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Y 4.096/10:5.hrg.100-679

S. HRG. 100-679

APPLICATION OF THE NATIONAL ENVIRONMENTAL
POLICY ACT TO U.S. PARTICIPATION IN AC-
TIONS OF INTERNATIONAL FINANCIAL INSTITU-
TIONS

G'S RECORD ONLY:

HEARING

BEFORE THE

SUBCOMMITTEE ON

HAZARDOUS WASTES AND TOXIC SUBSTANCES

OF THE

COMMITTEE ON

ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE

ONE HUNDREDTH CONGRESS

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UNIVERSITY

Printed for the use of the Committee on Environment and Public Works

FET 1989

87-156

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON: 1988

For sale by the Superintendent of Documents, Congressional Sales Office
U.S. Government Printing Office, Washington, DC 20402

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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
North Dakota, Chairman

QUENTIN N. BURDICK,

DANIEL PATRICK MOYNIHAN, New York
GEORGE J. MITCHELL, Maine
MAX BAUCUS, Montana

FRANK R. LAUTENBERG, New Jersey
JOHN B. BREAUX, Louisiana

BARBARA A. MIKULSKI, Maryland
HARRY REID, Nevada
BOB GRAHAM, Florida

ROBERT T. STAFFORD, Vermont JOHN H. CHAFEE, Rhode Island ALAN K. SIMPSON, Wyoming STEVE SYMMS, Idaho

DAVE DURENBERGER, Minnesota JOHN W. WARNER, Virginia LARRY PRESSLER, South Dakota

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CONTENTS

OPENING STATEMENTS

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Barnes, James, senior attorney, Environmental Policy Institute.

Written statement........

211

Burnham, James B., senior vice president, Mellon Bank

Written statement..

Nitze, William A., Deputy Assistant Secretary of State, Bureau of Oceans and
International Environmental and Scientific Affairs, Department of State......
Written statement....

172

Smith, Fred L., Jr., president, Competitive Enterprise Institute

Written statement..

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ADDITIONAL MATERIAL

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APPLICATION OF THE NATIONAL ENVIRONMENTAL POLICY ACT TO U.S. PARTICIPATION IN ACTIONS OF INTERNATIONAL FINANCIAL INSTITUTIONS

THURSDAY, JUNE 16, 1988

U.S. SENATE,

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS,

SUBCOMMITTEE ON HAZARDOUS WASTES
AND TOXIC SUBSTANCES,

Washington, DC.

The subcommittee met, pursuant to notice, at 9:32 a.m., in room 406, Dirksen Senate Office Building, Hon. Max Baucus, (chairman of the subcommittee) presiding.

Present: Senators Baucus, Symms, and Durenberger.

OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE STATE OF MONTANA

Senator BAUCUS. The subcommittee will come to order.

The subcommittee is meeting this morning to hear testimony on a subject of national and international importance. Simply stated, should the United States require that economic development projects for other countries meet our own strict environmental standards before we support development loans for these projects? In essence, should the United States' domestic policies be the guidelines for our foreign policy, especially when it applies to developing nations?

We are only too familiar with the profound global effects of deforestation, loss of productive farmland through substandard agricultural practices, and through poorly conceived hydropower projects. The bottom line is that bad economic development projects result in incalculable human suffering and the destruction of almost irreplaceable natural resources.

Examples abound of projects financed by the international community that have gone seriously awry because of bad planning and poor implementation.

In Botswana, a beef export project backfired, causing widespread desertification and destruction of wildlife populations. The cruelest irony is that despite large exports of beef, 65 percent of that country is now dependent on foreign food aid where once it was selfsufficient.

In Brazil, the Polonoreste project has been an economic and social disaster, with global implications. Thousands of people were

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