Cables Investigation
The zinc that doesn't sell
A Bolivian company got Trafigura thrown out of a state tender, and nobody published on what ground. Then it challenged the winner. A La Paz court closed the case on a tie-breaking vote, without looking at the substance, and the zinc still is not being sold.
By Violeta Ayala — Tecnóloga Creativa
Where we left off
In the first part of this piece we set out the file: four companies in a tender run by Empresa Minera Colquiri, a Comibol subsidiary, a Bolivian bidder that secured Trafigura's disqualification without the ground ever being published, an award to a third company, two crossed constitutional injunctions and a La Paz court that closed the case on a tie-breaking vote without looking at the substance.
This second part answers the question left standing: why that file, which looks like zinc paperwork, will sit at the centre of the constitutional argument of the coming months.
Why this is decided here
That a global trader has to fight its exclusion before a departmental court in La Paz is neither chance nor courtesy. It is written into article 320 of the Constitution, second paragraph: all foreign investment shall be subject to Bolivian jurisdiction, laws and authorities, and no one may invoke an exceptional situation or resort to diplomatic claims to obtain more favourable treatment.
That article is why Bolivia denounced the ICSID convention in 2007. Article 366, for its part, closes off international arbitration for foreign companies across the hydrocarbons chain.
In the public argument of these weeks, that is what gets called the lock on investment.
It means a company that wants to argue with the Bolivian state does it here, with judges from here and laws from here. Not in Washington, not in Paris, not on an arbitration panel where Bolivia is one party among others and pays fees in dollars.
The two readings
On August 31, in Santa Cruz, President Rodrigo Paz spoke about Jorge Quiroga's constitutional reform proposal, which aims mainly at removing that lock, and said that with two thirds in parliament two, three, four reforms could be done quickly. On September 4 he claimed he has more than 87 percent backing in the Assembly to transform the Constitution, and that the Constitution had placed obstacles in the way of development.
On September 7, the president of the Supreme Court of Justice, Romer Saucedo, called for a Constituent Assembly instead of the legislative route, and warned that a partial reform driven from the legislature could provoke social unrest if broad sectors are left out of the discussion.
This case can be read in two opposite ways, and both are honest.
The first: Bolivian jurisdiction worked. One of the largest traders in the world had to submit to a court in La Paz, and that court decided. That is exactly what article 320 guarantees, and it does not happen on its own.
The second: look at how the process went. A company excluded with documents it says it never saw, an award blocked by the party that caused the exclusion, a ruling that never examined the substance and a mineral that is not being sold.
That file will be the best argument for those who want the lock removed. They will say there are no guarantees here, and they will be able to point to a case.
It is also worth being exact about what can be changed quickly and what cannot. The constitutional injunction sits in articles 128 and 129, among the guarantees, and any reform touching rights, duties and guarantees requires a plenipotentiary originating Constituent Assembly. Partial reforms are done with two thirds of the Assembly and a referendum.
Nobody is going to abolish the injunction by the fast route. What can be moved is the article that obliges foreign companies to use it, and that is enough, because the dispute stops being argued in Bolivia.
If article 320 falls, this file does not become harder. It becomes unnecessary.
A company in Trafigura's position would not have to convince two judges in La Paz or wait for a tie-breaking vote. It would file the same due process claim before an international arbitration tribunal, where the Bolivian state sits as one party among others, and where the price of losing is counted in hundreds of millions.
The two arguments
The argument about foreign investment is usually told as a fight between opening up and closing down, and telling it that way is useless. There are two distinct arguments for keeping the lock, and it is worth separating them because they answer different things.
The first is about whether we believe in our own. Sending these disputes to international arbitration is a declaration, with a state's signature on it, that our courts are no good at resolving them.
That declaration fulfils itself. A system nobody uses never improves, builds no case law, trains no specialised judges and forces no institution to do things properly. The reverse holds too: as long as the jurisdiction stays here, we are obliged to make it work. Sovereignty is a duty before it is a right.
The second is sovereignty itself. If article 320 falls, a dispute over Bolivian minerals is settled by three arbitrators in another city, under rules Bolivia did not write, with fees and awards in dollars.
This is not hypothetical. Bolivia denounced the ICSID convention in 2007 for precisely that reason, after years of claims by foreign companies against the state.
What binds the two arguments is that they face the same sentence: our system does not work, let us hand it over.
That sentence has no floor, because it works just as well for handing over anything else. And the answer cannot be that the system works fine, because this file shows that it does not. The answer is to fix the tender, not to give away the courtroom.
The price of staying
The constitutional argument now coming will be made with cases like this one, and anyone who wants to defend resolving these matters in Bolivia will have to accept an uncomfortable condition.
To sustain the claim that jurisdictional sovereignty is worth it, the processes have to be defensible. A file in which somebody is excluded and the ground is never published is the finest gift to whoever wants to take the decision abroad.
Nothing will defend Bolivian jurisdiction better than a well-run tender, and nothing will attack it better than a badly run one.
The lock does not fall on its own. It falls when it stops being good for anything, and that is not decided in Washington.
Sources
- Political Constitution of the Plurinational State of Bolivia, article 320 on the subjection of foreign investment to Bolivian jurisdiction, laws and authorities; article 366 on international arbitration in the hydrocarbons chain; articles 128 and 129 on the constitutional injunction; and the provisions on partial and total reform.
- Erbol and Opinión, August 31, 2026: President Rodrigo Paz's remarks in Santa Cruz on constitutional reforms and the two-thirds route, in reference to Jorge Quiroga's proposal.
- Opinión, September 4, 2026: Paz's remarks on the 87 percent parliamentary backing and the Constitution's obstacles.
- Infobae and EFE, September 7, 2026: the call for a Constituent Assembly by the president of the Supreme Court of Justice, Romer Saucedo, and his warning about the risk of social unrest.
- Analyses published in August 2026 by El Diario, Los Tiempos and Cabildeo Digital on the scope of article 320, second paragraph, and its relation to the 2007 denunciation of the ICSID convention.
- First part of this piece: Four Companies, Two Injunctions, No Contract, sala.red.
This second part analyses the constitutional framework applicable to the case described in the first and the reform proposals currently under public discussion. The judicial decision referred to resolves a procedural point and does not rule on the substance of the disqualification. The reading of the effects of any reform of article 320 is interpretive and rests on the constitutional text in force and on the analyses cited. No person or company mentioned has been accused of any crime.
