Green Groups Sue US Development Bank Financing Climate-Damaging Projects Overseas

In an effort to hold the United States' development bank accountable for financing "climate-damaging" international projects, a trio of environmental organizations filed suit Wednesday over the Trump administration's attempt to exempt it from a key federal government transparency law.

"The DFC should be using the power of the U.S. purse to build clean and renewable energy opportunities, while holding itself accountable to the public as the Sunshine Act clearly requires."
--Kate DeAngelis, Friends of the Earth

Congress passed the Better Utilization of Investments Leading to Development (BUILD) Act in 2018, creating the United States International Development Finance Corporation (DFC) by merging the Overseas Private Investment Corporation (OPIC) and U.S. Agency for International Development's Development Credit Authority.

Although DFC adopted the regulations of OPIC, the new agency declared in an April 2020 rule that the Sunshine Act "is not applicable to DFC." The groups behind the lawsuit--the Center for Biological Diversity, Center for International Environmental Law (CIEL), and Friends of the Earth--disagree.

"This is an easy one for the Biden administration," said Bill Snape, senior counsel with the Center for Biological Diversity and lead lawyer on the legal filing, in a statement. "Congress intended this new agency to be open to the public and follow the Sunshine Act. While the Trump administration used the agency to favor its special interest benefactors like the oil and gas industry, our lawsuit says 'no more.' This agency needs sunshine, and it needs it now."

Filed in the U.S. District Court for the District of Columbia, the suit (pdf) seeks a finding that the institution is violating not only the Sunshine Act but also the Administrative Procedure Act. The former, passed in 1976, states that "every portion of every meeting of an agency shall be open to public observation," meaning that the subject, time, and date of meetings are announced at least a week in advance and minutes or transcripts along with relevant records are made public.

"Over decades of work, CIEL has witnessed the importance of transparency for communities on the ground," said CIEL's Carla Garcia Zendejas. "Time and time again, we have seen that the Sunshine Act meetings are a vital lifeline in securing access to information about the DFC's decision-making processes."

"This is particularly evident in the Maipo region of Chile. The community has spent years calling on OPIC to take action in the Alto Maipo Hydroelectric Project," she explained. "As the construction is underway and the livelihoods of the Maipo River Valley residents are at risk, transparency and accountability at the DFC are more important than ever."

Zendejas added that "CIEL--and our partners around the world--expect more from the corporation, which is meant to finance development in a way that builds and strengthens civic institutions, while providing for public accountability and transparency."

As Kate DeAngelis of Friends of the Earth put it: "The new U.S. International Development Finance Corporation must be a part of the climate solution, not the problem."

"The DFC should be using the power of the U.S. purse to build clean and renewable energy opportunities, while holding itself accountable to the public as the Sunshine Act clearly requires," she continued. DeAngelis also highlighted foreign projects that have generated concerns.

"The DFC's support of disastrous liquified natural gas development in Mozambique and fracking projects in Argentina are prime examples of why this agency needs more sunshine," she said. "As an international organization, Friends of the Earth is acutely aware of the need to stop exporting our pollution and problems to other countries."

In April, President Joe Biden marked Earth Day with a Leaders Summit on Climate and released an International Climate Finance Plan that disappointed some progressives. The White House said at the time that DFC "will update its development strategy to not only include climate for the first time, but also to make investments in climate mitigation and adaptation a top priority."

As Biden hosted the summit, DFC committed to increasing climate-focused investment and getting its portfolio to net-zero emissions by 2040.

Snape said Wednesday that "although President Biden's DFC has committed itself to 'net-zero emissions through its investment portfolio by 2040,' the agency still lags badly behind other countries' development agencies and is still promoting dirty shale gas and oil throughout the world."

Last month, 13 lawmakers led by Sen. Ed Markey (D-Mass.) and Rep. Earl Blumenauer (D-Ore.) sent a letter urging President Joe Biden to direct federal agencies including DFC to "end all new public financing support for fossil fuel projects overseas within 90 days."

The letter came a day after the International Energy Agency warned that countries must immediately transition from fossil fuels to renewable power sources.