International Environment: Improved Procedures Needed for Environmental
Assessments of U.S. Actions Abroad (Letter Report, 02/11/94,
GAO/RCED-94-55).

U.S. agencies perform a variety of work that could potentially affect
the environments of other nations. For example, they apply pesticides in
foreign countries to control agricultural pests, store waste on overseas
military bases, issue permits for ocean dumping, and negotiate
international trade agreements with environmental consequences. The
National Environmental Policy Act requires federal agencies to assess
the environmental impact of their actions, but the courts have not
determined whether this requirement extends to these agencies'
activities abroad. Executive Order 12114 specifically requires federal
agencies to assess the environmental impact of "major" actions abroad
but exempts other actions from this requirement. This report (1)
compares the requirements for environmental impact assessments under the
act and Executive Order 12114; (2) reviews federal agencies'
implementation of Executive Order 12114; and (3) analyzes the advantages
and disadvantages of applying the act's procedures to, or strengthening
environmental impact assessment procedures for, federal agencies'
activities outside the United States.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-94-55
     TITLE:  International Environment: Improved Procedures Needed for 
             Environmental Assessments of U.S. Actions Abroad
      DATE:  02/11/94
   SUBJECT:  Environmental law
             International relations
             Hazardous substances
             Environmental impact statements
             Environmental policies
             Jurisdictional authority
             Foreign governments
             Federal agencies
             Evaluation methods
IDENTIFIER:  Antarctica
             Brazil
             Mexico
             Chile
             Germany
             Japan
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Toxic Substances, Research
and Development, Committee on Environment and Public Works,
U.S.  Senate

February 1994

INTERNATIONAL ENVIRONMENT -
IMPROVED PROCEDURES NEEDED FOR
ENVIRONMENTAL ASSESSMENTS OF U.S. 
ACTIONS ABROAD

GAO/RCED-94-55

Environmental Assessments of Actions Abroad


Abbreviations
=============================================================== ABBREV

  NAFTA - North American Free Trade Agreement
  NEPA - National Environmental Policy Act

Letter
=============================================================== LETTER


B-255395

February 11, 1994

The Honorable Harry M.  Reid
Chairman, Subcommittee on Toxic Substances,
 Research and Development
Committee on Environment and Public Works
United States Senate

Dear Mr.  Chairman: 

This report responds to your request that we review federal agencies'
use of environmental impact assessments in conducting, regulating,
and supporting activities that may affect the environment of other
nations.  For example, U.S.  agencies apply pesticides in other
countries to control agricultural pests, store hazardous waste on
overseas military bases, issue permits for ocean dumping, and
negotiate international trade agreements that may have environmental
consequences.  The extent to which U.S.  agencies are required under
U.S.  law to assess the environmental impact of such actions is
unclear.  The National Environmental Policy Act (NEPA), signed into
law on January 1, 1970, requires federal agencies to assess the
environmental impact of their actions, but the courts have not
determined definitively whether this requirement extends to these
agencies' actions abroad.  Executive Order 12114, issued in 1979,
specifically requires federal agencies to assess the environmental
impact of certain "major" actions abroad; however, it exempts other
actions from this requirement.  Although policymakers have for years
debated the question of NEPA's applicability to U.S.  agencies'
actions abroad, recent federal court decisions have again focused
attention on this issue. 

Concerned about whether federal agencies are adequately assessing the
environmental consequences of their actions abroad, you asked us to
(1) compare the requirements for environmental impact assessments\1
under NEPA and Executive Order 12114, (2) review federal agencies'
implementation of Executive Order 12114, and (3) analyze the
advantages and disadvantages of applying NEPA's procedures to, or
strengthening environmental impact assessment procedures for, federal
agencies' actions outside the jurisdiction of the United States. 


--------------------
\1 We apply the broad term "environmental impact assessment" to any
of the following performed under Executive Order 12114: 
environmental assessments, environmental impact statements, bilateral
or multilateral environmental studies, concise environmental reviews,
or summary environmental analyses.  We also apply the term to
environmental assessments or environmental impact statements
performed under NEPA. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Compared to NEPA's requirements for environmental impact assessments,
Executive Order 12114's requirements are both more ambiguous and more
limited in the range of actions covered and in the analyses and
participation required.  Unlike NEPA and its implementing
regulations, the order does not fully describe the types of documents
or the kinds of analyses to be used in the assessment process. 
Furthermore, the order does not call for external review of the
assessment process.  External review includes interagency oversight,
public participation, and judicial review. 

Numerous federal agencies have procedures to implement Executive
Order 12114, and many have conducted environmental impact assessments
under the order for their actions abroad.  However, according to many
federal officials, ambiguities in the order have resulted in its
inconsistent application.  In particular, many officials told us that
additional guidance is needed because the order does not adequately
specify which major actions are included and does not indicate how
comprehensive the environmental impact assessments must be. 

Since the executive order's issuance in 1979, federal agency
officials and legal commentators have debated the merits of applying
NEPA's procedures or strengthened environmental impact assessment
procedures to extraterritorial actions.  Some have noted certain
difficulties that might arise in applying NEPA's requirements abroad,
such as infringement upon the sovereignty of host countries,
increases in the number of lawsuits, and encroachment upon the
President's flexibility in conducting foreign affairs.  Others,
however, believe that the extension of NEPA's procedural requirements
could improve agencies' decision-making and would be consistent with
recent U.S.  initiatives to strengthen the environmental impact
assessment procedures of foreign assistance agencies and multilateral
development banks.  Deciding whether and how to strengthen U.S. 
environmental review requirements abroad is ultimately a policy
decision that requires weighing diplomatic and environmental
considerations.  However, we believe that at a minimum, certain
modifications to the order are needed in the current process to
clarify (1) which actions require analysis and (2) how comprehensive
these analyses must be. 


   BACKGROUND
------------------------------------------------------------ Letter :2

NEPA, signed into law on January 1, 1970, directed federal agencies
to evaluate the environmental consequences of their actions.  The
Council on Environmental Quality, created in title II of NEPA, was
given responsibility in two executive orders to issue guidance to
federal agencies in their preparation of this evaluation, known as
the environmental impact assessment process.  NEPA has been used to
assess the environmental impact of federal actions ranging from the
construction of domestic dams, bridges, and highways to the
negotiation of international agreements, such as the New Panama Canal
Treaty. 

Although the language of NEPA indicates that the Congress was
concerned in 1969 about the global environment, NEPA did not
specifically require the assessment of federal actions outside the
jurisdiction of the United States.  Some federal agencies, such as
the Department of State, the Department of Defense, and the
Export-Import Bank, objected to applying NEPA abroad because its
time-consuming procedures could complicate foreign policy actions and
hobble the federal government's efforts to promote American exports. 
The Council on Environmental Quality argued at the time, however,
that federal actions abroad could harm the environment in other
countries or the global commons\2 and that NEPA should apply to all
major federal actions, regardless of location. 

After years of interagency debate over the applicability of NEPA
outside the United States and no definitive judicial decision on this
issue, on January 4, 1979, President Carter signed Executive Order
12114, "Environmental Effects Abroad of Major Federal Actions." The
intent of Executive Order 12114 was to strike a balance among
competing agency concerns.  While the order extended environmental
impact assessments to major federal actions abroad, it took into
account concerns about possible intrusion into foreign affairs,
national security, and export promotion activities, and it exempted
many major federal actions abroad from assessment. 

Executive Order 12114 has not prevented litigants from attempting to
obtain court rulings on the applicability of NEPA to major federal
actions abroad.  In January 1993, a federal court determined that
NEPA applied to the National Science Foundation's actions to
incinerate food wastes in Antarctica.\3 The National Science
Foundation had prepared environmental documentation for this action
under Executive Order 12114.  According to a National Security
Council official, following that decision, many federal agencies
called for clarification of NEPA's applicability outside the United
States.  In April 1993, the National Security Council began a review,
under Presidential Review Directive 23, to determine whether changes
were needed to the current policy governing the assessment of the
environmental impact of actions abroad.  This effort was preceded by
a 1990 Council on Environmental Quality task force and by
congressional hearings in 1988, 1989, and 1991 on this issue. 


--------------------
\2 The term "global commons" refers to those portions of the
planet--such as the oceans, the upper atmosphere, and Antarctica--in
which all nations have a common but nonproprietary interest. 

\3 Environmental Defense Fund, Inc.  v.  Massey, 986 F.2d 528 (D.C. 
Cir.  1993). 


   EXECUTIVE ORDER 12114 DIFFERS
   FROM NEPA IN SEVERAL IMPORTANT
   RESPECTS
------------------------------------------------------------ Letter :3

While one stated goal of Executive Order 12114 is to "further the
purpose" of NEPA, the order differs from NEPA in several important
respects.  Table 1 summarizes these differences, which include the
scope of the federal actions covered, the applicable procedures and
documents, and the extent of the external review of the assessments
by the public, other federal agencies, and the courts. 



                           Table 1
           
               Key Differences Between NEPA and
                    Executive Order 12114

NEPA                           Executive Order 12114
-----------------------------  -----------------------------
Broad in scope                 Limited in scope

Assessment process detailed    No Council on Environmental
in Council on Environmental    Quality regulations
Quality regulations

Evaluation of alternatives     Evaluation of alternatives
required                       not required

Public involvement required    Public involvement not
                               required

Interagency review required    Interagency review not
                               required

Judicial review available      No judicial review
------------------------------------------------------------

      NATIONAL ENVIRONMENTAL
      POLICY ACT
---------------------------------------------------------- Letter :3.1

NEPA is broad in scope in that it does not specifically exempt any
major federal action from its assessment process.  The NEPA
assessment process begins when an agency proposes an action. 
Generally, if the agency's own NEPA regulations\4 do not
categorically exclude the action, the agency performs an
environmental assessment of the proposed action.  The environmental
assessment may either generate a finding of no significant impact or
yield sufficient evidence to require a more detailed environmental
impact statement. 

Under NEPA and its implementing regulations, federal officials must
weigh alternatives to an agency's proposed action and seek comment
from the public and other federal agencies on that action.  Such an
informative and open process was intended to ensure the systematic
consideration of environmental values in federal decision-making. 
Under NEPA, both environmental assessment and environmental impact
statement documents are required to assess the environmental impacts
not only of the proposed action but also of possible alternatives to
the proposed action. 

To enhance the openness of the assessment process, NEPA, as
interpreted in case law, provides for external review by other
government agencies, the public, and the courts (through judicial
review).  Under section 309 of the Clean Air Act, the Environmental
Protection Agency is responsible for reviewing and commenting on
environmental impact statements prepared by other federal agencies
under NEPA.\5 In addition, the public is allowed to participate
during both the "scoping" process--when the range of actions,
alternatives, and impacts to be considered in environmental documents
are determined--and after draft environmental documents have been
prepared.  Finally, the courts have permitted citizens to challenge
agencies' procedural decisions under NEPA, such as decisions about
whether to prepare an environmental impact statement.  In 1991, 94
cases involving a NEPA claim were filed against federal agencies. 

Many believe that external review is critical to the quality of the
environmental impact assessment process.  The Council on
Environmental Quality has concluded that among nations that have
established environmental impact assessment systems, those that have
set up external review procedures have been more effective than those
that have not.\6


--------------------
\4 While NEPA did not require the Council on Environmental Quality to
issue regulations to federal agencies for implementing NEPA,
subsequent executive orders--Executive Order 11514 of 1970 and
Executive Order 11991 of 1977--directed the Council to issue guidance
and regulations to federal agencies to make the NEPA process more
uniform and efficient.  The Council's regulations do not address the
applicability of the various procedural requirements to specific
agency actions.  Instead, the Council requires each federal
department and agency to prepare its own procedures to ensure its
compliance in performing its particular mission.  The Council reviews
and approves all agencies' procedures and amendments to those
procedures. 

\5 This section directs the Environmental Protection Agency to refer
to the Council on Environmental Quality "any such legislation,
action, or regulation" found to be "unsatisfactory from the
standpoint of public health or welfare or environmental quality.  . 
.  ." Under section 102(2)(C) of NEPA and its implementing
regulations, other federal agencies can undertake similar reviews and
referrals. 

\6 Environmental Quality:  Twentieth Annual Report, Council on
Environmental Quality (Washington, D.C., 1990). 


      EXECUTIVE ORDER 12114
---------------------------------------------------------- Letter :3.2

Executive Order 12114 differs significantly from NEPA in both the
range of actions it covers and in the analyses and participation it
requires for its environmental impact assessments.  Executive Order
12114 applies to major federal actions that significantly affect (1)
the environment of the global commons, (2) a nation not participating
with the United States in the actions, (3) a nation to which the
United States exports a product or a physical project that produces
an emission or effluent that is prohibited or strictly regulated in
the United States because it poses a toxic or radioactive threat, or
(4) a designated natural or ecological resource of global importance. 

Executive Order 12114 also lists categories of major federal actions
that are exempt from the order.  These include actions by the
President, actions taken by or pursuant to the direction of the
President or a Cabinet officer involving national security or
occurring during the course of an armed conflict, intelligence
activities and arms transfers, the granting of export licenses or
permits or export approvals, certain actions relating to nuclear
activities, votes and other actions in international conferences and
organizations, and disaster and emergency relief actions.  The text
of Executive Order 12114 appears in appendix I. 

While Executive Order 12114 calls for the preparation of an
environmental impact statement in certain circumstances, this
document is less comprehensive than the environmental impact
statement required under NEPA.  Under the order, such a statement is
required only when an action will significantly affect the global
commons or when an action threatens a globally important natural
resource designated as such by the President or the Secretary of
State.  When an environmental impact statement is to be prepared
because an action may threaten both the global commons and a foreign
nation, the order explicitly provides that the statement need not
describe the action's effects within the foreign nation.  In
addition, an evaluation of the alternatives to the proposed action is
not called for under the order, as it is under NEPA.  Other
assessment documents called for under the order include "bilateral or
multilateral environmental studies" and "concise environmental
reviews, including environmental assessments, summary environmental
analyses or other appropriate documents." However, these documents
are not defined in the order.  The order did not require the Council
on Environmental Quality to issue regulations to describe these
documents or to explain when they should be prepared. 

External review of the assessment process is not required under
Executive Order 12114, as it is under NEPA.  No requirement exists
under the order for the Environmental Protection Agency or other
government agencies to review and comment on the environmental impact
statements prepared under the order.  Also, the order does not
mention the need for public comment during the assessment process. 
Finally, the order specifically exempts agencies' actions under the
order from judicial review. 


   AMBIGUITIES IN THE EXECUTIVE
   ORDER ARE OF CONCERN TO SOME
   AGENCIES
------------------------------------------------------------ Letter :4

Executive Order 12114 directs every federal agency taking major
federal actions defined in the order to develop procedures to
implement the order.  Twenty-one federal departments and agencies
have such procedures, and many have applied their procedures to
projects abroad.  Appendix II details the number and type of
assessments that have been completed under the order by the
departments and agencies we contacted. 

Generally, agencies have varied widely in interpreting and
implementing the order, particularly in deciding (1) which major
federal actions require environmental impact assessments and (2) how
comprehensively these assessments need to be performed.  We found
that ambiguities in the order contributed to this variation and that
additional guidance is needed to resolve the problem. 


      AGENCIES VARY AS TO WHICH
      ACTIONS REQUIRE ASSESSMENT
---------------------------------------------------------- Letter :4.1

Section 2-4 of the order requires the preparation of either (1) a
bilateral or multilateral environmental study or (2) a concise
environmental review for actions covered by section 2-3(b).  Under
section 2-3(b), such actions include "major federal actions
significantly affecting the environment of a foreign nation not
participating with the United States and not otherwise involved in
the action." According to a 1979 White House fact sheet, this
provision was intended to address situations involving a third-party
or innocent bystander:  For example, when the construction in one
country of a dam financed by the United States could cut off water
for another country, an environmental assessment would be required
because the nation whose water supply would be affected would not be
participating with the United States or otherwise involved in the
project. 

A section 2-4 document is also required for actions covered by
section 2-3(c)(1) and 2-3(c)(2).  Such actions provide a product or
project producing an emission or effluent that is prohibited or
strictly regulated in the United States, or a project that is
prohibited or strictly regulated in the United States to protect the
environment against radioactive substances.  Projects covered under
these sections included a rocket launch from Brazil sponsored by the
National Aeronautics and Space Administration and the construction of
hazardous waste storage facilities on overseas military bases by the
Defense Logistics Agency. 

As the Council on Environmental Quality's task force reported in July
1990,\7 agencies' implementation of Executive Order 12114's
requirements has varied widely and agencies disagree as to which
actions require environmental assessment.  According to the report,
several participants in the task force argued that some agencies have
failed to develop guidelines for implementing the order because they
believe that their actions abroad are excluded by virtue of a foreign
nation's participation.  Conversely, several participants said that
"under the terms of the [order], a nation's participation with the
agency is not sufficient to exempt an action from environmental
review unless the foreign nation is also 'involved in the action.'"
The report concluded that "Experience with .  .  .  Executive Order
12114 varies considerably within the federal government" and noted
that many federal agencies have made extensive use of environmental
impact assessments while "other agencies have had little experience"
with them. 

We found similar variation among federal agencies today:  Some
agencies interpret the applicability of the order to their actions
narrowly, while others assume a broader interpretation.  This
variation was particularly evident in agencies' interpretation of the
order's "participation" clause.  The U.S.  Section of the
International Boundary and Water Commission, for example, reported
that it had not developed procedures to implement the order because
all of its actions in Mexico are taken with the cooperation of that
country.  Similarly, the National Science Foundation, which had
developed implementation procedures, did not conduct an environmental
assessment for the construction of a laboratory in Chile, since that
country's government was participating in the project. 

Other agencies, however, have conducted an assessment for a major
federal action even though the agencies could have claimed that
another nation was participating in or had consented to the action. 
The Air Force European Command's environmental impact assessment
procedures, for example, go beyond the order to require environmental
reviews of actions that the Command believes would be exempt under
either the order or the Air Force's implementing regulations.  In
addition, the Air Force has conducted environmental reviews for base
closures and troop withdrawals under its executive order procedures
even though it could have argued that these activities were
undertaken with the participation of the host country.  Similarly,
the Federal Aviation Administration plans to conduct an environmental
impact assessment for an action in another country that is involved
in the action, even though such an assessment is not explicitly
required by the order. 


--------------------
\7 Interagency Task Force on Environmental Impacts Abroad, Council on
Environmental Quality (Washington, D.C.:  July 23, 1990). 


      AGENCIES ALSO VARY AS TO HOW
      COMPREHENSIVE ASSESSMENTS
      MUST BE
---------------------------------------------------------- Letter :4.2

Our interviews suggest that agencies also vary as to how thorough
their assessments must be for certain classes of actions covered by
Executive Order 12114.  Much of this variation is attributable to the
fact that, unlike NEPA and its associated regulations, the order does
not specify whether agencies' environmental documents should consider
alternatives to the proposed action and/or measures to mitigate
adverse environmental impacts. 

Accordingly, some agencies' executive order procedures encourage the
consideration of alternatives and mitigation strategies where
feasible, while other agencies' procedures do not.  For example, many
agencies' procedures require the consideration of alternatives only
for actions in the global commons, but several agencies' procedures
require no consideration of alternatives.  Few agencies' procedures
go beyond the guidance provided in the order in specifying how
comprehensively to prepare a concise environmental review or
environmental study. 


      AGENCIES SEEK ADDITIONAL
      GUIDANCE ON ASSESSMENTS
---------------------------------------------------------- Letter :4.3

While some of the variation in agencies' requirements and procedures
for environmental impact assessments can be attributed to the
flexibility built into Executive Order 12114, some of the variation
reflects agencies' confusion over ambiguities in the order.  As the
Council on Environmental Quality noted in 1990, many participants on
its interagency task force "stated that the Executive Order lacked
clarity and guidance and that their agencies have had difficulty in
implementation because of these factors." The report added that some
participants noted a lack of definitions for the terms "involved in,"
"participating in" and "global commons." A Department of Defense
participant maintained that the order was "troublesome," in part,
because it lacked clear guidance on what activities are to be
analyzed and on how an environmental impact assessment is to be
processed. 

Similar sentiments were expressed during the course of our review. 
In particular, officials from several agencies expressed uncertainty
over how the executive order applies to actions they conduct with
other countries.  For example, the Air Force European Command's Chief
of Environmental Law noted in an April 16, 1993, letter to Air Force
headquarters about assessing environmental impacts overseas that

     there are significant shortcomings in the [executive order] .  . 
     .  that have hindered the development and effective utilization
     of the environmental impact analysis process.  If the
     shortcomings could be corrected, a substantial improvement in
     the effectiveness of the program would be realized.  .  .  . 

He noted, among other specific problems, that (1) the order does not
define participation by another nation and therefore almost any
official involvement by host nation officials qualifies as
participation and (2) the issues that must be discussed in an
environmental review have never been identified. 

Other officials echoed the views expressed by participants in the
Council on Environmental Quality's task force, stating that
additional guidance should be developed to clarify when an
environmental impact assessment needs to be undertaken and how
comprehensive that assessment needs to be.  Some noted more
specifically that the guidance should clarify what constitutes the
involvement of other countries in the action; how detailed the
documentation needs to be; and what is required of the agency if host
nations have comparable environmental impact assessment laws.\8


--------------------
\8 As the 1990 task force showed, the Council on Environmental
Quality has conducted a limited exchange of information about
Executive Order 12114.  If the Congress abolished the Council--as it
considered doing in the last session--it would probably transfer the
Council's functions, such as oversight for NEPA, to the Environmental
Protection Agency, which would then likely oversee and provide
guidance on international environmental impact assessment. 


      AMBIGUITIES IN NEPA HAVE
      RAISED QUESTIONS ABOUT ITS
      APPLICABILITY TO TRADE
      AGREEMENTS
---------------------------------------------------------- Letter :4.4

Just as ambiguities in Executive Order 12114 have created uncertainty
over the applicability of the order's requirements for environmental
review abroad, so ambiguities in NEPA have raised questions about the
applicability of the act's procedures to certain federal actions,
particularly to trade agreements. 

NEPA requires that an environmental impact statement be prepared for
every "recommendation or report on proposals for legislation and
other major Federal actions significantly affecting the quality of
the human environment." On the basis of this provision, environmental
impact statements have been prepared for several international
agreements, ranging from the Montreal Protocol for the Protection of
the Stratospheric Ozone Layer to the New Panama Canal Treaty. 
However, according to the Council on Environmental Quality, no
environmental impact statements have been prepared for trade
agreements.  No environmental impact statement was prepared for the
North American Free Trade Agreement (NAFTA), although the Office of
the U.S.  Trade Representative independently completed an
environmental assessment of NAFTA and transmitted it to the Congress
in September 1992. 

In June 1993, in a suit brought by three public interest groups
contending that NAFTA constituted a proposal for legislation
significantly affecting the environment, a U.S.  district court ruled
that NEPA did in fact apply to NAFTA and ordered the Office of the
U.S.  Trade Representative to prepare an environmental impact
statement.\9 In September 1993, however, a U.S.  court of appeals
reversed that decision on jurisdictional grounds.\10

The prospect that the United States will negotiate more regional
trade agreements like NAFTA, as well as engage in further rounds of
the General Agreement on Tariffs and Trade, suggests a need for clear
guidance on when NEPA applies to trade agreements. 


--------------------
\9 Public Citizen v.  United States Trade Representative, 1993 U.S. 
Dist.  LEXIS 8682 (D.D.C.  June 30, 1993). 

\10 Public Citizen v.  United States Trade Representative, 1993 U.S. 
App.  LEXIS 24660 (D.C.  Cir.  Sept.  24, 1993).  The U.S.  Supreme
Court recently declined to review the appellate court's decision. 


   PROBLEMS AND BENEFITS OF
   EXTENDING NEPA'S PROCEDURES TO
   ACTIONS ABROAD
------------------------------------------------------------ Letter :5

While the need to clarify the ambiguities of Executive Order 12114
seems apparent, a more controversial issue is whether to strengthen
its environmental review provisions to more closely parallel those of
NEPA or to amend NEPA to apply explicitly to U.S.  agencies' actions
abroad.  For example, officials we interviewed expressed a wide
variety of opinions on a number of issues concerning U.S.  actions
abroad, such as whether to allow other U.S.  agencies to comment on
environmental documents, provide copies of these documents to
officials of other governments, or hold public hearings in other
countries. 

Many federal officials have cited difficulties they would face if
they were required to apply NEPA's procedures abroad, noting in
particular that doing so could infringe on the sovereignty of other
nations by imposing U.S.  law on foreign soil.  In 1990 and 1993,
U.S.  district courts echoed this concern by rejecting claims that
the Department of Defense needed to prepare environmental impact
statements under NEPA for major federal actions in the Federal
Republic of Germany and in Japan.  The court in 1990 stated that the
imposition of NEPA's requirements would encroach on the authority of
the Federal Republic of Germany to implement its own decision on the
matter.\11 In 1993, citing the 1990 case, the court noted that even
if NEPA did apply in the case involving Japan, no environmental
impact statements would be required because U.S.  foreign policy
interests outweighed the benefits of preparing the statements.\12

In the absence of safeguards limiting judicial review, some federal
officials fear that extending NEPA's procedures abroad could increase
the number of lawsuits using NEPA as a vehicle to litigate over
foreign relations and national defense policies.  Such litigation, as
well as implementing NEPA's procedural requirements, could disrupt
U.S.  relations with other countries and limit the President's
ability to act with the kind of flexibility and dispatch often
critical in the conduct of foreign affairs.  The litigation might
also raise difficult constitutional questions of encroachment on the
powers of the President. 

Another problem raised has been the potentially prohibitive cost of
conducting environmental impact assessments in other countries.  In
addition, NEPA's public participation requirements, some argue, would
be politically and culturally difficult to accomplish if agencies had
to translate documents or hold public hearings in foreign countries. 

In contrast, some believe that strengthening environmental assessment
procedures abroad, possibly by amending NEPA, could lead to better
decisions by requiring rigorous analysis of potential environmental
impacts before projects are undertaken.  Under NEPA, federal
officials must weigh alternatives to proposed agency actions and seek
comment from the public and other federal agencies on the actions. 
In enacting NEPA, the Congress believed that such an informative and
open decision-making process would help ensure the systematic
consideration of environmental values.  Many believe that allowing
the people directly affected by the projects to participate in the
process improves decision-making.  Assessing the environmental
impacts of federal actions abroad could prevent the kind of
environmental problems that have recently been discovered on overseas
military bases.  For example, we have reported on the problems of
managing hazardous waste at Department of Defense overseas
installations.\13 The United States may now have to settle claims
brought by host countries to clean up hazardous waste and other
sources of significant pollution. 


--------------------
\11 Greenpeace USA v.  Stone, 748 F.Supp.  749 (D.  Haw.  1990). 

\12 NEPA Coalition of Japan v.  Aspin, No.  91-1522, 1993 U.S.  Dist. 
LEXIS 17090 (D.D.C.  Nov.  30, 1993). 

\13 Hazardous Waste:  Management Problems Continue at Overseas
Military Bases (GAO/NSIAD-91-231, Aug.  28, 1991). 


      THE UNITED STATES IS
      SUPPORTING STRONGER
      ASSESSMENT REQUIREMENTS
      INTERNATIONALLY
---------------------------------------------------------- Letter :5.1

Some have argued that strengthening environmental impact assessment
requirements for U.S.  actions abroad would be consistent with other
recent U.S.  actions.  The United States has strengthened the
environmental impact assessment requirements for U.S.  foreign aid
agencies beyond the requirements of Executive Order 12114 and has
promoted other countries' use of NEPA procedures through
international agreement.  Interviews with experts on NEPA and our own
analysis show that, compared to these initiatives, Executive Order
12114 appears dated. 

For example, 1981 amendments to the Foreign Assistance Act require
the Agency for International Development to follow procedures similar
to those required by NEPA regulations.  The agency's procedures
provide for a host country's government and citizens to participate
during the assessment process and allow the agency's bureau
environmental coordinators to stop projects they believe will have
significant adverse environmental impacts.  The Overseas Private
Investment Corporation Amendments Act of 1985 requires the
Corporation to apply to its projects procedures similar to those used
by the Agency for International Development.  The act also requires
the Corporation to decline to assist projects that pose an
unreasonable threat to the environment or to protected areas.  In
addition, the Export Enhancement Act of 1992 amended the
Export-Import Bank Act of 1945 to permit the Export-Import Bank's
board to withhold financing from a project for environmental reasons. 

In 1989, the Congress enacted the "Pelosi Amendment" to title XIII of
the International Financial Institutions Act.  This amendment
requires the Secretary of the Treasury to instruct the U.S. 
executive directors of the multilateral development banks to vote
against any action proposed to be taken by a particular bank that
would have a significant effect on the environment unless the
proposed action is accompanied by an environmental assessment or
comprehensive environmental summary received at least 120 days before
the board votes on the proposal.  The Treasury Department reported to
the Congress that the restrictions placed on U.S.  support for
multilateral development bank projects by the Pelosi Amendment have
unquestionably been a factor in motivating the banks to develop
environmental assessment requirements for their projects. 

Finally, the United States has increasingly supported the use of NEPA
procedures by other countries, and NEPA has been copied by foreign
governments.  About 50 other countries have adopted an environmental
impact assessment system in some form.  In February 1992, the United
States signed the Convention on Environmental Impact Assessment in a
Transboundary Context (Espoo Convention).  The Espoo Convention,
limited to significant transboundary actions among countries
belonging to the Economic Commission for Europe, establishes
environmental impact assessment procedures, such as public
participation and analysis of alternatives, for these actions. 


   CONCLUSIONS
------------------------------------------------------------ Letter :6

We recognize that Executive Order 12114 represented an attempt to
strike a balance between safeguarding the environment abroad and
providing flexibility in foreign policy and national security
pursuits.  Federal officials and other experts on NEPA have long
debated the adequacy of the order, as well as the problems and
benefits of strengthening the environmental impact assessment
procedures used abroad.  Recent U.S.  actions to strengthen the
environmental assessment procedures of foreign aid agencies, coupled
with U.S.  initiatives to strengthen the environmental impact
assessment procedures of multilateral development banks and other
countries, could argue for strengthening the environmental impact
assessment procedures of other federal agencies as well.  Ultimately,
however, any decision to strengthen U.S.  environmental review
requirements abroad is a policy decision for the Congress and the
administration to make, taking into account both diplomatic and
environmental considerations. 

At a minimum, however, the variation we have found in agencies'
implementation of Executive Order 12114 suggests a need to clarify
(1) when environmental impact assessments are required and (2) how
comprehensively they should be prepared.  As part of its review of
environmental impact assessment procedures abroad under Presidential
Review Directive 23, the National Security Council will have an
opportunity to recommend changes to resolve the ambiguities in the
executive order. 


   RECOMMENDATIONS
------------------------------------------------------------ Letter :7

We recommend that the Assistant to the President for National
Security Affairs take the following steps: 

  Clarify which actions abroad require environmental assessments
     under Executive Order 12114.  In particular, the Assistant to
     the President for National Security Affairs should clarify if,
     and under what circumstances, participation with another country
     exempts actions from assessment. 

  Clarify how comprehensive the assessments must be, including
     whether and how agencies must consider alternatives, seek
     external review, and include public participation. 


   MATTERS FOR CONGRESSIONAL
   CONSIDERATION
------------------------------------------------------------ Letter :8

The completion of Presidential Review Directive 23 on environmental
impact assessment procedures abroad will give the Congress an
opportunity to consider whether these procedures should be
strengthened.  Should the Congress wish to strengthen these
procedures, it could require the Council on Environmental Quality, or
a successor agency if the Council is abolished, to write separate
regulations under NEPA for major federal actions abroad that would
explicitly require the consideration of alternatives, some degree of
public participation, and interagency review and oversight by the
Council or a successor agency. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :9

We discussed the contents of this report with the Acting Director,
Council on Environmental Quality, who generally agreed with the
information presented.  We incorporated his comments where
appropriate.  We also verified certain factual information with
officials from other agencies and incorporated their comments as
appropriate.  However, as agreed with your office, we did not obtain
written comments on a draft of this report. 


   SCOPE AND METHODOLOGY
----------------------------------------------------------- Letter :10

To determine the differences between Executive Order 12114 and NEPA,
we reviewed the texts of each, as well as related regulations, case
law, and articles in legal periodicals.  We also discussed the
differences with agency officials responsible for implementing the
order and NEPA. 

To determine how agencies have implemented the order, we interviewed
representatives from 13 Cabinet departments and 16 independent
federal agencies or commissions to determine (1) whether they had
international activities, (2) whether they had procedures for
assessing the environmental impacts of these activities, and (3) what
kinds of activities they had applied the procedures to.  We also
asked officials in these agencies for their opinions on the problems
and benefits of applying NEPA's procedures to their actions abroad. 

Because not every agency kept complete records of its
extraterritorial activities and because significant changes in agency
staff occurred since 1979, some agencies could not provide complete
information over a 15-year period.  In such cases, we relied on
agency officials' best estimates.  Also, to determine the problems
and benefits of extending NEPA's procedures to major actions abroad,
we reviewed congressional hearings and other literature on this issue
and discussed options with agency officials, representatives of
nongovernmental organizations, and experts in the field of
environmental impact assessment law. 

We conducted our review in Washington, D.C., from February 1993 to
December 1993 in accordance with generally accepted government
auditing standards. 


--------------------------------------------------------- Letter :10.1

As arranged with your office, unless you publicly announce its
contents earlier, we plan no further distribution of this report
until 30 days from the date of this letter.  At that time, we will
send copies to the appropriate congressional committees; the Acting
Chairman, Council on Environmental Quality; the Assistant to the
President for National Security Affairs; the heads of the other
agencies we contacted during our review; and the Director, Office of
Management and Budget. 

This work was performed under the direction of Peter F.  Guerrero,
Director, Environmental Protection Issues, who can be reached on
(202) 512-6111 if you or your staff have any questions.  Major
contributors to this report are listed in appendix III. 

Sincerely yours,

Keith O.  Fultz
Assistant Comptroller General




(See figure in printed edition.)Appendix I
EXECUTIVE ORDER 12114
============================================================== Letter 



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


FEDERAL AGENCIES' IMPLEMENTATION
OF EXECUTIVE ORDER 12114
========================================================== Appendix II

Five Cabinet departments--Defense, Energy, State,\1 Transportation,
and the Treasury--have procedures to implement Executive Order 12114. 
Eleven agencies within three of these departments have separate
implementing procedures.  The Food and Drug Administration in the
Department of Health and Human Services and the National Oceanic and
Atmospheric Administration in the Department of Commerce have their
own procedures, although their departments do not.  Of the 13
independent agencies and commissions we surveyed, 3 had such
procedures.\2

As table I.1 shows, 15 out of 21 agencies that have Executive Order
12114 procedures have performed environmental impact assessments
under either these procedures or another authority, such as the
National Environmental Policy Act.\3 While the total number of
assessments performed by these agencies for actions abroad is not
known, we estimate, on the basis of interviews with agency officials,
that over 500 assessments have been conducted since 1979.  This
estimate includes approximately 200 assessments submitted by
applicants for the Environmental Protection Agency's permits for
major new sources in Prevention of Significant Deterioration areas
established under the Clean Air Act of 1977.  Many of the remaining
actions were Department of Defense construction projects on overseas
military installations. 

Both the Animal and Plant Health Inspection Service of the Department
of Agriculture and the United States Information Agency have assessed
the environmental impact of actions they have planned to take outside
the United States even though they have no procedures for doing so
under the executive order or another authority. 




                                    Table II.1
                     
                     Federal Agencies That Have Procedures to
                         Implement Executive Order 12114

                   Estimated number of
                   environmental
                   impact assessments   Type of              Examples of
                   performed for        environmental        activities for
                   actions abroad       impact assessments   which environmental
Department/        since 1979 (under    typically performed  impact assessments
Agency             any authority)       \a                   have been performed
-----------------  -------------------  -------------------  -------------------
Environmental      Over 200             Concise              Permits for ocean
Protection Agency                       environmental        dumping and for
                                        reviews,             Prevention of
                                        environmental        Significant
                                        impact statements    Deterioration

Army               Over 100             Environmental        Conventional Armed
                                        reviews              Forces in Europe
                                                             Treaty; road
                                                             construction;
                                                             chemical weapons
                                                             transport from
                                                             Germany to U.S.
                                                             territory in
                                                             Pacific

National Science   Over 100             Programmatic         Ocean drilling; sea
Foundation                              environmental        water desalination
                                        impact               system, Antarctica
                                        statements

Department of      25                   Environmental        Montreal Protocol
State                                   impact statements,   on Substances That
                                        environmental        Deplete the Ozone
                                        reviews              Layer; use of
                                                             herbicides to
                                                             eradicate illicit
                                                             coca overseas

Air Force          Over 20              Environmental        Base closures;
                                        reviews              force structure
                                                             realignments; power
                                                             plant construction;
                                                             housing
                                                             construction

Food and Drug      Over 20              Environmental        Drug and food
Administration                          assessments          additive
(Department of                                               manufacturing by
Health                                                       U.S. companies
and Human                                                    overseas
Services)

Defense Logistics  20                   Environmental        Fuel storage tank
Agency                                  reviews              construction;
                                                             hazardous materials
                                                             and waste storage
                                                             facility
                                                             construction

National Oceanic   11-20                Environmental        Fishery management
and Atmospheric                         assessments,         projects in
Administration                          environmental        Atlantic and
(Department of                          impact statements    Pacific oceans
Commerce)

Department of      11-20                Environmental        Nuclear power plant
Energy                                  reviews,             export to
                                        environmental        Philippines;
                                        assessments          \shipment of
                                                             plutonium from
                                                             foreign research
                                                             reactors

National           4-6                  Environmental        Space launches on
Aeronautics                             assessments,         foreign soil
and Space                               environmental
Administration                          reviews

U. S. Coast Guard  3                    Environmental        Construction of
                                        impact statements    offshore ports;
                                                             vessel traffic
                                                             system and radar

Navy               3-5                  Environmental        Underwater
                                        assessments          explosive testing;
                                                             Arctic field
                                                             exercises

Army Corps of      2\b                  Environmental        Flood control
Engineers                               assessments,         project for North
                                        environmental        Dakota and Canada
                                        impact statements


Defense Nuclear    1                    Environmental        Groundwave nuclear
Agency                                  assessment           command and control
                                                             system

Federal Aviation   Unknown--at least    Environmental        Radar tower on
Administration     1                    assessment           Bimini, Caribbean
                   under way

Joint Chiefs of    None
Staff

Federal Highway    None
Administration

Maritime           None
Administration

Department of      All assessments
Defense            performed by
                   individual agencies

Department of      All assessments
Transportation     performed by
                   individual agencies

Department of the  None
Treasury
--------------------------------------------------------------------------------
Note:  Some agencies stated that they have not developed
environmental assessment procedures under the Executive Order because
they do not engage in major federal actions outside the United
States.  Other agencies stated that their only international actions
include providing technical assistance or training to other countries
or participating in international forums.  These agencies have not
developed procedures because they do not consider these activities
major federal actions as described in the order.  Still other
agencies that have not developed procedures stated that any
activities they might undertake outside the United States would have
little or no environmental impact. 

\a Executive Order 12114 specifies that the following types of
documents be used when considering the environmental effects of
actions abroad:  (1) environmental impact statements for actions
affecting the environment of the global commons; (2) bilateral or
multilateral environmental studies for actions affecting the
environment of a foreign nation not participating with the United
States and not otherwise involved in the action; (3) concise reviews
of the environmental issues involved--including environmental
assessments, summary environmental analyses, or other appropriate
documents--for actions described in (2), for actions providing a
product or physical project producing a toxic substance prohibited or
regulated in the United States, or for a physical project producing a
radioactive substance prohibited or regulated in the United States. 
Any one of the above documents may be prepared for an action
affecting a natural or ecological resource of global importance. 

\b The Army Corps of Engineers has also performed environmental
impact assessments for projects financed by other agencies. 

As table II.2 shows, three U.S.  foreign aid agencies assess the
environmental impact of their actions abroad under separate
procedures.  These procedures are more stringent than those required
under Executive Order 12114. 



                                    Table II.2
                     
                      U.S. Foreign Aid Agencies That Conduct
                       Environmental Impact Assessments for
                     Actions Abroad Under Separate Procedures

                                                               Examples of
                                                               activities for
                                          Estimated number of  which
                     Authority to         environmental        environmental
                     conduct              impact assessments   impact
                     environmental        performed abroad     assessments have
Agency               impact assessment    since 1979           been performed
-------------------  -------------------  -------------------  -----------------
Overseas Private     Overseas Private     Over 100             Large-scale
Investment           Investment           annually             industrial
Corporation          Corporation                               projects, such as
                     Amendments Act of                         mining, oil field
                     1985                                      development, and
                                                               chemical
                                                               manufacturing

Agency for           Foreign Assistance   75-100               Pesticide
International        Act                  annually             application; road
Development          of 1961, as amended                       improvements;
                                                               AIDS surveillance
                                                               and education
                                                               project

Export-Import        Section 17 of the    25                   Funding for
Bank                 Export-Import Bank                        chemical plants,
                     Act of 1945, as                           copper mine,
                     amended                                   pharmaceutical
                                                               plant
--------------------------------------------------------------------------------

--------------------
\1 In November 1979, the State Department also issued separate
procedures under Executive Order 12114 specifying environmental
assessment procedures for nuclear export activities of federal
agencies. 

\2 This number excludes three agencies that have environmental
assessment procedures under both the executive order and other
authorities--the Agency for International Development, the
Export-Import Bank, and the Overseas Private Investment Corporation
(see this report's letter and table II.2). 

\3 We use the broad term "environmental impact assessment" to include
any of the following performed under Executive Order 12114: 
environmental assessments, environmental impact statements, bilateral
or multilateral environmental studies, concise environmental reviews,
or summary environmental analyses. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III

RESOURCES, COMMUNITY, AND ECONOMIC
DEVELOPMENT DIVISION, WASHINGTON,
D.C. 

Bernice Steinhardt, Associate Director
Steve Elstein, Assistant Director
Amy R.  Maron, Evaluator
Timothy L.  Minelli, Evaluator
Fran Featherston, Senior Social Science Analyst
Elizabeth R.  Eisenstadt, Reports Analyst
Alicia Dinerstein, Intern

OFFICE OF GENERAL COUNSEL

Karen Keegan, Senior Attorney
