[Federal Register Volume 63, Number 37 (Wednesday, February 25, 1998)]
[Notices]
[Pages 9696-9709]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4802]
[[Page 9695]]
_______________________________________________________________________
Part VI
International Development Cooperation Agency
_______________________________________________________________________
Overseas Private Investment Corporation
_______________________________________________________________________
Request for Comments on Draft Environmental Handbook; Notice
Federal Register / Vol. 63, No. 37 / Wednesday, February 25, 1998 /
Notices
[[Page 9696]]
INTERNATIONAL DEVELOPMENT COOPERATION AGENCY
Overseas Private Investment Corporation
Request for Comments on Draft Environmental Handbook; Notice.
AGENCY: Overseas Private Investment Corporation, IDCA.
ACTION: Notice of publication and request for comments.
-----------------------------------------------------------------------
SUMMARY: The Overseas Private Investment Corporation (OPIC, or the
``Corporation'') has published a second version of its Environmental
Handbook (Handbook) which represents the current environmental policies
and procedures in use at the Corporation. Section 231(n) of the Foreign
Assistance Act of 1961 (22 U.S.C. 2191(k)(2), as amended), requires
OPIC to: ``Refuse to insure, reinsure, guarantee, or finance any
investment in connection with a project which the Corporation
determines will pose an unreasonable or major environmental, health, or
safety hazard, or will result in the significant degradation of
national parks or similar protected areas.''
An earlier draft of the Handbook was published as a notice in the
Federal Register on February 6, 1997. Based on the comments received in
response to that notice, OPIC has revised the Handbook. Comments are
now invited on the revised version of the Handbook that appears in this
document.
The Handbook consolidates a number of sources of information into a
single, easy-to-review and easily accessible document. The Handbook is
also available on OPIC's Internet web site at WWW.OPIC.GOV.OPIC will
consider further revision of the Handbook based on the comments we
receive.
DATES: Comments must be received on or before June 25, 1998.
ADDRESSES: Comments should be submitted to Mr. Jonathan Sohn,
Department of Financial Management and Statutory Review, Overseas
Private Investment Corporation, 1100 New York Avenue, N.W., Washington,
D.C. 20527, or via Internet e-mail at [email protected].
FOR FURTHER INFORMATION CONTACT: Contact Mr. Sohn by telephone at (202)
408-6265, by facsimile transmission at (202) 218-0288, or via Internet
e-mail at [email protected].
SUPPLEMENTARY INFORMATION: Message from OPIC President George Munoz:
OPIC has a 27-year history of mobilizing private capital and skills
in the economic and social development of less developed nations while
supporting the foreign policy and economic goals of the United States.
OPIC is releasing this draft of its Environmental Handbook for public
comment as part of a process to ensure we are meeting the mandate of
our statute to decline support for ``a project which * * * will pose an
unreasonable or major environmental, health or safety hazard.'' OPIC
has been a leader among agencies in international investment in fairly
applying environmental standards. The new draft guidelines were
developed to clarify current policies and strengthen them where
appropriate.
While it is difficult to address all concerns, our goal is a fair
balance between the public's interest in environmental safeguards and
business' legitimate need to make prompt decisions as they consider
international projects--projects which are critical for the fulfillment
of OPIC's mission. OPIC is also mindful that companies supported by our
foreign counterparts often do not have to meet comparable environmental
standards. This will be an important issue going forward. OPIC is
committed to leveling the playing field through international
harmonization of standards for all countries.
Developing nations are confronted with a range of environmental
challenges. We believe that in the long run a transparent decision-
making process involving public disclosure of environmental impact
assessments is good for business and good for sustainable development.
It can promote consensus building and broad support for the long-term
economic and environmental sustainability of OPIC-supported projects in
developing countries.
The new draft guidelines include:
A 60-day public comment period to review a project's
environmental impact assessment;
Adoption of the new 1997 World Bank draft guidelines;
Clarification of prohibitions; and
An independent audit requirement for environmentally
sensitive projects.
OPIC welcomes comments from all interested members of the
public. OPIC will make use of the information highway to broaden its
reach and to accommodate input in its decision making; OPIC may be
contacted via Internet e-mail at WWW.OPIC.GOV. There will be a 120-
day comment period from the date hereof before the guidelines are
made final. OPIC will carefully review comments on the draft
guidelines and will be particularly interested in hearing views on
the importance of the guidelines in ensuring fulfillment of OPIC's
mission.
OPIC looks forward to your thoughts and comments.
OPIC Environmental Handbook
February 1998 Edition
Table of Contents
OPIC'S Mission Statement
Introduction and Summary of Environmental Procedures
Environmental Screening
Environmental Assessment
Public Consultation and Disclosure
Environmental Standards
Climate Change and Renewable Energy
Conditionality
Monitoring and Compliance
Investment Funds Policy
Appendix A: OPIC Statute and Executive Order 12114
Appendix B: Recommended Content and Format for
Environmental Impact Assessment
Appendix C: Recommended Content and Format for
Environmental Management and Monitoring Plan
Appendix D: Recommended Content and Format for Initial
Environmental Audit (IEAU)
Appendix E: Projects Requiring Environmental Impact
Assessment--Category A
Appendix F: Categorical Prohibitions
Appendix G: 1997 World Bank Group Pollution Prevention and
Abatement Handbook
Appendix H: Format for Host Government Notification Letter
Appendix I: Glossary
OPIC'S Mission Statement
OPIC's mission is to mobilize and facilitate the participation of
United States private capital and skills in the economic and social
development of less developed countries and areas, and countries in
transition from nonmarket to market economies. In accomplishing its
mission, OPIC will promote positive U.S. effects and host country
development effects. OPIC will assure that the projects it supports are
consistent with sound environmental and worker rights standards. In
conducting its programs, OPIC will also take into account guidance from
the Administration and Congress on a country's observance of, and
respect for, human rights. In accomplishing its mission, OPIC will
operate on a self-sustaining basis.
Introduction: Statement of Purpose and Objectives
This Handbook is intended to provide information to OPIC's users,
as well as the interested public, with respect to the general
environmental guidelines, assessment and monitoring procedures that
OPIC applies, in its discretion, to prospective and ongoing investment
projects. The standards and procedures described in this Handbook
generally reflect existing practice at OPIC as it has evolved since the
enactment in 1985 of
[[Page 9697]]
statutory environmental provisions applicable to OPIC. (The
environmental provisions contained in OPIC's statute are reprinted in
Appendix A.) (OPIC is also subject to Executive Order 12114,
``Environmental Effects Abroad of Major Federal Actions.''
Environmental Assessment Procedures for EO 12114 are included in
Appendix A, as well as a reprint of a 1979 FR notice implenting the
EO.) Additionally, the Handbook reflects general policy initiatives
announced by President Clinton at the United Nations Special Session on
the Environment in June of 1997 as well as comments from OPIC's users
and other members of the public in response to OPIC's publication of
the Handbook in the Federal Register as a notice on February 6, 1997.
OPIC received comments on that notice for four months after its
publication. The provisions noted in this Handbook apply to all
political risk insurance, project finance and OPIC-supported financial
intermediaries unless otherwise noted.
Since 1985, OPIC has been required by statute to assess the
environmental impacts of projects under consideration for political
risk insurance and financing. OPIC's authorizing statute was also
amended at that time to direct the Corporation to decline assistance to
projects posing an ``unreasonable or major hazard to the environment,
health or safety'' or resulting in the ``significant degradation of a
national park or similar protected area.'' OPIC was also directed to
operate its programs consistent with the intent of sections 117, 118
and 119 of the Foreign Assistance Act relating to environmental impact
assessment, tropical forests, biological diversity and endangered
species. Then and since Congress has continued to express its intent
that ``great care * * * be paid to assuring the environmental soundness
of U.S. Government supported foreign assistance projects.'' This is
particularly important given OPIC's self-sustaining mandate. OPIC
strongly supports these principles on their own merits.
Over the years OPIC has worked with counterpart organizations
providing similar services to investors in the U.S., overseas and on a
multilateral basis as environmental procedures were developed. Many of
the OPIC standards and procedures described in this Handbook are also
applied by organizations such as the International Finance Corporation
(IFC) and the Multilateral Investment Guarantee Agency (MIGA), both
affiliates of the World Bank; the European Bank for Reconstruction and
Development (EBRD); and the U.S. Export-Import Bank (US Exim). In
OPIC's experience, the progressive harmonization of standards and
procedures similar to those used by these and other similar
organizations worldwide has facilitated co-financing and co-insurance
arrangements and made it simpler for clients to address environmental
requirements.
The Handbook is not designed to be a static document but rather an
evolving process. OPIC welcomes comments from business and public
interest organizations seeking to enhance OPIC's environmental
assessment and management process.
Summary of OPIC Environmental Procedures
OPIC projects receive thorough yet efficient environmental review,
following the process described below. Applicants should carefully
review the entire Environmental Handbook, including all Appendices, to
ensure full understanding of OPIC's Environmental Procedures.
(1) OPIC screens the application to determine whether its support
of the project would violate any categorical prohibitions required by
OPIC's statute or policy (See ``Categorical Prohibitions'', Appendix F)
to the extent possible at this early stage. If the project is
ineligible, OPIC informs the applicant immediately so as to avoid any
unnecessary effort or expense on the part of the applicant.
(2) If the project is not categorically ineligible, OPIC continues
to screen the application to determine the level of environmental
sensitivity associated with the industry sector or site involved (See
`` Environmental Screening'') and to request the appropriate type of
information from the applicant.
(3) If the project is identified as a Category A project, an
Environmental Impact Assessment (EIA) or Initial Environmental Audit
(IEAU) is required. Category B projects are subject to internal OPIC
assessment based on information supplied by the applicant that need not
take the form of an EIA. Category C projects do not have material
impacts on the environment and are not subject to environmental
assessment (See ``Environmental Assessment'').
(4) OPIC requires that applicants for Category A projects submit
the EIA or IEAU in a form that can be made public without compromising
business confidential information. With the consent of the applicant,
the country and industry sector involved in a Category A project (but
not the name of the applicant), are listed on OPIC's Internet Web Site
and the EIA or IEAU is made publicly available on request for a
designated comment period of 60 days prior to any final OPIC commitment
to a project. No application for a Category A project can be processed
without this public disclosure and review process. Environmentally
sensitive projects are also subject to host government notification
prior to final commitment (See ``Public Consultation and Disclosure''
and Appendix H).
(5) Concurrent with this public notification process, OPIC conducts
an internal assessment of the project based on the EIA and other
available information, including any comments it receives from the
public. Category B projects are also subject to an internal
environmental assessment. Through this review process, OPIC
environmental staff assess the impacts of the project and the standards
and mitigative conditions applicable to OPIC support (See
``Environmental Standards'').
(6) These conditions are discussed with the applicant and included
as representations, warranties and covenants in the loan agreement or
political risk insurance contract (See ``Conditionality'').
(7) OPIC monitors project compliance with contractual conditions
throughout the term of the OPIC loan agreement or insurance contract
(See ``Monitoring and Compliance'').
(8) Category A projects are also required to conduct at least one
independent environmental audit during the first three years of OPIC
support (See ``Compliance Audit'').
Similar procedures, but with restrictions on public disclosure and
consultation, apply to OPIC consideration and support of projects
supported by an OPIC-guaranteed investment fund or other financial
intermediaries (See ``''Investment Funds Policy'').
Environmental Screening
Environmental screening is the process of identifying, at the
earliest stage possible, the potential adverse environmental impacts of
a proposed project that could preclude OPIC support on categorical
grounds. If a project is determined to be categorically prohibited,
OPIC will promptly notify the investor that the application cannot be
considered for environmental clearance and ultimate project approval.
Examples of such projects include large dams that disrupt natural
ecosystems, infrastructure and raw material extraction in primary
tropical forests and other protected or ecologically fragile areas. (A
complete list of Categorical Prohibitions is provided in Appendix F.)
For projects that are not categorically ineligible for further
consideration,
[[Page 9698]]
OPIC continues its screening process to determine the level of effort
and public disclosure required for the satisfaction of OPIC's
environmental assessment requirements. OPIC's Environmental Unit
assigns each project to one of the following categories:
Category A: The appropriate category for projects likely to have
significant adverse environmental impacts that are sensitive (e.g.,
irreversible, affect vulnerable population groups, involve involuntary
resettlement, affect cultural heritage sites, etc.), diverse, or
unprecedented.\1\ Such projects can be readily identified on the basis
of industry sector or site sensitivity. They require a full-scale EIA
or IEAU, as well as an EMMP or ENR. A fairly comprehensive list of
industries and sites within this category is provided in Appendix E.
---------------------------------------------------------------------------
\1\ World Bank Group Pollution Prevention and Abatement
Handbook, September 1997.
---------------------------------------------------------------------------
Category B: The appropriate category for projects likely to have
adverse environmental impacts that are less significant than those of
Category A projects, meaning that few if any of the impacts are likely
to be irreversible, that they are site-specific, and that mitigatory
measures can be designed more readily than for Category A projects.\2\
The EA normally consists of a limited environmental review, identifying
suitable mitigating and management measures, and incorporating them
into the project. Projects not included in Categories A, C, D or E (as
defined below) can be expected to belong to Category B. Examples of
such project categories include: agriculture, electrical distribution,
electronics, food processing, light manufacturing, telecommunications
(involving infrastructure such as new telephone lines with rights of
way and towers, or that manufacture telecommunications equipment),
textiles and tourism. Information required from the applicant typically
includes the following: site description; processes involved; materials
used and stored on site; air, liquid, and solid wastes generated in
relation to applicable standards; and occupational health and safety
measures.
---------------------------------------------------------------------------
\2\ World Bank Group Pollution Prevention and Abatement
Handbook, September 1997.
---------------------------------------------------------------------------
Category C: The appropriate category for projects that are likely
to have minimal or no adverse environmental impacts. Projects in this
category that are normally exempt from all environmental assessment.\3\
Examples of such projects include branch banking, computer software
development and telecommunications (involving privatization of existing
service or other projects involving no infrastructure).
---------------------------------------------------------------------------
\3\ World Bank Group Pollution Prevention and Abatement
Handbook, September 1997.
---------------------------------------------------------------------------
Category D: This category includes financial intermediaries (FIs)
that make investments in or provide financing (loans, leases, etc.) to
identifiable projects or enterprises (``subprojects'') engaged in
activities within categories A and B. OPIC screens these subprojects to
determine the type of environmental review required. Also taken into
account is the nature and size of the FI's involvement in the
subproject. Expedited reviews are conducted for Category B subprojects
involving less than $5.0 million in investment, subject to further
review if the FI proceeds with additional investments in the same
subproject. (See section on Investment Funds' Policy.)
Category E: This category includes small-scale, stand-alone
business ventures that have demonstrable environmentally beneficial
impacts.\4\ Such projects may seek to promote conservation of natural
ecosystems or biological diversity and attempt to involve local
indigenous peoples and non-governmental organizations (NGOs) in the
management process. Ecotourism (as defined below) projects are an
example of this category of project. Certain Category E projects may be
subject to OPIC's public consultation and disclosure processes, as
described on page A-13, due to site sensitivity.
---------------------------------------------------------------------------
\4\ Projects that seek to environmentally enhance particular
aspects of a larger project are not screened into Category E.
---------------------------------------------------------------------------
Category F: Categorical Prohibitions: This category includes
projects that OPIC will not support due to negative environmental
impacts or siting concerns. If a project is determined to be
categorically prohibited, OPIC will promptly notify the investor that
the application cannot be considered for environmental clearance and
ultimate project approval. Examples of such projects include large dams
that disrupt natural ecosystems, infrastructure or raw material
extraction in primary tropical forests and other protected or
ecologically fragile areas. (A complete list of Categorical
Prohibitions is provided in Appendix F.)
Environmental Assessment (EA)
The primary purpose of OPIC's environmental review is to determine
the eligibility of the project based on OPIC's statutory obligation to
decline support for projects posing ``unreasonable or major
environmental, health or safety hazards.'' OPIC interprets ``health or
safety'' to apply both to project employees and to the affected public
living or working in the vicinity of the project.
In addition, OPIC is also required by statute to operate its
programs in a manner consistent with Sections 117, 118 and 119 of the
Foreign Assistance Act (FAA). These provisions pertain to environmental
assessment, and the protection of tropical forests, biodiversity and
endangered species, respectively.
Grounds for Declining Assistance to Projects. In addition to the
Categorical Prohibitions outlined above (See Screening and Appendix F)
there are several other circumstances under which OPIC will decline
support for a project on environmental grounds:
The applicant fails to provide OPIC with an EIA for a
Category A project or with adequate information about a Category B
project to conduct a review sufficient to determine project eligibility
on environmental grounds.
The project will, in OPIC's determination, result in
--Significant degradation of a national park, similar protected area or
tropical rainforest;
--The destruction of or significant degradation in the habitat of an
endangered species; and/or
--Other ``unreasonable or major environmental health or safety
hazards.''
Environmental assessment (EA) is the tool used by OPIC to make
these determinations and is the process of evaluating the environmental
and social impacts of a project and identifying ways to improve the
project by preventing, minimizing, mitigating, remediating or
compensating for adverse impacts as a condition of OPIC support. In a
broader sense, EA is the process of managing the environmental aspects
\5\ of a policy, strategy, program or project, from the earliest stages
of identifying potential actions to their completion and evaluation.
The process encompasses identification of potential adverse
environmental impacts; assessment of these impacts and comparison with
impacts of alternative approaches; design and implementation of
measures and plans to avoid, minimize, mitigate, or compensate for
adverse impacts; and design and implementation of associated management
and monitoring measures.
[[Page 9699]]
EA considers natural and social aspects in an integrated way.
---------------------------------------------------------------------------
\5\ World Bank Group Pollution Prevention and Abatement
Handbook, September 1997. The term `environment' encompasses the
natural environment (air, water, and land); human ecology and health
and safety; and sociocultural aspects (including involuntary
resettlement and indigenous peoples) and transboundary and global
environmental aspects.
---------------------------------------------------------------------------
By statute, OPIC is required to provide some degree of EA to every
project considered for insurance or finance in determining whether to
provide support for the project. This requirement extends to
subprojects undertaken by OPIC-supported investment funds and on-
lending facilities. (See the discussion of financial intermediaries,
below.) OPIC cannot provide a final commitment to a project (i.e.,
issue an insurance contract, disburse a loan, or approve a transaction
by a financial intermediary) until its environmental assessment is
complete and a determination is made by OPIC that the environmental,
health and safety impacts of the project are acceptable.
Different types of EAs are conducted by the applicant depending on
the nature of the project. The actual work may be conducted by the
applicant/sponsor or by a third party, such as an environmental
consultant. On the basis of its considerable experience reviewing such
materials, OPIC can advise applicants regarding many aspects of EA
preparation. OPIC can provide technical guidance to small businesses as
well as first time applicants on the scope and resources available for
preparing an assessment.
EAs and other environmental reports must be provided to OPIC as
early as possible in the application process. This enables OPIC to
identify environmental issues that may require additional attention
before the EA can be considered complete. Collaboration between OPIC
and other official and private lenders and insurers (which begins after
OPIC receives consent from the applicant) in reviewing environmental
information is in the interest of the applicant as it expedites the
review process and avoids delays and needless duplication with the
requirements of other lenders and insurers.
OPIC will make every effort to review the material thoroughly and
efficiently taking public comment period requirements (see below, p. A-
13) for Category A projects into account. In circumstances where OPIC
confronts a particularly full project pipeline, OPIC may contract for
outside expertise to enable it to complete the review process in a
timely manner. Any consultant hired to assist in the review would be
required to sign a confidentiality agreement to protect business
sensitive information.
In all cases, the cost of preparing the original EA is borne by the
applicant, sponsor or foreign enterprise. When OPIC engages independent
consultants to review all or part of the EA materials submitted by the
investor, to undertake an original assessment of the project and/or to
undertake a site visit as part of the environmental review process, it
requires the applicant to reimburse the associated costs.
OPIC may require one or more of the following documents to satisfy
a project's EA requirements:
Environmental Impact Assessment (EIA). An EIA is a comprehensive
assessment of the diverse impacts of a project on the natural and human
environment. It includes a detailed description of pre-existing
conditions (``baseline assessment''), all project activities having a
potential environmental impact (from pre-construction through
decommissioning and site reclamation), and the net impacts of the
project, taking into account alternative mitigative measures. It also
considers the relationship of the project to the natural and human
environment in the affected area and the cumulative impacts of those
activities. The content and format for an EIA will vary depending on
industry sector, the site and other project-specific factors. (A
generic format for an EIA is provided in Appendix B). If requested by
the client, OPIC will provide guidance with regard to the content of
the EIA.
Environmental Management and Monitoring Plan (EMMP). An EMMP is
designed to specify in detail the actions--both technical and
managerial--that the applicant or sponsor will undertake in order to
mitigate anticipated adverse impacts of the project on the environment,
health and safety. It also describes the technology and methodology
used to monitor the actual impacts of the projects on the environment
and the standards and procedures to be used for adjusting mitigative
measures as necessary to maintain impacts within an acceptable range.
(A generic format for an EMMP is suggested in Appendix C). While ISO
14000 Environmental Management Systems implementation is not a
substitute for a project-specific EMMP, a project sponsor's adherence
to the ISO criteria can facilitate the process of developing an
acceptable EMMP.
Major Hazard Assessment (MHA). An MHA is a specialized form of EA
designed to identify and assess the risks of catastrophic events
resulting from the operation of an industrial facility. For projects
requiring an MHA, OPIC requires completion of the MHA, preferably as
part of the EIA process, but no later than the commencement of project
operations. The categories of facilities subject to an MHA as well as
the content and format of an MHA are outlined in the ``World Bank
Guidelines for the Identification, Analysis and Control of Major Hazard
Installations in Developing Countries,'' a copy of which is available
from OPIC.
Initial Environmental Audit (IEAU). If the investment involves the
acquisition of a pre-existing facility or a site on which industrial
activity previously occurred, the project may also be subject to an
IEAU. An IEAU is designed to identify pre-existing adverse
environmental, health or safety conditions that could affect future
impacts from the facility or site. (A generic format for an IEAU is
suggested in Appendix D.) ISO Environmental Auditing criteria are a
useful adjunct to, although not a substitute for, performance-based
auditing that is required to meet OPIC IEAU requirements.
Environmental Remediation Plan (ENR). The project may involve the
remediation of environmentally adverse conditions at a site. In this
case the applicant will be required to provide OPIC with an ENR,
similar in format to an EMMP, and designed to address the issues raised
in the audit.
An EMMP, IEAU or ENR may be included as part of an EIA. Other
documents prepared to satisfy the requirements of other lenders may be
submitted to OPIC so long as the documentation addresses the
substantive issues needed for OPIC to complete its review of the
project.
Environmental Impact Statement (EIS). By statute and Executive
Order (EO) 12114 (See Appendix A), OPIC is required to prepare, and to
take fully into account, an EIS for any project ``significantly
affecting the environment of the global commons outside the
jurisdiction of any nation (e.g., the oceans or Antarctica).'' Given
the discrete nature of projects assisted by OPIC, it is considered
unlikely that any single project assisted by OPIC would meet the test
of ``significant impact'' on the global commons to warrant an EIS.
However, the cumulative impacts of several large projects could
conceivably have an impact on extraterritorial waters or the atmosphere
sufficient to trigger the requirement.
As prescribed by EO 12114, such an EIS should be concise and no
longer than necessary to permit an informed consideration of the
environmental effects of the proposed project and the reasonable
alternatives. It should include the following sections: (1) Purpose and
need for the proposed project; (2) a sufficient description of the
environment of the global commons affected by the proposed action; (3)
an
[[Page 9700]]
analysis, in comparative form, of the environmental consequences on the
global commons of the proposed action; and (4) reasonable alternative
means of structuring the project.
In lieu of preparing a new EIS, the Executive Order permits OPIC to
rely on one of the following: a pre-existing EIS for the same project
or a project involving similar environmental issues; a generic EIS
covering a number of similar projects; or an EIS obtained by other
agencies.
Public Consultation and Disclosure
The environmental assessment process has become an increasingly
public and transparent process among environmental regulatory agencies
in the United States and in some, although not all, foreign countries.
Likewise, multilateral development agencies that provide assistance to
governments and other public sector clients have also made their
activities more transparent to the public in both donor and host
countries.
OPIC recognizes the added value that interested and well-informed
members of the public can bring to the environmental assessment process
undertaken by its clients as well as by OPIC itself. Host country as
well as international non-governmental organizations (NGOs) often have
access to information and perceptions about potential environmental
impacts and resulting social, economic and cultural impacts that need
to be carefully considered as early as possible in the assessment
process. As a result, OPIC provides the public with a full opportunity
to comment on all Category A projects before making a final commitment
to such projects. A final commitment takes the form of a contract or
loan agreement for an insurance or finance project respectively.
At the same time, certain aspects of the plans and proposals of
private sector investors may contain sensitive business information.
While OPIC is subject to the disclosure requirements of the Freedom of
Information Act, those requirements contain an exemption for business
confidential information that is protected from disclosure under the
Trade Secrets Act.\6\
---------------------------------------------------------------------------
\6\ Certain requests for information may have to be obtained
through Freedom of Information Act (FOIA) requests. For more
information about OPIC's FOIA process visit OPIC's web page: HTTP://
WWW.OPIC.GOV/SUBDOCS/CONTACT/FOIA.HTM
---------------------------------------------------------------------------
Because OPIC's goal is to provide the public with a level of
comfort about its environmental process, applicants for OPIC assistance
for Category A insurance and finance projects are required to submit
Environmental Impact Assessments or Initial Environmental Audits (to be
distinguished from the independent third-party compliance audit) in a
form that can be shared with the public. In an effort to save copying
time and expenses, OPIC encourages applicants to provide the EIA on a
``read only'' computer disc.
Applicants must sign a waiver agreeing to public release of their
EIA or IEAU. Because EIAs and IEAUs are the property of the applicant,
OPIC cannot release these documents if the applicant does not consent.
However, if an applicant does not agree to EIA or IEAU release, OPIC
will be unable to proceed with further consideration of the
application.
In submitting project-specific information to OPIC, including
audits, management and remediation plans as well as monitoring reports,
applicants must specify which information has been or will be made
public in any format, including in the host country. Any additional
information that is identified as a public document will be treated as
such by OPIC in response to a specific request for such information.
Business confidential information will be accorded confidential
treatment to the full extent permitted by law.
World Wide Web Posting. The first step in OPIC's public
consultation and disclosure process is posting a notice of OPIC's
potential support for a Category A project on the World Wide Web. When
OPIC's Environmental Unit receives an environmental clearance request
in connection with an insurance or finance application for a Category A
project or subproject, OPIC will list the nature of the project and its
location (but not the name of the applicant or sponsor, e.g. ``Gas-
Fired Power Plant, Turkey'') on OPIC's Home Page on the World Wide Web
(HTTP://WWW.OPIC.GOV). No business confidential information will be
disclosed. This list will be updated at least monthly, and any comments
received will be considered in OPIC's processing of the application.
Additional information about projects may be provided to OPIC at any
time throughout the term of the project.
Comment Period. As a second step in the public consultation and
disclosure process, OPIC will provide the public with a full
opportunity to comment on all Category A projects before making a final
commitment to such projects. OPIC will consider all public comments
received and take them into account in its environmental assessment and
decision-making process. Should additional information be required
based on comments received, OPIC will pass these requests to the
applicant. The comment period varies depending on the type of support
an investor seeks:
Project Finance & Political Risk Insurance. Before making a final
decision to support a Category A project with political risk insurance,
OPIC will disclose the applicant's EIA or IEAU to the public for a
comment period of 60 days. OPIC will indicate on its World Wide Web
site and on a list server \7\ when OPIC receives a publicly releasable
copy of the EIA or IEAU, thus commencing the 60 day comment period.
OPIC also encourages the sponsor to release the EIA or IEAU in the host
country whenever feasible. A 60 day comment period is consistent with
the comment periods applied by multilateral institutions that issue
project finance and political risk insurance.
---------------------------------------------------------------------------
\7\ A list server is a mechanism for automatically updating OPIC
users of new Category A projects via the internet.
---------------------------------------------------------------------------
Financial Intermediaries (FIs). For FI investments: (A) OPIC will
post the nature of the investment and country where it is located on
OPIC's World Wide Web site and on a list server as soon as a request
for approval of a Category A investment is received. FI investments are
identified by an asterisk (*) unless only one fund is active in a given
country or the identity of the fund is self-evident by the nature of
the project. (B) OPIC will indicate when the EIA or IEAU for
investments has been received by OPIC on the World Wide Web site. OPIC
recognizes that the competitive nature of investment fund portfolio
activity may require more restrictive treatment of fund EIAs, etc. than
is the case for conventional investments.
Host Country Notification. In addition to public consultation, when
OPIC supports an environmentally sensitive project, OPIC notifies
appropriate host country government officials of all applicable
environmental, health and safety standards applicable to the project
(See Appendix H).
Annual OPIC Report. OPIC will report annually to Congress and the
public regarding its implementation of and compliance with internal,
national and international environmental policies, laws, treaties and
agreements to which its programs are subject. No confidential business
information will be disclosed in these reports.
Environmental Standards
In determining whether a project will pose an unreasonable or major
environmental, health or safety hazard,
[[Page 9701]]
or will result in significant degradation of national parks or similar
protected areas, Congress advised OPIC to ``rely primarily upon
guidelines and standards adopted by international organizations such as
the World Bank * * * and nongovernmental organizations with expertise
in this area.'' (House Report 99-285, September 23, 1985, page 5.)
1997 World Bank Group Pollution Prevention and Abatement Handbook.
In an effort to strengthen its standards, OPIC will rely on the most
current version of the World Bank standards for the majority of its
projects. The most current version was issued by the World Bank Group
in September of 1997 for the majority of industrial categories.
The 1997 Handbook received extensive review by several governments
(including U.S. federal environmental agencies), branches of the United
Nations, non-governmental organizations, industry associations and
individual companies.\8\
---------------------------------------------------------------------------
\8\ World Bank Group Pollution Prevention and Abatement
Handbook, September 1997.
---------------------------------------------------------------------------
Use of international standards is consistent with the current
practice of the IFC, MIGA and other organizations involved in
international investment. For particular industries not included in the
1997 draft, OPIC will consider compliance with the 1994 draft
guidelines acceptable. As the Bank continues to update its guidelines,
OPIC will substitute more current versions of particular guidelines on
a case-by-case basis by industry. (See Appendix G.)
Where there are gaps in World Bank standards on a given
environmental or natural resource issue, OPIC incorporates U.S. federal
standards, World Health Organization standards, and standards set by
other international authorities in its environmental assessment and
decision making process. In addition, OPIC has adopted particular
standards with respect to Ecotourism and Forestry.
Host Country Standards. All projects must comply with host country
environmental regulations. Therefore, whenever possible, applicants
must provide OPIC with summaries or copies of applicable host country
regulations as part of their EIS or EIA (for Category A projects) or as
information provided in support of their application (for Category B
projects). Government permits and certifications of compliance are
necessary in this regard, although not always sufficient to establish
compliance.
Cumulative and Associated Impact Assessment. In considering project
applications, OPIC takes into account in its decision-making process
the overall environmental effects of which its involvement is part. The
agency will avoid support where OPIC involvement in a project results
in cumulative or associated impacts that violate OPIC standards. In the
environmental assessment process, the term ``cumulative impacts'' means
recognition of the total environmental impact of pre-existing projects,
the proposed project, and imminent future projects.\9\ Cumulative
impacts can result from individually minor but collectively significant
actions taking place over a period of time. Assessing associated
impacts recognizes that certain other industrial processes are directly
and indirectly linked with the project being assessed and their
environmental impacts must be incorporated into the environmental
assessment.\10\
---------------------------------------------------------------------------
\9\ International Finance Corporation, ``Environmental Analysis
and Review of Projects,'' September 1993. World Bank OD 4.00-Annex
A. In addition, regional environmental assessments are applied by
the World Bank where a number of significant development activities
with potentially cumulative impacts are planned for a reasonably
localized area.
\10\ World Bank Operational Directive 4.00-Annex A: ``Indirect
impacts are induced consequences of the project which occur later or
in another part of the environment.'' Direct effects are caused by
the action and occur at the same time and place. Indirect effects
are caused by the action and are later in time or farther removed in
distance, but are still reasonably foreseeable. Indirect effects may
include growth inducing effects and other effects related to induced
changes in the pattern of land use, population density or growth
rate, and related effects on air and water and other natural
systems, including ecosystems.
---------------------------------------------------------------------------
Other Applicable Standards
In addition to the World Bank Group 1997 Pollution Prevention and
Abatement Handbook, the Bank has issued policies on Natural Habitats,
Involuntary Resettlement, Pest Management, Dams and International
Waterways. OPIC uses these policies to the extent applicable to private
sector investments.\11\
---------------------------------------------------------------------------
\11\ World Bank/IFC policies on Indigenous Peoples and Cultural
Properties are forthcoming.
---------------------------------------------------------------------------
Protected Area Standards
With respect to the identification of national parks and similar
protected areas, OPIC relies on World Bank guidelines and standards
stated in Operational Policy (OP) 4.04 on ``Natural Habitats'' issued
in September 1995. World Bank OP 4.04 defines ``critical natural
habitats'' as ``protected areas and areas officially proposed by
governments as protected areas (e.g. reserves that meet the criteria of
International Union for the Conservation of Nature [IUCN] \12\
classifications) * * * as indicated in Guidelines for Protected Area
Management Categories (Gland, Switzerland, and Cambridge, UK: IUCN/
1994) and the United Nations List of National Parks and Protected Areas
or by a similar list acceptable to the Bank, published by another
competent organization.''
---------------------------------------------------------------------------
\12\ The IUCN is a quasi-governmental organization established
in 1948 and is comprised of governments (including the U.S., Japan,
UK, Brazil, Sweden, etc.), government agencies, and international
and local non-governmental organizations. The U.S. Government is an
active participant in the IUCN. Six U.S. Government agencies are
members of the IUCN (State Department, Interior Department,
Agriculture Department, Commerce Department, Environmental
Protection Agency, and the U.S. Agency for International
Development). The IUCN's Commission on National Parks and Protected
Areas (CNPPA) is the leading international scientific and technical
body concerned with the selection, establishment and management of
national parks and other protected areas.
---------------------------------------------------------------------------
United Nations List of National Parks and Protected Areas (UN
List). The UN list was first issued in December 1962, and most recently
in 1993. For purposes of the UN list, a protected area was defined as
an ``area of land and/or sea [no smaller than 1,000 hectares]
especially dedicated to the protection and maintenance of biological
diversity, and of natural and associated cultural resources, and
managed through legal or other effective means.'' The UN list is
compiled by the IUCN and the World Conservation Monitoring Centre
(WCMC). Projects in or adversely impacting areas on the UN List are
categorically prohibited. (See Appendix F.) Projects that are near
national parks and protected areas have the potential to adversely
impact such areas.
In 1994 the IUCN published its Guidelines for Protected Area
Management, the purpose of which was to establish international
standards for the definition, identification and management of
protected areas. The relevant categories and primary management
objectives of each are summarized below:
------------------------------------------------------------------------
General management
Category Designation objectives
------------------------------------------------------------------------
Category 1a................. Strict Nature Managed mainly for
Reserve. science, preservation of
species and genetic
diversity.
Category 1b................. Wilderness Area Managed mainly for
wilderness protection.
[[Page 9702]]
Category II................. National Park.. Managed mainly for
ecosystem protection and
recreation.
Category III................ Natural Managed mainly for
Monument. conservation of specific
natural features.
Category IV................. Habitat/Species Managed mainly for
Management conservation through
Area. management intervention.
Category V.................. Protected Managed mainly for
Landscape/ landscape/seascape
Seascape. conservation and
recreation.
Category VI................. Managed Managed mainly for the
Resource sustainable use of
Protected Area. natural ecosystems.
------------------------------------------------------------------------
OPIC applies the IUCN's management category definitions to derive
two general categories of protected areas:
(1) Management Categories I-IV. Strict Nature Reserves/Wilderness
Areas, National Parks, Natural Monuments and Habitat/Species Management
Areas. Projects in or impacting these sensitive locations are
categorically prohibited unless determined to be Category E projects.
(See Appendix F.)
(2) Management Categories V-VI. Protected Landscape/Seascapes,
Managed Resource Protected Areas. Projects in or impacting these two
areas, including any extractive projects, must be consistent with IUCN
management objectives. For example, projects in Category V areas must
be consistent with recreation and conservation objectives in those
areas. Likewise, projects in Category VI areas must be consistent with
sustainable use of natural ecosystem objectives in those areas.
Resettlement Standards
Projects that require large-scale (more than 5,000 persons)
involuntary resettlement are categorically prohibited (See Appendix F).
For any potential project involving the resettlement of 100 or more
households, OPIC will assess the ability of the project sponsor to
carry out an effective resettlement program consistent with IFC
Operational Policy 4.12: Involuntary Resettlement and any subsequent
policy revisions or updates from the IFC. Copies of the Involuntary
Settlement Policy are available from OPIC.
Hydroelectric Dam Standards
OPIC does not support the construction of large dam projects that
disrupt natural ecosystems or the livelihoods of local inhabitants (See
Appendix F).
All other hydroelectric dam projects must, at a minimum, address
the issues noted in U.S. Export-Import Bank's Guidelines for Hydropower
and Water Resources Management (Dams & Reservoirs) as well as the World
Bank/IUCN Checklist For Key Potential Environmental & Social Impacts
Caused By Large Dam Projects.\13\ Copies of the Ex-Im guidelines and
the World Bank/IUCN checklist are available from OPIC.
---------------------------------------------------------------------------
\13\ World Bank Group/IUCN, Large Dams: Learning Frm the Past,
Looking at the Future, Workshop Proceedings, Gland Switzerland,
April 11-12, 1997.
---------------------------------------------------------------------------
Costs and benefits of large dams have been debated for many years.
Proponents note that dams provide electric power, irrigation for
agriculture, and water supply to developing areas. Critics claim that
project sponsors, public and private, systematically downplay the
adverse environmental, social and economic impacts of dams.\14\
Negative impacts associated with hydroelectric dams have included
population decline in certain species, involuntary resettlement of
indigenous people and reduced water quality.\15\ As a result, certain
large dam projects are categorically prohibited by OPIC. (See Appendix
F.)
---------------------------------------------------------------------------
\14\ World Bank Group/IUCN World Commission on Dams.
\15\ World Bank Gruop/IUCN World Commission on Dams, April 1997
Conference Report.
---------------------------------------------------------------------------
World Commission on Dams. At a Workshop in Gland, Switzerland in
April 1997 jointly hosted by the World Bank and IUCN, stakeholder
representatives from governments, civil society organizations,
international financial institutions, and the private sector agreed to
establish a World Commission on Dams. An independent commission was
established and has a two year mandate to review the development
effectiveness of large dams and develop standards, criteria and
guidelines to advise future decision making. Pending completion of the
commission's report, EIAs prepared for hydroelectric dam projects
should, at a minimum, address the issues noted above.
Forestry Standards/Certification
Infrastructure and extractive projects, including commercial timber
harvesting, in primary tropical forests are categorically prohibited
(See Appendix F).
Due to the difficulty of implementing consistent sustainability
across a broad range of ecological conditions, all other OPIC-supported
projects involving extraction from natural forests, including all
boreal/temperate forests and all secondary forests, must be and remain
certified by an independent non-governmental organization. Such
organizations must be accredited by an international accreditation body
(such as the Forest Stewardship Council) that can hold the certifier
accountable to a common set of principles and procedural protocols,
including periodic review and re-accreditation. Accredited certifiers
are required to adhere to an internationally agreed set of forest
management performance standards which incorporate a comprehensive
range of environmental and social criteria developed by a diverse group
of interests, organizations and stakeholders. Any forest product
labeling associated with a certified forest must be guaranteed by a
separate certification that credibly connects the labeled product to
its certified forest-of-origin.
Ecotourism Standards
All ecotourism projects should address the following issues: (1) A
comprehensive plan to protect ecological integrity and enhance
community participation. (2) Local community capacity building that
provides necessary skills for ecotourism development, while ensuring
that this development merges with traditional practices. (3) The
primary revenue source of the project must be directly linked to the
conservation effort. As a result, OPIC-supported ecotourism projects
can be a profitable conservation and community development model.
Ecotourism is a means of enabling tourist dollars to flow into
local communities in developing countries while simultaneously
conserving ecosystems and wildlife through responsible travel that
preserves cultures and natural environments.
Tourism in natural areas can generate significant adverse impacts
beyond those normally associated with large-scale tourism in commercial
areas. The World Bank Guideline on Tourism and Hotels is designed for
tourism in a conventional setting and does not address the specialized
impacts of tourism in natural ecosystems. OPIC-
[[Page 9703]]
supported Ecotourism projects seek to balance profitability with
ecological sustainability and respect for indigenous cultures.
Best Practices. OPIC does not attempt to prescribe to its potential
users the choice of technologies or processes they must use to meet the
applicable guidelines. However, standards of best practice developed by
governments, industry and non-governmental organizations can be useful
in providing guidance to OPIC and its users in assessing alternatives
and their feasibility. For this purpose OPIC makes use of international
best practice guidelines for sectors of particular importance to OPIC's
environmental mandate.
Climate Change and Renewable Energy
In 1992 the U.S. signed the UN Framework Convention on Climate
Change (FCCC) and committed the U.S. to ``stabilization of greenhouse
gas concentrations at a level that would prevent dangerous
anthropogenic interference with the climate system.'' In December 1997,
agreement was reached at Kyoto requiring mandatory limitations and
reductions in greenhouse gases by developed countries. However, it is
important to note that the U.S. Government recognizes that any
effective international effort to reduce greenhouse gas emissions must
include meaningful participation of developing countries.\16\ OPIC
seeks to support this policy via the following mechanisms:
---------------------------------------------------------------------------
\16\ Speech of President Clinton on July 24, 1997; Byrd-Hagel
Resolution on Climate Change (S. Res. 98).
---------------------------------------------------------------------------
Joint Implementation. To encourage U.S. companies, particularly
small business, to participate in efforts to reduce global greenhouse
gas emissions, OPIC will provide customized pricing for small business
projects intended to reduce such emissions, in particular those
projects certified by the U.S. Initiative for Joint Implementation (the
sharing of technology and resources, particularly transfers from
Developed to Developing nations, to limit and reduce GHG emissions).
OPIC will continually strive to make its portfolio more climate
friendly by proactively seeking renewable energy projects and by
seeking to harmonize its approach to climate change issues with that of
other U.S. Government entities.
Climate Change Reporting. In an effort to support the management of
global greenhouse gas emissions, OPIC tracks and reports, on an
aggregate basis, the annual greenhouse gas emissions from its power
sector projects. OPIC will track and report, on an aggregate basis, the
annual greenhouse gas emissions from other greenhouse gas emitting
projects to the extent an appropriate framework is available. Aggregate
tracking results will be available to the public and reported annually
to Congress.
Conditionality
In many cases, determinations of eligibility rely on critical
representations made by the client with respect to baseline
environmental conditions, mitigative measures and net impacts of
proposed projects. In addition to the EMMP or ENR submitted by the
applicant, OPIC may require the application of additional mitigative
measures in order to ensure that a project will not pose an
unreasonable or major environmental, health or safety hazard. These
critical representations and those undertakings agreed to by the
applicant or sponsor may be included in OPIC project documentation as
preconditions to contract execution, conditions of disbursement and/or
ongoing covenants, depending on the type of agreement entered into
between OPIC and the applicant. Where OPIC insures an institutional
lender, contract conditions are incorporated into the loan
documentation.
Environmental conditions and covenants are developed in close
consultation with the client to minimize the cost to the project and to
ensure that they are consistent with the host country's legal
framework, objectively measurable and verifiable, and allow for
sufficient flexibility to address issues if circumstances change. Upon
approval and in response to public requests, OPIC documents its
determination as to applicable substantive/technical standards and
conditions in an EA Summary.
Monitoring and Compliance
OPIC's environmental assessment process is an ongoing one and
continues through the full term of OPIC's relationship with the project
sponsor.
Monitoring. OPIC reserves the right to monitor projects' compliance
with environmental representations and undertakings throughout the term
of its insurance or financing. Monitoring may take the form of self-
reporting by the investor of summaries and, in specified cases, raw
data obtained from monitoring a project's environmental performance
(emissions, effluents or other waste discharges) as well as its
environmental impacts (e.g., on ambient conditions and biological
resources). OPIC requires investors to submit annual self-monitoring
reports for Category A projects. These annual reports must provide OPIC
with regular testing results for any emission standards, effluent
standards, ambient air limitations or water quality limitations that
were represented by the investor. Monitoring may also take the form of
third party evaluation, including compliance information developed by
host government authorities, co-lenders and independent auditors.
OPIC routinely conducts on-site monitoring of projects, using OPIC
staff and/or consultants, for environmental and environmentally-based
social impacts as well as U.S. economic and host country development
effects. OPIC endeavors to monitor all Category A projects on-site at
least once during the first three years of project commitment, and more
frequently depending on the environmental sensitivity of the project.
Category B, D and E projects are also subject to monitoring on a random
and selective basis.
Compliance Audits. OPIC requires project sponsors to conduct third-
party independent audits for all Category A projects. These audits are
designed to take place after an OPIC supported project begins
construction or is operational.\17\ The purpose of these audits is to
evaluate a project's compliance with all environmental and social
conditions (and underlying representations) that are reflected in
OPIC's environmental or related social requirements with respect to the
project and to validate the methodology used for all self-monitoring
reports. At least one independent third-party audit must be conducted
generally within the first three years of all Category A projects and
the sponsor must provide certification to OPIC that OPIC's contract
conditions have been met. OPIC retains the right to review all
compliance audits.
---------------------------------------------------------------------------
\17\ The independent third-party audit is distinct from the IEAU
conducted during the application process for existing projects. It
is further distinguished because the IEAU may be conducted by the
sponsor, whereas the compliance audit is to be conducted by an
independent third-party.
---------------------------------------------------------------------------
Category A projects will be required to conduct further certified
independent audits if the investor fails to submit contractually
required annual self-monitoring reports in a timely manner or if
monitoring trips or other information indicates a need for further
independent audits.
Business confidential information in these audits will be accorded
confidential treatment to the full extent permitted by law.
Independent third-party compliance audits allow OPIC-supported
projects to be evaluated in an objective and
[[Page 9704]]
systematic manner based on defined criteria. Proper execution of an
audit requires active cooperation of project owners and/or managers,
good coordination of all interviews and sampling activities in order to
reduce costs and a carefully documented inspection to support all
findings and recommendations.\18\
---------------------------------------------------------------------------
\18\ World Bank Group Pollution Prevention and Abatement
Handbook, September 1997.
---------------------------------------------------------------------------
Non-compliance, Remediation and Termination. Material
misrepresentation or non-compliance with environmental undertakings may
constitute an event of default under the terms of OPIC insurance
contracts and loan agreements. Depending on the severity and
reversibility of the environmental impact and the investor's
responsibility and due diligence in attempting to prevent the default
and in curing the problem, OPIC may treat the default as curable or
incurable. In the case of a curable default, OPIC works with the
investor to develop a feasible timetable for remediation. In the case
of an incurable default, OPIC may require contract termination in the
case of insurance, or acceleration of repayment or other available
lenders' remedies, in the case of a loan. If an equity investment on
the part of a financial intermediary (FI) is involved, divestiture by
the FI may be required. Additionally, failure to meet contractually
required reporting requirements can constitute a default. In all cases,
OPIC seeks to work cooperatively with investors and lenders to arrive
at an equitable resolution of the situation, taking into account the
requirements of other lenders and insurers.
Investment Funds Policy
The investment funds are one type of OPIC-supported FI. OPIC
provides financing to support a number of privately owned and managed
direct investment funds that have the capability to provide equity
capital to facilitate business formation and expansion. The investment
funds are privately owned, privately managed, and make their own
commercially based investment decisions. Typically, OPIC-supported
investment funds invest in five to forty percent of the equity capital
of each of their portfolio companies (although they may hold a majority
position), and may hold equity interests in ten to twenty companies
when fully invested. It has been OPIC's experience that the majority of
Category A projects involve the expansion or acquisition of existing
projects as opposed to ``greenfield'' projects.
All Category A investment fund projects are subject to a full
Environmental Impact Assessment or Audit and resulting terms and
conditions unique to the project. Additionally, where a fund proposes
to invest in a company rather than a specific project, the fund must
narrow the scope of the company's proposed use of the proceeds of the
fund's investment to specific projects that can readily be assessed.
All non-Category A portfolio investments involving a fund
commitment greater than $5 million require OPIC screening and
assessment in accordance with the procedures noted in this Handbook.
All non-Category A portfolio investments involving a fund
commitment of $5 million or less (a ``Non-Sensitive Small Project'' or
``NSSP'') can be invested in by the Fund prior to receiving formal
environmental clearance subject to the following conditions:
The fund must explicitly request that the proposal be
reviewed under an expedited process.
OPIC may ask follow-up questions for five business days
following the date of initial submission of the subproject, in order to
determine whether the proposed investment qualifies for expedited
review.
The fund must represent that it has taken commercially
reasonable efforts to obtain and provide all relevant environmental
information to OPIC and has no reason to believe that the project would
pose an unreasonable or major environmental, health or safety hazard.
Furthermore, the fund must represent that it will continue to obtain
and disclose to OPIC any material supplemental environmental, health or
safety information as received.
Any follow-on investment in the project will be subject to
OPIC review and clearance prior to the date of such further investment.
At OPIC's discretion, further review of an NSSP may occur
within a reasonable time period following the date of investment.
Possible outcomes of this review are:
i. Class I--The project is satisfactory and no further conditions
are placed on the NSSP.
ii. Class II--The project poses certain non-critical environmental,
health or safety issues. A remediation plan must be developed and
implemented. No further fund investment in the project will be
authorized prior to development of the remediation plan.
iii. Class III--The project poses unreasonable or major
environmental, health or safety hazards. No further investments in the
project are authorized and divestment must occur.
Finally, following OPIC review, investments may be authorized for
non-Category A investments involving a fund commitment greater than $5
million (and for follow-on investments in Class I and II NSSP projects)
that do not initially meet World Bank Guidelines, under the following
terms and conditions:
A detailed and time-sensitive remediation plan is
developed;
The remediation plan is incorporated into the fund's
investment arrangements with the portfolio company in a manner that
provides the fund with legally binding enforcement rights in the event
of material non-compliance;
At a minimum, the fund reports annually to OPIC regarding
implementation of the remediation plan;
OPIC will require the fund to implement its enforcement
rights or divest its position in the event of material non-compliance
with the approved remediation plan.
Appendix A--OPIC Statute (Environmental Provisions) and Executive Order
12114 (and Reprint of a 1979 FR Notice Implementing the EO)
All references are to the Foreign Assistance Act of 1961, as
amended, most recently by the Jobs Through Exports Act of 1992.
Section 231 * * *. The Corporation, in determining whether to
provide insurance, financing or reinsurance for a project, shall
especially--
(3) Ensure that the project is consistent with the provisions of
section 117, (as so redesignated by the Special Foreign Assistance
Act of 1986), section 118, and section 119 of this Act relating to
the environment and natural resources of, and tropical forests and
endangered species in, developing countries, and consistent with the
intent of regulations issued pursuant to sections 118 and 119 of
this Act.
In carrying out its purpose, the Corporation, utilizing broad
criteria, shall undertake--(n) to refuse to insure, reinsure,
guarantee or finance any investment in connection with a project
that the Corporation determines will pose an unreasonable or major
environmental, health or safety hazard, or will result in the
significant degradation of national parks or similar protected
areas.
Section 237. General Provisions Relating to Insurance, Guaranty and
Financing Programs
(m)(1) Before finally issuing insurance, reinsurance,
guarantees, or financing under this title for any environmentally
sensitive investment in connection with a project in a country, the
Corporation shall notify appropriate government officials of that
country of--
(A) all guidelines and other standards adopted by the
International Bank for Reconstruction and Development and any other
international organization relating to
[[Page 9705]]
the public health and safety or the environment which are applicable
the project; and
(B) to the maximum extent practicable, any restriction under any
law of the United States relating to public health or safety or the
environment that would apply to the project if the project were
undertaken in the United States.
The notification under the preceding sentence shall include a
summary of the guidelines, standards and restrictions referred to in
subparagraphs (A) and (B), and may include any environmental impact
statement, assessment, review or study prepared with respect to the
investment pursuant to section 239(g).
Section 239. General Provisions and Powers
(g) The requirements of section 117(c) of this Act relating to
environmental impact statements and environmental assessments shall
apply to any investment which the Corporation insures, reinsures,
guarantees, or finances under this title in connection with a
project in a country.
Environmental Assessment Procedures For Executive Order 12114
On January 4, 1979 the President issued Executive Order 12114
(44 FR 1957) entitled ``Environmental Effects Abroad of Major
Federal Actions''. The Executive Order requires federal agencies
taking action encompassed by the Order, and not exempted from it, to
effectuate procedures to implement the Order. The Overseas Private
Investment Corporation (OPIC) is implementing the Executive Order by
the adoption of the following procedures to take effect on September
4, 1979.
Section 1. Purpose
As required by Executive Order 12114. issued January 4, 1979,
which is incorporated herein by reference, the following procedures
shall be used by OPIC to ensure that all significant environmental
effects of its actions outside the United States are considered by
OPIC in its review of proposed insurance and finance projects. These
procedures shall supplement OPIC's existing environmental procedures
and guidelines required by the Foreign Assistance Act as amended
(the ``Act''), as set forth in OPIC Board of Directors and the
``OPIC Environmental Handbook.''
Section 2. Definition
A. Application. The term ``application'' means a formal request
to OPIC in the manner specified by OPIC for assistance under an OPIC
program from an eligible private party interested in investing in a
project in a foreign nation.
B. Environment. The term ``environment'' means the natural and
physical environment and excludes social, economic, and other
environments.
C. Global Commons. the term ``global commons'' means areas
outside the exercise of any national jurisdiction.
D. Host Country. The term ``host country'' means the foreign
country in which a project for which OPIC assistance is sought is or
will be located.
E. Major Action. The term ``major action'' means a contractual
commitment by OPIC to provide assistance under an OPIC program
involving at least $ 1 million of insured investment, loan
guaranties or direct loans. If the applicant therefor has or will
have sufficient control over the design and/or operation of the
project to mitigate environmental concerns raised by OPIC.
F. OPIC Programs. The term ``OPIC programs'' includes OPIC's
insurance, direct loan and loan guaranty programs as authorized by
the Act.
G. Significant Effects. With respect to effects on the
environment outside the United States, a proposed action has a
significant effect on the environment if it does significant harm to
the environment even though on balance the action is believed to
result in beneficial effects on the environment.
Section 3. Applicability of Procedures
A. Scope. Except as provided in Subsections B, C, and D below,
these procedures shall apply with respect to OPIC's review of each
new application for assistance under an OPIC program, whether for
new projects or expansions of existing projects, if a favorable
decision on such application will result in a major action by OPIC.
B. Exemptions. If upon the initial review of an application the
OPIC insurance or finance officer making such review determines that
the project for which OPIC assistance is sought has no significant
effects upon the environment outside the United States, these
procedures shall not apply. If upon further review of the
application, and prior to taking action, it is determined that the
project may have a significant effect upon the environment, this
exemption shall no longer apply. Also exempt from these procedures
are actions falling within the categories listed in Section 2-5(ii)
through (vii) of the Executive Order, as limited by Section 2-5(d).
A concise administrative record will be prepared to document these
determinations.
C. Categorical Exclusions. These procedures shall not apply to
the review of an application for any project falling within the
scope of any category of projects that are determined to involve no
significant effects on the environment. OPIC's Investment Committee
shall have the authority to establish such categorical exclusions.
D. Special Exemptions. These procedures shall not apply to the
review of any application for which the General Counsel determines
that an exemption is necessary as a result of emergency
circumstances, situations involving exceptional foreign policy or
national security sensitivity or other special circumstances (except
as limited by Section 2-5(d) of the Executive Order). In utilizing
any such special exemption, OPIC, through its designated
Environmental Officer, shall consult as soon as feasible with the
Department of State and the Council of Environmental Quality.
Section 4. Initial Determinations
A. With respect to any application for OPIC assistance falling
within the scope of Section 3(A) above, the OPIC officer reviewing
such application shall make the following determinations that shall
be documented by a concise administrative record:
1. Whether the proposed project is likely to have a significant
effect on the environment of the global commons;
2. Whether the proposed project is likely to have a significant
effect on the environment of a foreign country other than the host
country; and
3. Whether the proposed project is likely to have a significant
effect on the environment of a foreign country because it would
provide to that country;
(a) a product, or physical project producing a principal product
or an emission or effluent, which is prohibited or strictly
regulated by Federal law in the United States because its toxic
effects on the environment create a serious public health risk, such
as asbestos, vinyl chloride, acrylonitrile, isocyanates,
polychlorinated biphenyls, mercury, beryllium, arsenic, cadmium, and
benzene; or
(b) a physical project which in the United States is prohibited
or strictly regulated by Federal law to protect the environment
against radioactive substances.
4. Whether the proposed project is likely to have a significant
effect on natural or ecological resources of global importance
hereafter designated for protection by the President or in the case
of such a resource protected by international agreement binding on
the United States, by the Secretary of State.
B. The determination required in Subsection A above shall be
based upon the information contained in the application, information
reasonably available to OPIC and such additional information from
the applicant as deemed necessary by the reviewing officer.
C. In the event that the reviewing officer makes a positive
determination with respect to any of the categories specified in
Subsection A above (i.e. that a significant effect is likely to
result), and such determination is not reversed upon review by a
supervisory officer or by the Investment Committee, the finance or
insurance department, as the case may be, in consultation with
OPIC's Environmental Officer, shall take the following actions, as
appropriate, prior to acting on the application:
1. If the harmful effect is of the type described in Subsection
A(1) above, an environmental impact statement shall be obtained in
the manner specified in Section 5 below. Such an environmental
impact statement shall consider only the effects described in
Subsection A(1), regardless of whether the project would result in
other kinds of environmental effects.
2. If the harmful effect is of the type described in Subsection
A(2), A(3) or A(4) above, an environmental study or an environmental
review shall be prepared in the manner specified in Section 6 below.
Section 5. Environmental Impact Statement
A. If a department within OPIC is required by Section 4(C)(1) to
cause the preparation of an environmental impact statement for a
particular project, it shall do so in accordance with Subsection B
below. If an environmental impact statement for the proposed
project, a project involving similar environmental issues or a
generic statement
[[Page 9706]]
covering a host of similar projects already exists, no new
environmental impact statement shall be required. When one or more
other agencies are also involved in a particular project requiring
an environmental impact statement OPIC may rely upon an
environmental impact statement obtained by one or more of the other
agencies.
B. Environmental impact statements shall be concise and no
longer that necessary to permit an informed consideration of the
environmental effects of the proposed project and the reasonable
alternatives. The statement shall include a section on the
consideration of the purpose of and need for the proposed project; a
section that provides a succinct description of the environment of
the global commons affected by the proposed action: and a section
that analyzes, in comparative form, the environmental consequences
on the global commons of the proposed action and of reasonable
alternative means of structuring the project.
Section 6. Environmental Studies and Reviews
A. If a department is required under Section 4(C)(2) to produce
an environmental study or review, it shall, in consultation with the
Environmental Officer, determine whether an environmental study as
described in Subsection B below which deals with the environmental
aspects of the proposed project is available or will be undertaken
elsewhere. If no relevant environmental study is or will be
available, the OPIC department, in consultation with the
Environmental Officer, shall undertake the preparation of an
environmental review as described in Subsection C below with, as
appropriate, the assistance of the applicant and of other federal
agencies having jurisdiction by law or special expertise. If an
environmental review for the proposed project or a project involving
similar environmental issues or a generic review covering a class of
similar projects already exists, no new environmental review shall
be required hereunder. When one or more agencies are involved with
OPIC on a particular project, a lead agency may be designated to
prepare the environmental review.
B. An environmental study shall consist of a bilateral or
multilateral study by the United States and one or more foreign
nations or by an international body or organization in which the
United States is a member or participant.
C. An environmental review shall consist of a concise analysis
of important environmental issues relating to a proposed project,
including identification of such issues and of the significant
effects to the environment. The department involved in the
preparation of an environmental review shall consider the following
factors in deciding the scope, substance, and timing of review and
the availability of the review to other agencies:
1. The need to avoid infringement or the appearance of
infringement on the sovereign responsibilities and internal affairs
of another government;
2. The availability of meaningful information on the environment
of a foreign nation;
3. The need to protect confidential business information and
trade secrets of the applicant;
4. The desirability of acting promptly upon applications under
OPIC programs;
5. The desirability of the project in terms of its export
promotion and developmental effects;
6. OPIC's ability to influence the design and/or implementation
of the proposed project; and
7. The need to protect sensitive foreign affairs information and
information received from another government with the understanding
that it will be protected from disclosure.
Section 7. Decision
The required environmental documents developed in accordance
with these Procedures shall accompany the application through the
review process to enable officers responsible for approving an
application and, if necessary, the Board of Directors, to be
informed and to take account of the environmental consideration
covered by such documents.
Section 8. Availability
Subject to the consideration of Section 6(C), environmental
documents developed under these procedures shall be available to the
Department of State, Council on Environmental Quality and other
federal agencies and shall be included in the public information
files for the pertinent applications. Foreign governments affected
thereby may also be informed of such documents after coordinating
with the Department of State regarding such communication with the
foreign government.
Effective Date. These procedures became effective on September
4, 1979.
Dated: August 27, 1979.
J. Bruce Llewellyn,
President.
Appendix B--Recommended Content and Format for Environmental Impact
Assessment Category A Projects
I. Executive Summary
A. Concise project description
B. Identification of project sponsors, operators and contractors
C. Baseline environmental conditions
D. Applicable environmental standards
E. Proposed mitigation measures
F. Net environmental impacts
II. Policy, Legal and Administrative Framework
A. Applicable host country environmental and occupational safety
and health laws and regulations
B. Relevant international agreements
C. Requirements of potential investors, lenders and insurers
III. Baseline Conditions in Area Potentially Affected by Project
(``Project Area'')
A. Designation of project area perimeters
B. Physical geography (climate, geology, topography)
C. Natural events history (earthquakes, floods, fires, storms,
volcanic eruptions, etc.)
D. Biological environment
1. Proximity to national parks and other protected areas
2. Identification of unique or sensitive natural habitats of
internationally or locally recognized rare, threatened or endangered
species
3. Renewable and non-renewable natural resources
E. Human environment
1. Distribution of residential and occupational population in
project area
2. Description of previous, current and planned land use
activities in or near project area
3. Habitation or use of project area by indigenous peoples
F. Environmental quality of project area
1. Ambient air conditions (including seasonal variations)
(a) Sulfur dioxide
(b) Particulates
(c) Nitrogen oxides
(d) Carbon monoxides
(e) Airborne toxics
2. Water supply, quality and end use (human consumption
agriculture, plant and animal habitat)
(a) Marine waters including estuaries
(b) Surface waters (rivers, streams, lakes)
(c) Groundwater
3. Noise levels
4. Soil conditions including contamination from previous or
current activities
G. Archaeological, historical or cultural resources
IV. Potential (Unmitigated) Environmental, Health and Safety Impacts
A. Sources and volumes of untreated airborne, liquid, and solid
waste and potential impacts of unmitigated discharge on the
environment
B. Potential impacts on natural and biological resources
C. Potential human impacts:
1. Positive: employment, services, economic opportunities
2. Negative: resettlement and economic displacement
D. Potential occupational health and safety hazards
E. Potential for major safety and health hazards beyond the
workplace
V. Proposed Environmental Prevention and Mitigation Measures
(including a thorough discussion of alternatives and justifications
for measures selected)
A. Waste minimization measures
B. Waste treatment and disposal measures
C. Natural resource management (e.g. sustainable management of
biological resources and protection of endangered species and their
habitats)
D. Mitigation of human impacts: compensation, training, etc.
E. Occupational safety and health measures
F. Major hazard prevention and emergency response
VI. Projected Net Environmental Impacts (post-mitigation)
A. Physical impacts (e.g. topography, ground and surface water
supply, soil conservation)
B. Biological impacts (flora, fauna and related habitat with
particular attention to threatened and endangered species; natural
resources, e.g. primary forests, coral reefs, mangroves, etc.)
C. Net discharges of airborne, liquid and solid wastes and
resulting ambient
[[Page 9707]]
impacts as compared to applicable host country, World Bank and other
relevant regulatory standards and guidelines
D. Net exposures by workers to safety and health hazards
E. Net potential for major hazards
F. Consistency with applicable international agreements
VII. Appendices
A. Permits issued and pending from environmental authorities
B. Author information
1. Names, affiliations and qualifications of project team
2. Relationship of authors to project sponsors
C. Record of meetings held as part of EIA, including public
hearings and consultations with government and non-governmental
organizations
D. Reference bibliography
E. Technical data not included in text
Appendix C--Recommended Content and Format for Environmental Management
and Monitoring Plan
I. Applicable Regulatory Standards and Guidelines
A. Host country laws and regulations
B. Sponsor, investor, lender and insurance requirements
C. International agreements
II. Environmental Management Measures
A. Potential impacts and corresponding preventive and mitigative
measures
B. Equipment specifications for preventative and mitigative
measures
C. Operational and maintenance procedures
III. Organizational Responsibilities and Management Issues
A. Operations
B. Supervision
C. Internal enforcement
D. Monitoring
E. Remedial actions
IV. Training Requirements
V. Monitoring and reporting procedures
A. Perimeters to be monitored
1. Airborne emissions and corresponding ambient air impacts
2. Liquid effluents and corresponding ambient impacts on
receiving water
3. Physical impacts
4. Natural resource and biological impacts
5. Human impacts
(a) Standard of living of local inhabitants
(b) Impact on local economy
(c) Perceptions and attitudes of local inhabitants
6. Workplace conditions
(a) Accident frequency and severity
(b) Worker exposures to hazardous substances
7. Impacts on dedicated offsite infrastructure and facilities
B. Frequency of monitoring
C. Monitoring techniques and procedures
1. Equipment and instrumentation
2. Quality assurance/quality control (QA/QC procedures)
3. Personnel and training requirements
D. Reporting procedures
1. Internal
2. External (e.g. to local authorities)
Appendix D--Recommended Content and Format for Initial Environmental
Audit (IEAU)
I. Executive Summary
A. Environmental, safety and health areas of concern
B. Recommended mitigation measures/enhancement opportunities:
priorities
C. Implementation schedule
II. Project Description
A. location
B. past operations history
C. current operations
III. Applicable regulations and guidelines
IV. Audit procedure (protocol)
A. historical research
B. records review
C. interviews
D. site inspections
E. sampling and analysis (quality assurance and control)
procedures
V. Review of environmental management
A. environmental management structure
B. emergency, security and safety plans
C. company-community interaction program
D. handling of complaints and media coverage
VI. Environmental Impacts
A. air emissions
B. liquid effluents
C. solid (non-hazardous) waste treatment
D. hazardous materials and management
E. noise and vibration
F. groundwater and soil contamination
VII. Occupational Safety and Health
A. summary of accident reporting, recording and investigation
B. health and safety management
safety procedures
D. medical monitoring program
E. air quality
F. noise level exposure
G. chemical/material handling
H. temperature exposure
I. personal protective equipment
J. emergency response capability
K. fire protection
L. training programs
VIII. Conclusions
IX. Mitigation Recommendations
A. Identify appropriate measures
B. Priorities
C. Implementation schedule
X. Environmental Enhancement Opportunities
A. energy and energy conservation
B. waste minimization
C. cleaner technology initiatives
D. training programs
XI. Annexes
A. names of those responsible for preparing audit
B. written material references used
C. records of consultations
D. other data
Appendix E--Category A: Projects Requiring Environmental Impact
Assessment
Any projects supported by OPIC in this Category that
subsequently change in nature from the description provided in
application materials, and will thereby cause material impacts to
the environment, shall be required to submit additional EA documents
to OPIC that must be acceptable to OPIC in its sole discretion.
I. Industrial categories
A. Large-scale industrial plants
B. Industrial estates
C. Crude oil refineries
D. Large thermal power projects (200 megawatts or more)
E. Major installations for initial smelting of cast iron and
steel and production of non-ferrous metals
F. Chemicals
1. manufacture and transportation of pesticides
2. manufacture and transportation of hazardous or toxic
chemicals or other materials
G. All projects which pose potential serious occupational or
health risks
H. Transportation infrastructure
1. roadways
2. railroads
3. airports (runway length of 2,100 meters or more)
4. large port and harbor developments
5. inland waterways and ports that permit passage of vessels of
over 1,350 tons
I. Major oil and gas developments
J. Oil and gas pipelines
K. Disposal of toxic or dangerous wastes
1. incineration
2. chemical treatment
L. Landfill
M. Construction or significant expansion of dams and reservoirs
not otherwise prohibited
N. Pulp and paper manufacturing
O. Mining
P. Offshore hydrocarbon production
Q. Major storage of petroleum, petrochemical and chemical
products
R. Forestry/large scale logging
S. Large scale wastewater treatment
T. Domestic solid waste processing facilities
U. Large-scale tourism development
V. Large-scale power transmission
W. Large-scale reclamation
X. Large-scale agriculture involving the intensification or
development of previously undisturbed land
Y. All projects with potentially major impacts on people or
serious socioeconomic concerns
Z. Projects, not categorically prohibited, but located in or
sufficiently near sensitive locations of national or regional
importance to have perceptible environmental impacts on:
1. wetlands (not covered by the RAMSAR Convention).
2. areas of archeological significance
3. areas prone to erosion and/or desertification
4. areas of importance to ethnic groups/indigenous peoples
5. primary temperate/boreal forests
[[Page 9708]]
6. coral reefs
7. mangrove swamps
8. nationally-designated seashore areas
9. Managed resource protected areas, Protected Landscape/
seascape (IUCN categories V and VI) as defined by IUCN's Guidelines
for Protected Area Management Categories; additionally, these
projects must meet IUCN's management objectives and follow the
spirit of IUCN definitions.
Appendix F--Categorical Prohibitions
I. Infrastructure and extractive projects located in primary
tropical forests (see Glossary). Extractive projects include oil,
gas, mineral resources, steam/geothermal and surface resources such
as timber.
II. Projects involving the construction of `large dams' that
significantly and irreversibly: (A) disrupt natural ecosystems
upstream or downstream of the dam, or (B) alter natural hydrology,
or (C) inundate large land areas, or (D) impact biodiversity, or (E)
displace large numbers of inhabitants (5,000 persons or more) or (F)
impact local inhabitants' ability to earn a livelihood.
III. Projects involving the commercial manufacturing of ozone-
depleting substances or the production or use of persistent organic
pollutants. Investors may obtain a list of these substances and
chemicals from OPIC.
IV. Projects that require resettlement of 5,000 or more persons.
V. Projects in or impacting areas protected by the RAMSAR
Convention (Designated wetlands of international importance).
VI. Projects in or impacting natural World Heritage Sites (Areas
of significant ecological value that have been internationally
recognized as necessary for strict protection by members of the
World Heritage Convention).
VII. Projects in or impacting areas on the United Nations List
of National Parks and Protected Areas.
VIII. Extraction or infrastructure projects in or impacting
Strict Nature Reserves/Wilderness Areas, National Parks, Natural
Monuments or Habitat/Species Management Areas as defined by the
World Conservation Union's (IUCN) Guidelines for Protected Area
Management Categories, with the exception of projects specifically
intended to improve the environment and those meeting recognized
environmentally appropriate ecotourism guidelines. Investors may
obtain a copy of these guidelines from OPIC.
Appendix G--1997 World Bank Group: Pollution Prevention and Abatement
Handbook
1. Aluminum Manufacturing
2. Base Metal and Iron Ore Mining
3. Breweries
4. Cement Manufacturing
5. Chlor-Alkali Plants
6. Coal Mining and Production
7. Coating Manufacturing (in preparation)
8. Coke Manufacturing
9. Construction Terminals (in preparation)
10. Copper Smelting
11. Dairy Industry
12. Detergent Manufacturing (in preparation)
13. Dye and Pigment Manufacturing
14. Electronics Manufacturing
15. Engine-Driven Power Plants
16. Foundries
17. Fruit and Vegetable Processing
18. Fish and Shellfish Industries (in preparation)
19. Forestry Operations (in preparation)
20. General Manufacturing
21. Geothermal Power Plants (in preparation)
22. Glass Manufacturing
23. Hazardous Waste Management (in preparation)
24. Heavy Machinery (in preparation)
25. Industrial Estates
26. Infrastructure (in preparation)
27. Iron and Steel Manufacturing
28. Lead and Zinc Smelting
29. Meat Processing and Rendering
30. Medical Waste Management (in preparation)
31. Metal Fabrication (in preparation)
32. Mini Steel Mills
33. Mixed Fertilizer Plants
34. Monitoring
35. Municipal Waste Management (in preparation)
36. Nickel Smelting and Refining
37. Nitrogenous Fertilizer Plants
38. Oil and Gas Development-Onshore
39. Oil and Gas Development-Offshore (in preparation)
40. Pesticides Formulation
41. Pesticides Manufacturing
42. Petrochemicals Manufacturing
43. Petroleum Refining
44. Pharmaceuticals Manufacturing
45. Phosphate Fertilizer Plants
46. Pipelines and Terminals (in preparation)
47. Plywood and Wood Products Industry (in preparation)
48. Precious Metal Industry (in preparation)
49. Printing
50. Pulp and Paper Mills
51. Rubber and Plastic Manufacturing (in preparation)
52. Small Boilers (in preparation)
53. Sugar Manufacturing
54. Tanning and Leather Finishing
55. Textiles
56. Thermal Power-Guidelines for New Plants
57. Thermal Power-Guidelines for Existing Plants
58. Tourism and Hospitality Development
59. Vegetable Oil Processing
60. Wood Preserving
Appendix H--Format for Host Government Notification Letter
[date]
Minister of State for Environment,
Republic of ______________
Dear Mr./Ms. Minister: The Overseas Private Investment
Corporation (OPIC) is proposing to issue financing and insurance for
an investment in [name of host country] by a U.S. company. OPIC is
an agency of the United States Government, with the mandate of
facilitating economically productive and environmentally sound U.S.
private investments in developing countries and emerging economies.
OPIC is required by U.S. law to notify appropriate host
government authorities of investments under consideration for OPIC
assistance, which have the potential to pose significant
consequences for the environment. The project that is the subject of
this notification involves an investment by [name of applicant] in
the construction and operation of [concise description of project].
The potential environmental hazards associated with [industry
sector] includes [air, water, solid/hazardous waste, etc./].
Based on information provided to us by the investor, the project
does not appear to pose significant hazards to the environment,
public health, or safety resulting from the diverse impacts of
[industry sector].
OPIC is also required to provide your government with
information about standards and guidelines applicable to such
investments that have been developed by international organizations
or by federal environmental regulatory authorities of the United
States. The relevant World Bank and U.S. Environmental Protection
Agency (EPA) guidelines are attached for your information.
We understand, of course, that the project will be subject to
the laws of [name of host country] with respect to the protection of
the environment as well as occupational health and safety.
If you have any questions about OPIC's environmental assessment
of this project, you may contact OPIC's Director of Environmental
Affairs at the above address.
Sincerely yours,
[Name],
President and Chief Executive Officer.
Enclosures
APPENDIX I--GLOSSARY
Environmental Assessment (EA)--analytical tool used to
anticipate potential impacts of particular activities on the natural
environment and on humans dependent on that environment
Initial Environmental Audit (I+EAU)--assessment of environmental
and related human impacts of pre-existing or ongoing activities
Environmental Impact Assessment (EIA)--comprehensive analytical
effort designed to anticipate environmental impacts of major
projects having the potential to have significant, diverse and
irreversible impacts on the natural environment and on humans
dependent on that environment
Environmental Impact Statement (EIS)--comprehensive analytical
effort designed to anticipate environmental impacts of major federal
actions affecting the global commons outside of the jurisdiction of
any nation
Environmental Management and Monitoring Plan (EMMP)--systematic
program designed to prevent, mitigate and monitor anticipated
environmental and related human impacts of prospective and ongoing
activities
Environmental Remediation Plan (ENR)--systematic program
designed to reverse adverse environmental impacts of previous
activities at a site
European Bank for Reconstruction and Development (EBRD)--
multilateral development bank established in 1990 to assist in the
economic, social and political development of Central and Eastern
Europe and the New Independent States of the former Soviet Union.
Other members include the European Community and the United States.
[[Page 9709]]
Export-Import Bank of the United States (Exim)--independent U.S.
government agency that helps finance the overseas sales of U.S.
goods and services
Financial Intermediary (FI)--investment funds, bank or other
financial institution that lends directly to projects or investment
funds guaranteed or insured by OPIC that invest in projects
(``subprojects'') subject to OPIC approval on policy grounds.
Foreign Assistance Act (FAA)--Foreign Assistance Act of the
United States
International Finance Corporation (IFC)--affiliate of the World
Bank group that makes loans to and investments in private sector
projects in developing countries and emerging markets
ISO 14000--basic elements of an effective environmental
management system as developed by the Technical Committee of the
International Organization for Standardization (ISO) to provide
organizations worldwide with a common approach to environmental
management.
Major Hazard Assessment (MHA)--analytical tool used for
identifying, analyzing and controlling potential major hazards to
human health and safety resulting from storage and processing of
toxic and hazardous substances
Natural Forests--An area in which the cover has evolved
naturally so as to provide significant economic and/or ecological
benefits, or one that is sufficiently advanced in regeneration and
recovery from disturbance as to be judged in near-natural condition.
Forests that are not the result of man-made plantations, tree farms
or similar operations. All primary and secondary forests are
considered natural forests.
Primary Forests--Relatively intact forest that has been
essentially unmodified by human activity for the past sixty to
eighty years; an ecosystem characterized by an abundance of mature
trees. Human impacts in such forests have been limited to low levels
of artisanal hunting, fishing and harvesting of forest products,
and, in some cases, to low density, migratory shifting
agriculture.\19\
---------------------------------------------------------------------------
\19\ Tropical dry forest is deciduous to semi-evergreen during
the dry season, has a canopy with few epiphytes, and ranges from 2
to 40 meters in height in its undisturbed state. In the rainy season
it receives 500 to 3500 millimeters of precipitation, and the rain-
free dry season is 4 to 8 months long. Tropical moist forests is
generally defined as forest in areas that receive not less than
100mm of rain in any month for two out of three years and have an
annual mean temperature of 24 degrees Celsius or higher. Also
included in this category, however, are some forests (especially in
Africa) where dry periods are longer but high cloud cover causes
reduced evapotranspiration. Rene Dubos Center for Human
Environment's Environmental Encyclopedia; IFC OP 4.36, ``Forestry.''
---------------------------------------------------------------------------
World Bank (WB)--International Bank for Reconstruction and
Development.
(Authority: 22 U.S.C. Sec. 2191(k)(2), as amended)
James R. Offutt,
Assistant General Counsel for Administrative Affairs.
[FR Doc. 98-4802 Filed 2-24-98; 8:45 am]
BILLING CODE 3201-01-U