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Mr. EDWARDS. Well, I am not sure what mechanisms we would have for requiring the MDB's to reveal all the information that we consider when we review an EIS from a Federal agency. We require publication in the Federal Register, and the Freedom of Information Act allows any citizen to have access to information in the United States.

I don't know how the United States alone could require MDB's to divulge that information or countries where development would take place to do that if they don't have the laws in place in those countries.

Senator SYMMS. Well, based on what Mr. Malpass said then, Mr. Malpass, would not that information have to be supplied to Treasury ultimately if Treasury is going to contribute 10 percent or 20 percent or 30 percent or whatever to the loan?

Mr. MalPass. There have been attempts in the past on other issues to force the MDB's to do certain things, and what we find is that in operating in an international organization, that is not an approach that works very well. The harder you force, the more the institution can find ways to avoid that.

I am not speaking specifically now on the environment but on economic aspects of loans in general. It would be like trying to force a private commercial bank to disclose everything it knows about a loan that it is in the process of making.

Senator SymMs. Wasn't the original MDB set-up at the Bretton Woods Agreement and the staff of the MDB originally was to prepare the information for the contributing countries?

Mr. MALPASS. Yes, that is true, and, in fact, we have had good access to documentation including that in the area of environment, and EPA does now through its part in the WGMA process. It is not all the information that the banks would have as they prepare loan documents. Some of the information they have is proprietary or it may be particularly sensitive to a country.

So, I guess my view is that right now, the priority in getting good environmental lending-our priority shouldn't be in having the United States accumulate more data, because we already have a pretty good idea of where there are environmental problems.

Our priority should be on finding effective ways to work in these institutions to get them to-now, I need to clarify-to internalize, meaning to absorb within their system. I don't mean that in the sense of keeping private for themselves but internalized so that they and all their staff understand that environmentally sound loans are also economically sound.

Senator SYMMS. Who, then, would ultimately decide how the United States would vote?

Mr. MALPASS. Right now, the Treasury Department makes that decision based on advice from all the other agencies that participate in WGMA.

Senator SYMMS. Barber Conable does not make that decision?
Mr. MALPASS. I am sorry. Could you repeat the question?

Senator SYMMS. Who determines how the U.S. will vote on any particular loan?

Mr. MalPass. Barber Conable is the President of the World Bank and, som

Senator SYMMS. I understand that.

Mr. MALPASS. He does not-
Senator SYMMs. But it is U.S. Treasury then.
Mr. MALPASS. Yes, that is correct.

Senator SYMMS. So, how we decide, then, according to the letter you wrote me, is our own business as Nation. Our decision as to how we want to vote is our business. It is nobody else's as to

Mr. MALPASS. That is correct. We base our decision on a loan on an interagency process where environmental factors are considered.

Senator SYMMS. Well, back to the chairman's question about the internalization, then, of the information, if we overdo that the implication I get from Treasury is that you want Congress to play absolutely no role in this decision process. Is that correct?

Mr. MALPASS. No, that is not right. Congress plays a major role already in environmental considerations within the MDB's. There has been an extensive legislative mandate on which we act daily. My staffing considerations are based on laws on the books.

Senator SYMMs. Then, do you think that some of us are being totally unreasonable to just want to see if there is more environmental information that should be available to Congress, i.e., the country that is putting up the money, about what these environmental implications are?

Mr. MALPASS. I am not aware that we have had a problem in getting information on specific loans. Our frustration, both ours and that of Congress, has been on how we can influence the organizations to do good environmentally sound lending.

If there is a problem with information itself, that is something that we can work on directly with your able staff and with those in the House as well, and we do on a daily basis interact with Congress to get the information. But as far as I know, there hasn't been a real problem in getting information on specific loans. We get that through our AID mission, through extensive interviews with the World Bank and with the other MDB's.

They are, by and large, totally open to us in that we go and talk with them and find out what is going on in specific loans.

Senator SYMMS. Well, thank you very much.

Mr. Chairman, I would like to ask more questions, but I know we have another panel, and I am sure your time is short as is mine. So, for those of you that are here this morning, I may have just a very few questions to submit for the record if that would be acceptable to all of you.

Mr. MalPass. Senator Symms, if I may also, I would like to say that we are very open to communications with you and your staff and have been. So, I would look forward to that and to those of the chairman as well.

Senator SYMMS. Did you want to make a comment, Mr. Nitze?
Mr. Nitze. Yes, thank you, Senator Symms.

I would certainly agree with you that it is desirable that more information about these projects be made available. I think the place where it is most important that it be made available is in the developing countries themselves which are proposing these projects.

One of our long-term objectives is to build up non-governmental organizations within those countries. It is well and good that

NGO's in this country, along with the Congress and other institutions, take an interest in the environmental quality of these projects. However, if we are to bring about a long-term change which will be beneficial to the LDC's and the world as a whole, it is important that people in their own countries have a chance to participate in the decision making process.

I think, longer-term, if we can strengthen environmental assessments not only within the MDB's but within the proposing countries themselves with a provision that information be made publicly available in those countries, we will have moved further down the road of actually achieving our long-term objective. Senator SYMMS. Thank you.

. Senator Baucus. Thank you all very much. We appreciate it.

We will now proceed to our third panel which is our last panel. One witness scheduled to testify, Mr. Bruce Rich of the Environmental Defense Fund, is not here, but his statement will be in the record.

The other panelists are Larry Williams, the International Representative of the Sierra Club; Barbara Bramble, the Director of International Programs for the National Wildlife Federation; and James Barnes, senior attorney of the Environmental Policy Institute. Mr. Williams, why don't you begin. STATEMENT OF LARRY WILLIAMS, INTERNATIONAL


Mr. Chairman, I should start out by saying that I am somewhat staggered by Mr. Malpass' testimony, and I want to reflect on it. He asserts that the request for information as to the environmental impacts of the MDB projects is really not a major problem for the Treasury Department or for the U.S. Government.

I must take issue with that, because that seems to be the whole problem we face. That is something that we have been trying to deal with for the last four years, and the Congress has been involved through the House Banking Committee and the Appropriations Committees and through the MIGA legislation.

Getting sufficient information on the impact of projects before the U.S. has to cast a vote-that has been the struggle. The Treasury Department has been magnificent working with NGO's, other government agencies, setting up systems, working with AID, and the State Department in trying to search out around the world information on these bank projects.

The early warning system was set up which AID uses through their own missions to track these bank projects. Now, an intelligent person would say, why don't we go down to the World Bank down the street and ask them about their projects? In fact, it is hopeless. You can't do it.

The Treasury Department, at our request when I went to Botswana just recently, asked for an economic study on livestock raising dealing with the Botswana cattle project. The World Bank refused to give it to Treasury or State or AID, and they still refuse to give it to them.

Yet, it is a public document in Botswana. We asked the Minister of Public Lands, and he said well, of course you can have it. It is a public document, and it is right here, and won't you comment on it for us?

Then he wrote us a letter and said we would like all final documents from the Government of Botswana prepared by the World Bank to be available to the public. The World Bank, informallywe are going to make a formal request in conjunction with the Botswana Government-but in informal discussions with staff members of the World Bank we have been told that, if Botswana wants to give us that information, you can ask them. We are not going to give it to you.

So, the whole point of what you are trying to do and what your hearing here today is about is how we get information.

Now, the early warning system is a very imperfect system. We have some MDB 200 to 300 projects that come on the books every year, and we only have one line of information in a monopoly report that the World Bank publishes or the other banks publish describing what the project does and what its impact might be. The mandatory report doesn't even talk about what its impact might be. It just says what the project is.

What we are saying and asking is that a process be set up by which information can be available to the governments that have to vote on these projects, to the NGO's to evaluate them like ourselves, but, equally important if not more so, to the people who are impacted by these projects in the Third World who do not know these projects are coming until the bulldozers arrive. The local NGOs have no participation in the process.

May we suggest that this committee direct CEQ to prepare environmental assistant procedures. Work with Treasury, work with World Bank, work with OECD and the other international organizations over the next year after this legislation passes to develop procedures for the Treasury Department to follow in publishing environmental analyses. That analysis should be available some 60 days before the vote so that donor governments and the interested members of the public can analyze the environmental impact.

Why is that important? Because the World Bank staff gives our executive director the documents two weeks before the vote which often has very inadequate analysis, and two weeks is not enough for any nation to make a decision on the environmental impacts. When a nation is in another part of the globe, it is impossible.

Access to information is what it is all about.

It is our feeling that after the promulgation of the regulations, every project which comes on the books, after that time Treasury should be required to write environmental analysis where appropriate. It takes two years for a bank project to go through the pipeline before the Treasury Department would have to cast its vote. We feel that the banks will provide the environmental information to Treasury and, consequently, to the world, in adequate time for Treasury to comply with the law.

Why should the banks cooperate even though we have only a small percent vote in some banks? Because they cannot afford to not have the U.S. participate in the banks. We don't want the United States not to, participate. Politically, it would be, I think, impossible for the banks to say the United States is not an important voter and that they will not provide the information to allow Treasury to participate.

What we are talking about here is forcing the banks to do a better job at analyzing the environmental impacts of projects and also to provide the information for analysis by all concerned. We think this is a very excellent way-through a modified NEPA process, an environmental assessment process,-to get at this very critical issue.

Thank you very much.
Senator BAUCUs. Thank you, Mr. Williams.
Ms. Bramble?


Ms. BRAMBLE. Thank you, Mr. Chairman.

I would like to focus, on a different part of the problem than Larry Williams was just talking about. In fact, as some of the earlier witnesses described, in the long run, we are really talking about how to encourage a process of improved environmental assessment in the borrowing countries.

An intermediate step could be to require environmental assessment at the multilateral banks; and an even less important part of the process is environmental analysis by the Treasury Department itself. By the time a project comes to a vote by the executive directors, it is much too late to do anything reasonable or useful about the actual project.

So, while the proposed legislation would be a useful step toward better project analysis, and it is of some value to have more information available for the board vote, as Larry Williams was just describing, let's think a bit about what the long-term goal here is. Would imposing a U.S. statute on that process actually help or hurt?

In some ways, I find myself in an extremely surprising position here this morning-I am agreeing with much of what has been said by officials of this government on the question of whether an amendment to NEPA at this time would actually be a positive step or a negative step.

I have actually worked at CEQ. I have also represented major environmental organizations in this country for at least a decade. I have been involved in environmental litigation from one side of the country to the other; in addition I helped in the negotiation process that led to the UNEP principles and goals for environmental impact analysis which were described earlier.

From all of that experience, I strongly feel that the NEPA process has been incredibly valuable in this country. But what has made the NEPA process effective here is not the environmental impact statement writing procedures themselves. What is important about NEPA is the requirement for public comment, the requirement for the document to be available for a certain period of time before any decisions are made, and the right of citizens to bring government agencies to court if the document is inadequate.

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