Senator Patrick Leahy (D-VT) asks questions in the Senate Committee on Appropriations. Original image by flickr user Secretary of Defense(Creative Commons BY 2.0).
Over the past few weeks, U.S. legislators have been active in advocating for strict adherence to United States law with regard to multilateral development bank projects and their environmental impact, independence and transparency in the World Bank Inspection Panel, and the strengthening of the World Bank safeguards in the upcoming safeguard policies review.
Senator Patrick Leahy (D-VT) wrote to Timothy Geithner, Secretary of the Treasury; Hillary Clinton, Secretary of State; and Raj Shah, Administrator of the United States Agency for International Development (USAID) in August to express concern with the agencies’ implementation of specific sections of the International Financial Institutions Act of 1977. Senator Leahy specifically mentioned sections of the act that are “designed to ensure that U.S. representatives to the multilateral development banks have, and apply, objective information about the environmental impact of proposed MDB projects.”
Senator Leahy made it clear that he is concerned the above-mentioned provisions in the act are not being implemented as effectively as they were intended to be when they were written into law. The intent of these provisions is clear: to objectively determine if proposed loans or grants to MDBs would cause significant harm to the environment, and if so, to ensure that the Department of the Treasury not only does not support, but also seeks to prevent such projects. While Senator Leahy commended USAID for its diligence in identifying and analyzing MDB proposals and engaging in affirmative investigations of projects that meet the necessary criteria, he is not convinced that the information from USAID “is used effectively, including given appropriate consideration by the Department of the Treasury.”
As a result, Senator Leahy asked if in the future, he could personally be given the opportunity to review USAID’s initial assessments and trip reports for MDB proposals that are either under review or have been approved. He also requested detailed information from each of the agencies, including evaluations of past environmental assessments and a comparative analysis of MDB safeguard policies.
Representatives Barney Frank (D-MA) and Maxine Waters (D-CA) of the House Financial Services Committee sent a letter to Jim Yong Kim, newly-appointed President of the World Bank in September. In the letter, Representatives Frank and Waters explained the work of the Inspection Panel as “critically important to the Bank, to the people it serves, and to the Congress because it provides public accountability…” The members of Congress called on Kim to provide the Inspection Panel with strong and continued support, and to make clear to Bank management that the Panel’s judgments and findings of fact deserve widespread backing. In order to secure development effectiveness, they argued, Kim should promote “the greatest possible transparency for the process and documents developed by the Panel and ensure that the Panel and the process is valued and utilized…”
Frank and Waters also expressed concern with the resurgence of “seemingly long-settled questions” regarding the Panel’s ability to make determinations on the eligibility of claims and even to independently and transparently revise its own operating procedures. If the operating procedures are to be revised, Frank and Waters called on the draft procedures to be made public and the process to be open to all stakeholders. In addition, they asserted that new approaches to lending, such as development policy loans (DPLs) and Program for Results (PforR), could lead to a reduction both in transparency on the ground and in clarity of standards.
Then just two weeks ago, Democratic Leader Nancy Pelosi (D-CA) wrote to Timothy Geithner, Secretary of the Treasury, to express concerns about the upcoming review by the World Bank of its social and environmental safeguard policies. In her letter, Leader Pelosi made clear her hope that the Department of the Treasury will send a clear message to the World Bank – “that it should not take any actions to dilute its social and environmental safeguards including the protection of the rights of indigenous people and the sustainable use of natural resources.”
Pelosi explained that the safeguard policies at the World Bank have improved the implementation and outcome of international development projects by guaranteeing that people directly affected by projects have voices to defend their communities and the environment. She called on the safeguard policies review to ensure that the World Bank conforms to the highest international standards and creates a set of “strengthened and innovative procedures that will be transparent enough to be enforceable and have sufficient budget associated with them to be effective.” Pelosi also mentioned that she supports strengthening the safeguards to include “prior assessments of human rights, working conditions, and a stronger focus on climate change mitigation and adaptation.”
Additional Resources:
Senator Leahy to Agencies, August 3, 2012
Representatives Frank and Waters to World Bank President Kim, September 14, 2012
Democratic Leader Pelosi to Geithner, September 26, 2012