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Africa over the past year. I heard universal complaints from mission staff that they frequently did not hear of pending projects until the project was well into the planning process. The staff also complained that they often did not have the time or the means to properly evaluate proposed MDB projects.

If further investigation of a project seems warranted, Treasury and AID, with the help of State, will approach the Bank that is working on the project proposal. Additional information and documents which might help in the evaluation process are chen cajoled out of the officials.

All too often, the MDB will respond by telling the U.S. government that the information cannot be released because it is privileged information between the donor government and the Bank. Our government then has two options. Our representatives to the Banks mist either try to learn more about the project in advance by going through the back door of the MDB and to NGO representatives here and abroad, or wait for the loan documents when the loan goes before the Bank's Board of Executive Directors for approval.

The disadvantage of waiting until the loan goes to the Board for approval is that the executive directors receive the project appraisal reports only two weeks prior to the vote. In theory, the executive directors review each project and determine whether or not it merits financing. In practice, however, most executive directors do not have the staff or resources necessary to examine th: project files for problems, criticism, or data that are omitted from the Staff Appraisal Reports. The Board of Executive Directors, therefore, often functions as a rubber stamp. Most executive directors have standing instruc-ions from their countries to vote for all projects unless they receive specific instructions to the contrary. Since the time lap is only two weeks between receiving the loan documents and having to cast a vote, it is all but i possible for the executive directors to get the information to their countries in sufficient time for all the documents to be reviewed. It would be far better if environmental problems associated with a proposed projice were openly dealt with and resolved by all concerned well in advance of i: coming to the Board

for a vote.

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The difficulty of obtaining MDB project documents is well illustrated from a recent experience of mine. The Sierra Club and the Natural Resources Defense Council were recently invited by the government of Botswana to visit that country to examine the environmental effects of the World Bank funded livestock project. It is a project which we have criticized.

Prior to my departure, the Treasury Department and AID tried to obtain a copy of a World

17 Bank funded economic study on livestock grazing in Botswana.

This report would have been very useful to refer to prior to our trip. Predictably, all the might of the U.S. Government could not dislodge a copy of this report from the firm grip of the World Bank. The Bank claimed that the Government of Botswana would not allow them to release this document. When I told the Botswana Minister of Local Government and Land, P.K Balopi, of the difficul. ty our government was having in obtaining a copy of this study, he let out a big laugh as if that was the funniest story he had ever heard. He said we were welcome to have a copy of the document along with any other final MDB document pertaining to Botswana. As a result, Minister Balopi recently signed a letter of agreement between his Ministry, the Sierra Club and the Natural Resources Defense Council, which includes the following clause:

Botswana is perfectly happy for NRDC and the Sierra Club and
other organizations of similar concern to be given copies of final
reports that have been accepted by Botswana Government in relation
to projects, studies and policies. We are also willing to
reassure donors that such reports can be supplied by them
for...(balance of sentence cutoff in FAX transmission from
Botswana., 18

Under the current arrangement, the Treasury Department is being asked to evaluate and cast informed votes on some 300 DB projects a year. These voces are based on project lending documents which are only briefly available prior to the vote and whatever information Treasury and State can

17

National Land Management and Livestock Project · Incentives/Disincencives Study, Vols. I-III, McCowan International and Coopers & Lybrand, October 1987, Gaborone, Botswana.

18

Letter to Mr. Larry Williams, Sierra Club and Mr. David Wirth, Natural Resources Defense Council from Minister P.K. Balopi, Ministry of Local Government and Lands, Gaborone, Botswana, April 28, 1988.

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come up with through the AID missions or the non-governmental organizations. What we have is a horse and buggy information gathering system which relies on far too little information upon which some very big decisions must be based, Much more complete and timely information is badly needed by all of the donor countries, not just the U.S., given the huge impact these Bank projects have on people's lives and the natural resources of the Third World.

Clearly, more complete and punctual information is needed on the environmental and social impacts of MDB projects well in advance of the funding decision process.

It is also clear that the U.S. Treasury Department should not be exempted from NEPA. The real question is: how can Treasury comply with the requirements of NEPA given that MDB projects are located in far away places all over the Third World?

It is not our desire to require Treasury to write some 200 environmental impact statements a year. Treasury could never be expected to have the staff resources to develop the information for an EIS on its own. The Banks themselves are the only logical way that the information is going to be provided. It is our opinion that the Treasury Department needs to be given enough lead time to comply with NEPA (i.e., 1991) before it is precluded from voting on MDB projects which appear to have a major impact on the environment. The Bank's will not want to see the U.S. cut out of the decision making process and will thus supply the needed documentation to Treasury in a form that complies with the provisions of NEPA. It is our opinion that the MDBs cannot afford to allow a situation to develop which would cut the U.S. out of full participation on the Board of Executive

Directors.

However, the exact manner in which Treasury should be directed to comply with SEPA is a very big question. We do not think it is realistic to ask Treasury to file a draft and final EIS and to be obliged to comply with many of the other EPA and the CEQ regulations which are required for agencies which are more directly in control of U.S. activities outside our boarders which have a major impact on the environment. We take this

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position because Treasury is only in the position of evaluating proposed projects which have been designed by the MDBs and the borrower country and, therefore, does not have direct access the project impact information.

We suggest that the Congress amend Section 203 (the Office of Environmental Quality) of the Environmental Quality Improvement Act of 197019, rather than NEPA, by directing the Council on Environmental Quality to develop procedures within one year after the passage of this act to establish an environmental assessment process for the Treasury Department to follow prior to voting on MDB funded development projects.

We are sure that the information provided through this assessment process will be very welcome by the people who would be directly affected by the proposed projects, the other MDB donor nations, and all of us who are concerned about the adverse environmental impacts the First World is having on the Third World.

In conclusion, we also urge this Subcommittee to place into law the 1977 Executive Order20 directing CEQ to develop regulations for federal age es to follow in implementing the provisions of NEPA. This important Executive Order should not be left to the whims of the present or future administrations, to choose to abide, repeal, or alter in ways that might undermine the integrity of the NEPA process.

19

Pub.L. 91-224, 42 U.S.C. 4371-4374, April 3, 1970.

20

Executive Order 11514, as amended by EO 11991 (Secs. 2(g) and 3(h)). May, 1977, Protection and Enhancement of Environmental Quality

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I must apologise for the delay to communicating with you, following
your recent visit to Botswana, as I know you were anxious to have some
written understanding by the time you returned to Washington.

However, I felt it would be most appropriate if I broadened the
understanding by consulting with the other relevant Ministries and with
my Cabinet colleagues. I have now completed this process and I am
happy to be able to write and confirm the following points:

1. Botswana is willing to exchange Information, expertise and

views with National Resources Defence Council, the Sierra
Club and other organisations of similar concern in order to
assist Botswana's efforts to encourage sound land management,
environmental conservation and a proper regard for the

environment in its development projects.
2. Given Botswana's specific concern in relation to rangeland

degradation and allied problems, we are also willing to
exchange inforzation, expertise and views on the following items :-

Luplementation of the National Land "anagexent and
Livestock Project
isplenentation of policies to encourage sound land
Fanagecent on Tribal Grazir.g Land Policy :&nches and the
Counal areas
adop:102 and i pleceatae:on of che Vaticnal Conservacion
Strategy
implementacion os the recommendations of the study on
incentives and disir.centives in the livestock sector
improving the rational Development Bank's monitoring and
eniorcement of loan conditions for TGLP ranches and
education and training of environmental professionals.

3. Botswana is periectly happy for NRDC and the Sierra Club and other

cz3anisat.ons of similar concern to be given copies of final

eports that have been ac peed Botswana Government in relation
to projecte, studies and policies. We are also willing to
ressure donors that such reports can be supplied by them for

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