[House Report 110-241]
[From the U.S. Government Publishing Office]
110th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 110-241
======================================================================
OVERSEAS PRIVATE INVESTMENT CORPORATION REAUTHORIZATION ACT OF 2007
_______
July 19, 2007.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Lantos, from the Committee on Foreign Affairs, submitted the
following
R E P O R T
[To accompany H.R. 2798]
[Including cost estimate of the Congressional Budget Office]
The Committee on Foreign Affairs, to whom was referred the
bill (H.R. 2798) to reauthorize the programs of the Overseas
Private Investment Corporation, and for other purposes, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
TABLE OF CONTENTS
Page
The Amendment.................................................... 2
Summary.......................................................... 10
Background and Purpose for the Legislation....................... 10
Hearings......................................................... 11
Committee Consideration.......................................... 11
Votes of the Committee........................................... 11
Committee Oversight Findings..................................... 11
New Budget Authority and Tax Expenditures........................ 12
Congressional Budget Office Cost Estimate........................ 12
Performance Goals and Objectives................................. 14
Constitutional Authority Statement............................... 15
New Advisory Committees.......................................... 15
Congressional Accountability Act................................. 15
Earmark Identification........................................... 15
Section-by-Section Analysis and Discussion....................... 15
Changes in Existing Law Made by the Bill, as Reported............ 29
The Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Overseas Private Investment
Corporation Reauthorization Act of 2007''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) Since its founding in 1971, the Overseas Private
Investment Corporation (in this section referred to as
``OPIC'') has helped to mobilize and facilitate private capital
by United States investors in developing and emerging market
countries in support of United States foreign policy and
development goals.
(2) OPIC assistance should not, in any way, support projects
in countries that reject their obligations to support
international peace, security, and basic human rights.
(3) OPIC assistance should not be provided to those who
support enemies of the United States.
(4) OPIC assistance is a privilege and should be granted to
persons that, along with their affiliated companies,
demonstrate responsible and sustainable business practices,
particularly with regard to the environment, international
worker rights, and efforts against genocide and nuclear
proliferation. Denial of OPIC assistance is not a penalty or
sanction.
(5) Over OPIC's 35-year history, OPIC has supported
$177,000,000,000 in operating investments in more than 150
developing countries, helping to create more than 800,000 jobs
and some $13,000,000,000 in host-government revenues.
(6) OPIC projects have generated $71,000,000,000 in United
States exports and supported more than 271,000 United States
jobs.
(7) Projects assisted by OPIC in fiscal year 2006 are
projected to generate $1,000,000,000 in United States exports,
support more than 2,700 United States jobs, and have a positive
impact on the United States balance of payments.
(8) In fiscal year 2006, 87 percent of all OPIC-supported
projects supported small-and-medium-sized businesses in the
United States.
(9) In an era of limited Federal budgetary resources, OPIC
has consistently demonstrated an ability to operate on a self-
sustaining basis to support United States companies, all at a
net cost of zero to the United States taxpayer.
(10) OPIC has reserves totaling approximately $5,300,000,000
and will make an estimated net budget contribution to the
international affairs account of $159,000,000 in fiscal year
2008.
SEC. 3. REAUTHORIZATION OF OPIC PROGRAMS.
Section 235(a)(2) of the Foreign Assistance Act of 1961 (22 U.S.C.
2195(a)(2)) is amended by striking ``September 30, 2007'' and inserting
``September 30, 2011'' .
SEC. 4. PREFERENTIAL CONSIDERATION OF CERTAIN INVESTMENT PROJECTS.
Section 231(f) of the Foreign Assistance Act of 1961 (22 U.S.C.
2191(f)) is amended to read as follows:
``(f) to give preferential consideration to investment
projects in less developed countries the governments of which
are receptive to private enterprise, domestic and foreign, and
to projects in countries the governments of which are willing
and able to maintain conditions that enable private enterprise
to make its full contribution to the development process;''.
SEC. 5. REQUIREMENTS REGARDING INTERNATIONAL WORKER RIGHTS.
(a) Country Requirements.--Subsection (a) of section 231A of the
Foreign Assistance Act of 1961 (22 U.S.C. 2191a(a)) is amended--
(1) by amending the subsection heading to read as follows:
``International Worker Rights'';
(2) in paragraph (4), by striking ``(4) In'' and inserting
``(5) Additional determination.--In'' ; and
(3) by striking paragraphs (1) through (3) and inserting the
following:
``(1) Limitation on opic activities.--(A) The Corporation may
insure, reinsure, guarantee, or finance a project only if the
country in which the project is to be undertaken has made or is
making significant progress towards the recognition, adoption,
and implementation of laws that substantially provide
international worker rights, including in any designated zone,
or special administrative region or area, in that country.
``(B) The Corporation shall also include the following
language, in substantially the following form, in all contracts
which the Corporation enters into with eligible investors to
provide financial support under this title:
```The investor agrees not to take any actions to obstruct or
prevent employees of the foreign enterprise from exercising
their international worker rights (as defined in section 238(h)
of the Foreign Assistance Act of 1961), and agrees to adhere to
the obligations regarding those international worker rights.'
``(2) Preference to certain countries.--To the degree
possible and consistent with its development objectives, the
Corporation shall give preferential consideration to projects
in countries that have adopted, maintain, and enforce laws that
substantially provide international worker rights.
``(3) Use of annual reports on international worker rights.--
The Corporation shall, in carrying out paragraph (1)(A), use,
among other sources, the reports submitted to the Congress
pursuant to section 504 of the Trade Act of 1974. Such other
sources include the observations, reports, and recommendations
of the International Labor Organization, and other relevant
organizations.
``(4) Inapplicability to humanitarian activities.--Paragraph
(1) shall not prohibit the Corporation from providing any
insurance, reinsurance, guaranty, financing, or other
assistance for the provision of humanitarian assistance in a
country.''.
(b) Board of Directors.--Section 233(b) of the Foreign Assistance Act
of 1961 (22 U.S.C. 2193(b)) is amended by adding at the end the
following: ``The selection of the small business, organized labor, and
cooperative directors should be made, respectively, in consultation
with relevant representative organizations.''.
(c) Definitions.--Section 238 of the Foreign Assistance Act of 1961
(22 U.S.C. 2198) is amended--
(1) in subsection (f), by striking ``and'' after the
semicolon;
(2) in subsection (g), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(h) the term `international worker rights' means--
``(1) internationally recognized worker rights, as
defined in section 507(4) of the Trade Act of 1974 (19
U.S.C. 2467(4)); and
``(2) the elimination of discrimination with respect
to employment and occupation.''.
(d) General Provisions and Powers.--Section 239 of the Foreign
Assistance Act of 1961 (22 U.S.C. 2199) is amended--
(1) in subsection (h), by adding at the end the following:
``In addition, the Corporation should consult with relevant
stakeholders in developing such criteria.''; and
(2) in subsection (i), in the first sentence, by inserting
``, including international worker rights,'' after
``fundamental freedoms''.
SEC. 6. ENVIRONMENTAL ASSESSMENTS.
Section 231A(b) of the Foreign Assistance Act of 1961 (22 U.S.C.
2191a(b)) is amended to read as follows:
``(b) Environmental Impact.--The Board of Directors of the
Corporation shall not vote in favor of any action proposed to be taken
by the Corporation that is likely to have significant adverse
environmental impacts, unless for at least 60 days before the date of
the vote--
``(1) an environmental impact assessment, or initial
environmental audit, analyzing the environmental impacts of the
proposed action and of alternatives to the proposed action has
been completed by the project applicant and made available to
the Board of Directors; and
``(2) such assessment or audit has been made available to the
public of the United States, locally affected groups in the
host country, and host country nongovernmental
organizations.''.
SEC. 7. COMMUNITY SUPPORT.
Section 237 of the Foreign Assistance Act of 1961 (22 U.S.C. 2197) is
amended by adding at the end the following:
``(p) Community Support.--To the maximum extent practicable, the
Corporation shall require the applicant for a project that is subject
to section 231A(b) to obtain broad community support for the
project.''.
SEC. 8. CLIMATE CHANGE MITIGATION ACTION PLAN.
Title IV of chapter 2 of part I of the Foreign Assistance Act of 1961
(22 U.S.C. 2291 et seq.) is amended by inserting after section 234A the
following new section:
``SEC. 234B. CLIMATE CHANGE MITIGATION.
``(a) Mitigation Action Plan.--The Corporation shall, not later than
180 days after the date of the enactment of the Overseas Private
Investment Corporation Reauthorization Act of 2007, institute a climate
change mitigation action plan that includes the following:
``(1) Clean and efficient energy technology.--
``(A) Increasing assistance.--The Corporation shall
establish a goal of substantially increasing its
support of projects that use, develop, or otherwise
promote the use of clean energy technologies over the
4-year period beginning on the date of the enactment of
the Overseas Private Investment Corporation
Reauthorization Act of 2007.
``(B) Preferential treatment to projects.--The
Corporation shall give preferential treatment to the
evaluation and awarding of assistance for and provide
greater flexibility in supporting projects that use,
develop, or otherwise promote the use of clean and
efficient energy technologies.
``(2) Environmental impact assessments.--
``(A) Greenhouse gas emissions.--The Corporation
shall, in making an environmental impact assessment for
a project under section 231A(b), take into account the
degree to which the project contributes to the emission
of greenhouse gases.
``(B) Other duties not affected.--The requirement
under subparagraph (A) is in addition to any other
requirement, obligation, or duty that the Corporation
has.
``(3) Report to congressional committees.--The Corporation
shall, within 180 days after the date of the enactment of the
Overseas Private Investment Corporation Reauthorization Act of
2007, submit to the Committee on Foreign Affairs of the House
of Representatives and the Committee on Foreign Relations of
the Senate a report on the plan developed to carry out
paragraph (1)(A). Thereafter, the Corporation shall include in
its annual report under section 240A a discussion of such plan
and its implementation.
``(b) Extraction Investments.--
``(1) Prior notification to congressional committees.--The
Corporation may not approve any contract of insurance or
reinsurance, or any guaranty, or enter into any agreement to
provide financing for any project which significantly involves
an extractive industry and in which assistance by the
Corporation would be valued at $10,000,000 or more (including
contingent liability), until at least 30 days after the
Corporation notifies the Committee on Foreign Affairs of the
House of Representatives and the Committee on Foreign Relations
of the Senate of such contract or agreement.
``(2) Commitment to eiti principles.--The Corporation may
approve a contract of insurance or reinsurance, or any
guaranty, or enter into an agreement to provide financing to an
eligible investor for a project that significantly involves an
extractive industry only if--
``(A) the eligible investor has agreed to implement
the Extractive Industries Transparency Initiative
principles and criteria, or substantially similar
principles and criteria; or
``(B) the host country where the project is to be
carried out has committed to the Extractive Industries
Transparency Initiative principles and criteria, or
substantially similar principles and criteria.
``(3) Preference for certain projects.--With respect to all
projects that significantly involve an extractive industry, the
Corporation, to the degree possible and consistent with its
development objectives, shall give preference to a project in
which both the eligible investor has agreed to implement the
Extractive Industries Transparency Initiative principles and
criteria, or substantially similar principles and criteria, and
the host country where the project is to be carried out has
committed to the Extractive Industries Transparency Initiative
principles and criteria, or substantially similar principles
and criteria.
``(4) Definitions.--In this subsection:
``(A) Extractive industry.--The term `extractive
industry' refers to an enterprise engaged in the
exploration, development, or extraction of oil and gas
reserves, metal ores, gemstones, industrial minerals,
or coal.
``(B) Extractive industries transparency initiative
principles and criteria.--The term `Extractive
Industries Transparency Initiative principles and
criteria' means the principles and criteria of the
Extractive Industries Transparency Initiative, as set
forth in Annex A to the Anti-Corruption Policies and
Strategies Handbook of the Corporation, as published in
September 2006.
``(5) Reporting requirement.--The Corporation shall include
in its annual report required under section 240A a description
of its activities to carry out this subsection.
``(c) Definitions.--In this section:
``(1) Clean and efficient energy technology.--The term `clean
and efficient energy technology' means an energy supply or end-
use technology--
``(A) such as--
``(i) solar technology;
``(ii) wind technology;
``(iii) geothermal technology;
``(iv) hydroelectric technology; and
``(v) carbon capture technology; and
``(B) that, over its life cycle and compared to a
similar technology already in commercial use--
``(i) is reliable, affordable, economically
viable, socially acceptable, and compatible
with the needs and norms of the country
involved;
``(ii) results in--
``(I) reduced emissions of greenhouse
gases; or
``(II) increased geological
sequestration; and
``(iii) may--
``(I) substantially lower emissions
of air pollutants; or
``(II) generate substantially smaller
and less hazardous quantities of solid
or liquid waste.
``(2) Greenhouse gas.--The term `greenhouse gas' means--
``(A) carbon dioxide;
``(B) methane;
``(C) nitrous oxide;
``(D) hydrofluorocarbons;
``(E) perfluorocarbons; or
``(F) sulfur hexafluoride.''.
SEC. 9. PROHIBITION ON ASSISTANCE TO DEVELOP OR PROMOTE CERTAIN RAILWAY
CONNECTIONS AND RAILWAY-RELATED CONNECTIONS.
Section 237 of the of the Foreign Assistance Act of 1961 (22 U.S.C.
2197) is further amended by adding at the end the following:
``(q) Prohibition on Assistance for Certain Railway Projects.--The
Corporation may not provide insurance, reinsurance, a guaranty,
financing, or other assistance to support the development or promotion
of any railway connection or railway-related connection that does not
traverse or connect with Armenia and does connect Azerbaijan and
Turkey.''.
SEC. 10. INELIGIBILITY OF PERSONS DOING CERTAIN BUSINESS WITH STATE
SPONSORS OF TERRORISM.
(a) In General.--Section 237 of the Foreign Assistance Act of 1961
(22 U.S.C. 2197) is further amended by adding at the end the following:
``(r) Ineligible Projects.--
``(1) In general.--A project will not be eligible to receive
support provided by the Corporation under this title if either
of the following applies:
``(A)(i) An applicant for insurance, reinsurance,
financing, or other support for a project provided to
the government of a state sponsor of terrorism a loan,
or an extension of credit, that remains outstanding.
``(ii) For purposes of this subparagraph, the sale of
goods, other than food or medicine, on any terms other
than a cash basis shall be considered to be an
extension of credit.
``(B) An applicant for insurance, reinsurance,
financing, or other support for a project has an
investment commitment valued at $20,000,000 or more for
the energy sector in a country that is a state sponsor
of terrorism.
``(2) Definitions.--In this subsection:
``(A) Cash basis.--The term `cash basis' refers to a
sale in which the purchaser of goods or services is
required to make payment in full within 45 days after
receiving the goods or services.
``(B) Energy sector.--The term `energy sector' refers
to activities to develop or transport petroleum or
natural gas resources.
``(C) Investment commitment.--The term `investment
commitment' means any of the following activities if
such activity is undertaken pursuant to a commitment,
or pursuant to the exercise of rights under a
commitment, that was entered into with the government
of a state sponsor of terrorism or a nongovernmental
entity in a country that is a state sponsor of
terrorism:
``(i) The entry into a contract that includes
responsibility for the development of petroleum
resources located in a country that is a state
sponsor of terrorism, or the entry into a
contract providing for the general supervision
and guarantee of another person's performance
of such a contract.
``(ii) The purchase of a share of ownership,
including an equity interest, in that
development.
``(iii) The entry into a contract providing
for the participation in royalties, earnings,
or profits in that development, without regard
to the form of the participation.
``(D) State sponsor of terrorism.--The term `state
sponsor of terrorism' means a country the government of
which the Secretary of State has determined, for
purposes of section 6(j) of the Export Administration
Act of 1979, section 620A of the Foreign Assistance Act
of 1961, section 40 of the Arms Export Control Act, or
any other provision of law, to be a government that has
repeatedly provided support for acts of international
terrorism.
``(3) Certification.--
``(A) By applicants.--A person or entity applying for
insurance, reinsurance, a guaranty, financing, or other
assistance under this title may not receive such
support unless its chief executive officer certifies to
the Corporation, under penalty of perjury, that the
person or entity and its majority-owned subsidiaries
are not engaged in any activity described in
subparagraph (A) or (B) of paragraph (1).
``(B) By ultimate parent entities.--In the case of an
applicant that is a majority-owned entity of another
entity, in addition to the certification under
subparagraph (A), the chief executive officer of the
ultimate parent entity of the applicant must certify,
under penalty of perjury, that it and its majority-
owned subsidiaries are not engaged in any activity
described in subparagraph (A) or (B) of paragraph (1).
``(C) Application to straw man transactions.--In any
case in which--
``(i) an applicant for insurance,
reinsurance, financing, or other assistance
under this title is providing goods and
services to a project,
``(ii) more than 50 percent of such goods and
services are acquired from an unaffiliated
entity, and
``(iii) the unaffiliated entity is receiving
$20,000,000 or more, or sums greater than 50
percent of the amount of the assistance
provided by the Corporation for the project
(including contingent liability), for such
goods or services,
then the chief executive officer of the unaffiliated
entity must make a certification under subparagraph
(A), and any ultimate parent entity must make a
certification required by subparagraph (B).
``(D) Diligent inquiry.--A certification required by
subparagraph (A), (B), or (C) may be made to the best
knowledge and belief of the certifying officer if that
officer states that he or she has made diligent inquiry
into the matter certified.
``(E) Exception.--(i) A chief executive officer of an
applicant or other entity may provide a certification
required by subparagraph (A), (B), or (C) with respect
to the activity of a majority-owned subsidiary or
entity notwithstanding activity by such majority-owned
subsidiary or entity that would cause a project to be
ineligible for support under subparagraph (A) or (B) of
paragraph (1) if such activity is carried out under a
contract or other obligation of such majority-owned
subsidiary or entity that was entered into or incurred
before the acquisition of such majority-owned
subsidiary or entity by the applicant or ultimate
parent entity.
``(ii) Clause (i) shall not apply if the terms of
such contract or other obligation are expanded or
extended after such acquisition.
``(F) Definition.--For purposes of this paragraph, a
person is an ultimate parent of an entity if the person
owns directly, or through majority ownership of other
entities, greater than 50 percent of the equity of the
entity.
``(4) Exception.--The prohibition in paragraph (1) shall
not--
``(A) apply to a loan, extension of credit, or
investment commitment by an applicant, or other entity
covered by a certification under subparagraph (A), (B),
or (C) of paragraph (3), in Southern Sudan, Southern
Kordofan/Nuba Mountains State, Blue Nile State, or
Abyei, Darfur, if the Corporation, with the concurrence
of the Secretary of State, determines that such loan,
extension of credit, or investment commitment will
provide emergency relief, promote economic self-
sufficiency, or implement a nonmilitary program in
support of a viable peace agreement in Sudan, including
the Comprehensive Peace Agreement for Sudan and the
Darfur Peace Agreement; or
``(B) prohibit the Corporation from providing support
for projects in Southern Sudan, Southern Kordofan/Nuba
Mountains State, Blue Nile State, and Abyei, Darfur, if
the Corporation, with the concurrence of the Secretary
of State, determines that such projects will provide
emergency relief, promote economic self-sufficiency, or
implement a nonmilitary program in support of a viable
peace agreement in Sudan, including the Comprehensive
Peace Agreement for Sudan and the Darfur Peace
Agreement .
``(5) Prospective application of subsection.--This subsection
shall not be applied to limit support by the Corporation under
this title because an applicant, or other entity covered by a
certification under subparagraph (A), (B), or (C) of paragraph
(3) engaged in commercial activity specifically licensed by the
Office of Foreign Assets Control of the Department of the
Treasury.''.
(b) Termination.--
(1) In general.--The amendment made by this section shall
cease to be effective with respect to a country that is a state
sponsor of terrorism 30 days after the President certifies to
the appropriate congressional committees that--
(A) the country has ceased providing support for acts
of international terrorism and no longer satisfies the
requirements for designation as a state sponsor of
terrorism;
(B) the country does not possess nuclear weapons or a
significant program to develop nuclear weapons; and
(C) the country is not committing genocide or
conducting a program of ethnic cleansing against a
civilian population that approaches genocide.
(2) Definitions.--In this subsection:
(A) Appropriate congressional committees.--The term
``appropriate congressional committees'' means the
Committee on Foreign Affairs of the House of
Representatives and the Committee on Foreign Relations
of the Senate.
(B) State sponsor of terrorism.--The term ``state
sponsor of terrorism'' has the meaning given that term
in section 237(r)(2)(D) of the Foreign Assistance Act
of 1961, as added by subsection (a) of this section.
SEC. 11. INCREASED TRANSPARENCY.
(a) In General.--Section 237 of the Foreign Assistance Act of 1961
(22 U.S.C. 2197) is further amended by adding at the end the following
new subsections:
``(s) Availability of Project Information.--Beginning 90 days after
the date of the enactment of the Overseas Private Investment
Corporation Reauthorization Act of 2007, the Corporation shall make
public, and post on its Internet website, summaries of all new projects
supported by the Corporation, and other relevant information, except
that the Corporation shall not include any confidential business
information in the summaries and information made available under this
subsection.
``(t) Review of Methodology.--Not later than 180 days after the date
of the enactment of the Overseas Private Investment Corporation
Reauthorization Act of 2007, the Corporation shall publish in the
Federal Register and periodically revise, subject to a period of public
comment, the detailed methodology, including relevant regulations, used
to assess and monitor the impact of projects supported by the
Corporation on the development and environment of, and international
worker rights in, host countries, and on United States employment.
``(u) Public Notice Prior to Project Approval.--
``(1) Public notice.--The Board of Directors of the
Corporation may not vote in favor of any action proposed to be
taken by the Corporation on any Category A project until at
least 60 days after the Corporation--
``(A) makes available for public comment a summary of
the project and relevant information about the project;
and
``(B) makes the summary and information described in
paragraph (1) available to locally affected groups in
the area of impact of the proposed project, and to host
country nongovernmental organizations.
The Corporation shall not include any business confidential
information in the summary and information made available under
subparagraphs (A) and (B).
``(2) Published response.--To the extent practicable, the
Corporation shall publish responses to the comments received
under paragraph (1) with respect to a Category A project and
submit the responses to the Board not later than 7 days before
a vote is to be taken on any action proposed by the Corporation
on the project.
``(3) Definitions.--In this subsection, the term `Category A
project' means any project or other activity for which the
Corporation proposes to provide insurance, reinsurance,
financing, or other support under this title and which is
likely to have significant adverse environmental impacts.''.
(b) Office of Accountability.--Section 237 of the Foreign Assistance
Act of 1961 (22 U.S.C. 2197) is further amended by adding at the end
the following new subsection:
``(v) Office of Accountability.--The Corporation shall maintain an
Office of Accountability to provide problem-solving services for
projects supported by the Corporation and to review the Corporation's
compliance with its environmental, social, worker rights, human rights,
and transparency policies and procedures, to the maximum extent
practicable. The Office of Accountability shall operate in a manner
that is fair, objective and transparent.''.
SEC. 12. FRAUD AND OTHER BREACHES OF CONTRACT.
Section 237(n) of the Foreign Assistance Act of 1961 (22 U.S.C.
2197(n)) is amended--
(1) by striking ``Whoever'' and inserting:
``(1) In general.--Whoever''; and
(2) by adding at the end the following:
``(2) Deferrals to department of justice.--(A) The President
of the Corporation shall refer to the Department of Justice for
appropriate action information known to the Corporation
concerning any substantial evidence of--
``(i) a violation of this title;
``(ii) a material breach of contract entered into
with the Corporation by an eligible investor; or
``(iii) a material false representation made by an
investor to the Corporation.
``(B) Subparagraph (A) does not apply if the President of the
Corporation concludes that the matter described in clause (i),
(ii), or (iii), as the case may be, of subparagraph (A)--
``(i) is not evidence of a possible violation of
criminal law; and
``(ii) is not evidence that the Federal Government is
entitled to civil remedy or to impose a civil
penalty.''.
SEC. 13. TRANSPARENCY AND ACCOUNTABILITY OF INVESTMENT FUNDS.
(a) In General.--Section 239 of the Foreign Assistance Act of 1961
(22 U.S.C. 2199) is amended by adding at the end the following:
``(l) Transparency and Accountability of Investment Funds.--
``(1) Competitive selection of investment fund management.--
With respect to any investment fund that the Corporation
creates on or after the date of the enactment of the Overseas
Private Investment Corporation Reauthorization Act of 2007, the
Corporation may select persons to manage the fund only by
contract using full and open competitive procedures.
``(2) Criteria for selection.--In assessing proposals for
investment fund management proposals, the Corporation shall
consider, in addition to other factors, the following:
``(A) The prospective fund management's experience,
depth, and cohesiveness.
``(B) The prospective fund management's track record
in investing risk capital in emerging markets.
``(C) The prospective fund management's experience,
management record, and monitoring capabilities in its
target countries, including details of local presence
(directly or through local alliances).
``(D) The prospective fund management's experience as
a fiduciary in managing institutional capital, meeting
reporting requirements, and administration.
``(E) The prospective fund management's record in
avoiding investments in companies that would be
disqualified under section 237(r).
``(3) Annual report.--The Corporation shall include in each
annual report under section 240A an analysis of the investment
fund portfolio of the Corporation, including the following:
``(A) Fund performance.--An analysis of the aggregate
financial performance of the investment fund portfolio
grouped by region and maturity.
``(B) Status of loan guaranties.--The amount of
guaranties committed by the Corporation to support
investment funds, including the percentage of such
amount that has been disbursed to the investment funds.
``(C) Risk ratings.--The definition of risk ratings,
and the current aggregate risk ratings for the
investment fund portfolio, including the number of
investment funds in each of the Corporation's rating
categories.
``(D) Competitive selection of investment fund
management.--The number of proposals received and
evaluated for each newly established investment
fund.''.
(b) GAO Audit.--Not later than 1 year after the submission of the
first report to Congress under section 240A of the Foreign Assistance
Act of 1961 that includes the information required by section 239(l)(3)
of that Act (as added by subsection (a) of this section), the
Comptroller General of the United States shall prepare and submit to
the Committee on Foreign Affairs of the House of Representatives and
the Committee on Foreign Relations of the Senate an independent
assessment of the investment fund portfolio of the Overseas Private
Investment Corporation, covering the items required to be addressed
under such section 239(l)(3).
SEC. 14. EXTENSION OF AUTHORITY TO OPERATE IN IRAQ.
Section 239 of the Foreign Assistance Act of 1961 (22 U.S.C. 2199) is
amended by adding at the end the following:
``(m) Operations in Iraq.--Notwithstanding subsections (a) and (b) of
section 237, the Corporation is authorized to undertake in Iraq any
program authorized by this title.''.
SEC. 15. CONSISTENCY WITH EXISTING LAW.
Section 239 of the Foreign Assistance Act of 1961 (22 U.S.C. 2199) is
further amended by adding at the end the following:
``(n) Consistency With Other Law.--Section 620L of this Act shall
apply to any insurance, reinsurance, guaranty, or other financing
issued by the Corporation for projects in the West Bank and Gaza to the
same extent as such section applies to other assistance under this Act.
``(o) Limitation on Assistance to Gaza and the West Bank .--The
Corporation may not provide insurance, reinsurance, a guaranty,
financing, or other assistance to support a project in any part of Gaza
or the West Bank unless the Secretary of State determines that the
location for the project is not under the effective control of Hamas or
any other foreign terrorist organization designated under section 219
of the Immigration and Nationality Act (8 U.S.C. 1189).''.
SEC. 16. CONGRESSIONAL NOTIFICATION REGARDING MAXIMUM CONTINGENT
LIABILITY.
Section 239 of the Foreign Assistance Act of 1961 (22 U.S.C. 2199) is
further amended by adding at the end the following:
``(p) Congressional Notification of Increase in Maximum Contingent
Liability.--The Corporation shall notify the Committee on Foreign
Affairs of the House of Representatives and the Committee on Foreign
Relations of the Senate not later than 15 days after the date on which
the Corporation's maximum contingent liability outstanding at any one
time pursuant to insurance issued under section 234(a), and the amount
of financing issued under sections 234(b) and (c), exceeds the previous
fiscal year's maximum contingent liability by 25 percent.''.
SEC. 17. ASSISTANCE FOR SMALL BUSINESSES AND ENTITIES.
Section 240 of the Foreign Assistance Act of 1961 (22 U.S.C. 2200) is
amended by adding at the end the following:
``(c) Resources Dedicated to Small Businesses, Cooperatives, and
Other Small United States Investors.--The Corporation shall ensure that
adequate personnel and resources, including senior officers, are
dedicated to assist United States small businesses, cooperatives, and
other small United States investors in obtaining insurance,
reinsurance, financing, and other support under this title. The
Corporation shall include, in each annual report under section 240A,
the following information with respect to the period covered by the
report:
``(1) A description of such personnel and resources.
``(2) The number of small businesses, cooperatives, and other
small United States investors that received such insurance,
reinsurance, financing, and other support, and the dollar value
of such insurance, reinsurance, financing and other support.
``(3) A description of the projects for which such insurance,
reinsurance, financing, and other support was provided.''.
SEC. 18. TECHNICAL CORRECTIONS.
(a) Pilot Equity Finance Program.--Section 234 of the Foreign
Assistance Act of 1961 (22 U.S.C. 2194) is amended--
(1) by striking subsection (g); and
(2) by redesignating subsection (h) as subsection (g).
(b) Transfer Authority.--Section 235 of the Foreign Assistance Act of
1961 (22 U.S.C. 2195) is amended--
(1) by striking subsection (e); and
(2) by redesignating subsection (f) as subsection (e).
(c) Guaranty Contract.--Section 237(j) of the Foreign Assistance Act
of 1961 (22 U.S.C. 2197(j)) is amended by inserting ``insurance,
reinsurance, and'' after ``Each''.
(d) Transfer of Predecessor Programs and Authorities.--
(1) Transfer.--Section 239 of the Foreign Assistance Act of
1961 (22 U.S.C. 2199), as amended by the preceding provisions
of this Act, is amended--
(A) by striking subsection (b); and
(B) by redesignating the subsections (c) through (p)
as subsections (b) through (o), respectively.
(2) Conforming amendments.--(A) Section 237(m)(1) of the
Foreign Assistance Act of 1961 (22 U.S.C. 2197(m)(1)) is
amended by striking ``239(g)'' and inserting ``239(f)''.
(B) Section 240A(a) of the Foreign Assistance Act of 1961 (22
U.S.C. 2200A(a)) is amended--
(i) in paragraph (1), by striking ``239(h)'' and
inserting ``239(g)''; and
(ii) in paragraph (2)(A), by striking ``239(i)'' and
inserting ``239(h)''.
(C) Section 209(e)(16) of the Admiral James W. Nance and Meg
Donovan Foreign Relations Authorization Act, Fiscal Years 2000
and 2001 (as enacted into law by section 1000(a)(7) of Public
Law 106-113; 31 U.S.C. 1113 note) is amended by striking
``239(c)'' and ``2199(c)'' and inserting ``239(b)'' and
``2199(b)'', respectively.
(e) Additional Clerical Amendments.--Section 234(b) of the Foreign
Assistance Act of 1961 (22 U.S.C. 2194(b)) is amended by striking
``235(a)(2)'' and inserting ``235(a)(1)''.
SEC. 19. EFFECTIVE DATE.
(a) New Applications.--This Act and the amendments made by this Act
shall apply with respect to any application for insurance, reinsurance,
a guaranty, financing, or other support under title IV of chapter 2 of
part I of the Foreign Assistance Act of 1961 if the application is
received by the Overseas Private Investment Corporation on or after
July 1, 2007, and the application is approved by the Corporation on or
after the date of the enactment of this Act.
(b) Extensions and Renewals.--
(1) In general.--Subject to paragraph (2), this Act and the
amendments made by this Act shall apply with respect to any
extension or renewal of a contract or agreement for any such
insurance, reinsurance, guaranty, financing, or support that
was entered into by the Corporation before the date of the
enactment of this Act if the extension or renewal is approved
by the Corporation on or after such date of enactment.
(2) Exception.--This Act and the amendments made by this Act
shall not apply to any extension or renewal which is
substantially identical to an extension or renewal formally
requested in a detailed writing filed with the Corporation
before July 1, 2007.
Summary
H.R. 2798, the Overseas Private Investment Corporation
Reauthorization Act of 2007, was referred to the Committee on
Foreign Affairs on June 20, 2007, and was subsequently referred
to the Subcommittee on Terrorism, Nonproliferation, and Trade.
On June 21, 2007, the Subcommittee on Terrorism,
Nonproliferation, and Trade adopted an amendment in the nature
of a substitute, and the bill was reported favorably, as
amended, to the Committee on Foreign Affairs by a vote of 6-2.
On June 26, 2007, during the full committee markup, the
Committee on Foreign Affairs reported the bill favorably, as
amended, by a vote of 23-5, with one voting ``present.''
Background and Purpose for the Legislation
The Overseas Private Investment Corporation (OPIC) was
established as an agency of the United States in 1971. OPIC's
mandate is to mobilize and facilitate the participation of
United States private capital and skills in the economic and
social development of less developed countries, thereby
complementing the development assistance objectives of the
United States. OPIC provides political risk insurance, project
financing, and other financial assistance to U.S. companies in
support of these objectives. Over the agency's 35-year history,
OPIC has supported $177,000,000,000 in assistance in more than
150 developing countries, helping to create more than 800,000
jobs and some $13,000,000,000 in host-government revenues. OPIC
operates on a self-sustaining basis, at a net cost of zero to
U.S. taxpayers.
H.R. 2798, the ``Overseas Private Investment Corporation
Reauthorization Act of 2007'' reauthorizes OPIC through
September 30, 2011, while strengthening the agency's
development mandate and ensuring that OPIC activities are
consistent with United States foreign policy objectives. The
bill has many important aspects, including: (1) strengthening
the rights of workers overseas; (2) requiring OPIC to institute
a climate change mitigation action plan to increase the
Corporation's support of projects that use and promote the use
of clean energy technology; and (3) discouraging private sector
investment with enemies of the United States by prohibiting the
Corporation from supporting applicants of OPIC assistance that
have certain ties to state sponsors of terrorism.
Hearings
The Subcommittee on Terrorism, Nonproliferation, and Trade
held a hearing entitled ``The Reauthorization of OPIC'' on May
24, 2007. The Subcommittee heard testimony from Robert
Mosbacher, Jr., President and Chief Executive Officer of the
Overseas Private Investment Corporation; Jeff Vogt of the AFL-
CIO; Jonathan Sohn of the World Resources Institute; Frank J.
Gaffney, Jr. of the Center for Security Policy; and Dr. Tim
Kane of The Heritage Foundation.
Committee Consideration
On June 26, 2007, the Committee held a markup and H.R. 2798
was reported favorably to the House, as amended, by a vote of
23-5, with one voting ``present.''
Votes of the Committee
H.R. 2798 was reported favorably to the House, as amended,
by a vote of 23-5, with one voting ``present.''
Voting yes: Lantos, Ackerman, Faleomavaega, Sherman, Wexler,
Engel, Watson, Carnahan, Woolsey, Scott, Sires, Ros-
Lehtinen, Gallegly, Manzullo, Pence, Wilson, Barrett,
Fortenberry, McCaul, Poe, Inglis, Fortuno, and
Bilirakis.
Voting no: Burton, Royce, Chabot, Tancredo, and Flake.
Voting ``present'': Jackson Lee.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
In compliance with Clause 3(c)(2) of House Rule XIII, the
Committee adopts as its own the estimate of new budget
authority, entitlement authority, or tax expenditures or
revenues contained in the cost estimate prepared by the
Director of the Congressional Budget Office, pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R.2798, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 16, 2007.
Hon. Tom Lantos, Chairman,
Committee on Foreign Affairs,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2798, the Overseas
Private Investment Corporation Reauthorization Act of 2007.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Sam
Papenfuss, who can be reached at 226-2840.
Sincerely,
Peter R. Orszag.
Enclosure
cc:
Honorable Ileana Ros-Lehtinen
Ranking Member
H.R. 2798--Overseas Private Investment Corporation Reauthorization Act
of 2007
SUMMARY
H.R. 2798 would extend through 2011 the authority of the
Overseas Private Investment Corporation (OPIC) to issue
political risk insurance and to finance investments in
developing countries and emerging market economies with direct
loans and loan guarantees. Additionally, the bill would require
OPIC to give preferential treatment to a variety of projects,
including those in less-developed countries, those that respect
workers' rights, those that promote the use of alternative
energy sources, and those that agree to an international
standard for transparency for projects that involve extractive
industries, like mining and drilling. H.R. 2798 also would
require OPIC to publish summaries of each project it approves
on its Internet Web site, use competitive bidding to select
managers for its investment funds, and create an office of
accountability. Finally, the bill would allow OPIC to operate
in Iraq on a permanent basis as well as in Gaza and Sudan with
the concurrence of the Secretary of State.
CBO estimates that implementing H.R. 2798 would cost $6
million in 2008 and $74 million over the 2008-2012 period,
assuming appropriation of the estimated amounts. Enacting the
bill would not affect direct spending or revenues.
H.R. 2798 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would not affect the budgets of state, local, or tribal
governments.
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of H.R. 2798 is shown in the
following table. The costs of this legislation fall within
budget function 150 (international affairs).
By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2007 2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Spending Under Current Law for OPIC -124 -193 -190 -189 -195 -209
Estimated Authorization Level\1\
Estimated Outlays -62 -144 -165 -176 -191 -207
Proposed Changes 0 33 30 29 35 4
Estimated Authorization Level\2\
Estimated Outlays 0 6 7 12 23 26
Spending Under H.R. 2798 for OPIC -124 -160 -160 -160 -160 -205
Estimated Authorization Level
Estimated Outlays -62 -138 -158 -164 -168 -181
----------------------------------------------------------------------------------------------------------------
Note: OPIC = Overseas Private Investment Corporation.
\1\The 2007 level is the amount appropriated for that year plus the estimated amount of offsetting collections
for negative subsidy receipts in OPIC's credit program account and for collections in OPIC's noncredit
account. The 2008-2012 levels are CBO's baseline projections for collections and administrative spending
sufficient to service OPIC's outstanding portfolio.
\2\The estimated authorization level reflects the amount OPIC requested for its 2008 appropriation, adjusted for
inflation, minus the estimated amount OPIC would need to service its outstanding portfolio of insurance,
loans, and loan guarantees.
BASIS OF ESTIMATE
For this estimate, CBO assumes that the bill will be
enacted before the end of fiscal year 2007, that the necessary
funds and authority will be provided in annual appropriation
acts near the start of each fiscal year, and that outlays will
follow historical spending patterns for OPIC activities.
OPIC insures investors in developing countries and emerging
markets against losses due to expropriation, currency
inconvertibility, and damage that results from political
violence. In addition, OPIC provides direct loans and loan
guarantees to finance such investment. The bill would authorize
OPIC to issue new insurance policies and to make direct loans
and loan guarantees through 2011, to the extent the necessary
authority and funds are provided in annual appropriations acts.
The estimated spending under current law assumes that OPIC
continues to service its outstanding insurance and credits and
to receive collections on its investments in U.S. securities,
but that it issues no new insurance policies and finances no
new investments after September 30, 2007. (Interest on existing
securities brings in collections of more than $200 million a
year to the OPIC account, but that interest is paid by the U.S.
Treasury and thus shows up as an offsetting payment elsewhere
in the federal budget.) CBO expects that administrative
expenses under current law would gradually be reduced to the
minimum rate necessary to service outstanding insurance and
credits.
CBO estimates that funding for administrative expenses and
the cost of credit would be provided in annual appropriations
acts at the level requested by OPIC for 2008--$77 million--
adjusted for inflation. Additionally, we expect that under H.R.
2798, OPIC would continue to issue new insurance policies
through 2011. Because the bill would extend OPIC's authorities
through 2011 only, we estimate that funding in 2012 would only
be needed for the administrative expenses of servicing
outstanding insurance, direct loans, and loan guarantees.
For the past few years, the subsidy rate for many loan
guarantees made by OPIC has been negative, thus generating
discretionary offsetting collections. CBO estimates that under
current law those collections would gradually decline from $36
million in 2007 to $6 million in 2011. Under the bill, CBO
estimates that negative subsidy collections would increase by
$114 million over the 2008-2012 period, and those collections
are reflected in the net estimated costs over the 2008-2012
period.
Based on information from OPIC, CBO estimates that the new
requirements in H.R. 2798 would not significantly affect the
costs of OPIC's operations. Accordingly, CBO estimates that
extending OPIC's authorization through 2011 would have a net
cost of $6 million in 2008 and $74 million over the 2008-2012
period, assuming appropriation of the necessary funds.
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
H.R. 2798 contains no intergovernmental or private-sector
mandates as defined in UMRA and would not affect the budgets of
state, local or tribal governments.
ESTIMATE PREPARED BY:
Federal Costs: Sam Papenfuss (226-2840)
Impact on State, Local, and Tribal Governments: Neil Hood (225-
3220)
Impact on the Private Sector: Paige Piper/Bach (226-2960)
ESTIMATE APPROVED BY:
Peter H. Fontaine
Deputy Assistant Director for Budget Analysis
Performance Goals and Objectives
Pursuant to clause (3)(c) of House rule XIII, upon
enactment of this legislation, the Overseas Private Investment
Corporation should use the support programs that it offers to
promote internationally-recognized worker rights, encourage the
use of clean and efficient energy technology, and deter
investments in states that sponsor terrorism, engage in nuclear
proliferation, or commit acts of genocide.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8 of the Constitution.
New Advisory Committees
H.R. 2798 does not establish or authorize any new advisory
committees.
Congressional Accountability Act
H.R. 2798 does not apply to the Legislative Branch.
Earmark Identification
H.R. 2798 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9(d), 9(e), or 9(f) of rule XXI.
Section-by-Section Analysis and Discussion
Section 1. Short Title.
This section states that this Act may be cited as the
``Overseas Private Investment Corporation Reauthorization Act
of 2007.''
Section 2. Findings.
This section includes several findings that support the
reauthorization of the Overseas Private Investment Corporation,
hereafter referred to as ``OPIC'' or ``the Corporation.'' The
findings note that since its creation in 1971, the Corporation
has generated $71,000,000,000 in United States exports and
supported more than 271,000 United States jobs. Beyond its goal
of assisting less developed countries, the Committee believes
that OPIC should continue to prioritize expanding U.S. exports,
supporting U.S. jobs, and assisting U.S. small- and medium-
sized businesses.
This section also notes that OPIC assistance is a privilege
and should be granted to persons who, along with their
affiliated companies, demonstrate responsible and sustainable
business practices, particularly with regard to the
environment, international worker rights, and efforts against
genocide and nuclear proliferation. Moreover, OPIC is in a
unique position to advance democracy by supporting investments
in those countries that promote human rights and the rule of
law as opposed to countries that have oppressive regimes.
Section 3. Reauthorization of OPIC Programs.
This section amends section 235 of the Foreign Assistance
Act of 1961 (FAA) by reauthorizing OPIC through September 30,
2011. The Corporation's current authority expires September 30,
2007.
Section 4. Preferential Consideration of Certain Investment Projects.
This section amends section 231 of the FAA to require OPIC
to give preferential consideration to investment projects in
less developed countries, the governments of which are
receptive to private enterprise and are willing and able to
maintain conditions that enable private enterprise to make its
full contribution to the development process. The Committee
believes that the prospects for a country's development are
improved, especially over the long run, when the host
government protects the human rights of its people, strengthens
the rule of law, and promotes democratic governance.
Section 5. Requirements Regarding International Worker Rights.
This section amends section 231A of the FAA to require OPIC
to take certain measures to strengthen the rights of workers
overseas. This subsection requires that OPIC support a project
only if the country in which the project is to be undertaken
has made or is making significant progress toward the
recognition, adoption, and implementation of laws that
substantially provide international worker rights. Here,
``international worker rights'' is defined as the International
Labor Organization (ILO) core labor standards plus acceptable
conditions of work. Current law provides that the Corporation
may support a project only if the country in which the project
is to be undertaken is taking steps to adopt and implement laws
that extend internationally-recognized worker rights to workers
in that country. This requirement does not, however, prohibit
the Corporation from supporting a project that provides
humanitarian assistance. Moreover, each eligible investor will
be required contractually not to take any action to obstruct or
prevent an employee from exercising their international worker
rights, a greater commitment than what was previously required.
This subsection also requires, to the degree possible and
consistent with its development objectives, OPIC to give
preferential consideration to projects in countries that have
adopted, maintain, and enforce laws that substantially provide
international worker rights.
The Committee believes that promoting international worker
rights is a cornerstone of U.S. foreign policy, and OPIC should
play an active role in this effort. OPIC must guarantee that
all eligible investors provide for and respect international
worker rights. While the Committee recognizes that the
Corporation currently relies on the Generalized System of
Preferences (GSP) process for verifying the majority of
countries in which OPIC assistance may be provided, the
Committee expects OPIC to implement a thorough review of its
approval process for determining the eligibility of non-GSP
cleared countries to ensure that OPIC assistance is not being
used to reward those countries that fail to respect
international worker rights.
The Committee also expects OPIC to carefully review all
project applications to ensure that project sponsors have not
previously committed serious violations of international worker
rights and are not currently violating those rights on any
current projects. OPIC should also closely and routinely
monitor project compliance, and review any complaints related
to a project.
Additionally, the Corporation should make every effort to
further advance international worker rights abroad by giving
preferential treatment to projects in countries that have
adopted, maintain, and enforce laws that provide international
worker rights. The Committee requires OPIC to promote U.S.
investment in developing countries that proactively provide for
international worker rights, rather than in those countries
that are making minimal progress. Such a system should not
reward minor progress of states toward ensuring respect for
workers; it should instead encourage U.S. investment in
developing countries that respect the rights of workers in
practice.
Subsection (b) amends section 233 of the FAA to state that
the selection of the small business, organized labor, and
cooperative directors to OPIC's Board should be made,
respectively, in consultation with relevant representative
organizations.
Subsection (c) amends section 238 of the FAA by broadening
the definition of international worker rights to include the
elimination of discrimination with respect to employment and
occupation.
Subsection (d) amends section 239 of the FAA by making
changes to OPIC's general provisions.
Section 6. Environmental Assessments.
This section amends section 231A of the FAA to require an
OPIC project applicant to conduct an environmental impact
assessment or audit for any project that is likely to have
significant adverse environmental impacts. The assessment
required by this section must be undertaken at least sixty days
prior to OPIC approval and made available to the public.
The Committee believes that OPIC must maintain strong
environmental safeguards. In furtherance of this mandate,
interested parties in the Unites States and in the host country
must have ample opportunity to comment on these assessments and
audits. The Corporation must make readily accessible, in full,
the aforementioned assessments and audits to all members of the
Board of Directors, the American public, and all affected
groups in the host country.
Section 7. Community Support.
This section amends section 237 of the FAA to require
applicants for OPIC assistance to obtain broad community
support for projects that are likely to have significant
adverse environmental impacts. The Committee believes that
securing the support of local communities potentially impacted
by these projects is critical to ensuring effective results.
Local support for the project is likely to be inadequate if
efforts to obtain approval do not respect local community and
indigenous decision making structures.
Efforts by the International Finance Corporation (IFC) to
implement its Policy and Performance Standards on Social and
Environmental Sustainability requirement for ``broad community
support'' provide one model for understanding how the support
of communities should be obtained. Applicants for OPIC
assistance should obtain the support of indigenous peoples and
other locally affected communities for proposed projects, and
be manifested in specific and mutual agreements. Such
agreements should result from a participatory process by which
indigenous peoples, local communities, government agencies, and
companies reach consensus in a forum that gives affected people
enough leverage to negotiate the conditions under which the
proposed project could proceed. Such a process should provide
transparent and measurable outcomes that clearly benefit the
community after project completion.
Section 8. Climate Change Mitigation Action Plan.
This section amends title IV of chapter 2 of part I of the
FAA by inserting a new section after section 234A that requires
OPIC to institute a climate change mitigation action plan.
Within 180 days of enactment, the Corporation must institute a
plan that: (1) establishes a goal of substantially increasing
its support of projects that use, develop, or otherwise promote
the use of clean energy technologies; and (2) gives
preferential treatment to projects that use, develop, or
otherwise promote the use of clean and efficient energy
technologies. This section further requires OPIC to take into
account the degree to which a project contributed to greenhouse
gas emissions in making an environmental assessment under
section 231A(b) (as amended by this Act). The Committee notes
that Section 8 should not be construed to detract from OPIC's
ability to respond to other environmental remediation projects.
In February 2007, the Intergovernmental Panel on Climate
Change released its report on climate change science, finding
``unequivocal'' evidence that the Earth's climate is warming.
The report further states that the current atmospheric
concentrations of carbon dioxide and methane, two important
greenhouse gas emissions, ``exceeds by far the natural range
over the last 650,000 years.'' In response, OPIC must develop
and implement a comprehensive climate change mitigation plan
that substantially reduces the Corporation's greenhouse gas
footprint.
The World Bank Group, consistent with the carbon disclosure
practices of a number of similar institutions and major
corporations, is developing a system to estimate the impacts of
overall greenhouse gas emissions in countries where it
operates. Pursuant to the Clean Energy Investment Framework,
mandated by the Group of 8 in Gleneagles in 2005 and
subsequently being developed by the World Bank Group, similar
work is being initiated. The options assessment will include an
ex ante accounting for all direct and indirect greenhouse gas
emissions and the project lifetime trajectory of those expected
emissions.
The Committee expects OPIC to develop a climate change
mitigation action plan and ensure that its environmental impact
assessments include an accounting of both direct and indirect
greenhouse gas emissions over the lifetime of all projects
assisted by the Corporation.
Private sector firms Citigroup and Bank of America set
clean energy investment targets of $50 billion and $20 billion
respectively. In 2005, Goldman Sachs set a $1 billion target
for clean energy and met that target. The World Bank has
adopted a target to increase investments in ``new renewable
energy'' by 20 percent annually. Similarly, OPIC should
establish, as appropriate, a goal that at least 10 percent of
its aggregate loan, guarantee, and insurance authority goes to
support projects that use, develop, or otherwise promote clean
and efficient energy technologies or energy conservation. A
wide variety of options are available to the Corporation for
meeting this goal, including investments in solar technology,
energy efficiency, geothermal technology, carbon capture
systems, and other technologies that significantly reduce
emissions of greenhouse gases. OPIC should avoid any investment
in controversial projects involving nuclear energy,
environmentally questionable hydroelectric projects over 10
megawatts, or wind projects which have a negative environmental
impact which may exceed its positive environmental impact.
Some observers have expressed concern about providing U.S.
assistance to projects that involve extractive industries. An
extractive industry refers to an enterprise engaged in the
exploration, development, or extraction of oil and gas
reserves, metal ores, gemstones, industrial minerals, or coal.
History has shown that while these industries have generated a
lot of government revenues, many of these have been exploited
for personal gain by public officials. In recent years, many in
the international community have sought to address these
problems by promoting an array of ``good governance'' measures
aimed at increasing the transparency of these projects. For
example, the International Finance Corporation (IFC), a
component of the World Bank Group, requires that clients of all
IFC-financed extractive industry projects publicly disclose
their material payments from those projects to the host
government(s).
Section 8 contains a number of requirements for OPIC to
support projects that involve the extractive industries. This
section requires OPIC to notify the Committee on Foreign
Affairs of the House of Representatives and the Committee on
Foreign Relations of the Senate 30 days prior to approving any
project which significantly involves an extractive industry
where OPIC financing exceeds $10,000,000.
This section further mandates that in order for OPIC to
support a project that involves the extractive industry, either
the host country or project sponsor must commit to the
Extractive Industries Transparency Initiative (EITI) principles
and criteria, or substantially similar principles and criteria.
The EITI supports improved governance in resource-rich
countries through the verification and full publication of the
project sponsor's payments and government revenues.
By ``substantially similar principles and criteria,'' the
Committee means the general agreement of EITI principles, as
well as the adoption of specific criteria, including:
1) LRegular publication of all material oil, gas and
mining payments by companies to governments and all
material revenues received by governments from oil, gas
and mining companies to a wide audience in a publicly
accessible, comprehensive and comprehensible manner.
Where such audits do not already exist, payments and
revenues are the subject of a credible, independent
audit, applying international auditing standards;
2) LPayments and revenues are reconciled by a credible,
independent administrator, applying international
auditing standards and with publication of the
administrator's opinion regarding that reconciliation
including discrepancies, should any be identified;
3) LThis approach should be extended to all companies
including state-owned enterprises;
4) LCivil society is actively engaged as a participant
in the design, monitoring and evaluation of this
process and contributes towards public debate; and
5) LA public, financially sustainable work plan for all
the above is developed by the host government, with
assistance from the international financial
institutions where required, including measurable
targets, a timetable for implementation, and an
assessment of potential capacity constraints.
Finally, this section requires the Corporation, to the
degree possible and consistent with its development objectives,
to give preference to a project in which both the eligible
investor and host country has agreed to implement the
Extractive Industries Transparency Initiative principles and
criteria, or substantially similar principles and criteria.
The Committee believes that OPIC should also seek the
disclosure of such documents as Host Government Agreements,
Concession Agreements, and bidding documents, allowing in any
such dissemination or disclosure for the redaction of, or
exceptions for, business proprietary information or information
that would create a competitive disadvantage.
The Committee commends OPIC for its transition away from
assisting large oil and gas projects to focus on projects that
better meet its development mandate. Limited public resources
for foreign assistance should focus on the many critical needs
of developing countries. Extractive industries have significant
access to private capital markets and increasingly do not need
OPIC assistance.
Following a 2-year multi-stakeholder process that evaluated
the effects of international oil projects on poverty reduction
and the environment in a development country and on the global
climate, the Extractive Industries Review of the World Bank
Group recommended an end to financing oil projects by the World
Bank Group by 2008 and that from January 1, 2007, clients of
all IFC-financed extractive industry projects publicly disclose
their material payments from those projects to the host
government(s). Similarly, OPIC is currently prohibited from
providing direct investment loans to finance any project that
involves the extraction of oil and gas. The Committee
discourages the Corporation from pursuing or issuing contracts
of insurance, reinsurance, or any guaranty, entering into any
agreement to provide financing, or providing other assistance
for projects that involve the development, extraction,
processing or transportation of crude oil.
While the Committee has not legislatively prohibited the
Corporation from supporting projects that significantly involve
an extractive industry, the provisions in this section will
greatly improve the transparency of OPIC's investment in
extractive industries. The Committee will closely monitor
OPIC's efforts to improve transparency when considering the
appropriateness of the Corporation's involvement in this
sector. OPIC should include in its annual report to Congress
information concerning the progress made by the Corporation in
implementing the provisions contained in this section.
Section 9. Prohibition on Assistance to Develop or Promote Certain
Railway Connections and Railway-Related Connections.
This section amends section 237 of the FAA to prohibit OPIC
from supporting the development or promotion of any railway
connection that does not traverse or connect with Armenia and
does connect Azerbaijan and Turkey. While the prohibition in
this section is limited to railway projects in the Caucasus,
the Committee believes that the Corporation should not support
any projects designed to deliberately isolate countries
friendly to the United States or which otherwise shut out a
country allied with the United States from participation in a
regional development project.
The Committee commends OPIC's President, Robert Mosbacher,
for his commitment to prohibit OPIC support for a controversial
railway project in the Caucasus. This section will ensure that
future presidents likewise avoid OPIC participation in this and
similar railway development projects. The proposed Kars-
Tbilisi-Baku railway is estimated to cost as much as $800
million. The existing railroad could be utilized to connect
these cities more efficiently and for a tiny fraction of the
cost if an existing rail linkage through Armenian territory
would be utilized. However, efficient and inexpensive
development of rail connections in the region is not the only
goal of this project, as evidenced by statements of Azeri
officials, including President Aliyev. Isolation of Armenia is
a significant motivating factor in the route of this proposed
railway. U.S. support for projects in this region should be
used to promote economic development and, where possible, to
lay the groundwork for reconciliation through mutual benefit
and should support projects that reinforce the need for
peaceful coexistence between Armenia and its neighbors.
Section 10. Ineligibility of Persons Doing Certain Business with State
Sponsors of Terrorism.
Section 10 adds a new subsection (r) to Section 237 of the
FAA to make ineligible for OPIC assistance persons with certain
business activity in or with state sponsors of terrorism.
Paragraph (1) provides that OPIC may not support an
applicant's project where an applicant for OPIC assistance has
an investment commitment valued at $20 million or more in the
energy sector of a country identified by the Department of
State as a state sponsor of terrorism, or where an applicant
has an outstanding loan or extension of credit to the
government of one of the countries designated as a state
sponsor of terrorism. Sales of goods and services, other than
food or medicine, on anything other than a cash basis
constitute an extension of credit for these purposes.
The Committee believes that OPIC assistance is a privilege,
not a right. The Committee believes that only good actors
should receive such assistance, which does not include those
persons engaged in business activities in or with countries
designated by the Department of State as state sponsors of
terrorism. United States law and regulations apply a wide array
of sanctions to these countries, often prohibiting U.S. persons
from conducting most transactions with these countries. The
Committee is aware that for the most part, U.S. firms are
already prohibited from conducting the activities described in
this section.
Paragraph (2) defines cash basis as requiring payment
within 45 days of receipt of goods. Allowing a government buyer
to keep open accounts beyond 45 days, either by agreement or
because the seller regularly declines to demand or otherwise
enforce its right to timely payment, shall be considered an
impermissible extension of credit. Investment commitment in the
energy sector is broadly defined to include any commitment to
help develop petroleum and/or natural gas resources of the
countries.
While the Committee employs a similar definition of an
investment commitment to that used in the Iran Sanctions Act
(50 U.S.C. 1701 note), the Committee does not intend for that
statute to govern this provision's application to investments
in Iran. The Department of State has willfully ignored that law
and failed to find a single violation of the statute since
1998. OPIC should not find that a company or any of the
applicable affiliated entities are eligible for OPIC assistance
merely because the Department of State has never found them in
violation of the Iran Sanctions Act. OPIC should take every
necessary step to determine whether there is a disqualifying
investment commitment. Where some evidence exists (perhaps
through reportage in the financial press) that an applicant or
an applicable affiliated entity has a disqualifying energy
sector investment in any of the state sponsors of terrorism,
then the burden of proof should be on the applicant to
demonstrate to the Corporation that it and its applicable
affiliates does not have such an investment.
Paragraph (3) requires that the chief executive officers of
applicant firms certify as part of the application process that
their firms are not undertaking the disqualifying activities.
The chief executive officer of an applicant will sign on behalf
of his/her firm and any subsidiaries in which they hold a
majority stake. If the applicant cannot certify that it, and
its majority owned subsidiaries, are not undertaking these
activities, they are ineligible for OPIC assistance. The
ultimate parent entity of the applicant must similarly certify
that it, and its majority-owned subsidiaries, is not conducting
the disqualifying activities. The ultimate parent of an
applicant is the entity at the top of the majority-ownership
chain. For example, if more than 50 percent of the shares of an
applicant are owned by company A, and if more than 50 percent
of the shares of company A are in turn owned by company B and
if no single entity owns 50% of company B, then the highest
ranking executive of company B must certify that his/her
company and any of its majority-owned subsidiary entities are
not engaged in disqualifying activities described by this
section. The term ``chief executive officer'' is meant as a
descriptive term--the highest ranking officer of the company
should sign the required certification, whatever his/her title
may be.
The Committee has been concerned that U.S. corporations
have used their foreign-incorporated subsidiaries to avoid U.S.
sanctions laws. While this conduct may sometimes comply with
the letter of the law, the Committee believes that such
corporations should prevent their subsidiaries and other
affiliates under their control from doing business in countries
that are state sponsors of terrorism. Firms that fail to take
this action should, at a minimum, face a loss of OPIC
assistance to all of the companies they control.
The certifications are designed to ease implementation and
enforcement of the provision. In making the required
certifications, the signing officers should not rely on the
fact that their firms and any applicable affiliates have not
been found in violation of the Iran Sanctions Act or any other
statutes and regulations concerning business with state
sponsors of terrorism. The officers may know more about the
corporations they control than the Department of State can
learn or process. The officers must sign under penalty of
perjury and their inquiries into their own firm's and any
applicable affiliates' activities should therefore be exacting.
The Committee expects signing officers to err on the side of
caution when possible disqualifying activities are found.
Likewise, the Corporation should not simply take at face value
the certifications provided by applicable officers. There are a
number of sources available that will allow the Corporation to
periodically verify the accuracy of certifications.
A chief executive officer may provide a required
certification under an exemption to the certification
requirements provided for in subsection (E) notwithstanding the
fact that an affiliated entity has a $20 million investment
commitment in the energy sector of one of the state sponsors of
terrorism or has an outstanding loan or extension of credit to
one of the governments of those countries, so long as the
affiliated entity's disqualifying activity occurred prior to
the time of affiliation. However, if an existing business
relationship or contract that would be a disqualifying act is
expanded or extended temporarily after acquisition, than this
exemption shall not apply. For example, an executive required
to provide one of the certifications called for by this section
may do so notwithstanding the fact that a firm that his/her
corporation acquired two years ago has an investment in the
energy sector of Sudan pursuant to a contract entered into
prior to the acquisition of the subsidiary. If however, the
contract were to be extended for an additional period, or
expanded to include additional development, the certification
could not be made.
Subparagraph (3) also applies the certification requirement
to ``straw man'' transactions, which involve a non-applicant
firm that receives much of the benefits of OPIC assistance and
provides much of the goods or services supported by the
assistance, but which is not directly in contract with OPIC.
The applicant firm should be considered a ``straw man'' if the
applicant is: (1) buying goods and services from another firm,
and (2) those goods or services are worth 50 percent or more of
the total provided to the project by the applicant, and (3) the
other, non-applicant firm will receive $20 million or more or
an amount equal to or greater than 50 percent of the value of
the OPIC assistance as consideration for the goods and services
provided. The chief executive officer of the non-applicant firm
is required to sign the certification called for by Paragraph
3(A) and any ultimate parent entity of the non-applicant firm
must sign the certification required by Paragraph 3(B). This
provision is meant to prevent a situation where one firm would
be able to effectively receive OPIC assistance notwithstanding
prohibited activities, through contract or other commitment
with another firm that would be the actual applicant.
Subsection (4) sets out an exception for otherwise
disqualifying investments or business in certain areas of
Sudan, including Southern Sudan, Southern Kordofan/Nuba
Mountains State, Blue Nile State, and Abei, Darfur, if the
Corporation, with the concurrence of the Secretary of State,
determines that the investment or other business will provide
humanitarian relief, promote self-sufficiency or support
certain peace agreements.
The Committee acknowledges that certain investments and
business in Sudan, especially in the South, may actually
benefit the cause of peace and beneficial economic development
for the very people who have been victimized by the regime in
Khartoum. The Committee provides that the disqualification in
section 10 should not apply to business activities by
applicants in Sudan that benefit certain populations of the
country. The Committee strongly believes that OPIC should
provide assistance for projects in certain areas of Sudan,
including Southern Sudan, Southern Kordofan/Nuba Mountains
State, Blue Nile State, and Abei, Darfur.
Subsection (5) provides for the termination of these
provisions with respect to a country if the President certifies
that the country is no longer a state sponsor of terrorism and
also does not have nuclear weapons or a program to develop
nuclear weapons, and is no longer committing genocide or
``ethnic cleansing that approaches genocide.'' This section
applies to any country listed by the Department of State as a
sponsor of terrorism. However, in order for this provision to
cease to be effective against a country, its government must
demonstrate, and the President must affirmatively concur, that
it no longer supports terrorism and no longer has a nuclear
program or possesses nuclear weapons, and is no longer
committing genocide or a program of ethnic cleansing that
approaches genocide.
The Committee, through previous legislative action, has
determined the Khartoum government's actions in Darfur
constitute genocide. In the future, whether similarly gross
violations against human rights rise to the level of genocide
may be debated. The Committee believes that the inclusion of
the term ``ethnic cleansing that approaches genocide'' should
avoid ambiguity with respect to the termination of this
provision.
Section 11. Increased Transparency.
This section amends section 237 of the FAA to increase the
transparency of OPIC activities. Subsection (a) requires the
Corporation (1) to make public, and post on its Internet
website, summaries of all new projects supported by the
Corporation (excluding any confidential business information),
and (2) to publish in the Federal Register and subject to a
period of public comment, the detailed methodology used to
assess and monitor the impact of projects supported by the
Corporation on the development and environment of, and
international worker rights in, host countries, and on United
States employment. Subsection (a) also requires that OPIC's
Board of Directors may not vote in favor of any action proposed
to be taken by the Corporation on any Category A project until
at least 60 days after the Corporation makes available for
public comment a summary of the project and relevant
information about the project.
To strengthen its monitoring of international worker rights
and environmental practices and to enhance the credibility of
its efforts in these areas among outside parties, the Committee
expects OPIC to make its procedures significantly more
transparent, adopting industry best practices of posting
information about controversial cases, internal and third-party
inspection results, and remediation follow-up on OPIC's
website.
The Committee expects the Corporation to make available on
its website as much project information as possible without
disclosing business confidential information. The Committee
expects the Corporation to make available to the public in
whole all eligible documents and the eligible portions of
documents containing relevant information on environmental,
economic, social, and worker rights impacts, including pre-
approval and post-approval documents.
The Committee is concerned by the lack of information
regarding the methodologies employed by OPIC to determine
whether it is complying with its mandate. To ensure that OPIC
is meeting its obligations, OPIC must publish in the Federal
Register, subject to a period of public comment, the detailed
methodology used to assess and monitor the impact of projects
supported by the Corporation on the development and environment
of, and international worker rights in, host countries, and on
United States employment.
OPIC is additionally subject to new requirements intended
to increase the transparency of ``Category A'' projects, which
involve projects that have a significant adverse environmental
impact. OPIC's Board of Directors cannot vote in favor of any
``Category A'' project until at least 60 days after the
Corporation makes available for public comment a summary of the
project and all eligible and relevant information about the
project. It is the intent of the Committee that the
Corporation, to the maximum extent practicable, works with
relevant and concerned parties in assessing the environmental
impact of its projects and provides substantive responses to
the concerns of the American public, affected groups in the
area of impact of the proposed project, host country non-
governmental organizations, and other stakeholders.
Consequently, the Corporation is barred from approving any
``Category A'' project unless all members of the Board of
Directors receive 7 days prior to the vote full copies of the
Corporation's responses to the comments received from all
stakeholders.
Subsection (b) requires OPIC to maintain an Office of
Accountability to provide problem-solving services for projects
supported by the Corporation and to review the Corporation's
compliance with its environmental, social, worker rights, human
rights, and transparency policies and procedures. The Committee
expects the Office of Accountability to operate in a manner
that is fair, objective and transparent.
The Corporation is to be commended for establishing an
Office of Accountability, which was called for in the Overseas
Private Investment Corporation Amendments Act of 2003. The
Committee expects OPIC to properly maintain the Office. The
Office of Accountability must provide problem-solving services
for OPIC-supported projects, and it must, on an ongoing basis,
review the Corporation's compliance with its environmental,
social, worker rights, human rights, and transparency policies
and procedures.
Section 12. Fraud and Other Breaches of Contract.
The Committee recognizes and commends OPIC for its efforts
to address cases of fraud. To ensure that OPIC upholds the
highest standards of accountability, the Committee, under this
section, requires the President of OPIC to refer to the
Department of Justice for appropriate action information known
to the Corporation concerning any substantial evidence of: (1)
a violation of this title; (2) a material breach of contract
entered into with the Corporation by an eligible investor; or
(3) a material false representation made by an investor to the
Corporation. This section does not apply if the President of
the Corporation concludes that the matter is not evidence of a
possible violation of criminal law and is not evidence that the
Federal Government is entitled to civil remedy or to impose a
civil penalty.
Section 13. Transparency and Accountability of Investment Funds.
Subsection (a) amends Section 239 of the FAA by adding
provisions relating to transparency and accountability of OPIC
investment funds. This subsection mandates that the Corporation
contract with persons to manage investment funds only by full
and open competition. This subsection also requires that OPIC
consider various factors in assessing proposals for investment
fund management, including the prospective fund manager's track
record in investing risk capital in emerging markets, and its
record in avoiding investments in companies that would be
disqualified under section 237(r) of the FAA (as added by
section 10 of this Act).
The Committee requires OPIC to select the investment fund
management through a competitive and open process, using
criteria that assess the prospective management's experience
and track record. The Committee recognizes and commends OPIC
for initiating this policy already as a response to abuses in
the 1990s. The Committee intends to legislatively mandate this
reform.
The Committee requires OPIC to report on the investment
fund management selection process. Existing reporting on the
investment funds leaves it unclear how competitive it actually
is for capital management firms to secure OPIC management
contracts. The Committee requires this information to assess
the competitiveness of the selection process, as well as the
nature of the investment fund market. This information is
especially important given the increasing number of OPIC
investment funds. The Committee also intends that investment
fund managers and beneficiary firms be considered applicants
for OPIC assistance for purposes of section 10.
Subsection (b) requires the Government Accountability
Office to carry out an independent assessment of the investment
fund portfolio of OPIC.
Section 14. Extension of Authority to Operate in Iraq.
This section amends section 239 of the FAA to allow OPIC to
support projects in Iraq, notwithstanding subsection (a) and
(b) of section 237 of the FAA. Those provisions require that
there be an agreement in place with the government of any
country in which it operates and that suitable conditions exist
to protect the interests of the Corporation. Given the violent
and chaotic situation in Iraq, and due to difficulties in
dealing with an unstable Iraqi government, no agreement is in
place between the United States and Iraq to provide OPIC
assistance.
The Committee has provided limited authority to allow OPIC
to provide assistance to projects in Iraq, notwithstanding
subsection (a) and (b) of section 237 of the FAA. The
Corporation should otherwise comply with all other requisite
mandates, including worker rights provisions, in operating in
that country. The committee has permitted OPIC to support
development in Iraq provided that Iraq is taking substantial
steps toward reaching such an agreement with the United States
and making definitive progress towards establishing the
conditions that protect the interest of the Corporation.
Section 15. Consistency with Existing Law.
This section amends section 239 of the FAA to ensure that
OPIC, in providing support for projects in the West Bank and
Gaza, is complying with other statutory restrictions related to
providing U.S. assistance to these areas. Additionally, OPIC
may not support a project in any part of Gaza or the West Bank
unless the Secretary of State determines that the location for
the project is not under the effective control of Hamas or any
other foreign terrorist organization designated under section
219 of the Immigration and Nationality Act.
Congress enacted the Palestinian Anti-Terrorism Act of 2006
in December, 2006. The Act was a response to the Palestinian
elections held in January 2006, where Hamas, a group designated
by the State Department as a foreign terrorist organization,
won a majority of seats in the Palestinian Parliament. The
intent of this section is to clarify that the restrictions on
U.S. assistance provided for under that Act apply to OPIC
assistance.
Section 16. Congressional Notification Regarding Maximum Contingent
Liability.
This section amends section 239 of the FAA to require that
OPIC notifies the House Committee on Foreign Affairs and the
Senate Committee on Foreign Relations within 15 days after the
Corporation's maximum contingent liability outstanding exceeds
the previous fiscal years maximum contingent liability by 25
percent.
Although world economic conditions have been stable in
recent years and OPIC is well-reserved against potential
losses, future economic instability or financial shocks in
developing markets (such as occurred in Mexico, Asia, Russia
and Brazil from 1994-1999) cannot be ruled out. Such an
eventuality, while perhaps unlikely, could raise into question
the ability of OPIC to absorb potential losses without having
to seek appropriations funding from the Congress. This
provision requires that Congress be given ``early warning'' of
any undue expansion of OPIC's balance sheet, thereby helping to
enhance Congressional oversight and help shield the American
taxpayers from potential liability.
Section 17. Assistance for Small Business and Entities.
This section amends section 240 of the FAA by requiring
that OPIC commit adequate staff and resources to assist small
businesses and investors in the United States with obtaining
the insurance, reinsurance, financing, and the other types of
support that the Corporation offers. The Corporation is
required to detail in each annual report the progress it has
made in terms of assisting small business by including: (1) a
description of the staff and resources directed to this area;
(2) the number of small businesses and investors that the
Corporation has supported, and the total dollar value
associated with that support; and (3) a description of each
small business project that the Corporation supported.
OPIC continues to play a critical role in helping U.S.
small- and medium-sized enterprises (SMEs) operate abroad. OPIC
already has an existing Small Business Center that offers a
streamlined approval process to help SMEs access the OPIC
services. The Small Business Center is headed by a Vice
President who reports directly to the President and CEO of
OPIC. OPIC also has teams of specialists within their insurance
division and other divisions within OPIC (such as the General
Counsel's office) to cater to the unique needs of SMEs. The
Committee commends OPIC for taking these initiatives to
administratively create these offices to meet the challenges of
serving United States SMEs. As a result, OPIC's financing
support to U.S. SMEs grew 62 percent over the past 10 years--to
$320--million since attention was first brought to this issue.
More than 80 percent of all OPIC projects approved in 2006 were
for U.S. SMEs--up from just 18 percent in 1996. The Committee
strongly encourages more U.S. small businesses to get involved
in exporting as one way to help lower the nation's trade
deficit. Having various Federal trade promotion agencies pay
special attention to SMEs by ensuring that adequate resources
and personnel are in place will go a long way toward
accomplishing the goal of increased U.S. exports.
The purpose of Section 17 is to ensure that OPIC will
continue to have a specialized cadre of experts on staff that
understand and can quickly respond to the unique needs of SMEs.
Small businesses often have tighter time frames in which to
conclude a deal and cannot afford to wait in line behind an
application filed in support of a complex, ``big business''
deal. Section 17 is intended to give maximum management
flexibility to OPIC in implementing this provision which would
allow OPIC to maintain its current structure with respect to
SMEs or to streamline the small and medium business operations
at some point in the future. However, the Committee wants to
also ensure that the SME team at OPIC includes senior
officials, including at least one individual at the Vice
President level, that reports directly to the President and CEO
of OPIC. This ensures that the voice of SMEs will continue to
be heard at the top in order to implement policies or
procedures that respond to the ever changing needs of SMEs
engaged in the global marketplace. The Committee would strongly
disapprove any downgrading of the current structure at OPIC
that is designed to assist SMEs.
Section 17 also ensures that OPIC reveals as part of its
annual report various performance measurements as to how OPIC
served U.S. SMEs during the previous year. The information
shall include a description of the personnel and resources OPIC
primarily dedicates to SMEs, the number of SMEs helped by
OPIC's programs, the dollar volume of such assistance, and a
description of the SME projects. This information will give the
Committee and the general public another tool by which to
evaluate the effectiveness of OPIC.
Section 18. Technical Corrections.
This section amends various sections of the FAA to make
technical and conforming corrections.
Section 19. Effective Date.
Subsection (a) establishes that the Overseas Private
Investment Corporation Reauthorization Act of 2007 and the
amendments made by the Act shall apply to only applications for
OPIC support that both are received by the Corporation on or
after July 1, 2007 and also approved by the Corporation on or
after the date of the enactment of the Act.
Subsection (b) establishes that the Overseas Private
Investment Corporation Reauthorization Act of 2007 and the
amendments made by the Act shall apply to any extension or
renewal of OPIC support that was entered into before the
enactment of the Act if the extension or renewal is approved on
or after the date of the enactment of the Act.
Subsection (b) establishes that the Overseas Private
Investment Corporation Reauthorization Act of 2007 and the
amendments made by the Act do not apply to an extension or
renewal of OPIC support that is substantially identical to an
extension or renewal formally requested before July 1, 2007.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
FOREIGN ASSISTANCE ACT OF 1961
PART I
* * * * * * *
Title IV--Overseas Private Investment Corporation
Sec. 231. Creation, Purpose and Policy.--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, thereby complementing the
development assistance objectives of the United States, there
is hereby created the Overseas Private Investment Corporation
(hereinafter called the ``Corporation''), which shall be an
agency of the United States under the policy guidance of the
Secretary of State.
* * *
* * * * * * *
[(f) to consider in the conduct of its operations the
extent to which less developed country governments are
receptive to private enterprise, domestic and foreign,
and their willingness and ability to maintain
conditions which enable private enterprise to make its
full contribution to the development process;]
(f) to give preferential consideration to investment
projects in less developed countries the governments of
which are receptive to private enterprise, domestic and
foreign, and to projects in countries the governments
of which are willing and able to maintain conditions
that enable private enterprise to make its full
contribution to the development process;
* * * * * * *
Sec. 231A. Additional Requirements.--(a) [Worker Rights]
International Worker Rights.--
[(1) Limitation on opic activities.--The Corporation
may insure, reinsure, guarantee, or finance a project
only if the country in which the project is to be
undertaken is taking steps to adopt and implement laws
that extend internationally recognized worker rights,
as defined in section 507(4) of the Trade Act of 1974,
to workers in that country (including any designated
zone in that country). The Corporation shall also
include the following language, in substantially the
following form, in all contracts which the Corporation
enters into with eligible investors to provide
financial support under this title: The investor agrees
not to take actions to prevent employees of the foreign
enterprise from lawfully exercising their right of
association and their right to organize and bargain
collectively. The investor further agrees to observe
applicable laws relating to a minimum age for
employment of children, acceptable conditions of work
with respect to minimum wages, hours of work, and
occupational health and safety, and not to use forced
labor. The investor is not responsible under this
paragraph for the actions of a foreign government.
[(2) Use of annual reports on workers rights.--The
Corporation shall, in making its determinations under
paragraph (1), use the reports submitted to the
Congress pursuant to section 504 of the Trade Act of
1974. The restriction set forth in paragraph (1) shall
not apply until the first such report is submitted to
the Congress.
[(3) Waiver.--Paragraph (1) shall not prohibit the
Corporation from providing any insurance, reinsurance,
guaranty, or financing with respect to a country if the
President determines that such activities by the
Corporation would be in the national economic interests
of the United States. Any such determination shall be
reported in writing to the Congress, together with the
reasons for the determination.]
(1) Limitation on opic activities.--(A) The
Corporation may insure, reinsure, guarantee, or finance
a project only if the country in which the project is
to be undertaken has made or is making significant
progress towards the recognition, adoption, and
implementation of laws that substantially provide
international worker rights, including in any
designated zone, or special administrative region or
area, in that country.
(B) The Corporation shall also include the following
language, in substantially the following form, in all
contracts which the Corporation enters into with
eligible investors to provide financial support under
this title:
``The investor agrees not to take any actions to
obstruct or prevent employees of the foreign enterprise
from exercising their international worker rights (as
defined in section 238(h) of the Foreign Assistance Act
of 1961), and agrees to adhere to the obligations
regarding those international worker rights.''
(2) Preference to certain countries.--To the degree
possible and consistent with its development
objectives, the Corporation shall give preferential
consideration to projects in countries that have
adopted, maintain, and enforce laws that substantially
provide international worker rights.
(3) Use of annual reports on international worker
rights.--The Corporation shall, in carrying out
paragraph (1)(A), use, among other sources, the reports
submitted to the Congress pursuant to section 504 of
the Trade Act of 1974. Such other sources include the
observations, reports, and recommendations of the
International Labor Organization, and other relevant
organizations.
(4) Inapplicability to humanitarian activities.--
Paragraph (1) shall not prohibit the Corporation from
providing any insurance, reinsurance, guaranty,
financing, or other assistance for the provision of
humanitarian assistance in a country.
[(4) In] (5) Additional determination.--In making a
determination under this section for the People's
Republic of China, the Corporation shall discuss fully
and completely the justification for making such
determination with respect to each item set forth in
subparagraphs (A) through (E) of section 507(4) of the
Trade Act of 1974.
[(b) Environmental Impact.--The Board of Directors of the
Corporation shall not vote in favor of any action proposed to
be taken by the Corporation that is likely to have significant
adverse environmental impacts that are sensitive, diverse, or
unprecedented, unless for at least 60 days before the date of
the vote--
[(1) an environmental impact assessment or initial
environmental audit, analyzing the environmental
impacts of the proposed action and of alternatives to
the proposed action has been completed by the project
applicant and made available to the Board of Directors;
and
[(2) such assessment or audit has been made available
to the public of the United States, locally affected
groups in the host country, and host country
nongovernmental organizations.]
(b) Environmental Impact.--The Board of Directors of the
Corporation shall not vote in favor of any action proposed to
be taken by the Corporation that is likely to have significant
adverse environmental impacts, unless for at least 60 days
before the date of the vote--
(1) an environmental impact assessment, or initial
environmental audit, analyzing the environmental
impacts of the proposed action and of alternatives to
the proposed action has been completed by the project
applicant and made available to the Board of Directors;
and
(2) such assessment or audit has been made available
to the public of the United States, locally affected
groups in the host country, and host country
nongovernmental organizations.
* * * * * * *
Sec. 233. Organization and Management.--(a) * * *
(b) Board of Directors.--All powers of the Corporation shall
vest in and be exercised by or under the authority of its Board
of Directors (``the Board'') which shall consist of fifteen
Directors, including the Chairman, with eight Directors
constituting a quorum for the transaction of business. Eight
Directors shall be appointed by the President of the United
States, by and with the advice and consent of the Senate, and
shall not be officials or employees of the Government of the
United States. At least two of the eight Directors appointed
under the preceding sentence shall be experienced in small
business, one in organized labor, and one in cooperatives. Each
such Director shall be appointed for a term of no more than
three years. The terms of no more than three such Directors
shall expire in any one year. Such Directors shall serve until
their successors are appointed and qualified and may be
reappointed.
* * * * * * *
All Directors who are not officers of the Corporation or
officials of the Government of the United States shall be
compensated at a rate equivalent to that of level IV of the
Executive Schedule (5 U.S.C. 5315) when actually engaged in the
business of the Corporation and may be paid per diem in lieu of
subsistence at the applicable rate prescribed in the
standardized Government travel regulations, as amended, from
time to time, while away from their homes or usual places of
business. The selection of the small business, organized labor,
and cooperative directors should be made, respectively, in
consultation with relevant representative organizations.
* * * * * * *
Sec. 234. Investment Insurance and Other Programs.--The
Corporation is hereby authorized to do the following:
(a) * * *
(b) Investment Guaranties.--To issue to eligible investors
guaranties of loans and other investments made by such
investors assuring against loss due to such risks and upon such
terms and conditions as the Corporation may determine:
Provided, however, That such guaranties on other than loan
investments shall not exceed 75 per centum of such investment:
Provided further, That except for loan investments for credit
unions made by eligible credit unions or credit union
associations, the aggregate amount of investment (exclusive of
interest and earnings) so guaranteed with respect to any
project shall not exceed, at the time of issuance of any such
guaranty, 75 per centum of the total investment committed to
any such project as determined by the Corporation, which
determination shall be conclusive for purposes of the
Corporation's authority to issue any such guaranty: Provided
further, That not more than 15 per centum of the maximum
contingent liability of investment guaranties which the
Corporation is permitted to have outstanding under section
[235(a)(2)] 235(a)(1) shall be issued to a single investor.
* * * * * * *
[(g) Pilot Equity Finance Program.--
[(1) Authority for pilot program.--In order to study
the feasibility and desirability of a program of equity
financing, the Corporation is authorized to establish a
4-year pilot program under which it may, on the limited
basis prescribed in paragraphs (2) through (5),
purchase, invest in, or otherwise acquire equity or
quasi-equity securities of any firm or entity, upon
such terms and conditions as the Corporation may
determine, for the purpose of providing capital for any
project which is consistent with the provisions of this
title except that--
[(A) the aggregate amount of the
Corporation's equity investment with respect to
any project shall not exceed 30 percent of the
aggregate amount of all equity investment made
with respect to such project at the time that
the Corporation's equity investment is made,
except for securities acquired through the
enforcement of any lien, pledge, or contractual
arrangement as a result of a default by any
party under any agreement relating to the terms
of the Corporation's investment; and
[(B) the Corporation's equity investment
under this subsection with respect to any
project, when added to any other investments
made or guaranteed by the Corporation under
subsection (b) or (c) with respect to such
project, shall not cause the aggregate amount
of all such investment to exceed, at the time
any such investment is made or guaranteed by
the Corporation, 75 percent of the total
investment committed to such project as
determined by the Corporation.
The determination of the Corporation under subparagraph
(B) shall be conclusive for purposes of the
Corporation's authority to make or guarantee any such
investment.
[(2) Limitation to projects in sub-saharan africa and
caribbean basin.--Equity investments may be made under
this subsection only in projects in countries eligible
for financing under this title that are countries in
sub-Saharan Africa or countries designated as
beneficiary countries under section 212 of the
Caribbean Basin Economy Recovery Act.
[(3) Additional criteria.--In making investment
decisions under this subsection, the Corporation shall
give preferential consideration to projects sponsored
by or significantly involving United States small
business or cooperatives. The Corporation shall also
consider the extent to which the Corporation's equity
investment will assist in obtaining the financing
required for the project.
[(4) Disposition of equity interest.--Taking into
consideration, among other things, the Corporations'
financial interests and the desirability of fostering
the development of local capital markets in less
developed countries, the Corporation shall endeavor to
dispose of any equity interest it may acquire under
this subsection within a period of 10 years from the
date of acquisition of such interest.
[(6) Consultations with congress.--The Corporation
shall consult annually with the Committee on Foreign
Affairs of the House of Representatives and the
Committee on Foreign Relations of the Senate on the
implementation of the pilot equity finance program
established under this subsection.]
[(h)] (g) Local Currency Guaranties for Eligible Investors.--
To issue to--
(1) * * *
* * * * * * *
SEC. 234B. CLIMATE CHANGE MITIGATION.
(a) Mitigation Action Plan.--The Corporation shall, not later
than 180 days after the date of the enactment of the Overseas
Private Investment Corporation Reauthorization Act of 2007,
institute a climate change mitigation action plan that includes
the following:
(1) Clean and efficient energy technology.--
(A) Increasing assistance.--The Corporation
shall establish a goal of substantially
increasing its support of projects that use,
develop, or otherwise promote the use of clean
energy technologies over the 4-year period
beginning on the date of the enactment of the
Overseas Private Investment Corporation
Reauthorization Act of 2007.
(B) Preferential treatment to projects.--The
Corporation shall give preferential treatment
to the evaluation and awarding of assistance
for and provide greater flexibility in
supporting projects that use, develop, or
otherwise promote the use of clean and
efficient energy technologies.
(2) Environmental impact assessments.--
(A) Greenhouse gas emissions.--The
Corporation shall, in making an environmental
impact assessment for a project under section
231A(b), take into account the degree to which
the project contributes to the emission of
greenhouse gases.
(B) Other duties not affected.--The
requirement under subparagraph (A) is in
addition to any other requirement, obligation,
or duty that the Corporation has.
(3) Report to congressional committees.--The
Corporation shall, within 180 days after the date of
the enactment of the Overseas Private Investment
Corporation Reauthorization Act of 2007, submit to the
Committee on Foreign Affairs of the House of
Representatives and the Committee on Foreign Relations
of the Senate a report on the plan developed to carry
out paragraph (1)(A). Thereafter, the Corporation shall
include in its annual report under section 240A a
discussion of such plan and its implementation.
(b) Extraction Investments.--
(1) Prior notification to congressional committees.--
The Corporation may not approve any contract of
insurance or reinsurance, or any guaranty, or enter
into any agreement to provide financing for any project
which significantly involves an extractive industry and
in which assistance by the Corporation would be valued
at $10,000,000 or more (including contingent
liability), until at least 30 days after the
Corporation notifies the Committee on Foreign Affairs
of the House of Representatives and the Committee on
Foreign Relations of the Senate of such contract or
agreement.
(2) Commitment to eiti principles.--The Corporation
may approve a contract of insurance or reinsurance, or
any guaranty, or enter into an agreement to provide
financing to an eligible investor for a project that
significantly involves an extractive industry only if--
(A) the eligible investor has agreed to
implement the Extractive Industries
Transparency Initiative principles and
criteria, or substantially similar principles
and criteria; or
(B) the host country where the project is to
be carried out has committed to the Extractive
Industries Transparency Initiative principles
and criteria, or substantially similar
principles and criteria.
(3) Preference for certain projects.--With respect to
all projects that significantly involve an extractive
industry, the Corporation, to the degree possible and
consistent with its development objectives, shall give
preference to a project in which both the eligible
investor has agreed to implement the Extractive
Industries Transparency Initiative principles and
criteria, or substantially similar principles and
criteria, and the host country where the project is to
be carried out has committed to the Extractive
Industries Transparency Initiative principles and
criteria, or substantially similar principles and
criteria.
(4) Definitions.--In this subsection:
(A) Extractive industry.--The term
``extractive industry'' refers to an enterprise
engaged in the exploration, development, or
extraction of oil and gas reserves, metal ores,
gemstones, industrial minerals, or coal.
(B) Extractive industries transparency
initiative principles and criteria.--The term
``Extractive Industries Transparency Initiative
principles and criteria'' means the principles
and criteria of the Extractive Industries
Transparency Initiative, as set forth in Annex
A to the Anti-Corruption Policies and
Strategies Handbook of the Corporation, as
published in September 2006.
(5) Reporting requirement.--The Corporation shall
include in its annual report required under section
240A a description of its activities to carry out this
subsection.
(c) Definitions.--In this section:
(1) Clean and efficient energy technology.--The term
``clean and efficient energy technology'' means an
energy supply or end-use technology--
(A) such as--
(i) solar technology;
(ii) wind technology;
(iii) geothermal technology;
(iv) hydroelectric technology; and
(v) carbon capture technology; and
(B) that, over its life cycle and compared to
a similar technology already in commercial
use--
(i) is reliable, affordable,
economically viable, socially
acceptable, and compatible with the
needs and norms of the country
involved;
(ii) results in--
(I) reduced emissions of
greenhouse gases; or
(II) increased geological
sequestration; and
(iii) may--
(I) substantially lower
emissions of air pollutants; or
(II) generate substantially
smaller and less hazardous
quantities of solid or liquid
waste.
(2) Greenhouse gas.--The term ``greenhouse gas''
means--
(A) carbon dioxide;
(B) methane;
(C) nitrous oxide;
(D) hydrofluorocarbons;
(E) perfluorocarbons; or
(F) sulfur hexafluoride.
Sec. 235. Issuing Authority, Direct Investment Authority and
Reserves.--
(a) Issuing Authority.--
(1) * * *
(2) Termination of authority.--The authority of
subsections (a), (b), and (c) of section 234 shall
continue until [September 30, 2007] September 30, 2011.
* * * * * * *
[(e) There is hereby authorized to be transferred to the
Corporation at its call, for the purposes specified in section
236, all fees and other revenues collected under predecessor
guaranty authority from December 31, 1968, available as of the
date of such transfer.]
[(f)] (e) There are authorized to be appropriated to the
Corporation, to remain available until expended, such amounts
as may be necessary from time to time to replenish or increase
the noncredit account revolving fund, to discharge the
liabilities under insurance, reinsurance, or guaranties issued
by the Corporation or issued under predecessor guaranty
authority, or to discharge obligations of the Corporation
purchased by the Secretary of the Treasury pursuant to this
subsection. However, no appropriations shall be made to augment
the noncredit account revolving fund until the amount of funds
in the noncredit account revolving fund is less than
$25,000,000. Any appropriations to augment the noncredit
account revolving fund shall then only be made either pursuant
to specific authorization enacted after the date of enactment
of the Overseas Private Investment Corporation Amendments Act
of 1974, or to satisfy the full faith and credit provision of
section 237(c). In order to discharge liabilities under
investment insurance or reinsurance, the Corporation is
authorized to issue from time to time for purchase by the
Secretary of the Treasury its notes, debentures, bonds, or
other obligations; but the aggregate amount of such obligations
outstanding at any one time shall not exceed $100,000,000. Any
such obligation shall be repaid to the Treasury within one year
after the date of issue of such obligation. Any such obligation
shall bear interest at a rate determined by the Secretary of
the Treasury, taking into consideration the current average
market yield on outstanding marketable obligations of the
United States of comparable maturities during the month
preceding the issuance of any obligation authorized by this
subsection. The Secretary of the Treasury shall purchase any
obligation of the Corporation issued under this subsection, and
for such purchase he may use as a public debt transaction the
proceeds of the sale of any securities issued under the Second
Liberty Bond Act after the date of enactment of the Overseas
Private Investment Corporation Amendments Act of 1974. The
purpose for which securities may be issued under such Bond Act
shall include any such purchase.
(1) * * *
* * * * * * *
Sec. 237. General Provisions Relating to Insurance Guaranty,
and Financing Program.--(a) * * *
* * * * * * *
(j) Each insurance, reinsurance, and guaranty contract
executed by such officer or officers as may be designated by
the Board shall be conclusively presumed to be issued in
compliance with the requirements of this Act.
* * * * * * *
(m)(1) * * *
(A) * * *
* * * * * * *
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)] 239(f).
* * * * * * *
(n) Penalties for Fraud.--[Whoever]
(1) In general.--Whoever knowingly makes any false
statement or report, or willfully overvalues any land,
property, or security, for the purpose of influencing
in any way the action of the Corporation with respect
to any insurance, reinsurance, guarantee, loan, equity
investment, or other activity of the Corporation under
section 234 or any change or extension of any such
insurance, reinsurance, guarantee, loan, equity
investment, or activity, by renewal, deferment of
action or otherwise, or the acceptance, release, or
substitution of security therefor, shall be fined not
more than $1,000,000 or imprisoned not more than 30
years, or both.
(2) Deferrals to department of justice.--(A) The
President of the Corporation shall refer to the
Department of Justice for appropriate action
information known to the Corporation concerning any
substantial evidence of--
(i) a violation of this title;
(ii) a material breach of contract entered
into with the Corporation by an eligible
investor; or
(iii) a material false representation made by
an investor to the Corporation.
(B) Subparagraph (A) does not apply if the President
of the Corporation concludes that the matter described
in clause (i), (ii), or (iii), as the case may be, of
subparagraph (A)--
(i) is not evidence of a possible violation
of criminal law; and
(ii) is not evidence that the Federal
Government is entitled to civil remedy or to
impose a civil penalty.
* * * * * * *
(p) Community Support.--To the maximum extent practicable,
the Corporation shall require the applicant for a project that
is subject to section 231A(b) to obtain broad community support
for the project.
(q) Prohibition on Assistance for Certain Railway Projects.--
The Corporation may not provide insurance, reinsurance, a
guaranty, financing, or other assistance to support the
development or promotion of any railway connection or railway-
related connection that does not traverse or connect with
Armenia and does connect Azerbaijan and Turkey.
(r) Ineligible Projects.--
(1) In general.--A project will not be eligible to
receive support provided by the Corporation under this
title if either of the following applies:
(A)(i) An applicant for insurance,
reinsurance, financing, or other support for a
project provided to the government of a state
sponsor of terrorism a loan, or an extension of
credit, that remains outstanding.
(ii) For purposes of this subparagraph, the
sale of goods, other than food or medicine, on
any terms other than a cash basis shall be
considered to be an extension of credit.
(B) An applicant for insurance, reinsurance,
financing, or other support for a project has
an investment commitment valued at $20,000,000
or more for the energy sector in a country that
is a state sponsor of terrorism.
(2) Definitions.--In this subsection:
(A) Cash basis.--The term ``cash basis''
refers to a sale in which the purchaser of
goods or services is required to make payment
in full within 45 days after receiving the
goods or services.
(B) Energy sector.--The term ``energy
sector'' refers to activities to develop or
transport petroleum or natural gas resources.
(C) Investment commitment.--The term
``investment commitment'' means any of the
following activities if such activity is
undertaken pursuant to a commitment, or
pursuant to the exercise of rights under a
commitment, that was entered into with the
government of a state sponsor of terrorism or a
nongovernmental entity in a country that is a
state sponsor of terrorism:
(i) The entry into a contract that
includes responsibility for the
development of petroleum resources
located in a country that is a state
sponsor of terrorism, or the entry into
a contract providing for the general
supervision and guarantee of another
person's performance of such a
contract.
(ii) The purchase of a share of
ownership, including an equity
interest, in that development.
(iii) The entry into a contract
providing for the participation in
royalties, earnings, or profits in that
development, without regard to the form
of the participation.
(D) State sponsor of terrorism.--The term
``state sponsor of terrorism'' means a country
the government of which the Secretary of State
has determined, for purposes of section 6(j) of
the Export Administration Act of 1979, section
620A of the Foreign Assistance Act of 1961,
section 40 of the Arms Export Control Act, or
any other provision of law, to be a government
that has repeatedly provided support for acts
of international terrorism.
(3) Certification.--
(A) By applicants.--A person or entity
applying for insurance, reinsurance, a
guaranty, financing, or other assistance under
this title may not receive such support unless
its chief executive officer certifies to the
Corporation, under penalty of perjury, that the
person or entity and its majority-owned
subsidiaries are not engaged in any activity
described in subparagraph (A) or (B) of
paragraph (1).
(B) By ultimate parent entities.--In the case
of an applicant that is a majority-owned entity
of another entity, in addition to the
certification under subparagraph (A), the chief
executive officer of the ultimate parent entity
of the applicant must certify, under penalty of
perjury, that it and its majority-owned
subsidiaries are not engaged in any activity
described in subparagraph (A) or (B) of
paragraph (1).
(C) Application to straw man transactions.--
In any case in which--
(i) an applicant for insurance,
reinsurance, financing, or other
assistance under this title is
providing goods and services to a
project,
(ii) more than 50 percent of such
goods and services are acquired from an
unaffiliated entity, and
(iii) the unaffiliated entity is
receiving $20,000,000 or more, or sums
greater than 50 percent of the amount
of the assistance provided by the
Corporation for the project (including
contingent liability), for such goods
or services,
then the chief executive officer of the
unaffiliated entity must make a certification
under subparagraph (A), and any ultimate parent
entity must make a certification required by
subparagraph (B).
(D) Diligent inquiry.--A certification
required by subparagraph (A), (B), or (C) may
be made to the best knowledge and belief of the
certifying officer if that officer states that
he or she has made diligent inquiry into the
matter certified.
(E) Exception.--(i) A chief executive officer
of an applicant or other entity may provide a
certification required by subparagraph (A),
(B), or (C) with respect to the activity of a
majority-owned subsidiary or entity
notwithstanding activity by such majority-owned
subsidiary or entity that would cause a project
to be ineligible for support under subparagraph
(A) or (B) of paragraph (1) if such activity is
carried out under a contract or other
obligation of such majority-owned subsidiary or
entity that was entered into or incurred before
the acquisition of such majority-owned
subsidiary or entity by the applicant or
ultimate parent entity.
(ii) Clause (i) shall not apply if the terms
of such contract or other obligation are
expanded or extended after such acquisition.
(F) Definition.--For purposes of this
paragraph, a person is an ultimate parent of an
entity if the person owns directly, or through
majority ownership of other entities, greater
than 50 percent of the equity of the entity.
(4) Exception.--The prohibition in paragraph (1)
shall not--
(A) apply to a loan, extension of credit, or
investment commitment by an applicant, or other
entity covered by a certification under
subparagraph (A), (B), or (C) of paragraph (3),
in Southern Sudan, Southern Kordofan/Nuba
Mountains State, Blue Nile State, or Abyei,
Darfur, if the Corporation, with the
concurrence of the Secretary of State,
determines that such loan, extension of credit,
or investment commitment will provide emergency
relief, promote economic self-sufficiency, or
implement a nonmilitary program in support of a
viable peace agreement in Sudan, including the
Comprehensive Peace Agreement for Sudan and the
Darfur Peace Agreement; or
(B) prohibit the Corporation from providing
support for projects in Southern Sudan,
Southern Kordofan/Nuba Mountains State, Blue
Nile State, and Abyei, Darfur, if the
Corporation, with the concurrence of the
Secretary of State, determines that such
projects will provide emergency relief, promote
economic self-sufficiency, or implement a
nonmilitary program in support of a viable
peace agreement in Sudan, including the
Comprehensive Peace Agreement for Sudan and the
Darfur Peace Agreement .
(5) Prospective application of subsection.--This
subsection shall not be applied to limit support by the
Corporation under this title because an applicant, or
other entity covered by a certification under
subparagraph (A), (B), or (C) of paragraph (3) engaged
in commercial activity specifically licensed by the
Office of Foreign Assets Control of the Department of
the Treasury.
(s) Availability of Project Information.--Beginning 90 days
after the date of the enactment of the Overseas Private
Investment Corporation Reauthorization Act of 2007, the
Corporation shall make public, and post on its Internet
website, summaries of all new projects supported by the
Corporation, and other relevant information, except that the
Corporation shall not include any confidential business
information in the summaries and information made available
under this subsection.
(t) Review of Methodology.--Not later than 180 days after the
date of the enactment of the Overseas Private Investment
Corporation Reauthorization Act of 2007, the Corporation shall
publish in the Federal Register and periodically revise,
subject to a period of public comment, the detailed
methodology, including relevant regulations, used to assess and
monitor the impact of projects supported by the Corporation on
the development and environment of, and international worker
rights in, host countries, and on United States employment.
(u) Public Notice Prior to Project Approval.--
(1) Public notice.--The Board of Directors of the
Corporation may not vote in favor of any action
proposed to be taken by the Corporation on any Category
A project until at least 60 days after the
Corporation--
(A) makes available for public comment a
summary of the project and relevant information
about the project; and
(B) makes the summary and information
described in paragraph (1) available to locally
affected groups in the area of impact of the
proposed project, and to host country
nongovernmental organizations.
The Corporation shall not include any business
confidential information in the summary and information
made available under subparagraphs (A) and (B).
(2) Published response.--To the extent practicable,
the Corporation shall publish responses to the comments
received under paragraph (1) with respect to a Category
A project and submit the responses to the Board not
later than 7 days before a vote is to be taken on any
action proposed by the Corporation on the project.
(3) Definitions.--In this subsection, the term
``Category A project'' means any project or other
activity for which the Corporation proposes to provide
insurance, reinsurance, financing, or other support
under this title and which is likely to have
significant adverse environmental impacts.
(v) Office of Accountability.--The Corporation shall maintain
an Office of Accountability to provide problem-solving services
for projects supported by the Corporation and to review the
Corporation's compliance with its environmental, social, worker
rights, human rights, and transparency policies and procedures,
to the maximum extent practicable. The Office of Accountability
shall operate in a manner that is fair, objective and
transparent.
Sec. 238. Definitions.--As used in this title--
(a) * * *
* * * * * * *
(f) the term ``predecessor guaranty authority'' means
prior guaranty authorities (other than housing guaranty
authorities) repealed by the Foreign Assistance Act of
1969, section 202(b) and 413(b) of the Mutual Security
Act of 1954, as amended, and section 111(b)(3) of the
Economic Cooperation Act of 1948, as amended (exclusive
of authority relating to informational media
guaranties); [and]
(g) the term ``local financial institution''--
(1) * * *
(2) does not include a branch, however
organized, of a bank or other financial
institution that is organized under the laws of
a country in which the Corporation does not
operate[.]; and
(h) the term ``international worker rights'' means--
(1) internationally recognized worker rights,
as defined in section 507(4) of the Trade Act
of 1974 (19 U.S.C. 2467(4)); and
(2) the elimination of discrimination with
respect to employment and occupation.
Sec. 239. General Provisions and Powers.--(a) * * *
[(b) The President shall transfer to the Corporation, at such
time as he may determine, all obligations, assets and related
rights and responsibilities arising out of, or related to,
predecessor programs and authorities similar to those provided
for in section 234 (a), (b), and (d). Until such transfer, the
agency heretofore responsible for such predecessor programs
shall continue to administer such assets and obligations, and
such programs and activities authorized under this title as may
be determined by the President.]
[(c)] (b)(1) The Corporation shall be subject to the
applicable provisions of chapter 91 of title 31, United States
Code, except as otherwise provided in this title.
* * * * * * *
[(d)] (c) To carry out the purposes of this title, the
Corporation is authorized to adopt and use a corporate seal,
which shall be judicially noticed; to sue and be sued in its
corporate name; to adopt, amend, and repeal bylaws governing
the conduct of its business and the performance of the powers
and duties granted to or imposed upon it by law; to acquire,
hold or dispose of, upon such terms and conditions as the
Corporation may determine, any property, real, personal, or
mixed, tangible or intangible, or any interest therein; to
invest funds derived from fees and other revenues in
obligations of the United States and to use the proceeds
therefrom, including earnings and profits, as it shall deem
appropriate; to indemnify directors, officers, employees and
agents of the Corporation for liabilities and expenses incurred
in connection with their Corporation activities; to require
bonds of officers, employees, and agents and pay the premiums
therefor; notwithstanding any other provision of law, to
represent itself or to contract for representation in all legal
and arbitral proceedings; to enter into limited-term contracts
with nationals of the United States for personal services to
carry out activities in the United States and abroad under
subsections (d) and (e) of section 234; to purchase, discount,
rediscount, sell, and negotiate, with or without its
endorsement or guaranty, and guarantee notes, participation
certificates, and other evidence of indebtedness (provided that
the Corporation shall not issue its own securities, except
participation certificates for the purpose of carrying out
section 231(c) or participation certificates as evidence of
indebtedness held by the Corporation in connection with
settlement of claims under section 237(i)); to make and carry
out such contracts and agreements as are necessary and
advisable in the conduct of its business; to exercise the
priority of the Government of the United States in collecting
debts from bankrupt, insolvent, or decedents' estates; to
determine the character of and the necessity for its
obligations and expenditures, and the manner in which they
shall be incurred, allowed, and paid, subject to provisions of
law specifically applicable to Government corporations; to
collect or compromise any obligations assigned to or held by
the Corporation, including any legal or equitable rights
accruing to the Corporation; and to take such actions as may be
necessary or appropriate to carry out the powers herein or
hereafter specifically conferred upon it.
[(e)] (d) The Inspector General of the Agency for
International Development (1) may conduct reviews,
investigations, and inspections of all phases of the
Corporation's operations and activities and (2) shall conduct
all security activities of the Corporation relating to
personnel and the control of classified material. With respect
to his responsibilities under this subsection, the Inspector
General shall report to the Board. The agency primarily
responsible for administering part I shall be reimbursed by the
Corporation for all expenses incurred by the Inspector General
in connection with his responsibilities under this subsection.
[(f)] (e) Except for the provisions of this title, no other
provision of this or any other law shall be construed to
prohibit the operation in Yugoslavia, Poland, Hungary, or any
other East European country, or the People's Republic of China,
or Pakistan of the programs authorized by this title, if the
President determines that the operation of such program in such
country is important to the national interest.
[(g)] (f) 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.
[(h)] (g) In order to carry out the policy set forth in
paragraph (1) of the second undesignated paragraph of section
231 of this Act, the Corporation shall prepare and maintain for
each investment project it insures, finances, or reinsures, a
development impact profile consisting of data appropriate to
measure the projected and actual effects of such project on
development. Criteria for evaluating projects shall be
developed in consultation with the Agency for International
Development. In addition, the Corporation should consult with
relevant stakeholders in developing such criteria.
[(i)] (h) The Corporation shall take into account in the
conduct of its programs in a country, in consultation with the
Secretary of State, all available information about observance
of and respect for human rights and fundamental freedoms,
including international worker rights, in such country and the
effect the operation of such programs will have on human rights
and fundamental freedoms in such country. The provisions of
section 116 of this Act shall apply to any insurance,
reinsurance, guaranty, or loan issued by the Corporation for
projects in a country, except that in addition to the exception
(with respect to benefiting needy people) set forth in
subsection (a) of such section, the Corporation may support a
project if the national security interest so requires.
[(j)] (i) The Corporation, including its franchise, capital,
reserves, surplus, advances, intangible property, and income,
shall be exempt from all taxation at any time imposed by the
United States, by any territory, dependency, or possession of
the United States, or by any State, the District of Columbia,
or any county, municipality, or local taxing authority.
[(k)] (j) The Corporation shall publish, and make available
to applicants for insurance, reinsurance, guarantees,
financing, or other assistance made available by the
Corporation under this title, the policy guidelines of the
Corporation relating to its programs.
(k) Transparency and Accountability of Investment Funds.--
(1) Competitive selection of investment fund
management.--With respect to any investment fund that
the Corporation creates on or after the date of the
enactment of the Overseas Private Investment
Corporation Reauthorization Act of 2007, the
Corporation may select persons to manage the fund only
by contract using full and open competitive procedures.
(2) Criteria for selection.--In assessing proposals
for investment fund management proposals, the
Corporation shall consider, in addition to other
factors, the following:
(A) The prospective fund management's
experience, depth, and cohesiveness.
(B) The prospective fund management's track
record in investing risk capital in emerging
markets.
(C) The prospective fund management's
experience, management record, and monitoring
capabilities in its target countries, including
details of local presence (directly or through
local alliances).
(D) The prospective fund management's
experience as a fiduciary in managing
institutional capital, meeting reporting
requirements, and administration.
(E) The prospective fund management's record
in avoiding investments in companies that would
be disqualified under section 237(r).
(3) Annual report.--The Corporation shall include in
each annual report under section 240A an analysis of
the investment fund portfolio of the Corporation,
including the following:
(A) Fund performance.--An analysis of the
aggregate financial performance of the
investment fund portfolio grouped by region and
maturity.
(B) Status of loan guaranties.--The amount of
guaranties committed by the Corporation to
support investment funds, including the
percentage of such amount that has been
disbursed to the investment funds.
(C) Risk ratings.--The definition of risk
ratings, and the current aggregate risk ratings
for the investment fund portfolio, including
the number of investment funds in each of the
Corporation's rating categories.
(D) Competitive selection of investment fund
management.--The number of proposals received
and evaluated for each newly established
investment fund.
(l) Operations in Iraq.--Notwithstanding subsections (a) and
(b) of section 237, the Corporation is authorized to undertake
in Iraq any program authorized by this title.
(m) Consistency with Other Law.--Section 620L of this Act
shall apply to any insurance, reinsurance, guaranty, or other
financing issued by the Corporation for projects in the West
Bank and Gaza to the same extent as such section applies to
other assistance under this Act.
(n) Limitation on Assistance to Gaza and the West Bank.--The
Corporation may not provide insurance, reinsurance, a guaranty,
financing, or other assistance to support a project in any part
of Gaza or the West Bank unless the Secretary of State
determines that the location for the project is not under the
effective control of Hamas or any other foreign terrorist
organization designated under section 219 of the Immigration
and Nationality Act (8 U.S.C. 1189).
(o) Congressional Notification of Increase in Maximum
Contingent Liability.--The Corporation shall notify the
Committee on Foreign Affairs of the House of Representatives
and the Committee on Foreign Relations of the Senate not later
than 15 days after the date on which the Corporation's maximum
contingent liability outstanding at any one time pursuant to
insurance issued under section 234(a), and the amount of
financing issued under sections 234(b) and (c), exceeds the
previous fiscal year's maximum contingent liability by 25
percent.
Sec. 240. Small Business Development.--(a) * * *
* * * * * * *
(c) Resources Dedicated to Small Businesses, Cooperatives,
and Other Small United States Investors.--The Corporation shall
ensure that adequate personnel and resources, including senior
officers, are dedicated to assist United States small
businesses, cooperatives, and other small United States
investors in obtaining insurance, reinsurance, financing, and
other support under this title. The Corporation shall include,
in each annual report under section 240A, the following
information with respect to the period covered by the report:
(1) A description of such personnel and resources.
(2) The number of small businesses, cooperatives, and
other small United States investors that received such
insurance, reinsurance, financing, and other support,
and the dollar value of such insurance, reinsurance,
financing and other support.
(3) A description of the projects for which such
insurance, reinsurance, financing, and other support
was provided.
Sec. 240A. Reports to the Congress.--After (a) the end of
each fiscal year, the Corporation shall submit to the Congress
a complete and detailed report of its operations during such
fiscal year. Such report shall include--
(1) an assessment, based upon the development impact
profiles required by section [239(h)] 239(g), of the
economic and social development impact and benefits of
the projects with respect to which such profiles are
prepared, and of the extent to which the operations of
Corporation complement or are compatible with the
development assistance programs of the United States
and other donors; and
(2) a description of any project for which the
Corporation--
(A) refused to provide any insurance,
reinsurance, guaranty, financing, or other
financial support, on account of violations of
human rights referred to in section [239(i)]
239(h); or
* * * * * * *
----------
SECTION 209 OF THE ADMIRAL JAMES W. NANCE AND MEG DONOVAN FOREIGN
RELATIONS AUTHORIZATION ACT, FISCAL YEARS 2000 AND 2001
SEC. 209. CONTINUATION OF REPORTING REQUIREMENTS.
(a) * * *
* * * * * * *
(e) Continuation of Reports Terminated by the Federal Reports
Elimination and Sunset Act of 1995.--Section 3003(a)(1) of the
Federal Reports Elimination and Sunset Act of 1995 (Public Law
104-66; 31 U.S.C. 1113 note) does not apply to any report
required to be submitted under any of the following provisions
of law:
(1) * * *
* * * * * * *
(16) Section [239(c)] 239(b) of the Foreign
Assistance Act of 1961 (Public Law 87-195; 22 U.S.C.
[2199(c)] 2199(b)) (relating to OPIC audit report).
* * * * * * *