Friday, October 31, 2008

Bolivia: Constitution and Hydrocarbons


Andrés Soliz Rada was Hydrocarbons and Energy minister in the first months of Evo Morales’ government. He resigned in September 2006 as a result of disagreements with the government.

A former Senator and, earlier, a member of the Congress, Soliz Rada is a lawyer, journalist and university professor. He is associated with the National Left, a current of Marxist thought in Latin America that originated in a wing of Argentine Trotskyism.

While a supporter of Morales, Soliz Rada is a harsh critic of many of the MAS government’s actions, including recognition of 36 indigenous nations in the new draft Constitution, which he regards as a threat to the integrity of the Bolivian state and an encouragement to its dismemberment by imperialism and local elites.

I intend to write more about the new Constitution, now scheduled for ratification in a referendum to be held January 25. In my opinion, its recognition of the plurinational nature of Bolivia is a major step forward toward integrating the indigenous peoples in the revolutionary process now under way in Bolivia and some other South American countries.

In the following article, Soliz Rada criticizes a major concession that was made by the government in the recent negotiations to break the deadlock with the opposition on the text of the draft Constitution and enable it to be put to a popular vote for adoption. I have added notes that translate the provisions of the Constitution he cites. The full text (in Spanish) of the amended Constitution, as it will be put to a popular vote on January 25, is at

For an overview of the background, process and outcome of the recent negotiations, I recommend an article by Federico Fuentes: Unprecedented Alliance Defeats Right-Wing Assault,

Articles by Andrés Soliz Rada in English can be found on various web sites, including ZSpace,ésrada and Bolivia Rising,

A different translation of this article was published in Bolivia Rising.

by Andrés Soliz Rada


The contrast between the draft Constitution of the MAS, approved by the Constituent Assembly in Oruro in December 2007, and the Constitution emerging from the consensus agreement reached on October 21 between the authorities and the neoliberal parties in the National Parliament, marks an enormous retreat when it comes to hydrocarbons.

Articles 359 and 362[1] adopted in Oruro were inspired by the Nationalization Decree of May 1, 2006, which gave the State sole authority over the reserves and limited contracts with private companies to those for the provision of services. Those rules added that agreements with the companies that were not in compliance would be ipso facto null and void and that whoever signed any such agreement on behalf of the State would be prosecuted for treason to the Fatherland.

The Nationalization Decree was definitively tainted by the shared production contracts signed with the companies in October 2006, which allowed them to be the owners of a percentage of production, the reason why they consider themselves the owners of substantial portions of the country’s reserves.

The MAS-neoliberal parliamentary coalition left articles 359 and 362 intact, but introduced a transitional article (the eighth) which, while stating that the concessions concerning natural resources (including gas and petroleum), electricity, telecommunications and basic services should be adapted to the new legal order, added in subtle bad faith that the migration from these concessions to the new constitutional regime “SHALL IN NO CASE MEAN REFUSAL TO RECOGNIZE ACQUIRED RIGHTS.”[2]

Those rights are obviously the ones obtained for the foreign oil companies in the October 2006 contracts, so the statements on the nullity of accords that violate the Constitution and the prosecution for treason against the Fatherland of those who sign them have been converted into worthless scraps of paper, albeit maintained in the new text of the Constitution.

Adding to the frustration on hydrocarbons is the country’s disillusionment over the legalization of latifundios in the hands of oligarchs, above all in Santa Cruz, Beni and Pando, indicating that the decision to limit the extension of lands to five or ten thousand hectares (the uncertainty will be resolved in the January referendum) will apply only to future transactions.

Vice-President Álvaro García Linera, commenting on the retreats of the new draft from the one adopted at Oruro, stated that the latter was too radical and that its scope had to be limited. Those responsible for introducing these limits on oil and gas policy were Minister Carlos Romero and Senator Roberto Ruiz of PODEMAS, the party of Jorge Quiroga [the conservative Acting President from 2001 to 2002].

Ruiz, in his capacity as chief civic leader in Tarija (in 2004), was the major force behind the Liquefied Natural Gas Pacific Project, under which Bolivia was to export gas to the United States in “African” conditions, which would have resulted in the rapid exhaustion of its reserves. He also backed former President Carlos Mesa in his decision to sell gas to Argentina at the subsidized price of 98 cents per million cubic feet at a time when Brazil was already paying more than three dollars per million cubic feet.

García Linera, aware of complaints about the new constitutional draft, recalled that it marked a great advance with the recognition of the plurinational character of the country. Such recognition involves, no doubt, significant historical redress for the original peoples and cultures, but it should not serve as a cover for the continued pillaging of natural resources and the failure to fulfill promises of concessions of lands to ethnic communities — the pattern, with few exceptions, since the founding of the Republic.

Translated by Richard Fidler

[1] Article 359 [translation]

I. Hydrocarbons, irrespective of the condition in which they are found or the form in which they are present, are the inalienable and imprescriptible property of the Bolivian people. The State, on behalf of the Bolivian people and as their representative, exercises ownership of all production of the country’s hydrocarbons and is the sole entity authorized to market them. All income received from the sale of hydrocarbons shall be the property of the State.

II. No contract, accord or agreement, direct or indirect, implicit or explicit, may prejudice in whole or in part the provisions of this article. Any contract in breach of this article shall ipso facto be null and void and whoever has granted, signed, approved or executed it commits a crime of treason to the Fatherland.

Article 362 [translation]

I. YPFB [Yacimientos Petrolíferos Fiscales Bolivianos – the state-owned oil and gas company] is authorized to enter into contracts for the provision of services with private or jointly owned Bolivian or foreign public companies allowing the said companies, on its behalf and as its representatives, to carry out specific activities in the production process in return for compensation or payment for their services. The execution of such contracts shall in no case signify forfeitures by YPFB or the State.

II. The aforementioned contracts for exploration and development of hydrocarbons must first be authorized and expressly approved by the Plurinational Legislative Assembly. Should no such authorization be obtained, they shall be ipso facto null and void, without the need for any judicial or extrajudicial ruling.


. . .

Eighth. I Within one year from the election of the Executive Organ and the Legislative Organ, the concessions concerning natural resources, electricity, telecommunications and basic services shall conform to the new legal order. The migration from the concessions to a new legal regime shall in no case mean refusal to recognize acquired rights. …

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