Ecosystem and Indigenous Peoples Protection Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Ecosystem and Indigenous Peoples 
Protection Act''.

SEC. 2. FINDINGS; SENSE OF THE CONGRESS.

    (a) Findings.--The Congress finds the following:
            (1) The Congress is pleased that the institutions of the 
        World Bank Group have adopted environmental assessment and 
        information access procedures. These policy changes have 
        generated increased 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. 
        Furthermore, while environmental information and compliance 
        with environmental and social policies has improved 
        substantially, there are inconsistencies and gaps in how the 
        World Bank implements their policies and procedures.
            (2) Current environmental safeguards in the taxpayer-
        supported international financial institutions are inadequate. 
        The World Bank does not prepare a full environmental assessment 
        for a significant portion of its activities. Even in those 
        cases where an environmental assessment is made, the assessment 
        is often not made available in a full or timely manner to the 
        United States Executive Director 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 environmental 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 taxpayers will contribute $27,200,000 for a loan that 
        will be used for a project that will result in resettlement 
        that will harm Tibetan and Mongolian indigenous peoples, and 
        despoil the environment of the region, 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 concluded 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 
        portfolio, according to the World Bank. The Bank's inspection 
        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 counterpart financing.
            (5) United States funding should be made contingent 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 environmental and social 
        protection at the World Bank Group. The World Bank Group sets 
        the standards, which other international financial institutions 
        follow. 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. 
        Furthermore, in 1999, 63 percent of the lending by the World 
        Bank is for macroeconomic adjustment programs that do not have 
        to follow environmental or social policies.
            (7) The World Bank's board of directors and management have 
        consistently undermined the effectiveness 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 citizen claims. The inspection panel was created in 
        response to calls by the Congress for more, not less, 
        accountability at the Bank.
            (8) The United States and other donor governments 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 significant 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 environmental and 
        social policies to all lending and financial 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 SUPPORTING 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 OPERATIONS 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 available to an institution in the 
World Bank Group if--
            ``(1) the Secretary of the Treasury, the Administrator 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 Administrator of 
        the Agency for International Development has certified to the 
        committees specified in subsection (d)(3) that a project funded 
        by the institution has resulted in significant involuntary 
        resettlement, 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 entities other than 
        those involuntarily resettled; or
            ``(3) the institution has not developed and implemented a 
        `pay-for-performance policy' which requires salary or pay 
        reduction, or termination of employment, for any employee of 
        the institution who is involved in the preparation, appraisal, 
        or implementation 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 Director 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 
        determined 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 before 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 environmental risks, 
        engineering studies, Project Appraisal Reports, Project 
        Information Documents, resettlement plans, plans involving 
        indigenous peoples, supervision reports, project completion 
        reports, performance audit reports, country assistance reviews, 
        draft policy papers, draft and final country assistance 
        strategies, quality assurance group reports, compliance unit 
        reports and audits, annual reviews of portfolio performance, 
        Policy Framework Papers, and all documentation related to the 
        categorization of projects and of environmental screening 
        documents relating to the project, and relating to all projects 
        with environmental and social impacts; and
            ``(3) oppose the provision of any financial assistance that 
        it would be unlawful for the Export-Import Bank of the United 
        States or the Overseas Private Investment Corporation to 
        provide, and seek to have the institution adopt the same 
        environmental policies limiting the provision of financial 
        assistance as apply to the Export-Import Bank of the United 
        States or the Overseas Private Investment Corporation.
    ``(c) Enforcement.--If the Secretary of the Treasury determines 
that an international financial institution has provided financial 
assistance for a project or activity over the opposition of the United 
States Executive Director as expressed pursuant to subsection (b), 
then, in addition to any reduction pursuant to this subsection with 
respect to any other such project or activity, the Secretary shall 
reduce the amount of any payment required to be made to the institution 
by any department, agency, or instrumentality of the United States, 
during the 5-year period beginning with the date the financial 
assistance is so provided, by a percentage equal to--
            ``(1) the total amount of financial assistance to be 
        provided by the institution for the project or activity, 
        divided by the total amount of financial assistance to be 
        provided by the institution to all projects and activities 
        during the period for which financial assistance is to be 
        provided by the institution for the project or activity; 
        multiplied by
            ``(2) the total amount of contributions paid to the 
        institution by any department, agency, or instrumentality of 
        the United States during the 5-year period ending on the date 
        the assistance begins to be so provided, divided by the total 
        amount of contributions paid to the institution by all member 
        countries of the institution during such 5-year period.
    ``(d) Compliance Report.--
            ``(1) In general.--The Secretary of the Treasury, the 
        Administrator of the Environmental Protection Agency, and the 
        Administrator of the Agency for International Development shall 
        prepare annual reports on the extent to which the United States 
        Executive Directors at the institutions in the World Bank Group 
        have complied with subsection (b), and a statement of the 
        number of projects which were approved by such institutions, 
        notwithstanding opposition or abstention by the United States 
        Executive 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 Executive 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 Administrator 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 Relations 
        and the Committee on Environment and Public Works of the Senate 
        and the Committee on Banking and Financial Services and the 
        Committee on International Affairs of the House of 
        Representatives.
    ``(e) Definitions.--In this section:
            ``(1) Environmental or social policy of the world bank 
        group.--The term `environmental or social policy of the World 
        Bank Group' includes Operational Policies (OP), Operational 
        Directives (OD), and Operational Policies Notes (OPN), 
        including the matters set forth in the following documents:
                    ``(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 Reconstruction and Development, the International 
        Development Association, the International Finance Corporation, 
        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 environmental 
                impact, has the meaning given in section 1508.27 of 
                volume 40, Code of Federal Regulations (in effect as of 
                July 1, 1998); and
                    ``(B) in relation to involuntary resettlement, 
                means any resettlement that affects indigenous 
                populations, and any resettlement project that affects 
                more than 500 individuals.''.

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 SOCIAL 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 serious environmental 
        or social effects; and
            ``(2) work with other donor countries to establish an 
        environmental and social trust fund to ameliorate the 
        detrimental environmental and social effects caused by 
        projects.''.

SEC. 5. STRENGTHENING OF ENVIRONMENTAL ASSESSMENT REQUIREMENTS.

    (a) Extension of Requirements to All International 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 appears and 
                inserting ``institutions'';
            (2) in subsection (d)(2), by striking ``a multilateral 
        development bank'' and inserting ``an international financial 
        institution''; and
            (3) by striking subsection (g) and inserting the following:
    ``(g) International Financial Institution Defined.--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 paragraph 
        (2),'' and inserting ``(2)'';
            (4) by moving the provisions amended by paragraphs (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 Impacts.--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 mitigate any 
potential adverse environmental impacts of the proposed action,'' 
before ``has been completed''.

Summary: Amends the International Financial Institutions Act to provide that no U.S. funds may be made available to the World Bank Group: (1) if a determination is made that the use of any part of the funds will have a significant adverse environmental impact, or will violate an environmental or social policy of the World Bank Group; (2) if there is significant involuntary resettlement (with an exception); or (3) if a 'pay-for-performance policy' (requiring pay reduction or termination of employees involved in projects violating environmental or social policies) has not been implemented.
Requires the Secretary of the Treasury to instruct U.S. executive directors in the World Bank Group to use their influence to achieve funding conditions.
Provides for enforcement through payment reductions. Calls for public release of information on non- complying projects.
Describes the scope of World Bank Group environmental and social policies to include, among other matters, environmental assessment, pest management, safety of dams, cultural property and indigenous peoples.