The World Bank Group’s member countries collectively determine policy and make investment decisions. Its board of directors is made up of 24 executive directors who represent all 185 member countries. The U.S. Executive Director is the main liaison between the United States and the World Bank Group. Treasury has the lead role in working with the U.S. Executive Director to determine the U.S. position on proposed World Bank Group projects. As a member country of the World Bank Group, the United States may support, abstain from voting, or vote against a proposed project. However, no single member country can veto a proposed project. In 1989, the World Bank established social and environmental guidelines, or Safeguard Policies, to identify and address potentially significant negative environmental and social impacts. In 2006, IFC developed its own distinct performance standards for assessing the environmental and social impact of its projects, and MIGA introduced its own standards, which were largely based on IFC’s, in 2007. The World Bank, IFC, and MIGA have also established policies guiding the disclosure of project information to the public. IFC and MIGA guidelines state that proposed project documents, including environmental assessments, should be released 60 days prior to a board vote on projects with potential, significant adverse impacts. The World Bank disclosure guidelines do not specify a number of days. World Bank Group entities screen project proposals for potential environmental impacts and assign one of four categories to determine the type of environmental assessment needed. See table 1. Title XIII outlines the U.S. government’s basic requirements for reviewing the potential environmental and social impacts of proposed multilateral development bank projects, including those of the World Bank Group. The overall purpose of the legislation is to ensure that U.S. assistance to multilateral development banks promotes sustainable use of natural resources and the protection of the environment, public health, and the status of indigenous people in developing countries. In 1989, Congress amended Title XIII to include Section 1307, commonly referred to as the Pelosi Amendment. The Pelosi Amendment directly affects whether the U.S. government will support a proposed project. It directs the U.S. government to ensure that a proposed project with potentially significant negative impacts meets certain requirements, such as making publicly available an assessment of the project’s environmental impact 120 days before the World Bank Group’s Board of Directors votes on the project. If the World Bank Group’s project sponsor does not make the assessment or a summary of the assessment publicly available within this time frame, the law instructs the U.S. government not to vote in favor of the proposal. The law also requires that the assessment include an analysis of the project’s cumulative and associated impacts, as well as alternatives to the proposed project. As a result of the Pelosi Amendment, the World Bank Group and other major multilateral development banks began requiring project sponsors to prepare environmental impact assessments and make them available to affected groups, according to representatives from U.S. government agencies and nongovernmental organizations, as well as a 1998 U.S. Congressional Research Service report determining the impact of the Pelosi Amendment. Both the Pelosi Amendment and other sections of Title XIII specify the responsibilities of several U.S. agencies in monitoring proposed multilateral development bank projects with the potential for significant environmental and social impacts. As the lead U.S. agency interacting with the multilateral development banks, Treasury is to take the following actions: ensure that an environmental impact assessment or a comprehensive summary accompanies project proposals, consult with and consider recommendations from other federal agencies and interested members of the public regarding this assessment, determine whether an environmental assessment has been made publicly available at least 120 days prior to the board vote on the proposal, instruct the U.S. Executive Director on the U.S. position for each proposed project, consult with other U.S. agencies to develop environmental impact review procedures for proposed multilateral development bank projects and assist in implementing these procedures, and provide an annual report to Congress on the environmental sustainability of multilateral development banks’ operations and the efficacy of U.S. efforts in this process. Title XIII also requires USAID to work with Treasury and the Department of State (State) to analyze, where feasible, the environmental, social, and other impacts of proposed multilateral development bank projects “well in advance” of the projects’ board vote date, and to ensure that investigations are undertaken for proposals that are likely to have substantial adverse impacts. USAID is also required to provide its own report to Congress that identifies proposals likely to have adverse impacts on the environment, natural resources, public health, or indigenous peoples. State and Treasury are to work with USAID to vigorously promote mechanisms to strengthen the environmental performance of multilateral development banks. Treasury addresses Pelosi Amendment requirements for assessing World Bank Group projects by conducting reviews that focus on procedural requirements such as whether the project’s environmental assessment is made publicly available by the project sponsor 120 days before the World Bank Group’s board vote date. Treasury also engages in required interagency consultations by leading a weekly interagency working group. However, Treasury does not always identify projects with potentially significant environmental and social impacts in advance of the interagency meetings, making it difficult for participants to provide effective input. Because they have different responsibilities and flexibility within their statutory requirements, USAID and Treasury take different approaches to analyzing in more depth the environmental and social impacts of a few controversial projects. The agencies learn about many such projects through regular interaction with nongovernmental organizations. As required by the Pelosi Amendment, Treasury conducts reviews of environmental documentation for World Bank Group proposals that could have significant environmental or social impacts. Treasury’s efforts generally focus on fulfilling the requirements of the legislation, which are largely procedural; specifically, Treasury staff review documentation on World Bank Group projects to ensure that procedural requirements specified in the legislation are met. These requirements include ensuring that an environmental impact assessment or a comprehensive summary of the assessment is made publicly available 120 days prior to the World Bank Group’s Board of Executive Directors vote date and that the summary contains items such as discussions of alternatives to the proposed project and the project’s direct and indirect environmental impacts. A Treasury Department official who reviews project documentation stated that the review process involves attempting to ascertain the actual disclosure date, which is not necessarily the date or dates listed on the documents. The Treasury reviews generally take place once the World Bank Group’s Board of Executive Directors schedules a vote for the proposed project. In practice, this can be anywhere from 1 to 3 weeks prior to the scheduled vote date. In calendar year 2007, Treasury officials estimated that they reviewed over 95 projects that they determined could have significant environmental or social impacts. The Pelosi Amendment requires that Treasury consider, among other things, associated and cumulative environmental impacts in its review of World Bank Group project documentation but does not specify what criteria should be used to determine these considerations. As a result, one Treasury economist said she uses professional judgment to determine if the evidence “seems reasonable” when reviewing environmental assessments for compliance with the Pelosi Amendment’s requirement regarding associated and cumulative environmental impacts. Since the amendment does not require Treasury to review proposals to determine if they meet the World Bank Group’s environmental and social safeguard policies, Treasury generally does not evaluate proposals for compliance with these policies. Treasury officials stated that they do not do this because the multilateral development banks have their own procedures, staff, and accountability mechanisms for ensuring compliance with bank policies. Treasury officials noted that they occasionally may closely review the analysis contained in the environmental assessment or other project documentation if they have concerns about the environmental and social impact of the project. However, these officials told us that they rarely instruct the U.S. Executive Director not to support a proposal because of deficiencies with the assessment’s technical analysis. Because Treasury is only required by law to review proposals on which the World Bank Group board votes, a subset of proposals, specifically, umbrella proposals, are not always reviewed by Treasury for compliance with the Pelosi Amendment. These proposals, which are presented to the World Bank Group’s board for approval, contain an environmental assessment that represents a framework for multiple sub-projects. Although the board must approve the proposal as a whole, future sub- projects—some of which could have significant adverse impacts—are not subject to board approval. Since the board does not vote on subprojects, the Pelosi Amendment does not require Treasury to review them. Instead, Treasury reviews these types of proposals on a case-by-case basis. According to Treasury officials, they use professional judgment to determine if the intended sub-projects are likely to have significant adverse environmental and social impacts and, therefore, whether they review environmental documents associated with the sub-projects. Treasury reports its findings to Congress, as required by law, but does not provide these reports in a timely manner. Federal law requires Treasury to provide an annual report to Congress summarizing the environmental performance of the multilateral development banks, including the World Bank Group. Treasury’s most recent report is for fiscal year 2005. Treasury officials told us in October 2007 and again in August 2008 that they were still preparing the report for fiscal year 2006. Treasury addresses the Pelosi Amendment’s requirement that it consult with other agencies by leading an interagency working group on multilateral assistance that meets once a week for about an hour to discuss U.S. agencies’ concerns regarding proposed World Bank Group projects. This group discusses political, economic, environmental, social, and other concerns related to proposed multilateral development bank projects, including those of the World Bank Group. The purpose of these discussions is to solicit agency input as to whether Treasury should instruct the U.S. Executive Director to support the projects. In addition to Treasury, State, USAID, and the Commerce Department are regular participants at the meeting. Other agencies such as EPA have attended in the past. According to participants, the volume of proposals and brief discussion time at the working group meetings has limited the quality of discussion on proposals with potentially significant environmental and social impacts.