SEC. 603. SENSE OF THE CONGRESS RELATING TO CONDITIONAL FINANCIAL ASSISTANCE BY MULTILATERAL LENDING INSTITUTIONS TO POLAND.

It is the sense of the Congress that the Secretary of the Treasury should instruct the United States Executive Directors of the multilateral development banks (as defined in section 1617 of the International Financial Institutions Act), of the International Monetary Fund, of the International Finance Corporation, and of the Multilateral Investment Guarantee Agency to enter into discussions with the other executive directors of such institutions and propose that such institutions not provide financial assistance or debt forgiveness to Poland until the government of Poland allows and facilitates privately owned entities established in foreign countries to invest in private commercial ventures in Poland.

SEC. 604. SENSE OF THE CONGRESS OPPOSING THE MAKING OF CERTAIN LOANS OR THE EXTENSION OF CERTAIN FINANCIAL AND TECHNICAL ASSISTANCE TO THE PEOPLE'S REPUBLIC OF CHINA.

(a) FINDINGS.-The Congress finds that—

(1) the Government of the People's Republic of China ordered the People's Liberation Army to brutally attack peaceful demonstrators who had assembled in Tiananmen Square;

(2) this attack violated the human rights of the demonstrators;

(3) several thousand innocent and defenseless protesters were killed in the initial assault;

(4) these violations of human rights have evolved into a pattern of continuing repression and reprisals against citizens throughout China as evidenced by the beating of alleged dissidents, the order to the army to shoot "rioters"-the Chinese Government's term for the peaceful demonstrators on sight, the mass arrest of students and workers, the public declarations by government-controlled media that physicists Fang Lizhi and Li Shuxian (who are being given refuge in the United States Embassy in Beijing) are "guilty" before being afforded due process, and the banning of all independent, unofficial prodemocracy organizations;

(5) the Government of the People's Republic of China is trying to suppress truthful accounts of the actions taken in Beijing and throughout the country, by, among other things, expelling foreign journalists, including the local bureau chief of the Voice of America, from the country;

(6) the People's Republic of China has received almost $8,000,000,000 in development loans from the International Bank for Reconstruction and Development, and increasing amounts of assistance from the Asian Development Bank;

(7) it is morally repugnant that, through such multilateral development banks, United States taxpayer dollars are used to support the present policies of the People's Republic of China;

(8) such development loans cannot be justified on economic grounds because economic development and market reforms cannot be achieved in the environment of repression that now clearly exists there; and

(9) the People's Republic of China is engaging in “a pattern of gross violations of internationally recognized human rights

such as flagrant denial to life, liberty, and the security of person". (b) STATEMENT OF POLICY.-It is the sense of the Congress that the President should

(1) instruct the United States Executive Directors of the International Bank for Reconstruction and Development and the Asian Development Bank to use their voices and votes to oppose the making of any loan or the extension of any financial or technical assistance to the People's Republic of China, in accordance with section 701(f) of the International Financial Institutions Act; and

(2) consider the People's Republic of China to be a country described in section 701(a)(1) of such Act until the President determines that the repression and reprisals against persons in connection with the prodemocracy demonstrations have ended.

TITLE VII-MISCELLANEOUS

SEC. 701.16 SHORT TITLE.

This title may be cited as the "Global Environmental Protection Assistance Act of 1989".

PART A-COMMERCIAL DEBT-FOR-NATURE EXCHANGES SEC. 711.17 AMENDMENT TO THE FOREIGN ASSISTANCE ACT. * *

PART B-MULTILATERAL FOREIGN ASSISTANCE

COORDINATION

SEC. 721. GENERAL POLICY.

It is the sense of the Congress that the Secretary of State should seek to develop an increased consideration of global warming, tropical deforestation, sustainable development, and biological diversity among the highest goals of bilateral foreign assistance programs of all countries.

SEC. 722. POLICY ON NEGOTIATIONS.

(a) IN GENERAL.-The Secretary of State, acting through the United States representative to the Development Assistance Committee of the Organization for Economic Coordination and Development (OECD), should initiate, at the earliest practicable date, negotiations among member countries on a coordinated approach to global warming, tropical deforestation, sustainable development, and biological diversity through bilateral assistance programs that would include

(1) increased consideration of the impact of developmental projects on global warming, tropical deforestation, and biological diversity;

(2) reduction or elimination of funding for those projects that exacerbate those problems;

16 22 U.S.C. 2151 note.

17 Sec. 711 added a new chapter 7 to part I of the Foreign Assistance Act of 1961, titled "Debtfor-Nature Exchanges". For text, see Legislation on Foreign Relations Through 1996, vol. I-A.

(3) coordinated research and development of projects that emphasize sustainable use or protection of tropical forests and support for local conservation efforts;

(4) expanded use of forgiveness of foreign assistance debt in exchange for policy changes or programs that address problems associated with global warming, tropical deforestation, sustainable development, and biological diversity;

(5) increased use of foreign assistance funds and technical assistance in support of local conservation, restoration, or sustainable development efforts and debt-for-nature exchanges;

(6) improved exchange of information on energy efficiency and solar and renewable energy sources, and a greater emphasis on the use of those sources of energy in developmental projects; and

(7) increased use of environmental experts in the field to assess development projects for their impact on global warming, tropical deforestation, and biological diversity.

(b) IMPLEMENTATION OF AGREEMENT.-Negotiations described in subsection (a) shall seek to ensure that the recommended changes are implemented as quickly as possible by member countries of the Development Assistance Committee.

TITLE VIII-EFFECTIVE DATE

SEC. 801.18 EFFECTIVE DATE.

Except as otherwise provided in this Act, this Act and the amendments made by this Act shall take effect on the date of the enactment of this Act.

18 22 U.S.C. 262d note.

b. Providing for U.S. Participation in a Capital Stock Increase for the International Bank for Reconstruction and Development and Replenishment of the African Development Fund

Partial text of H.R. 4645 as passed by the House on September 28, 1988, and enacted into law by sec. 555 of Public Law 100-461 [Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1989; H.R. 4637], 102 Stat. 2268, approved October 1, 1988

A BILL To provide for participation by the United States in a capital stock increase of the International Bank for Reconstruction and Development and a replenishment of the African Development Fund, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1.1 * * *

SEC.2 2. ***

SEC. 3.3 POLICY BASED LENDING FOR DEBT REDUCTION.

(a) CRITERIA.-The Secretary of the Treasury shall instruct the United States Executive Director of the International Bank for Reconstruction and Development to initiate discussions with other directors of such bank and to advocate and support the facilitation of voluntary market-based programs for the reduction of sovereign debt and the promotion of sustainable economic development, which, if implemented, would

(1) not require any organization or government to participate in such a program;

(2) result in debt reduction for each participating country tailored to the particular situation of each country;

(3) provide assistance to participating countries conditioned on the implementation of economic reforms, and the preservation of economic reforms previously implemented, by the country that are consistent with the principles of sustainable development;

(4) encourage participating countries to make economic adjustments steadily and over a period of time in order to achieve policy reform;

(5) use debt reduction techniques that would not compensate commercial banks for the reduction in the value of such debt, but would serve as a catalyst for new lending;

(6) involve such bank in lending for purposes of debt reduction and conversion only where such involvement would not lower the credit rating of such bank;

(7) not require public sector funding beyond that provided through any capital increase for such bank, and any replenish

1 Sec. 1 amended the Bretton Woods Agreements Act (22 U.S.C. 286 et seq.).

2 Sec. 2 amended the African Development Fund Act (22 U.S.C. 290g et seq.).

322 U.S.C. 286hh.

ment for the International Development Association, which is agreed to by the member countries of such institutions; and

(8) accomplish debt reduction, not as an end, but as a means to greater growth and investment in, and the restoration of voluntary private lending to, participating countries for environmentally and economically sustainable development.

(b) POLICY BASED LENDING FOR DEBT REDUCTION AND SUSTAINABLE GROWTH.-The Secretary of the Treasury shall instruct the United States Executive Director of the International Bank for Reconstruction and Development to initiate discussions with other directors of such bank and to propose that policy based loans be made by such bank for, among other reasons, facilitating a reduction in the debt service burden of any country which is participating in a voluntary market-based program for debt reduction described in subsection (c).

(c) VOLUNTARY MARKET-BASED PROGRAM FOR DEBT REDUCTION AND SUSTAINABLE GROWTH.-In connection with the discussions initiated pursuant to subsection (b), The Secretary shall instruct the United States Executive Director of the International Bank for Reconstruction and Development to propose that a country be considered to be participating in a voluntary market-based program of debt reduction for purposes of subsection (b) if the creditors of such country agree to significantly reduce the debt service of such country through forgiveness of a percentage of the interest owed by such country on any sovereign debt or through any other means. (d) REPORTS.-Not later than March 1, 1989, March 1, 1991, and March 1, 1993, respectively, the Secretary of the Treasury shall submit to the Committee on Banking, Finance and Urban Affairs 4 of the House of Representatives and the Committee on Foreign Relations of the Senate 3 reports each of which

(1) describes the long term strategy and lending programs of the International Bank for Reconstruction and Development for reducing and managing the debt burden of the countries designated as "Highly Indebted Countries" in the 1987-1988 World Debt Tables published by such bank, and summarize the long term strategy and lending programs of such bank for other seriously indebted countries;

(2) contains an explanation of the measures taken by such bank to facilitate the reduction of the debt burden of the countries designated as "Highly Indebted Countries" in the 19871988 World Debt Tables published by such bank;

(3) describes the extent (if any) to which such bank has implemented the measures described in subsections (b) and (c); and

(4) describes the success each of such countries has had in managing and reducing their debt burdens and achieving sustainable and equitable economic growth as measured by criteria including the ratio of debt service to exports, the ratio of debt to gross national product, net resource flows, and per capita income.

*Sec. 1(a)2) of Public Law 104-14 (109 Stat. 186) provided that references to the Committee on Banking, Finance and Urban Affairs of the House of Representatives shall be treated as referring to the Committee on Banking and Financial Services of the House of Representatives.