The Multilateral Investment Guarantee Agency (MIGA) has issued a 13-page response to the report Risky Business published by Friends of the Earth and other NGOs this summer (see Bretton Woods Update 24). The agency contests the report’s claims that it promotes corporate investment in unsustainable projects.
MIGA maintains that it supports only projects that have “a positive developmental impact” and involve ethical corporate clients. It rejects allegations of environmental degradation and human rights abuses resulting from MIGA-supported projects, including mining projects in Peru, Russia and Guyana. Without its political risk insurance, MIGA claims, many projects would not have been carried out.
The NGOs pointed out that MIGA‘s portfolio conveyed a bias towards large infrastructure projects that have not benefited the poor. Foreign direct investments, like those guaranteed by MIGA, have not focused on primary services infrastructure badly needed in least developed countries nor has it shown how guarantees to large international banks have increased access to credit for the poor, they charged. The NGOs also noted inconsistencies between MIGA‘s policies and that of the World Bank, including a shorter public comment period for Environmental Impact Assessments and the lack of mandatory assessments for some projects.
MIGA‘s response to Risky Business
Risky Business: How the World Bank’s Insurance Arm Fails the Poor and Harms the Environment