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Administrator of AID was instructed in this legislation to instruct Aid

missions and U.S. embassies to analyze environmental impacts of MDB projects

in advance of the project approvals.

Such reviews are to address adverse

impacts on the environment, natural resources and indigenous peoples, and

recommendations for eliminating adverse impacts are to be made by AID


The feasibility of an "early warning system" for projects of

concern with other interested donors was to be studied.

Media Attention

Media attention has also put pressure on World Bank with respect to


In recent months, Sixty Minutes, the popular Sunday Night news

magazine television program, aired a segment on the Bank's problems with the

Polonoroeste Project in Brazil.

The information in the program drew on the

material of the environmental groups, who had brought similar information to

the Congress several years ago, regarding this project.

In 1986, the Sierra Club produced a widely circulated report called

Bankrolling Disasters that summarized many of the concerns that were being

expressed by environmental groups.

This was preceded by several articles in

various environmental journals and the press about these concerns.

World Bank Reorganization Plans

On May 5, 1987, the President of the World Bank, former U.S. Representa

tive Barber Conable, announced in a major speech on environmental issues that

the World Bank would be substantially reorganized, and that as part of that reorganization, environmental concerns would receive high priority.



announced that a Department would be established for environmental concerns,

staffed by some 50 people, with environmental staff in the regional divisions

as well as at headquarters.

In this speech, Mr. Conable acknowledged the importance of environmental

protection in achieving development goals, and noted longstanding Bank

policies to protect the environment.

He also acknowledged that together with

some successes, "Inevitably, the Bank has also stumbled."

He committed the


seeking solutions:

"If the World Bank has been part of the problem

in the past, it can and will be a strong force in finding solutions for the


He also mentioned the continuation of large projects will remain, but:

"Our role in such projects, however, will include greater sensitivity to their long-term environmental effects. We will put new emphasis both on

correcting economic policy incentives that promote environmental abuse and on

stimulating the small-scale activities that can combat human and environmen.

tal deprivation.

Not only will we strengthen the Bank's longstanding policy

of scrutinizing development projects for their environmental impact and

withholding support for those where safeguards are inadequate, but we will

also institutionalize an approach to natural resource management that puts a

premium on conservation."

Mr. Conable committed the World Bank to several new initiatives:

.-a country-by-country assessment of the most severely threatened

environments in developing nations;

--a continent-wide initiative against the advance of the desert and the

destruction of forests in Africa;


..a contributing role in a global program to support tropical forest


..participation in a cooperative effort by Mediterranean nations and

international organizations to prepare a long-term campaign to protect the

Mediterranean Sea and its coasts.

Mr. Conable emphasized the environmental needs in Africa, and said:


believe we must mount an international environmental rescue and development

effort in sub-Saharan Africa.

I will ask World Bank staff experts to draw up

a special program of technical studies to identify and assess urgent,

promising environmental protection projects, regional, not just national, in

their scope." Among the other objectives he emphasized, he also stated

commitment of resources to forestry:

"The Bank intends to more than dourie

its annual level of funding for environmentally sound forestry projects from

$138 million this year to "$350 million in fiscal 1989."

This reorganization and the renewed commitment to environmental concerns

go well beyond earlier efforts to establish environmental guidelines for Bank

projects, but skeptics are taking a "wait and see" attitude about real


Environmental guidelines and policies have been in effect for

several years, but they have not prevented problems from arising.

A number

of questions remain as the World Bank institutes its reorganization.



--Who will head the new Environment Department?

.- How high

continuing priority will environmental concerns be at the

highest levels in World Bank management?

..What will be the mechanisms by which the Environment Department staff

interact with other Bank staff;

how will the concerns for which the Depart.

CRS - 7

ment is responsible be integrated into planning and analysis throughout the


..What environmental training will the new Department staff have?


what extent will personnel from elsewhere in the Bank.-especially those

without environmental expertise..staff the new environment unit?

-- How successful will the World Bank be in upgrading environment as a

development priority in recipient governments?

Is this not a necessary

concomitant of increased concern for environment in Bank-funded projects?

.Will the environmental assessments to be conducted by the Bank in

specific countries result in plans for projects targeted specifically.. and

effectively.-on redressing the problems identified?

.- To what extent will other MDBs institute similar reforms aimed at

increasing environmental considerations in their planning and project


Attached are four items:


Section 539 of P.L. 99-591, containing directives to U.S. agencies

to seek increased environmental emphasis in World Bank and other MDB ac.


(2) Bankrolling Disasters, the Sierra Club report on the World Bank

which summarizes many of the concerns that have been raised by critics of its

environmental performance;


The May 5 speech given by Barber Conable concerning the World Bank

reorganization and the need for higher priority for environment in World Bank



A July 3, 1987, Wall Street Journal article about current develop.

ments on environment and U.S. policy regarding the MDBs.




Greenpeace USA • 1436 V Streetw. Washington DC 20009 . Tel (202) 462-1177

Tlx 89-2359. Fax (202) 462-4507

The Honorable Quentin N. Burdick, Chair
Senate Environment and Public Works Committee
United States Senate
Washington, D.C. 20510

Dear Mr. Chairman,

Greenpeace respectfully submits the following comments on the amendment to s. 1792 to extend the National Environmental Policy Act (NEPA) requirements to proposals for international financial assistance. Our interest in the bill is prompted by. first, our awareness of widespread problems in the Third World with the adverse environmental impacts associated with multilateral development bank projects, and second, our standing commitment to the adoption of a rigorous environmental impact assessment process for all projects of MDBs and other donor organizations working in the Third World.

Moreover, we are particularly interested in securing a more open process for the people whose lives could be profoundly affected by environmentally unsound development projects. Of primary importance are access, by indigenous NGOs, to project information at the earliest possible time, and the full participation of non-governmental organizations in the project planning and cycle.

Our statement, we believe, provides compelling evidence on the appropriateness of applying section 102(2)(C) of NEPA to MDB activities. We believe s. 1792 is not only appropriate but essential in augmenting the movement by other international and bilateral aid institutions, including U.S. Agency for International Development, the United Nations Environment Program, and many more, to conducting environmental impact assessment for development projects.

There is no reason why such environmental impact assessment processes cannot also be undertaken by the MDBs. For institutions which have such an enormous influence on the environments in developing countries to ignore such a fundamental responsibility is simply inexcusable. Indeed, when the 100th Congress examined the environmental protection policies of the World Bank, Africa Bank, Asia Bank and the Inter-American Development Bank it concluded U.S. appropriations should be conditioned, in part, upon reform of their environmental impact assessment procedures.

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