Home' Trinidad and Tobago Guardian : June 19th 2014 Contents With the run-up to the
World Cup in Brazil
marked by protests,
and crime, perhaps
nobody felt more
relief at the snafu-free opening match than
Munich Re underwriting manager Andrew
His insurance company has written policies
covering US$400 million in potential losses
at this year s World Cup. While they are not
through the woods yet---the US$229 million
stadium in the Amazonian jungle at which
England and Italy are scheduled to play this
weekend is reported to be in "bad shape"---
Duxbury is feeling confident. "The noise
around these events is always generated in the
immediate run-up," he says. "I don t want to
underestimate and belittle the issues that Brazil
has---and that are manifesting themselves in
these protests---but we do see it as a regular
Similar fears, Duxbury notes, marked the
days before the Olympic Games in Sochi and
London and the last World Cup in South
Africa. In every case, there were no major dis-
ruptions. "Did we get an event? Yes, we did.
Did the athletes love it? Yes. Did the TV come
in? Were we watching it? Yes, yes, yes," he
says. "And I expect to see that here as well."
Munich Re is one of about a half dozen
major backstops for FIFA, media rights holders,
sponsors, and anybody else with a large finan-
cial stake in the World Cup. Along with com-
petitors such as Swiss Re and Hannover Re,
it sets the market for as much as US$2 billion
in insurance covering the event. If matches
are cancelled, delayed, or interrupted by weath-
er, violence, stadium failures---anything that
falls "outside the control" of the insured---
Munich Re helps cover sunk costs. This makes
the company expert in everything from mete-
orology and crowd control to political climates
and stadium construction.
In the seven years since Brazil was named
host for 2014, Duxbury has led a team of
roughly a dozen Munich Re employees in gam-
ing out the universe of potential risks. The
project is part modern data collection, part
"old-fashioned underwriting," says Duxbury.
"You know that there is an X per cent chance
of two inches of rain only one day in July at
that venue. Would two inches cancel the
This means looking at drainage plans, past
cancellations, and event protocols---and even
then, you never know for sure. There could
be a volcanic explosion in Iceland, an event
from 2010 that Duxbury remembers playing
havoc across Europe. "Either the stars couldn t
get there, security couldn t get there, or the
audience couldn t get there," he says. "I could
honestly not have imagined a volcano in Iceland
could have impacted Europe for that length
of time and shut our airports down."
For all Brazil s struggles since the financial
crisis, the 2014 World Cup is a relatively safe
proposition for Munich Re. Unlike the
Olympics, which are centred in a single city,
the global soccer tournament is spread
throughout the country. This dissipates risk
because there is no concentrated target and
allowances can be made for a catastrophe at
any single venue. "I have sleepless nights about
London, two years later," says Duxbury, "a
much more difficult risk proposition because
you ve got so many more moving parts, so
much of a bigger organisation in terms of ath-
letes, different disciplines---all wedged into
one of the world s bigger cities---and therefore
notoriously difficult to tie down and make
completely watertight and secure."
There will no doubt be protests, crime, plan-
ning failures, and problems from now until
the World Cup final on July 13. For Munich
Re, those are minor irritants. Duxbury s concern
is large-scale disaster: "I m imagining I d be
turning on the television from my living room
in the evening in the UK going, Ok, now we
have a real problem. I think I ll know imme-
JUNE 2014 • WEEK THREE www.guardian.co.tt BUSINESS GUARDIAN
INTERNATIONAL | BG21
Chile s government rejected an US$8 billion
proposal to dam Patagonian rivers to meet the
country s growing energy demands, handing
a victory to environmentalists who praised
the June 10 ruling as a landmark moment.
A ministerial commission rejected the
HidroAysen plan, which would have tamed
two of the world s wildest rivers and built
more than 1,000 miles (1,600 kilometres) of
power lines to supply energy to central Chile.
After a three-hour meeting, Chile s ministers
of agriculture, energy, mining, economy and
health voted unanimously to reject the project.
The committee "decided to side with com-
plaints presented by the community," Envi-
ronment Minister Pablo Badenier told reporters.
"As of now, the hydroelectric project has been
The project would have built five dams on
the Baker and Pascua rivers in Aysen, a mostly
roadless region of southern Patagonia where
rainfall is nearly constant and rivers plunge
from Andean glaciers to the Pacific Ocean
through green valleys and fjords.
Patricio Rodrigo, executive secretary of the
Patagonia Defense Council, called the decision
"the greatest triumph of the environmental
movement in Chile."
It "marks a turning point, where an empow-
ered public demands to be heard and to par-
ticipate in the decisions that affect their envi-
ronment and their lives," Rodrigo said.
Chile is strapped for energy, but most
Chileans opposed HidroAysen, and protests
against it at times turned violent.
"This is truly amazing news," said Margarita
Baigorria Cruces, a local resident of Aysen
who led a petition campaign against the project
for activist group Avaaz.
"We were dreaming and hoping this would
happen. We won t be condemned to drink
gold: water is our treasure and this historical
victory was meant to be sooner or later. The
last thing you lose is hope."
HidroAysen executives had promised that
the Aysen region would get cheaper energy,
jobs, scholarships and millions in infrastructure,
including seaports and airports.
But people in the sparsely populated area
remained divided. About three dozen families
would have been relocated, but the dams would
have drowned 14,000 acres (5,700 hectares),
required carving clear-cuts through forests,
and eliminating whitewater rapids and water-
falls that attract ecotourism. They also could
have destroyed habitat for the endangered
Southern Huemul deer: Fewer than 1,000 of
the diminutive animals, a national symbol,
are believed to exist.
With its energy-intensive mining industry
demanding more power, experts say Chile
must triple its current 18,000-megawatt
capacity in just 15 years, despite having no
domestic oil or natural gas resources. The
dams were planned to generate a total of 2,750
megawatts, almost a third of central Chile s
current needs, within 12 years.
Before she was elected last year, President
Michelle Bachelet had said the HidroAysen
plan was not viable. She announced last month
that she instead would tackle Chile s energy
crunch by building up alternative energy
sources and terminals for liquefied natural
The HidroAysen joint venture is 51 per cent
owned by European energy generator Endesa
and 49 per cent owned by the Chilean com-
pany Colbun SA. Endesa is a Spanish subsidiary
of the Italian energy company Enel SpA.
The company can appeal the decision before
an environmental court, and analysts expect
a long legal battle. The HidroAysen venture
was not immediately available for comment.
Chile rejects US$8bn dam project in Patagonia
What can go wrong
at the World Cup?
Ask the insurance underwriter
Portugal's Fabio Coentrao is carried away on a stretcher after being injured during the group G
World Cup soccer match between Germany and Portugal at the Arena Fonte Nova in Salvador,
Brazil, on Monday, June 16, 2014. (AP)
Munich Re is one of about
a half dozen major backstops
for FIFA, media rights holders,
sponsors, and anybody else
with a large financial stake in
the World Cup.
Along with competitors
such as Swiss Re and Hannover
Re, it sets the market for as
much as US$2 billion in
insurance covering the event.
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