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We have extensively reformed U.S. domestic law regarding the operation of A.I.D., State

Department and Treasury Department mechanisms for overseeing these institutions. We have not tried to duplicate abroad America's own environmental decision-making process, but rather tried to protect foreign nations' basic resources and environments on a much more fundamental level.

The Committee believes that strong local support is necessary if environmental protection efforts are to succeed; this at least has been our experience in the United States. Bearing this in

mind, the Committee has carefully avoided trying to

apply the same NEPA standards to domestic and

foreign programs.

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Each of the MDB's is controlled by its member nations and run by a board of directors. On

average, the United States contributes 20% to the

operation of the MDB's. Recognizing the

proportional percentage of control the United States has over each MDB, we cannot simply demand the application of U.S. environmental standards to

these institutions. Rather, we must work in cooperation with the other contributor and borrower

nations to promote environmental reforms.

Demanding that NEPA be enforced on the

MDB's could actually cause serious harm to

America's efforts in this regard.

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Without American leadership, the multilateral

development banks would continue to increase

their funding for environmentally harmful projects. However, thanks to the State Department, U.S. A.I.D., and -- most importantly -- the Treasury Department, extensive changes are occurring at each bank. Example: As part of its reorganization last year, the World Bank announced that it would create a new environmental department. Greater attention is being paid to environmental issues in decisions on potential loans.

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While I am not satisfied with the progress so

far, I believe that some progress is being made in

integrating environmental criteria into the

decision-making process. Reforms are currently being undertaken at each of the three regional banks.

In dealing with the MDB's, we must always remember that they are culturally complex institutions. Many of the officials who run them did not grow up with the environmental awareness that we have. While we see environmental protection as an essential component of economic development, many bank officials view the two as competing

interests.

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Our job in promoting environmentally

sustainable development is not just to oppose U.S.

participation in environmentally damaging projects,

but to cooperate with the banks themselves, borrower nations and sponsor nations to promote sensitivity to the environment.

Our efforts are beginning to bear fruit. This summer we expect the first European nation to adopt U.S.-style environmental guidelines for bank voting instructions. In addition, the U.S. is now sharing the information developed in our "early warning system," which identifies potentially

destructive projects. This information is now being used by sponsor nations to shape instructions to their MDB board representatives.