Washington, DC – A coalition of non-profit organizations is taking the US Agency for International Development (USAID) to task for failing to conduct required environmental reviews of development bank loans. In a joint letter to USAID Administrator Andrew Natsios, eleven environmental and international policy groups complain that violations of domestic and international laws are falling through bureaucratic cracks.
US law (the Pelosi Amendment, after lead author Rep. Nancy Pelosi) requires meaningful review of environmental and legal compliance prior to bank boards approving the loans. Despite repeated reports of violations of national laws and bank policies involving corruption, financial swindles and environmental devastation, USAID and the Departments of Treasury and State fail to take action. Therefore, the coalition asks USAID to –
Establish a system to follow-up on reports that multilateral development banks may be failing to meet U.S. legal standards or breaking international laws;
Hold World Bank and regional development bank managers accountable for violations negligently or knowingly financed by loan packages; and
Foster mechanisms to protect whistleblowers when they report problems within the agency and the development banks.
The groups also cite the removal of USAID’s main environmental reviewer of development bank loans, John M. Fitzgerald, as aggravating these failings. At that time, the agency contended that they were going to upgrade the review function by spreading Fitzgerald’s assignments among several staff positions. Rather than build a larger staff to handle reviews, USAID eliminated all three environmental positions from its Policy Bureau and merely piled Fitzgerald’s bank reviews and reports on top of the work of remaining staff without reducing their workload.
“USAID lied when it said it was removing its lone environmental analyst in order to upgrade the World Bank review function,” commented PEER Executive Director Jeff Ruch whose organization is representing Mr. Fitzgerald in challenging USAID’s elimination of his position. “Mr. Natsios is reviving the role of the ‘Ugly American’ by tying foreign aid to our commercial advantage at the expense of safe agriculture, safe energy, indigenous peoples, and the conservation of forests and wildlife.”