Pitfalls and Pipelines - Philippine Indigenous Peoples Links

Chapter 2.3: International Advocacy with Companies and Their Investors
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Inter-American Development Bank Group. Generally they
use taxpayers’ money to provide financing for the purpose
of development, although their interests can be much
more varied. For instance, the World Bank Group includes
the International Finance Corporation (IFC), which acts
as the private sector arm of the Bank, and the Multilateral
Investment Guarantee Agency (MIGA). MIGA provides political
risk insurance, effectively guaranteeing foreign direct
investments made in developing countries against so-called
“political risk.” Effectively, this is another form of corporate
welfare. MIGA was instrumental in providing political risk
insurance to allow finance to be raised for the construction of
the much criticized Grasberg mine in West Papua/Indonesia.
Once the project was completed, the mine owners—Freeport
McMoRan and Rio Tinto—were able to discard the insurance
as having done its job, most likely to avoid a long overdue
environmental investigation. 32
As noted in Chapter 2.2, the World Bank has, despite its
development mandate, a history of support for the extractive
industries, which it failed to correct even when presented with
evidence of the questionable development benefits in its own
Extractive Industries Review (EIR). Nadia Martinez of USbased
Institute for Policy Studies noted the Bank failed “to distinguish
its goals and standards from the likes of Halliburton,
ExxonMobil, Shell, and other profit-driven institutions.” 33 In
fact, the year the Bank rejected the EIR’s findings, in the first
nine months (of 2004), just half a dozen oil, gas and mining investments
accounted for no less than 56 percent of all related
financial returns to the IFC. 34 It could barely afford to give up
such a cash cow.
So the Bank keeps trying to justify such investments. Its
latest initiative is called extractives for development (E4D).
This is a “knowledge sharing platform” aimed at transforming
the extractive industries into a force for development.
Speaking in December 2011, Rachel Kyte, the Bank’s Vice
President for Sustainable Development, admitted that the
sector has been blighted by “corruption, rent-seeking, environmental
damage, disregard for the rights of local communities,
[and] conflict and fragility.” 35