[Congressional Record Volume 147, Number 81 (Tuesday, June 12, 2001)]
[Senate]
[Pages S6138-S6139]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LUGAR (for himself, Mr. Biden, Mr. Chafee, Mr. Craig, Mr. 
        Kerry, Mr. Leahy, Mr. Lieberman, Mr. Murkowski, Mr. Reed, and 
        Mr. Roberts):
  S. 1021. A bill to reauthorize the Tropical Forest Conservation Act 
of 1998 through fiscal year 2004; to the Committee on Foreign 
Relations.
  Mr. LUGAR. Mr. President, Senator Biden and I are today introducing a 
bill to reauthorize appropriations for the Tropical Forest Conservation 
Act of 1998 for the Fiscal Years 2002, 2003 and 2004. We are joined in 
this effort by Senators Chafee, Craig, Kerry, Leahy, Lieberman, 
Murkowski, Reed and Roberts.
  The United States has a significant national interest in protecting 
tropical forests in developing countries. Tropical forests regulate the 
hydrological cycle on which world agriculture depends. The genetic 
diversity contained in tropical forests is important for plant 
breeding. Twenty-five percent of prescription drugs come from tropical 
forests. Tropical forests also serve as carbon sinks, storing carbon to 
mitigate the potential effects of the increase in greenhouse gases on 
the world's climate. Avoiding tropical deforestation is essential to 
mitigating the threat of climate change.
  Worldwide, there is a net loss of thirty million acres of forests 
every year. The heavy debt burden of many developing countries 
encourages them to engage in unsustainable exploitation of natural 
resources in order to generate revenue to service external debt. At the 
same time, these poor governments tend to have few resources available 
to set aside and protect key areas.
  The Tropical Forest Conservation Act addresses the economic pressures 
on developing countries through ``debt for nature'' mechanisms that 
reduce foreign debt while leveraging scarce funds available for 
international conservation. Specifically, the Act authorizes the 
President to reduce certain bilateral government debt owed to the 
United States through three distinct mechanisms: debt buybacks; debt 
restructuring and reduction; or debt swaps. In return, eligible 
developing countries with significant tropical forests must establish 
and place local currencies in tropical forest funds. These funds are 
managed primarily by local, non-governmental organizations and make 
grants for projects that are designed to protect or restore tropical 
forests or to promote their sustainable economic use.
  The debt for nature mechanisms in the Act effectively leverage the 
limited funds available for international conservation. Under the 
Tropical Forest Conservation Act, the host country places currencies in 
its tropical forest fund, the value of which typically exceeds the cost 
to the U.S. Treasury of the debt reduction agreement. Furthermore, 
because these tropical forest funds have integrity and are broadly 
supported within the host country, conservation organizations are 
interested in contributing their own money to them, producing an 
additional leverage of federal conservation dollars.
  Our bill would reauthorize appropriations for the Act for three 
years, with funding levels of $50 million in Fiscal Year 2002, $75 
million in Fiscal year 2003 and $100 million in Fiscal Year 2002.
  President Bush has indicated his strong support for the Tropical 
Forest Conservation Act, which is modeled upon President George Herbert 
Walker Bush's Enterprise for the Americas program as well as upon the 
Biden-Lugar Global Environmental Protection Assistance Act of 1989. 
These programs have helped to foster the development of responsible, 
community-based conservation organizations that are capable of 
addressing environmental problems at the local level and ensuring 
successful program implementation.
  The Tropical Forest Conservation Act encourages the repayment of debt 
owed to the United States government, addresses the cash flow problems 
of poorer nations, promotes cooperation

[[Page S6139]]

between governmental and local conservation organizations and helps to 
save the world's outstanding tropical forests, which are disappearing 
at an alarming rate.
  It is my understanding that Congressmen Rob Portman and Tom Lantos 
are introducing identical legislation in the House of Representatives. 
Senator Biden and I plan to work with our colleagues in the House and 
Senate toward speedy passage of this three year reauthorization bill.
  I ask unanimous consent that the text of the bill and a summary be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1021

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. AUTHORIZATION OF APPROPRIATIONS TO SUPPORT 
                   REDUCTION OF DEBT UNDER THE FOREIGN ASSISTANCE 
                   ACT OF 1961 AND TITLE I OF THE AGRICULTURAL 
                   TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954.

       (a) Reauthorization.--Section 806 of the Tropical Forest 
     Conservation Act of 1998 (22 U.S.C. 2431d) is amended by 
     adding at the end the following new subsection:
       ``(d) Authorization of Appropriations for Fiscal Years 
     After Fiscal Year 2001.--For the cost (as defined in section 
     502(5) of the Federal Credit Reform Act of 1990) for the 
     reduction of any debt pursuant to this section or section 
     807, there are authorized to be appropriated to the President 
     the following:
       ``(1) $50,000,000 for fiscal year 2002.
       ``(2) $75,000,000 for fiscal year 2003.
       ``(3) $100,000,000 for fiscal year 2004.''.
       (b) Conforming Amendment.--Section 808(a)(1)(D) of the 
     Tropical Forest Conservation Act of 1998 (22 U.S.C. 
     2431f(a)(1)(D)) is amended by striking ``to appropriated 
     under sections 806(a)(2) and 807(a)(2)'' and inserting ``to 
     be appropriated under sections 806(a)(2), 807(a)(2), and 
     806(d)''.

            Summary of the Tropical Forest Conservation Act

       The Tropical Forest Conservation Act of 1998 (Public Law 
     105-214) helps to protect the world's dwindling tropical 
     forests through ``debt for nature swaps.''
       The TFCA focuses on tropical forest conservation, using the 
     same principles as the 1989 Global Environmental Protection 
     Act, Biden-Lugar, and former President Bush's Enterprise for 
     the Americas Initiative (EAI). The bill extends eligibility 
     for ``Debt for Nature'' swaps under the EAI to lower and 
     middle income countries in Africa and Asia with globally or 
     regionally outstanding tropical forests. It authorizes 
     appropriations to compensate the Treasury Department for 
     revenues foregone when debts with poorer developing nations 
     are restructured at less than their asset value.
       The Tropical Forest Conservation Act of 1998 authorizes the 
     President to reduce certain bilateral government debt owed to 
     the United States under the Foreign Assistance Act of 1981 or 
     Title 1 of the Agricultural Trade Development and Assistance 
     Act of 1954. In exchange, the eligible developing country 
     would place local currencies in a tropical forest fund, which 
     would be used for projects to preserve, restore or maintain 
     its tropical forests. In some instances, debt swaps would 
     occur at no cost to the Federal Treasury since sovereign debt 
     would simply be reduced to its asset value under the Federal 
     Credit Reform Act of 1990. In other instances, poorer nations 
     will be allowed to restructure their debt at an amount 
     somewhat lower than its asset value and Federal 
     appropriations would have to be used to compensate the 
     Treasury for reductions in its anticipated revenue stream. 
     The law also allows private organizations to contribute their 
     funds to help facilitate a debt swap under the terms of the 
     bill.
       To qualify for assistance, eligible countries must meet the 
     criteria established by Congress under EAI: the government 
     must be democratically elected, must not support acts of 
     international terrorism, must cooperate on international 
     narcotics control matters, must not violate internationally 
     recognized human rights, and must institute any needed 
     investment reforms.
       To ensure accountability, an administrative body is 
     established in the beneficiary country. This body will 
     consist of one or more U.S. Government officials, one or more 
     individuals appointed by the recipient country's government, 
     and representatives of environmental, community development, 
     scientific, academic and forestry organizations of the 
     beneficiary country. It is authorized to make grants for 
     projects which would conserve its outstanding tropical 
     forests. Additionally, the existing Enterprise for Americas 
     Initiative Board is expanded by four new members and oversees 
     both the EAI and the Tropical Forest Conservation Act.
       The authorization of appropriations for the 1998 Tropical 
     Forest Conservation Act expires at the end of fiscal year 
     2002. Legislation will be introduced to extend the 
     authorization of appropriations through fiscal years 2002 at 
     a level of $50,000,000 in FY 2002, $75,000,000 in FY 2003 and 
     $100,000,000 in FY 2004.

  Mr. BIDEN. Mr. President, I am pleased to once again join my 
distinguished colleague from Indiana, Senator Lugar, in introducing 
legislation to protect the world's significant tropical forests through 
``debt-for-nature'' mechanisms. We have shared a long and fruitful 
bipartisan relationship on this important issue. I am gratified that we 
have the bipartisan support of our original cosponsors noted by Senator 
Lugar.
  Tropical forests are a cornerstone of the global environment. 
Figuratively speaking, they are the ``lungs'' of our planet, and they 
can help to regulate and mitigate the process of climate change. They 
guide global patterns of rainfall on which agriculture and fisheries 
depend. They harbor pharmaceutical treasures that we are just beginning 
to explore. They are home our planet's widest diversity of plants and 
animals.
  We have a responsibility, a duty, to be good stewards of these 
essential resources, and it is in our direct economic interest to see 
that they flourish.
  In 1989, Senator Lugar and I coauthored the Global Environmental 
Protection Assistance Act, which was enacted into law as title VII A of 
the International Finance and Development Act of 1989 (Public Law 101-
240, December 19, 1989). That Act authorized US AID to use its funds 
for Debt for Nature swaps. Under the authority of this Act, US AID has 
used $95 million of its funds to establish environmental endowments 
totaling $146 million in Costa Rica, Honduras, Indonesia, Jamaica, 
Madagascar, Mexico, Panama and the Philippines.
  President Bush's Enterprise for the Americas Initiative (EAI), 
carried forward this linkage between debt reduction and the generation 
of local funds to protect the environment. The EAI provided $876 
million in debt relief and $154 million in local endowments at a 
federal cost of $90 million in seven countries in Latin America and the 
Caribbean: Argentina, Bolivia, Chile, Columbia, El Salvador, Jamaica 
and Uruguay.
  The Tropical Forest Conservation Act of 1998 extended the debt for 
nature mechanism of the EAI to the protection of significant tropical 
forests in lower and middle income developing countries throughout the 
world, not just those in Latin America and the Caribbean. Furthermore, 
the Tropical Forest Conservation Act (TFCA), authorizes the use of two 
new, no cost ``debt-for-nature'' models, the Buy Back option and Debt 
Swap option.
  The basic premise behind this series of programs has not changed over 
the years. Many of the world's important tropical forests are found in 
countries that do not have the resources to protect them. Their own 
patterns of economic development and their participation in the 
international economy place irresistible pressures on them to turn 
these irreplaceable global resources into quick local cash. One of the 
important contributors to those pressures is too often the debt those 
countries owe to us. That is one thing we can do something about.
  The mechanisms in this bill will allow us to multiply the small 
dollar cost of writing the debt of those countries off of our books, 
leveraging substantially more resources to the cause of preserving 
tropical forests around the world.
  I look forward to taking this bill up in the Foreign Relations 
Committee as soon as possible, and I fully expect it will continue to 
enjoy the strong support it has had in the past. I also look forward to 
working with the Administration to provide the funding that the 
President has called for to implement this program.
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