Latin Nations suspending World Bank arbitration

Bolivia’s president on Sunday stated that both Bolivia and Venezuela should relinquish their ties with a World Bank body which arbitrates between foreign investors and states.

Likewise, Venezuela and Nicaragua should also leave the Washington based International Center for Settlements of Investment Disputes (ICSID), this idea was proposed by a close partner of the Venezuelan President, Hugo Chavez, at the Latin American Summit.

Evo Morales suggestion implied that "(We) emphatically reject the legal, media and diplomatic pressure of some multinationals that ... resist the sovereign rulings of countries, making threats and initiating suits in international arbitration."

This proposal has not yet been approved by the concerned nations, and there is no evidence of any time frame by which it will be decided upon. Eva Morales also announced the nationalization of the energy sector last year.

The country has been offended by its encounters with ICSID, mainly after the case against it regarding the venture with Italy's Edison and Bechtel Enterprise Holdings which had to pull out of a $200 million water project there in 2000.

"The governments of Latin America, and I think the world, never win the cases. The multinationals always win," Morales complained.

Hugo Chavez is also quite interesting in the prospect of giving up on ICSID, as the settlements body is now taking into consideration a claim from Italy's Eni, which is seeking compensation for Venezuela's capture of its Dacion oilfield last year.

Venezuela is also in the process of claiming a state majority in the enormous heavy crude fields of the Orinoco heavy crude belt, which would consequently affect multinationals such as ConocoPhillips, Exxon Mobil Corp., BP Plc, Total, Statoil and Chevron Corp.