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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

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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

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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

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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.

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A.1.D. and State to our colleagues in other agencies and to the

offices of our U.S. Executive Directors for their information.

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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.

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