A US-China Investment War Is Quietly Emerging, and the Environment Will Be the Ultimate Casualty
By Sarah Brewin
On Oct. 3, the U.S. Senate passed a law to create an agency called the International Development Finance Corporation (IDFC), to replace the Overseas Private Investment Corporation (OPIC) set up in 1969. The IDFC will invest up to $60 billion in developing countries and, unlike OPIC, is empowered to make equity investments. It is designed to counter what some in Washington describe as China's "economic warfare" of indebting developing countries and garnering diplomatic influence and support, largely through infrastructure projects such as the Belt & Road Initiative.
The IDFC is set up by the Better Utilization of Investments Leading to Development Act (the Build Act), which passed the House of Representatives in August with bipartisan support, and has been lauded in international development circles for its pro-development agenda. But there are at least four very concerning aspects of the Build Act, making it likely that the environment will be the ultimate casualty in this new front in the U.S.-China war of influence.
1. Key Environmental Threshold Removed
A key environmental safeguard imposed on OPIC has slipped out of the Build Act. OPIC's authorizing statute required it to refuse support for any project which "will pose an unreasonable or major environmental, health, or safety hazard, or will result in the significant degradation of national parks or similar protected areas."
This underpinned the very first step in OPIC's project screening procedures, designed to ensure that environmentally damaging projects don't get supported. A 2003 report to Congress shows that this provision formed the basis for OPIC to decide whether a project was 'categorically prohibited' from receiving support. According to OPIC's environmental handbook, this captured "large dams that disrupt natural ecosystems, infrastructure and raw material extraction in primary tropical forests and other protected or ecologically fragile areas."
History also shows us how important this provision could be for pulling support for projects already underway. In 1995 OPIC canceled $100 million of political risk insurance for a U.S. company operating the world's largest gold mine in Indonesia. The cancellation was prompted by environmental contamination from the mine that poisoned fish and local water supplies, and reports of killings and torture by the company's private security services. While the legal basis for the decision has never been made clear, it could well have been the above provision.
2. Host Country Notification Requirements Removed
Another of OPIC's environmental mandates has been stripped from its successor organization under the Build Act. OPIC's authorizing statute required it, before supporting a project, to contact the host country government, inform them of the likely environmental impacts and the international environmental standards applicable to the project, and any U.S. regulations that would apply if the project was carried out there. OPIC had to share any environmental impact assessments carried out, and to take into account any comments received in response. This provision was used by OPIC to notify governments from Liberia to Ghana to Pakistan of OPIC's potential support to projects in those countries with the potential to have "significant adverse environmental impacts." IDFC, on the other hand, will not be required by its authorizing statute to engage and assist host country governments in this way.
3. Climate Ignored
Climate considerations are entirely absent from the Build Act. OPIC was sued in 2003 by Greenpeace, Friends of the Earth and four cities in Colorado and California. OPIC accepted liability for financially supporting fossil fuel projects from 1990 to 2003 that accounted for nearly 8% of global carbon emissions—almost one-third of total U.S. emissions. In a settlement agreement, OPIC committed to establishing a goal of reducing greenhouse gas emissions associated with its projects by 20 percent over ten years and increasing financing for renewable energy. The creation of IDFC would have been an opportune moment to carry such commitments over to the new body taking over OPIC's mandates by enshrining them in the Build Act. As it stands, climate does not appear anywhere in the law.
4. Foreign Policy Interests Prioritized
The Build Act explicitly mixes sustainable development with geopolitical strategic objectives, stating that one of the objectives of the IDFC is "to provide countries a robust alternative to state-directed investments by authoritarian governments and U.S. strategic competitors using high standards of transparency and environmental and social safeguards, and which take into account the debt sustainability of partner countries."
This explicit inclusion of foreign policy objectives is a major departure from OPIC's authorizing statute, which did not even contain the words "foreign policy." The reference to environmental and social safeguards rings hollow in light of the key environmental safeguards imposed on OPIC that have been stripped from IDFC's authorizing statute.
The Build Act requires the IDFC to develop guidelines and criteria to ensure that each project it supports has "a clearly defined development and foreign policy purpose." The requirement that all projects serve a foreign policy purpose, combined with weakened environmental protections, could see the IDFC supporting environmentally damaging projects if they are seen to be in U.S. foreign policy interests—for instance, if it was thought that if not financed by IDFC, the project would instead be financed by a "strategic competitor," with debt, influence and diplomatic relations accruing to that competitor rather than the U.S.
OPIC's track record has included support to projects that reportedly mismanaged hazardous waste in Chile, contaminated water and degraded forests in Liberia, and failed to recognize the existence of an indigenous community in Bolivia because it did not carry out a social and environmental assessment. It is hard then to see how its successor agency, with a weaker environmental mandate, a broader potential investment portfolio, and an explicit dictate to out-compete Chinese money, is well placed to do better.
Sarah Brewin is an agriculture and investment advisor to the International Institute for Sustainable Development.
This article was produced by Earth | Food | Life, a project of the Independent Media Institute.
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Where Does the Deficiency Begin?<p>Nobody knows exactly how much vitamin D a person actually needs. The question of when a deficiency starts is correspondingly controversial. However, vitamin D is becoming increasingly popular.Not only is the pseudo-scientific literature on the "sun vitamin" experiencing an upswing, but the number of published studies has also increased enormously in recent years. For example, in 2019 <a href="https://academic.oup.com/edrv/article/40/4/1109/5126915" target="_blank">a study found that</a> Vitamin D is responsible for keeping the skeleton functional and is associated with cardiovascular diseases, type 2 diabetes and various types of cancer. <br></p>
An All-Rounder<p>Vitamin D levels in the body rise and fall according to sun exposure. If sufficient UV rays reach the skin, the body is able to produce the vitamin itself. However, the human body only derives an estimated 10 to 20 percent of its daily requirement from food.</p><p>The vitamin D that we synthesize from sunlight or food is not biologically active at first. Before the kidneys can produce the biologically active form of the vitamin, known as calcitriol, and release it into the blood, some metabolic processes must take place beforehand.</p><p>In addition, many organs have receptors to which the precursor of calcitriol binds. Further, this substance is also present in blood.</p><p>From this precursor, the organs then produce calcitriol themselves, which the body then uses for countless other processes in the body. This form of vitamin D thus regulates insulin secretion, inhibits tumor growth, and promotes the formation of red blood cells as well as the survival and activity of macrophages, which are important for the <a href="https://www.mdpi.com/2072-6643/5/7/2502/htm" target="_blank">immune system.</a></p>
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Association Versus Intervention Studies<p>Many studies on the vitamin are association or observational studies. "By definition, these studies cannot prove the causal relationship, but only point to mere correlations," said Fassnacht. The physician tries to illustrate this with an example:</p><p>"Imagine two groups of 80-year-olds. One group is spry, active and does sports. If you compare them with another group living in nursing homes, the difference in vitamin D levels will be dramatic. Life expectancy would also be extremely different."</p><p>But to try to explain the difference in fitness by vitamin D status alone is far too simplistic. "Vitamin D levels are a good measure of how sick someone is. But not more," says Fassnacht. </p><p>According to Fassnacht, none of the intervention studies carried out to date -- that specifically examined the effect of vitamin D on various diseases -- has been able to confirm the previous association and laboratory studies or the presumed positive effect of vitamin D.</p>
Further Research Is Needed<p>"If a coronavirus infection is suspected, it is therefore absolutely necessary to check the vitamin D status and quickly correct any possible deficit," said the recommendation of the paper published by the University of Hohenheim.</p><p>"Studies are underway to see whether vitamin D helps in COVID-19 infection, but I personally do not believe that this is really the case," says endocrinologist Fassnacht. Nevertheless, he says it is of course useful to carry out these studies.<br></p><p>"I don't want to rule out that there are actually subgroups of people who benefit from an additional vitamin D dose," he says. After all, this has been proven to be the case with a severe deficit.</p><p>In view of the study situation, Fassnacht does not think much of preventive, nationwide vitamin D substitutes. "My belief that the vitamin helps somewhere is very low. But, of course, I can be wrong."</p>
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