NAFTA and environmental infrastructure projects.

• Author: Weiss, Barbara

In the final days before the U.S. House of Representatives took up the debate on the North American Free Trade Agreement (NAFTA), the governments of Mexico and the United States agreed on arrangements to assist communities on both sides of the border in coordinating and carrying out environmental infrastructure projects. The agreement establishes mechanisms for implementing NAFTA's environmental protection provisions.

The governments will establish two institutions:

1) a North American Development Bank (NADBank), capitalized in equal shares by the United States and Mexico, that will provide some $2 billion or more in new financing to supplement existing sources of funds and foster the expanded participation of private capital; and

2) a Border Environment Cooperation Commission (BECC) to assist local communities in developing and implementing environmental infrastructure projects and to certify projects for NADBank financing.

The two new institutions will help marshall resources from all sources, both public and private, to solve the environmental problems of the border region.

The BECC

The Border Environment Cooperation Commission will work with the affected states and local communities and nongovernmental organizations in developing effective solutions to environmental problems in the border region. It will provide technical and financial planning assistance for environmental infrastructure to enhance the environment in the border region. The BECC will not itself develop or manage projects. Rather, it will assist states and localities and private investors proposing environmental infrastructure projects in:

* coordinating, developing and implementing projects;

* assessing their technical and financial feasibility;

* evaluating social and economic benefits; and

* arranging public and private financing for projects.

The BECC may certify to NADBank any project that meets the technical, environmental and financial criteria applied by it. To be eligible for certification, projects shall observe the environmental laws for the place where the project is to be located or carried out.

For a project with significant transboundary effects, an environmental assessment shall be presented and the BECC shall determine, in consultation with affected states and localities, that the project meets the necessary conditions to achieve a high level of environmental protection for the affected area. Each country will have five members on the BECC Board of...