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PRI's Environmental News Magazine

Environmental Oversight

Air Date: Week of December 13, 2002

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The U.S. government is a major funding source of development projects in countries around the globe. But critics contend it isn’t doing enough to ensure those projects aren’t harming the environment. Living on Earth’s Anna Solomon-Greenbaum reports from Washington.

Transcript

CURWOOD: The Untied States plays an influential role in determining the lending practices of international institutions such as the World Bank and the Inter-American Development Bank. Federal law requires US agencies to review international development projects for significant environmental impacts. But critics say that system has broken down. Living on Earth’s Anna Solomon-Greenbaum reports from Washington.

SOLOMON-GREENBAUM: Until last September, John McKnight Fitzgerald was the environmental policy analyst at the US Agency for International Development, or AID.

FITZGERALD: My job was to review World Bank projects and projects of other multi-lateral development banks, as they’re called, to see what they were likely to do to the environment and to indigenous peoples.

SOLOMON-GREENBAUM: And Fitzgerald was to report to Congress those projects, like dams, pipelines or logging that posed the most risk. But in September, he was removed from his job and now AID plans to eliminate the analyst position altogether. Fitzgerald claims he was punished for challenging the Treasury Department when it attempted to soften his critiques of development projects in his 2001 report to Congress.

FITZGERALD: There were a number of different instances where we wrote originally that failure to have an environmental impact statement for this particular loan was, we felt, a violation of the law, and Treasury would not have us say that. So AID accepted a toning down of the language to say that it was inconvenient or made it difficult for us to review the impact without having a real environmental impact assessment. Well, that was only half the point.

SOLOMON-GREENBAUM: Also in his original draft Fitzgerald wrote a 40-page summary of what he believed were systemic problems preventing the banks and the U.S. government from adequately protecting the environment of developing countries. It was this critique, he says, which most angered Treasury officials and led to its wholesale removal in the final draft to Congress.

Randy Quarles is Treasury’s under-secretary for international affairs. He wasn’t involved in editing Fitzgerald’s draft, but he says the purpose of the annual report is clear.

QUARLES: The principal role of that report should be to describe over the reporting period what decisions have come before the international financial institutions and how those international financial institutions have responded and what actions the U.S. government has taken…and that’s what those reports do.

SOLOMON-GREENBAUM: Instead, a memo from Treasury to AID said Fitzgerald’s report lacks this focus and thus bears little resemblance to previous AID reports. Treasury’s Quarles says there are other forums which do explore broader policy questions like the ones Fitzgerald posed. As for critics who charge that Treasury views the environment largely as an obstacle to development, Quarles says that’s simply not the case.

QUARLES: With respect to the environmental policy of the multilateral development banks, the U.S. government and the executive directors who report to the Treasury have been voices in these institutions, frequently the only voice in these institutions, for improving their environmental policies.

SOLOMON-GREENBAUM: Quarles describes the relationship between AID and Treasury as a collegial one. And AID says the reason Fitzgerald lost his job is not politics but bureaucracy. AID is undergoing a major reorganization which will move environmental staff from one bureau to another. Instead of assigning one worker to the bank reviews, the task will be spread out among a few employees.

PELOSI: I have serious questions about the elimination of the position of the environmental analyst.

SOLOMON-GREENBAUM: Congresswoman Nancy Pelosi, a Democrat from California who will serve as her party’s leader in the House next year, says she’s concerned that the loss of a full-time analyst may be part of a broader effort by the Bush administration to undermine U.S. oversight of development projects. It was Pelosi who wrote the law in 1989 that first required this oversight and led to the creation of the analyst position at AID.

PELOSI: At the time, there was a great deal of degradation of the environment that was participated in by the World Bank and other multilateral development banks. These loans were made with the cooperation and support of the United States. So the purpose of the legislation, which later became an amendment to a larger bill, was to make sure that no loans were made for environmental projects unless there was an environmental assessment made and unless that assessment was made public to the people in the region and internationally.

SOLOMON-GREENBAUM: Pelosi says the banks have made a lot of progress since that time in taking the environment more seriously. But she warns there are still problems. Environmental assessments, for example, often aren’t undertaken until after a decision is made about funding of project.

Others in Congress and environmental groups say Treasury has repeatedly supported loans for controversial projects despite negative environmental reviews by AID. They say AID’s relationship to Treasury shouldn’t necessarily be a collegial one but one of independent oversight. Some Congressional staff are now drafting language to strengthen Pelosi’s original legislation.

Meanwhile, John McKnight Fitzgerald has filed a whistleblower complaint, alleging he was removed to silence his criticism. And one U.S.-funded bank is considering a loan to a controversial pipeline project already underway in Peru’s rainforest.

For Living on Earth, I’m Anna Solomon-Greenbaum in Washington.

 

 

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