Israeli Company Mekorot Exits Chile Amid Controversies Over Contract Irregularities

Original article: Empresa israelí Mekorot se retira de Chile en medio de cuestionamientos por irregularidades

The Israeli state water company Mekorot has severed its contractual ties with the Biobío Region following the conclusion of its water consultancy agreement with the Regional Development Corporation of Biobío.

The contract, signed on June 1, 2023, called for the development of a Regional Water Resources Management Plan for $329,412 over a period of 12 months. At the time of its announcement, the Regional Government stated that it would make Biobío a leader in strategic water management. However, the final report was never delivered.

This agreement was established during the tenure of former regional governor Rodrigo Díaz Worner, who also led the Regional Development Corporation of Biobío and is currently under investigation in connection with the ProCultura Case, which is part of the larger Convenios Case investigating the transfer of public funds to foundations.

Report to the Comptroller’s Office

In March 2024, Lawyers for Palestine filed a complaint with the Comptroller General of the Republic questioning the hiring process.

Concerns were raised about the lack of a public bidding process, clauses limiting the company’s liability, and the application of foreign legislation.

It was also noted that the contract was signed through a private law corporation funded by public resources.

“When doubts arise regarding its execution or the conditions under which it was awarded, the use of funds that belong to all Chileans is at stake,” explained Nelson Hadad Abuhabda, a member of the legal team.

The official response from the Regional Development Corporation of Biobío, provided under the Transparency Law, indicated that the contract ended due to the completion of the agreed term and that the Regional Comptroller’s Office dismissed the complaint, finding no illegalities in the hiring process.

However, the same document states that during the contract’s execution, only a partial payment of $28,995,960 was recorded in July 2023 and that the consultancy did not reach the stage of delivering final products, which means the entity does not have a final report on the promised study.

Although the Regional Comptroller’s Office did not declare the contract illegal, it did become part of its annual audit plan to determine how these public resources were handled.

“The serious issue is that the agreement ended without the development of a water strategy to address the water crisis in the region. Even so, nearly $30 million in public resources were disbursed without any effective return for the citizens,” explained Hadad.

Role in Occupied Palestinian Territories

The controversy is also linked to the role Mekorot plays in the Occupied Palestinian Territories.

Reports from international human rights organizations accuse the company of participating in an expropriation system that benefits illegal Israeli settlements while restricting water access for Palestinian communities.

“Mekorot is listed by the UN as a company tied to the illegal occupation of Palestine. States should avoid contracts with companies involved in these activities and act in accordance with their international human rights obligations,” says Hadad.

Despite the Regional Corporation stating that the Israeli company’s departure from Biobío was due to the fulfillment of the agreed timeframe, Lawyers for Palestine believe that the non-renewal of the contract is “not coincidental. It responds to the complaint we filed with the Comptroller’s Office and sustained pressure from civil society, human rights organizations, and environmental groups.”

Lawyers for Palestine affirmed that they will continue monitoring similar agreements in the country and reiterated their call to enhance standards of transparency, administrative integrity, and respect for international law in public contracting.

El Ciudadano