PART : 01

Introduction

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1.1 Objective of the Report

The primary objective of the report is to gain practical insights of the business world. The knowledge of
international trade and business can contribute immensely to the all sided development of a nation.
International trade in majority of the countries has contributed significantly to the gross domestic product
or the GDP. It has served as a platform for "globalization". The derived objectives of these reports are:
To apply theoretical knowledge in the practical field.
To acquire knowledge about current globalization phenomenon & its effects.
To fulfill the partial requirement of M.B.A. Program
To obtain knowledge about the function of MIGA.
To know about the projects under MIGA in Bangladesh.
To ascertain the contribution of MIGA in the economy of Bangladesh.

1.2 Methodologies:
Basically the report on MIGA & BANGLADESH that has been done for the MBA term report
purpose is one sort of theoretical report because the report is based on facts and information those are
already available and are analyzed through judgmental basis. In order to make the report more meaningful
and presentable, two kinds of sources of data and information have been used:
A. The Primary Sources Personal observation of world and Bangladesh economy
B. The Secondary Sources Different publications regarding globalization, foreign exchange operation and economic of
Bangladesh.
Internet was used broadly as a theoretical source of information.
Websites and Newsletters are also was major sources.
1.3 Scope & Limitation:
This report has been prepared through extensive idea in International trade and business. Through the
globalization, recent world economy comes across a historical era. Also Bangladesh has been faced a
global change vastly in different areas.
To prepare a report in a short duration (only few weeks) is not an easy task. In preparing this report some
problems and limitation have encountered which are as follows:

The main constrain of the study was insufficiency of information, which was required for the
study.
The data and information are not in organized way.
Due to time limitation many of the aspects could not be discussed in the present report.

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PART : 02
Overview: Multilateral Investment
Guarantee Agency(MIGA)

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2.1 Introduction:
Globalization creates investment opportunities for enterprises around the world. Attracting foreign
investment has been a key challenge for economic growth in developing countries. Corruption, political
instability, armed conflict, and other internal problems affect foreign direct investment (FDI) inflows
negatively. To facilitate the FDI, the World Bank Group was established. The World Bank Group, one of
the worlds largest development institutions, is a major form of financial and technical assistance to
developing countries around the world. Its member institutions work together and complement each
others activities to achieve their shared goals of reducing poverty and improving lives.
Joint projects and programs of the Bank Groups institutions focus on promoting sustainable
development by expanding financial markets, issuing guarantees to investors and commercial lenders, and
providing advisory services to create better investment conditions in developing countries.Working
together, the World Bank, IFC, and MIGA catalyze projects that make assistance available to clients
through greater innovation and responsiveness.
Among the world bank institutions, Multilateral Investment Guarantee Agency (MIGA) is one, which
provides political risk insurance or guarantees against losses caused by noncommercial risks to facilitate
foreign direct investment (FDI) in developing countries.

2.2 Overview of Multilateral Investment Guarantee Agency (MIGA):

The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, is an
international organization committed to promoting foreign direct investment in its developing country
members in order to support economic growth, reduce poverty and improve peoples lives. MIGA fulfills
this mandate by issuing guarantees against non-commercial risks (political risk insurance contracts) to
investors and lenders, covering: expropriation, breach of contract, currency transfer restrictions, war and
civil disturbance, and non-honoring of sovereign financial obligations. MIGAs operational priorities
focus on investments in the worlds poorest countries and investments in conflict-afflicted environments,
providing support for complex deals, particularly projects involved in infrastructure and extractive
industries.
Strategy:
MIGAs operational strategy plays to its foremost strength in the marketplaceattracting investors and
private insurers into difficult operating environments. It focus on insuring investments in the areas where
it can make the greatest difference
Countries eligible for assistance from the International Development Association (the worlds
poorest countries)
Conflict-affected environments
Complex deals in infrastructure and extractive industries, especially those involving project
finance and environmental and social considerations
South-South investments (from one developing country to another)

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MIGA offers comparative advantages in all of these areasfrom its unique package of products and
ability to restore the business community's confidence, to its ongoing collaboration with the public and
private insurance market to increase the amount of insurance available to investors.
Products:
MIGA fulfill its mission by providing political risk insurance guarantees to private sector investors and
lenders. MIGAs guarantees protect investments against-non-commercial risks and can help investors
obtain access to funding sitsces with improved financial terms and conditions. Since its inception in 1988,
MIGA has issued more than $24 billion in political risk insurance for projects in a wide variety of sectors,
covering all regions of the world. It also conduct research and share knowledge as part of its mandate to
support foreign direct investment into emerging markets.
Team
Its people have extensive experience in political risk insurance, with backgrounds including banking and
capital markets, environmental and social sustainability, project finance and sector specialties, and
international law and dispute settlement. Meet its senior management.
Shareholders
MIGAs corporate powers are vested in the Council of Governors, which delegates most of its powers to a
Board of Directors. Voting power is itighted according to the share of capital each director represents.
The directors meet regularly at the World Bank Group headquarters in Washington, DC, where they
review and decide on investment projects and oversee general management policies.
Historical events:
The idea for a multilateral political risk insurance provider was floated long before MIGAs
establishmentin fact as far back as 1948. But it was not until September 1985 that this idea started to
become a reality. At that time the World Banks Board of Governors began the process of creating a new
investment insurance affiliate by endorsing the MIGA convention that defined its core mission: "to
enhance the flow to developing countries of capital and technology for productive purposes under
conditions consistent with their developmental needs, policies and objectives, on the basis of fair and
stable standards to the treatment of foreign investment."
1988
1990
1991
1996
2005
2006
2008
2009

MIGA is established
MIGA issues its first investment guarantee contracts supporting fits projects
representing a total of $1.04 billion in direct investment
Membership tops 100 countries
MIGA launches IPA neta global internet-based information exchange,
communications network, and marketplace
MIGA launches Small Investment Program to encitsage investment in small and
medium-size enterprises.
MIGA supports first project under the new facility for Afghanistan to promote
development in the cotton sector
MIGA celebrates 20th anniversary
MIGAs Board of Directors approves substantial changes to the
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2010

agencys operational regulations encompassing a number of measures including

one new type of coverage: non-honoring of sovereign financial obligations.
Basel Committee on Banking Supervision classifies MIGA as a "highly-rated
multilateral," a treatment that recognizes the special value of MIGAs insurance to
banks.
MIGA launches Asia hub to expand physical presence in the region

2011

Council of Governors approves amendments to MIGAs convention to enhance

MIGAs effectiveness as a multilateral provider of political risk insurance

2.3 Functional department:

It has fits operational department through which extends insurance to developmentally sound cross-border
investments made in member countries. The fits Operational Departments of MIGA are the followings:
The Operations Department (MIGOP): It has primary responsibility for underwriting
guarantee projects in a broad range of sectors including infrastructure, finance, telecom,
agribusiness, manufacturing, services, oil, gas, and mining.
The Economics and Policy Department (MIGEP): It is responsible for assessing country,
environmental, social, reputational, and project risks for due diligence, as itll as ensuring projects
compliance with MIGAs environmental and social standards throughout guarantee periods.
The Legal Affairs and Claims Department (MIGLC): It focuses on all legal activities related
to operational support for the provision of guarantees against political risks, advice to member
countries on varied aspects of foreign investment legal matters, and assistance of investment
disputes betiten investors and host country.
The Finance and Risk Department (MIGFR): It acts as the custodian of MIGAs financial
integrity with a focus on both income sustainability and balance sheet strength. It also provides
analytical support for the effective implementation of MIGAs operational work program.

2.4 Types of Coverage:

MIGA offers coverage for five non-commercial risks. Coverage may be purchased individually or in
combination.
Currency Inconvertibility and Transfer Restriction:
Protects against losses arising from an investors inability to legally convert local currency (capital,
interest, principal, profits, royalties, and other remittances) into hard currency (Dollar, Euro or Yen)
and/or to transfer hard currency outside the host country where such a situation results from a government
action or failure to act. Currency depreciation is not covered. In the event of a claim, MIGA pays
compensation in the hard currency specified in the contract of guarantee.

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Expropriation:
Protects against losses arising from certain government actions that may reduce or eliminate ownership
of, control over, or rights to the insured investment. In addition to outright nationalization and
confiscation, "creeping" expropriationa series of acts that, over time, have an expropriatory effectis
also covered. Coverage is available on a limited basis for partial expropriation (e.g., confiscation of funds
or tangible assets).
In case of total expropriation of equity investments, compensation to the insured party is based on the net
book value of the insured investment. For expropriation of funds, MIGA pays the insured portion of the
blocked funds. For loans and loan guaranties, MIGA can insure the outstanding principal and any accrued
and unpaid interest. Compensation would be paid upon assignment of the investor's interest in the
expropriated investment (e.g., equity shares or interest in a loan agreement) to MIGA.
War, Terrorism, and Civil Disturbance:
Protects against loss from, damage to, or the destruction or disappearance of, tangible assets or total
business interruption (the total inability to conduct operations essential to a projects overall financial
viability) caused by politically motivated acts of war or civil disturbance in the country, including
revolution, insurrection, coups d'tat, sabotage, and terrorism.
For tangible asset losses, MIGA would pay the investors share of the lesser of the replacement cost and
the cost of repair of the damaged or lost assets, or the book value of such assets if they are neither being
replaced nor repaired.
For total business interruption that results from a covered war and civil disturbance event, compensation
would be based, in the case of equity investments, on the net book value of the insured investment or, in
the case of loans, the insured portion of the principal and interest payment in default.
For short-term business interruption, MIGA would pay unavoidable continuing expenses and
extraordinary expenses associated with the restart of operations and lost business income or, in the case of
loans, missed payments.
Breach of Contract:
Protects against losses arising from the governments breach or repudiation of a contract with the investor
(e.g., a concession or a power purchase agreement). Breach of contract coverage may be extended to the
contractual obligations of state-owned enterprises in certain circumstances. In the event of an alleged
breach or repudiation, the investor should invoke the dispute resolution mechanism (e.g., an arbitration)
set out in the underlying contract
MIGA may, at its discretion, make a provisional payment pending the outcome of the dispute and before
compensation for non-payment of an award is paid. For non-payment of an award, MIGA would pay the
investor's interest in the award.
Non-Honoring of Sovereign Financial Obligations:
Protects against losses resulting from a governments failure to make a payment when due under an
unconditional financial payment obligation or guarantee related to an eligible investment. It does not
require the investor to obtain an arbitral award. This coverage is applicable in situations when a

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sovereigns financial payment obligation is unconditional and not subject to defenses. Compensation
would be based on the insured outstanding principal and any accrued and unpaid interest.

2.5 Eligibility:
MIGA insures cross-border investments made by investors in a MIGA member country into a developing
member country.
Corporations and financial institutions are eligible for coverage if they are either incorporated in,
and have their principal place of business in, a member country or if they are majority-owned by
nationals of member countries.
A state-owned company is eligible if it operates on a commercial basis. An investment made by a
non-profit organization may be eligible if it is carried out on a commercial basis.
MIGA insures new and existing investments. For an existing investment to be considered eligible,
the project must meet certain criteria. For example, MIGA may insure existing investments where
an eligible investor is seeking to insure a pool of existing and new investments Acquisitions,
including the privatization of state-owned enterprises, may also be eligible. Investors seeking
clarification on eligibility are envisaged to contact us.
The types of foreign investments that can be covered include equity, shareholder loans,
shareholder loan guaranties, and non-shareholder loans. All loans and loan guaranties, including
those issued by shareholders of the project, must have a minimum maturity of more than one year
provided that MIGA determines the project represents a long-term commitment by the investors.
In keeping with MIGA's objective of promoting economic growth and development, investment
projects must be financially and economically viable and meet MIGAs social and environmental
performance standards.

2.6 Terms and Conditions:

Pricing:
MIGA prices its guarantee premiums based on a calculation of both country and project risk. Fees
average approximately one percent of the insured amount per year, but can be significantly lower or
higher.
Duration Of Guarantee:
Coverage is for up to 15 years (possibly 20 if justified by the nature of the project). MIGA cannot
terminate the contract unless the investor defaults on its contractual obligations to MIGA, but the investor
may reduce or cancel coverage without penalty on any contract anniversary date starting with the third
anniversary.
Coverage:
Investors may choose any combination of the five types of coverage offered by MIGA. MIGA may insure
up to $220 million per project, and if necessary more can be arranged through syndication of insurance.
Note that under the Small Investment Program, investors are offered a package covering currency
inconvertibility and transfer restriction; expropriation; and war, terrorism, and civil disturbance.

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Standard Contracts of Guarantee:

Contract of Guarantee for Equity Investments

Contract of Guarantee for Loan Guarantees
Contract of Guarantee for Non-Shareholder Loans
Contract of Guarantee for Shareholder Loans
Contract of Guarantee for Non-Shareholder Loans - Non-Honoring of a Sovereign Financial
Obligation

2.7 Underwriting Process:

MIGAs underwriting process begins when a client submits a Preliminary Application. The application is
free, confidential, short, and it can be done online. As soon as it receive the application, it will assign an
underwriter to review it to determine whether the project meets its eligibility criteria. MIGA will then
contact the client to discuss the project.
At this point the underwriter discusses preliminary pricing with the client, the potential size of the
guarantee, and the MIGA covers that are most appropriate for the investment. It also work with the client
to identify environmental and social impact assessments that must be undertaken.
Definitive Application and Client Documentation:
The next step is for the client to submit a Definitive Application (the form will be provided by MIGAs
underwriting team). After receiving the completed Definitive Application, MIGA begins a thorough
review of the project. To ensure a quick underwriting process, the project sponsors must submit
supporting documentation, which it review to ensure that the project meets MIGAs policies and
guidelines. The supporting documentation it require to begin the formal underwriting process typically
may include:
Feasibility study or a business plan supporting the economic viability and financial soundness of
the project
Financial forecast/ model
All loan documentation, including shareholder and non-shareholder loans (drafts acceptable
during underwriting) and all loan-related documents
All loan guaranties (including back-stop guarantees from parent companies)
Financial statements and incorporation documents/by-laws from the investor and the project
enterprise in the host country
Environmental permits/environmental impact assessment if applicable
Land purchase/lease agreements
All other applicable project licenses/ permits/ agreements/contracts
Underwriting Fees:
Definitive Application Fee: $5,000 for cover of less than $25 million and $10,000 for larger amounts.
The application fee is applied toward the initial premium or, if MIGA rejects the project for any reason,
the fee is refunded.
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Processing Fee: Additional fees may be required for complex projects. For example, fees may be
required to cover the cost of site visits for environmental and social due diligence.
Syndication Fee: If applicable, a fee will be applied when MIGA arranges a projects total insurance
requirements through reinsurance.
Review, Disclosure, and Due Diligence by MIGA:
Before it undertake extensive underwriting , MIGAs management conducts a preliminary assessment of
the projects development impact, risk profile, and compliance with its legal and policy requirements.
This early review helps give prompt feedback to clients on the project and the requirements for MIGA
coverage. Once a project is authorized to proceed, its underwriting team completes its analysis of the
projects risks, its economic and financial viability, its environmental and social impact, and in general,
its contribution to development.
During this period it will also seek the host countrys approval to issue the insurance. This should provide
some comfort to clients because the country has supported MIGAs participation in the project. Once its
management approves a project, it submits the project to its Board of Directors, comprising government
representatives from its member countries. In accordance with its disclosure policy, a brief summary of
the project and related environmental and social impact documents must be publicly disclosed prior to
presentation to the Board of Directors. With MIGAs Board approval and host country approval, the
guarantee contracts are ready to be signed.
The duration of the underwriting process depends on the complexity of the project. Complex projects
requiring extensive environmental and social due diligence will take longer, but most projects can be
underwritten in fits to six months or less. Projects under the Small Investment Program can be processed
in one to two months if all of the required documentation has been provided.

Sector:
MIGAs investment guarantees cover projects in a broad range of sectors and subsectors, with projects in
the financial sector accounting for the largest share (49 percent) of the agencys outstanding portfolio at
the close of fiscal year 2011. The high exposure in the sector is largely the result of MIGAs support to
the banking sector in the wake of the international financial crisis.
At 33 percent of MIGAs outstanding gross portfolio, the infrastructure sector is a priority focus for the
agency.
In fiscal year 2011, the agribusiness, manufacturing, and services sector accounted for 13 percent, while
the oil, gas and mining sector accounted for 5 percent of the agencys gross exposure.

2.8 Lending by MIGA

Since 1990, MIGA has issued guarantees totaling $19.5 billion and insured up to 922 guarantees for
projects from over 91 developing countries. IDA eligible countries are top MIGA clients making up 63

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percent of MIGAs gross outstanding portfolio. In 2008, MIGA issued 38 guarantees to 24 projects
totaling $2.1 billion with Gross Exposure at $6.5 billion.
MIGA envisages development by insuring new cross-border investments from any MIGA member
countries. MIGA insured investment includes: expansion, modernization, or financial restructuring of
existing projects, privatization of state-owned enterprises. MIGA also insures investments involving
equity, shareholder loans, and shareholder loan guarantees with minimum maturity of three years;
unrelated borrower with shareholder investment already insured; technical assistance, management
contracts, franchising.
In FY 2008, 60 percent of MIGA guarantees tire issued to Europe and Central Asia while the Middle East
and North Africa region received 21 percent of MIGA's overall guarantees. This was foliated by SubSaharan Africa at 10 percent and Latin America and the Caribbean at 8 percent. Asia and the Pacific only
made up 2 percent of guarantees issued by MIGA. By sectors, MIGAs coverage of the infrastructure is
largest and stands at 44 percent. Finance is next at 30 percent, manufacturing and services at 15 percent,
and extractive industries at 12 percent.
Lending products
Pricing for MIGA guarantee premiums is calculated based on both country and project risk with duration
up to 15 years. MIGA can terminate the contract only when the guarantee holder default on its
contractual obligation to MIGA, but after three years of coverage, the guarantee holder may cancel or
reduce coverage on any contract anniversary. Fits types of coverage are transfer restriction,
expropriation, war and civil disturbance, breach of contract, and investors may select one or a
combination for MIGA coverage. Equity investments can be insured limit is 90 percent and debt up to 95
percent. MIGA is allowed to insure up to $200 million, with further coverage arranged through
syndication of insurance.
Requirements to receive lending:
Eligibility for coverage is considered case-by-case. Nationals from MIGA member countries may be
eligible for MIGA provided the nationality of the investor and the investment are not the same. MIGA
makes for exception under certain conditions. Coverage for corporations requires the company to be
incorporated with its principal place of business in a member country, or with majority-ownership by
nationals of member countries. A state-owned corporations eligibility depends on its commercial basis.
To qualify for MIGA coverage, preliminary applications must be submitted before an investment
commitment. MIGA only covers new investments. With the submission of the preliminary application,
MIGA staff will decide within three business days on the project merit. Further process requires a
confirmation letter and a definitive application with request for further details on the project. MIGA can
usually process a guarantee within three to fits months after receiving a definitive application. The
application process fee of $5000 could be waived under special circumstances for Small and Medium
Investors and Enterprises.

2.9 Institutional Integrity :

The World Bank Group has identified corruption as among the greatest obstacles to economic and social
development.. Corruption and similar misconduct undermine development by distorting the rule of law
and itakening the institutional foundation upon which economic growth depends. The harmful effects of
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corruption are especially severe on the poor, who are hardest hit by economic decline, most reliant on the
provision of public services, and least capable of paying the extra costs associated with bribery, fraud, and
the misappropriation of economic privileges.
Corruption damages policies and programs that aim to reduce poverty, so attacking corruption is critical
to the achievement of MIGAs and the World Bank Groups overarching mission of poverty reduction.
MIGAs approach to combating fraud and corruption is part of a larger World Bank Group effort, and
MIGA works closely with the relevant World Bank Group departments on these issues.
Combating Fraud and Corruption in MIGA-Supported Projects:
MIGA carries out an integrity/corporate risk assessment in all projects considered for MIGA guarantees,
by considering:
checks of involved parties
clients safeguards for dealing with fraud and corruption
the project structure and contractual arrangements.
MIGAs stance against fraud, corruption, related misconduct (coercive, collusive, and obstructive
practices), or a lack of transparency, is also incorporated into the legal documentation governing its
investment guarantees, and gives MIGA the right to decline to pay compensation or terminate guarantee
coverage.
Additionally, allegations of such misconduct in projects for which MIGA has issued a guarantee are
subject to review and determination under the World Bank Groups sanctions and debarment process.
MIGAs objective is to ensure a fair, transparent, and rational way to evaluate allegations of misconduct
in any MIGA project.

2.10 Environmental and social safeguards:

MIGA strives for positive development outcomes in the investment projects they insure. An important
component of positive development outcomes is the social and environmental sustainability of projects,
which it expect to achieve by applying a comprehensive set of social and environmental performance
standards.
MIGAs environmental and social safeguard policies are derived from its extensive experience insuring
investments around the world. They are a pitiful tool for identifying risks, reducing development costs,
and improving project sustainabilitybenefiting affected communities and preserving the
environment. During the underwriting process, it identify the policies and guidelines that are applicable to
a project. Projects are expected to comply with those policies and guidelines, as itll as applicable local,
national, and international laws.
Through MIGAs Policy on Social and Environmental Sustainability, it put into practice its commitment
to these issues. This policy applies to all investment guarantees for which Definitive Applications tire
received after October 2007.

Social and Environmental Review: an overview of the approach

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When an investment is proposed for a guarantee, MIGA conducts a social and environmental
review of the project as part of its overall due diligence. This review is appropriate to the nature
and scale of the project, and commensurate with the level of social and environmental risks and
impacts. MIGA reviews any new business activity that is being considered for MIGA guarantee
support, whether in the pre-construction, construction, or operational stage. Where there are
significant historical social or environmental impacts associated with the project, including those
caused by others, MIGA works with its client to determine possible remediation measures.
The effectiveness and efficiency of the social and environmental review depend partly on the
timing of MIGAs involvement. When this involvement occurs in the early stages of project
design, MIGA is able to support the client more effectively in anticipating and addressing specific
risks, impacts and opportunities, and help build its capacity to manage these throughout the life of
the project.
The social and environmental review includes three key components: (i) the social and
environmental risks and impacts of the project as assessed by the client; (ii) the commitment and
capacity of the client to manage these expected impacts, including the clients social and
environmental management system; and (iii) the role of third parties in the projects compliance
with the Performance Standards. Each of these components helps MIGA to ascertain whether the
project can be expected to meet the Performance Standards. In the case of projects with
significant adverse impacts on affected communities, MIGA also assures itself that there is broad
community support for the project within the affected communities .MIGA bases its review on
the clients Social and Environmental Assessment. In cases where such Assessment does not meet
the requirements of Performance Standard 1, MIGA requires the client to undertake additional
Assessment or, where appropriate, to commission Assessment by external experts.
MIGAs Performance Standards on Social and Environmental Sustainability:
The Multilateral Investment Guarantee Agency (MIGA) applies the Performance Standards to manage
social and environmental risks and impacts and to enhance development opportunities in the projects that
it supports through the provision of guarantees against political risks.1 The Performance Standards may
also be applied by other financial institutions electing to apply them to projects in emerging markets.
Together, the eight Performance Standards establish standards that the client2 is to meet throughout the
life of an investment supported by a MIGA guarantee.
Performance Standard 1: Social and Environmental Assessment and Management System:
Performance Standard 1 underscores the importance of managing social and environmental performance
throughout the life of a project (any business activity that is subject to assessment and management).
Objectives To identify and assess social and environment impacts, both adverse and beneficial, in the
projects area of influence.
To avoid, or where avoidance is not possible, minimize, mitigate, or compensate for adverse
impacts on workers, affected communities, and the environment.
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 To ensure that affected communities are appropriately engaged on issues that could potentially
affect them.
To promote improved social and environment performance of companies through the effective
use of management systems
This Performance Standard applies to projects with social or environmental risks and impacts that should
be managed, in the early stages of project development, and on an ongoing basis
Performance Standard 2: Labor and Working Conditions:
Performance Standard 2 recognizes that the pursuit of economic growth through employment creation and
income generation should be balanced with protection for basic rights of workers. For any business, the
workforce is a valuable asset, and a sound worker-management relationship is a key ingredient to the
sustainability of the enterprise.
Objectives To establish, maintain and improve the worker-management relationship.
To promote the fair treatment, non-discrimination and equal opportunity of workers, and
compliance with national labor and employment laws.
To protect the workforce by addressing child labor and forced labor.
To promote safe and healthy working conditions, and to protect and promote the health of
workers
Failure to establish and foster a sound worker-management relationship can undermine worker
commitment and retention, and can jeopardize a project.
Performance Standard 3: Pollution Prevention and Abatement:
Performance Standard 3 recognizes that increased industrial activity and urbanization often generate
increased levels of pollution to air, water, and land that may threaten people and the environment at the
local, regional, and global level.1 On the other hand, along with international trade, pollution prevention
and control technologies and practices have become more accessible and achievable in virtually all parts
of the world.
Objectives
To avoid or minimize adverse impacts on human health and the environment by avoiding or
minimizing pollution from project activities.
To promote the reduction of emissions that contribute to climate change.
This Performance Standard outlines a project approach to pollution prevention and abatement in line with
these internationally disseminated technologies and practices. In addition, this Performance Standard
promotes the private sectors ability to integrate such technologies and practices as far as their use is
technically and financially feasible and cost-effective in the context of a project that relies on
commercially available skills and resources.
Performance Standard 4: Community Health, Safety and Security:
Performance Standard 4 recognizes that project activities, equipment, and infrastructure often bring
benefits to communities including employment, services, and opportunities for economic development.
However, projects can also increase the potential for community exposure to risks and impacts arising
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from equipment accidents, structural failures, and releases of hazardous materials. Communities may also
be affected by impacts on their natural resources, exposure to diseases, and the use of security personnel.
Objectives
To avoid or minimize risks to and impacts on the health and safety of the local community during
the project life cycle from both routine and non-routine circumstances.
To ensure that the safeguarding of personnel and property is carried out in a legitimate manner
that avoids or minimizes risks to the communitys safety and security.
While acknowledging the public authorities role in promoting the health, safety and security of the
public, this Performance Standard addresses the clients responsibility to avoid or minimize the risks and
impacts to community health, safety and security that may arise from project activities. The level of risks
and impacts described in this Performance Standard may be greater in projects located in conflict and
post-conflict areas.
Performance Standard 5: Land Acquisition and Involuntary Resettlement:
Involuntary resettlement refers both to physical displacement (relocation or loss of shelter) and to
economic displacement (loss of assets or access to assets that leads to loss of income sources or means of
livelihood) as a result of project-related land acquisition. Resettlement is considered involuntary when
affected individuals or communities do not have the right to refuse land acquisition that results in
displacement. This occurs in cases of: (i) lawful expropriation or restrictions on land use based on
eminent domain and ii) negotiated settlements in which the buyer can resort to expropriation or impose
legal restrictions on land use if negotiations with the seller fail.
Objectives
To avoid or at least minimize involuntary resettlement wherever feasible by exploring alternative
project designs
To mitigate adverse social and economic impacts from land acquisition or restrictions on affected
persons use of land by: (i) providing compensation for loss of assets at replacement cost; and (ii)
ensuring that resettlement activities are implemented with appropriate disclosure of information,
consultation, and the informed participation of those affected
To improve or at least restore the livelihoods and standards of living of displaced persons
To improve living conditions among displaced persons through provision of adequate housing
with security of tenure4 at resettlement sites.
Performance Standard 6: Biodiversity Conservation and Sustainable Natural Resource
Management:
Performance Standard 6 recognizes that protecting and conserving biodiversitythe variety of life in all
its forms, including genetic, species and ecosystem diversityand its ability to change and evolve, is
fundamental to sustainable development. The components of biodiversity, as defined in the Convention
on Biological Diversity, include ecosystems and habitats, species and communities, and genes and
genomes, all of which have social, economic, cultural and scientific importance.
Objectives
To protect and conserve biodiversity
To promote the sustainable management and use of natural resources through the adoption of
practices that integrate conservation needs and development priorities

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This Performance Standard reflects the objectives of the Convention on Biological Diversity to conserve
biological diversity and promote use of renewable natural resources in a sustainable manner. This
Performance Standard addresses how clients can avoid or mitigate threats to biodiversity arising from
their operations as well as sustainably manage renewable natural resources.
Performance Standard 7: Indigenous Peoples:
Performance Standard 7 recognizes that Indigenous Peoples, as social groups with identities that are
distinct from dominant groups in national societies, are often among the most marginalized and
vulnerable segments of the population. Their economic, social and legal status often limits their capacity
to defend their interests in, and rights to, lands and natural and cultural resources, and may restrict their
ability to participate in and benefit from development.
Objectives
To ensure that the development process fosters full respect for the dignity, human rights,
aspirations, cultures and natural resource-based livelihoods of Indigenous Peoples
To avoid adverse impacts of projects on communities of Indigenous Peoples, or when avoidance
is not feasible, to minimize, mitigate, or compensate for such impacts, and to provide
opportunities for development benefits, in a culturally appropriate manner
To establish and maintain an ongoing relationship with the Indigenous Peoples affected by a
project throughout the life of the project
To foster good faith negotiation with and informed participation of Indigenous Peoples when
projects are to be located on traditional or customary lands under use by the Indigenous Peoples
To respect and preserve the culture, knowledge and practices of Indigenous Peoples
They are particularly vulnerable if their lands and resources are transformed, encroached upon by
outsiders, or significantly degraded. Their languages, cultures, religions, spiritual beliefs, and institutions
may also be under threat. These characteristics expose Indigenous Peoples to different types of risks and
severity of impacts, including loss of identity, culture, and natural resource-based livelihoods, as well as
exposure to impoverishment and disease.
Performance Standard 8: Cultural Heritage:
Performance Standard 8 recognizes the importance of cultural heritage for current and future generations.
Consistent with the Convention Concerning the Protection of the World Cultural and Natural Heritage,
this Performance Standard aims to protect irreplaceable cultural heritage and to guide clients on
protecting cultural heritage in the course of their business operations. In addition, the requirements of this
Performance Standard on a projects use of cultural heritage are based in part on standards set by the
Convention on Biological Diversity.
Objectives
To protect cultural heritage from the adverse impacts of project activities and support its
preservation
To promote the equitable sharing of benefits from the use of cultural heritage in business
activities

2.11 Categorization of Projects

In accordance with its policies, MIGA uses a system of social and environmental categorization to: (i)
reflect the magnitude of impacts understood as a result of the clients Social and Environmental
16 | P a g e

Assessment; and (ii) specify MIGAs institutional requirements to disclose to the public project specific
information prior to presenting projects to its Board of Directors for approval in accordance with Section
12 of the Disclosure Policy. A proposed investment is classified as:
Category A: if it may have potentially significant adverse social or environmental impacts that are
diverse, irreversible, or unprecedented.
Category B: if it may have potentially limited adverse social or environmental impacts that are few in
number, generally site specific, largely reversible, and readily addressed through mitigation measures.
Category C: if the project has minimal or no adverse social or environmental impacts, including certain
financial intermediary projects with minimal or no adverse risks.
Category FI: is assigned to all financial intermediary projects excluding those that are Category C
projects.

2.12 Project Monitoring:

After MIGA issues a Contract of Guarantee, MIGA carries out the following actions to monitor the
performance of the projects being supported:
Require the project to submit periodic Monitoring Reports on its social and environmental
performance as agreed with MIGA
Conduct site visits of certain projects with social and environmental risks and impacts
Review project performance on the basis of the clients commitments in the Action Plan, as
reported by the clients Monitoring Reports, and, where relevant, review with the client any
performance improvement opportunities
If changed project circumstances would result in adverse social or environmental impacts, work
with the client to address them
If the client fails to comply with its social and environmental commitments, as expressed in the
Action Plan or legal agreement with MIGA, work with the client to bring it back into compliance
to the extent feasible, and if the client fails to reestablish compliance, exercise remedies when
appropriate
Encourage the client to report publicly on its social, environmental and other non-financial
aspects of performance, in addition to reporting on the Action Plan as required by Performance
Standard 1
Encourage the client to continue to meet the Performance Standards after the client has decided
the MIGA guarantee is no longer necessary and has cancelled.

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PART: 03
MIGA & BANGLADESH

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3.1 MIGA in Bangladesh

The Multilateral Investment Guarantee ( MIGA) : MIGA provides insurance/guarantee against noncommercial risk . It also advises member governments on the design and implementation of policies and
programs, and sponsors dialogue between the international business community and host governments on
investment issues. Bangladesh signed and ratified the MIGA Convention in March 1987 and became full
member of MIGA.
The projects that obtained guarantee from MIGA are the followings:
. Ashuganj Power Station Company Ltd. (APSCL)
Sheba Telecom Ltd.
Khulna Power Company Ltd.
Socit Gnrale (Bangladesh)
Karnaphuli Fertilizer Company Limited

3.2 Description of the projects:

3.2.1 Project Name:
Ashuganj Power Station Company Ltd. (APSCL)
With the countrys power sector facing a severe cash crunch, the state-owned Ashuganj Power Station
Company Ltd (APSCL the breakthrough to receive US$420 million Export Credit Agency (ECA) fund to
set up its 382 MW combined cycle power plant. This is the first ever funding from ECA sources beyond
the conventional lending by multilateral donor agencies or from suppliers credit.
Hong Kong-based leading international bank HSBC (Hong Kong and Shanghai Banking Corporation) has
arranged the ECA fund from a number of international lenders. After signing a contract with HSBC on
Thursday evening, APSCL managing director Nurul Alam told UNB that now the there is no barrier to
the implementation of a large power project in the country. We hope, the projects physical work will
start within January next and we could be able to open the L/C for import of equipment for the plant, he
said adding that the project will start commercial generation from March 2015.
Mahbubur Rahman, Head of Corporate Banking of HSBC, Bangladesh, signed the contract on behalf of
his bank. Power Divisions joint secretary and APSCL chairman Md.Anwar Hussain, who led the
negotiation with the HSBC for securing the ECA funding, said that this has opened a new window
beyond the conventional financing by the multilateral donor agencies. He hoped that following the
project, many ECA financiers will come forward to finance other power projects in Bangladesh when the
government has a plan to increase the countrys power generation to 20,000 MW by 2012. Officials said
the HSBC will itself participate in the lending process. Of the ECA lenders, Germanys Euler Hermes will
provide $101 million while CESCE of Spain will give $60 million and ONDD of Belgium $75 million.
The rest $184 million will come from Multilateral Investment Guarantee Agency (MIGA) backed
facilities under the HSBC. The APSCL will pay off the loan in next 10 years with 4.7 percent interest.
Official sources said that the APSCL has also made successful negotiation to secure another US$192
million ECA funding for its 225 MW combined cycle power project as well. The plant will be installed at
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the same premises in Ashuganj power station. Another leading international bank, Standard Chartered,
will arrange the ECA fund for the 225 MW Project for which a contract is likely to be signed between the
APSCL and the London-bashed multinational bank. The governments Hard-Term Loan Committee
recently gave go-ahead to the two ECA funding totaling US$ 622 million
The APSCL signed a contract on May 17 this year with EPC contractor -Consortium of Inelectra
International AB of Sweden and TSK Electronica y electricidad SA of Spain - to build the 382 MW
power plant at the Ashuganj power station premises.
As per the deal of 450 MW projects, the plants gross production capacity will be 382.30 MW while the
net output will be 373.312 MW. The plant will run at 56.81 percent of efficiency using natural gas of
48.80 million cubic feet per day. This project will produce one of the lowest-priced electricity as per unit
will cost Tk 1.82.
The APSCL also signed another contract with another EPC contractor - South Korean Hyundai
Engineering Company and Daewoo International Corporation - on October 5 last year to build the 225
MW combined cycle power plant at Ashuganj power station.
Project name

Ashuganj Power Station Company Ltd. (APSCL)

Project ID
Fiscal year
Status
Guarantee holder
Investor country
Host country
Environmental category

10517
2012
Proposed
HSBC
China
Bangladesh
A

Sector
Date SPG disclosed
Projected Board date
Gross exposure
Project type
Strategic priority area
ESRS

Power
September 06, 2012
November 20, 2012
$300.0 million
Non-SIP
Complex Project South-South IDA
Environmental and Social Review Summary for Ashuganj Power
Station Company Ltd. in Bangladesh

This summary covers a non-shareholder loan from the Hong Kong Shanghai Banking Corporation
(HSBC) of Hong Kong SAR, China to Ashuganj Power Station Company Ltd. (APSCL) in Bangladesh.
HSBC will coordinate and arrange a $420 million financing package to APSCL for the project. The
investor has applied for a MIGA guarantee of up to $300 million for a period of up to 11 years against the
risk of non-honoring of sovereign financial obligations. The Ministry of Finance of Bangladesh will
provide an unconditional sovereign guarantee covering debt obligations of APSCL under its loan
agreement with HSBC.
.
Environmental Categorization
The project is a category A under MIGAs Policy on Social and Environmental Sustainability.

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Applicable Standards
While all Performance Standards are applicable to this investment, based on our current information, the
investment will have impacts which must be managed in a manner consistent with the following
Performance Standards:
PS1: Social and Environmental Assessment and Management Systems
PS2: Labor and Working Conditions
PS3: Pollution Prevention and Abatement
PS4: Community Health, Safety & Security
PS6: Biodiversity Conservation & Sustainable Natural Resource Management
The site for the power plant development is currently owned by APSCL. There are no issues related to
land acquisition at this stage of project development and no people will be physically or economically
displaced as a result of the development. Therefore PS 5 is not applied. The EIA confirmed that no
indigenous people will be impacted by the development nor will it impact on traditional, customary lands
or cultural resources. No indigenous people live in the area, therefore PS 7 does not apply. No remarkable
archaeological or historically important structures were identified in the area and the probability of
finding significant cultural resources in the project zone is low, therefore PS 8 does not apply. However, a
chance finds procedure for the construction phase will be developed.
Development Impact
Bangladesh currently faces an acute shortage of power generation capacity. This impairs the countrys
economic and social development and constrains growth. The government of Bangladesh has made
energy a high priority and recently adopted an updated Power Sector Master Plan, which includes this
project. The proposed project will help meet the countrys growing demand for power, using a domestic
gas resistance and efficient technology.
The project is consistent with MIGAs strategic priorities of supporting investment into the worlds
poorest countries, complex projects, and South-South investments.

3.2.2 Project name:

Sheba Telecom Ltd.
Since its inception in 1988, MIGA has issued guarantee contracts totaling $1.8 billion for projects in the
telecommunications sector. The telecommunications portfolio currently stands at $880.8 million,
accounting for 9 percent of MIGAs outstanding gross portfolio.
Sheba Telecom(PVT Ltd)-after talking lots- finally was granted license in 1989 to operate in the rural
areas of 199 upazilas. Later it obtained GSM license in 1996 to extend its business to cellular mobile,
radio telephone services. It launched operation in the last quarter of 1997 as a Bangladesh-Malaysia joint
venture.
In July, 2004, it was reported that Egypt based Orascom Telecom is set to purchase the Malaysian stakes
in Sheba Telecom through a hush-hush deal, as Sheba had failed to tap the business potentials in
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Bangladesh mainly due to a chronic feud between its Malaysian and Bangladeshi partners. An agreement
was reached with Orascom worth US$25 million was finalized in secret. The pact has been kept secret for
legal reasons, considering financial fallout and because of the feud.
The main reason for the undercover dealing was the joint venture agreement between the Bangladeshi and
the Malaysian partners, which dictates that if any party sells its Sheba shares, the other party will enjoy
the first right to buy that.
Integrated Services Ltd. (ISL), the Bangladeshi partner, was being officially shown as purchasing the
shares held by Technology Resources Industries (TRI) of Malaysia for $15 million. ISL then paid another
$10 million to Standard Chartered Bank to settle Sheba's liabilities.
In September, 2004, Orascom Telecom Holdings purchased 100% of the shares of Sheba Telecom (Pvt.)
Limited (Sheba). It was acquired for US$60 million. Sheba had a base of 59,000 users, of whom 49,000
were regular when it was sold.[7] Afterward it was re-branded and launched its services under the
Banglalink brand on February 10, 2005. Banglalinks license is a nationwide 15-year GSM license and
will expire in November, 2011.
In March, 2008, Sheba Telecom (Pvt.) Limited changed its name as Orascom Telecom Bangladesh
Limited, matching its parent company name
Project name
Project ID
Fiscal year
Status
Guarantee holder
Investor country
Host country
Sector

Sheba Telecom Ltd.

5943
2006
Active
Orascom Telecom Holding, S.A.E.
Egypt, Arab Republic of
Bangladesh
Telecommunications

Gross exposure
Project type

$78.3 million
Non-SIP

MIGA has issued a $78.3 million guarantee to Orascom Telecom Holding SAE, a company organized
under the laws of Egypt, covering its equity investment in Sheba Telecom Ltd. in Bangladesh. The
guarantee is for a period of up to 15 years and covers against the risks of transfer restriction, expropriation
and war and civil disturbance. Orascom made this investment through its wholly owned subsidiary
Orascom Telecom Ventures, which is incorporated in the British Virgin Islands.
The project involves the acquisition, operation and maintenance of a national mobile telephone network
based on GSM technology. The company offers countrywide services. Since acquiring Sheba, Orascom
has upgraded the network and re-branded the company as Banglalink. Orascom has rapidly deployed new
network infrastructure, set up a distribution network, and offers high-quality mobile services at
competitive prices.
By supporting this project, MIGA aims to help the government address the acute shortage of reliable
telephone services in the country. Bangladesh has an extremely low teledensity of less than 1 percent.
Landline telephony is exorbitantly expensive for the majority of Bangladeshis, with connection charges as
high as $150 and the average wait for a connection ranging from 10-13 months.

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Sheba expects to increase its number of customers from the current one million to more than six million
by 2012. The project will expand access to telecommunications throughout the country, thereby
facilitating commerce in rural and urban areas. The national government will receive a 1 percent share of
the projects annual revenue in addition to $20 million annually in corporate and other taxes. Consumers
will benefit from better and cheaper cellular service. Shebas actions have prompted other operators to
improve their networks, and the increased competition has caused rates to fall by 25-30 percent. The
company also employs and trains 350 local staff and about 2,000 people through exclusive dealers of
Sheba service.

3.2.3 Project name:

Khulna Power Company Ltd.
Khulna Power Company Ltd. (KPCL) is an independent power producer (IPP). The principal
activity of the Company is to generate electricity and to deliver the output to the national grid. Its
customer includes Bangladesh Power Development Board (BPDB). The Company has set up a 110
megawatt liquid fuel-fired, convertible to dual fuel-fired (liquid gas), barge mounted power plant in
Khulna, Bangladesh. During the year ended December 31, 2011, the Company exported about 1,202.01
million kilowatt hour of electricity. The Companys two subsidiary companies include Khulna Power
Company Unit II Ltd. and Khanjahan Ali Power Company Ltd. Khanjahan Ali Power Company Ltd.
(90% subsidiary of KPCL), a 40 megawatt rental power plant project started its commercial operation, on
May 29, 2011. Khulna Power Company Unit II Ltd. (99% subsidiary of KPCL), a 115 megawatt rental
power plant project started its commercial operation, on June 1, 2011.
Project name
Project ID
Fiscal year
Status
Guarantee holder
Investor country
Host country
Sector

Khulna Power Company Ltd.

1619
1999
Not Active
Coastal Power Khulna Ltd
Cayman Islands
Bangladesh
Power

Gross exposure
Project type

$29.3 million
Non-SIP

MIGA issued a $29.3 million guarantee to cover Coastal Power Khulna, Ltd., a wholly-owned subsidiary
of the Coastal Corporation of the United States, for its investment in the construction and operation of a
dual-fuel barge- mounted 110 MW power plant, located in Khulna. The plant will operate on heavy fuel
oil in the initial years of operation, and will be converted for gas use as soon as it becomes available in the
area. MIGA's guarantee covers the investment against the risks of transfer restriction, expropriation, and
war and civil disturbance.
The plant is designed to alleviate the severe power shortages in the Khulna and adjacent areas, identified
as industrial growth centers by the Government of Bangladesh, while improving the overall reliability of
the country's power supply. The facility will displace the generating capacity of the older, less efficient,
and high-cost plants in the region. The plant conforms to all applicable environmental standards.
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The plant will directly and positively affect the economy of the immediate region. It provides
employment to over 100 people from the surrounding areas and many of the jobs are technical and
managerial in nature. Significant numbers of jobs have been created at the fuel terminal, barges,
restaurants, transportation services, and other ancillary businesses created to serve the needs of the plant.
New industrial and commercial establishments are likely to open to take advantage of the stable and
reliable power, and existing establishments do not require back-up generators. In addition, the plant has
contributed significant funds toward social causes in the region.

3.2.4 Project name:

Socit Gnrale (Bangladesh)
SGS is the worlds leading inspection, verification, testing and certification company. Recognized as the
global benchmark for quality and integrity, we employ more than 64,000 people and operate a network of
over 1,250 offices and laboratories around the world.
We are constantly looking beyond customers and societys expectations in order to deliver market
leading services wherever they are needed. As the leader in providing specialized business solutions that
improve quality, safety and productivity and reduce risk, we help customers navigate an increasingly
regulated world. Our independent services add significant value to our customers operations and ensure
business sustainability.
We aim to be the most competitive and the most productive service organization in the world. Our core
competencies in inspection, verification, testing and certification are being continuously improved to be
best-in-class. They are at the heart of what we are. Our chosen markets will be solely determined by our
ability to be the most competitive and to consistently deliver unequalled service to our customers all over
the world.
Established in 1878, the company started by offering agricultural inspection services to grain traders in
Europe. From those early beginnings, we grew in size and scope as our agricultural inspection services
spread around the world. On 19 July 1919, the company adopted the name of Societe Generale de
Surveillance (today, known as SGS). During the mid-20th century, we began to diversify and started
offering inspection, testing and verification services across a variety of sectors, including industrial,
minerals and oil, gas and chemicals, among others. In 1981, the company went public.
The current structure of SGS, consisting of 10 business segments operating across 10 geographical
regions, was formed in 2001. From our beginnings in 1878 as a grain inspection house, we have steadily
grown into our role as the industry leader. We have done this through continual improvement and
innovation and through supporting our customers operations by reducing risk and improving
productivity.
Project name
Project ID
Fiscal year
Status
Guarantee holder
Investor country
Host country
Sector

Socit Gnrale (Bangladesh)

839
1997
Not Active
Socit Gnrale S.A.
France
Bangladesh
Banking
24 | P a g e

Gross exposure
Project type

$9.0 million
Non-SIP

MIGA issued a $9 million guarantee to Socit Gnrale, S.A. of France for its investment in the
establishment and operation of a branch bank in Dhaka. MIGA's guarantee covers the investment against
the risks of expropriation, transfer restriction, and war and civil disturbance.
Socit Gnrale (Bangladesh) will concentrate on commercial, merchant, and investment banking
activities, and its clients will include private individuals, export companies, and multinational
corporations. The bank will employ about 60 local staff and provide on-the-job training in technical and
managerial skills, such as cash management, trade finance, management information systems, and foreign
exchange transactions. Technology for a new financial management system, designed by Socit
Gnrale for its overseas operations, will improve banking operations.

3.2.5 Project name

Karnaphuli Fertilizer Company Limited
Karnaphuli Fertilizer Company Limited (KAFCO) is a 100% export oriented international joint venture
company.Established in Bangladesh with the shareholding and support of the governments and private
sectors of Bangladesh, Japan, Denmark and the Netherlands, KAFCO is the largest joint venture
investment in Bangladesh. KAFCO markets its products to many countries around the world.
The KAFCO plant is a fully integrated complex, it lies on 55 acres of land, located in Rangadia,
Karnaphuli, Chittagong just alongside the Karnaphuli river. The company employs a total of over 600
people at it's plant site and corporate office in Dhaka. Most of those employed at plant site live in the
company's housing colony built 3km down from the plant on 16 acres of developed land. The housing
colony incorporates a school, medical clinic and recreational facilities for the benefit of the company's
employees.
The KAFCO complex produces high-grade granular Urea and anhydrous Ammonia. The facility consists
of an ammonia plant, urea plant, and a urea granulation unit, all supported by captive power generation.
KAFCO's corporate office is in Bangladesh's capital city, Dhaka.
Project name
Project ID
Fiscal year
Status
Guarantee holder
Investor country
Host country
Sector

Karnaphuli Fertilizer Company Limited

1570
1993
Not Active
MarubeniCorporation
Chiyoda Corporation
Japan
Bangladesh
Manufacturing

Gross exposure
Project type

$32.2 million
Non-SIP

In fiscal 1991 MIGA issued guarantees of $9.9 million each to support Marubeni Corporation and
Chiyoda Corporation, two Japanese equity investors in the Kamaphuli Fertilizer Company, Ltd.
(KAFCO) in Bangladesh. This $500 million fertilizer facility experienced delays in implementation that
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necessitated a restructuring of the complex project financing. As a result, both Marubeni and Chiyoda
increased their contributions to the project in fiscal 1992. MIGA issued $16.1 million of additional
coverage to each of these Japanese investors to cover their loans to the project.

Environmental and Social Review Summary on KAFCO:

Business Ethics & Transparancy
KAFCO shall do business in ways that are transparent, ethical, demonstrate high personal integrity and
respect for rights of individuals. It undertakes to:
o

respect rule of law. Make commitments that can be honored. Desist in consciously
misleading and involving in unacceptable practices.

contribute towards social causes, economic growth and preservation of environment

provide quality products that are safe for their intended use.

endeavor to provide stakeholders with accurate and timely information to facilitate

understanding and support for company business as also for the development of private
sector in the country.

discourage and work against all forms of corruption including extortion and bribery etc.

Environment
KAFCO shall work towards prevention of harm to the environment and continued improvement of
environment preservation. The guidelines given below shall help in the discharge of its responsibilities.
o

satisfy legal requirements, national or international relevant to company business, to

mitigate any adverse impact on environment. All employees shall consider environment
matters to be critical and integral to their respective functions.
promote good environment practices when sourcing products & services.

conserve energy & water, promote & encourage recycling and other waste recovery
initiatives.

undertake initiatives to promote greater environmental responsibility. Monitor

emissions/effluents to ensure compliance to country standards. Encourage development
and diffusion of environmentally friendly technologies.

encourage compliance with environmental rules & regulations. Assess impact on

environment of all new businesses, products and projects.

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Health & Safety

KAFCO recognizes the crucial importance of health & safety issues and therefore, undertakes to:
o

o
o
o

satisfy legal requirements, national or international relevant to company business. All

employees shall consider health & safety matters to be critical and integral to their
respective functions.
provide a healthy, safe and secure working environment.
encourage and involve employees on health and safety matters that affect their work.
adopt systematic approach to health and safety in order to achieve continuous
improvement in performance.

EMPLOYEE RELATIONS & WORKPLACE PRACTICES

KAFCO observes following principles in obtaining a congenial work environment that fosters
professional harmony, excellence and competencies.
o

be an equal opportunity employer. Eliminate discrimination in respect of employment

and occupation.

establish fair labor practices and respect for all workers & staff. Uphold freedom of
association and recognize the right to collective bargaining. Eliminate all forms of forced
and child labor.

use human resource with skills & experience matched against those required for the work
to be performed.

support and respect for internationally proclaimed human rights. Make sure not to be
complicit in human rights abuses.

rely on total commitment of all employees.

maintain fair and competitive terms & conditions of employment. Provide opportunities
for training and development.

Community Relations
KAFCO supports empowerment which entails providing people with training, education and
opportunities to allow help themselves. This would help improve economic environment of the
community through creation of wealth & jobs, business opportunities and philanthropy. It therefore, is
obliged to:
o

promote social values and humanitarian causes.

promote and patronize actions/activities toward the cause of education, health, civic
amenities, poverty alleviation, environment preservation and social justice.

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support arts, culture, sports and institutions (schools, universities, think tanks, research
and cultural institutions) that enrich public and community life.

support and/or sponsor seminars, conferences, symposia on matters relating to national

interest, social issues, culture and well being of the community.

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Conclusion:
The Multilateral Investment Guarantee Agency (MIGA) is an international financial institution
which offers political risk insurance guarantees. Such guarantees help investors protect foreign
direct investments against political and non-commercial risks in developing countries. Political
risk insurance is a type of insurance that can be taken out by businesses, of any size, against
political riskthe risk that revolution or other political conditions will result in a loss. The
underwriting of political risk insurance is a dynamic, growing business. As globalization
increases, there are more corporations doing more business in more places around the world with
each passing year. Some of the changes occurring in the business are high growth, new product
offerings, and a greater role for private capital. The Multilateral Investment Guarantee Agency
(MIGA) facilitates the growth.
This institution provides a crucial role in providing credit in the form of higher risk loans, equity
positions and risk guarantee instruments to private sector investments in developing countries. It
helps companies implement investment plans and especially seek to engage in countries where
there is restricted access to domestic and foreign capital markets and provide risk mitigation that
enables investors to proceed with plans they might otherwise abandon.

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Bibliography

1. www.miga.org
2. www.trading economics.com
3. www.international economics.com
4. Bangladesh Bank website
5. www.worldbank.org

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