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Proposals to protect the constitution from neoliberalism

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Bolivarian Movement for Sovereignty and Integration based on solidarity of the people: against the FTA and the FTAAs | 5 October 2006

Freely translated by Anoosha Boralessa (June 2015). Not revised by or any person or organization.

Proposals to protect the Constitution from Neo Liberalism

Representatives of more than 200 trade unions, indigenous organizations and members of NGOs that make up this social group held a comprehensive and democratic debate. This debate was specifically organized to resist free trade treaties and to put forward proposals for alternative ways of integrating. They succeeded in harmonizing fundamental principles that assembly members could use to halt neoliberal radicalization. This radicalization tends to favour, more every time, private capital and to dismantle safeguards on fundamental human and civil rights.

The apathy of the citizenry in the 1980s and 1990s was largely responsible for allowing the successful incursion of the economic belief that privatized successful state enterprises and reduced to the State to its bare minimum. However, two decades later, civil society completely shook off its lethargy and began to recover its rights to voice its dissent and to intervene.

Many of the Movement’s members admit that the Constituent Assembly on its own will not bring about changes so long as the current exclusionary economic system is in force. However, this does not mean that it will squander the big meeting as an opportunity for, at least, imagining a State that really does practise and defend social justice.

The First Determination: the FTA is outside the Law
What the Movement means is that Free Trade Treaties (FTAs), which Western Powers propose to countries that are less developed, are somewhat akin to rules of capitalism in its final, imperialist phase.

Generally speaking, free trade agreements (FTAs) seriously harm the Political Constitutions of States. When FTAs protect capital and not workers, they fail to acknowledge the social regime. This type of agreement not only denies the spirit of human rights but also tramples on human dignity.

FTAs are not simply trade agreements given that two thirds of its provisions are on issues that do not relate to the exchange of goods between countries. Examples are:
rules on patenting of plants and animals,
intellectual property rules that drive up medicines,
special guarantees for transnational investments,
establishment of extraterritorial, private justice exclusively for businesses,
the elimination of preferences for national products for public procurement,
the expansion of privatized services,
free trade in genetically modified seeds and foods,
bringing natural resources such as water, flora and fauna to the market place, and
amending laws including the provisions of the political constitutions of our countries.

FTAs force the weaker countries to modify their laws and to “neoliberalize” their Constitutions. Essentially, parties do not freely enter into these agreements. Such agreements are imposed on States so that they waive their right to intervene freely, in their sovereign capacity, in national economic development. [1]

Apart from these observations, the Movement raises several questions that the members of the Assembly should respond to:
Which is more important: trade liberalization or the right of a State to intervene in the market place to meet the needs of its people?
Which are more important: the rights of capital or fundamental human rights?
Can education, health and water, traditionally considered as human rights, be commoditized?
Is it ethical to privatize nature through gene patenting?
In a global economic environment, characterised by the complete domination of transnational corporations, can perchance the weaker countries dispense with the State, so that their businesses compete “on an equal footing” with businesses from the first world that are subsidized by their home States?

Six principles to debate
In more than 10 meetings held to date throughout the country, the Bolivarian Movement has agreed upon six central principles to avoid the future Constitution being contaminated with the virus of neoliberalism and collapsing against market dictates.

The texts proposed seek to establish basic negotiating positions for international agreements – such as FTAs or bilateral investment protection treaties - postulated by Northern powers; the treatment that is given to foreign investment; the role of the State in foreign trade and its sovereign rights and the retention of services (health, education and others) as public rights among others issues.

The Negotiating Positions For Any International Agreement
Any negotiation and signing of international agreements must be governed by the following principles that cannot be deviated from:
Social control
Preservation of human rights
“Any international agreement, in particular, international trade agreements, must be negotiated publicly, transparently and with the social control of the social movements. Through respecting the principles of the Political Constitution of the State, the Congress of the Republic shall approve and define the parameters and the limits in advance of international negotiations. Treaties negotiated shall be submitted to a binding referendum before being ratified by Congress”
This is the Movement’s first proposal. [2]

Furthermore, it is emphasized that no departmental authority (autonomous regional governments in whatever form) may negotiate for itself international treaties or trade agreements.

“Human rights, the economic, social and cultural rights of the population, and third generation rights are superior to any contract, bilateral investment treaty or trade agreement.”

Control over foreign investment
National and/or foreign investors that are interested in exploration, exploitation, transformation and the sale of natural resources must be governed by bioethical principles of responsibility with future generations, to transfer technology and to give preferential treatment to the national labour force and professionals, as well as raw materials and inputs. This can be justified on the basis of the principle of social justice.
“Any businessman that provides a service must be established legally in the country, under the national regulations and laws. This requires authorization from indigenous communities to exploit natural resources found in their territories. The State, as the absolute owner of natural resources, guarantees all investments that respect these edicts and that are governed by the principle of reasonable profit, which allows returns for the country, for the regions and for the indigenous and original communities.

Any dispute between a national investor and/or a foreigner shall be resolved in national courts.” So specifies the second tenet of the Movement’s proposal. [3]

The Recovery of the State
Once again, the State asserts control over foreign trade to promote the participation of all sectors and to avoid monopoly and abusive intermediation. It seeks to ensure an equitable distribution of profits, to stand in the way of the sale of genetically modified products, toxic wastes and other elements that are detrimental to health or the environment and to guarantee that foreign trade develops the country, in particular, the more marginalized sectors.

The Movement added: The State must protect the domestic market from the invasion of subsidized products. [4]

The Prohibition on Making Profit from Essential Services
We have to preserve a social and anti-commercial rationale when administering public services.
“Generally speaking, public services are activities based on the logic of socialism. Such logic stands in opposition to trade and unreasonable profit. In general, public or social enterprises shall shoulder the provision of essential services. They shall reinvest their profits in the community and will operate on principles of solidarity, universality, dignity and respect for human rights and the environment”. [5]

The Movement considers that the State must guarantee free education and health; that such services should be physically, economically and culturally accessible to people. This is because human rights do not depend on the rules of the marketplace and are not profit driven. Water is an essential resource for life. Therefore it is a fundamental human right and falls under the responsibility of the State and society in its entirety. [6]

Health is a Right not a Commodity
The State must protect health, traditional medicine and guarantee access to generic medicines. This is because civil rights are superior to any patent, legal provision or trade agreement.

The Movement emphasized:
“The Bolivian State does not recognize any type of patent over forms of animal life, vegetation, therapeutic, surgical, medical diagnostic methods and traditional knowledge that are considered the common heritage of society.”

“Health is an obligation of the State and a service provided by an insurance agency, of wholly public character; one that recognizes and practices traditional medicine.”

In this respect, it is proposed to criminalize the use, production and sale of genetically modified food stuffs and seeds.

The Constitution is Sovereign
The sixth constitutional mechanism to protect the Constitution from neoliberal free trade: the Movement emphasizes that the Constitution and state sovereignty are superior to any international agreement.
“Any international agreement must respect the Constitution currently in force. Any treaty provision that conflicts with the Constitution shall be null. Any bilateral or multilateral treaty that was signed in the past that is detrimental to the interests of a State and that directly or indirectly violates human rights, must be revised and renegotiated in conformity with the new Constitution. Any international agreement that was subscribed to, in breach of art 24, 25 and 135 of the CPE in force at the realization of the Constitutional Assembly, will be null and void. International agreements cannot undermine or shrink the State’s sovereign right to ratify new agreements or international agreements.”

The foregoing repeats verbatim the sixth principle proposed by the Movement.
Key Ideas for discussion in the Constituent Assembly
In light of the foregoing, the Social Bolivian Movement that militates against neo liberal FTAs and that constructs alternative proposals for integration, identifies some key ideas that necessarily would need to be considered when the Constituent Assembly is deliberating.

One of them is related to the State, so vilified over the last two decades.
In the first place, the State has the absolute right to dictate and to impose economic, social and legal rules on foreign investment. A State’s regulatory power cannot be considered an “impediment to trade” or an “obstacle” to trade. Neither is it acceptable that it exonerates businesses from complying with certain “licenses, norms or qualifications”.

Second, the State has the obligation of establishing quality standards - for example in water supply, the overriding objectives of education, hospital licenses etc. This is because it is dangerous to concede unlimited freedom to transnational capital without there being an effective counterweight for States. The fact that business objectives are not always in sync with the needs of states and the most vulnerable social groups must not be glossed over.

Third, the State needs to recover control over its natural resources and its economy for the social benefit and to build a country where the spirit of social justice is more important than the laws of offer and demand or private business profits.

Another key idea that the Movement identified is the need to give genuine prominence to individuals and not to businesses (whether foreign or national). For this reason, it is necessary to map out specific provisions that safeguard civil rights against the unbridled expansion of corporate rights.

For example, it should be a government policy to protect human life and to expressly prohibit the plans and health programs directed at birth control. The State should guarantee, free of charge, the professionalization of its work force, subsidize the peasantry and protect the lives of the thousands of Bolivians that are abroad.

On the other hand, art 173 of the Constitution that is in force, requires the State to grant development loans to peasant and indigenous communities to improve agricultural returns. We should supplement the Constitution with the requirement to promote Food Sovereignty, that is, the sourcing of the population’s food requirements from local and national production.

Food Sovereignty is achieved by preferring domestic agricultural production, especially organic, by granting fiscal preferences and development funds.

For all these reasons, the Constitution must clearly establish that the State has the power to develop production, collection, transformation, sale and industrialization of products in accordance with custom and usage in each region of the country. This is to counter the FTA provisions that require governments to eliminate any type of preferences for national manufacturers.

It is a priority for the Bolivian state to subsidize agricultural and industrial micro-producers and not to grant national treatment to transnational agroindustry.

It is also proposed to pass a consumer law that guarantees that the best products are consumed in the domestic market and are not subject to wholesale exportation, which is happening today. Bolivians are not “second-class” citizens.

Continuing the defence of the individual human being, it is fundamental that the Constitution recognizes the State’s sovereign right to nationalize its natural resources as well as businesses that are strategically divested (agro industry included); but furthermore, it also exploits and industrializes renewable and non-renewable natural resources subject to effective social control.

It is necessary to construct an agency of social control – a type of “Fourth Social Power” consisting of civil society organizations and not of parties or citizens associations where the old policies are simply resuited.

What is sought is a space that only the people can occupy, communitarian in its design, and consisting of organizations such as Confederations, Trade Unions, Neighbourhood Councils, OTBs and supervisory committees which would not have to make money but would receive money from the State as a requirement for their functioning. [7]

These representatives would be elected on a rotating basis on merit (expertise and experience as leaders). It would be possible to revoke their mandate if their work was below standard and they would always be required to abide by collective decisions.

This body of social control would function in all institutions that are now in operation (whether at the local, municipal, departmental or statal level) so as not to create further red tape.

Towards a Social Economy
It is necessary to reflect on a new programme of economic development. This is because it is not a government policy to consolidate market rule and accelerate the extinction of the State. Rather, its policy is to consolidate on self-determination and the underpinnings of the State, so that the people are protected from inequalities.

Faced with commercialism that is out of control, it is proposed to bolster Economic Solidarity, understood as an economic form, founded in productive associations that distribute benefits equitably between partners and the entire population.

In this sense, the Movement proposes that the State protects and promotes associative modes of production, transformation and sale done in solidarity such as Cooperatives and Rural Economic Organizations (OECAs) and microbusinesses. These are the bases for sustainable and equitable development.

This development, for example, materialized when preference was given to state purchases, and infrastructure for organic and sustainable agricultural production is prioritized.

What is needed is to invigorate the spirit of arts 132 and 133 of the Constitution currently in force. These articles provide that the economic regime essentially responds to the principles of social justice. The latter tend to ensure for its entire population, a “dignified existence for each individual human being” that tends to strengthen national independence and the development of the country through the defense and the use of natural and human resources to safeguard the security of the State and to try to ensure the well-being of the Bolivian people.

The Movement continues: the future Constitution must include a concept that has now almost been blotted out of the memory of voracious capitalists: solidarity based on a truly democratic State.

Bolivians have always acted out Western thought and we have not given importance to the thinking and technology of the societies that preceded Columbus. So the Movement says. Therefore, we propose dusting down the analytical tools of our ancestors such as legal norms and thought processes that have stood the test of time. These include mink’a, el ayno , el chhuqhu and the Andean commands: ama sua, ama quilla and ama llula.


[1] Article 29 of the Constitution provides that the following powers are exclusive to the Legislature: altering and modifying the Codes, laying down regulations and making provisions on judicial proceedings. What does this constitutional edict mean when we see that a negotiation that is supposedly “exclusively commercial” requires amending and approving dozens of legal provisions?

Art 30 of the Constitution establishes that public powers cannot delegate powers that the Constitution confers on them; nor can they grant to the Executive, powers to supplement the powers expressly allotted to the Executive. When the government signs an international treaty and parliament ratifies it, permitting a transnational foreign enterprise to make a claim before an International arbitral panel in Washington, it is delegating powers to a supranational body to resolve issues that fall within the powers allotted to the Judicial branch, that under the Constitution, cannot be delegated.

Art 24 of the CPE provides, “Foreign businesses and individuals submit to the laws of Bolivia without ever being able to invoke exceptional circumstances nor being able to make diplomatic protests.” And as if to clear away any doubts, art 135 indicates:
“All businesses established for exploitation, profit or business in the country shall be considered nationals and shall submit to the sovereignty, laws and the authorities of the Republic”.

Despite this, different governments have signed 24 Bilateral Investment Treaties that recognize privileges for foreign enterprises compared with domestic enterprises. Enterprises of these 24 countries can appeal to ICSID (International Center for the Settlement of Investor State Disputes), a dependent of the World Bank. In other words, Bolivia is home to first class enterprises that have their own international justice and second-class national enterprises, that are subject to Bolivarian justice.

The FTAs impinge on the State’s sovereignty. This is because they contain clauses that severely restrict fiscal regulatory powers.

The State may not impose limits on the number of service providers, the total value of their assets, the total number of transactions, the total number of natural persons that can be hired in a specific sector or make distinctions between businesses according to the legal form their business association takes: non -profit organization, cooperatives, SRL, SA, subsidiaries etc. (market access clause). Furthermore, the treaties require the State to give “National Treatment” to foreign businesses, i.e., treatment that is no less favourable than that which is granted in similar circumstances, to domestic enterprises. Through the clause “Local Presence”, a State may not demand that a foreign service provider establishes a representative office or resides within the national territory as a condition for the cross border supply of a service.”

[2] Arts 2 and 4 of the CPE indicate that sovereignty rests with the people. Therefore, prior to signing an FTA, we need a sovereign decision of the people taken through a referendum.

[3] Although foreign investors optimize production, they also contaminate the environment and endanger the population’s health. For example, it is reported that the mining co, Inti Raymi, works like Swiss clockwork. But then why are the people that worked for this company dying of cancer that has pervaded all their organs? Members of the Movement in Oruro raise this question. They consider that the enterprise pollutes the air, land and water; furthermore, that this enterprise does not care about the effects it has on the environment and the health of its workers. This is because its immediate interest is limited to recover its investment.

Investors receive substantial profits such as lucrum cessante (compensation for future profits in the case of a nationalization). Furthermore they are guaranteed: the recovery of their investments in less than five years; the option to repatriate their profits; and the advantages of a private international justice system such as the World Bank’s ICSID.

The FTA prohibits the nationalization of public?? enterprises for the common good. This type of agreement only validates investors’ rights. Human rights are demoted to second place. These agreements see profit as fundamental, not human rights.

Under art 24 of the Constitution, foreign enterprises and subjects are required to submit to Bolivian laws and Bolivian authorities. The FTAs and the bilateral investment protection treaties breach this edict by establishing supranational tribunals such as the World Bank’s ICSID, to settle commercial conflicts. Art 31 provides that the acts of those that usurp functions are null. In this case, supranational tribunals supplant the Bolivian judiciary’s powers.

[4] Articles 141 and 142 authorize the State to regulate trade and industry and to intervene in the market place through fiscal monopoly on certain exports if the public interest requires it. International trade agreements impose limits on the sovereign control of the State so as to prevent it from even being able to establish performance requirements for foreign investment. In summary, FTAs limit a State’s powers and its sovereignty. So while a State loses its power to take action in the economy, private investment becomes more and more prominent.

[5] Art 134 CPE establishes that “in the exceptional circumstances that public service concessions are granted, they may not be granted for a period of more than 40 years.” This means that public services for water, light, telephone, education, health, rural electrification, etc as a general rule must be administered by the State and only “exceptionally” may concessions be granted to private persons. The FTAs claim to include the major quantity of possible services within agreements on liberalization and privitization.

[6] Art 7 of the Constitution provides that a citizen’s fundamental rights include the following: Health and social security; Ownership of private property; Carrying out any commercial or industrial activity provided that it does not prejudice the public interest.

Art 35 provides that the rights and guarantees provided in art 7 do not pre- empt other rights that are not specifically provided for – for example the right to a healthy environment and above all the freedom to access services and information. The North American FTAs violate all these principles because they are negotiated in secret; they consider that private property is sacred even at the cost of the common good and only those citizens that can pay, can have access to essential services.

[7] The other proposal is that this mechanism of social control consists of representatives of grass roots organizations, a State representative, and representatives from each sector (mining, health and teaching etc) and the grass roots population (central, sub-central etc). These officials would be remunerated.

 source: Movimiento Boliviano por la Soberanía y la Integración solidaria de los pueblos: Contra el TLC y el ALCA