2018 Advocating for a Sound Foundation for a New U.S. Development Finance Institution
In March 2018, the Better Utilization of Investments Leading to Development (BUILD) Act was introduced in both the House and Senate. The bi-partisan bills called for the creation of a new U.S. development finance institution, the United States International Development Finance Corporation (DFC). The DFC would subsume OPIC as well as USAID’s Development Credit Authority (DCA), have an expanded liability cap, and have an expanded set of financial tools for its development activities.
From the beginning, Accountability Counsel actively pushed for the legislation to enshrine protections for communities affected by the proposed agency’s activities. This includes strong environmental and social policies to ensure that the agency does not finance projects that cause environmental degradation, engage in illegal labor practices, or otherwise harm the local communities where the projects are located. We also pushed for a provision in the legislation that would mandate an independent accountability office to receive complaints related to environmental, social, and human rights harm. Most development finance institutions have these offices, including OPIC, and it was crucial that the legislation provide an avenue for addressing community complaints.
AC engaged in months of advocacy and outreach with our partners, and as a result the final legislation, signed into law in October 2018 as a part of the Federal Aviation Administration Reauthorization Act, includes strengthened environmental and social provisions. Importantly, the legislation mandates an independent accountability office to receive complaints of harm related to the DFC’s activities.
From the passage of the law, AC worked to ensure that the transition from OPIC and USAID’s DCA to the DFC is a transparent and participatory process and ensures that the new agency operates according to best practice. Per the BUILD Act’s requirements, the administration provided Congress with a reorganization plan on March 8, 2019 that included some details on the transition. That same month, Accountability Counsel and over 30 partners sent a joint letter to the Senate Foreign Relations Committee and the House Foreign Affairs Committee requesting a hearing and robust oversight of the transition.
The DFC became operational on January 2, 2020, and we have continued to advocate for the agency to operate according to high standards. Learn more about our current advocacy here.