CHAPTER 3
OPIC’s Shadow Claims History Robert C. O’Sullivan
The final claims determinations (claims paid and denied) by the Overseas Private Investment Corporation (OPIC) are publicly available, and a c umulative claims history is published annually. As of September 30, 2010, OPIC paid 290 claims totaling US$969.8 million and denied 28 claims, 14 of which were submitted to arbitration. At the 2004 International Political Risk Management symposium hosted by the Multilateral Investment Guarantee Agency (MIGA) and Georgetown University on November 12, I presented a paper titled “Learning from OPIC’s Experience with Claims and Arbitration” that included a discussion of what can be learned from “near claims.” This chapter expands on what can be learned from claims matters that never received a final determination and thus that remain in the “shadows,” as opposed to the final claim determinations that OPIC makes publicly available. Those shadow claims include (a) situations that OPIC monitored when multiple claims seemed likely because of serious country issues, (b) specific projects for which the investor sent OPIC a notice of potential claim but made no claim, (c) investment disputes in which the insured investor requested an OPIC intervention (advocacy), and (d) claims that were filed but were withdrawn before a decision was made.
Overview of the Data Information regarding shadow claims is not as complete or as uniform as that for decided claims, but OPIC has enough data on approximately 100 shadow claims to offer overall generalizations and to present some specific case studies. Infrastructure projects account for almost one-third of the total claims, with power projects taking the lead (table 3.1). Thus, adding oil and gas projects (12) and mining projects (5) to infrastructure projects would account for almost half of those claims (47). The further addition of projects involving land use rights—hotel and real estate (8) and agribusiness (5)—would account for 60 percent of the shadow claims. By adding contractors and exporters, always a source of disputes, one can account for nearly two-thirds of the total. 13