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TESTIMONY OF

A. ALAN HILL
CHAIRMAN, COUNCIL ON ENVIRONMENTAL QUALITY

HEARING BEFORE THE SUBCOMMITTEE
ON HAZARDOUS WASTES AND TOXIC SUBSTANCES
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

UNITED STATES SENATE

JUNE 16, 1988

THE NATIONAL ENVIRONMENTAL POLICY ACT AND ITS APPLICATION TO
UNITED STATES PARTICIPATION IN ACTIONS OF INTERNATIONAL

FINANCIAL INSTITUTIONS
AND OTHER INTERNATIONAL ACTIVITIES

Mr. Chairman, thank you for the opportunity to testify this

morning on the subject of applying the National Environmental

Policy Act (NEPA) to United States participation in the actions

of international financial institutions.

Your letter requesting

testimony posed several questions, addressing the relationship of

NEPA to U.S. government actions in the context of international

financial institutions, as well as questions relating to the broader issue of NEPA's applicability to u.s. activities

overseas.

My responses are set forth below.

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1. Please comment generally on the role of NEPA in U.S. participation in international activities. Should NEPA be used more extensively in U.S. sponsored or supported international activities? What are the current limitations in applying NEPA to international activities involving the U.S. and what actions would be needed to broaden its use?

General Comments on the Role of NEPA in
U. S. Participation in International Activities

NEPA's applicability to U.S. actions overseas, whether in

the context of bilateral relationships or international institutions, has been the subject of controversy since Congress

passed the act in 1969.2 There is no record in the legislative

history of a debate directly on the point of whether NEPA applied

to federal actions occurring outside the territorial jurisdiction

of the United States.

Soon after NEPA was signed into law by

President Nixon on January 1, 1970, federal agencies with

responsibilities for projects which were implemented overseas,

such as the Department of State, the Agency for International

Development, and the Export-Import Bank, asserted the position

that the procedural requirements of Section 102(2)(C) of NEPA, the section which requires preparation of a "detailed statement" for major federal actions significantly affecting the quality of the human environment, did not apply to activities which occurred within the territorial jurisdiction of another sovereign

government.

In 1971, the issue of NEPA's applicability to u.s. actions abroad was considered by the Legal Advisory Committee to the

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Pub. L. 91-190, 42 U.S.C. 4321-4347, January 1, 1970.

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Council on Environmental Quality (CEQ). The Advisory Committee

unanimously concluded that NEPA applied to u.s. actions carried out within the territorial jurisdiction of another nation.2

During the early and mid-1970s, this issue continued to be vigorously debated by the various federal agencies. Federal court decisions, so integral to the development of NEPA in a domestic setting, proved less conclusive in answering the question of NEPA's applicability to overseas activities. were settled out of court or decided on other grounds, or decided in such a manner that both sides claimed victory. CEQ's 1973

Cases

guidelines implementing the procedural provisions of NEPA

required the assessment of both the national and international

environment, but the guidelines, unlike the present regulations, were advisory only and thus not binding on the agencies.

In 1976, CEQ issued a "Memorandum on the Application of the

EIS Requirement to Environmental Impacts Abroad of Major Federal Actions"", which concluded that the procedural requirements of Section 102(2)(C) of NEPA apply to all federal actions having

2

Report of the Legal Advisory Committee to the President's Council on Environmental Quality, December 1971, pp. 13-17.

3

See, Environmental Defense Fund v. Agency for International Development, 6 ELR 20121 (D.D.C. 1975); Sierra Club v. Coleman, 405 F. Supp. 53 (D.D.C. 1975); 421 F. Supp. 63 (D.D.C. 1976); Sierra Club v. Atomic Energy Comission, ELR 20885 (D.D.C. 1974); Wilderness Society V. Morton, 463 F.2d 1261 (D.C. cir. 1972).

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significant effects on the quality of the human environment,

whether in the United States, in other countries, or in areas

outside the jurisdiction of any country. The Memorandum also stated that NEPA provides sufficient procedural flexibility to

accommodate national security or foreign policy considerations.

CEQ's direction to federal agencies to fully assess the

potential environmental effects of proposed actions outside the

United States continued to be controversial and only partially implemented during the mid 1970s. In 1977, President Carter issued an Executive Order6 directing ceQ to issue binding

regulations to federal agencies for implementing the procedural

provisions of NEPA.

During the course of its work, CEQ

identified the issue of NEPA's applicability to federal actions

abroad as an issue which needed to be addressed in a regulatory

context.

That effort, involving a long and much publicized

interagency debate”, resulted in the issuance by President Carter

of Executive Order 121148, on Environmental Effects Abroad of

Major Federal Actions.

The basic thrust behind development of

the Executive Order was to negotiate a practical approach to the issue which would enable agencies to take into account

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Executive Order 11514, as amended by Executive Order 11991, May 24, 1977.

See "President Orders Environmental Review of International Actions", 9 ELR 10011 (January, 1979); "Forthcoming CEQ Regulations to Determine whether NEPA Applies to Environmental Impacts Limited to Foreign countries", 8 ELR_10111 (June, 1978).

See Appendix A.

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environmental effects of federal actions abroad, consistent with

U.S. economic, foreign policy, and national security interests,

while avoiding a direct resolution of the legal issue.

Executive Order 12114 was issued on January 4, 1979.

Section 1 of the order states that it ".

represents the

United States government's exclusive and complete determination

of the procedural and other actions to be taken by Federal

agencies to further the purposes of the National Environmental Policy Act, with respect to the environment outside the United States, its territories and possessions." It does not create a

cause of action in the courts.

The term "environment" is

defined as the natural and physical environment and excludes

social, economic and other environments. 10

Under Executive Order 12114, federal agencies were directed

to publish implementing procedures, in consultation with CEQ and

the Department of State.

The agency procedures must address the

following categories of actions:

(a)

major federal actions significantly affecting the

environment of the global commons outside the jurisdiction of any

nation (e.g., the oceans or Antarctica).

For these actions, an

environmental impact statement (EIS) must be prepared.

(b) major federal actions significantly affecting the

environment of a foreign nation not participating with the United

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