Environmental Impact of Multilateral Development Bank-funded Projects

The subcommittee met, pursuant to call, at 10:10 a.m., in room 2222, Rayburn House Office Building, Hon. Mike Lowry presiding. Present: Representatives Lowry, Levin, and Bereuter.

Mr. LOWRY. I think to save time I do have an opening statement my staff labored hard to write that I would like to read. So I think I would like to begin the hearing.

Two very important members of the panel, first, the subcommittee chairman, Jerry Patterson, has had a terrible bout with back problems and is trying to get here. So he has asked me to convene the hearing.

Second, of course, the ranking member, Doug Bereuter, who also in addition to, of course, being very valuable on this panel, has paid a tremendous amount of interest to the specific subject that is the subject of the hearings, is on his way.

So I think what I would like to do is begin and read my statement, which hopefully won't take too long and hope Doug is here by that time. If he is not, I am going to pause for a couple more minutes to see if he arrives. If he doesn't arrive, we will continue

on.

I would like him to be here before we go to Mr. Conrow.
So I would like to convene the hearing of the subcommittee.

As most people in this room know, the last week in April, when the subcommittee marked up and passed out of this subcommittee the multilateral development bank legislation, there was a commitment by the subcommittee chairman and ranking minority member to have hearings on the very important question of the environmental, the health, the effect on indigenous people, effect of projects supported by the development banks, the World Bank, the multilateral development banks.

I want to first thank the subcommittee, the chairman, Mr. Patterson, and those others for sticking actually to the agreement. They said we would have hearings before June was over. June is not over. I think it is pretty good when Congress sticks to something like that. We appreciate that.

I have an opening statement that I would like to read into the record.

I would like to emphasize most of all what is not the subject of these hearings. The desirability of economic growth is not at issue. There is no doubt in my mind that an expanding economy in Third World nations is essential for the well-being and even stability of these nations. But, as we in the Northwestern United States have learned, ill-conceived development can create problems that last for generations.

A classic example in my State occurred during the development of our hydroelectric dams. The cheap electricity was a massive boon to my State and to the whole region.

But, in the process of that development, we came close to destroying our valuable runs of salmon. Our fishing industry is still suffering from the destruction of habitat caused by those dams.

Now there are expensive plans to build in the fish passageways, ladders, and screens that should have been put into the early designs in the first place. Retrofitting our waterways is beginning, and it is very expensive. I am sure that our regional fishing industry wishes very strongly that these losses had been considered at the outset, and that some Government agency would have forced us to face this problem squarely in the beginning.

Second, this hearing does not represent an attempt to dictate development policy to other nations. Rather, it is an attempt to bring into focus all of the costs and benefits of development projects. A country might still decide to pursue a project in light of negative findings about environmental effects of a particular project, just as our own Government sometimes chooses to do.

But it should be top priority to know as much as possible in advance about such problems, rather than stumble blindly in an environmental darkness. Environmental protection is a sound, longterm investment.

In 1980, the multilateral development banks supported the need for environmentally sensitive and responsible development in a joint declaration, yet some individuals report that environmental concerns are still an afterthought in the planning process, and that much of the material that is developed is difficult to obtain.

Here are some examples of the types of problems that may be created in poorly conceived projects:

Irrigation ditches can create standing water that makes good mosquito breeding habitat. These mosquitoes can introduce malaria to dry areas where it was previously uncommon.

Dams can block rivers and destroy native fishes used by local people. In some areas of Africa, the still, muddy water can also foster huge populations of snails, the intermediate host for schistosomiasis, one of the world's most frequent debilitating tropical dis

eases.

The Aswan Dam in Egypt, funded by the Soviet Union, did just that in spite of ample warning of the medical consequences.

Hydro projects may provide electricity to distant cities or factories, while flooding out local tribes or small farms. Those whose homes have been destroyed may sacrifice all they own for the sake of towns, cities, or factories they have never seen and may not even be able to imagine.

In the most remote areas, the mere presence of outsiders may jeopardize small bands of indigenous peoples. In the last century, native Americans died by the thousands from diseases like measles, mumps, and whooping cough. There is no doubt that native Americans had far more to fear from our germs than our bullets. In fact, some historians now believe that there were significant Indian migrations away from the common routes of early settlers because of the tribes' fear of disease.

We could see this same pattern of disease, death and population crash occurring in other isolated areas in the 20th century, if development proceeds in these remote areas without careful planning and preparation for these susceptible populations.

Finally, the destruction of wild lands in remote areas cannot continue indefinitely. Such destruction could cause global damage. Some experts believe that the tropical forests in Latin America provide a major portion of the planet's oxygen supply. If so, the increase in slash and burn agriculture or creation of grazing land is extremely serious. Moreover, tropical forests have long been a source of useful drugs and other chemical products. Plant species are being destroyed before the developed world even knows of their existence, much less their usefulness.

Genetic research on wild cousins of our cultivated crops has barely begun. Disease or pest resistant strains of rice, oil palms, plantains, and other tropical crops may soon be wiped out. Environmental considerations may prescribe programs which work to incorporate tropical forests into agriculture rather than eliminate them in favor of grazing or other foreign agricultural models.

Introduction of nonnative species can cause unforeseen havoc. For example, lakes in Guatemala which once supported local people with fish have seen their native species virtually disappear after fierce competition with the invaders.

Three years have now elapsed since the declaration of the MDB's that they would work to incorporate sound environmental planning in all of their activities. Now is a good time to review that progress, and to recommend changes to our representatives where changes may be necessary.

Environmental protection is a very sound investment. Far from impeding development, environmental protection is essential to it. I thank you again for holding these hearings.

I think we will find this series of hearings we are going to have over three sessions-one scheduled today, concentrating primarily on environmental concerns after the testimony from the administration; one tomorrow on indigenous people, and after the 4th of July a hearing concentrating specifically on health problems.

I think that will be very useful to our concerns.

Congressman Sandy Levin has now joined us. Sandy, do you have an opening comment you would care to make?

Mr. LEVIN. Just a brief comment.

I believe that the subcommittee chairman and you, in particular, are to be commended for looking into this issue.

In the last 3 or 4 years there has been a significant increase in interest in this area. This has not only been true within the institutions, the multilateral institutions and the bilateral institutions, but perhaps more significantly among developing nations.

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