Between 1999 and 2001, the OECD member nations negotiated environmental policy framework for their ECAs. (See fig. 1.) With the exception of the United States, OECD members agreed in November 2001 to voluntarily implement a version of this framework, known as the Common Approaches. This process of negotiation followed a 1997 communiqué from the Group of Eight (G-8) that indicated a strong interest in negotiating common environmental guidelines for ECAs. At the 1999 G-8 summit, the heads of state issued a second communiqué stating that they hoped for agreement within the OECD by their 2001 summit, a deadline the G-8 reiterated the following year. The United States led the effort to regularly place common ECA environmental procedures on the G-8 agenda. The United States sought to promote uniform standards because it was concerned about unequal export market conditions and growing concern from nongovernmental organizations (NGO) that ECA-funded projects had the potential to cause significant environmental harm. However, the most current version of the Common Approaches required neither public disclosure of project information nor establishment of a single set of technical standards. Because the United States believed that these provisions were essential, it objected and said it would block the agreement if it were sent before the OECD Council for approval. Twenty-eight of 29 OECD members of the Working Party on Export Credits and Credit Guarantees (ECG) subsequently opted to voluntarily adhere to the Common Approaches, thus implementing the framework without a formal decision. Application of the Common Approaches began on January 1, 2002. (See app. II for a list of OECD participants and ECG members that are implementing the Common Approaches.) Some ECAs have used environmental guidelines from the World Bank Group as a model for the development of environmental procedures and standards to use in evaluating projects. The environmental guidelines of Ex-Im Bank, for example, were developed using World Bank standards as a reference point. While the environmental review policies of different organizations within the World Bank Group vary somewhat, they generally follow a similar screening and categorization process (see fig. 2). The World Bank’s environmental policies include evaluation and technical standards, such as those for emissions, which are laid out in the Pollution Prevention and Abatement Handbook. It also has a set of qualitative environmental and social standards, known as safeguard policies. These outline broad project and evaluation expectations, including guidelines on involuntary movement of peoples, impacts on cultural property, and conservation of natural habitats. Representatives of both the business community and the environmental NGO community have expressed considerable interest in the issue of environmental review procedures for ECAs, but for different reasons. Some businesses in the United States are concerned that if Ex-Im Bank maintains environmental standards more stringent than the standards of some competitor ECAs, the additional project review and mitigation costs may hurt U.S. exports. Businesses in other OECD countries are also concerned that disclosure requirements, which the United States proposed in OECD negotiations, will make sensitive business information public. In contrast, environmental NGOs in numerous countries have become interested in ECA environmental review standards as a result of actual or proposed ECA funding of large potentially environmentally harmful projects as the Three Gorges Dam in China, the Chad-Cameroon oil pipeline, and the Camisea gas field development project in Peru. (See app. III for descriptions of selected ECA projects.) NGO representatives stated that ECAs, as public entities, should provide members of the public with the opportunity to provide input on projects that their governments are supporting. A number of these NGOs have joined in a campaign to change ECA practices to include strong review standards and open disclosure policies. While most OECD members have adopted a common environmental policy framework through the Common Approaches, some notable differences remain in their ECA environmental review procedures and policies. Because the Common Approaches is only a framework, it allows important differences in members’ national polices in certain key areas, such as the application of technical standards and the disclosure of project-specific information. Ex-Im Bank guidelines provide much more specific detail than the Common Approaches framework (see table 1). Ex-Im Bank guidelines clearly describe which types of applications must undergo environmental review. For those transactions requiring review, Ex-Im Bank guidelines contain nine detailed sector tables delineating specific environmental requirements. Ex-Im Bank guidelines also provide for a public disclosure period prior to a final decision by its Board of Directors. During this period, it lists the name and location of projects which will be subject to an environmental review and makes certain environmental information available upon request. In contrast, the Common Approaches is a framework that allows for variations in project review specifics. The Common Approaches framework differs from Ex-Im Bank guidelines in that it does not specify the use of a single set of technical standards, does not establish a set review procedure, and does not require public disclosure of project information prior to final funding decisions. Adherents to the Common Approaches are, however, expected to assess projects using specific standards selected by the ECA involved, categorize projects according to environmental risk level, and annually report to the OECD information on environmentally sensitive projects. When the OECD members developed the Common Approaches, they effectively established a framework to create or update their own ECA environmental review policies. Most OECD members have taken action to implement the Common Approaches’ provisions. Some members, including Belgium, Greece, Hungary, and Portugal, did not previously have any environmental review practices but since adopting the Common Approaches have taken steps to create them. These include hiring staff to review projects for environmental concerns or training current staff to do so and implementing procedures for reviewing potential projects. Many of the members that had environmental policies in place before adopting the Common Approaches have revised those policies since January 2002 to adhere to the Common Approaches. For example, as shown in appendix IV, ECAs in the six countries we visited have made revisions based on the provisions of the Common Approaches. Other OECD members have made similar revisions. For example, Norway introduced an environmental review policy in 1998 but reviewed it in 2003 to be sure it conformed to the Common Approaches. Most OECD members are now following similar basic procedures for reviewing sensitive projects. For example, most of the countries we visited require applicants for financing to complete a questionnaire regarding the potential environmental impacts of their proposed project, which the ECA uses to categorize the project. Projects likely to have significant adverse environmental impacts are placed in category A, while projects with questionable environmental impacts are classified as category B. Most ECAs place projects with little or no potential environmental impact in category C. Most ECAs require applicants to complete an environmental impact assessment if their projects are placed in category A (high risk of environmental impact). ECA projects may be approved despite adverse environmental impacts. Each ECA we visited relies on the judgment of its experts to evaluate the overall environmental impact of projects. Moreover, several ECAs, including Ex-Im Bank, allow their Boards to approve projects, notwithstanding the results of the environmental review. For example, Canada's ECA cites grounds where it could approve projects with adverse impacts under certain circumstances, including if it believes that the project represents an opportunity to improve environmental conditions in the host country or transfer environmentally sound technology and services. Despite the commonalities among OECD members’ environmental impact review systems, differences exist in how ECAs review potential projects and report on projects they undertake. These differences involve the application of technical standards and the disclosure of certain information. OECD members vary in terms of the technical standards they use to assess environmental impacts. We found that it is common for members to use World Bank technical standards for their reviews. For example, most countries review projects for compliance with World Bank technical standards regarding air quality, greenhouse gas emissions, water consumption, and waste management (see table 2 for selected examples of air emissions and water quality not-to-exceed standards). While most members use World Bank technical standards, many also look to standards that other organizations have established. The World Bank has not updated its technical standards since 1998, and some officials stated that they prefer standards that are more up to date. For example, several ECA officials said they use World Bank standards in the majority of cases; but in some situations, standards set by the World Health Organization or the European Union are more appropriate or current. Canadian ECA officials reported that they use standards of the World Bank, World Health Organization, Canada, and regional development banks as benchmarks in their reviews. The French ECA established its own set of technical standards for three sectors. These sectors involve the most environmentally sensitive projects and represent a large portion of France’s ECA-financed exports: conventional thermal power plants, large dams, and oil and gas projects. The standards contain a minimum set of criteria, which is largely linked to World Bank standards. In addition, French ECA officials said they encourage but do not require applicants to meet best practice standards, based on the best available technology or practices within the project’s sector. The German ECA, in contrast, does not rely on a defined set of environmental standards. It requires that all projects meet the environmental standards of the country in which the project is being constructed. German ECA officials stated that if the host country’s standards are not comparable with internationally recognized standards or German national environmental standards, additional information is required before approval. ECAs do not commonly follow the World Bank safeguard policies on social impacts. During the OECD negotiations there was no consensus on how to account for these impacts, so they are not a part of the Common Approaches. However, some ECAs have taken steps to include considerations for social impacts in their environmental standards. For example, the British ECA requires applicants to answer questions about social and human rights impacts during the screening process. Projects that will have social impacts must submit a social impact assessment or some mitigation plan to address those potential impacts. The Japanese ECA has also included provisions on social impacts, including impacts on indigenous peoples, in its environmental policy.