69–010 

Calendar No. 593 

110TH CONGRESS REPORT " ! SENATE 2d Session 110–273 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

REAUTHORIZATION ACT OF 2008 

MARCH 4, 2008.—Ordered to be printed 

Mr. BIDEN, from the Committee on Foreign Relations, 

submitted the following 

R E P O R T 

[To accompany H.R. 2798] 

The Committee on Foreign Relations, having had under consideration the bill (H.R. 2798), to reauthorize the programs of the Overseas Private Investment Corporation, and for other purposes, having considered the same, reports the bill favorably with an amendment in the nature of a substitute, and recommends that the bill, 

as amended, do pass. 

CONTENTS 

Page 

I. Purpose ........................................................................................................... 1 

II. Committee Action .......................................................................................... 1 

III. Discussion ....................................................................................................... 2 

IV. Cost Estimate ................................................................................................. 8 

V. Evaluation of Regulatory Impact .................................................................. 8 

VI. Changes in Existing Law .............................................................................. 8 

I. PURPOSE

The purpose of H.R. 2798 is to reauthorize the programs of the 

Overseas Private Investment Corporation. 

II. COMMITTEE ACTION

H.R. 2798 was introduced by Representative Brad Sherman on 

June 20, 2007. It is cosponsored by Representatives Tom Lantos, 

Ileana Ros-Lehtinen, and Donald Payne. A companion bill, S. 2349, 

was introduced by Senators Biden and Lugar on November 14, 

2007. On February 13, 2008, the committee ordered H.R. 2798 reVerDate Aug 31 2005 01:15 Mar 05, 2008 Jkt 069010 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\SR273.XXX SR273

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ported favorably by voice vote with an amendment in the nature 

of a substitute. 

III. DISCUSSION

A. Overview 

H.R. 2798, the ‘‘Overseas Private Investment Corporation Reauthorization Act of 2008’’ reauthorizes the agency through September 30, 2011. It strengthens the agency’s development mandate 

and ensures that its activities are consistent with United States 

foreign policy objectives. The Overseas Private Investment Corporation (OPIC) is an independent agency of the United States established in 1971. OPIC’s mandate is to mobilize and facilitate the 

participation of the U.S. private sector in the economic and social 

development of less developed countries, thereby complementing 

the development assistance objectives of the United States. OPIC 

provides political risk insurance, project financing, and other financial assistance to U.S. companies in support of these objectives. 

Over the agency’s 35-year history, OPIC has supported 177 billion 

dollars’ worth of investments in more than 150 developing countries, helping to create more than 800,000 host-country jobs and 

generating some $13 billion in host-government revenues. 

B. Summary of major provisions 

The legislation includes several important changes to current 

law: (1) Strengthening the statutory provisions on rights of workers 

overseas; (2) requiring OPIC to institute a climate change mitigation action plan to increase the Corporation’s support of projects 

that use and promote the use of clean energy technology and reduce greenhouse gas emissions; (3) ensuring extractive industry 

projects supported by OPIC conform to standards and principles established by the Extractive Industries Transparency Initiative; (4) 

strengthening transparency requirements to ensure that the public 

has sufficient notice and information about potential OPIC-supported projects; and (5) directing OPIC to prepare a report on the 

feasibility of broadening assistance to projects that support low-income home buyers. 

Internationally Recognized Worker Rights (Sec. 3). This section 

amends section 231A of the Foreign Assistance Act (FAA) of 1961 

to require OPIC to take certain measures to strengthen the rights 

of workers overseas. The committee believes that promoting internationally recognized worker rights is an integral component of 

U.S. foreign policy, and OPIC’s development mandate requires that 

it play a role in this effort. The bill directly links workers rights 

standards in OPIC-supported projects to standards established 

under the Generalized System of Preferences (GSP) in the Trade 

Act of 1974 and directs that the Corporation can only provide assistance to prospective applicants if: (1) The country in which the 

project is to be undertaken is eligible as a GSP beneficiary country 

and has not been determined to be ineligible for GSP benefits due 

to its record on worker rights or child labor; or (2) if the country 

is not eligible as a GSP beneficiary country, the government in the 

country in which the project is to be undertaken has taken or is 

taking steps to afford workers in the country internationally recognized worker rights. These amendments will simplify the workers 


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rights provision in current law for OPIC by specifically linking the 

standard for most countries to the GSP process. The committee 

also expects OPIC to carefully review all project applications and 

consider whether project sponsors have previously committed, or 

are currently committing, significant violations of internationally 

recognized worker rights. OPIC should monitor project compliance, 

and review any complaints related to a project. 

‘‘Internationally recognized worker rights’’ follows the definition 

provided in section 507(4) of the Trade Act of 1974. The worker 

rights limitation does not apply to the provision of humanitarian 

services. The legislation directs OPIC to consider information contained in reports required by this Act and the Trade Act of 1974 

as well as other relevant information—including observations, reports and recommendations of the International Labor Organization—when making worker rights determinations for purposes of 

project eligibility. In addition, the legislation removes a waiver previously granted to the President of the United States allowing the 

Corporation to support projects ‘‘in the national interest’’ in countries that may fall below established worker rights standards. Finally, the legislation adds an ‘‘elimination of discrimination with 

respect to employment and occupation’’ clause to the worker rights 

standard. 

Preferential Consideration of Certain Investment Projects (Sec. 4). 

This section amends section 231(f) of the FAA and requires OPIC, 

to the greatest degree practicable and consistent with the Corporation’s goals, to provide preferential consideration to investment 

projects in less developed countries, the governments of which are 

receptive to private enterprise and are willing and able to maintain 

conditions that enable private enterprise to make its full contribution to the development process. This does not affect the committee’s longstanding belief that protecting human rights, strengthening the rule of law, and promoting democratic governance by the 

host government are essential elements toward sustainable longterm development. 

Climate Change Mitigation (Sec. 5). This section requires OPIC 

to institute a climate change mitigation action plan. Climate 

change is one of the critical issues facing the international community and has especially serious implications for developing countries. The committee believes that agencies such as OPIC, whose 

mandate is to promote economic and social development in less developed countries, has an important role to play toward mitigating 

climate change and energy security. The committee commends 

OPIC for the strong leadership role it has assumed through its 

greenhouse gas and clean energy initiative, and urges the Corporation to continue to sustain such efforts. To ensure this momentum 

is not lost, the legislation directs the Corporation to establish 

benchmark clean energy technology, climate mitigation and greenhouse gas goals. Within 180 days of enactment, the Corporation 

must institute a plan that will include the following: 

First, OPIC shall establish a goal for substantially increasing 

support of projects that use, develop, or otherwise promote the use 

of clean energy technology during the 10-year period beginning on 

the date of enactment of this Act. This should include preferential 

treatment to evaluating and awarding assistance for projects that 


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use, develop, or otherwise promote the use of clean energy technologies. 

Second, when the agency undertakes environmental impact assessments of potential projects, it shall take into account the degree to which the project contributes to the emission of greenhouse 

gases. This subsection applies to all projects, not just those classified as ‘‘Category A,’’ and shall not be construed to eliminate any 

other requirement found elsewhere in law. 

Third, the legislation directs OPIC to continue to maintain a goal 

for reducing direct greenhouse gas emissions associated with 

projects in the Corporation’s portfolio by 20 percent during the 10- 

year period beginning on the date of enactment, as well as a goal 

for limiting annual investment in projects that have significant 

greenhouse gas emissions in a manner that will help achieve a 20- 

percent reduction in greenhouse gas emissions over 10 years. The 

Corporation is directed to maintain a goal based on total aggregate 

greenhouse gas emissions of all projects in a manner compatible 

with the findings and actions taken under the United Nations 

Framework Convention on Climate Change. 

The committee includes the following reporting requirements to 

be included in the Corporation’s annual report: Annual greenhouse 

gas emissions attributable to each project that has significant 

greenhouse gas emissions in the Corporation’s active portfolio; estimated greenhouse gas emissions for each new project that has significant greenhouse gas emissions; extent to which the Corporation 

is meeting its greenhouse gas reduction goals; and a listing of each 

new project supported by the Corporation that involves renewable 

energy and environmentally beneficial products and services, including clean energy technology. In submitting its annual report, 

the ‘‘reporting requirements’’ in this subsection apply to all 

projects, including those implemented through financial intermediaries. 

In this section, ‘‘clean technology’’ refers to a renewable energy 

supply or end-use technology that, compared over its life cycle to 

a similar technology already in widespread commercial use within 

a given country, will reduce emissions of greenhouse gases or decrease energy intensity of operation, substantially lower emissions 

of air pollutants, or generate substantially smaller and less hazardous quantities of solid and liquid waste. ‘‘Clean’’ end-use technologies include end-use energy efficiency measures that achieve 

substantial reductions in greenhouse gas emissions. ‘‘Clean’’ enduse technologies do not include HFC–23 abatement projects. 

Transparency for Extraction Investments (Sec. 5). The bill creates 

a new subsection under the climate change mitigation section addressing extraction investments. The committee recognizes the 

often problematic history of extractive industry projects in developing countries. The committee intends for this legislation to provide important transparency safeguards so that OPIC-sponsored 

projects can best fulfill the agency’s development mandate. The legislation directs the Corporation to provide notice to Congress not 

later than 60 days before approval of extractive industry projects, 

defined as those which are Category A and valued at $10,000,000 

or more. 

In general, the Corporation may approve a contract of insurance, 

reinsurance, a guaranty, or provide financing to an eligible investor 


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for a project that significantly involves an extractive industry only 

if: (1) The eligible investor has agreed to implement Extractive Industries Transparency Initiative (EITI) principles and criteria, or 

substantially similar principles and criteria related to the specific 

project to be carried out; and (2) the host country where the project 

is to be carried out has committed to EITI principles and criteria 

or substantially similar principles and criteria, or the host country 

is taking the necessary steps to establish functioning systems. 

Functioning systems include: accurately accounting for revenues 

and expenditures in connection with extraction; the independent 

audit of such revenues and expenditures and the widespread public 

dissemination of the finding of the audit; and verifying government 

receipts against company payments, including widespread dissemination of such payment information and disclosure of such documents as host government agreements. The legislation includes an 

exception to the above provision and allows for the Corporation to 

approve an extractive industry project, even if the host country has 

not committed to EITI or substantially similar principles and criteria and is not taking the necessary steps to establish functioning 

accounting, auditing and government receipt verification systems, 

provided that the host government does not prevent the eligible investor from implementing EITI or substantially similar principles 

and criteria related to the specific project to be carried out. 

‘‘Extractive industry’’ refers to an enterprise engaged in the exploration, development, or extraction of oil and gas reserves, metal 

ores, gemstones, industrial minerals, forestry or coal. By ‘‘substantially similar principles and criteria,’’ the committee means the 

general agreement of EITI principles, as well as the adoption of 

specific criteria, including: 

(1) Regular publication of all material oil, gas and mining 

payments by companies to governments and all material revenues received by governments from oil, gas, and mining companies to a wide audience in a publicly accessible, comprehensive, 

and comprehensible manner; 

(2) Payments and revenues are reconciled by a credible, independent administrator, applying international auditing standards and with publication of the administrator’s opinion regarding that reconciliation including discrepancies, should any 

be identified; 

(3) This approach should be extended to all relevant companies including state-owned enterprises; and 

(4) Involvement of civil society in the design, monitoring and 

evaluation of this process and contributes toward public debate. 

Finally, this section requires the Corporation, to the extent practicable and consistent with its development objectives, to give preference to projects where both the eligible investor and host country 

have agreed to implement EITI principles and criteria, or substantially similar principles and criteria. 

Increased Transparency (Sec. 6). The committee commends OPIC 

for its transparency initiative implemented in response to the 2003 

reauthorization committee report. This section furthers transparency by amending section 231A(c)(2) of the FAA to require 

OPIC to provide advance notice and information regarding all 


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projects considered by the Board of Directors. The committee wants 

to ensure there is a robust exchange of information and viewpoints 

prior to Board discussion of potential projects. In the past, public 

hearings scheduled by OPIC to receive views regarding the activities of the Corporation have been sparsely attended or cancelled 

due to lack of attendance. The committee believes public input 

would be enhanced by requiring OPIC to make information available in advance about potential projects to be voted on by the 

Board of Directors. The legislation is intended to address this information gap and ensure that interested parties are aware in advance about the public hearing date and have sufficient information in which to prepare for such a hearing. 

The legislation directs the Corporation to hold a public hearing 

in order to afford an opportunity for any person to present view regarding the activities of the Corporation. It shall notice such a 

hearing at least 20 days in advance. To ensure participants are 

adequately prepared for such a hearing, at least 15 days in advance, the Corporation shall make available a public summary of 

each project, not including any confidential business information, 

including information related to workers rights, as well as information related to the project’s social and environmental impacts. 

The legislation also directs the Corporation to make available to 

the public the detailed methodology used to assess and monitor the 

impact of projects supported by the Corporation related to hostcountry environmental and development impact, project impact toward employment in the United States and the protection of internationally recognized worker rights, as well as the elimination of 

discrimination with respect to employment and occupation, in host 

countries. 

The legislation furthers additional transparency toward ‘‘Category A’’ projects, which are projects that have a significant adverse environmental impact. ‘‘Category A project’’ means a project 

or other activity for which the Corporation proposes to provide insurance, reinsurance, a guaranty, financing, or other assistance 

and which is likely to have a significant adverse environmental impact. OPIC’s Board of Directors may not vote in favor of any action 

proposed to be taken by the Corporation on any Category A project 

until at least 60 days after the Corporation makes available for 

public comment a summary of the project and relevant information 

about the project. Such summaries, which shall not include confidential business information, shall be made available to groups in 

the area that may be impacted by the proposed project and to 

NGOs in the host country. To the extent practicable, the Corporation shall publish responses to comments received with respect to 

a Category A project and submit the responses to the Board not 

later than 7 days before a vote is to be taken for action on the 

project. 

The committee commends the Corporation for establishing an Office of Accountability. The Corporation shall continue to maintain 

an Office of Accountability to provide, to the maximum extent practicable, upon request, problem-solving services for projects supported by the Corporation and to review the Corporation’s compliance with its environmental, social, internationally recognized 

worker rights, human rights, and transparency policies and procedures. The committee expects the Office of Accountability to conVerDate Aug 31 2005 01:15 Mar 05, 2008 Jkt 069010 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\SR273.XXX SR273

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tinue to operate in a manner that is fair, objective, and transparent. 

Ineligibility of Persons Doing Certain Business with State Sponsors of Terrorism (Sec. 9). The bill adds a new subsection (m) to 

Section 239 of the FAA to make ineligible for OPIC assistance persons with certain business activity in or with state sponsors of terrorism. This will ensure that OPIC assistance will not go towards 

entities, parent companies or affiliates that are engaged in a discouraged transaction with a ‘‘state sponsor of terrorism.’’ The legislation is meant to strike a balance between concern that 

the Corporation refrain from directing any support toward entities 

engaged in a discouraged transaction with a state sponsor of terrorism, while ensuring the Corporation is able to function in an effective and efficient manner and that certification requirements 

will not have a chilling effect on potential applicants. 

The Corporation has provided the committee with assurances 

that the certification required by this section will require the certifying officer to affirm that they have taken appropriate measures 

necessary to determine whether their firm and any applicable affiliated entities are engaged in discouraged transactions, and if necessary, has received any information and cooperation from affiliated entities needed to make the certification. ‘‘State sponsor of terrorism’’ means any country the government 

of which the Secretary of State has determined has repeatedly provided support for acts of international terrorism pursuant to the 

Export Administration Act of 1979 and the Arms Export Control 

Act. This does not include Southern Sudan, Southern Kordofan/ 

Nuba Mountains State, Blue Nile State, and Abyei, Darfur, if the 

Corporation, with concurrence of the Secretary of State, determines 

that providing assistance for projects in such regions will provide 

emergency relief, promote economic self-sufficiency, or implement a 

nonmilitary program in support of a viable peace agreement in 

Sudan. 

Consistent with the current policy of the United States, OPIC 

should not be supporting projects in the HAMAS-controlled Gaza 

Strip. Should this policy change, OPIC officials have committed to 

consult closely with the Secretary of State to ensure that any support provided to projects within Gaza is consistent with U.S. policy 

objectives. In addition, the committee expects the Corporation to 

consult with Senate Committee on Foreign Relations and the 

House Committee on Foreign Affairs before approval of assistance 

to such projects. 

Low-Income Housing (Sec. 12). The bill directs OPIC to submit 

a report to the Committee on Foreign Relations of the Senate and 

the Committee on Foreign Affairs of the House of Representatives, 

on the feasibility of broadening assistance to projects that provide 

support to low-income home buyers. OPIC has a housing initiative 

with commitments approaching $1 billion for over 450,000 housing 

units in projects that afford home ownership opportunities to 

middle- and low-income residents in developing countries. If such 

additional assistance is found to be feasible, the committee directs 

OPIC to identify and begin to implement steps to provide such assistance. The committee notes that there has been an exponential 

growth in the population of urban areas and an equivalent increase 

in urban poverty and slum dwellings. In 2007, the number of slum 


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dwellers crossed the 1 billion mark, and cities of the developing 

world are projected to absorb 95 percent of urban growth in the 

next two decades. Therefore, the committee urges the Corporation 

to focus attention and resources towards this issue by helping to 

increase access to affordable housing by low-income residents in developing countries. 

IV. COST ESTIMATE

At the time of the filing of this report, the cost estimate of this 

legislation had not yet been provided by the Congressional Budget 

Office. The chairman will cause the estimate to be printed in the 

CONGRESSIONAL RECORD when it is provided. 

V. EVALUATION OF REGULATORY IMPACT

Pursuant to Rule XXVI, paragraph 11(b) of the Standing Rules 

of the Senate, the committee has determined that there is no regulatory impact as a result of this legislation. 

VI. CHANGES IN EXISTING LAW

Pursuant to Rule XXVI, paragraph 12 of the Standing Rules of 

the Senate, the committee has determined that dispensing with the 

requirement of this provision of the rules is necessary to expedite 

the business of the Senate. 

Æ 


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