Letter to the IDB

July 10, 2002
July 9, 2002
9 de Julio, 2002
May 26, 2002
May 6, 2002

Juan E. Notaro
Executive Director
Bolivia, Paraguay and Uruguay
Inter-American Development Bank
1300 New York Avenue, N.W.
Washington, D.C. 20577

Dear Mr. Notaro,

On April 12, we held meetings at the IDB with Mr. Jorge Arrizurieta and Mr. Jorge Crespo Velasco, the Alternate Executive Directors for the United States and Bolivia, respectively. The purpose of the meetings was to discuss how the Inter-American Development Bank (IDB) can ensure that it respects the rights of indigenous peoples in Bolivia, and better incorporates human rights and environmental standards into its projects.

We delivered the attached letter communicating the concerns of the Coordinadora de Pueblos Étnicos de Santa Cruz (CPESC), the regional indigenous organization that represents indigenous communities affected by hydrocarbons projects in the department of Santa Cruz, particularly with regards to the IDB's plans to finance 1) the Transredes S.A. project (which includes theYabog Expansion Project) as well as 2) the Bolivia Brazil Pipeline Expansion Project (please see Amazon Watch's project profile attached).

As the new Executive Director for Bolivia, you will have the opportunity to decide whether the IDB will finance this project. Therefore, we would like to urge you to vote against supporting this project based on the following points:

1. Given all the scathing information that has surfaced around the Enron collapse we consider that it would be negligent for the IDB to approve any project in which Enron has any involvement, such as Transredes (Enron has a 25% stake in this company). In a recent correspondence to the Bolivian Minister of Sustainable Development, over 29 concerned organizations from around the world requested that the Ministry launch an independent socio-environmental audit to resolve social conflicts and address outstanding environmental issues (see attached letter).

2. As you probably know, the Bolivian Congress and the Comptroller of the Republic are now investigating the legality of Enron's entrance into Bolivia. We hope that the IDB is aware of recent allegations reported in the San Francisco Chronicle that in 1994 Enron paid US$ 2.5 million bribe to representatives of Bolivia's state-owned oil and gas company (YPFB) to influence the capitalization process. We are also trying to learn whether Enron engaged in these sorts of actions after 1994. Approving any loan that would further Enron's presence in Bolivia before the results of the investigations have concluded and the afore-mentioned issues have been resolved would be premature.

3. There is now an ongoing process in Bolivia to reform the Constitution, Environmental Law, and regulations related to the Hydrocarbons Law. As you are aware, there has been significant controversy over the primary and secondary environmental and social impacts of the main Bolivia-Brazil pipe and Rio San Miguel - Cuiaba Pipeline, both of which were partly sponsored by Enron. Given that the legal framework is not clearly defined and considering the unresolved impacts and ongoing investigations, it would not be responsible for the Bank to approve any projects within this sector.

4. Given that the IDB aimed to supervise the process of capitalization of the state utility sector, we request that it publicly disclose its role in the capitalization process and specifically in verifying the legality of Enron's entrance into the Bolivian energy market.

5. We request that the IBD promote an independent socio-environmental audit to ascertain whether or not Enron's projects achieved their alleged objective to alleviate poverty and conserve the environment. As previously noted, in a recent letter to the Bolivian Minister of Sustainable Development, over 29 concerned organizations from around the world requested that the Ministry launch a similar investigation. The IDB should support an independent auditor, separate from that of the government and the IDB.

We look forward to your response and thank you for your consideration.


Jorge Cortes F.
Regional Coordinator
Plataforma de Derechos Humanos
Capítulo Boliviano

Derrick Hindery, M.A./C. Phil.
Bolivia Coordinator
Amazon Watch

Nadia Martínez P.
Sustainable Energy and Economy Network
Institute for Policy Studies

Honorable Michael Oxley, Chairman, Committee on Financial Services
Doug Bereuter, Chairman, International Monetary Policy and Trade Subcommittee
Honorable Sue Kelly, Chairperson, Oversight and Investigation Subcommittee
Jose Bailaba P., Coordinadora de Pueblos Etnicos de Santa Cruz (CPESC)
Adalid Contreras, Plataforma Interamericana de Derechos Humanos Democracia y Desarrollo
Robert Montgomery, Private Sector Department, Inter-American Development Bank
Jon Sohn, Policy Analyst, Friends of the Earth

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