Request for Comments on Draft Environmental Handbook; Notice.

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.

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\1\ World Bank Group Pollution Prevention and Abatement

Handbook, September 1997.

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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.

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\2\ World Bank Group Pollution Prevention and Abatement

Handbook, September 1997.

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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).

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\3\ World Bank Group Pollution Prevention and Abatement

Handbook, September 1997.

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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.

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\4\ Projects that seek to environmentally enhance particular

aspects of a larger project are not screened into Category E.

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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.

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\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.

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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\

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\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

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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.

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\7\ A list server is a mechanism for automatically updating OPIC

users of new Category A projects via the internet.

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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\

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\8\ World Bank Group Pollution Prevention and Abatement

Handbook, September 1997.

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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\

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\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.

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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\

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\11\ World Bank/IFC policies on Indigenous Peoples and Cultural

Properties are forthcoming.

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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.''

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\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.

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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

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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.

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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.

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\13\ World Bank Group/IUCN, Large Dams: Learning Frm the Past,

Looking at the Future, Workshop Proceedings, Gland Switzerland,

April 11-12, 1997.

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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.)

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\14\ World Bank Group/IUCN World Commission on Dams.

\15\ World Bank Gruop/IUCN World Commission on Dams, April 1997

Conference Report.

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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:

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\16\ Speech of President Clinton on July 24, 1997; Byrd-Hagel

Resolution on Climate Change (S. Res. 98).

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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.

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\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.

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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\

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\18\ World Bank Group Pollution Prevention and Abatement

Handbook, September 1997.

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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\

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\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.''

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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