Introduction

This Practice Note sets out some of the key considerations for a business before it decides to commence operations in Bolivia.

During the 1990s, Bolivia, as other countries in the world to varying degrees, implemented an extensive plan for privatisation of state-owned companies and certain public services, and new supporting legislation which promoted a wave of foreign investments. This was particularly the case in the industry sectors of hydrocarbons, telecommunications, rail transport, electricity, water supply, and to an extent, mining.

The twenty-first century opened with resistance and social protest against such policies. The privatisation of the water supply in the city of Cochabamba, accompanied by an important increase in tariffs, led to the so-called 'water war'. As a result of civil and political resistance, the concession, held by a group of foreign investors, was cancelled. This triggered a claim via international arbitration which was eventually settled. A similar situation followed with the water supply company in the main city of La Paz.

Opposition against the hydrocarbons