IDB example should serve as a warning to Congress

0 Comments | Insight on the News, March 18, 2003 | by John M. Fitzgerald

Martin Edwin Andersen's recent series of reports on the Inter-American Development Bank (IDB) prompts me to ask whether the members of Congress who chair the foreign-operations subcommittees that fund these institutions will heed the warnings inherent in these stories and require greater controls and real remedies when these banks fail to maintain proper standards.

From March 2000 to October 2002, I reviewed projects and policies of the World Bank and regional development banks as an environmental-policy analyst at the U.S. Agency for International Development (USAID). We in the policy bureau of USAID recommended in a November 2000 draft report to Congress that the Treasury Department undertake a number of reforms to better implement current law designed to protect public health and the environment, to bring more information to the public about the development banks, to prevent abuses of authority and illegal actions, and to remedy the harm that results from such actions. The Treasury Department objected to that part of the report and the new administration of USAID cut the recommendations from the final version.

Precautionary procedures matter. The IDB has approved funding for environmentally harmful dams without completing environmental assessments and reviewing alternatives to these dams before construction began. U.S. law requires that assessments be done before projects are approved so that the economic and environmental effects of alternatives can be weighed by the board of directors before the water is over the dam, so to speak--not after the dams are built.

Cutting corners in one area often is linked to cutting corners in other areas. Let's hope Sen. Mitch McConnell (R-Ky.) and Rep. Jim Kolbe (R-Ariz.) take steps to improve the law or at least ensure that Treasury Secretary John Snow will enforce the law and control these problems before giving Treasury another billion dollars and three years of authority to fund these banks.

John M. Fitzgerald
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