§262p–4i Multilateral development banks and debt-for-nature exchanges

Summary

The Secretary of the Treasury must tell the U.S. representatives at the multilateral development banks to push each bank to create a department for environmental protection and resource conservation, unless Treasury says it is already done. That department must handle restoration, protection, and sustainable use; write and enforce strict environmental rules for loans; and promote debt-for-nature deals and work to restore and protect tropical forests, renewable resources, endangered ecosystems, and species in borrowing countries. The U.S. directors must also back loans that help countries adopt good environmental policies, encourage banks to use part of environmental loans to help buy back or restructure private debt at market discounts, make sure bank staff help debtor countries work with NGOs and private groups on debt-for-nature swaps, and urge banks to include sustainable-use rules and economic programs in loan agreements and to provide policy changes or extra money for at least 1 of 9 conservation activities (including ocean and atmosphere restoration, species protection, parks and reserves, natural resource management, local conservation programs, training for conservation skills, research and public education, land and ecosystem management, and regenerative farming/forestry/watershed practices). While negotiating guidelines with other executive directors, the U.S. directors should treat “restoration, protection, or sustainable use” policies as ones that meet five goals: (1) support development that keeps and restores renewable resources without harming critical ecosystems or making global problems worse; (2) conserve and manage resources to reduce pressure and use land wisely so resources last; (3) avoid exceeding limits set by local water cycles, soil, climate, vegetation, and cultural practices; (4) promote restoring soils, vegetation, water cycles, wildlife, critical ecosystems (tropical forests, wetlands, and coastal marine resources), biodiversity, and other resources while minimizing depletion; and (5) where feasible, prevent pollution that threatens health and key ecosystems and favor energy use that meets needs and relies on renewable sources. The U.S. directors must try to include these five goals in the banks’ final guidelines.