North American Development Bank - Border Environment Cooperation Commission Reform

Due to the urgent environmental infrastructure needs in the U.S.-Mexico border region, Presidents Bush and Fox directed a binational working group to hold a series of discussions with states, communities, and other stakeholders in the border region to develop recommendations designed to strengthen the performance of the North American Development Bank (NADBank) and the Border Environment Cooperation Commission (BECC).

Reforms
The Presidents accepted the recommendations and will direct their respective Administrations to work with their legislatures to make the recommendations reality. NADBank and BECC will remain focused on environmental infrastructure priorities and will continue their urgent work on projects as the recommended reforms are implemented. The key recommendations for improvement are as follows:

Geographic Scope: To expand the capacity of both institutions to address important binational environmental needs, the geographic scope for BECC/NADBank operations in Mexico should be expanded from 100 km to 300 km from the border. This expansion would be coupled with a system of financial differentiation that concentrates grants and low interest rate loans for projects in the poorest communities located within the current border region of 100-km, in both countries. The geographic limit in the United States would remain unchanged at 100-km from the border.

Financial Instruments: To provide a greater level of financial flexibility so that its capital can be used more effectively and creatively, NADBank should expand its ability to extend concessional financing by doubling its Low Interest Rate Lending Facility and increasing its capacity to provide grants out of its own resources.

Organizational Structure and Process: To improve functional coordination and operational efficiency between BECC and NADBank, the two boards of directors should be replaced by a single board to oversee both institutions. This new board would have representation from the federal governments, the border states, and the public. At the same time, a comprehensive business process review should be initiated to identify ways to improve overall project design, certification, and implementation.

Private Sector: To expand the tools available for financing projects that, among other things, mitigate industrial pollution, improve air quality, and recycle and reuse wastes, a more concerted effort should be made to certify and finance private sector environmental projects.

The United States and Mexico established the BECC and the NADBank in 1993 to help develop and finance environmental infrastructure projects within 100 km of either side of the U.S.-Mexico border. The BECC works with the border states and local communities to develop and certify projects, and the NADBank arranges financing for these projects.