104

GUIDELINES FOR THE NEGOTIATION OF BENEFITS

DISTRIBUTION OF HARNESSING SHARED ENERGY

RESOURCES ACCORDING TO THE EXPERIENCES

OF NEGOTIATORS AND THE APPROACH OF

REGIONAL SPECIALISTS. CASE STUDY OF ITAIPU

BINATIONAL HYDROPOWER PLANT.

LINEAMIENTOS PARA LA NEGOCIACIÓN DE LA DISTRIBUCIÓN DE BENEFICIOS DEL

APROVECHAMIENTO DE LOS RECURSOS ENERGÉTICOS COMPARTIDOS DE ACUERDO

CON LAS EXPERIENCIAS DE LOS NEGOCIADORES Y EL ENFOQUE DE LOS ESPECIALISTAS

REGIONALES. ESTUDIO DE CASO DE LA CENTRAL HIDROELÉCTRICA BINACIONAL ITAIPÚ.

Eduardo Ortigoza

, Richard Ríos

, Noel Jiménez

, Victorio Oxilia

Recibido: 22/11/2021 y Aceptado: 28/06/2022

ENERLAC. Volumen VI. Número 1. Junio, 2022 (104 - 119)

ISSN: 2602-8042 (impreso) / 2631-2522 (digital)

Foto de Ana María Arroyo en archivo personal.

105

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OLADE – AUGM

1 Grupo de Investigación en Sistemas Energéticos (GISE),

Facultad Politécnica de la Universidad Nacional de

Asunción. Paraguay. eortigoza@pol.una.py

https://orcid.org/0000-0002-8525-3984

2 Grupo de Investigación en Tecnologías Verdes (GITV),

Facultad Politécnica de la Universidad Nacional de

Asunción. Paraguay. rrios@pol.una.py

https://orcid.org/0000-0002-6951-9498

3 Paraguay. noeljimenez91@gmail.com

https://orcid.org/0000-0002-9993-9725

4 Núcleo de Investigación en Energía y Recursos Naturales

(IRNE), Facultad Politécnica de la Universidad Nacional de

Asunción. Paraguay. voxilia@pol.una.py

https://orcid.org/0000-0002-4152-0788

ABSTRACT

In South America, in the 1970s, bilateral treaties

were signed for the use of the shared hydro-

electric potential. These treaties were results of

international negotiations among countries of the

La Plata Basin, which took place in the midst

of various complexities. The systematization of

these negotiation experiences could support the

advancement of electricity integration, given

that there is still a high regional hydroelectric

potential to be exploited. The main objective

of this work is to systematize the lessons

learned in the negotiation processes in which

Paraguay participated, in order to provide ele-

ments for future decision-making. Methods were

applied to systematize these lessons learned.

The results of the analysis provide valuable in-

formation for strategic decision-making, imple-

mentation, monitoring and communication to

stakeholders, regarding what to negotiate (con-

sidering the revision of Annex C of one the

hugest hydropower plant of the world: ITAIPU

scheduled for 2023) and how to organize inter-

nally to carry out the negotiations. The con-

clusions of this study are also valid for other

region’s watershed and also could be applied

for the use of shared natural resources in other

regions of the world.

Keywords: Energy Integration; Negotiations;

Learning History, ITAIPU.

RESUMEN

En Sudamérica, en la década de 1970, se

firmaron tratados bilaterales para el uso del

potencial hidroeléctrico compartido. Estos tra-

tados fueron resultado de negociaciones interna-

cionales entre los países de la Cuenca del Plata,

que se desarrollaron en medio de diversas

complejidades. La sistematización de estas ex-

periencias de negociación podría apoyar el

avance de la integración eléctrica, dado que

aún existe un alto potencial hidroeléctrico re-

gional por explotar. El objetivo principal de este

trabajo es sistematizar las lecciones aprendi-

das en los procesos de negociación en los que

participó Paraguay, con el fin de aportar ele-

mentos para la toma de decisiones futuras.

Se aplicaron métodos para sistematizar estas

lecciones aprendidas. Los resultados del análisis

aportan información valiosa para la toma de

decisiones estratégicas, la implementación, el

monitoreo y la comunicación a los actores,

respecto a lo que se debe negociar (considerando

la revisión del Anexo C de una de las centrales

hidroeléctricas más grandes del mundo: ITAIPU,

prevista para 2023) y cómo organizarse inter-

namente para llevar a cabo las negociaciones.

Las conclusiones de este estudio también son

válidas para las cuencas hidrográficas de otras

regiones y también podrían aplicarse al uso de

los recursos naturales compartidos en otras

regiones del mundo.

Palabras clave: Integración energética;

Negociaciones; Historia de aprendizaje; ITAIPU.

106

INTRODUCTION

The 1960s saw a strong growth in the demand

for electricity in Paraguay’s neighboring coun-

tries Argentina and Brazil, with which Paraguay

shares important hydroelectric resources. In the

late 1960s and early 1970s, the Paraguayan State

negotiated and signed two bilateral treaties,

namely the Treaties of ITAIPU and YACYRETA,

that established binational entities with equal

state participation, with the aim of harnessing

the Paraná River’s shared resources for elec-

tricity generation. The legal foundations were

established for the association between the

States (Paraguay-Brazil; Paraguay-Argentina) for

their respective exploitation in the aspects of

governance of the binational entities (Annex

A of the Treaties), based on principles of equal

rights and obligations between the signatory

countries; the construction work and technical

characteristics of the projects (Annex B); and

the financial and marketing terms for the energy

produced (Annex C). The documents stipulated

an equal division of this energy between the

partner countries, as well as the exclusive – or, in

the case of EBY, priority– rights of companies

in the partner countries to purchase the energy,

exclusively for domestic consumption.

Bilateral –in some instances tripartite– negotia-

tions took place in the context of disputes over

ownership of benefits from shared natural

resources –water resources, in particular– in the

same hydrographic basin: the La Plata River basin,

on its international stretch of the Paraná River.

International negotiations took place in very

different contexts in Paraguay and its neighbo-

ring partner countries, as regards the size of their

electrical systems, development of their indus-trial

sectors –particularly the basic industry and capital

goods sectors– and general country conditions

for obtaining loans, as the projects were to be

carried out through external financial resources

due to the very low ratio between the capital of

the binational entities formed and their financing

requirements. Binational negotiations continued

during construction through to operation of

the hydropower plants, seeking various adjust-

ments in the three above-mentioned organiza-

tional, technical and financial dimensions, the

results and strategies of which were contested

by some segments of society, particularly in Pa-

raguay. Both international agreements provide

for the review of financial aspects as of 2014 in

the case of YACYRETA –already approved by the

National Congress of Paraguay– and 2023 in

the case of ITAIPU.

Main construction work for these two major

engineering projects was carried out beginning

in the mid-1970s and over the course of four

decades, on the basis of complex international

agreements reached through negotiations fea-

turing all sorts of complexities, conditions and

challenges such as: (i) asymmetries among the

countries (Debernardi, 1996; Pereira, 1974);

(ii) diversity of geopolitical approaches on

the use of a hydrographic basin for electricity

generation; (Debernardi, 1996; Pereira, 1974)

(iii) technological challenges; (iv) the need for

external financing in an unfavorable global

context; (Oxilia, 2009) and (v) difficulties in rea-

ching consensus on binational agreements at

the country level (Canese & Mauro, 1985;

Guglialmelli, 1980; Pereira, 1974).

GUIDELINES FOR THE NEGOTIATION OF BENEFITS DISTRIBUTION OF HARNESSING SHARED ENERGY RESOURCES ACCORDING TO THE EXPERIENCES OF NEGOTIA-

TORS AND THE APPROACH OF REGIONAL SPECIALISTS. CASE STUDY OF ITAIPU BINATIONAL HYDROPOWER PLANT.

Ortigoza, Eduardo; Ríos, Richard; Jiménez, Noel; Oxilia, Victorio

The 1960s saw a strong

growth in the demand for

electricity in Paraguay’s

neighboring countries

Argentina and Brazil, with

which Paraguay shares

important hydroelectric

resources.

107

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OLADE – AUGM

OBJECTIVES

The main objective of this study is to systema-

tize the lessons learned from the bilateral

and tripartite negotiations carried out during

the preparation, construction and operation

phases of both ITAIPU and YACYRETA bina-

tional hydropower projects on the Paraná

River, with a view to providing elements for

future decision making in the scope of regional

integration processes and initiatives, and in the

phase of negotiation over financial and marke-

ting aspects of the energy generated by both.

Considering the proposed objective and time

elapsed since the first negotiations took place,

we propose applying the documentation method

based on historical analysis for historical con-

textualization of the binational projects in

combination with the learning history method

for collecting information from relevant actors

identified on an actor is map.

Identifying and organizing the lessons learned

in international negotiations over the Paraná

River hydropower plants are relevant for South

American countries because of the immense

hydropower potential still to be exploited in

hydrographic basins whose sovereignty is shared

by multiple countries, such as those of the

Amazon River and especially that of the River

Plate. Difficulties of all sorts that have arisen

during implementation of large international

or national hydropower projects in South Ame-

rica –e.g., the Inambari, Belo Monte, Madera River

Complex projects, among others– demonstrate

the usefulness of learning from the evolution of

large hydropower projects in the region.

Learning about the experiences of people who

participated in the construction of the bina-

tional projects is of utmost importance for

Paraguay, considering that in the year 2023

Annex C of the Treaty of ITAIPU will be revised.

Furthermore, the possibility still exists of buil-

ding new hydropower projects on the Paraná

River, which are binational in essence. That is,

these projects would entail a negotiation not so

much with Brazil, but rather with Argentina

–e.g. the Aña Cuá (related to YACYRETA), expan-

sion of YACYRETA hydropower plant, Itacorá-

Itatí and Corpus projects– involving works that

would contribute to the attainment of one of

the objectives in the Energy Policy of the Re-

public of Paraguay, namely to “guarantee

energy security with self-sufficiency criteria....”

(MOPC, 2016).

The proposed objective is relevant for the ener-

gy sectors in South American countries and for

the advancement of energy integration. This

is because a sizeable hydropower potential

exists that remains to be exploited in the

hydrographic basins whose sovereignty is

shared among multiple countries: the Amazon

River basin and especially the La Plata River

basin, as shown in Table I. Therefore, learning

from already completed projects could contri-

bute to an important and crucial future de-

velopment of the region’s power systems.

Regarding future hydropower projects (Table I),

some specialists in the region (Sauer, 2015)

highlight the convenience of implementing

an integrated management approach for both

hydropower resources and the assets of exis-

ting enterprises by creating a Southern Energy

Corporation. This regional corporation’s objec-

tive would be to invest in construction of new

binational projects in the La Plata River basin

and in their electrical interconnection net-

works, with the corporation acting as the main

electricity generation hub in an integrated elec-

tricity market in the Southern Cone of the

Americas

. Therefore, learning from already

completed projects could contribute to an im-

portant and crucial future development of the

region’s power systems(Ortigoza et al., 2018;

Walczak et al., 2021).

       

Uruguay.

108

Table 1. Hydroelectric Projects in the La Plata River Basin (not yet implemented)

Projects

Available potential (Paraná and Uruguay rivers)

Power Average energy Partner countries

Aña Cua (*) 270 MW 2.000 GWh/año

Paraguay –

Argentina

YACYRETA (*) (**) 4.650 MW 21.200 GWh/año

Itacora Itatí (*) 1.660 MW 11.300 GWh/año

Corpus (*) 2.880 MW 20.200 GWh/año

Panambi (***) 1.048 MW 5.970 GWh/año Argentina

– Brazil

Garabi (***) 1.152 MW 5.475 GWh/año

a (*) Source: Technical Report IPPSE (IPPSE, 2017) (**) Includes currently installed capacity (3100 MW)

b (***) Source: http://garabipanambi.com.ar

Although there are accounts from some of key

actors in the negotiations, which have some-

times been published as their own work

(Damill & Fanelli, 1994; Debernardi, 1996), or

as a compilation and analysis by researchers

(Oxilia, 2009), these experiences had not been

systematized in the form of lessons learned,

as has been done in this study

This analysis will focus on systematizing the

elements that could be used as an analysis in

the preparation of objectives, strategies and

internal organization for the revision of Annex

C of the Treaty of ITAIPUu. Therefore, the speci-

fic objectives for this analysis are:

I. To identify guidelines for organizing the

negotiation process, during its preparation

phase prior to negotiation; and

II. To define guidelines for defining a new

cost of electricity service setting structure for

ITAIPU Binational, based on the Objectives of

the National Energy Policy 2040 (PEN 2040).

 

out with financial support from the National Council of

Science and Technology of Paraguay

MATERIALS AND METHODS

This research work was undertaken in three

stages. First, a historical analysis of the projects

was carried out. In the second stage, a learning

histories survey was carried out through in-

terviews with key actors who expressed their

willingness to collaborate with the project.

Finally, the third stage consisted in preparing a

Preliminary Table of Lessons Learned (PTLL).

Each of the stages is described below:

Although historical contextualization of the

negotiations helps in understanding the motiva-

tions that could explain actions and decisions

related to the projects, it fails to capture the

learning from experiences during implementa-

tion of these projects. This requires deploying

tools and techniques for identifying and sys-

tematizing lessons learned. Considering the

proposed objective and the long period of time

elapsed since the last developments relating

to the binational treaties –late 1950s for

YACYRETA and mid-1960s for ITAIPU– we

propose applying the learning histories (LH)

method for collecting and systematizing infor-

mation on lessons learned from actors who

were linked to the projects during their various

GUIDELINES FOR THE NEGOTIATION OF BENEFITS DISTRIBUTION OF HARNESSING SHARED ENERGY RESOURCES ACCORDING TO THE EXPERIENCES OF NEGOTIA-

TORS AND THE APPROACH OF REGIONAL SPECIALISTS. CASE STUDY OF ITAIPU BINATIONAL HYDROPOWER PLANT.

Ortigoza, Eduardo; Ríos, Richard; Jiménez, Noel; Oxilia, Victorio

109

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OLADE – AUGM

phases, from initial negotiations through to their

current operation phase.

Therefore, both a historical and geopolitical

analysis and the application of learning histories

serve as components of this study’s methodolo-

gical proposal. Following are theoretical consi-

derations for these methodological components:

Historical analysis with a geopolitical focus

on the use of natural resources under shared

sovereignty

Several authors (Canese & Mauro, 1985; Cardozo,

1965; Caubet, 1991; Cotrim, 1999; Debernardi,

1996; Oxilia, 2009) contextualize the negotia-

tion and implementation of the binational

Treaties of ITAIPU and YACYRETA within the

framework of the development of Keynesian

policies and as examples of geopolitical dis-

putes over the use of shared natural resources

during a particular historical period in the region

in which military governments predominated.

In addition, the global financial context was very

unstable during the period when the terms of

the binational treaties were negotiated and

financial disbursements began.

Within the methodological proposal, this ana-

lysis functioned as the basis for the preparation

of research instruments for the surveying of

lessons learned, as well as for their systemati-

zation and presentation. On the one hand, the

oil price shock in 1973 and at the end of that

decade produced an unprecedented concen-

tration of foreign currency in oil exporting

countries with the consequent abundance of

petrodollars. On the other hand, the breakdown

of the Bretton Woods agreements and fluctua-

tions in exchange rates among the world’s main

currencies produced a crisis in the international

financial system, with high, fluctuating interest

rates, and serious consequences for Latin Ame-

rica, where it was known as a period of external

debt crisis or The Lost Decade (1980)(Bértola

& Ocampo, 2012; Centro da Memória da Eletri-

cidade no Brasil, 2001) .

Several methods for systematizing lessons

learned have been applied in different con-

texts, such as in topics related to perceptions

on inter-company negotiations(Eiteman, 1990),

the use of renewable sources (Baigún et al.,

2011; Sanyal & Enedy, 2011; Tokman, 2011;

Wiltsee, 2000), internationalization in compa-

nies (Bianchi & Ostale, 2006), among others.

However, no studies can be found in the litera-

ture that aim at systematizing lessons learned

from international negotiations over binational

hydropower enterprises.

Method for systematizing the lessons learned

The main objective of systematizing the lessons

learned is to avoid institutional amnesia: the

team that participated in the execution of

the projects losing that learning. Learning

from mistakes made and setbacks, as well

as from solutions implemented, is valued (Guzzo

et al., 2012).

The tool selected presents the experiences and

understandings of participants –people who

initiated, implemented and participated in

organizational transformation efforts or expe-

riences– as well as direct non-participants who

South American countries

have an immense

hydropower potential,

still to be exploited in

hydrographic basins whose

sovereignty is shared

by multiple countries.

110

were affected by these events (Kleiner & Roth,

1996). Thus, tacit knowledge, which in some

cases is irretrievable, is codified and converted

into a knowledge base, which people can access

when similar situations arise.

To apply learning histories, interviews were

conducted using techniques (interviews) and

instruments (e.g. questionnaires).

Once interview results were obtained, the

lessons learned were identified in expert

workshops. The lessons learned identified

can be organized following an approach related

to achievement of the objectives proposed for

their systematization. Finally, the results are

presented in a Lessons Learned Table.

Additionally, based on the lessons learned, a

proposal was designed for: i) future compo-

nents of the post-2023 UCES, and ii) internal

organization of the negotiation process that can

be used by either negotiating party.

STAGES OF THIS RESEARCH WORK

This research work was carried out in four

stages. First, a historical and geopolitical study

of the binational enterprises was carried out

by means of a documentary analysis. The next

step was applying learning histories through

interviews with key actors in Argentina, Brazil

and Paraguay, who were carefully identified by

reason of their links with the projects. Infor-

mation was collected from various sectoral

actors, such as the government, binational en-

tities, public energy companies, private sector

and academia. Subsequently, possible elements

of the post-2023 UCES and for the preparation

of the Lessons Learned Table were assessed.

The following is a description of work done in

each of the stages:

First stage - Analyzing the socioeconomic roots

of the binational enterprises and geopoliti-

cal problems related to the use of shared

water resources on the Paraná River

The conditions of the economies and electricity

sectors of Argentina, Brazil and Paraguay were

very different during the decades when the

negotiations for the signing of the Treaties of

ITAIPU and YACYRETA took place. Paraguay

was an agro-exporting country, with produc-

tion based on family agriculture, small farms

and little industrial development. Argentina and

Brazil were countries with significant, diver-

sified industrial development. They were the

first two economies in South America to have

experienced expanding markets, developing

basic industries driven by state-owned com-

panies, and significant progress in the local

business sector. There were also differences

among the countries’ electricity sectors and

their financing capacities for this sector:

Argentina and Brazil had their own financing

programs for the electricity sector at the state

level. However, there was a common element

to all three countries: the State’s marked pre-

sence in electricity development. State-owned

(public) electricity companies operated in all

For Paraguay, the

hydropower exploitation of

the Paraná River was the

most beneficial option to

support its long-term

electricity development

with a centralized

approach.

GUIDELINES FOR THE NEGOTIATION OF BENEFITS DISTRIBUTION OF HARNESSING SHARED ENERGY RESOURCES ACCORDING TO THE EXPERIENCES OF NEGOTIA-

TORS AND THE APPROACH OF REGIONAL SPECIALISTS. CASE STUDY OF ITAIPU BINATIONAL HYDROPOWER PLANT.

Ortigoza, Eduardo; Ríos, Richard; Jiménez, Noel; Oxilia, Victorio

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cases under plans to develop their hydropower

generation systems, with greater intent after the

1973 oil price crisis, the year of the signing of

the binational treaties.

In Brazil, a strong growth in electricity demand

necessitated an accelerated increase in elec-

tricity production (Centro da Memória da

Eletricidade no Brasil, 2001). During the 1950s

and 1960s, the Brazilian electricity sector

needed to consider options for its electricity

supply (Pereira, 1974). Though without the high

growth rates of Brazil, in Argentina the increase

in electricity demand led Agua y Energía

Eléctrica to push a hydropower generation

program that was implemented decisively du-

ring the 1970s and 1980s (Agua y Energía

Eléctrica, 1987).

Since the late 1950s and during the 1960s,

Argentina and Brazil showed strong interest in

exploiting the hydropower potential of the Paraná

River’s international stretch, in an environment

with a strong geopolitical content.

For Paraguay, a country that had been in the

process of organizing its power system through

its vertically organized, state-owned company

ANDE since the mid-1960s, the hydropower

exploitation of the Paraná River was of great

importance, as this was the most beneficial

option, whether from the perspective of unit

capacity cost or energy security and quality, to

support its long-term electricity development

with a centralized approach.

It should also be recalled that ITAIPU Binational

has historical roots in a boundary demarcation

conflict between Paraguay and Brazil in the

area around the now vanished Guairá Falls. The

diplomatic solution is also considered a successful

case of negotiation over a geopolitical dispute

over the use of a natural resource under shared

sovereignty.

Foto de Valdemaras D. en Unsplash.

112

Second stage - Applying learning histories

through interviews with key actors from

Argentina, Brazil and Paraguay

After better understanding the reasons for

the creation of the ITAIPU and YACYRETA

binational entities, the most important aspects

to be extracted from the negotiation pro-

cesses and which could be used for future

enterprises were identified. Subsequently, inter-

views were conducted with the relevant actors

using the learning histories method.

In order to deploy the learning histories tool

selected for data collection, subjects to be

interviewed were identified by analyzing their

links to and the roles they played in these

projects. Interviews were conducted with actors

from Argentina, Brazil and Paraguay who were

involved in the negotiations over the projects.

More than thirty people were interviews in

total, from various sectors of society.

Before conducting the interviews, a list was

drawn up with the names of the people who

were involved in the most relevant negotia-

tions; with this list including actors from

Argentina, Brazil and Paraguay. Selection of the

actors to be consulted was done on the basis of

how closely they participated in the bilateral

negotiations. The final list included former

directors of ITAIPU and YACYRETA, financial

directors, advisors, ministers, builders, pre-

sidents of ANDE and ELETROBRAS, legislators,

professors, Presidents and others who re-

negotiated the treaties. Once the list of people

to be interviewed had been drawn up, a ques-

tionnaire was developed including targeted

questions for each actor, depending on the

position they held at the time, in order to elicit

first-hand experiences that could be relevant

and usable in the future.

Interview reports were presented in the

format recommended by the learning histories

tool, to facilitate the work carried out in the

next stage.

Third stage: Assessing the elements that

should be considered in the revision of

Annex C

Regarding the case study on the unit cost

of electricity service (CES), components

were assessed that could be part of the new

Annex C as a result of the negotiations. To

support this assessment, two elements were

taken into account: (i) discourse analysis of

the interviews conducted and characterized in

section D; and (ii) instruments included in Ob-

jective IV of the National Energy Policy 2040

(approved by Executive Order 6092/2016),

namely to “Consolidate Paraguay’s position as

a regional energy integration hub based on the

sustainable use of its natural resources and on

its strategic geographic location”(MOPC, 2016).

From the discourse analysis stands out a

conservative attitude towards the current CES

structure. The National Energy Policy 2040

establishes the creation of a National Infrastruc-

ture Bank for Economic and Social Development

(BNIDES) to manage the financial resources

that would originate from the revision of Annex

C, in the event that the current components

are maintained and by redirecting the compo-

nents to new ones.

Social participation

and transparency are

crucial when strategic

natural resources are

harnessed.

GUIDELINES FOR THE NEGOTIATION OF BENEFITS DISTRIBUTION OF HARNESSING SHARED ENERGY RESOURCES ACCORDING TO THE EXPERIENCES OF NEGOTIA-

TORS AND THE APPROACH OF REGIONAL SPECIALISTS. CASE STUDY OF ITAIPU BINATIONAL HYDROPOWER PLANT.

Ortigoza, Eduardo; Ríos, Richard; Jiménez, Noel; Oxilia, Victorio

113

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From the systematization of the lessons

learned, following are the elements of a propo-

sed possible structure for the CES that would

benefit the societies of Paraguay and Brazil:

1) Operating expenses;

2) Technological updating;

3) Social-environmental responsibility;

4) Capital gain or equity profits (ANDE and

ELETROBRAS);

5) Royalties I (refers to the royalties currently

in force); and

6) Royalties II (here, new “royalties” are

included to be applied towards the creation

of the National Infrastructure Bank for

Economic and Social Development (BNIDES),

as defined in the Energy Policy 2040).

These new elements must be monitored and

supervised and must allow society to carry

out this task, as an institution belonging to all

Paraguayans (50% of the hydropower plant),

and must comprise policies, programs and plans

for developing infrastructure, education and

health. The social participation and transpa-

rency are crucial when strategic natural resour-

ces are harnessed.

Stage four - Preparing the lessons learned

table

Once the interviews were completed, a report

was prepared. This report contained the A

report was prepared after interviews were

completed. This report contained the stories,

experiences, suggestions and recommenda-

tions from interviewees, who had participated in

the different negotiation processes over the

ITAIPU and YACYRETA hydropower plants.

Subsequently, a focus group was used to validate

the PTLL, with the participation of actors who

had been interviewed, specialists in nego-

tiation issues, professors, students, legislators,

among others.

The learning history reports were analyzed in

an expert workshop

and the lessons learned

were identified and classified. Bearing in mind

that the objective of systematizing the lessons

learned is to improve the conditions and

results of future negotiations, this analysis

showed that achieving this objective is feasible

using Deming’s continuous improvement ap-

proach (Arvesin, 1998). These categories are:

1) Policy decision making; 2) Strategy planning;

3) Strategy implementation; 4) Monitoring

and evaluation of strategies and results. Also,

based on the interviewees’ responses, an

additional category to the continuous improve-

ment approach was included (+D) related to

communication and social participation, taking

into account the content and political nature

of the negotiations.

       

Group (GISE) of the National University of Asunción

Polytechnic School, Asuncion.

114

Table 2. Lessons Learned table

Catering

Binational entities

Lessons learned Remarks

Policy decision making

Leveraging favorable political

situations in both countries.

Environment conditions

should exist to carry out

the negotiations. Valid

interlocutors with strong

leadership are needed.

Strategy Planning

Involving government leaders



on issues.

When situations cannot solved

at the technical level, leaders

must be involved.

Strategy implementation

Bring country proposals

previously developed with

technical rigor.

Proposals to be presented must

be developed by the experts

from the sector.

Monitoring, evaluation

and results of negotiations

Monitoring and evaluating

progress and results of

negotiations.

Decisions made must be

followed up on and evaluated.

Communication and

social participation



participatory mechanisms to

facilitate communication and

participation for consensus

on national positions.

Society must participate in

strategies that will be followed.

1 From past negotiations

GUIDELINES FOR THE NEGOTIATION OF BENEFITS DISTRIBUTION OF HARNESSING SHARED ENERGY RESOURCES ACCORDING TO THE EXPERIENCES OF NEGOTIA-

TORS AND THE APPROACH OF REGIONAL SPECIALISTS. CASE STUDY OF ITAIPU BINATIONAL HYDROPOWER PLANT.

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The analysis of the lessons learned systemati-

zed following the negotiation process approach

over aspects with political content –as these are

negotiations between countries over the use of

their shared resources– allows to recommend a

scheme of internal organization that can be im-

plemented by a negotiating party (a country),

at three levels (i) Policy decision-making;

(ii) Strategy planning and implementation; and

iii) Social consensus building. The classification

for the systematization of the lessons learned

organized according to the Deming cycle quality

tool can be seen in Figure 1. Considering the

lessons learned from the international negotia-

tions, it was possible to make a classification

following the continuous improvement process,

with the objective of providing a tool that could

help decision makers when negotiating future

hydropower projects, as mentioned above.

Figure 1. (a) Deming Cycle - Continuous Improvement that serves to improve planning and pro-

cesses within an organization; (b) Deming Cycle adapted for negotiations with other countries,

which incorporates the social participation (+D).

Source: Own elaboration.

DoAct

Plan

Check

(a) (b)

Act

• Policy

decision-

making

Check

• Strategy

monitoring

and evaluation

Plan

• Strategy

planning

• Strategy

implementation

116

Figure 2. Proposed internal organization of the negotiation process

Source: Own elaboration.

Leaders of other Government

Decision makers

Government Leaders

Decision makers

Consensus about

negotiations

Last

negotiation

instance

Auction

situation

Deployment

Negotiation

Regional Policy

Observatory

Think Tank

Specialists

Multidisciplinary and Multisectoral

Continuos

information

Social

participation

Strategic

communication

Monitoring

and

evaluation

Negotiating Team

Multidisciplinary - Leadership

Capacity - Trained in Strategies

Other Negotiators

Consensus

building

Solve critical points

Objectives

and goals

Figure 2 describes an experience-based nego-

tiation process that incorporates a continuous

improvement process and includes both the

use of prospective techniques and the participa-

GUIDELINES FOR THE NEGOTIATION OF BENEFITS DISTRIBUTION OF HARNESSING SHARED ENERGY RESOURCES ACCORDING TO THE EXPERIENCES OF NEGOTIA-

TORS AND THE APPROACH OF REGIONAL SPECIALISTS. CASE STUDY OF ITAIPU BINATIONAL HYDROPOWER PLANT.

Ortigoza, Eduardo; Ríos, Richard; Jiménez, Noel; Oxilia, Victorio

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OLADE – AUGM

tion of civil society stakeholders:

Level I: Policy decision making. On the one

hand, it represents the authority that draws

up the policies for the negotiation –including

the objectives and goals to be achieved– and,

on the other hand, the final decision-making

authority for the negotiations. This level of

hierarchy includes heads of state, ministers,

foreign ministers and ambassadors. This autho-

rity should clearly brief the negotiating team

(Level II) on the objectives and goals. This

level must have access to relevant and timely

information on the progress of the implemen-

tation of negotiation strategies; and intervene in

the resolution of critical and conflictive issues

between the negotiating parties.

Level II: Strategy planning and implemen-

tation. This is the level of permanent negotiation.

Teams in charge of negotiations must be

multidisciplinary, and possess leadership skills

and training in strategy. It is their role to plan

strategies and ways to implement them. To

achieve this, these teams must rely on con-

tributions from: 1) a specialist think tank

implementing multisectoral technical-scientific

based methods (proposal and evaluation of

prospective studies and systemic analysis, among

others); and 2) a regional politics watch that

analyzes the political situation in the countries

seeking to leverage favorable situations for

energy integration. Likewise, monitoring stra-

tegy implementation using clear indicators and

evaluating the results are relevant to the progress

of the negotiation process.

Level III: Social consensus building. This

level is represented by a loop of reflections on

how the negotiations are perceived socially and

adequate communication on the negotiating

team’s progress. Different sectors of society

must perceive transparency in the negotiations

and at the same time feel involved in the pro-

cess. They must endorse the negotiating team’s

statements (Level II) and the government

leaders’ decisions (Level I).

DISCUSSION

This article presents an attempt to understand

and analyze the negotiations that led to

the development of ITAIPU and YACYRETA,

while presenting important information on

the lessons learned from those discussions,

according to the experiences of those who

were part of the negotiations or had contact

with those who did. The contents collected in

the interviews were analyzed by a team of

specialists who extracted the central ideas f

rom the discourse of the interviewees and

clas-sify them in the PTLL. Subsequently, focus

groups were held to review the PTLL and

validate the contents collected and classified

in the table. This section presents a synthesis

of the lessons learned, organized by themes

following the steps of the PDCA and D+ cycle as

described above. The D+ factor introduces an

upward feedback that has been absent in the

early stages of the negotiations, but which

has gradually become more vocal in recent

developments. It is now bidirectional, i.e.,

the population must be involved. On the one

hand, it is necessary to design a communi-

cation strategy to make the information and

the process transparent, so that an active effort

to deepen and enrich the downward feedback,

from decision-makers to the society, is crucial.

Furthermore, upward feedback (from society

to decision-makers) should be sought as well.

In order to achieve consensus and acceptance

of results of these negotiations in society,

there must be mechanisms to help public par-

ticipation in the procedure to achieve final

results, as well as contingent planning that

creates the necessary flexibility to allow for

adaptation (or at least the possibility of doing

so) with the adversary.

CONCLUSIONS

118

This paper analyzed the experiences – whether

positive or negative– of the people who

participated in the creation of ITAIPU and

YACYRETA. Interviews with key actors in the

two projects led to the identification of a num-

ber of lessons learned.

First, it should be noted that the theoretical

and methodological framework proposed is

appropriate for systematizing lessons learned.

A historical and geopolitical analysis allowed

identifying actors and conducting the inter-

views; the learning histories tool facilitated

the recording and analysis of experiences; and

the Deming cycle provided a way to classify

and present the lessons learned following an

approach that allowed to prepare a proposal

for organizing the negotiations within the

countries, based on prior learning. The results

of this work entails that the approach of

Deming cycle for the international negotiation

process must be complemented by social parti-

cipation and mechanisms to communicate to the

society in a transparent way about the negotia-

tion progress. In this context, the main contri-

bution of this study is the systematization of

lessons learned from international negotiations

by combining the learning histories tool with

Deming’s continuous improvement approach.

It has been perceived that when negotiating,

there are several factors that contribute to these

actions being carried out more promptly and

in a cordial environment. These identified fac-

tors contribute to the ability to apply this work

to any projects with similar characteristics.

Secondly, this research work at its current state

points at several elements that should be taken

into account for the advancement of energy

integration based on the use of shared hydro-

power resources, among which the following

are mentioned: (i) high-level officials should

be informed about the follow-up on interests,

particularly on critical issues; (ii) negotiating

team should be carefully selected; (iii) it is

advisable to create a multisectoral forum of

advisors and specialists to analyze various

strategy and result scenarios.

Regarding the guidelines for the revision of

Annex C, a proposal for the CES structure was

presented, in which the current cost would

be maintained, with both states receiving the

distribution of Royalties I and II. 

ACKNOWLEDGEMENTS

The authors are very grateful to the Paraguayan

National Council of Science and Technology

(CONACyT) for financial support through

the projects PINV 18-1040 and the PRONII

program. Finally, gratitude is also extended to

one anonymous reviewer for her/his comments

and suggestions, which were very helpful to

improve this article.

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