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"Your" water, "their" tribunal. BITs in water privatizations

Monday, August 20, 2007

You don't believe me? There is more than one case, really. I want to get back to that Tanzanian water privatization case, as reported by the Guardian:

Lawyers for Tanzania's government, whose participation in such a tribunal process is among the terms of a bilateral investment treaty signed with Britain in 1994, argue that Biwater failed in its contractual obligations, performing worse than its inefficient state-owned predecessor. If the government was to meet its citizens' need for safe water, it too had no choice, they claim, but to terminate the City Water arrangement just 22 months into what was meant to be a 10-year contract.

Now, you think the government can do anything once such dispute arises?
Despite the secrecy of proceedings - the tribunal is closed to the public, and Biwater sought and was granted a ruling that both parties refrain from speaking publicly to the media during the week-long hearing that finally began in The Hague in April - a host of interested parties will be closely monitoring the outcome in the wake of final arguments submitted as proceedings wrapped up in July.The World Bank, which pressed Tanzania to enter into the contract, now faces the possibility of seeing the country penalised in a tribunal of the bank's own creation.
Voila. "Your" water, "their" tribunal. A state is not that 'sovereign' when dealing with investors.

And check this info too:
According to a new report published by the Washington-based Institute for Policy Studies, and Food and Water Watch, there are more than 2,500 bilateral investment treaties today, compared to 385 in 1989. And of the 255 investor-state lawsuits filed under these treaties, more than two-thirds have been lodged in the past four years.
There is a way to get around BIT, withdraw! But of course, other investors might pull back too. So this could be a middle way: Can we create a non applicability clause in BITs for water privatisation?