The Chinese government is inserting confidentiality clauses into its investment agreements with the Bolivian government, according to sources close to the deals who have viewed the agreements in question.

The sources, some of which have direct access to the Bolivian government and Chinese firms, claim that contractors are strictly prohibited from sharing any details about the investment contracts with Congress or the public, unless specifically instructed by the Chinese government. The deals have been agreed to by the ruling Movement for Socialism party, led by President Luis Arce.

The deals, these sources allege, include energy and mining contracts, which are of particular relevance to China’s critical mineral strategy in South America, and infrastructure construction deals in and near the Bolivian Amazon.

Some of the deals were signed in the immediate aftermath of corruption scandals involving officials in the MAS government led by Evo Morales, in whose cabinet Arce served, and Chinese state and private firms working in Bolivia.

In an interview with The Diplomat, one source working on energy dossiers for the Yacimientos de Litio Bolivianos (YLB), Bolivia’s public lithium company, who spoke on condition of anonymity due to fear of political persecution, said that “everything is in the dark with China.” The comment was about the lack of detail given by the Arce government on energy and mining deals with China, specifically regarding lithium.

Officials within Arce’s Ministries of Hydrocarbons and Mining also allege that gold mines are being exploited in secret by firms linked to the Chinese government. Though they did not mention a specific mining site, they mentioned that the mining was being conducted on Indigenous territory, as previously alleged by Julieta Pelcastre, a reporter with Diálogo Américas.

The confidentiality clauses help prevent the information from coming to public attention. Given geopolitical tensions in Bolivia and the region, China likely prefers this information to be kept under wraps, in line with its low-profile diplomatic strategy, which allows it to sign sometimes contentious deals without fear of backlash.

The MAS government’s tensions with the Organization of American States and the Inter-American Commission on Human Rights, as well as the governments of the United States and Canada, neither of which have an Ambassador in La Paz, also restrict the international community’s ability to gather information about specific Chinese investments.

Despite China’s prominent role in managing and financing Bolivia’s economy, the extent of Beijing’s financial activities in the country remains unclear. Furthermore, the sources in Arce’s energy cabinet with access to the confidential financial deals allege that through the deals China guarantees its own exclusivity and restricts the Bolivian counterparts’ power to negotiate the terms of the deals or seek outside international financing.

The sources in Arce’s energy ministries allege that China also reserves itself the freedom to negotiate the terms of the deals at a time of its choosing and restricts Bolivia’s ability to seek negotiations after signing – a freedom not granted to other countries. The principle goes against international trade law, as dictated by the World Trade Organization, of which both China and Bolivia are members.

Silvia Molina Carpio, a Researcher at the Center for Studies for Labor and Agricultural Development (CEDLA) in La Paz, argues that “if this is being done in Bolivia, it is definitely being done in other Latin American countries as well, in full disregard of the region’s constitutional sovereignty.”

The Arce administration, including the YLB and Ministries of Hydrocarbons and Mining, did not respond to requests for comment.

In fact, according to the AidData Project at the College of William & Mary in Virginia, China has used confidentiality clauses in over 100 of its loan packages throughout the developing world, particularly in Latin America.

The clauses revealed by AidData, however, pertained explicitly to loans and only related to the countries’ ability to share information about the loans with external creditors and lenders. In this new case, the entities being kept in the dark are the government and the public of the country itself. AidData has little information on Chinese investments in Bolivia.

“Some figures in the government know about this, but won’t reveal anything since China is their cash cow, and would not want to jeopardize deals worth billions of dollars,” Molina Carpio said.

Dr. Evan Ellis of the Center for Strategic and International Studies said the presence of confidentiality clauses “underlines the predatory nature of Chinese companies and the importance for Latin America and other partners to be at the top of their game when they negotiate and review contracts.”

Two sources working for the MAS allege that some legislators of the Plurinational Legislative Assembly know of and have endorsed this situation and approve of the loans. If true, this would also be a violation of Bolivian law.

Last November, in response to allegations of foul play by the Chinese government and Chinese firms in Bolivia, Senator Pedro Vargas of the MAS told The Diplomat from his office in La Paz that “the government has always, and will always, act in accordance with the rule of law and the Constitution, and act in the best interests of the Bolivian people.” Vargas added that “the United States and China will continue to compete for influence, but the truth is, we will continue to do what is best for our country, and the deals we have been able to secure move our country forward.”