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That is what has made NEPA work here. But if you are trying to ensure that something like NEPA can operate in other countries, you will find that U.S. legislation is probably not the right vehicle.

I have discussed with many officials of other governments over the years the value of the environmental impact assessment process. I have had to spend hours convincing them that I don't mean the U.S. NEPA itself, with the EIS requirement and a history of 75,000 law suits. What they need to hear is that environmental impact assessment (EIA) is valuable for government decision making. My goal is that they will eventually begin to do it themselves.

Many countries now do. Brazil and Mexico, for example, have environmental impact statement laws within their own system. And I have talked to several people in each of those countries about legislation such as is proposed here. They say legislation like this wouldn't make any difference to them at all, since they normally would prepare an environmental analysis anyway.

But there are dozens, if not scores, of other countries which are just getting used to this whole idea. The threat of imposing a U.S. law on them would not be helpful at this point.

The reason that this proposal looks like imposing U.S. law on them (which of course we can't do) is because, practically speaking, who else are we really imposing it upon?

Looking at the goal of this legislation, it is something that I have long wanted to see-environmental impact assessment preparation as part of the process of project evaluation for World Bank and other MDB projects. But the key point is at what stage the analysis is done.

If the borrowing countries are doing it themselves, that might have an effect on the project. If the World Bank does the analysis, that might have an effect on bank staff and therefore improve their future recommendations about projects. If Treasury does it, the report can only affect the U.S. vote. That is the least important piece of this whole process.

On the one hand, it really is our nation's right to decide not to vote for projects that are going to damage the environment, cause disease, and increase human misery, which many of the projects funded by some of these institutions have done. So for our narrow national purposes, this legislation gives us a useful tool to decide on votes. But in the end what we are really after is improving the decision making process in the developing countries. Threatening a negative project vote is just a small step in encouraging those changes.

I would like to suggest that there are some alternatives to amending NEPA. One of them would be to legislate a requirement that the United States executive directors promote agreement among all of the donor nations to the MDB's that before an MDB loan can be brought up for a vote, an environmental impact assessment must be prepared by the project proponent, under international standards for environmental impact assessment. Which EIA standards are chosen, OECD or UNEP or something different, doesn't necessarily matter.

The point is that the key concepts of NEPA could be promoted without referring to NEPA itself. This avoids bringing the baggage,

shall we say, of the litigation history of this extremely successful law in the U.S. context. The key pieces to me are—

Senator BAUCUS. I am going to have to ask you to summarize, please.

Ms. BRAMBLE. Yes, I certainly will.

The key pieces of NEPA that we need to promote are: access to information, as Larry Williams described, i.e. public availability of the document in the borrowing country-not so much here in the United States but in the borrowing countries; and consultation of the relevant agencies within the borrowing countries.

I think those elements are in the UNEP principles and goals. An extremely valuable service that this nation could provide to promote those internationally accepted standards, by consensus, among the governments which make up the boards of the multilateral development banks.

Thank you very much.
Senator BAUCUS. Thank you very much.

Before we proceed with Mr. Barnes, I have to leave for another meeting. Senator Symms will preside over the meeting, but I would like the witnesses to know that I will review the record that will be available not only to me but to other members of the committee as well.

I want to thank you all for coming.

Senator Symms (presiding). Thank you very much, Mr. Chairman.

Mr. Barnes?

STATEMENT OF JAMES BARNES, SENIOR ATTORNEY,

ENVIRONMENTAL POLICY INSTITUTE Mr. Barnes. Thank you very much, Mr. Chairman.

I am very pleased to be here this morning on behalf of the Environmental Policy Institute.

Just a brief note about my background. I have represented envie ronmental groups in this country for 18 years now. I was involved in some of the early major NEPA legislation and the litigation that ensued under it, starting with the Alaska Pipeline case, and I also was counsel on the Philippines reactor case which was mentioned earlier, which is a good example of an unfortunate result that could have been stopped had our procedures at the time been seen by our society to fully apply to that activity.

Just as a footnote, that reactor was, of course, finished in the Philippines. It cost about $3 billion, and it will never generate one watt of power for a lot of reasons that could have been avoided.

Turning to the MDB situation, when I looked at the draft that had been prepared for amending paragraph (d) of section 102 of NEPA, I asked myself, what is the ultimate intention of the committee here? Is it to provide a lever and a model for U.S. officials to use in influencing the MDB's or is the intention to have our officials actually carry out these assessments themselves?

I haven't, as yet, gotten a clear reading from talking to various staff people about that.

I have discussed this at some length with Tom Stoel, who testified before your committee on May 10 on behalf of the Natural Resources Defense Council. At that time he submitted, on page 3 of his testimony, a suggested modification to the proposed amendment which would implicitly make clear that it is more of a lever and a model for U.S. officials to use rather than one for U.S. officials to have to carry out. I would commend the committee's attention to his proposed redraft of that amendment to make it more clear that the MDB's themselves are to end up preparing these assessments, with similar contents as under U.S. law, but not in any sense word for word or all the detailed requirements.

Mr. Stoel also commented to the committee on that occasion about the consultation procedures required under NEPA and, in his draft, the language about consultation is not in there. That needs some further work, in my view, because we do have a difficult situation here in trying to apply our ideas in the international context. But I do feel that there is probably some good that can come from the Congress passing an appropriately worded modification to NEPA and then reviewing it in about two years' time, as Mr. Stoel suggested, before it would come fully into effect to see if in fact it has been useful in promoting the MDB's to adopt procedures which, so far-let's be frank—they haven't adopted.

As to the benefits of having this expanded kind of process, we have to look at several categories of beneficiaries. First of all, as almost all the witnesses have mentioned this morning, the people directly affected by the projects in question would be a primary beneficiary.

Right now, these people are the last to know about projects that directly affect their lives and their lands, and that is wrong.

Secondly, we have knowledgeable non-governmental organizations in the international context. These people are basically excluded from the development process as it is carried out by the MDBs at the present time. There are some changes afoot, but as we are talking this morning, not much has really changed, in my view, over the last several years.

Third, you have other governments. Most other governments, as we have heard this morning, don't have any early warning systems about projects of concern. So, they come to these votes ignorance, for the most part.

NGOS have discussed on a number of occasions with these executive directors what information they have available to them, and the answer in almost all cases is whatever the MDB staff provides them. They don't have any independent way at the present time of evaluating a situation as we do because of our very good laws enacted during the last several years, which have assisted our Treasury representatives in many remarkable respects.

Last, we have our own citizens and institutions in this country which, right now, as Larry was mentioning a minute ago — and we could give you a lot of chapters and verses on this, but we don't have access ourselves to information sufficiently in advance to help our government decide what to do on these votes.

So, that is about all I would like to say about that right now, and I know that a number of us, including Mr. Stoel and myself, would be happy to work with the committee on some further redrafting of this requirement.

Very briefly, I wanted to turn to another item that is even more important from a strictly U.S. standpoint, and that is, what are our agencies doing overseas, often in conjunction with the MDBs, and should they be covered by NEPA?

We have the case of the Bureau of Reclamation right now, which is engaged in what may be a major effort to dam up the Three Gorges section of a major river system in China. We have tried in the NGO community without any success at all to get documents about what our government is doing overseas in this case, and there are lots of other examples that we could turn to.

I think the committee might want to look at this more carefully. At the present time we haven't proposed an amendment, but, again, a number of us would be very happy to discuss this with the staff and members to see if they are interested, because there is no doubt that there are institutions of this government carrying on activities about which we would be shocked if we didn't have access to the information about such activities in our own country.

Thank you, Mr. Chairman.

Senator SYMMS. Thank you very much. I want to thank all of you for your being here and for your cooperation in testifying here this morning

Mr. Williams, Mr. Barnes touched on the very question that the chairman and I discussed with the previous panel, and that is the question of the informational aspects of if Treasury were in a position or were willing to make more information available, what, for example, could an organization like yours be able to do if in fact the information were available? Do you feel it would be very helpful in the overall process?

Mr. Williams. I think Barbara Bramble's testimony was right on target in the sense that what you want to do is improve the lending process. You want to improve the projects. That is your ultimate goal.

Having an analysis of what the impacts are going to be and whether there are better alternatives and whether some modifications can be made well in advance, hopefully, will lead to better projects and also lead us away from projects that do harm to indigenous peoples that are affected by these projects. So, that is the goal.

Senator SYMMs. If this information were available, and let's say just in a hypothetical sense that the United States is the most concerned about the question, if Treasury sent the information to your organization, could you then be able to have an impact in some of the other contributing countries, say, in Europe or Asia?

Mr. WILLIAMS. Yes, absolutely. That is very correct.

We would distribute to the other donor nations. We would urge Treasury to do it on their own, and I think they would. We would distribute it to the borrowing country.

Environmental agencies within the borrowing countries don't even know, often, what is being planned for them.

So, that information in the other donor countries, obviously, if they feel there is a problem here, they will be forewarned before it comes to a vote.

Senator SYMMS. Mr. Barnes, do you want to comment on that? Mr. BARNES. I just want to follow up very briefly on that.

In our various NGO relationships with other entities around the world, both governments and NGOs, the one thing that keeps coming out over and over again is that they are depending upon the very small number of governments in the developed countries that do provide some information about these kinds of things to their own citizens to tell them what is going on. Both non-governmental and, as Larry said, oftentimes, the ministry officials for environment and health in the developing world themselves don't even know what actually is going on in a lot of these projects.

You may recall, in fact, that one of our key reforms in the legislation in the last couple of years is to make certain that the MDBs fully involve the health and environmental ministers in their processes. That hasn't happened yet. They are making some small steps forward there.

So, I think we are in a very good position in countries like the United States and several of the European countries. We need this information in advance—and some people have suggested 60 days. Frankly, I don't think that is enough. I think 120 days is an absolute, rock bottom minimum to think about assimilating the information, analyzing it, and then putting it out to people both in this country and abroad who would have some use for it and could, as a result of receiving it, perhaps make different decisions as to how their countries voted ultimately.

Senator SYMMS. Ms. Bramble?

Ms. BRAMBLE. To augment that, I would give an example. We should be pretty frank about this. Many of the problems that the environment is facing in many borrowing countries are not usually at the behest of the multilateral development banks. Most of the problem projects are devised and applied for by the borrowing countries.

Now, the reason we have been concentrating on the multilateral banks for the last five years is that the banks have a great amount of influence on the kinds of projects that are applied for by the borrowers; they also should be but are not yet a force for the better on environmental policy.

However, it is not that they, in fact, are thinking up all of these horror stories. Some of the destructive projects yes, I am sure, the banks had a hand in formulating. But in most cases, while the banks have had a wrong-headed view of strategies and goals for development, the worst projects came from the borrowers. Another reasons for focusing on the MDBs is that they are usually not willing to stop damaging projects. Also, they are located here in the United States. So, we have a great influence of them.

But, in the long run, we are supporting changes in environmental policy of the borrowing country governments. So the EIA information has to feed into policy debates within the borrowers; what we do with the information about MDB projects is to send it to the environmental groups in those countries.

Senator SYMMs. Well, thank you very much.

It has been my experience that, in many instances, the people in the country are very sensitive to the environmental risks and concerns, but it becomes a government to government issue.

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