By BEATRICE EDWARDS
I must respond to the misleading Nov. 15 letter from the Inter-American Development Bank (IDB), “Clearing up Camisea misconceptions,” written to conceal the financial mismanagement and environmental damage caused by the Camisea project, which were exposed in Kelly Hearn‘s Nov. 9 article “U.S. questions development bank after troubled gas project in Peru.”
When ProPublica published accounts of the IDB‘s enormous investment losses in February 2009, the bank denied them. ProPublica responded with a letter from Sen. Richard Lugar, Indiana Republican, to the IDBpresident, which read:
“The reported scale of the IDB‘s investment portfolio losses of $1.9 billion – 10 to 100 times higher than the losses of the other development banks – is of grave concern.”
The IDB‘s own internal review stated that those losses were caused by inadequate risk analysis that allowed heavy investment in U.S. mortgage-backed securities.
Although the U.S. Treasury approved the IDB‘s capital request, the bank should be aware that in the United States, financial appropriations are made by Congress. Congress may not approve Treasury‘s requested increase for the IDB because of the bank’s poor management, even if other development banks receive increased funding.
With respect to the public consultations on the pipeline the IDB cites, the coalition of indigenous-peoples organizations routinely protests the stage-managed quality of these meetings. Last year, the coalition wrote that the agenda had not been agreed to by stakeholders, diverse participation was not guaranteed, relevant information was not distributed, and the time frame was too short for meaningful dialogue.
Finally, the IDB claims that no further ruptures have occurred, but with the consultations staged and the documentation unexamined, who can believe that?