Vivendi Threatens Argentines with US$357 million Legal Claim
When Vivendi entered the province of Tucuman, Argentina in 1994 the concession contract included an immediate 95% increase in water rates. Meanwhile, government studies showed that 37.8% of the population did not have the financial ability to pay for water. As one might imagine, the water concession was extremely unpopular and resistance to the high rates resulted in civil disobedience and a payment boycott. Now, 10 years later, Vivendi has a US$357 million claim against the government of Argentina for damages and lost profits. The claim is being heard in the World Bank’s International Centre for the Settlement of Investment Disputes (ICSID). It is a common tactic of the water transnationals to use international arbitration to extract money from governments when they have been unable to achieve what they feel are the necessary returns on their investment. Tucuman is the poorest province in Argentina. The US$357 million claim is one-third of the public debt in the province. It is an outrage that a multinational conglomerate earning billions in revenues each year should be preying off the poorest province in a country that has already been bankrupted by the pro-corporate policies of the IMF and World Bank.