Investment Dispute Mediation Services in Ethiopia

WASHINGTON, DC, December 18, 2002 — For the past four years, the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, has been helping the government of Ethiopia negotiate with investors to resolve investment claims resulting from expropriatory actions taken under the Mengistu government 27 years ago. These actions involved the expropriation of all assets owned by foreign investors.
At the government's request, MIGA and Ethiopia co-signed a Memorandum of Understanding in October 2000 designating the agency the official mediator for resolution of the expropriation claims.

MIGA's mandate is to promote foreign direct investment into emerging economies to improve people's lives and reduce poverty. MIGA fulfills this mandate and contributes to development by offering noncommercial risk insurance (guarantees) to investors and lenders, and by providing technical assistance and dispute mediation services to help developing countries attract and retain private investment.

As a development institution, MIGA's goal is to help Ethiopia resolve these claims and improve the country's image to help it attract the funding and private investment needed for economic growth and poverty reduction. MIGA acts as a neutral third-party facilitator that brings the parties together to discuss the best possible ways of resolving investment disputes. Given the dire economic situation and looming threat of severe famine facing the people of Ethiopia, MIGA is highly sensitive to the need for fair and reasonable solutions. A number of claimants share our concern.

There are currently some 42 claims being reviewed by MIGA. Most of these claims relate to investments by Greek individuals and by a few companies and individuals of other nationalities. The fact that the claimants' assets were expropriated is not under dispute. What is at issue is the amount of compensation due. In some cases, Ethiopia has offered restitution of assets, and in others, monetary compensation. A few cases have been resolved.

As with any mediation effort, the mediator is bound by the strictest confidentiality that cannot be breached without the agreement of the parties involved. Therefore, as a matter of policy, MIGA will not discuss individual dispute cases, such as the one brought forward by Nestlé Germany. However, the concerned parties may be contacted directly.

For information
 
Moina Varkie, mvarkie@worldbank.org, t. 202.473.6170,
t. 202.473.3509