECOGNITION OF ACQUIRED RIGHTS”.

Such rights, as is obvious, are those obtained by the foreign oil companies in the October 2006 contracts, such that the announcements relating to the nulifying of agreements that violate the constitution and the trial of their authors for betraying the homeland has converted itself into wet paper, despite the fact it is maintained in the text.

Adding to the frustration over the issue of hydrocarbons is the disenchantment of the country due to the legalisation of latifundios in the hands of oligarchs, above all in Santa Cruz, Beni and Pando, by foreshadowing that the decision to limit the extension of lands to 5000 or 10,000 hectares (the doubt will be resolved in the January referendum), will only be valid in the future.

Vice president Alvaro Garcia Linera, commenting on the setbacks to the new project in regards to that approved in Oruro, indicated that this last one was too radical and its reach had to be limited. Those encharged with introducing these limits in matters of oil were Minister Carlos Romero and Senator Roberto Ruiz, from Podemos, the political party of Jorge Quiroga.

Ruiz, in his condition of principal civil leader in Tarija, (in 2004), was the principal driving force of the Pacific LNG Project, in which Bolivia would have had to export gas to the US in “african” conditions, and which would have led moreover to the rapid drying up of the reserves. He also backed the ex-president Carlos Mesa in his decision to sell gas to Argentina at the subsidised price of $0.98 per million cubic feet, at the same time as Brazil was already paying more than $3 for this quantity.

Garcia Linera, on hearing concerns over the new constitucional project, recalled that a great advance has been made with the recognition of the plurinational character of the country. Such a recognition, undoubtably, brings with it an important historic reparation of the originario peoples and cultures, which, nevertheless, should not be used as a shield to continue with the expoliation of natural resources and unfulfilled promises of land concessions to ethnic conglomerates, as has been occurring until now, with minimum exceptions, since the foundation of the republic.

Translated from Bolpress

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