This is long but it outlines in great detail just what Anvil was required to go through to get the World Bank guarantees.
Makes ABC look really really REALLY stupid.
MIGA's Environmental and Social Review Procedures
I. INTRODUCTION
1. The Multilateral Investment Guarantee Agency (MIGA) is a member of the World Bank Group. As stated in MIGA's Convention (Article 2), the objective of the agency is "...to encourage the flow of investments for productive purposes among member countries, and in particular to developing member countries...." MIGA does so by:
providing political risk guarantees (insurance) to investors in projects in developing member countries; and
providing advice to developing member countries on how to improve their ability to attract foreign investment.
2. Article 12(d) of the Convention states the following:
"In guaranteeing an investment, the Agency shall satisfy itself as to:
(i) the economic soundness of the investment and its contribution to the development of the host country;
(ii) compliance of the investment with the host country's laws and regulations;
(iii) consistency of the investment with the declared development objectives and priorities of the host country; and
(iv) the investment conditions in the host country, including the availability of fair and equitable treatment and legal protection for the investment."
As stated in the Convention, and as amplified by the Commentary on the Convention and by MIGA's Operational Regulations, the host country's laws, regulations, and stated development priorities are important in MIGA's evaluation of a project's contribution to economic and social development in the host country. It is MIGA's view that acceptable environmental performance, sustainability with respect to natural resource management, and social soundness are critical factors in the "...economic soundness of the investment and its contribution to the development of the host country." Following practices elsewhere in the World Bank Group, MIGA evaluates the project in terms of its own environmental policies and guidelines.
3. MIGA's project cycle and relationship to investors are unique within the World Bank Group. MIGA's environmental and social policies, while harmonized with IFC policies, are adapted to the nature of MIGA's business as an investment insurance provider.
4. MIGA's Operational Regulations (paragraph 3.26) set a goal for review and approval of guarantees within 120 days from receipt of a definitive application. Because of this goal, these procedures are designed to obtain relevant information necessary for the review in a timely fashion so that the necessary environmental clearance is obtained prior to issuing coverage to the applicant. This document outlines the procedures that must be followed by MIGA staff to ensure that this is done. The procedure:
discusses applicable environmental and social policies;
outlines applicable environmental and other guidelines;
describes the project cycle which MIGA uses in underwriting an investment, and highlights where in the cycle MIGA's Environment Office is required to provide input; and
details the procedures that MIGA staff must follow to ensure that projects meet MIGA's commitment to environmentally sustainable and socially responsible projects.
5. It is MIGA's policy that all the investments that it facilitates through its guarantee program are carried out in an environmentally and socially responsible manner. To this end, projects which MIGA insures must comply with applicable MIGA environmental guidelines and safeguard policies (as defined in Part II, below). MIGA's Environment Office is responsible for the environmental and social review, clearance, and supervision of projects in a manner consistent with the requirements contained in this review procedure
II. POLICIES AND GUIDELINES
Policies
6. Environmental Assessment Policy. MIGA's environmental assessment policy (Annex B of the Operational Regulations) provides overall policy and general principles that guide MIGA with respect to its consideration of an applicant's environmental assessment for a project. As part of its underwriting process, MIGA will take into consideration environmental aspects of the proposed investment in light of MIGA's environmental and social safeguard policies and guidelines.
7. Environmental and Social Safeguard Policies. In addition to MIGA's environmental assessment policy, various other environmental and social policies provide additional guidance to MIGA staff in determining the soundness of a project's contribution to the development of the host country. Thus, it is MIGA's policy that the projects it insures are consonant with the following environmental and social safeguard policies as posted on MIGA's website at the time the definitive application is received: Natural Habitats; Forestry; Pest Management; Safety of Dams; Involuntary Resettlement; Indigenous Peoples; Safeguarding Cultural Property; and Projects on International Waterways. 1
8. Consultation and Disclosure. MIGA requires the following actions, as appropriate, by sponsors of all Category A projects during environmental assessment.
a) The project sponsor is required to consult with, or to have consulted with, locally affected parties and local interest groups (i.e., local stakeholders) about the project's environmental impacts, and to take their views into account. The project sponsor should initiate consultations as early as possible. The project sponsor should consult before the terms of reference for the environmental assessment are finalized, and once a draft environmental assessment report has been prepared. In addition, the project sponsor continues to consult with relevant stakeholders throughout project construction and operation, as necessary, to address project-related environmental and social issues that affect them.
b) For meaningful consultations, the project sponsor provides, or has provided, relevant information in a timely manner and in a form and language that are understandable and accessible to the groups being consulted.
c) When an environmental impact assessment report is required, the project sponsor is required to give public notification and disclose locally, as early as possible in an appropriate manner, the environmental impact assessment report at a public place accessible to project affected groups and local interest groups such as nongovernmental organizations. In addition, a non-technical environmental assessment summary should be disseminated in the local language to local stakeholders. If the project sponsor has not already publicly disclosed an environmental impact assessment report for a Category A project locally, MIGA will require the applicant to locally release the environmental impact assessment report at an appropriate public place. If disclosure of the written report is not appropriate, (e.g., because of low literacy rates in affected communities), alternative means of disclosing the report's findings must be considered. Extensive consultation with affected parties and local interest groups throughout preparation of the environmental assessment report and project implementation may be an appropriate form of disclosure in such cases.
9. The applicant for a Category A project must provide sufficient detail to MIGA regarding compliance with these requirements. Annex 1 provides guidance to MIGA staff regarding key information requirements in determining whether the applicant's project has complied with MIGA's local consultation and local disclosure requirements. Factors to be considered by MIGA Management in making this determination include: the procedures and requirements established by local environmental laws and policies for environmental permitting, and local social and cultural conditions that may constrain certain forms of public consultation and disclosure.
10. For projects that are already approved and permitted in accordance with host country environmental laws and regulations, MIGA will ascertain (Annex 1) whether the goals and objectives of local consultation and local disclosure have been adequately addressed by previous or ongoing actions by the project sponsor or host government. In making this judgment, MIGA will ascertain whether:
project-related records indicate that affected parties and local communities were, or are, aware of the project and its impacts;
information exists that indicates that the project sponsor or the environmental permitting authorities were, or are, aware of the key issues of concern to affected parties regarding the impacts of the project; and
the project's design and implementation have taken, or will take, into consideration these issues and concerns to the extent reasonable and practical.
If MIGA determines that these tests have not been fully met, MIGA and the applicant agree on a supplemental public consultation and disclosure program to address any identified deficiencies. MIGA may accept ongoing consultation with affected parties during project implementation, provided that such consultation offers adequate opportunity for changes in project design or implementation that reasonably address local concerns.
Environmental Guidelines
11. MIGA's environmental guidelines consist of the World Bank's environmental guidelines as established in the World Bank's Pollution Prevention and Abatement Handbook. The Pollution Prevention and Abatement Handbook is founded on the principles of sustainable development, cleaner production processes and pollution prevention. MIGA normally expects that an applicant's investment will comply with these guidelines. Part III sets forth the detailed provisions to be taken into account by project sponsors in designing and operating projects. MIGA staff need to ensure that each project insured by the Agency complies or will comply with the more stringent of environmental requirements of the host country or MIGA's environmental guidelines. However, taking into account country legislation and local conditions, an environmental assessment may recommend alternative emission levels and approaches to pollution prevention and abatement for the project. The environmental assessment report must provide full and detailed justification for the levels and approaches chosen for the particular project or site.2 Any variances from the guidelines must be reviewed and approved by the Executive Vice President, and will be identified in documents submitted to the Board, and accompanied by a summary explanation of its justification. In cases where the project does not fully comply with appropriate guidelines or recognized best management practices, MIGA may require a corrective action plan as a condition of guarantee.
12. In the absence of specific host country laws and regulations or World Bank environmental guidelines, MIGA may apply other internationally recognized environmental standards or best management practices to the project.
Occupational Health and Safety Practices
13. MIGA will evaluate an applicant's investment with respect to internationally recognized occupational health and safety practices. Normally this consists of warranties and representations from the applicant regarding appropriate standards and practices, measures taken to provide a safe working environment, and implementation of safety training programs. The World Bank Group's Occupational Health and Safety Guidelines (September 1988) provide additional guidance for those industries and pollutants most frequently encountered in MIGA projects. Additional guidance can be sought from MIGA's Environment Office.
Additional Guidance Materials
14. MIGA may consult, as appropriate, other guidance materials in reviewing projects. For example, additional guidance to MIGA staff can be found in various annexes and guidance notes that are attached to the IFC's Procedure for Environmental and Social Review of Projects.
Exclusions
15. MIGA's Operational Regulations (paragraph 3.08) explicitly state that "Investments of a military or highly speculative nature or in legally prohibited activities such as narcotics production shall not be covered." Consistent with practices among the other Bank Group members, MIGA will not provide guarantees for certain other types of business activities. These include:
products or activities deemed illegal by the host country or international law;
drift net fishing using nets in excess of 2.5 km in length;
activities prohibited by MIGA's environmental and social safeguard policies (e.g., Natural Habitats, Forestry, Pest Management);
manufacture and trade in weapons and munitions, distilled spirits for human consumption, tobacco, wildlife and wildlife products that are regulated under CITES, radioactive materials for non-medical uses, unbonded asbestos fibers, products containing PCBs, pharmaceuticals subject to international phase out or ban, pesticides subject to international phase out or ban, and ozone-depleting substances subject to international phase out; and
enterprises whose primary sources of income are gambling, prostitution, or involving forced labor or child labor inconsistent with internationally recognized norms.
Recognizing the high diversification seen in many industries and companies, and the often complex arrangements of parent companies and subsidiaries, MIGA will take into consideration the primary type of business of the applicant, the percentage of income that might come from the activities noted in this paragraph through subsidiaries, and the extent to which MIGA's guarantee may be seen to directly facilitate investment in an excluded activity. In such rare cases, a reasonableness test will be applied, subject to Board review and concurrence, when the project would have a significant development impact in the host country.
National and Local Environmental Laws and Regulations
16. MIGA expects all investments to operate in accordance with national and local laws and regulations, including environmental laws and regulations. A requirement to do so is expressly stated in Article 12(d) of the Convention, and must be a part of every MIGA contract. The insurance applicant must warrant compliance with host country environmental requirements. Failure of a company to operate legally is grounds for cancellation of the contract or denial of a claim. In the event MIGA discovers, either during project appraisal or subsequent to issuing a guarantee, that the project is not in compliance with local environmental laws and regulations, MIGA will require the applicant to commit to a program and schedule for achieving compliance, and condition continued coverage of the guarantee on satisfactory progress on the corrective actions.
III. PROJECT CYCLE
17. Timing of MIGA's formal involvement in the development of a project can vary significantly. MIGA is normally approached on a project through the submission of the Preliminary Application for Guarantee.3 Applications submitted by potential investors are sent to the MIGA Applications Office where they are registered. A preliminary screening is performed for eligibility. Subsequently, MIGA notifies the prospective client whether the project appears to be eligible for coverage and, if so, issues a Notice of Registration. MIGA officially begins its underwriting process once a Definitive Application and appropriate fees (which may include fees for MIGA's environmental review) are submitted by the prospective investor.
Early Management Screening (EMS).
18. The project underwriter will examine, inter alia, policy issues (if any) and the insurance requirements of the project, and will prepare a brief document (EMS) to submit to management for a decision as to whether to underwrite the project. The EMS will also make a "working estimate" on how much coverage to offer the project for MIGA's account, to be reinsured, or under the Cooperative Underwriting Program. The EMS will also identify the proposed members of the underwriting team.
19. A Monthly Operations Report lists those Definitive Applications currently being underwritten. The Report is cleared by the Vice President of Underwriting, and is circulated on a confidential basis to the President, Executive Vice President, and select senior managers in the World Bank Group.
Underwriting
20. Chapter 3 of MIGA's Operational Regulations provides guidelines in making underwriting decisions, including determination of risk, coverage, and premiums. Project assessment includes evaluation of the project's acceptability in terms of Article 12(d) of the Convention. In accordance with Article 12(d) of the Convention, the Commentary on the Convention, and the Operational Regulations, MIGA may rely on a statement by the host country as evidence that the project conforms to the laws, regulations, objectives, and priorities referred to in Article 12(d) and paragraph 3.09 of the MIGA Operational Regulations. Countries typically convey such a statement in the host country approval.
21. At the completion of underwriting, a draft President's Report, with detailed confidential annexes, is prepared by the underwriting team for the project. The detailed report examines, inter alia, the eligibility of the investor and the investment, and the risks associated with the project. The report also describes the environmental, social, and developmental issues associated with the project. The draft President's Report, with confidential annexes, is submitted to a Risk Management Committee for review, discussion, and recommendation for approval.
22. A President's Report is prepared for each guarantee operation. There are two types of Presidents' Reports: (a) a Streamlined President's Report for guarantees under US$25 million; and (b) a Formal President's Report for guarantees over US$25 million. The President's Report contains, inter alia, summaries of the project and risk assessments. Once the President's Report is recommended for approval by the Risk Management Committee, the President's Report is approved by the Executive Vice President on behalf of the President, subject to Board concurrence. Each President's Report is transmitted to MIGA's Secretary who is responsible for distributing it to MIGA's Directors.
Contract Issuance
23. One or more Contract(s) of Guarantee are prepared for each project. The underwriting team assembles the contract based on a standard contract and general conditions of guarantee. Depending upon the nature of the project and whether certain risk mitigating measures must be incorporated into the contract, approved amendments to the contract and/or general conditions for guarantee are utilized as appropriate. The contract is cleared by two managers from the Underwriting Department and by MIGA's Legal Department. Negotiations of the contractual conditions are often necessary; they are carried out by the underwriter in charge of the project and a lawyer from MIGA's Legal Department. Provisions reflecting any amendments to the general conditions as a consequence of the negotiations with the investor, as well as to the contract, are drafted by MIGA's Legal Department.
24. Before issuing a contract of guarantee, an approval from the host country is obtained directly by MIGA. In most cases, approval is given on a no-objection basis within a reasonable period, which is normally 30 days from the date of request of the approval, pursuant to agreements concluded between MIGA and its Category II country members.
25. Contracts are offered to the applicant following Board concurrence and receipt of a Host Country Approval. The applicant accepts the contract by signing it and paying the premium to MIGA. The Executive Vice President signs the contract on behalf of MIGA. In his absence, the Vice President of Underwriting is authorized to sign it.
Quarterly Guarantees Report
26. The Operational Regulations require the President to submit to the Board each quarter a report for its review listing the projects approved during the year, contracts issued, premium earned, and countries and sector concentration data.
IV. PROCEDURES FOR ENVIRONMENTAL AND SOCIAL REVIEW
Responsibilities
27. The environmental assessment of a project's environmental performance generally is the responsibility of the project sponsor. The applicant is expected to provide the necessary documentation that allows MIGA to evaluate the project in the context of host country laws and regulations in force at the time the project sponsor applies to the relevant authorities for project permits and approvals. MIGA evaluates the project with respect to MIGA's environmental and social policies and guidelines, and may rely extensively on information provided by the applicant in making this evaluation. MIGA normally does not expect the applicant (or the project sponsor) to evaluate its investment with respect to Bank-financed country environmental studies, country assistance strategies, or comparable Bank-financed studies or programs that are not part of national or local environmental policy, laws, or regulations. To the extent these are relevant, this will be done by MIGA staff.
28. MIGA often finds itself asked by a minority partner or a financial institution to insure its participation in a proposed project. In such cases, it is common to find that such an applicant is not in "control" of the project sponsor's environmental assessment process. This is particularly a problem when the minority partner represents a new investor in an already existing operation or project. In such cases, MIGA recognizes that the applicant may only be able to provide documents prepared entirely by other partners, or some subset of these documents. In such a situation, the applicant will be requested to provide sufficient information such that MIGA can assure itself that the project is in compliance with local laws and regulations and with policy provisions of relevant MIGA environmental and social policies, and consistent with MIGA's environmental guidelines. In some cases, this may include warranties and representations by the project sponsor.
29. Environmental review by MIGA staff involves a broad range of environmental, social, technical, commercial and legal issues and requires input from various members of the project team. It is the responsibility of the underwriter to obtain all relevant information from the applicant and to work closely with the Environment Office during the environmental review process. Review of the client's environmental assessment, and environmental clearance, is the responsibility of the Environment Officer assigned to the project. When MIGA seeks necessary technical assistance on environmental matters from specialists from the IFC, IBRD, or from outside consultants, coordination is the responsibility of the Environment Officer. The Environment Officer, utilizing best professional judgment, assesses whether each project will comply with applicable policies and meet the applicable guidelines, and makes the underwriter aware of any issues that are not in conformity with these requirements.
Project Screening and Categorization
30. Upon request of an underwriter, the MIGA Environment Office will conduct a preliminary environmental screening of the project to identify key environmental issues of concern and categorize the project. The purpose of project screening is to decide on the nature and extent of the environmental assessment needed for the project. Projects are categorized by MIGA into environmental review category A, B, or C in accordance with MIGA's environmental assessment policy (Annex B of Operational Regulations). The classification of a project depends on the type, location, sensitivity, and scale of the project, as well as the nature and magnitude of its potential impacts.
31. Generally speaking, projects whose impacts are limited in number, less adverse than those of Category A, and can be addressed by compliance with MIGA's environmental guidelines or through application of recognized pollution prevention and abatement measures (or recognized best management practices) will be classified as Category B projects. The initial environmental screening also identifies additional information that is required to complete environmental review and provide clearance of the project. The findings of the initial environmental screening are summarized in an internal memorandum from MIGA's Environment Office to the underwriter.
Environmental and Social Information Requirements and Review
32. General Requirements. Chapter 3 of the MIGA Operational Regulations provides guidelines in making underwriting decisions, including determination of risk, coverage, and premiums. The assessment includes evaluation of the project's acceptability in terms of Article 12(d) of the Convention. Paragraph 3.06 of the Operational Regulations includes the following requirement regarding environmental review of the proposed guarantee:
"Before issuing a Contract of Guarantee, the Underwriting Authority shall satisfy itself that the Investment Project is consistent with MIGA's environmental policies and takes into account MIGA's environmental guidelines; their specific application is addressed in MIGA's environmental review procedures. The Contract of Guarantee shall include provisions allowing the Agency to monitor the compliance of the project with these environmental guidelines and policies while the contract is in force. The Contract of Guarantee shall also establish that non-compliance with host country regulations or MIGA environmental policies or guidelines entitles MIGA to cancel the contract if the non-compliance is not corrected within a period set forth in the Contract of Guarantee. Annex B sets forth the policy to be followed by the Agency for these purposes."
33. MIGA staff will undertake a detailed review of the environmental assessment and other environmental information upon receipt from the applicant. During the review, deficiencies may be identified in the documentation, or other questions or concerns may arise. In such cases, the underwriter will contact the applicant to seek necessary clarification or additional information. In special circumstances, a visit to the project site might be required to complete the environmental review process. This site visit may be undertaken by MIGA staff or an appropriate expert or advisor working under the direction of MIGA staff. Specific activities associated with the review process depend on the category of the project as follows:
Category A Projects. Visit to the project site by the MIGA Environment Officer, or a member of the IFC's Environment Division, or a qualified consultant to gain firsthand knowledge of the project and to meet with the project sponsor and others to discuss environmental and social concerns and information needs, to explain public consultation and disclosure requirements, and to determine the issues which must be addressed in the environmental assessment report. Desk review of the environmental impact assessment report provided by the applicant.
Category B Projects. Desk review of environmental and social information provided by the applicant. A site visit may be required, depending on the complexity of the project.
Category C Projects. No further environmental review required.
34. The purpose of the environmental review process is to determine that either the project is in compliance with MIGA's environmental policies and consistent with the guidelines (ref. paragraphs 6 - 15), or to suggest measures the investor must take to ensure compliance and consistency. Ideally, all significant environmental issues should be satisfactorily addressed before submission of the President's Report to the Board of Directors. However, a decision may be made, on the recommendation of MIGA Management and with Board concurrence, to issue a guarantee which is conditional on the sponsor completing necessary environmental activities or mitigation measures within a reasonable, specified time.
35. Social Review. The general requirement to address project-related social issues during the environmental assessment process is fundamentally inherent in the environmental assessment process, and is established in MIGA's environmental assessment policy (Annex B to the Operational Regulations). Specific policy requirements are contained in MIGA's policies on indigenous peoples, cultural property, and involuntary resettlement. In addition, where projects have the potential to result in significant and diverse social impacts, MIGA will review information on the social aspects of the proposed project and consider these issues as part of its underwriting process. In some situations, however, the magnitude and complexity of social issues go beyond the scope or responsibility of the private sector and fall within the domain of government. MIGA recognizes the importance and sensitivity of the project sponsor-government relationship in addressing such issues. Given the variations among countries, industry sectors, and individual projects, the interface between the private and public sectors on these issues is best addressed on a case-by-case basis. Since a high percentage of MIGA guarantee holders also are minority investors, it is also appropriate that social issues be addressed on a case-by-case basis in a manner consistent with the applicant's role in project design and implementation.
36. Expansions, Modernizations, and Retrofits. In plant expansion and modernization projects, the entire plant (existing and proposed new facilities) is subject to evaluation of environmental issues. Any new facilities or investments insured by MIGA must conform to applicable MIGA policies and meet applicable guidelines. In addition, MIGA usually requires the project sponsor to retain an independent consultant to complete an environmental audit of the existing plant and may require the project sponsor to undertake programs to bring the existing plant into compliance with applicable MIGA policies and meet applicable guidelines within a reasonable time frame.
37. Privatization. For privatization projects, MIGA usually requires the applicant to retain an independent consultant to complete an environmental audit of the facilities. Depending on the results of the audit, MIGA may require the applicant to agree on programs to bring the facilities into compliance with applicable MIGA policies and meet applicable guidelines within a reasonable time frame. If new facilities are also involved, the new facilities insured by MIGA must comply with applicable MIGA policies and meet applicable guidelines.
Environmental and Social Clearance
38. Upon determination that the project will comply with the applicable MIGA policies and meet the applicable guidelines, the Environment Office provides written clearance to the underwriter. The formal clearance from the Environment Office states that, based on the information reviewed, the project, if implemented as designed and operated accordingly, will comply with applicable MIGA policies and meet the applicable guidelines. The clearance memo details outstanding issues as well as the actions required to address those issues. Project monitoring requirements are also identified, as are any other obligations of the project sponsor. The formal clearance does not certify the project's performance against host country requirements. The Environment Office works with the lawyer in identifying special contract provisions, if any, for environmental matters. The lawyer provides support on legal matters, including drafting the environmental language in the project's legal documentation. Following approval by the applicant, the Environment Office arranges for the transmission of appropriate documents to the World Bank InfoShop, and the posting of appropriate notices and information on MIGA's Home Page (the Internet).
Disclosure of Findings from the Environmental Review
39. MIGA's approach to its public disclosure of information regarding environmental aspects of projects is discussed in detail later in this document in paragraphs 43 - 44. MIGA staff, however, must exercise great caution in balancing the need for accountability for MIGA's stewardship of public funds with the constraints placed upon MIGA staff by MIGA's Convention and by commercial law. Confidentiality of client data is accorded a very important place in the Agency's values. Article 33(e) of the MIGA Convention states explicitly that:
"The President and the Staff shall maintain at all times the confidentiality of information obtained in carrying out the Agency's operations."
The importance of confidentiality of client-related data is underscored and expanded upon in MIGA's Operational Regulations. Paragraph 3.30 of the Regulations provides:
"The Agency shall safeguard information received on a confidential basis and shall in particular safeguard business information of a proprietary character received from Applicants or guarantee holders so as to avoid its disclosure to actual or potential competitors."
MIGA's approach to confidentiality also reflects the commercial law of the jurisdictions in which it does business. Even had the Convention and the Operational Regulations been silent on the issue, commercial law would have imposed an obligation of confidentiality upon MIGA. The duty of an insurer to handle its client's affairs with discretion has been long established at law, and the breach of this duty leaves an insurer exposed to potentially enormous liability, especially in the case of proprietary information. In some cases, knowledge of MIGA's early discussions with an applicant may influence stock prices of the prospective client or the prospective client's competitors; this also has severe legal implications. Indeed, the Commentary on the Convention clearly demonstrates that MIGA is expected to operate in accordance with accepted principles of insurance and banking, and with respect to commercial and insurance law.
40. MIGA's disclosure policy, Annex C of the Operational Regulations, identifies three categories of information whose confidentiality remains critical to the successful conduct of MIGA's business:
proprietary information submitted to MIGA on a confidential basis by insured investors;
documents internal to MIGA that contain sensitive information about specific investments and the risks associated with them; and
the terms and conditions of individual Contracts of Guarantee.
MIGA staff are obliged to continue to safeguard this information and other sensitive business information from public disclosure.
41. MIGA is committed to remain accountable for its stewardship of public funds and its responsiveness to public interest in development issues. This section describes what MIGA expects of clients with respect to public disclosure locally of environmental information, and MIGA's responsibilities with respect to public disclosure of the client's environmental information.
42. Requirements of Applicants and Sponsors. In the case of Category A projects, MIGA requires the project sponsor to consult, or to have consulted, during the environmental assessment process with project-affected parties and local interest groups about the project's environmental impacts, and to take their views into account. Furthermore, the project sponsor (or the applicant) will be required to disclose locally, in an appropriate manner, the environmental impact assessment report. MIGA must be satisfied that local interests have been consulted in a meaningful and timely manner with adequate information regarding the impacts of a Category A project and the sponsor's proposed measures to address them. (Additional detail is provided in paragraphs 8 - 10 of these procedures.)
43. Disclosure of Environmental Information by MIGA. For Category A projects, MIGA will release the sponsor's environmental impact assessment report to the Bank's InfoShop in Washington DC at least 60 days before the Board date. Notice of the release of the sponsor's environmental impact assessment report for Category A projects will be posted on the Internet through MIGA's home page. Environmental information on the project should not be released until: (1) MIGA's Environment Office has reviewed the environmental information and determined that the information is sufficiently complete and appropriate for public disclosure, and (2) the applicant has notified MIGA in writing that it authorizes the release of the information. If a project sponsor objects to MIGA's release of environmental information through the World Bank InfoShop, MIGA will not issue a guarantee.
44. When MIGA participates with the IFC, IBRD, IDB, EBRD, or OPIC in the same project, MIGA will not duplicate the release of information already undertaken by its counterpart organization(s). MIGA, however, will post on its website a cross-reference to the disclosure of the EIA by the relevant counterpart organization(s). MIGA in accordance with its Operational Regulations and subject to Board approval, may issue a guarantee contract conditioned on the client completing environmental activities to the satisfaction of MIGA and the counterpart organization(s).
Guarantee Approval
45. Upon clearance of the proposed guarantee, the Environment Officer prepares or reviews an outline of the findings of the environmental and social review for inclusion in the President's Report to the Board, including the project category, major environmental and social issues and mitigation measures, other appropriate details, and a statement regarding compliance of the project with relevant requirements. The President's Report will note any outstanding environmental issues and any conditions for contract issuance. The contract will reflect any requirements identified by the environmental and social review, and environmental clearance. Approval of the contract is the responsibility of the President, under the direction of the Board.
Revision to the Environmental Action Plan
46. For Category A projects, the Environmental Action Plan is an essential and critical part of the environmental assessment report. The project sponsor may need to update the Environmental Action Plan to reflect the final understandings on environmental and social issues with MIGA. If this entails substantive differences in the Environmental Action Plan and occurs after the release of the environmental assessment report to the World Bank InfoShop, the applicant updates the Environmental Action Plan and submits it to MIGA, which will then release it to the World Bank InfoShop. The applicant is also required to release the substantively updated Environmental Action Plan locally in a culturally appropriate manner. If the project sponsor objects to MIGA's release of a revised Environmental Action Plan, MIGA staff will not underwrite the project.
Project Compliance
47. Compliance will be assured by the applicant's specific and continuing representations and warranties that measures to comply with environmental requirements will be taken and maintained throughout the term of the Contract of Guarantee. Failure to do so may result either in contract cancellation or denial of a claim.
48. MIGA may from time-to-time request warranties from the guarantee holder that the project remains in compliance with the terms and conditions of the contract. For all Category A projects, the guarantee holder is required to submit at MIGA's request an environmental monitoring report confirming compliance with local environmental laws and regulations, and demonstrating compliance with the Environmental Action Plan. MIGA may also carry out monitoring visits, request specific data, or carry out other measures as necessary to verify information. Frequency of site visits will depend on environmental and social complexity of the project. Evidence that a project is not in compliance are grounds for canceling coverage or denying a claim.
ANNEX 1
Guidance for Review of Public Consultation and Disclosure
To assist Underwriters in determining whether a sponsor's approach to public consultation and disclosure for a Category A project meet the goals and objective of MIGA's environmental policy, information should be available to satisfactorily address the following questions. If the environmental impact assessment process has already been completed, information is required as to what was done about these matters.
What do local laws and regulations require for public consultation during preparation of environmental impact assessment documents?
What governmental agencies, at local and national levels, must review and approve the environmental impact assessment report? How is this done?
What does the project sponsor propose to do to consult with local communities and stakeholders during preparation of the environmental impact assessment report?
· What are the expected dates and venues for the public consultation activities?
How will local communities and stakeholders be notified of the project, and the preparation of the environmental impact assessment? What will be the primary methods of consultation?
What local nongovernmental organizations or community organizations are in the project area that may have an interest in the impacts of the project and how will they be consulted during environmental impact assessment preparation?
How will reactions and relevant comments from the local stakeholders be considered by the project sponsor in project design and implementation?
What do local laws and regulations require for public disclosure of the draft environmental impact assessment report? If there is no requirement, will government authorities permit the company to release a draft environmental impact assessment report for local review and comment?
How will availability of the draft environmental impact assessment report for public review and comment be announced locally?
How much time will be provided to stakeholders to review and comment on the environmental impact assessment report before it is finalized?
How will public comments on the draft environmental impact assessment report be handled in finalizing it?
1. Guidance on application and implementation of these policies to MIGA projects can be found in the appropriate best practice guidance manuals of the IFC.
2. In accordance with Part III of the Pollution Prevention and Abatement Handbook (July 1998. Industrial Pollution Management -- Statement of Principles, Using the Guidelines).
3. MIGA can only directly insure new investments, including privatization and expansions or modifications/restructuring of existing projects. To be eligible for MIGA coverage, the preliminary application has to be filed with MIGA prior to an applicant's commitment to invest.
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