Virginia Journal of International Law
Summer, 1995
35 Va. J. Int'l L. 777
Environmental Reform at the World Bank: The Role of the U.S. Congress
Ian A. Bowles * and Cyril F. Kormos **
* Vice President for Conservation Policy Programs at Conservation International, a Washington D.C.based nonprofit organization which supports conservation of tropical forests and other endangered
ecosystems in more than twenty countries. Prior to joining Conservation International in 1991, Mr.
Bowles served as Legislative Assistant in the U.S. House of Representatives where he worked on issues
related to foreign affairs and international development assistance.
** M.Sc., International Political Economy, London School of Economics; J.D. expected 1996, George
Washington University Law School. Mr. Kormos is a Research Associate at Conservation International.
The authors would like to thank the following people for taking time to be interviewed for this Article:
Glenn Prickett, Chief Environment Advisor for the U.S. Agency for International Development; E.
Patrick Coady, former U.S. Executive Director of the World Bank and Conservation International Senior
Fellow; Bruce Rich, Environmental Defense Fund; Larry Williams, Sierra Club; Lawrence Summers,
Deputy Secretary of the Treasury; Congressman Barney Frank; World Bank advisor and former
Congressman Matt McHugh; Tim Rieser of Senator Patrick Leahy's office; Alec Echols of the National
Fish and Wildlife Foundation; Robert Gustafson of Congressman John Porter's office; David Wirth,
Associate Professor of Law, Washington and Lee Law School; Alex Shakow, Judy Maguire and Robert
Goodland of the World Bank; Chad Dobson, the Bank Information Center; Charles Dallara, former
Assistant Secretary of the Treasury; Jeff Morrelli, former staff person for the House Committee on
Banking; Mark Murray, House Committee on Appropriations; Jonathan Sanford, Congressional Research
Service; Abby Sutherland, Bretton Woods Committee; Brian Crowe, Mark Rentschler, David Joy and
Mike Kaplan of the Treasury Department; and Susan Levine of the Overseas Private Investment
Corporation. All were generous with their time and many provided valuable comments on early drafts.
SUMMARY:
... Donor countries continue to provide financial support to the Bretton Woods institutions in the hopes of
spurring development and opening new markets, but their assistance has not been without increasingly
vocal calls for reform of lending practices, particularly with regard to the environmental impact of
international projects. ... It begins with a brief summary of the congressional and executive branch
frameworks for interaction with the World Bank and other MDBs. ... As a result, the MDBs were forced
to enter into a dialogue with NGOs and to consider the possible negative effects on congressional funding
that might result from alienating these groups. ... For example, the legislation amended the IFIA to
reemphasize the need for greater cooperation between the World Bank and NGOs and to instruct the U.S.
executive director to push for procedures that would give NGOs and affected parties access to
information on projects before submission to the Executive Board. ... As the above account of
congressional legislation concerning environmental reform of the MDBs indicates, there has been a
progression from hearings in the early 1980s to the enactment in the late 1980s and 1990s of a large body
of policy guidance and a number of limitations on the ability of the U.S. executive directors at the MDBs
to vote in favor of individual projects. ...
TEXT:
[*777]
I. Introduction
More than fifty years ago, the world's major economic powers met at the Bretton Woods Conference and
created the World Bank n1 and the International Monetary Fund (IMF). Since their [*778] creation, these
institutions' influence on the economic affairs of industrialized countries has diminished significantly, but
their impact on the economies of developing countries has become pervasive. n2 Donor countries
continue to provide financial support to the Bretton Woods institutions in the hopes of spurring
development and opening new markets, but their assistance has not been without increasingly vocal calls
for reform of lending practices, particularly with regard to the environmental impact of international
projects. n3
In the early 1980s, a number of U.S. environmental groups, n4 working in collaboration with developing
country partner organizations, actively began to publicize the adverse environmental impact of World
Bank lending. They charged that World Bank and IMF policies promoted the unsustainable use of natural
resources, failed to provide for sufficient public access to information and did not allow local community
participation in project development. What has unfolded over the last ten years is a fascinating story of
how public activism spurred the U.S. government to demand significant changes in the lending
procedures of the world's largest development institution. n5 This Article examines the particular role
Con- [*779] gress has played in promoting environmental reform of the World Bank. n6
Congressional activism toward the World Bank raises a number of questions: What are the appropriate
roles of the legislative and executive branches in directing U.S. policy toward multilateral institutions like
the World Bank? To what extent does the change of political parties in the executive and legislative
branches affect Congress-World Bank dynamics? What are the effects of drafting specific and directed,
rather than vague and open-ended, legislation? Are the various policy goals and reforms sought by
Congress always compatible?
This Article attempts to answer some of these questions in light of environmental reform of the World
Bank. Section II reviews relevant congressional legislation and related actions n7 concerning the World
Bank since 1983. Section III attempts to answer some of the legal aspects of the questions posed above,
including the debate about the proper role of the legislative and executive branches under the World Bank
Articles of Agreement, the constitutional issues related to foreign assistance, and the predominant use of
appropriations, not authorization, legislation as a vehicle to dictate U.S. policy toward multilateral
development banks (MDBs). Section IV examines six specific changes in the World Bank and discusses
the role Congress may have played in their evolution. It also discusses the efficacy of different types of
legislation in effecting change at the World Bank. Section V concludes by considering the costs and
benefits of congressional activism on environmental reform of the World Bank and speculates about the
role of political parties and nongovernmental organizations (NGOs) in changing World Bank policies.
II. Congressional Legislation on Environmental Issues and MDBs
This Section reviews congressional legislation related to environmental issues and the World Bank. It
begins with a brief summary of the congressional and executive branch frameworks for interaction with
the World Bank and other MDBs. It then summarizes [*780] the different types of legislation available to
Congress to influence World Bank policies. Finally, it reviews the actual legislation, beginning in 1983
and including a short discussion of some of the historical events in the early 1980s that set the tone and
pattern of congressional involvement in these issues.
Congressional involvement in MDB issues is divided between authorizing and appropriating committees.
n8 The authorizing committees are charged with the enactment of legislation to authorize U.S.
participation in and annual appropriations to the MDBs. Although the purpose of the authorizing
committees is to provide policy guidance and the purpose of the appropriating committees is to allocate
budgetary resources, these roles have become somewhat blurred, particularly in the foreign affairs arena.
n9 Congress has not enacted a comprehensive foreign assistance reauthorization act since 1985. n10 Thus,
most of the relevant MDB legislation has been enacted by the appropriations committees in consultation
with the authorizing committees. n11 The use of annual appropriations to enact authorizing legislation
creates two distinct types of law: appropriations law that applies only during the fiscal year for which it is
enacted and law that amends the U.S. Code and remains permanent until repealed.
Although Congress authorizes U.S. participation in the MDBs and provides funds for this purpose, the
Secretary of the Treasury formally represents the U.S. government at the MDBs in his capacity as a
governor of the banks. The MDBs are independent international organizations and are run by their own
independent management. Their boards of executive directors, which are in continual session, supervise
daily operations and oversee all loans. The President appoints the U.S. executive director who reports to
[*781] the Secretary of the Treasury through the Assistant Secretary for International Affairs.
A. Types of Legislation
Congress has three principal types of legislation available to influence MDBs: policy guidance, voting
restrictions and the power of the purse. n12 In general, policy guidance states congressional findings and
U.S. government policies. For example, in 1988, Congress enacted legislation that stated, "United States
assistance to the multilateral development banks should promote sustainable use of natural resources and
the protection of the environment, public health, and the status of indigenous peoples in developing
countries." n13 Other forms of policy guidance give instructions to the U.S. executive directors of the
MDBs to pursue certain policies through the "voice and vote" of the United States n14 and to provide
benchmarks against which to measure future progress. n15
The second type of legislation consists of voting restrictions for U.S. executive directors. The "Pelosi
Amendment," for example, requires the U.S. executive director at the World Bank to abstain from any
vote on an action that "would have a significant impact on the environment" unless the board of directors
and affected groups have been provided with an Environmental Impact Assessment (EIA) at least 120
days in advance of the vote. n16 Similar voting restrictions have also been used for political reasons and
for retribution against countries with poor human rights records. n17
The use of conditions is the third major type of legislation used by Congress in this context. As an
example, for fiscal year 1993, Congress conditioned the release of $ 30 million it had appropriated for the
Global Environment Facility (GEF) on receipt of certifica- [*782] tion by the Secretary of the Treasury
that certain policies and procedures had been established. n18 Conditional appropriations are
uncontroversial in the domestic context because the Constitution gives Congress the power of the purse.
n19 Congress is free to determine the amount of funding it provides for any given program, to set
conditions for disbursements or even to earmark part of its contribution. In the international context,
however, the legal validity of such actions is less certain. n20
B. Review of Relevant Legislation
This Section provides a summary of relevant actions taken by Congress in an effort to change MDB
environmental policy. House and Senate reports have been included along with enacted legislation in
order to show not only the evolution of congressional concerns about MDBs' policies on the environment,
but also their influence on the MDBs' actions.
1. Early Congressional Action: 1983-1986 n21
Until the early 1980s, the World Bank was relatively free from outside pressure and interference on
environmental issues. The U.S. government had not incorporated environmental considerations into its
policies and Congress had failed to provide any meaningful oversight. n22 Congress and the executive
branch viewed the World Bank as an important economic tool for promoting capitalism worldwide, and
although the United States had vigorously encouraged a wide range of policy changes in the World Bank,
n23 it paid little attention to the potential environmental impacts of Bank lending. n24 Congressional
policy began to change in 1983 as Con- [*783] gress opened an environmental flank in its battles to direct
the World Bank.
As a result of lobbying by a number of environmental groups, the House held a series of hearings between
1983 and 1984 to address the impact of MDB lending on the environment. n25 Congress had not
previously addressed this issue, despite a growing body of criticism from the academic and NGO
communities concerning the potentially disastrous environmental effects of large-scale development
projects. These hearings, therefore, served as an important legislative catalyst. In response to graphic
testimony from the environmental community and indigenous rights groups, n26 the House produced the
Patterson Recommendations, a series of draft recommendations that laid the groundwork for a decade of
congressional policy guidance and benchmark recommendations, despite the fact that they were never
enacted. n27 The recommendations focused primarily on access to information and on accountability. n28
Most importantly, they created a basis for further [*784] congressional action and signaled an important
degree of substantive engagement in these issues. n29
Similarly, the Senate began to address environmental concerns in 1983 and 1984. Brazilian and U.S.
environmental NGOs had become increasingly concerned with the Polonoroeste project, a massive rural
development program in Rondonia, Brazil jointly funded by the World Bank and the International
Development Bank. n30 In a 1984 letter to World Bank President A.W. Clausen, the NGOs raised
specific concerns and claimed that Polonoroeste was a potential environmental disaster. n31 When the
chief of the World Bank's Brazil Division responded on behalf of Clausen, he declined to address the
NGOs' specific concerns and insisted that environmental priorities had played a key role in planning the
project. n32 Disturbed by the World Bank's poor response, the NGOs took their concerns to Senator
Robert Kasten. n33 Senator Kasten asked Clausen to respond in full to the NGOs' concerns and indicated
the bank should give the NGO letter the same attention it would have received if it had been from him.
n34 The Senator also warned then-Secretary of the Treasury Donald Regan that the Bank's failure to
respond to NGO concerns regarding the Polonoroeste project could only erode the already weak support
for MDBs in the Senate. n35 Ultimately, the World Bank provided a detailed response and suspended
loan payments to the Polonoroeste project but not without further meetings and interventions from
Kasten. n36
This episode is important for two reasons. First, it demonstrates that members of Congress were willing to
dispense with the standard protocol of working through the Treasury Department and, [*785] instead,
personally investigate World Bank loans on the behalf of environmental NGOs themselves. As a result,
the MDBs were forced to enter into a dialogue with NGOs and to consider the possible negative effects
on congressional funding that might result from alienating these groups. Secondly, the debate marked the
other major trend in congressional action on MDB and environmental issues - the use of specific project
cases to set precedents. In future years, such cases would often be used as the basis for U.S. demands for
changes in the way MDBs addressed environmental issues. n37
In 1985, Congress began drafting legislation addressing the MDBs and the environment in earnest, and
passed the first major piece of legislation on this issue. The House identified five factors that had
prevented effective and sustainable development in the past. n38 First, there had been a lack of
coordination between donor countries and international NGOs. Second, there was an overreliance on topdown project planning at the expense of grass roots participation. There was also a lack of environmental
or natural resources impact assessment during the initial project stages. Fourth, borrower countries were
unable to assess adequately the environmental and natural resource capacities of their countries when
requesting loans. Finally, there was an inadequate exchange of information concerning hazardous
technologies and chemicals. n39 The House stressed that unless projects were designed better from their
inception, the "U.S. will continue to find itself in the position of trying to remedy an ecologically and
culturally disastrous situation after the damage has already been done." n40
Likewise, the Senate expressed concern "that the MDBs have not adequately considered the potential
unacceptable environmental consequences of many of the projects that are selected for funding" n41 and
stressed that the health of local ecosystems in developing countries was vital to regional and global
ecology. n42 In addition, the report stated that projects that were not environmentally viable would not be
economically viable either, and warned that poorly planned projects were ultimately counter-productive
[*786] and set back development efforts. n43 The Senate report also emphasized that simple policy
statements on the part of the MDBs would not be an acceptable substitute for action, and that the Senate
Committee on Foreign Relations was including bill language instructing the U.S. executive directors to
encourage MDBs to hire professionals responsible for evaluating the environmental impacts of proposed
and ongoing projects. n44
In its first major piece of legislation to address environmental concerns with respect to MDBs, Congress
instructed the U.S. executive directors to promote change at the banks. n45 Specifically, Congress
directed the executive directors to promote an increase in environmentally trained staff to review projects
and to promote institutional changes to facilitate cooperation between the borrower country and MDB
staff. n46 The legislation also encouraged MDBs to involve both borrower country government officials
and conservation or indigenous peoples NGOs in planning and strategy sessions. n47 Congress mandated
the U.S. executive directors to call for more lending for environmentally beneficial projects, n48 to
advocate the establishment of training programs for natural resource planning and program development
n49 and to push for a special board meeting to discuss ways of improving environmental performance.
n50 Moreover, the legislation targeted U.S. government agencies, requesting that a "thorough evaluation"
within the U.S. government be conducted to address problems associated with development projects as
well as the adequacy of existing measures to cope with these problems. n51 It also called for a report from
the Treasury Department outlining MDB progress on implementation [*787] of the various measures in
the legislation. n52 Finally, the bill directed the Secretary of the Treasury and the Secretary of State to
initiate discussions with the representatives and ministries of other donor or lending countries. n53
Many of these provisions were restated the following year in the 1986 legislation. The House and the
Senate remained critical of the MDBs' inattention to environmental concerns, with the Senate striking a
more critical tone than its counterpart. The House expressed concern over the "considerable new evidence
that these institutions are continuing to finance large-scale, ecologically and culturally disruptive projects
without adequate consideration of the alternatives that may be environmentally more beneficial and, in
some cases, economically less risky." n54 As a result, the report included a general provision, later
enacted, that addressed "management, staffing and program reforms." n55 The report also included in the
general provision the requirement that the Department of State improve the early warning system n56 so
that alternatives which would eliminate or reduce potentially adverse environmental impacts could be
discussed. n57
The Senate Committee on Appropriations, however, reduced MDB funding because the MDBs had failed
to address the Senate's specific environmental concerns. n58 The Senate expected to see "documentary
evidence" of environmental reform at the banks [*788] and was "appalled at the lack of fundamental
principles of environmental science utilized to make final recommendations on selecting projects for
funding." n59 Finally, the report indicated that in the future the committee would be concerned
particularly with protection and conservation of wetlands. n60
In 1986, Congress enacted legislation n61 addressing MDBs and the environment which not only restated
portions of the 1985 legislation, n62 but also included important new provisions. Despite its
thoroughness, however, it was never codified, and its statutory authority only extended to the funds
appropriated for fiscal year 1987. n63 One new provision required U.S. executive directors to encourage
borrower countries to "fully inform local communities and appropriate non-governmental organizations"
of project planning to allow them to participate in the process. n64 It also charged them with promoting
the implementation of plans for sustainable management and rehabilitation of natural resources n65 and
stressed the need for more efficient energy consumption in borrower nations. n66 The legislation
recommended that the MDBs establish a project review period lasting a minimum of four weeks between
staff recommendations to the board and board action. n67 It also laid out several requirements for the U.S.
Treasury Department and AID missions. n68 Finally, it directed the U.S. executive directors to attempt to
obtain changes that would "eliminate or mitigate" the environmental impacts of destructive development
projects. n69 [*789]
2. Amending the International Financial Institutions Act: 1987-1988
Although the House and Senate reports essentially reiterated the importance of the previous years'
provisions, Congress took an important step toward the formation of a more permanent body of statutory
policy guidance addressing MDBs when it amended the IFIA. The House expressed cautious optimism
with ongoing institutional reforms at the MDBs, n70 and its report cited several "positive steps,"
including the addition of new environmental staff at several banks and a "consultative meeting" held by
the Inter-American Development Bank (IADB) with borrower country agencies, NGOs and IADB staff to
discuss ways to promote more environmentally friendly lending. n71 The report also noted, however, that
funding for major projects continued without adequate environmental safeguards. n72 In response to the
continued lack of environmental safeguards, the report encouraged U.S. executive directors to continue to
press for additional environmentally trained staff and for smaller-scale projects, and it stated that AID
should continue its work on an early warning system. n73
Senate Report 236 n74 continued in much the same tone as the previous year's report. n75 Perhaps most
importantly, the Senate report stated that "MDB management would be well advised to give some thought
to the fact that the distribution of funds to these institutions has been shaped largely by the unequal action
of the various MDB's in responding to the reforms called for" in legislation enacted in 1986. n76 [*790]
In its amendment to the IFIA, n77 Congress criticized the performance of the MDBs n78 and set out
detailed instructions to U.S. executive directors and relevant U.S. government agencies to work toward
MDB reform. n79 For example, the amendment established the early warning system requiring AID, U.S.
embassies, the Department of the Treasury, the Department of State and any other relevant agencies to
review loan proposals "well in advance" of approval, to conduct an investigation when "there is reason to
believe that any such loan is particularly likely to have substantial adverse impacts" and to make the
results of the investigation public unless the information is classified for national security reasons. n80 It
also mandated the creation of a "system for cooperative exchange of information with other interested
member countries on assistance proposals." n81 Finally, the amendment called for more staff to assess
sociocultural and environmental impacts of loans, for greater participation by borrower countries' NGOs
and indigenous peoples, and for full availability of documents relating to the impact of MDB loans. n82
[*791]
In addition to the above changes, the amendment changed the IFIA's policy guidance section. n83 Under
the new policy, U.S. participation in international financial institutions was "predicated on the
implementation of programs to promote environmentally sustainable economic growth and sustainable
management of natural resources." n84 The U.S. executive directors had to promote a requirement under
which all MDB lending and adjustment programs would include environmental impact analyses and legal
protection for indigenous peoples. n85 The amendment also sought greater policy-based lending for
natural resource management and conservation of biologically important ecosystems, such as wetlands.
n86 Congress ordered the Treasury Department to report on the feasibility of reducing developing country
debt through an increase in "debt for conservation initiatives." n87 Congress also required the Secretary
of the Treasury, along with the Secretary of State and the Administrator of AID, to "initiate discussions"
to improve the environmental performance of MDBs. n88 Finally, the amendment enhanced the early
warning system by requiring AID, the Treasury Department and the State Department to share
information obtained through the early warning system with interested borrower or donor countries. n89
Congress did not take much new action in 1988 with regard to the MDBs and environmental concerns,
although it did amend the [*792] IFIA again. The House n90 and Senate n91 reiterated that compliance
with legislation enacted in previous years remained critical. The Senate report considered
"implementation of environmental legislation to be vitally important to the future operations" of the
MDBs. n92 Funds appropriated for the World Bank for fiscal year 1988 had been approved in large part
because the World Bank had announced in May 1987 that it would undertake various reforms. n93 The
Senate report expressed "particular concern" with the slow pace of implementation for these reforms. n94
The Congressional amendment to the IFIA n95 required the U.S. executive director to the World Bank to
initiate discussions with other executive directors at the World Bank, the International Finance
Corporation and the IDA to provide "advice and assistance" to countries interested in facilitating debt-fordevelopment swaps. n96 It also mandated them to discuss financing human welfare and natural resource
programs in Sub-Saharan Africa n97 and to encourage other executive directors to consider a borrower
country's history of compliance with agreements surrounding debt-for-development swaps as an
important factor in awarding loans. n98
3. A Landmark Year: 1989
Congress took significant steps with regard to the environment, through both authorizations and
appropriations legislation, making 1989 a landmark year. In general, the 1989 appropriations process was
complicated for two reasons. First, President Bush vetoed the first version of the Foreign Operations,
Export Financing and [*793] Related Operations Act. n99 Second, Chairman David Obey n100 resisted
administration pressure and adamantly refused to make any funds available to the World Bank. n101
Chairman Obey claimed that developing countries were using World Bank loans - and therefore
American taxpayer dollars - to repay commercial debt, and he objected strongly to this practice. n102
Although funds were ultimately restored in the House-Senate conference at the Senate's request, the
withholding of appropriations by the House was an important political gesture. n103 Chairman Obey
probably did not intend to reduce dramatically World Bank funding, yet his decision signaled serious
discontent even among supporters of MDB funding. Even though the episode was unrelated to
environmental considerations, it reinforced the message that Congress was monitoring the MDBs
carefully and that its appropriation of funds for MDBs was by no means an automatic process.
The 1989 House report addressed energy conservation and efficiency, stating that MDBs can and should
work to overcome the "technical, institutional and political constraints in developing countries [which]
often discourage investments in end-use efficiency and renewable energy." n104 Although the report
commended the World Bank for its decision to triple annual lending to the forestry sector, it noted that
despite rhetoric, the Bank had not invested a great deal in sustainable tropical forestry projects. n105
Moreover, as a result of the secrecy of the World Bank forestry project negotiations, local citizens were
often unaware of the impact forestry projects would have on their livelihoods and could not provide the
input essential to project success. n106 The report also emphasized the need for greater participation by
local NGOs in all project planning and stated that systematic consultation with [*794] these groups
should become an "integral and mandatory part of the project cycle." n107
With respect to the IMF, the House stated that the IMF's economic stabilization prescriptions could
dramatically affect the environment as developing countries turned toward rapid development of natural
resources to address short-term balance of payments problems. n108 The report questioned the wisdom of
IMF policies that placed pressure on debtor countries "to forgo needed long term environmental, social
and public health investments to meet short term adjustment criteria" and requested the Secretary of the
Treasury to report on ways in which the social and environmental impacts of IMF lending agreements
could be evaluated. n109 Finally, the report expressed "support for debt-for-nature swaps as a small but
creative and promising contribution to the overall debt problem in the developing world." n110
In the actual appropriations legislation, Congress stated "it is the policy of the United States that
sustainable economic growth must be predicated on the sustainable management of natural resources."
n111 The legislation included elaborate directions to the U.S. executive directors that focused primarily
on the expansion of programs addressing global climate change. n112 It instructed the [*795] Secretary of
the Treasury to report annually to Congress regarding MDB environmental progress. n113
In addition to addressing a range of key environmental issues through appropriations legislation,
Congress enacted important authorization legislation, the International Development and Finance Act
(IDFA) of 1989. n114 The IDFA contained the Pelosi Amendment, which prevents U.S. executive
directors of MDBs from voting in favor of any proposed action unless an EIA has been conducted at least
120 days before the loan comes before the board of directors for a vote. n115 The EIA must be made
available to the board of directors, the rest of the Bank, affected groups and local NGOs before the U.S.
executive director can support the project. n116 The amendment also requests the U.S. executive director
to lobby the bank for public access to the assessments in member countries and to consult with the
executive directors of other member countries regarding the development of procedures for systematic
environmental assessment of loans. n117 Although its sponsors originally intended to require public
availability of EIAs, the amendment, as enacted, allows the U.S. executive director to bypass the
disclosure requirement entirely if the Secretary of the Treasury "finds compelling reasons to believe that
disclosure . . . would jeopardize the confidential relationship between the borrower country and the
respective bank." n118
The IDFA also instructs the executive directors to undertake negotiations to create environmental
departments at all MDBs which will "promote, coordinate and facilitate debt-for-nature [*796]
exchanges" n119 and to assist in restructuring private debt. n120 In addition to addressing developing
countries' debt, Congress included several provisions similar to those in the 1987 amendment of the IFIA.
n121
4. Continued Criticism of Environmental Reform at the World Bank: 1990-1991
Although the House and Senate remained critical of MDB progress on environmental issues, Congress
voted to fund the ninth replenishment of the IDA in 1990. The House focused its critique on energy and
forestry issues. n122 The House report argued for the consolidation of smaller, energy efficient projects to
facilitate financing. n123 The report also maintained that it was not enough for MDBs to avoid harming
tropical forests; MDBs must actively contribute to conservation and regeneration. n124 Finally, the House
report stressed that it expected an annual report from the Secretary of the Treasury describing progress in
these areas, and it specifically noted that this requirement existed above and beyond reporting
requirements enacted the previous year. n125
Senate Report 519 proved to be more confrontational than its House counterpart. n126 The report stated
that despite the numerous benefits MDBs could bring to the international community and to [*797] the
United States, the banks had a weak constituency in Congress; public support for institutions that
promoted environmental degradation and failed to address the "root causes of underdevelopment" was
understandably low. n127 Unless MDBs became "much more responsive" to the problems of poverty,
environmental degradation and population growth, the report warned that "the [Senate] Committee ... [on
Foreign Relations'] continued support for the MDB's cannot be taken for granted." n128 It acknowledged
that there had been some improvements but maintained that MDB performance with respect to the
environment remained "far from satisfactory" and that MDBs continued to fund destructive large-scale
projects. n129 The report concluded, however, that additional legislation would not be particularly helpful
in addressing environmental concerns. n130
The strong language in the Senate report notwithstanding, Congress voted to fund the ninth replenishment
of the IDA and enacted yet more instructions for the World Bank's U.S. executive director. n131 For
example, the legislation amended the IFIA to reemphasize the need for greater cooperation between the
World Bank and NGOs and to instruct the U.S. executive director to push for procedures that would give
NGOs and affected parties access to information on projects before submission to the Executive Board.
n132 In addition to creating these new instructions to the U.S. executive directors, Congress consolidated
and narrowed its executive director instructions from the previous year. n133
Finally, Congress imposed restrictions on the money it appropriated to the World Bank. It withheld
twenty-five percent of funds for the General Capital Increase pending submission of a report [*798] from
the Secretary of the Treasury detailing the changes the World Bank had implemented for fiscal year 1990
as well as the changes expected in fiscal 1991 with respect to energy, forestry conservation and family
planning activities. n134 Although the reports were duly submitted and the money released, Congress had
made it clear that release of funds was not automatic. n135
Until 1991, congressional involvement in World Bank environmental issues focused primarily on
reducing or eliminating negative environmental impacts. n136 That year, however, the World Bank, the
U.N. Environment Program and the U.N. Development Program established the Global Environment
Facility (GEF). It was a three-year pilot program chosen as the interim financial mechanism of the
Conventions on Climate Change and Biological Diversity signed at the 1992 U.N. Conference on
Environment and Development (UNCED or Rio Earth Summit). n137 The GEF represents the World
Bank's most significant effort to proactively protect the environment. It posed, therefore, a different
challenge for Congress: finding ways to bolster a program created to have a positive impact rather than
mitigating or reducing programs that had a deleterious impact on the environment. The GEF is also
notable because its creation was led, not by the U.S. government, but by European donors, in particular
France and Germany. n138
Although the House report which accompanied the unenacted appropriations legislation recommended
allocating $ 50 million in direct funding for the GEF, and stated that it expected AID to provide an
additional $ 50 million to fund GEF-associated projects, n139 Congress failed to pass a full
appropriations bill and thus did not fund the GEF. n140 Nonetheless, Congress later became [*799] a
pivotal player in efforts to restructure and prepare the GEF to become an operational institution after the
pilot phase. n141
5. Escalation in the Use of Conditions: 1992-1994
In 1992, Congress once again passed a full appropriations act for foreign operations, n142 and both the
House and Senate reports contained lengthy discussions on MDBs and environmental issues. House
Report 585 devoted most of its attention to the GEF, criticizing GEF funding. n143 It noted that in many
cases AID projects which were being used as credit for GEF appropriations were projects that would have
received funding anyway. As a result, no net increase in GEF appropriations was taking place. n144 The
report stated that "the Global Environmental Facility, appropriately restructured, will likely play an
important role in providing funds to developing countries under the recently negotiated Framework
Convention on Climate Change and the Convention on Biological Diversity" and accordingly, expressed
"dismay" that the GEF direct contribution was only $ 50 million. n145 Finally, the report emphasized that
MDBs were not systematically complying with the Pelosi Amendment's reporting requirements for
financing "private-sector economic development projects" and requested that the U.S. executive directors
push for better compliance. n146
By contrast, Senate Report 419 began by praising the Treasury Department's efforts to bring about
environmental reform and noted with satisfaction that despite an unfortunate lack of support from other
donors, these efforts were beginning to yield results. n147 In particular, the report cited the World Bank's
new environmental staff and forestry policy paper as evidence of positive and much-needed change. n148
The Senate report concluded, however, that despite these positive signs, the World Bank had not done
enough. "Renewable energy and energy efficiency projects" continued to represent too [*800] small a
fraction of Bank energy lending. n149 More importantly, even though it conducted EIAs with increasing
frequency, the World Bank continued to subsidize large infrastructure projects without "adequate concern
for environmental and social consequences." n150 The report also noted the critical need for better "water
and land resources" management and pressed the World Bank to develop a "comprehensive water
resource policy." n151
In light of these continued problems, the Senate report called for enactment of benchmarks in "energy
efficiency, tropical forest protection, environmental assessment, and resettlement of forcibly displaced
populations" for all MDBs. n152 These benchmarks, the first three of which had been mentioned in the
House report the previous year, n153 were to be met by mid-1993; failure to meet them would provide "a
clear basis to consider appropriate actions," such as withholding funds from MDBs in "future years."
n154
Congress once again amended the IFIA in 1992, enacting the proposed benchmarks and, for the first time,
making appropriations explicitly conditional on progress in conservation. n155 The amendment required
the Secretary of the Treasury and the Secretary of State to initiate bilateral discussions with officials from
member countries of the Organization for Economic Cooperation and Development (OECD) to obtain
international support for the benchmarks. n156 The Secretary of the Treasury had to report to Congress in
detail the results of these bilateral discussions n157 and the progress made by each MDB in meeting the
benchmarks. n158 [*801]
In addition to establishing benchmarks, Congress took the unprecedented step of conditioning the
appropriation of $ 30 million for the GEF on the implementation of procedures allowing public access to
GEF project information. n159 If the World Bank failed to implement these procedures by September 30,
1993, the funds would be redirected to AID for use in projects consistent with the GEF and the Global
Warming Initiative. n160 Unlike the benchmarks, which were flexible in that Congress only required that
the MDBs demonstrate progress in the areas mentioned, the GEF conditions involved the implementation
of actual procedures, allowing no room for partial compliance.
The use of conditions marked an important escalation in congressional involvement in environmental
reform at the World Bank. Congress provided the United States' first contribution to the GEF in the form
of an appropriation conditioned on specific, codified reforms. This aggressive approach helped frame the
debate over reform of the GEF. n161 In fact, the World Bank failed to make the requisite reforms by its
September 30, 1993 deadline, and the GEF funds were instead diverted to AID, as provided for in the
statute. n162
Congress renewed its criticism of the MDBs the following year in its appropriations legislation, although
on the whole it did not take much action on the issue. However, the World Bank's release of an internal
document, the "Wapenhans Report," n163 in the same year as the Morse Commission Report n164 made
the fiscal year 1994 appropriations process all the more controversial. The Wapenhans Report exposed
numerous management flaws as well as a declining project success rate at the World Bank. n165 The
release of the report [*802] also coincided with the negotiations for the tenth replenishment of the IDA,
thereby forcing Congress to make some difficult decisions. Congress responded by maintaining
legislative pressure on the MDBs and by escalating pressure on the World Bank in negotiations behind
closed doors. n166 The negotiations resulted in an informal agreement by Congress to authorize the first
two installments of the IDA's replenishment; Congress, however, would not authorize the third
installment unless the World Bank demonstrated real progress in responding to concerns raised by the
Wapenhans Report. n167 This compromise allowed Congress to continue its push for MDB reform, yet
provided more time for the parties concerned to implement those reforms.
The House n168 and Senate n169 reports continued the trend of previous years' reports. n170 In light of
the Wapenhans and Morse Commission Reports, the House report called for independent oversight
systems for the World Bank and the other international financial institutions. n171 It stressed that a new
system of decentralized project implementation at the MDBs would be a prerequisite for institutional
reform at the banks. n172 The report also recommended restricting funds from any institutions that did
not agree in advance to make all documents available to the U.S. governor or representative. n173 This
provision contained a substantial escape clause, however, that allowed documents to be withheld if the
gov- [*803] ernor or representative certified to the Committees on Appropriations that the confidentiality
of those documents was "essential to the operation of the institution." n174 Although this provision was
never enacted into law, it indicated that members of Congress might consider more drastic measures in
the future.
Although both the House and Senate reaffirmed the necessity for environmental reform, transparency
reform and greater cooperation with communities affected by World Bank projects, many
environmentalists had called for more drastic measures such as the total elimination of funding. The
House report, however, stated that sustainable development could not take place "in the absence of
functional national economies" and that "cutting off assistance would only lead to further economic
decline and increased poverty further aggravating environmental damage." n175 The report also justified
funding on the grounds that the congressional compromise on replenishment of the IDA contained
provisions to improve lending practices, especially with respect to the environment. n176 The House thus
sought a balanced approach to MDB funding. Its broad support for replenishment of the IDA signaled that
environmental reform realistically could not take absolute precedence over all other considerations. At the
same time, its threat to prevent authorization of the third installment served as a powerful means to keep
MDBs on the path to reform.
The Senate was equally critical of the MDBs and raised similar issues, including the lack of public access
to information and the need for an independent appeals panel to review projects. n177 According to the
report, "fundamental changes" at the World Bank would be crucial for the Bank to receive future funding.
n178 Furthermore, the United States would not be obligated to contribute to the World Bank until it
received a report from the Treasury Department detailing the World Bank's efforts at implementing
[*804] the environmental reforms referenced in the 1992 benchmarks. n179 The report also noted that its
1992 report had called for the promotion of water projects to alleviate environmental and economic
pressures for fresh water and requested information from the Treasury Department on the Bank's progress
in this area. n180
The legislation Congress finally enacted included a minor modification in the second condition for GEF
funding established by Congress in the previous fiscal year. For fiscal year 1993, Congress had stipulated
that procedures allowing public participation must exist before funds could be given to the GEF. n181 In
contrast, for fiscal year 1994, Congress delegated to the Secretary of the Treasury the discretion to release
GEF funding if he determined that the GEF implementing agencies were "in the process of developing"
clear procedures for public participation in GEF projects. n182 As a result, following the March 1994
GEF restructuring agreement, n183 the Secretary of the Treasury certified to Congress that its conditions
had been met, and U.S. funds were released to the GEF for the first time. n184 Congress also included a
number of instructions for the Secretary of the Treasury related to marshalling U.S. pressure for the
creation of "an independent entity" with "the authority and functions of an inspector general" for each of
the MDBs. n185
The 1993 negotiations surrounding the tenth replenishment to the IDA had several repercussions for
appropriations in 1994. Most importantly, authorization of the third installment of the tenth replenishment
was withheld pending further reform at the Bank. n186 Also, the Clinton Administration asked Congress
to refrain from drafting any new legislation addressing the World Bank to ensure that the Bank would
have time to implement the [*805] changes called for by Congress in previous years. Congress, however,
did enact several provisions related to environmental concerns and once again amended the IFIA. n187 It
added a provision entitled "Respect for Indigenous Peoples," which requires the U.S. executive directors
and the U.S representative to the GEF council to push for policies protecting "the territorial rights,
traditional economies, cultural integrity, traditional knowledge and human rights of indigenous peoples."
n188 Congress also passed a temporary provision related to implementation of the Wappenhans Report
recommendations under which only fifty percent of the funds appropriated for the IBRD would be
released. n189 Release of the remaining funds was contingent on a determination by the Secretary of the
Treasury that the World Bank was implementing the recommendations included in the "Next Steps," the
follow-up to the Wapenhans Report; the "Resettlement and Development" policy action plan; and the
Bank's 1993 "Disclosure of Operational Information" procedures. n190 Congress enacted similar
provisions with respect to the International Finance Corporation. n191 The Secretary of the Treasury did,
in the subsequent year, make positive determinations in both cases and the funds were released. n192
In 1994, the House assessed MDB progress in implementing the various reforms. n193 The report
supported the ongoing GEF restructuring, citing new procedures that provided access to information on
GEF projects, better procedures for consultations with NGOs and affected communities, a new
governance system mechanism allowing for individual projects, and an independent evaluation of the
GEF's pilot phase as justifications for including a $ 98.8 million direct contribution to the facility. n194
Although House [*806] Report 524 endorsed the administration's efforts to establish more stringent
project approval mechanisms, it noted that a "higher special voting majority and a lower number of
countries required to put an individual project on the Council agenda would have been preferred." n195 In
addition, the report endorsed the administration's attempt to make GEF resources available to other
agencies beyond the three implementing agencies. n196
The report recognized that reforms in operations and management were finally being implemented. There
were several positive changes, the most significant being the creation of the Public Information Center,
which was designed to increase the availability of previously restricted documents, and the Independent
Inspection Panel, which was designed to provide recourse for affected communities if World Bank
policies and procedures were not adequately implemented in any given project. n197
The House report, however, called for greater emphasis on projects for "energy conservation, renewable
energy, microenterprise, sustainable agriculture and forestry, public transport" and projects for reduction
of environmental degradation. n198 This signaled that even if progress was being made at the World
Bank management level, it had yet to be translated into tangible results on the ground. n199 In addition to
this criticism, the House also recommended that despite the Bank's efforts in making information more
readily available, Congress should continue to condition U.S. funding obligations on advance agreement
by the receiving institution to provide all documents requested by a U.S. governor or representative. n200
[*807]
The Senate report for 1994 presented a similar picture. n201 On one hand the report stated that the
committee had done its best to fully fund the MDBs, stressing the need to compensate for the arrears
caused by budget and policy considerations in previous years. n202 On the other hand, the report
emphasized that the same policy problems which had caused Congress to reduce contributions were still
at issue. Noting that the World Bank had wasted billions of dollars on "misguided projects or corrupt
governments" and that poverty levels had actually increased in many areas, the report suggested that the
fiftieth anniversary of the Bretton Woods agreement provided the bank with a good opportunity to do
some productive soul searching. n203 Although the report recommended that the United States continue
to play a leadership role - and thus continue funding - in pushing the World Bank towards further reform,
it stressed that it did not intend to make out a "blank check." It therefore made further World Bank
funding conditional upon a determination by the Treasury Department that reforms were being
implemented. n204
The Senate report also listed issues of particular concern, such as continued problems with the World
Bank's resettlement policy, the Arun III project in Nepal and the need for initiatives to address fresh water
development. n205 It encouraged the administration to use its influence to ensure that the GEF Secretariat
is as independent from its three implementing agencies as possible and to ensure that other agencies,
including NGOs, participate in project "selection and execution." n206 Finally, it reiterated that the GEF
should be as public and transparent as possible in its operation. n207
C. Summary
As the above account of congressional legislation concerning environmental reform of the MDBs
indicates, there has been a progression from hearings in the early 1980s to the enactment in the late 1980s
and 1990s of a large body of policy guidance and a number of limitations on the ability of the U.S.
executive directors at the MDBs to vote in favor of individual projects. In the last [*808] three years,
Congress has taken bolder steps to set statutory conditions on MDB funding and to withhold future
authorizations for IDA resources. The next Sections address some of the legal issues related to U.S.
participation in international financial institutions. This Article will then discuss six specific areas of
reform at the World Bank and draw links where appropriate to the congressional legislation discussed in
this Section.
III. Legal Issues
A. Introduction
This Section will discuss some of the underlying legal issues that affect the policy dialogues between
Congress and the executive branch and between the World Bank and the U.S. government. It begins by
summarizing the legal basis for criticisms of congressional activism in this area and then discusses the
specific legal issues at hand.
Critics at the World Bank argue that decision making at international financial institutions should be
governed solely by their boards of executive directors. n208 The process of approving a loan should be a
purely multilateral process, and lending institutions should never be held hostage by the legislature of any
one nation. n209 In addition, the Articles of Agreement for the World Bank and the IDA n210 do not
permit political considerations to play a role in loan approval; instead, decision making is based solely on
economic factors. In fact, the World Bank is not legally permitted to accept any funds appropriated
conditionally by a particular country. n211 Nevertheless, the World Bank continues to be sensitive to the
concerns of the legislature of its biggest donor. n212 [*809]
Critics in the U.S. executive branch, in particular at the Treasury Department, argue that for U.S. foreign
policy to be coherent and cohesive it must be formulated in one place only. According to one Bush
Administration official, "Congress clearly has the right to have policy views that the administration must
factor into its positions, but if such views are too rigid, they can undermine the administration's
effectiveness." n213 As a result, some critics argue that congressional input is not only counterproductive,
but most likely unconstitutional as well. n214 Indeed, the practice of attaching substantive policy
directives to appropriations bills is controversial and according to some critics, raises constitutional
questions. n215
The Treasury Department, however, is aware of the fact that Congress holds the power of the purse and
therefore the power to dictate policy. "Congress has had a major influence on U.S. policy toward the
MDBs," says Lawrence Summers, Undersecretary of the Treasury for International Affairs. n216 Despite
critics' objections, legislation passed by Congress remains, as a political and an economic reality,
impossible to deny.
B. World Bank Articles of Agreement
The World Bank has argued that donor country legislative pressure, such as that imposed by Congress,
contravenes the World Bank's Articles of Agreement, article IV, section 10 which states that:
The Bank and its officers shall not interfere in the political affairs of any member; nor shall they be
influenced in their decisions by the political character of the member or members concerned. Only
economic considerations shall be relevant to their decisions, and these considerations shall be weighed
impartially in order to achieve the purposes stated in Article I. n217
According to the World Bank's General Counsel, Ibrahim Shihata, this article provides conclusive
evidence that the Bank is meant to be an apolitical institution and that donor pressure is inappropri[*810] ate. n218 The language in this article is not nearly as conclusive as Shihata would infer.
Article IV, section 10 makes three different statements. First, the World Bank may not "interfere" in the
"internal political affairs of its members." n219 This provision is not relevant for this analysis because it
does not address the issue of donor country pressure. Second, the Bank should not be "influenced ... by
the political character" of its members. n220 At first blush, this clause seems to imply that the World
Bank must not be subject to political influences from member countries, a reading which would make
congressional legislative pressure improper. Upon closer examination, however, this language points to
another, more plausible, interpretation. Section 10 does not state that the Bank shall not be influenced by
the political "activities" of its members, a phrase which could reasonably be intended to refer to
legislative pressure or lobbying. Instead, section 10 speaks of political "character." Though the word
"character" is ambiguous, it strongly suggests that what the Articles of Agreement are primarily
concerned with are ideological considerations. In fact, this provision may have been included simply to
assure Communist bloc countries that the World Bank would not be used as an instrument to interfere
with political ideologies by withholding lending or through other means. n221
Third, the World Bank may base its decisions only on "economic considerations." n222 Unfortunately,
the phrase "economic considerations" is not defined in the World Bank Articles of Agreement. When read
in context with the rest of section 10, one definition would suggest that at the very least "economic"
means "not political." This inference, however, raises two problems. First, defining [*811] economics and
politics as entirely independent concepts is difficult. n223 As a practical matter, in many cases it may not
be possible to isolate political and economic factors when making a decision on a World Bank project. In
fact, the idea that large-scale development projects entailing loans of hundreds of millions of dollars could
ever be made in a political vacuum is unrealistic at best. Indeed, there have been a number of cases in
which politics were the primary motivation behind bank lending. n224 For example, the World Bank
declined to lend money for projects in Chile while the leftist government of Salvador Allende was in
power. Only after Augusto Pinochet took control in a 1973 coup did the country receive World Bank
funds. n225 Similarly, the Ceaucescu government in Romania, viewed as independent from the Soviet
Union, received significant funds after a series of "unprecedented exceptions" were made by the World
Bank to make lending possible. n226
Second, even if it were indeed possible to separate political and economic factors that might affect loan
decisions, to oppose a decision it would still be necessary to establish that the World Bank had based its
decision on political, rather than economic, factors. n227 In other words, a strict application of article IV,
section 10 would necessitate an analysis of the World Bank's intent in order to determine whether a loan
decision rested on valid criteria. Demonstrating conclusively that the Bank's approval or disapproval was
politically motivated would be almost impossible.
Shihata stresses the fundamentally apolitical nature of the process but concedes that political
considerations do play a part in World Bank decisions. n228 He seems to be distancing himself, not from
politics per se, but from the idea that partisanship or ideological preferences might create an unacceptable
bias in loan approval. For example, the Bank might decide to deny a loan because a borrower country's
government was too unstable to properly administer and implement the project. Although the decision
would be "politically motivated," political instability would be a legitimate reason to deny the loan. On
the other hand, denying a project because the Bank disagreed with the ideological leanings of the
borrower would seem to violate section 10. [*812]
How then does section 10 apply to congressional legislation aimed at environmental reform of the
MDBs? The proper interpretation would find that the legislation does not constitute interference into the
internal political affairs of a member country. The legislation is directed at the Treasury Department and
the World Bank's U.S. executive director, not the World Bank itself. Moreover, the threat of a reduced
contribution, not the "political character" of the United States, is the influential factor in World Bank
deliberations. Congressional actions therefore do not violate the second clause of section 10.
The final clause, which concerns economic versus political considerations, is more problematic.
Arguably, because the pressure originates in a legislative body, it is political in nature. The substance of
the legislation, however, is directed toward reducing the environmental destructiveness of projects; such a
goal is not fundamentally a political concern. Developing countries may have a legitimate right to
development and may believe they cannot afford the levels of environmental consciousness found in
developed countries, but this belief does not imply that environmental considerations are therefore
political. Congressional legislation that seeks to reduce or eliminate loans to countries with what
Congress considers to be problematic human rights records is more difficult to justify under section 10.
Nevertheless, it would be disingenuous to argue that concern for natural resources and the health of the
global environment is somehow an essentially political consideration.
The most credible argument asserting that congressional environmental legislation is improper is one
based on its effects in undermining the multilateral nature of the World Bank. Unquestionably, when
Congress passes legislation, it acts unilaterally with respect to other member countries. Moreover, if all
other member countries adopted similar restrictions on their contributions, the result could paralyze the
World Bank. n229 Concern about the ecological impact of World Bank projects is not confined to
Congress, however; the United States enjoys the support of many other countries in this matter, even if
this support is not always publicly expressed. n230 [*813]
More importantly, it is unclear that legislation constitutes unilateral action. Under the World Bank
Articles of Agreement, a member and the Bank may deal with each other "only through [the member's]
Treasury, central bank, stabilization fund or other similar fiscal agency." n231 This restriction ensures
that the Bank does not have to work with different branches of the same government who may make
conflicting statements. Simply because Congress passes legislation giving the U.S. executive director
instructions, or establishing conditions for U.S. contributions, it does not follow that Congress works
directly with the World Bank. Moreover, congressional legislation does not necessarily affect the
multilateral character of the Bank: even though the World Bank has made efforts to respond to
congressional criticisms, it is certainly at liberty to ignore the legislation completely.
C. Constitutional Issues
Even though congressional activism appears to be legitimate under the World Bank Articles of
Agreement, it nevertheless raises several U.S. constitutional issues. First, it calls into question the
principle of separation of powers. Under the Constitution, the executive branch bears the responsibility of
representing the United States abroad and formulates most U.S. foreign policies. n232 Congress,
however, has constitutional powers of its own which it can and does use to influence foreign policy. n233
Indeed, since World War II, Congress has become significantly more involved in foreign affairs. n234
The question, therefore, is the extent to which Congress can participate in this area without infringing on
the President's power or aggrandizing itself. Although this question continues to be the center of intense
debate n235 and cannot be [*814] resolved here, it is possible to evaluate the constitutional legitimacy of
legislation directed at World Bank reforms.
Second, assuming Congress can affect foreign policy, the means by which it exerts its influence becomes
an issue. Although article I, section 9 of the Constitution grants plenary appropriations power to
Congress, this power is not listed with the enumerated powers in section 8. n236 Because appropriations
is not listed among these other, more substantive powers, some argue that the appropriations process
cannot be a vehicle for policy change, but rather, addresses solely the distribution of funds. n237 A more
accurate interpretation, however, would find that appropriations legislation is constitutionally
indistinguishable from other legislation and is thus a legitimate means to advance policy interests. n238
In United States v. Curtiss-Wright Export Corp. n239 the Supreme Court recognized the "very delicate,
plenary and exclusive power of the President as the sole organ of the federal government in the field of
international relations." n240 The Court noted that although the Constitution requires the Senate to
provide "advice and consent" on treaties, it rests the power to negotiate with other sovereigns entirely
with the President. n241 The Court further stated that "Congress itself is powerless to invade" this area of
authority. n242
The Court seems to have based its decision in Curtiss-Wright on practical considerations and simple
deductive reasoning. The substantial risk of "serious embarrassment" and "harmful results" which exists
when several branches of government (or in the case of a divided Congress, different members of the
same branch) speak for the country in international affairs led the Court to use strong language in defining
the executive's power. n243 In his opinion, Justice Sutherland distinguishes between powers over
"internal affairs" and powers over "external or foreign affairs." n244 The restrictions on federal power
implied by Congress' enumerated powers and the "necessary and proper" clause of article I are restrictions
that apply exclusively in the "internal affairs" con- [*815] text. n245 The federal legislative powers
described in the Constitution are exceptions "carved" from the legislative powers held by the states at the
time the Constitution was drafted. n246 Because neither the colonies nor the states ever had the power to
participate in international affairs, Sutherland argues, the source of federal power in international affairs is
therefore derived from the Crown, the original holder of the power to represent the colonies
internationally. n247 As "the sole organ of the federal government in the field of international relations,"
therefore, the executive branch is the appropriate branch to exercise power in external affairs. n248
Although the boundaries of the executive's power in foreign affairs are not clearly defined, the strong
language in Curtiss-Wright has support in several constitutional provisions. The President's Commanderin-Chief authority, n249 in combination with his authority to receive foreign ambassadors, n250 and his
central role in making treaties (subject only to Senate approval), n251 implies a predominate role for the
executive branch in international affairs. Eugene Rostow argues that the appointments power, n252 which
enables the President to send ambassadors abroad, provides further evidence of a constitutional scheme
designed to grant power to the President in the international arena. n253 Specifically, one ambassadorial
function is to gather intelligence, and this intelligence can be used by the President as a basis for treaty
negotiations or for sending troops abroad. n254 Indeed, the majority of commentators take the view that
the executive should be the predominant force in foreign affairs. n255 Charles Cooper notes that the
[*816] Founders had intended this result. Their frustration with ineffectual executive branches in the state
governments prompted them to create a strong executive at the Philadelphia Convention. n256
Further support for a strong presidential role in international affairs can be found by contrasting the "take
Care" clause and other broad language of executive power in article II with the more specific grants of
congressional power in article I, section 8. n257 Robert Turner notes that, unlike the grant of legislative
power, the description of the executive's power under the "take Care" clause is not subject to enumeration
or any other limiting language. n258 Moreover, Turner argues, the duty to take care that the laws of the
United States are faithfully executed does not confine the executive to following congressional legislative
policy directives. n259 Because the word "laws" includes constitutional imperatives, which clearly trump
congressional legislation, the President is not necessarily constrained by laws passed by Congress. n260
Moreover, the "laws" the President must execute arguably include customary international law as well.
n261 The Supreme Court has held that international law is part of the law of the United States and has
used international law to invalidate actions by the United States taken pursuant to congressional order.
n262
Although there is a strong case for complete executive control of foreign affairs, support for congressional
participation in this area also exists. Justice Sutherland, in his Curtiss-Wright opinion, applied a speech by
John Marshall arguably out of context to support executive branch control over foreign affairs. n263 In
his speech, Marshall stated "the President is the sole organ of the nation in its external relations, and its
sole representative with foreign nations." n264 According to Raven-Hansen and Banks, under the cor[*817] rect interpretation, Marshall stated that the executive branch in fact possesses sole power to
execute foreign policy, but only so long as Congress has not spoken on the issue. In other words, if
Congress has set forth a policy on foreign relations, the executive must communicate and transmit that
policy as if it were any other law. n265 Raven-Hansen and Banks thus argue that the "president inevitably
makes foreign policy," n266 but that the President is only "one of the organs" formulating it. n267
Paradoxically, the broad language in article II also supports the argument for a congressional role in
foreign affairs. The vague confines of the executive power are evidence that the Founding Fathers
envisioned a more limited role for the executive than that intended for the legislative power. Arthur
Schlesinger, for example, argues that the Framers envisioned a "partnership" between Congress and the
executive branch. n268 Although Louis Henkin acknowledges that the executive has become the
dominant force in foreign affairs, he maintains that the Framers originally intended Congress to be the
key policy-making branch and that they had only a vague conception of the nature of the executive
policy-making functions. n269
More specifically, several scholars point to the appropriations clause as a plenary power that gives
Congress a voice in the formulation of foreign policy. n270 Although Jacques LeBoeuf recognizes that
secrecy and dispatch make the executive better suited to acting in the international arena, n271 he finds
that the "Boland Amendment" to the Intelligence Authorization Act, n272 in which Congress prohibited
any use of funds for the Contras in Nicaragua, is constitutional. LeBoeuf argues that because Congress
has the power to [*818] declare war, it should also have the authority to determine when the United States
should involve itself in another country's war. n273
As a practical matter, the executive branch's superior resources for gathering and interpreting information
concerning foreign relations, as well as the need to speak with a unified voice in the international arena,
give the executive an edge in setting foreign policy. n274 The scope of executive power, however, does
not seem so clearly delineated that any congressional involvement in this area would be unconstitutional.
Although Cooper emphasizes that the power to formulate foreign policy rests primarily in the executive
branch, he does recognize that separation of powers concerns arise primarily when Congress seeks to
"micromanage" foreign policy through legislation, thereby aggrandizing its own power. n275
Thus, the key question regarding the constitutionality of legislation addressing environmental reform at
the World Bank is whether Congress has impermissibly expanded its power at the executive's expense.
This hardly seems to be the case: participation in MDBs represents only a small part of foreign aid, let
alone foreign policy in general. On the other hand, congressional policy directives concerning the MDBs
are sufficiently detailed and numerous that Congress in effect controls this particular element of United
States foreign aid. There are two responses to this proposition. First, Congress does not dictate whether
the United States should be a member of the MDBs. In other words, if Congress mandated that the United
States withdraw from participation in the MDBs, and did so against the executive's will, a different
problem might arise. Furthermore, although Congress has provided extensive instructions to the Treasury
Department concerning negotiations with the World Bank, the fact remains that in the absence of behindthe-scenes negotiations between members of Congress and Bank officials, the Treasury Department still
conducts discussions with the MDBs.
Second, as noted above, congressional environmental legislation addressing the MDBs arguably does
nothing more than impose common sense parameters on how taxpayers' money should be spent. As such,
the legislation does not infringe on the executive's power in foreign affairs but rather is a logical
expression of Congress' power of the purse. [*819]
Denying that tension results from congressional appropriations legislation that is quasi-substantive in
nature would be incorrect. Prudential considerations, however, caution that where the constitutional
conflict can be avoided it is better to do so. The above construction avoids a direct conflict which would
require judicial resolution. Practical considerations also play a large part in this debate. Although some
Treasury Department officials complain that their job is rendered considerably more difficult by
congressional meddling, resort to the courts to end such interference has not been seriously considered.
The outcome of such a case is far from clear-cut, and open hostility between the two branches would
profit no one.
D. Use of Appropriations Legislation
Even if legislation passed by Congress does not present problems of constitutional dimensions, the
legislative vehicle Congress used to address the environment and MDBs raises other legitimate questions.
There is resistance to the practice of using spending bills as a vehicle for passing substantive legislation or
policy directives, and some commentators suggest that this practice is improper. n276 Before addressing
this issue, it is important to note that some of the legislation summarized in Section II was included in
authorizations bills. Congress could have included all of this legislation in authorizations bills; in many
instances, however, the authorizing language was included in appropriations legislation and an
independent bill was never passed. n277 [*820]
There is no indication, either in the text of the Constitution or in recent case law, that appropriations
legislation is an impermissible means for enacting substantive law. The Constitution treats all bills
generically, and the only conditions imposed by the Supreme Court are the bicameralism and presentment
requirements. n278 Case law generally supports the use of appropriations legislation to enact substantive
policy, though some decisions create some confusion. In Robertson v. Seattle Audubon, the Supreme
Court stated, "Congress ... may amend substantive law in an appropriations statute, as long as it does so
clearly." n279 Earlier, in Andrus v. Sierra Club, n280 the Court had cited House and Senate Rules as well
as TVA v. Hill n281 for the opposite proposition. Andrus, however, can be distinguished from Robertson.
Andrus concerned a claim by the Sierra Club that under the National Environmental Policy Act, an
appropriations request constituted major federal action and required an Environmental Impact Statement.
The Supreme Court held that a budget request was not a proposal for legislation because appropriations
are not substantive legislation. n282 The Court's specific finding that a budget request does not trigger the
NEPA Environmental Impact Statement requirement should not, in itself, be interpreted as holding that
appropriations legislation cannot be used for policy purposes. For this reason, the Court's conclusion in
Andrus should be read as dicta. Interestingly, the only case the Supreme Court relies on for support is
TVA v. Hill, a case in which the Court restricted its holding to the proposition that appropriations bills
could not imply substantive changes in the law, but rather had to do so expressly. n283 In any case, after
Robert- [*821] son, Andrus does not appear to prevent the use of appropriations legislation to enact
substantive policy.
Another problem posed by appropriations legislation is the fact that it only applies to the fiscal year for
which it is enacted. In United States v. Vulte, n284 the Supreme Court stated unambiguously that
appropriations legislation could indeed contain substantive provisions, but those provisions would apply
only during the period for which the appropriations were enacted unless the legislation explicitly stated
otherwise. n285 Therefore, the inclusion of substantive provisions in appropriations legislation is valid,
but it may be unclear at times whether Congress intended the legislation to be permanent. The question of
permanence does not affect the basic premise that appropriations legislation may be used for the purposes
of enacting substantive law. It is also of secondary importance in the context of MDB legislation, because
the major policy statements were specifically enacted as amendments to the IFIA.
E. Summary
The World Bank's political response to U.S. legislation involves a number of considerations. First,
Congress cannot effect change directly in the World Bank; it can only instruct the executive branch to
take certain actions. n286 The executive branch can in turn push an issue with great political commitment
or it can simply "go through the motions" to demonstrate to Congress that it has taken congressional
directives seriously. The ways the World Bank chooses to respond to policies advocated by the U.S.
executive director likely involve a political calculus about the degree of real importance the executive and
legislative branches place on the given issue.
Within this mechanical and political framework, the World Bank can address issues raised by Congress
and relayed through the U.S. executive director in one of three ways: (1) it can ignore legislation
concerning it; (2) it can change its policies if it judges it important to do so; or (3) it conceivably can
refuse to accept conditionally appropriated funds under the World Bank Articles of Agreement. n287 The
World Bank has used a combination of the first two [*822] options. It would be within the World Bank's
power to refuse to accept conditionally appropriated funds, but it has not chosen to do so; thus, the third
response is improbable. In sum, the World Bank will continue to object to congressional intrusions but is
unlikely to take radical steps to resist aggressively what has become the status quo.
Issues related to whether Congress can legally place conditions on its contributions to the World Bank
will likely continue because it is not in the executive branch's interest to seek judicial resolution. Such
resolution might determine that the executive branch holds only those powers which Congress has not
explicitly taken away from it. Although confining or prescriptive legislation regarding the World Bank
may irritate the executive branch, the World Bank and other donors - and may arguably be
counterproductive at times - it is a reality that is unlikely to be challenged through legal means. Other
donors can respond, however, by pressuring the United States to refrain from such unilateral actions.
The issue of passing authorizing language as part of appropriations legislation is largely an internal
political matter for Congress to consider. The practice has emerged for political reasons and will likely
continue for the foreseeable future. Foreign assistance is not popular in the electorate or among the rankand-file members of Congress. n288 It is therefore not in the interest of the congressional leadership to
open a lengthy debate over authorizing legislation; instead, the leadership will choose to confine debate to
the required appropriations legislation, assuming it wants to maintain U.S. participation in the World
Bank. These assumptions will be tested over the next year as the first Republican-controlled Congress in
more than forty years begins to consider foreign assistance issues. n289
IV. Bank Environmental Policy Changes and Their Congressional Antecedents
This Section analyzes the impact of congressional actions on environmental policy changes at the World
Bank. It summarizes the issues related to six specific reforms and their relation to various congressional
actions in order to provide a general picture of the World Bank's record on the environment. The Section
con- [*823] cludes with a brief discussion concerning the different types of legislation used to effect
change at the World Bank.
A. Environmental Staffing
In a landmark May 1987 speech, World Bank President Barber Conable announced the creation of a new
set of bureaucratic mechanisms to ensure environmental quality in Bank lending. n290 Specifically,
Conable converted the Environment, Science and Technology Unit into a more powerful, centralized
Environment Department and created Regional Environment Divisions in each of the World Bank's
regional vice presidencies. n291 These changes greatly increased the Bank's complement of
environmental staff. n292 At the time, the move was widely hailed by environmentalists and Congress
alike as a significant step forward. n293 Formal World Bank restructuring to elevate the profile of
environmental issues had been one of Congress' earliest environmental demands. n294
Although the 1987 restructuring increased the visibility of environmental issues within the World Bank,
its net result on lending decisions remains unclear. According to one critic, the Environment Department
lacks influence over lending operations and the Regional Environmental Divisions are relegated to a
technical assistance role, rather than a stronger, more independent quality control position. n295 Members
of Congress have also voiced concern [*824] over the role of the new Environment Department. n296
Nevertheless, President Conable clearly intended the restructuring to signal World Bank leadership on
environmental issues and to counter congressional and environmentalist concerns. n297
B. AID Early Warning System
In 1986, Congress instructed the Reagan Administration to study the feasibility of an early warning
system (EWS) through which U.S. government agencies - notably U.S. Embassies and AID - could
provide detailed review of the impacts of proposed World Bank projects. n298 The next year, Congress
formally created the EWS, which is still in place today. n299 The EWS has proved to be an important
mechanism for interagency coordination of MDB project review. It led to regularly scheduled interagency
meetings and the creation of the so-called "Tuesday Group" comprised of U.S. government agencies and
interested NGOs that meets monthly to consider upcoming Bank projects. n300
Solely a creation of the U.S. government, the EWS is not a World Bank reform per se. "It grew out of a
desire on the part of the Congress to use the existing U.S. agencies to increase the ability of U.S.
representatives at the World Bank to have independent information about World Bank projects." n301 In
essence, the EWS was designed to create a "shadow" EIA of proposed World Bank projects based on
field data produced by other U.S. government agencies.
The creation of the EWS marked a rising tide of congressional and agency interest and activism
concerning World Bank projects, and the Clinton Administration has continued to work closely with
NGOs through the Tuesday Group and other consultative mechanisms. n302 These initiatives and the
congressional mandates that led [*825] to their creation have had an unquantifiable direct effect on Bank
projects, but their most important contribution is the increased amount of data with which U.S. executive
directors are able to judge the merits of Bank loans. n303
C. Environmental Assessment
Environmental Impact Assessment is a basic, internationally accepted element of environmental policy.
n304 Originally established in the United States for domestic projects, n305 an assessment typically
analyzes the potential environmental consequences of development activities, considers alternatives and
their environmental impacts, and outlines mitigation measures to minimize environmental harm. Many
countries have since adopted EIAs as part of their national environmental policies. n306 International
development agencies have also adopted EIA procedures for their own internal use in planning and
decision making. At the 1992 Rio Earth Summit, representatives agreed that countries and international
agencies should adopt and implement EIA policies. n307
Even though it was not listed among the Patterson Recommendations, EIA became an early congressional
priority. Congress essentially created AID's early warning system to serve as a surrogate EIA procedure
in the absence of strong policies at the banks themselves. In 1986, Congress used appropriations
legislation to direct the U.S. executive directors to promote changes in the banks to "eliminate or
mitigate" the environmental impacts of destructive development projects. n308 In 1989, Congress went
further, calling for management plans to ensure systematic environmental review of all projects. n309
Environmental Impact Assessments rank as one of Congress' highest policy priorities at the MDBs. The
Pelosi Amendment pre- [*826] vents U.S. executive directors from voting on proposed MDB loans that
have potentially significant environmental impacts unless an EIA has been made available to them at least
120 days in advance. n310 This policy, which took effect in December 1991, is acknowledged as having a
significant effect in the development of the World Bank's EIA policy. n311
Interestingly, the World Bank had maintained since the early 1970s that it carefully reviewed the potential
environmental impacts of its loan operations. n312 The Bank did have a policy on environmental impact
assessment which was weaker than that advocated by Congress, n313 but a formal and visible public
statement of this policy occurred only in October 1989, shortly before the Pelosi Amendment was
enacted. n314 The policy mandated preparation of an environmental assessment for projects potentially
involving "diverse and significant environmental impacts." n315 It did not address the issue of
availability of environmental assessment documents to the executive directors, the U.S. Government or
the public - a key provision of the Pelosi Amendment. n316
After passage of the Pelosi Amendment, the availability of environmental assessment documents and their
timing became a major issue between the Treasury Department and the World Bank. n317 The Treasury
Department took a strong stand on this issue during negotiations of the ninth replenishment of the IDA in
the later half of 1989 and the first months of 1990. Following a stiff negotiating round, in which the
United States alone pressed for availability of documents, the final report regarding replenishment
concluded that:
The preparation of the [Environmental Assessment] report would be part of an ongoing process of
consulta- [*827] tion with affected groups and relevant local NGOs and the completed report would be
made available to such groups. This report would also be made available at this stage to the executive
directors for information. This would be well in advance of their consideration of the project since
appraisal typically takes place 180 days or more before presentation to the executive directors. n318
This agreement, in combination with concerns expressed by Congress, NGOs and others, led the World
Bank to revise its environmental assessment policy in October 1991 - two years after the policy's initial
adoption and two months before the Pelosi Amendment's directives took effect. n319
The EIA debate remains active today: the International Finance Corporation arguably has yet to comply
with the Pelosi Amendment. n320 Regardless of such drawbacks, the EIA issue stands as one of
Congress' most visible successes in reform of the MDBs. At a minimum, Congress greatly increased the
speed with which EIA procedures were adopted by the World Bank and other MDBs. Arguably, it also
forced the World Bank to create an EIA process when it otherwise would not have done so. n321 At
present, the environmental assessment "is the World Bank's main tool for ensuring that its operations have
the best possible impact on the environment." n322
Despite Congress' success in influencing the World Bank to use an EIA process, the legislative tool used
to force the issue is the subject of much debate. The Pelosi Amendment restricts the ability of U.S.
executive directors to vote in favor of projects under certain circumstances. The Treasury Department
strongly opposed such limitations on the grounds that they would undermine the effectiveness of U.S.
executive directors. n323 The U.S. executive directors also opposed the requirements as "a detriment to
negotiations." n324 Environmentalists defend the approach taken by the [*828] Pelosi Amendment as an
effective "hammer" with which to force the EIA issue at the World Bank and other MDBs. n325
D. Forestry and Energy Policies
Changes in World Bank forestry policy were brought about through pressure from NGOs working with
Congress and through the U.S. executive director. In general, congressional involvement reflected the
"rain forest chic" of the late 1980s and public concern about the loss of tropical forests. n326 Beginning
in 1988, Congress provided an increasingly clear set of policy guidance on the issue, and the Bush
Administration pushed hard for implementation. n327 Their effort continued in 1989 as part of major
congressional legislation designed to address global climate change n328 and grew in volume and
specificity over the next several years. Such congressional activism, along with the vigorous involvement
of the World Bank's executive director, n329 influenced the development of the 1991 World Bank
Forestry Policy. n330
The President of the World Bank had indicated in 1987 that a centerpiece of the World Bank's
environmental efforts would be a 150% increase in forestry lending by 1989, n331 and in 1989 he
announced a further tripling of forestry lending. n332 Some of the projects taken to the World Bank
Board of Directors that resulted from that increase in funding generated a great deal of controversy. For
example, in 1990, the U.S. executive director challenged the advisability of a forestry sector project in
Cote d'Ivoire that NGOs indicated would expand timber production in 500,000 hectares of [*829] rain
forest. n333 Subsequently, the executive directors requested that World Bank management suspend
lending for forestry projects until the Bank had adopted a forestry project that incorporated environmental
concerns. n334
The timing and substance of subsequent reforms in lending indicated that Congress had provided early
leadership on forestry issues. In a technical sense, Congress can be credited with significant achievements
in changing World Bank forestry lending. Other questions, however, are whether the policy changes have
produced positive results at the project level and whether the World Bank itself can have a significant
impact on developing country forestry. Indonesia, for instance, generates $ 8 billion annually in forest
products. n335 Given this magnitude, it is far from clear that the World Bank can leverage changes in
forestry policy regardless of the merits of its own policies.
World Bank lending in the energy sector provides another example of detailed and vocal policy guidance
from Congress. Energy lending, in fact, was the motivation behind the creation of the Early Warning
System n336 and a main point of policy engagement for Congress and the NGO community. n337
Congress provided strong rhetorical leadership on World Bank energy lending in the form of an
increasingly detailed set of policy guidance on MDB energy sector lending in 1988, and in 1990 and
1992, two sets of "benchmarks" to judge progress in energy lending. Congress's goal was to shift lending
toward energy efficiency and demand-side management and to decrease reliance on traditional large-scale
energy supply expansion projects. n338
In 1989, World Bank President Barber Conable said that energy efficiency was another area where the
Bank promised to "play a leadership role." n339 Three years later, the Bank adopted a new [*830] energy
lending policy that was designed to promote energy efficiency and reform of energy pricing to reduce
consumption. Such commitments, however, are not viewed by critics as bringing about meaningful
change in energy lending. n340 The timing of World Bank commitments and policy changes in this area,
however, tend to suggest that changes were made in response to outside critics, among which Congress
was the most vocal. Although the policy has been established, critics note that actual energy loans do not
comply with the policy. Out of approximately $ 7 billion in new energy loans for the first half of 1993,
only two out of forty-six loans complied with World Bank policy. n341 Therefore, even though Congress
has forced significant reforms on paper, project quality remains low.
In sum, congressional activism in the form of policy guidance has led to major policy changes in the
World Bank's forestry and energy lending, at least as a formal matter. Nevertheless, Congress remains
"disappointed in the [World] Bank's failure to fully implement these policies, particularly in the energy
and forestry sectors." n342 Congressional concerns "have prompted Congress to move beyond specific
sectoral policy issues [to] focus more on process-oriented issues like access to information and public
participation in World Bank projects." n343
E. Global Environment Facility (GEF)
The World Bank and the U.N. Development Program created the Global Environment Facility in 1991 in
anticipation of the Rio Earth Summit. A division of the World Bank's Environment Department, the GEF
initially was a three-year experimental "Pilot Phase" to identify ways to address global environmental
problems such as the loss of biological diversity and the threat of global climate change. The Bank's
strategy was to create a funding mechanism prior to the Rio Earth Summit so that it would be available to
finance the Convention on Biological Diversity and the Framework Convention on Climate Change (Rio
Conventions). n344 [*831]
From the outset, the U.S. government was skeptical about the GEF. The World Bank's U.S. executive
director believed that the GEF should be a part of the World Bank and subject to its project review
mechanisms. n345 In contrast, NGOs generally argued that the GEF should be established as an
independent entity with its own governance, management and funding programs and priorities. n346
Because the GEF was a new institution, donor countries exerted enormous pressure on the World Bank to
avoid creating a new GEF and to use instead the existing project delivery structures of the World Bank
and U.N. Development Program. n347
The German and French governments provided the majority of financial backing for the GEF's 1991 Pilot
Phase; n348 the United States contributed none of the funding that year. As discussed previously in this
Article, Congress appropriated $ 30 million for the GEF in 1992 conditioned on the GEF's fulfillment of
certain goals. Because the conditions were not met, the GEF never received the $ 30 million. n349
As a result, the use of conditions became a major point of contention among donors during the GEF
financial replenishment discussions in 1993 and early 1994. In 1993, Congress again provided a
conditioned appropriation for the GEF, but the Treasury Department was able to certify that the requested
reforms had been made. n350 In 1994, Congress gave the GEF $ 90 million free of conditions. n351
GEF funding, therefore, provides an example of successful intervention by Congress. The changes made
in the GEF were significant and followed those requested by Congress. n352 The net result is an
institution better able to carry out its mandate. Undoubtedly, it [*832] was Congress that set the tone for
the GEF restructuring debates, from financial replenishment to its structural reforms.
F. Public Accountability
Lack of public access to information about World Bank projects has been a basic concern for NGOs and
Congress since the beginning of environmental reform efforts. Although Congress enacted a wide range
of legislation on the subject and the Treasury Department successfully pushed for a significant number of
incremental improvements in the public's ability to gain access to World Bank documents, n353 the most
significant structural change was the creation of the World Bank Inspection Panel in 1994. n354 The
Inspection Panel was based in part on the experience of the Morse Commission in evaluating the
environmental aspects of the Narmada dam project in India. n355 The panel is vested with the authority to
investigate complaints of World Bank policy and procedural violations that materially affect parties and
groups in borrowing countries. n356
Congress played a major role in the creation of the Inspection Panel. After nearly a decade of work on
information policy issues, Congress sought a process-oriented solution that would insure that existing
policies were implemented. n357 In June 1993, Appropriations Subcommittee Chairman Senator Patrick
Leahy wrote a detailed letter to World Bank President Lewis Preston outlining congressional concerns
about the declining performance of Bank projects. n358 In his letter, Senator Leahy pointed to the
experience of the Morse Commission in evaluating the Narmada project in India; he also suggested that
"serious consideration should be given to establishing a permanent, independent commission for
investigating public concerns about Bank-financed projects." n359 Senator Leahy linked the creation of
such an institution with [*833] efforts to address Congress' "waning tolerance for an institution supported
with public funds that denies the public access to relevant information, or to an impartial mechanism for
investigating complaints about the use of those funds." n360
Senator Leahy's strongly worded letter was part of a concerted effort by Congress in 1993 to force
creation of the Inspection Panel. n361 Congress succeeded in 1993 during the authorization process for
the tenth replenishment of the IDA. Congressman Barney Frank finally forced the issue with the World
Bank. Following a long series of meetings and discussions with the Treasury Department and
Congressman Frank, World Bank Managing Director Ernest Stern told Frank that the World Bank lacked
sufficient time to establish an inspection agency that year. n362 Frank responded by threatening to delay
congressional authorization of the IDA replenishment. n363 Ultimately, the World Bank agreed to create
the Inspection Panel and Congress authorized two out of three years of appropriations for the IDA. n364
G. Summary
Congress has played a significant role in all the reforms discussed in this Section. The 1987 creation of an
Environment Department at the World Bank can be linked to congressional attention. Although the EWS
was not a World Bank reform, it laid the groundwork in many ways for the EIA debate and the Pelosi
Amendment. The reform of forestry and energy policies at the World Bank took place in a climate of
heavy congressional interest in the subjects. Finally, the GEF restructuring and the creation of the
Inspection Panel were two issues where Congress set the tone for reforms. Three lessons can be drawn
from this experience.
1. The most effective form of legislation is that which sets specific conditions and requires structural
changes be made.
The Treasury Department has the most leverage in seeking specific reforms if Congress states its position
clearly. The two most [*834] significant achievements of the Clinton Administration and the
Democratically-controlled 103rd Congress were the creation of the Inspection Panel and the restructuring
of the GEF. In both cases, Congress conditioned its funding on specific reforms. Although Treasury
Undersecretary Larry Summers believes that "the broad contours of U.S. policy toward the MDBs should
have the consent of Congress," he admits that "Congress has been effective by using threats." n365
2. Policy-level changes require strong cooperation between Congress and the executive branch.
The success of the U.S. government in reforming World Bank lending policies in the forestry and energy
sectors would not have been possible without strong commitment to these issues on the part of the Bush
Administration. Much of the action over forestry policy was carried out at the level of the World Bank
Board of Directors and involved specific projects. Despite the creation of benchmarks and other forms of
congressional instruction on these issues, Congress does not generally have the capacity to remain
involved in the day-to-day technical issues related to policy changes in a given sector. According to one
Senate staff member, "there is no question that Congress does not have enough time and resources to
devote to oversight. We have not done enough to hold people accountable for failing to implement
policies." n366
3. Voting restrictions are not a precise instrument for changing policy and cause conflict with the
executive branch.
The Pelosi Amendment continues to be hotly debated. Apart from its requirement that the MDB Boards
of Directors have access to EIAs 120 days prior to Board consideration of given loans, the amendment
has a number of imprecise provisions related to the definition of environmental impacts and quality of
assessments. n367 In hindsight, Congress may have been more successful conditioning its IDA
appropriations on creation of a specific procedure for Board consideration of EIAs instead of limiting the
ability of the U.S. executive directors to vote on individual projects. For example, Charles Dallara, thenAssistant Secretary [*835] of the Treasury, raised the EIA issue at the negotiations for the ninth
replenishment of the IDA, n368 but Congress passed the Pelosi Amendment and limited the
maneuverability of U.S. executive directors. This analysis, however, should not be interpreted as arguing
that Congress did not force the EIA issue at the MDBs, rather, that it did so in a manner that caused
certain conflicts with the Treasury Department.
V. Conclusion
In evaluating Congress' role in promoting environmental reform at the World Bank, there are four factors
that should be considered: (1) the costs and benefits of congressional involvement; (2) the role of NGOs
in congressional involvement; (3) the role of the political dynamic in this field; and (4) the outlook for the
future.
A. Costs and Benefits of Congressional Activism
There have been major benefits and only minor costs associated with congressional activism on
environmental issues. Included among the benefits are greater access to information concerning World
Bank lending, stronger mechanisms for ensuring accountability for project quality and a reduction in
harmful environmental impacts. The costs have been the restricted maneuverability of the executive
branch in pursuing its policy objectives, the frustrations associated with congressional mandates that are
at times incompatible, n369 and what Undersecretary Summers has termed the "ritualization" of World
Bank lending where each loan document has a lengthy section on politically sensitive issues like the
global environment. n370
As this analysis has shown, however, the U.S. system of government is organized to give Congress wide
latitude in determining policy even in the complex area of development assistance funding. As a general
rule, Congress has taken a much more hands-on approach to foreign affairs since the Vietnam War. n371
As a result, although other governments and the World Bank may view the congressional approach to
environmental reform at the World [*836] Bank as intrusive, it is perhaps better viewed as the cost of
doing business with the United States.
B. Role of Environmental NGOs
In the early 1980s, environmental NGOs raised legitimate and basic questions about the environmental
impacts of World Bank lending. NGOs have continued to be important in issues related to U.S. funding of
the World Bank. According to one staff member, in early efforts to reform the World Bank, "Congress
had very little information on its own [to judge World Bank projects]. We had to rely on NGOs to provide
information from site visits." n372 Treasury Department official Larry Summers agrees. "Congress is the
megaphone of the NGOs. NGOs have done their homework, but would have less impact without
Congress." n373 Nevertheless, praise for NGO involvement is not universal. Critics like Gregg
Easterbrook argue that NGOs overplayed their hand in the lead-up to the 1992 Earth Summit when they
raised additional concerns about the World Bank and the GEF. In doing so, they gave donor governments
a good excuse not to contribute to development assistance. n374 Easterbrook is correct in that
environmentalist critiques of the GEF have been used by members of Congress seeking to eliminate U.S.
funding for the GEF, but he fails to make the broader point that governments nevertheless agreed to a $ 2
billion financial replenishment for the GEF in 1994.
C. Role of Political Parties
Environmental concerns have typically been associated with the Democratic Party in the United States.
Congressional leaders like Senator Patrick Leahy and Representatives Barney Frank and David Obey
have been leaders on environmental reforms at the World Bank. Relations with the environmental NGOs
have not always been smooth, however. For example, Representative Obey had a major dispute with
environmental NGOs over IDA funding. After several NGOs suggested cutting IDA appropriations to
force change at the World Bank, Obey ordered his staff to stop working with certain NGOs. n375
Moreover, Representative Frank and Sena- [*837] tor Leahy generally took a harder line than
Representative Obey on such issues. n376
Significant leadership, however, has come from Republican members of Congress and the Bush
Administration as well. Republican Senator Robert Kasten was among the first to raise NGO concerns
with the World Bank. "It was the Republicans who took a harder line on the Banks. [Deputy Assistant
Secretary of the Treasury] George Folsom added the environmental mandate to his office's title and [Bush
Administration U.S. Executive Director at the World Bank] Pat Coady fought for major changes during
his tenure," asserts Chad Dobson of the World Bank Information Center. n377
In ten of the past twelve years, the United States has had a Republican President and, for the most part, a
Democratically-controlled Congress. When President Clinton assumed office and Democrats controlled
both branches, the dynamic for environmental reform at the World Bank changed. Under one theory,
during the years that the Republicans controlled the White House, foreign assistance funding was more
assured because Republicans in Congress supported the President's budget request for political reasons
and Democrats encouraged foreign assistance for ideological reasons. Once Clinton took office,
Republicans in Congress were unlikely to support the President, so a narrower base of congressional
Democrats had to be cultivated by the Administration. "With Democrats divided, the Clinton
administration had to focus on fundraising for the MDBs," explained Pat Coady, a Bush Administration
appointee. n378 As a result, the Clinton Administration was less able to push a strong environmental
reform agenda with the World Bank for fear that its criticisms might imperil funding on Capitol Hill.
n379 Although the Clinton Administration would certainly debate this point, many of its achievements
were made with strong prompting from Congress.
An additional factor may in part explain the support for environmental reform during Republican years in
the White House: liberal Democrats in Congress became a swing vote for MDB funding because
Republicans were in the minority. According to Larry Williams, "the left was the key for MDB funding
during the [*838] Republican years. The Reagan and Bush Administrations were afraid of losing liberal
support, so they had to deal with the environmentalists." n380 This factor, however, does not explain the
leadership shown by Republican members of Congress like Senator Kasten.
D. Outlook for the Future
Regardless of the possible and varied political motivations for congressional involvement in
environmental reform at the World Bank, the United States is at an important juncture in its participation
in all international institutions. The November 1994 elections ushered in the first period of Republican
control of Congress in more than forty years. Given the dominant role Congress has played in setting
policy toward the MDBs, much is at stake for the future of the World Bank. It is impossible to determine
as of this writing whether the new Congress will continue a reform-minded approach to the World Bank,
place higher priority on budget reduction issues related to foreign assistance, or do both. Nevertheless, the
period of 1983-94 will be viewed as one of successful congressional activism toward environmental
reform of the World Bank.
As of this writing, Congress is four months overdue in passing the Foreign Operations Appropriation for
fiscal year 1996, and the current stalemate over funding for certain family planning programs does not
appear likely to be resolved this year. The legislation currently under discussion includes deep cuts in
U.S. contributions to the World Bank and related institutions such as the GEF. This legislation is unlikely
to face presidential veto.
Although some of the proposed legislation concerning foreign assistance is reform-oriented, Congress
appears to be placing greater emphasis on wholesale reductions in expenditures rather than maintaining a
strict reform agenda. This development tends to reinforce one of the conclusions drawn in this Article,
namely that 1995 was a milestone marking a departure from the intensive bipartisan attention that
Congress paid to environmental reform between 1983 and 1994. Nevertheless, there are promising signs
that the work begun by Congress in the early eighties will be continued by incoming World Bank
President James Wolfensohn, and that the World Bank will adopt broad-reaching environmental [*839]
reforms that would mark a new standard for international financial institutions.
The period covered by this Article saw a remarkable degree of reform-minded congressional engagement
in the international system. The authors hope that this summary will be a useful tool for those working in
the environmental community and other areas of public interest as they study and act on examples of
successful efforts to reform the international development agencies.
FOOTNOTES:
n1. The 1944 Bretton Woods Conference led to the creation of the International Bank for Reconstruction
and Development (IBRD). The term "World Bank" is commonly used to describe the World Bank Group.
That group includes the IBRD, which provides below market loans to member countries; the International
Development Association (IDA), which provides concessional loan credits to the poorest developing
countries; the International Finance Corporation, which lends primarily to private sector activities; and the
Multilateral Investment Guarantee Agency, which provides investment guarantees or risk insurance to
investors for certain activities in developing countries.
n2. The MDBs combined provide approximately $ 25 billion annually in loans to developing countries.
The World Bank's share is $ 22 million, making it by far the largest international development institution.
David Young, The Application of Environmental Impact Statements to United States Participation in
Multinational Development Projects, 8 Am. U. J. Int'l L. & Pol'y 309, 309, 313 (1992). For additional
statistics and information regarding the role of the World Bank in development assistance, see The World
Bank Group, Making Development Sustainable: The World Bank Group and the Environment, Fiscal
1994, at 6-7 (1994).
n3. See, e.g., Bruce Rich, Mortgaging the Earth: The World Bank, Environmental Impoverishment, and
the Crisis of Development 138-47 (1994) (describing a 1987 "60 Minutes" expose and a 1990
documentary that recount destructive effects of World Bank projects in Brazilian rain forests).
n4. Most notably, the Natural Resources Defense Council, the Environmental Policy Institute and the
National Wildlife Federation were early critics of the World Bank's environmental record. Id. at 111.
n5. Much of this public activism also was substantively supported by a range of critics within the World
Bank and world governments, but the U.S. government has been the most influential in this regard.
n6. Although reference is made to the IMF and the regional development banks - the Inter-American
Development Bank, the Asian Development Bank and the African Development Bank - the principal
focus of this Article is the World Bank Group.
n7. In a number of cases, members of Congress or congressional committees have held oversight
hearings, written letters or had personal communications that are relevant parts of the legislative history
of this issue.
n8. The Senate Committee on Foreign Relations and the House Committee on Banking and Urban Affairs
and its Subcommittee on International Development, Finance, Trade and Monetary Policy have
authorizing jurisdiction. The Senate and House Appropriations Committees' Subcommittees on Foreign
Operations, Export Financing, and Related Programs are responsible for MDB appropriations.
n9. See generally Louis Fisher, The Authorization-Appropriation Process in Congress: Formal Rules and
Informal Practices, 29 Cath. U. L. Rev. 51 (1979) (surveying congressional use of authorization and
appropriation legislation).
n10. See Foreign Relations Authorization Act, Fiscal Years 1986 and 1987, Pub. L. No. 99-93, 99 Stat.
405 (1985).
n11. In 1989, Congress made an exception to this trend, however, when it passed free-standing
authorizing legislation - the International Development and Finance Act of 1989, Pub. L. No. 101-240,
521, 103 Stat. 2492, 2511 (codified as amended in scattered sections of 22 U.S.C.) [hereinafter IDFA].
n12. See generally Jonathan E. Sanford, U.S. Policy Toward the Multilateral Development Banks: The
Role of Congress, 1988 Geo. Wash. J. Int'l L. & Econ. 1 (describing various means available to Congress
to influence MDBs).
n13. H.R.J. Res. 395, Pub. L. No. 100-202, 101 Stat. 1329, 1329-134 (1987) (codified as amended at
International Financial Institutions Act, 22 U.S.C. 262m (1987) [hereinafter IFIA]); see also, H.R. 3750,
100th Cong., 1st Sess. 1301 (1987) (containing actual amendment which was enacted by reference in
H.R.J. Res. 395).
n14. Sanford, supra note 12, at 20.
n15. For example, in 1992 Congress stated that MDBs should use integrated, least-cost energy planning
for all energy loans. Foreign Operations, Export Financing and Related Programs Appropriations Act,
1993, Pub. L. No. 102-391, 106 Stat. 1633, 1666 (1992).
n16. IDFA 521, 103 Stat. at 2511 (codified as amended at 22 U.S.C. 262m-7 (1988)).
n17. For example, Congress has targeted loans to China and Iran in a number of instances. See Sanford,
supra note 12, at 59 n.214, 62.
n18. See infra note 159 and accompanying text.
n19. U.S. Const. art. I, 9.
n20. See discussion infra part III.C.
n21. The years referenced in the subsection headings are calendar years during which Congress
authorized future programs and made appropriations for the next fiscal year.
n22. Telephone Interview with Alec Echols, former Legislative Director to U.S. Senator Robert Kasten
(R-Wis.) (Aug. 15, 1994) [hereinafter Echols].
n23. See generally Sanford, supra note 12, at 49-51 (discussing congressional appropriations for fiscal
years 1978 and 1979 which stipulated that no U.S. funds should be used for IDA loans to Vietnam).
Appropriations bills between 1974 and 1977 stated that the U.S. executive directors must oppose all IDA
loans "for the benefit of any country which develops any nuclear explosive device, unless the country is
or becomes" a party to the Nuclear Non-Proliferation Treaty. Id. at 112.
n24. Congress had little experience with environmental issues concerning the MDBs, and the other
branches of government were no more familiar with them than Congress. See Environmental Impact of
Multilateral Development Bank-Funded Projects: Hearings Before the Subcomm. on International
Development Institutions and Finance of the House Comm. on Banking, Finance and Urban Affairs, 98th
Cong., 1st Sess. 4, 24-25 (1983) (statements of Rep. Bereuter and James Conrow, Director of the Office
of Multilateral Development Banks at the Department of the Treasury) [hereinafter 1983 Hearings].
n25. See Draft Recommendations on the Multilateral Banks and the Environment, 1984: Hearings Before
the Subcomm. on International Development, Finance, Trade and Monetary Policy of the House Comm.
on Banking, Finance and Urban Affairs, 98th Cong., 2d Sess. (1984) [hereinafter Patterson
Recommendations]; 1983 Hearings, supra note 24.
n26. See, e.g., 1983 Hearings, supra note 24, at 35 (statement of Brent Blackwelder describing negative
effects of water resource development projects); see also Rich, supra note 3, at 113-17 (describing NGO
testimony at the 1983 Hearings).
n27. Patterson Recommendations, supra note 25, at 1-27. The recommendations were named for
Congressman Jerry Patterson who chaired the subcommittee in 1983. See also Rich, supra note 3, at 11920 (discussing review and issuance of recommendations).
n28. Specifically, the Patterson Recommendations addressed the need for more environmentally qualified
staff members in U.S. government agencies and at the MDBs to monitor the ecological impacts of MDB
lending. They encouraged MDBs to involve local NGOs and the health and environment ministers of
borrower countries in the loan planning and implementation processes, and they emphasized the need for
smaller projects using light capital technology in place of the traditional, large-scale monolithic projects
favored by the banks. The recommendations pushed for lending strategies consistent with the World
Conservation Strategy and the 1980 Declaration of Environmental Policies and Procedures Relating to
Economic Development. They urged the Secretary of the Treasury to instruct U.S. executive directors to
oppose projects that could create unsustainable use of natural resources and to play a leading role in
promoting environmentally conscious lending. Finally, they requested the Office of Technology
Assessment to undertake a six-month study of MDB environmental policies and asked the Department of
the Treasury to produce annual reports summarizing MDB activities and evaluating MDBs' efforts to
implement reforms. See Patterson Recommendations, supra note 25, at 1-12.
n29. The House warned that if the recommendations went unheeded, they would be enacted into law the
following year and funding to unresponsive MDBs would be reduced. Id. at 1-3.
n30. See Rich, supra note 3, at 120-23.
n31. Specifically, the NGOs alleged that it had been poorly conceived, would lead to widespread
conversion of pristine rain forest areas and would further threaten the well-being of several indigenous
nations in the area. Id. at 122.
n32. Id. at 123.
n33. Id. Senator Kasten was the chairman of the Senate Appropriations Subcommittee on Foreign
Operations, Export Financing, and Related Programs.
n34. See id.; Echols, supra note 22.
n35. Echols, supra note 22.
n36. Rich, supra note 3, at 125-27. In other 1984 actions, the Senate instructed the Treasury Department
to pressure the MDBs to hire more environmental professionals to assist in project planning and directed
the department to report in detail to Congress concerning progress in this area. See S. Rep. No. 531, 98th
Cong., 2d Sess. 30 (1984).
n37. See infra note 57 and accompanying text.
n38. H.R. Rep. No. 252, 99th Cong., 1st Sess. 21 (1985).
n39. Id. at 21.
n40. Id.
n41. S. Rep. No. 167, 99th Cong., 1st Sess. 33 (1985).
n42. Id.
n43. Id.
n44. Id. at 34. The report also instructed the U.S. executive directors to request board meetings to discuss
the environmental review processes at the various banks and the institutional changes which would
prevent future funding of environmentally destructive projects. Id.
n45. See H.R.J. Res. 465, Pub. L. No. 99-190, 540, 99 Stat. 1185, 1309-10 (1985) (codified as amended at
IFIA, 22 U.S.C. 2621 (1989)).
n46. Id. 540(a)(1), 99 Stat. at 1309.
n47. Id. 540(a)(2), 99 Stat. at 1309.
n48. Id. 540(a)(3), 99 Stat. at 1309.
n49. Id. 540(a)(4), 99 Stat. at 1310.
n50. Id. 540(a)(6), 99 Stat. at 1310. The legislation also directed the U.S. executive directors to request
the IBRD and the Inter-American Development Bank to provide reviews of their environmental
performances over the past ten years. Id. 540(a)(7), 99 Stat. at 1310.
n51. Id. 540(a)(5), 99 Stat. at 1310.
n52. Id. 540(b), 99 Stat. at 1310. In particular, the legislation required the report to discuss IBRD's
progress in adding environmental professionals or in developing alternative plans for environmental
staffing in its regional offices. Id. 540(d), 99 Stat. at 1310.
n53. Id. 540(c), 99 Stat. at 1310; see also S. Rep. No. 167, supra note 41, at 34 (requesting the Treasury
Department and the U.S. executive directors to work with other lending countries to implement these
measures).
n54. H.R. Rep. No. 747, 99th Cong., 2d Sess. 29 (1986).
n55. Id.; see also H.R.J. Res. 738, Pub. L. No. 99-591, 539, 100 Stat. 3341, 3341-232 (1986) (enacting the
general provision).
n56. See infra note 80 and accompanying text.
n57. H.R. Rep. No. 747, supra note 54, at 29-30. The requirement was a reaction to criticism that neither
the Treasury Department nor the State Department had responded to a proposed IBRD livestock project in
Botswana despite concerns expressed by the U.S. Agency for International Development (AID) through
its "early warning system." Id.
n58. S. Rep. No. 443, 99th Cong., 2d Sess. 31 (1986). Specifically, many development projects had been
counterproductive, and MDB loans had often exacerbated drought, famine and disease. The report warned
that projects which did not take into account ecosystem capacity would have a high failure rate. In
addition, the Senate reiterated the need for more staff with environmental expertise and emphasized that
the objective was not to create another "level of bureaucracy to review projects" but rather to ensure that
staff members trained in "environmental disciplines" took part in regular project reviews. Id. at 33.
n59. Id.
n60. Id. at 33-34; see also H.R.J. Res. 738, 539(a)(7), 100 Stat. at 3341-234 (urging MDB commitments
to fund projects that protect and preserve crucial wetlands systems).
n61. See H.R.J. Res. 738, 539, 100 Stat. at 3341-232.
n62. See S. Rep. No. 443, supra note 58, at 41 (noting that H.R.J. Res. 738, 539, 100 Stat. at 3341-232,
restated several parts of H.R.J. Res. 465, 540, 99 Stat. at 1309-10).
n63. As a result, the legislation did not further amend the IFIA.
n64. H.R.J. Res. 738, 539(a)(2)(C), 100 Stat. at 3341-233.
n65. Id. 539(a)(4), 100 Stat. at 3341-233.
n66. Id. 539(a)(6), 100 Stat. at 3341-234.
n67. Id. 539(a)(10), 100 Stat. at 3341-234.
n68. Specifically, it required the Treasury Department to provide the Appropriations Committees with
annual reports detailing progress in environmental reforms. Id. 539(e), 100 Stat. at 3341-235. It directed
AID missions and U.S. embassies to analyze potentially adverse impacts of proposed MDB projects and
to update a list of problem projects semiannually. Id. 539(g), 100 Stat. at 3341-235. It also requested that
the Administrator of AID and the Secretaries of State and Treasury cooperate to conduct a feasibility
study concerning the possibility of establishing a cooperative early warning system with other donor
countries. Id. For an explanation of the early warning system, see infra note 80 and accompanying text.
n69. Id. 539(h), 100 Stat. at 3341-235 to 3341-236.
n70. H.R. Rep. No. 283, 100th Cong., 1st Sess. 33 (1987).
n71. Id.
n72. Id. at 33-34.
n73. Id. For an explanation of the early warning system, see infra note 80 and accompanying text.
n74. S. Rep. No. 236, 100th Cong., 1st Sess. (1987).
n75. For example, the report reiterated that the environmental quality of loans would be a key factor in
measuring the success of lending reform at the MDBs and noted that while individual MDBs were having
varying degrees of success in implementing reform, the Senate Committee on Appropriations was "not
satisfied with the actions of any of these institutions." Id. at 57.
n76. Id. at 58; see also supra text accompanying notes 61-69 (summarizing enactment of 1986
legislation).
n77. H.R.J. Res. 395, Pub. L. No. 100-202, 537, 101 Stat. 1329, 1329-161 (codified as amended at IFIA,
22 U.S.C. 262l to m-5 (1988)). Authorization legislation drafted by the House Subcommittee on
International Development, Finance, Trade and Monetary Policy originally contained portions of the
amendment later codified at 262m to m-5. See H.R. 3750, 100th Cong., 1st Sess. 12 (1987). Because that
bill was never enacted, those portions were enacted in appropriations legislation by reference. See H.R.J.
Res. 395, 101 Stat. at 1329-134.
n78. Specifically, the amendment criticized the MDBs for failing to provide adequate safeguards for the
environment and called for more "systematic and adequate assistance to their borrowers" in this area. 22
U.S.C. 262m-1 (1988).
n79. Id. 262m-1 to -2. Specifically, it instructed the Secretary of the Treasury and the Secretary of State to
"vigorously promote mechanisms" to improve the environmental performance of MDBs.
n80. Id. In addition to the above requirements, the U.S. executive directors must push MDB management
to allow sufficient time between loan proposals and Bank action for proper review by member
governments. Following the review, AID, the Treasury Department and the State Department must notify
Congress semiannually of all loan proposals "likely to have an adverse impact on the environment,
natural resources, public health or indigenous peoples." Notification must also be sent to the U.S.
executive directors with instructions that they eliminate or mitigate these adverse impacts. Id.
n81. Id. 262m-3. Specifically, it instructed the U.S. executive directors to push for better educational
programs to train mid-level managers in environmental analysis and to "urge" the banks to develop ways
to incorporate unquantified environmental costs into all lending. It also instructed them to push for more
loans for environmental projects and more policy-based loans for resource management. Id. 262m-4 to -5.
n82. Id.
n83. H.R.J. Res. 395, 537, 101 Stat. at 1329-130, 1329-161 to 1329-162 (codified as amended at 22
U.S.C. 2621).
n84. Id. 537(a), 101 Stat. at 1329-161. Specifically, the amendment required the U.S. executive directors
to push the MDBs to add environmental staff, to develop plans for systematic environmental review of
projects, to "inform and involve" host country officials and NGOs in environmentally sensitive projects
and to increase lending for environmentally beneficial projects. Id.
n85. Id. 537(b), 101 Stat. at 1329-162.
n86. Id; see also H.R. Rep. No. 283, supra note 70, at 103-04 (stressing the need for policy-based lending
programs calculated to preserve natural resources and recommending the creation of pilot programs
designed to allow investment in natural resource conservation as a means for discharging debt); S. Rep.
No. 236, supra note 74, at 58-59 (stressing the need to protect areas of global significance, such as
tropical forests and wetlands, given their high ecological productivity and biodiversity).
n87. H.R.J. Res. 395, 537(c), 101 Stat. at 1329-162.
n88. Id. 537(g), 101 Stat. at 1329-163.
n89. Id. 537(h), 101 Stat. 1329-163; cf. 22 U.S.C. 262m-2 to -3 (establishing an early warning system that
includes investigative, reporting and information-sharing requirements with respect to projects likely to
have adverse environmental impacts). Under the amendment, the State Department was also required to
work with AID to provide a report detailing "a comprehensive strategy for maximizing" bilateral and
multilateral assistance with respect to natural resource conservation. H.R.J. Res. 395, 537(k), 101 Stat. at
1329-164.
n90. H.R. Rep. No. 641, 100th Cong., 2d Sess. 20 (1988). The House report contained relatively little
with respect to the MDBs, with the exception of an instruction requiring the U.S. executive directors "to
adopt an energy conservation and efficiency policy." Id.
n91. S. Rep. No. 395, 100th Cong., 2d Sess. 32 (1988).
n92. Id.
n93. See id. World Bank President Barber Conable gave a landmark speech in May 1987 in which he
mentioned several reforms including a dramatic increase in environmental staff, financing more
environmental projects, and an increase in environmental non-governmental organization participation.
See Rich, supra note 3, at 146 and infra notes 290-93 and accompanying text.
n94. S. Rep. No. 395, supra note 91, at 32.
n95. Foreign Operations, Export Financing and Related Operations Act, 1989, Pub. L. No. 100-461, 555,
102 Stat. 2268, 2268-36 (codified as amended at IFIA, 22 U.S.C. 262p-4 (1988)).
n96. Id. (codified as amended at 22 U.S.C. 262p-4c(b)(1)).
n97. Id. (codified as amended at 22 U.S.C. 262p-4d(b)).
n98. Id. (codified as amended at 22 U.S.C. 262p-4e(a)).
n99. When President Bush vetoed the original foreign operations appropriations bill, H.R. 2939, 101st
Cong., 1st Sess. (1989), it was the first time a president had vetoed a free-standing appropriations bill.
The next day, Congress enacted H.R. 3743, 101st Cong., 1st Sess. (1989), which was identical to the
original legislation except for the provision that had prompted the presidential veto. See Foreign Aid is
Vetoed, but Then Salvaged, 45 Cong. Q. Almanac 780, 789 (1989) [hereinafter Foreign Aid is Vetoed].
n100. Chairman, House Foreign Operations, Export Finance, and Related Programs Subcommittee (DWis.).
n101. Foreign Aid is Vetoed, supra note 99.
n102. Id.
n103. Id. at 798-99.
n104. H.R. Rep. No. 165, 101st Cong., 1st Sess. 23 (1989).
n105. Id. at 25.
n106. Id. The report also called for the U.S. executive directors to provide an analysis of the impact of
forest sector loans on carbon dioxide emissions in borrower countries. Id.
n107. Id. at 25-26.
n108. Id. at 26.
n109. Id.
n110. Id. at 26-27; see also S. Rep. No. 131, 101st Cong., 1st Sess. 65-69 (1989) (addressing the same
issues as H.R. Rep. No. 165, supra note 104, but taking a more critical stance, particularly with respect to
local participation in project planning, implementation, debt-for-nature swaps and forestry).
n111. Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1990, Pub. L.
No. 101-167, 533(a), 103 Stat. 1195, 1225 (codified as amended at 22 U.S.C. 262l (1990)). This
imperative, similar to the one enacted in 1987, has become a subcommittee leitmotif; following its
enactment in 1989, it has been included verbatim in every subsequent report to demonstrate unwavering
congressional commitment to environmental reform in the MDBs. See, e.g., H.R. Rep. No. 553, 101st
Cong., 2d Sess. 39 (1990) (restating policy statement).
n112. Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1990, 533(a)-(c),
103 Stat. at 1225-27. These directions required the U.S. executive directors to push for increased staff
with "expertise in end-use energy efficiency and conservation and renewable energy" and to implement
new procedures in this area. The U.S. executive directors were also required to lobby for EIAs for
proposed energy projects that included alternatives to the projects and that allowed for public
participation in the evaluation process. The instructions further required the U.S. executive directors to
encourage the banks to include environmental costs in the economic assessment of projects, promote
energy efficiency in policy-based loans to the energy sector, provide technical assistance, and establish a
board in each MDB to discuss investments in alternate sources of energy, end-use energy efficiency and
conservation. Id. 533(a), 103 Stat. at 1225-26.
n113. Id. 533(b)(1)-(3), 103 Stat. at 1226-27. The Treasury Department was required to address energy
conservation and include an analysis of the impact of forest sector loans on borrowing countries' carbon
dioxide emissions. Id.
n114. IDFA, Pub. L. No. 101-240, 521, 103 Stat. 2492, 2511 (codified as amended at 22 U.S.C. 262m-7
(1990)).
n115. Id. 521, 103 Stat. at 2511. The Pelosi Amendment became effective as of Dec. 19, 1991. Id. 801,
103 Stat. at 2524.
n116. Id. 801, 103 Stat. at 2524.
n117. Id. 521, 103 Stat. at 2512. The Pelosi Amendment even makes U.S. personnel available to assist the
MDBs with training staff and producing studies or reports for public release. Included as U.S. personnel
are the Secretary of the Treasury, the Secretary of the Interior, the Administrator of the Environmental
Protection Agency, the Chairman of the Council on Environmental Quality, the Administrator of AID and
the Administrator of the National Oceanic and Atmospheric Administration. Id.
n118. Id. 521, 103 Stat. at 2511; see also Young, supra note 2, at 325 (noting exception in IDFA that
allows the executive director to vote for a project in the absence of an EIA). The Treasury Department has
never invoked this provision.
n119. IDFA 512, 103 Stat. at 2508 (codified as amended at 22 U.S.C. 262p-4-i to -k (1990)).
n120. Id.
n121. See supra notes 77-89 and accompanying text. In particular, the IDFA emphasized the need for
more lending for the environment, better cooperation with NGOs and more "collaboration for information
exchange." IDFA 512, 103 Stat. at 2510. Moreover, it modified the Inter-American Development Bank
Act, preventing the Secretary of the Treasury from making any further contributions to the capital stock
or fund for special operations until the Inter-American Development Bank created an environmental unit,
increased the number of environmentally oriented staff and involved NGOs and indigenous peoples in
project design. See IDFA 201, 103 Stat. at 2497 (codified as amended at 22 U.S.C. 283z-5(c) (1994)). It
also targeted the IMF in its revision of the Bretton Woods Agreement Act, instructing the U.S. executive
director at the IMF to promote greater environmental consciousness and increased public access to
information concerning IMF activities and projects. See IDFA 302, 103 Stat. at 2500-1 (codified as
amended at 22 U.S.C. 286kk(1)-(2) (1994)).
n122. H.R. Rep. No. 553, supra note 111. Specifically, as it had in 1989, the report emphasized that
MDBs should play a critical role in overcoming "technical, institutional and political constraints" which
discourage developing countries from investing in "end-use efficiency and renewable energy." Id. at 39.
n123. Id. at 40.
n124. Id.
n125. Id.
n126. S. Rep. No. 519, 101st Cong., 2d Sess. (1990).
n127. Id. at 45.
n128. Id.
n129. Id. at 46. For example, only one percent of World Bank energy loans had been devoted to
developing renewable energy projects, and MDBs continued to promote excessive levels of timber
extraction as well as reliance on use of fossil fuels. Id.
n130. Id.
n131. Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1991, Pub. L.
No. 101-513, 104 Stat. 1979, 2032 (1990).
n132. Id. 562, 104 Stat. at 2032-33 (codified as amended at 22 U.S.C. 262p-4-l (1990)). The legislation
also instructed the U.S. executive director to encourage greater reliance on field offices in assessing
project proposals and to hold open hearings in the borrower country during project identification and
preparation. Id. As in the previous year, Congress once again stressed the need for expanding energy
conservation and efficiency programs and reiterated the importance of conducting EIAs and of including
environmental costs in project design. Id. 562(a), 104 Stat. at 2033.
n133. Id. 562(a) , 104 Stat. at 2033.
n134. Id. tit. I, 104 Stat. at 1979.
n135. The fiscal year 1991 appropriations act was also noteworthy because it authorized the President to
accept U.S. membership to the European Bank for Reconstruction and Development [hereinafter EBRD].
Id. 562(c), 104 Stat. at 2034. Included with the acceptance of membership were the usual MDB
guidelines. It instructed the Secretary of the Treasury to seek the establishment of procedures "to assess
the impact of any loan guarantees, or other activities on the environment." Id.
n136. See, e.g., 22 U.S.C. 262m-1 to -2 (advocating investigation into and publicization of projects likely
to have adverse environmental impacts).
n137. See Rich, supra note 3, at 175-76, 257-58; Young, supra note 2, at 326-27.
n138. See Rich, supra note 3, at 175.
n139. H.R. Rep. No. 108, 102d Cong., 1st Sess. 17 (1991).
n140. Funding for fiscal year 1992 was made available through two continuing resolutions: H.R.J. Res.
360, Pub. L. No. 102-145, 105 Stat. 968 and H.R.J. Res. 456, Pub. L. No. 102-266, 106 Stat. 92.
n141. See infra text accompanying note 145.
n142. Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1993, Pub. L.
No. 102-391, 106 Stat. 1633 (1992).
n143. H.R. Rep. No. 585, 102d Cong., 2d Sess. 16-17 (1992).
n144. Id.
n145. Id.
n146. Id. at 18-19.
n147. S. Rep. No. 419, 102d Cong., 2d Sess. 49 (1992).
n148. Id. The report also noted that attitudes seemed to be changing at the Bank as the fundamental notion
that conservation and economic development are inextricably linked finally began to take root in the
collective consciousness of the World Bank's personnel. Id.
n149. Id.
n150. Id. Specifically, the report cited the World Bank's decision to continue the Sardar Sarovar Dam and
Power project in India, with its significant "environmental and resettlement problems," as "inconsistent
with its role as a world leader on the environment in the post-UNCED period." Id. at 50.
n151. Id. at 50-51.
n152. Id. at 50.
n153. See H.R. Rep. No. 108, supra note 139, at 17-18.
n154. S. Rep. No. 419, supra note 147, at 50.
n155. Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1993, 532(c)(1)(2), 106 Stat. at 1666-67 (codified as amended at IFIA, 22 U.S.C. 262l).
n156. Id. 532(a)-(b), 106 Stat. at 1666.
n157. Id. The reports were due on Mar. 1, 1993. Id.
n158. Id. 532(c)(1), 106 Stat. at 1666. Reports on MDB progress were due by Mar. 1, 1993 and Mar. 1,
1994. In terms of substance, the actual benchmarks did not differ radically from much of the legislation
already passed by Congress in previous years; they buttressed measures already requested in earlier
versions of the IFIA, compare H.R.J. Res. 395, 537, 101 Stat. at 1329-161 to 1329-162 with Foreign
Operations, Export Financing, and Related Programs Appropriations Act, 1993, 532, 106 Stat. at 166667, and further consolidated the legislation concerning MDBs and the environment. Foreign Operations,
Export Financing, and Related Programs Appropriations Act, 1993, 532(c), 106 Stat. at 1666-67.
n159. Id. tit. I, 106 Stat. at 1633; see also S. Rep. No. 419, supra note 147, at 51 (recommending $ 30
million for the GEF and conditioning the provision of these funds on the establishment of clear
procedures for public access to information concerning GEF projects).
n160. Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1993, tit. I., 106
Stat. at 1633.
n161. See infra note 170.
n162. See supra note 160 and accompanying text.
n163. Willi A. Wapenhans et al., Report of the Portfolio Management Task Force, Effective
Implementation: Key to Development Impact (1992) [hereinafter the Wapenhans Report].
n164. Bradford Morse, Sardar Sarovar: Report of the Independent Review (1992) [hereinafter the Morse
Commission Report].
n165. Wapenhans, supra note 163, at 4.
n166. Interview with Chad Dobson, Secretary, Bank Information Center, in Washington, D.C. (Aug. 3,
1994) [hereinafter Dobson].
n167. Id. The first two installments were for fiscal years 1994 and 1995. Id.
n168. H.R. Rep. No. 125, 103d Cong., 1st Sess. (1993).
n169. S. Rep. No. 142, 103d Cong., 1st Sess. (1993).
n170. For example, the House report urged compliance with the energy provisions set out in the fiscal
year 1991 appropriations legislation, see Foreign Operations, Export Financing, and Related Programs
Appropriations Act, 1991, 533(a), 104 Stat. at 2013, as well as with the benchmarks set forth in its fiscal
year 1993 legislation. See Foreign Operations, Export Financing, and Related Programs Appropriations
Act, 1993, 532(c), 106 Stat. at 1666-67. It called for reform of the GEF and recommended a direct
contribution of $ 30 million, once again conditioned on the establishment of procedures giving public
access to GEF project documentation and providing for cooperation with NGOs and affected
communities. H. Rep. No. 125, supra note 168, at 15-16. The report advocated a super-majority
requirement for project approval and an independent evaluation of the GEF pilot phase. Id. at 16. Citing
the success of the Pelosi Amendment, the House report underscored the need for a public EIA process,
particularly with respect to the MDB private sector lending facilities. Accordingly, it directed the
Treasury Department to continue to work on reforms that would increase the use of EIA and make them
available to the public. Id. at 36.
n171. H.R. Rep. No. 125, supra note 168, at 33.
n172. Id. at 33-35.
n173. Id. at 36.
n174. Id.; cf. Pelosi Amendment, IFIA 521, 103 Stat. at 2519 (mandating that the Secretary of the
Treasury instruct the U.S. executive director of each MDB not to vote for any action which would have a
significant impact on the environment but allowing actions where an assessment of the effects of the
proposed action and of alternatives has been made or where disclosure of the action would "jeopardize the
confidential relationship between the bank and the borrowing country").
n175. H.R. Rep. No. 125, supra note 168, at 39.
n176. Id. at 39-40.
n177. S. Rep. No. 142, supra note 169, at 44-48.
n178. Id. at 44 (citing findings of the Wapenhans Report, supra note 163, and the Morse Commission
Report, supra note 164).
n179. Id. at 47; see also supra notes 155-58 and accompanying text (describing enactment of
benchmarks).
n180. S. Rep. No. 142, supra note 169, at 47; S. Rep. No. 419, supra note 147, at 50-51.
n181. See supra text accompanying note 159.
n182. Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1994, Pub. L.
No. 103-98, tit. I, 107 Stat. 931, 931-32 (1993).
n183. World Bank-GEF, Instrument to Establish the Restructured Global Environment Facility (1994).
n184. Telephone Interview with Mark Rentschler, Assistant Director for Sustainable Development, U.S.
Dep't of Treasury (Jan. 26, 1996) [hereinafter Rentschler].
n185. Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1994, I, 107 Stat.
at 932.
n186. Dobson, supra note 166; see also supra note 167 and accompanying text (describing congressional
compromise on the tenth replenishment of the International Development Association). Although this
action did not affect fiscal year 1995 directly, it increased the pressure for reform before fiscal year 1996.
n187. Foreign Operations, Export Financing, and Related Programs 1995 Appropriations and 1994
Supplemental Appropriations, Pub. L. No. 103-306, 108 Stat. 1608 (1994) (codified as amended at 22
U.S.C. 262l, 262p-4o (1995)).
n188. Id., 526(d), 108 Stat. at 1633-34.
n189. Id. 567(a)(1), 108 Stat. at 1651.
n190. Id. 567(b), 108 Stat. at 1651.
n191. Id.
n192. Rentschler, supra note 184.
n193. H.R. Rep. No. 524, 103d Cong., 2d Sess. 17 (1994). Specifically, it emphasized the continuing need
to improve the EIA process and directed the U.S. executive directors to continue pushing for
implementation of environmental and energy initiatives and the 1992 benchmarks. Id.; see also supra note
155 and accompanying text (describing enactment of benchmarks).
n194. H.R. Rep. No. 524, supra note 193, at 17. Ultimately, Congress appropriated $ 90 million for the
GEF. See Foreign Operations, Export Financing, and Related Programs appropriations Act, 1995, tit. I,
108 Stat. at 1608. The Clinton Administration had requested $ 100 million as the second installment of its
$ 430 million pledge to the GEF, and both the House and Senate Appropriations Committees had
recommended $ 98.8 million in funding, but the final $ 90 million level was approved after amendments
were offered in both houses to cut the GEF appropriation by a larger amount. See S. Rep. No. 287, 103d
Cong., 2d Sess. 33 (1994); H.R. Rep. No. 524, supra note 193, at 39.
n195. H.R. Rep. No. 524, supra note 193, at 18.
n196. Id. at 18. The three implementing agencies are the World Bank, the United Nations Environment
Program and the United Nations Development Program.
n197. Id. at 35. The report also highlighted the implementation of "tighter policies" for "environmental
impact assessments, agriculture, water resources management, energy efficiency and the power sector and
forestry" as another sign of progress at the World Bank, but it recognized that these new environmental
polices had yet to be duplicated by the regional MDBs. In general, though, even the regional MDBs were
"promoting good governance" and "encouraging greater transparency, accountability, the rule of law, and
public participation" in project planning and implementation. Id.
n198. Id. at 41.
n199. Id.
n200. Id. at 37.
n201. S. Rep. No. 287, supra note 194.
n202. Id. at 19, 32.
n203. Id. at 32-33.
n204. Id. at 33.
n205. Id. at 33-34.
n206. Id. at 35.
n207. Id.
n208. As one World Bank executive stated, "the Board is the formal decision-making body of the World
Bank, not individual legislatures." Interview with Alex Shakow, External Affairs, The World Bank, in
Washington, D.C. (Aug. 12, 1994) [hereinafter Shakow].
n209. Id.
n210. IBRD, Articles of Agreement, Dec. 27, 1945, 60 Stat. 1440, 2 U.N.T.S. 134, amended by 16 U.S.T.
1942, T.I.A.S. No. 5929 (Dec. 16, 1965) [hereinafter World Bank Articles of Agreement]; IDA, Articles
of Agreement, Jan. 26, 1960, 11 U.S.T. 2284, 439 U.N.T.S. 249 [hereinafter IDA Articles of Agreement].
n211. See World Bank Articles of Agreement, supra note 210, art. IV, 4.
n212. For example, Senate staff member Tim Rieser notes that he and other key congressional staff have
held a number of formal and informal meetings with World Bank management to discuss issues of
concern to Congress. Interview with Tim Rieser, staff of Senator Patrick Leahy, in Washington, D.C.
(Aug. 15, 1994) [hereinafter Rieser].
n213. Interview with Charles Dallara, former Assistant Secretary of the Treasury in the Bush
Administration, in Washington, D.C. (Aug. 18, 1994) [hereinafter Dallara].
n214. See Robert F. Turner, The War Powers Resolution: Unconstitutional, Unnecessary, and Unhelpful,
17 Loy. L.A. L. Rev. 683 (1984).
n215. See infra notes 235 and 276 and accompanying text.
n216. Interview with Lawrence Summers, Undersecretary of the Treasury for International Affairs, in
Washington, D.C. (Aug. 11, 1994) [hereinafter Summers].
n217. World Bank Articles of Agreement, supra note 210, art. IV, 10.
n218. Ibrahim Shihata, The World Bank and Human Rights: An Analysis of the Legal Issues and the
Record of Achievements, 17 Den. J. Int'l L. & Pol'y 39, 44-48 (1988) (arguing that the World Bank
Articles of Agreement prohibit executive directors "from interfering in the political affairs of any member
[or] from being influenced in [their] decisions by the political character of the member concerned" and
that "only economic considerations, ... weighed impartially, are relevant to the Board's decisions"); see
also Bartram S. Brown, The United States and the Politicization of the World Bank: Issues of
International Law and Policy 102 (1992) (arguing that art. IV, 10 is intended to protect the "rights and
independence" of World Bank members).
n219. World Bank Articles of Agreement, supra note 210, art. IV, 10, cl. 1.
n220. Id. art. IV, 10, cl. 2.
n221. See David Wirth, Bartram S. Brown, The United States and the Politicization of the World Bank:
Issues of International Law and Policy, 15 Mich. J. Int'l L. 687, 689 (1994) (book review).
n222. World Bank Articles of Agreement, supra note 210, art. IV, 10, cl. 3.
n223. Robert Gilpin, The Political Economy of International Relations 11-12 (1987).
n224. See Rich, supra note 3, at 99.
n225. Id. at 99-100.
n226. Id. at 100, 102.
n227. See Wirth, supra note 221, at 690-91.
n228. Shihata, supra note 218, at 44, 47.
n229. "One view is that, carried to the extreme, congressional conditions on MDB funding could mean
the end of the multilateral institutions," admits Tim Reiser. See Reiser, supra note 212.
n230. Interview with Pat Coady, former U.S. Executive Director of the World Bank, Washington, D.C.
(July 28, 1994) [hereinafter Coady].
n231. World Bank Articles of Agreement, supra note 210, art. III, 2.
n232. See infra pp. 815-16.
n233. E.g., U.S. Const. art. 1, 8 (granting Congress power to "regulate Commerce with foreign nations,"
"declare war" and "raise and support armies").
n234. See, e.g., Stephen B. Cohen, Conditioning U.S. Security Assistance on Human Rights Practices
(describing increased Congressional concern over arms sales to countries with dubious human rights
records); Peter Raven-Hansen & William Banks, Pulling the Purse Strings of the Commander in Chief, 80
Va. L. Rev. 833 (1994) (describing the War Powers Act and the use of appropriations power to influence
national security decisions).
n235. See, e.g., Louis Fisher, How Tightly Can Congress Draw the Purse Strings?, 83 Am. J. Int'l L. 758
(1989); Louis Henkin, Foreign Affairs and the Constitution, 66 Foreign Aff. 284 (1987-88); Jacques B.
Leboeuf, Limitations on the Use of Appropriations Riders by Congress to Effectuate Substantive Policy
Changes, 19 Hastings Const. L.Q. 457 (1992); Turner, supra note 214.
n236. U.S. Const. art. I, 8-9.
n237. See William Barr, The Appropriations Power and the Necessary and Proper Clause, 68 Wash. U.
L.Q. 623, 629 (1990).
n238. See discussion infra part III.D.
n239. United States v. Curtiss-Wright Export Corp., 299 U.S. 304 (1936).
n240. Id. at 320.
n241. Id. at 321.
n242. Id. at 319.
n243. Id. at 320.
n244. Id. at 315.
n245. Id. at 315-16.
n246. Id. at 316.
n247. Id.
n248. Id. at 320.
n249. U.S. Const. art. II, 2, cl. 1.
n250. U.S. Const. art. II, 3.
n251. U.S. Const. art. II, 2, cl. 2.
n252. U.S. Const. art. II, 2.
n253. See Charles J. Cooper et al., What the Constitution Means by Executive Power, 43 U. Miami L.
Rev. 165, 198 (1988) (remarks by Eugene V. Rostow in panel discussion).
n254. Id.
n255. See, e.g., Cooper et. al., supra note 253, at 198 (remarks by Sen. Orrin Hatch, stating that "the
President is ... clearly assigned the position of leadership in United States foreign affairs"); Cooper et. al.,
supra note 253, at 177 (Cooper commenting that the "executive power conferred a broad authority that
extended beyond the mere execution of the laws"); Robert F. Turner, War and the Forgotten Executive
Power Clause of the Constitution: A Review Essay of John Hart Ely's War and Responsibility, 34 Va. J.
Int'l L. 903, 905 (1994) (criticizing Ely's "narrow reading of the President's Commander in Chief power").
n256. Cooper et. al., supra note 253, at 177 (remarks by Charles J. Cooper).
n257. Turner, supra note 255, at 933 (quoting 15 The Papers of Alexander Hamilton 38-39, 42 (Harold C.
Syrett ed., 1969)).
n258. Id.
n259. Id. at 13.
n260. Id.
n261. See Cooper et. al., supra note 253, at 183 (remarks by Michael Tigar); see also, The Paquete
Habana, 175 U.S. 677 (1900) (finding that because international law dictates that unarmed fishing vessels
pursuing their calling are exempt from capture as the prize of war, the United States must pay to the
claimants the proceeds of the sale of vessels and cargo that had been seized in the 1898 blockade against
Cuba).
n262. The Paquete Habana, 175 U.S. at 677, 700.
n263. Raven-Hansen & Banks, supra note 234, at 901.
n264. Curtiss-Wright, 299 U.S. at 319 (citing 6 Annals of Cong., col. 613 (1800) (statement of Rep.
Marshall)).
n265. Raven-Hansen & Banks, supra note 234, at 901.
n266. Id. (quoting Henkin, supra note 235, at 294).
n267. Id.
n268. Arthur Schlesinger, The Legislative-Executive Balance in International Affairs, The Wash. Q.,
Winter 1989, at 99, 102.
n269. Henkin, supra note 235, at 306-08.
n270. See, e.g., LeBoeuf, supra note 235, at 459 (noting that "the Appropriations Clause grants to
Congress an awesome power over the other branches of government" that "can be used as a shield and as
a sword ... enabling forays into [the other branch's] territory"). But see Raven-Hansen & Banks, supra
note 234, at 943 (concluding that "the power of the purse is not plenary" but that "the constitutionality of
most ... restrictive appropriations can be saved by strict construction").
n271. LeBoeuf, supra note 235, at 481-82; see Raven-Hansen & Banks, supra note 234, at 905-09.
n272. Pub. L. No. 100-453, 104, 102 Stat. 1904, 1905 (1988).
n273. LeBoeuf, supra note 235, at 485.
n274. Cooper et al., supra note 253, at 198 (remarks by Hatch).
n275. Id. at 166, 177 (remarks by Cooper).
n276. LeBoeuf, supra note 235, at 493 (arguing that "Congress should avoid enacting substantive policy
changes through appropriations riders").
n277. There are two reasons for the lack of free-standing reauthorization of the Foreign Assistance Act
and its authorizing legislation. First, although the House has passed, or attempted to pass, such legislation
several times over the past decade, the Senate has generally not been able to follow suit. This inability
may be explained by the fact that between 1986 and 1995, the Senate Foreign Relations Committee was
chaired by the elderly Senator Claiborne Pell who was not an activist leader. The committee's ranking
Republican was Senator Jesse Helms, who is known for his antipathy toward foreign assistance and
international institutions. See Thomas W. Lippman, Senate Votes 10 Percent Cut in Foreign Aid; Top
Recipients Israel, Egypt Keep Full Funding; New Spending Level Generally Accepted, Wash. Post, Sept.
23, 1995, at A21. The presence of a nonactivist chairman and a hostile ranking Republican insured that
authorizing legislation for foreign assistance would not be passed by the Senate during that period.
Second, there was the reluctance of the House and Senate leadership to put more than one piece of
internationally oriented authorizing legislation on the floor for consideration in any given year. Congress
is obliged to pass appropriations legislation, but the leadership generally viewed additional foreign aid
legislation as too politically perilous to consider on the floor. For this reason, the House and Senate
generally passed State Department authorization legislation - where policy statements related to
individual countries could easily be included - and did not provide floor time for reauthorizations of
USAID and the international financial institutions. Many of the provisions concerning MDBs were thus
included in appropriations bills out of necessity.
n278. See INS v. Chadha, 462 U.S. 919 (1983) (finding a section of the Immigration and Naturalization
Act unconstitutional on grounds that its use of the legislative veto circumvented the bicameralism and
presentment requirements); Raven-Hansen & Banks, supra note 234, at 841.
n279. Robertson v. Seattle Audubon Soc'y, 503 U.S. 429, 440 (1992).
n280. Andrus v. Sierra Club, 442 U.S. 347, 359-61 (1978).
n281. TVA v. Hill, 437 U.S. 153 (1978).
n282. Andrus, 422 U.S. at 361. The Court reversed the lower court, holding that a budget request could in
some circumstances be considered a proposal for new legislation requiring an Environmental Impact
Statement if budget approval "significantly changes the status quo." Id. at 354-55 (quoting Sierra Club v.
Andrus, 581 F.2d 895, 903 (D.C. Cir. 1978)).
n283. Hill, 437 U.S. at 155.
n284. United States v. Vulte, 233 U.S. 509 (1914).
n285. Id. at 512; see also Cella v. United States, 208 F.2d 783, 790 (7th Cir. 1953) (stating "Congress has
the power to enact permanent legislation in an appropriations act").
n286. It should be noted that U.S. legislation is readily accessible to the public, including the World
Bank, for review.
n287. World Bank Articles of Agreement, supra note 210, art. IV, 10.
n288. See, e.g., H.R. Rep. No. 524, 103d Cong., 2d Sess. 6 (1994) (noting that foreign assistance has been
controversial).
n289. See Lippman, supra note 277.
n290. See Rich, supra note 3, at 146. In July 1986, Conable became the new President of the World Bank.
n291. Id.
n292. Id.
n293. Id. at 146, 148 (stating that "Barber Conable's promises to green the World Bank aroused great
hopes" and citing Philip Shabecoff, World Bank Offers Environment Projects, N.Y. Times, May 6, 1987,
at A14 (quoting statement by Gus Speth, then President of the World Resources Institute, that the change
was "a charter for a new day at the World Bank")).
n294. See, e.g., Patterson Recommendations, supra note 25 (calling for greater environmental staffing at
the World Bank); Rich, supra note 3, at 146 (describing a 1984 letter from Senator Robert Kasten to thenWorld Bank President Clausen regarding the environmental impacts of the Brazilian Polonoroeste project
which helped convince incoming President Conable to take bold steps to reform the environmental
aspects of the World Bank bureaucracy).
n295. See The World Bank, 1995: Hearing Before the Subcomm. on Domestic and Int'l Monetary Policy
of the House Comm. on Banking and Financial Services, 104th Cong., 1st Sess. 21 (1995) (statement of
Bruce Rich, Senior Attorney and Director, International Program, of the Environmental Defense Fund).
n296. See Echols, supra note 22. According to Echols, Congress wanted to "stop short of demanding an
Environment Department because it did not want to see environment issues pigeon-holed and out of the
mainstream of World Bank lending." Id.
n297. See Rich, supra note 3, at 146. In fact, Conable announced the 1987 restructuring at a dinner hosted
by the World Resources Institute, a Washington, D.C.-based NGO. Id. at 146 n.75.
n298. See supra note 68.
n299. See supra note 81 and accompanying text.
n300. Interview with Larry Williams, Director of International Programs, Sierra Club, in Washington,
D.C. (July 29, 1994) [hereinafter Williams]. Williams worked with Congress on the legislation to
establish the EWS.
n301. Id.
n302. Id.
n303. Id.
n304. See Young, supra note 2, at 328 (noting that France, Germany, Great Britain and Japan required
similar assessments for domestic activities with cross-border effects).
n305. See The National Environmental Policy Act of 1969, 42 U.S.C. 4332 (requiring preparation of an
environmental impact statement for federal actions and proposed legislation that significantly affects the
environment); Young, supra note 2, at 315-20.
n306. See supra note 304.
n307. See United Nations, Rio Declaration on Environment and Development, Principle 17, in Earth
Summit Agenda 21: The United Nations Programme of Action From Rio 11, U.N. Sales No. E.93.I.11
(1993).
n308. H.R.J. Res. 738, 539(h), 100 Stat. at 3341-235 to 3341-236; see also supra text accompanying note
69.
n309. IDFA, 521, 103 Stat. at 2512 (codified as amended at 22 U.S.C. 262m-7-e).
n310. 22 U.S.C. 262m-7.
n311. Interview with Robert Goodland, Environment Department, the World Bank, in Washington, D.C.
(Aug. 4, 1994) [hereinafter Goodland]; Williams, supra note 300.
n312. See Rich, supra note 3, at 111-12 (citing claims by former World Bank President Robert
McNamara that the Bank conducted environmental reviews of all projects).
n313. See Ibrahim F.I. Shihata, The World Bank and the Environment: A Legal Perspective, 16 Md. J.
Int'l L. & Trade 1, 5-6 (1992) (citing Operational Manual Statement (OMS) No. 2.36, Environmental
Aspects of Bank Work (May 1984)).
n314. World Bank Operational Directive 4.00, annex A, Environmental Assessment (Oct. 31, 1989).
n315. Id.
n316. See 22 U.S.C. 262m-7a(1).
n317. See Dep't of the Treasury, 1994 Annual Report to Congress, Environment and the Multilateral
Development Banks 11 (1994).
n318. International Development Association, Additions to IDA Resources: Ninth Replenishment 5
(unpublished report approved by the Executive Directors, Jan. 30, 1990) (on file with authors).
n319. See Shihata, supra note 313, at 9.
n320. Congress continues to raise the International Finance Corporation's noncompliance although the
Treasury Department disputes such noncompliance. See H.R. Rep. No. 125, supra note 168, at 41-42.
n321. Williams, supra note 300.
n322. The World Bank, The First Year of IDA 10 (Oct. 1994).
n323. See Williams, supra note 300.
n324. See Coady, supra note 230.
n325. See Williams, supra note 300.
n326. Echols, supra note 22.
n327. See Coady, supra note 230.
n328. Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1990, 533-34,
103 Stat. at 1225-27. The legislation outlined a nine-point set of directives to the U.S. executive directors
to urge changes in MDB energy and forestry policies. Id. 533(a), 103 Stat. at 1225.
n329. See Rich, supra note 3, at 165.
n330. The major tenets of the policy were to prohibit lending for commercial logging in primary moist
tropical forest and to establish certain conditions for World Bank involvement in the forestry sector. The
World Bank, The World Bank and the Environment: A Progress Report Fiscal 1991, at 91-92 (1991)
[hereinafter The World Bank and the Environment]. Critics viewed the 1991 policy as "a major step
forward, [having been] prepared with input from NGOs and pledging that the Bank would finance no
logging in intact primary forests." Rich, supra note 3, at 165.
n331. Id. at 161.
n332. Id. at 165.
n333. Id. at 165; Coady, supra note 230.
n334. Rich, supra note 3, at 165.
n335. The World Bank, The Economics of Long Term Management of Indonesia's Natural Forests (Draft
1995) (on file with authors).
n336. Echols, supra note 22.
n337. Telephone Interview with Glenn Prickett, former Senior Associate, Natural Resources Defense
Council (Aug. 1, 1994) (noting that groups like the Natural Resources Defense Council have made energy
lending a centerpiece of their efforts to reform World Bank lending) [hereinafter Prickett].
n338. See John M. Updergraph, III, Large Scale, Capital-Intensive Development Projects in the Third
World: Congressional Influence Over Multinational Development Bank Lending, 13 B.C. Third World
L.J. 345, 366-67 (1993).
n339. See Rich, supra note 3, at 169 (citing World Bank President Barber Conable, Remarks at Tokyo,
Japan (Sept. 11, 1989)).
n340. See, e.g., Environmental Defense Fund & Natural Resources Defense Council, Power Failure: A
Review of the World Bank's Implementation of its New Energy Policy (1994) (describing the new World
Bank energy policy and finding that energy loans failed to comply with the most important policy
requirements).
n341. Id.
n342. Rieser, supra note 212.
n343. Id.
n344. See Rich, supra note 3, at 245, 257-58.
n345. See Coady, supra note 230.
n346. See Ian A. Bowles & Glenn T. Prickett, Conservation International & the Natural Resources
Defense Council, Reframing the Green Window: An Analysis of the GEF Pilot Phase Approach to
Biodiversity and Global Warming and Recommendations for the Operational Phase 33-34 (1994).
n347. See The World Bank and the Environment, supra note 330, at 102 (stating "the GEF's organization
is based on the understanding that no new bureaucracy will be created").
n348. See Rich, supra note 3, at 75.
n349. See supra p. 801 (describing GEF appropriations and the use of conditions).
n350. See supra note 159 and accompanying text.
n351. See supra note 194 and accompanying text.
n352. Specifically, the restructured GEF has its own independent governance mechanism and secretariat.
It also underwent an independent and highly critical evaluation that is helping to shape a coherent
operational strategy. See Bowles & Prickett, supra note 346, at 33-34.
n353. See, e.g., Letter from Secretary of the Treasury Lloyd Bentsen to Representative Nancy Pelosi (July
29, 1994) (relaying the Treasury Department's efforts to change the International Finance Corporation's
policy concerning the Environmental Impact Assessments associated with the Pelosi Amendment) (on file
with authors).
n354. The idea for the Inspection Panel has several authors, and the Dutch Government was an early
leader in its promotion.
n355. Letter from Senator Patrick Leahy to Lewis Preston, President, World Bank (June 7, 1993) (on file
with authors) [hereinafter Letter from Senator Leahy].
n356. New Independent Inspection Panel Office Opens, The Inspection Panel News Release No. 1 (IBRD
and IDA, Washington, D.C.), Sept. 7, 1994, at 1.
n357. Rieser, supra note 212.
n358. Letter from Senator Leahy, supra note 355.
n359. Id.
n360. Id.
n361. Interview with Congressman Barney Frank, in Washington, D.C. (Aug. 16, 1994).
n362. Id.
n363. Id.
n364. See Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1995, tit. I,
108 Stat. at 1608; Foreign Operations, Export Financing, and Related Programs Appropriations Act,
1994, tit. I., 107 Stat. at 931.
n365. Summers, supra note 216.
n366. Rieser, supra note 212.
n367. Interview with David Joy, Senior Counsel, Dep't of the Treasury, in Washington, D.C. (Aug. 3,
1994).
n368. Id.
n369. Former Congressman Matt McHugh notes that legislating is a "messy process" and that a given
chairman often faces greater pressure to pass his or her bill than to ensure the consistency of all of its
myriad provisions. Interview with Matt McHugh, former U.S. Representative, in Washington, D.C. (Sept.
1, 1994).
n370. Summers, supra note 216.
n371. Rieser, supra note 212.
n372. Echols, supra note 22.
n373. Summers, supra note 216.
n374. Gregg Easterbrook, A Moment on Earth: The Coming Age of Environmental Optimism 599 (1995).
n375. Prickett, supra note 337.
n376. Interview with Jeff Morrelli, former staff member on the House Banking Committee, in
Washington, D.C. (Sept. 2, 1994).
n377. See Dobson, supra note 166.
n378. Coady, supra note 230.
n379. Dobson, supra note 166.
n380. Williams, supra note 300.