According to a letter signed by over 40 NGOs delivered in September to Ms. Yukiko Omura, the new head of the Multilateral Investment Guarantee Agency (MIGA): “MIGA not only has weaker information disclosure, social and environmental policies than other arms of the World Bank Group, but it has also been criticized for failing to meet even its own minimum standards.”
MIGA provides political risk insurance or guarantees to private investors and lenders to encourage foreign direct investment into developing countries.
NGO concerns include:
- Portfolio balance: MIGA’s portfolio does not differ significantly from private sector risk insurance portfolios. Despite its mandate as a development institution, MIGA has provided guarantees for projects with questionable pro-poor development benefits, disproportionately concentrated in middle-income countries that are already relatively well positioned to receive private investment.
- Transparency: MIGA’s information disclosure policies fall far short of the minimum standards of the Bank’s other public and private-sector lending arms.
- Social and environmental safeguards: In 2002, MIGA’s independent evaluation office, the Operations Evaluations Unit (OEU), examined the institution’s oil, mining and gas portfolio. Findings suggest that MIGA is failing to provide rigorous oversight of its projects to ensure that all investments are carried out in an environmentally and socially responsible manner.
- Development effectiveness: The CAO found that MIGA does not have a system to monitor or collect information on the development impacts or effectiveness of the projects it guarantees.
Ms. Omura replied in mid-October affirming her “personal commitment to bring the agency closer to the rest of the World Bank Group”. On portfolio balance, the MIGA head said she would “like to see MIGA doing more projects in our priority areas”. On disclosure and safeguards, MIGA will complete a review of its policies “within 12 months of board approval of IFC’s new safeguard policies” (IFC policies are scheduled to go to the board in mid-2005). On effectiveness, MIGA will conduct a “more rigorous and integrated analysis of the economic, environmental and social impacts of the projects” it supports. To help achieve this goal, it plans to hire a senior social specialist and a chief economist.