I
106TH CONGRESS
1ST SESSION
H. R. 2969
To prevent United States funds from being used for environmentally destruc-
tive projects or projects involving involuntary resettlement funded by
any institution of the World Bank Group.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 29, 1999
Mr. COX (for himself, Mr. GILMAN, Mr. KUCINICH, Mr. PORTER, Ms. PELOSI,
Mr. ROHRABACHER, Mr. MCGOVERN, Mr. PAUL, Mr. GUTIERREZ, Mr.
LEWIS of Georgia, Mr. STARK, Ms. MCKINNEY, Mr. BROWN of Ohio, Ms.
LEE, Mr. JACKSON of Illinois, Mr. LANTOS, Mr. UDALL of Colorado, and
Mr. EVANS) introduced the following bill; which was referred to the Com-
mittee on Banking and Financial Services
A BILL
To prevent United States funds from being used for environ-
mentally destructive projects or projects involving invol-
untary resettlement funded by any institution of the
World Bank Group.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Ecosystem and Indige-
nous Peoples Protection Act’’.
SEC. 2. FINDINGS; SENSE OF THE CONGRESS.
(a) FINDINGS.—The Congress finds the following:
(1) The Congress is pleased that the institu-
tions of the World Bank Group have adopted envi-
ronmental assessment and information access proce-
dures. These policy changes have generated in-
creased concern for the environmental impact of
projects, and have created a greater environmental
awareness at such institutions. However, problems
continue to arise in the use by World Bank decision
makers of information generated by environmental
assessments and the adequacy of their content. Fur-
thermore, while environmental information and com-
pliance with environmental and social policies has
improved substantially, there are inconsistencies and
gaps in how the World Bank implements their poli-
cies and procedures.
(2) Current environmental safeguards in the
taxpayer-supported international financial institu-
tions are inadequate. The World Bank does not pre-
pare a full environmental assessment for a signifi-
cant portion of its activities. Even in those cases
where an environmental assessment is made, the as-
sessment is often not made available in a full or
timely manner to the United States Executive Direc-
tor of the institution. The World Bank’s internal
evaluation department found that the environmental
assessments have little to no impact on the project
design and project decisions. Internal reviews have
further determined that more than a third of all
World Bank projects either do not adhere to the en-
vironmental policies or fail to meet environmental
performance goals.
(3) Under current law, United States taxpayers
are forced to contribute funds even for projects that
are opposed by the United States Executive Director
of the institution from which funding for the project
has been requested. For example, United States tax-
payers will contribute $27,200,000 for a loan that
will be used for a project that will result in resettle-
ment that will harm Tibetan and Mongolian indige-
nous peoples, and despoil the environment of the re-
gion, notwithstanding that the United States voted
against providing a loan for the project.
(4) Projects of the World Bank Group resettle
large numbers of people. A world Bank study con-
cluded that 543,000 people had been relocated from
1986 through 1993. Almost 3,000,000 more people
are or will be resettled under the current active port-
folio, according to the World Bank. The Bank’s in-
spection panel has found an imbalance in execution
of investment components of Bank-financed projects
and resettlement components of the same projects,
in large part due to the common practice of leaving
resettlement and environmental measures to coun-
terpart financing.
(5) United States funding should be made con-
tingent on evidence that the institutions will not
make any loan or provide any financial assistance
that will have a significant adverse environmental
impact, including involuntary resettlement and the
destruction of forests or other natural ecosystems.
(6) For several years, the Congress has made it
a priority to seek a broader policy framework for en-
vironmental and social protection at the World Bank
Group. The World Bank Group sets the standards,
which other international financial institutions fol-
low. In fact, the Congress has made environmental
issues a condition for United States contributions to
the international financial institutions. The World
Bank repeatedly exhibits a failure to comply with
these environmental and social policies. Further-
more, in 1999, 63 percent of the lending by the
World Bank is for macroeconomic adjustment pro-
grams that do not have to follow environmental or
social policies.
(7) The World Bank’s board of directors and
management have consistently undermined the effec-
tiveness of its only accountability mechanism, the
independent inspection panel, by interfering with the
ability of the panel to carry out investigations of
Bank policy violations in response to legitimate cit-
izen claims. The inspection panel was created in re-
sponse to calls by the Congress for more, not less,
accountability at the Bank.
(8) The United States and other donor govern-
ments agreed in the replenishment negotiations for
IDA 12 that the World Bank Group should make
more information publicly available and improve
overall transparency.
(b) SENSE OF THE CONGRESS.—It is the sense of
the Congress that—
(1) the World Bank Group has not made sig-
nificant progress in complying with environmental
policies or mandates;
(2) the World Bank Group should seek full
compliance with its environmental and social policies
and policies on information disclosure;
(3) the World Bank Group should apply its en-
vironmental and social policies to all lending and fi-
nancial instruments; and
(4) the World Bank should not interfere with
the authority or the independence of its inspection
panel, and that panel should have the mandate to
cover all institutions in the World Bank Group.
SEC. 3. PREVENTION OF UNITED STATES FUNDS FROM SUP-
PORTING WORLD BANK GROUP OPERATIONS
THAT DO NOT FULLY COMPLY WITH WORLD
BANK GROUP ENVIRONMENTAL AND SOCIAL
POLICIES.
Title XIII of the International Financial Institutions
Act (22 U.S.C. 262m–262m–7) is amended by adding at
the end the following:
‘‘SEC. 1308. PREVENTION OF UNITED STATES FUNDS FROM
SUPPORTING WORLD BANK GROUP OPER-
ATIONS THAT DO NOT FULLY COMPLY WITH
WORLD BANK GROUP ENVIRONMENTAL AND
SOCIAL POLICIES.
‘‘(a) IN GENERAL.—No department, agency, officer,
or employee of the United States may make funds avail-
able to an institution in the World Bank Group if—
‘‘(1) the Secretary of the Treasury, the Admin-
istrator of the Environmental Protection Agency, or
the Administrator of the Agency for International
Development determines that the institution will use
any part of the funds to provide financial assistance
with respect to a project or activity that will have a
significant adverse environmental impact, or that
will violate an environmental or social policy of the
World Bank Group;
‘‘(2) the Secretary of the Treasury or the Ad-
ministrator of the Agency for International Develop-
ment has certified to the committees specified in
subsection (d)(3) that a project funded by the insti-
tution has resulted in significant involuntary reset-
tlement, unless the Secretary or the Administrator
subsequently have certified to such committees that
the institution has verified that all of the costs of
such resettlement, including all costs incurred by
those involuntarily resettled, have been paid by enti-
ties other than those involuntarily resettled; or
‘‘(3) the institution has not developed and im-
plemented a ‘pay-for-performance policy’ which re-
quires salary or pay reduction, or termination of em-
ployment, for any employee of the institution who is
involved in the preparation, appraisal, or implemen-
tation of any project or activity which, if conducted,
would violate any environmental or social policy of
the World Bank Group.
‘‘(b) USE
OF
UNITED
STATES
INFLUENCE
TO
ACHIEVE FUNDING CONDITIONS.—The Secretary of the
Treasury shall instruct the United States Executive Direc-
tor at each institution in the World Bank Group to use
the voice, vote, and influence of the United States to—
‘‘(1) oppose the provision by the institution of
financial assistance of any kind for any project or
activity that the Administrator of the Environmental
Protection Agency and the Administrator of the
Agency for International Development have deter-
mined will have a significant adverse environmental
impact or violate an environmental or social policy of
the World Bank Group;
‘‘(2) oppose the provision of financial assistance
of any kind for any project if, at least 120 days be-
fore the board of directors of the institution votes to
approve or disapprove the project, the institution
does not make available to the public and to the
United States Executive Director at the institution
all environmental assessments, technical information,
feasibility studies, consultant reports on environ-
mental risks, engineering studies, Project Appraisal
Reports, Project Information Documents, resettle-
ment plans, plans involving indigenous peoples, su-
pervision reports, project completion reports, per-
formance audit reports, country assistance reviews,
draft policy papers, draft and final country assist-
(b), and a statement of the number of projects which
were approved by such institutions, notwithstanding
opposition or abstention by the United States Execu-
tive Directors involved, and a record of the United
States Executive Directors’ voting records.
‘‘(2) EFFORTS
TO
HAVE
PROBLEM
PROJECT
WATCH LISTS RELEASED.—The United States Exec-
utive Directors at the institutions in the World Bank
Group and the Secretary of the Treasury shall seek
the public release of any list which details problem
projects and those projects that do not comply with
an environmental or social policy of the World Bank
Group.
‘‘(3) SUBMISSION.—On October 1 of each fiscal
year, the Secretary of the Treasury, the Adminis-
trator of the Environmental Protection Agency, and
the Administrator of the Agency for International
Development shall submit each report required by
paragraph (1) to the Committee on Foreign Rela-
tions and the Committee on Environment and Public
Works of the Senate and the Committee on Banking
and Financial Services and the Committee on Inter-
national Affairs of the House of Representatives.
‘‘(e) DEFINITIONS.—In this section:
‘‘(1) ENVIRONMENTAL OR SOCIAL POLICY OF
THE
WORLD
BANK
GROUP.—The term ‘environ-
mental or social policy of the World Bank Group’ in-
cludes Operational Policies (OP), Operational Direc-
tives (OD), and Operational Policies Notes (OPN),
including the matters set forth in the following docu-
ments:
‘‘(A) Information Policy.
‘‘(B) 
Environmental 
assessment 
(OP
4.01).
‘‘(C) Natural Habitats (OP 4.04).
‘‘(D) Pest Management (OP 4.09).
‘‘(E) Forestry (OP 4.36).
‘‘(F) Safety of Dams (OP 4.37).
‘‘(G) Cultural Property (OPN 4.11).
‘‘(H) Indigenous Peoples (OD 4.20).
‘‘(I) Involuntary Resettlement (OD 4.30).
‘‘(J) Projects in International Waterwyas
(OP 7.50).
‘‘(K) Projects in Disputed Areas (OP
7.60).
‘‘(L) Project Supervision (OD 13.05) .
‘‘(M) Project Monitoring And Evaluation
(OD 10.70).
‘‘(2) INSTITUTION
IN
THE
WORLD
BANK
GROUP.—The term ‘institution in the World Bank
Group’ means the International Bank for Recon-
struction and Development, the International Devel-
opment Association, the International Finance Cor-
poration, and the Multilateral Investment Guarantee
Agency.
‘‘(3) OPPOSE.—The term ‘oppose’ means, with
respect to voting, to vote ‘No’.
‘‘(4) SIGNIFICANT.—The term ‘significant’—
‘‘(A) in relation to an adverse environ-
mental impact, has the meaning given in sec-
tion 1508.27 of volume 40, Code of Federal
Regulations (in effect as of July 1, 1998); and
‘‘(B) in relation to involuntary resettle-
ment, means any resettlement that affects in-
digenous populations, and any resettlement
project that affects more than 500 individ-
uals.’’.
SEC. 4. ADVANCEMENT OF ENVIRONMENTAL AND SOCIAL
GOALS.
Title XIII of the International Financial Institutions
Act (22 U.S.C. 262m–262m–7) is further amended by
adding at the end the following:
‘‘SEC. 1309. ADVANCEMENT OF ENVIRONMENTAL AND SO-
CIAL GOALS.
‘‘The Secretary of the Treasury shall instruct the
United States Executive Director at the institutions of the
World Bank Group to use the voice, vote, and influence
of the United States to encourage the institutions to—
‘‘(1) establish a list of projects and categories
of projects for which the institutions will not provide
financial assistance because doing so would cause se-
rious environmental or social effects; and
‘‘(2) work with other donor countries to estab-
lish an environmental and social trust fund to ame-
liorate the detrimental environmental and social ef-
fects caused by projects.’’.
SEC. 5. STRENGTHENING OF ENVIRONMENTAL ASSESS-
MENT REQUIREMENTS.
(a) EXTENSION OF REQUIREMENTS TO ALL INTER-
NATIONAL FINANCIAL INSTITUTIONS.—Section 1307 of
the International Financial Institutions Act (22 U.S.C.
262m) is amended—
(1) in subsections (a) through (f), except in
subsection (d)(2)—
(A) by striking ‘‘multilateral development
bank’’ each place it appears and inserting
‘‘international financial institution’’; and
(B) by striking ‘‘banks’’ each place it ap-
pears and inserting ‘‘institutions’’;
(2) in subsection (d)(2), by striking ‘‘a multilat-
eral development bank’’ and inserting ‘‘an inter-
national financial institution’’; and
(3) by striking subsection (g) and inserting the
following:
‘‘(g) INTERNATIONAL FINANCIAL INSTITUTION DE-
FINED.—In this section, the term ‘international financial
institution’ has the meaning given in section 1701(c)(2).’’.
(b) ELIMINATION OF EXCEPTION TO ASSESSMENT
REQUIREMENT.—Section 1307(a) of such Act (22 U.S.C.
262m(a)) is amended—
(1) by striking ‘‘(a) ASSESSMENT’’ and all that
follows through ‘‘(1) IN GENERAL.—Beginning’’ and
inserting the following:
‘‘(a) ASSESSMENT REQUIRED BEFORE FAVORABLE
VOTE ON ACTION.—Beginning’’;
(2) by striking ‘‘(A)’’ and inserting ‘‘(1)’’;
(3) by striking ‘‘(B) except as provided in para-
graph (2),’’ and inserting ‘‘(2)’’;
(4) by moving the provisions amended by para-
graphs (2) and (3) of this subsection 2 ems to the
left; and
(5) by striking paragraph (2).
(c) ASSESSMENTS TO INCLUDE PROPOSALS
FOR
MITIGATING POTENTIAL ADVERSE ENVIRONMENTAL IM-
PACTS.—Section 1307(a)(1) of such Act (22 U.S.C.
262m(a)(1)), as amended by subsection (b) of this section,
is amended by inserting ‘‘, and proposing methods to miti-
gate any potential adverse environmental impacts of the
proposed action,’’ before ‘‘has been completed’’.
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