social and natural mechanisms that lead to trouble.
Before advanced nations undertake such transfers,
therefore, they should try to anticipate the
unwanted, potentially damaging side effects of their
actions.

Because of the relatively embryonic state of our
ecological science, not even the advanced nations can
always predict such side effects. But our knowledge,
our experience, and our resources vastly exceed those
of underdeveloped nations and through NEPA the
United States can provide access to the considerable
ecological expertise it does possess."

-

Charles Warren's list can be updated. Foreign aid is currently being criticized for inducing environmental problems such as those involving Livestock Production for Botswana or the Yangtze River's Three Gorges Dam in the Peoples Republic of China. Congress has demonstrated that it wants to help legitimate socio-economic development abroad. It will not stand for aid dollars being siphoned away through corruption nor will it stand for spending on projects which undermine sustainable development. The Continuing Resolution for FY 1988 adopted last December'' provides that the multilateral development banks should continue to reform their environmental procedures, and that the Treasury Department should encourage such reform." This reaffirms Section 539 of Public Law 99-591, and Treasury's mandate to encourage reform.

The pace of reform in international financial institutions has been laborious and slow. There is no sound reason why the World Bank and other multilateral development banks have not drawn on the EIA expertise in agencies in nations such as the USA, Australia, Canada or the Netherlands, in order to establish their own EIA procedures.

Congress has several options which it could pursue to accelerate

the pace of reform in the multilateral development banks. These

representing the United States in any international financial

assistance organization prepare an environmental impact statement in each discrete budget undertaking for development projects. Since international financial institution budgets are prepared more than a year in advance, there is adequate time to prepare an EIS. Alternatively, assign all such EIS preparation to AID or Treasury or

State.

(c) Legislate To Leverage Require that the federal agency representing the United States in any international financial assistance organization select one or more projects or programs for preparation of a programmatic EIS by the agency.'' Payment of U.S. aid would be conditioned on completing the programmatic EIS and the adoption of generic measures for mitigation of adverse environmental effects. The U.S. could do this jointly with nations such as The Netherlands which have efficient EIA procedures like NEPA.

Once the organization agreed to do an analysis equivalent to an EIS, the federal agency would be relieved of its EIS responsibility so long as the international financial organization met minimal competency tests in performing its own EIA.

(d)

Legislate To Expand E.0. 12114 - Simply direct that Treasury comply with NEPA Section 102(2)(C) for each vote on proposed actions of multilateral development banks such as the International Monetary Fund. This would require a phase-in period since many development projects are in late stages of development. It should also make some provision to defer to any EIS prepared by the relevant international financial institution so as to avoid unnecessary duplication. Treasury could be directed to use AID's procedures, or be left to do its own rule-making to establish agency procedures on how to comply.

(e)

Provide Technical Training

Appropriate and especially

allocate funds solely for providing international financial institutions with training technical advice and assistance and personnel in order to establish EIA procedures and actually undertake initial environmental impact assessment procedures. Alternatively, provide such help directly to foreign developing nations through AID. Leave further evolution of the applicability of NEPA abroad to the President and/or the courts.

(f) Punt

In conclusion, we have seen that compliance with NEPA is an established fact for most federal agencies, and that the foreign affairs agencies are no exception. All agencies were reluctant to retool initially; once experienced in EIA techniques, agencies realize the many benefits of the process which Congress created through NEPA. It would be a small, but probably an effective step for Congress to mandate the preparation of programmatic environmental impact statements as proposed in Option "C" above. That escalates the pressure on multilateral development banks to establish EIA

procedures, with a minimum of cost to U.S. taxpayers. The fact that the U.S. would be scrutinizing the environmental sufficiency of projects of international financial institutions would probably propel them to establish their own EIA procedures as soon as possible. This result would be encouraged by authorizing the U.S. federal agency to rely on the multilateral EIA whenever such is done

consistent with U.S. standards under NEPA.

As the world's population grows and more projects are begun, it is critical that they be completed in a sound environmental context. We do not have enough time or money to do the projects twice, originally and then by way of repair or revision once the environmental flaws

appear.

Congress was extraordinarily effective and farsighted when it first created the methodology of EIA. EIA procedures began with NEPA. EIA procedures rapidly are becoming an international standard. There is no reason for either the foreign affairs agencies or the international financial institutions to avoid employing routine EIA procedures. In Senator Jackson's words, "The global character of ecological relationships must be the guide for domestic

activities."""

I wish you success in your deliberations following these hearings.

I shall be pleased to provide any further information you may need on these matters. Thank you for your attention.

Annotations To Testimony

1.42 USC 4321, et seq.

2. ECC Council Directive of 27 June 1985, "On the assessment of the effects of certain public and private projects on the environment," 85/337/EEC, 175 Official J. of the European Communities 41 (July 7, 1985).

3. N.Z. Cabinet Decision of 7 August 1972, and EIA procedures effective 1 March 1974 promulgated by the Commission for the Environment.

4. See D.A.R. Williams, Chap. VIII, "Environmental Impact Assessment and Reporting," in ENVIRONMENTAL LAW at 234 and 237-8 (Butterworth, Wellington, N.Z. 1980).

5. Canada, Cabinet Decision of 20 December 1977, "Environmental Assessment and Review Process, modified by Cabinet Decision of 15 February 1977, and strengthened by guidelines issued by Order in Council, in June of 1984. See B. Sadler (ed.), Audit and Evaluation in Environmental Assessment and Management: Canadian and International Experience (Environment Canada, 1987).

6. Progress Report on Implementation of Environmental Reform in Multilateral Development Banks, transmitted to Senator Robert W. Kasten, Jr., by John K. Meagher, Assistant Secretary for Legislative Affairs, U.S. Department of the Treasury, February 5, 1988.

7. Environmental Impact Assessment in The Netherlands," Ministry of Housing, Physical Planning and Environment (The Hague, 28 August 1984).

8. Report of the Legal Advisory Committee To The President's Council on Environmental Quality, Whitney North Seymour Jr., Chairman

(December, 1971).

9. NY State Environmental Quality Review Act ("SEQRA"), Article 8, Environmental Conservation Law, 17% McKinney's Consol. L. of N.Y.

10. Environmental Law Institute, NEPA IN ACTION: ENVIRONMENTAL OFFICES IN NINETEEN FEDERAL AGENCIES (October, 1981).

11. M.T. Farvar, J.P. Milton, The Careless Technology: Ecology and International Development (National History Press, 1972).

12. Op. cit., supra note 8, at p. 14.

13. See my article, N.A. Robinson, "Extraterritorial Environmental Protection Obligations of the Foreign Affairs Agencies: The Unfulfilled Mandates of NEPA, 7 N.Y.U.J. INT'L L. and POL. 257