TESTIMONY OF WILLIAM A. NITZE DEPUTY ASSISTANT SECRETARY OF STATE BUREAU OF OCEANS AND INTERNATIONAL ENVIRONMENTAL AND SCIENTIFIC AFFAIRS JUNE 16, 1988 HEARINGS BEFORE THE SUBCOMMITTEE ON HAZARDOUS WASTES AND TOXIC SUBSTANCES COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS UNITED STATES SENATE Thank you Mr. Chairman and good morning. I am pleased to testify before your committee this morning on the subject of applying the National Environmental Policy Act (NEPA) authorities to U.S. participation in actions of international financial institutions. The U.S. plays a strong leadership role in the multilateral development banks (MDBs), and has made substantial financial contributions to them since their inception. Clearly, the MDBS play a critical, if not primary role, in the development process. In general, their lending has been very beneficial for the recipient countries. MDB-assisted projects range from institution building in education and health fields to large infrastructure projects such as roads and electric power plants. Development is, of course, the mandate. But we must recognize and ensure that the development we achieve is sustainable. If projects are not planned initially with a - 3 concern for environmental impacts and effective management of natural resources, we may all suffer adverse impacts in the future. We must minimize the possibility that a country's resource base may suffer permanent damage, that adverse health effects may occur, and that future development may be undermined and costs significantly increased. Poor planning, often caused by the pressure for short-term economic benefits, can cause irreparable damage to soils and forests or result in projects which cannot be sustained. There is much scientific and economic evidence that truly sustainable development can only be built on a foundation of careful resource management which integrates environmental considerations into overall planning efforts. The Congress, in response to growing public concern, has recently passed legislation intended to make the MDBS more sensitive to environmental concerns. The State Department strongly supports these efforts and is working closely with congressional committees, the NGOs, and other federal agencies to ensure that MDBS promote environmentally sound projects in developing countries. I would submit, Mr. Chairman, that there are a number of international activities which show that there is strong and growing momentum in this area. We have begun to see results from our efforts to increase awareness through discussions in international fora and bilaterally with other countries to influence bank policies, as well as with MDB officials themselves. These efforts have been mounted on a number of levels. At the project level, A.I.D.'s Early Project Notification (EPN) system alerts 53 A.I.D. missions and U.S. embassies around the world to proposed MDB projects. This notification comes while these projects are still in the planning stages. It is our conviction that this is the correct time and place to begin assessing the effects of proposed projects. · 5 Mission assessments from the EPN system are passed by A.I.D. and State to our colleagues in other agencies and to the offices of our U.S. Executive Directors for their information. Where necessary, mission suggestions and concerns are passed along to Bank staffs. This process has proven tremendously helpful in alerting the U.S. Government to environmental concerns. The principal forum for interagency deliberations is the Working Group on Multilateral Assistance (WGMA). This working group is charged with reviewing and commenting on individual project proposals for MDB loans and related documents. It meets weekly to identify problems and issues for resolution. Through this process, the U.S. thoroughly assesses certain categories of loans for adverse environmental impacts and develops guidance to be followed by U.S. Executive Directors of the banks in evaluating loan proposals. A separate working level inter-agency group meets weekly to coordinate the U.S. Government's strategy on MDB reform. |