Congress OKs ‘Debt-for-Nature’ Conservation Bill

Developing countries could reduce their debts to the United States by taking steps to protect their tropical forests under a “debt-for-nature” plan given final congressional approval Wednesday.

By a voice vote, the House moved to accept Senate changes to the measure and send the president a bill that allows the restructuring of debts unlikely to be fully paid by developing countries, in exchange for actions to save endangered tropical forests.

The administration supports the bill.

The measure sets aside $325 million over three years to promote the “debt-for-nature” swaps.

“This is an innovative, market-based approach to a critical environmental challenge,” said Rep. Rob Portman (R-Ohio), author of the legislation.

Portman noted that half of the world’s tropical forests are in four countries--Indonesia, Peru, Brazil and the Congo--that collectively owe the United States more than $5 billion.

Half the world’s tropical forests have already disappeared, he said, and in the last year alone more than 30 million acres were lost.

The legislation also authorizes “debt buybacks,” in which a country could fully buy back its debt in exchange for local conservation funds and debt swaps. In a debt swap, third parties purchase the debt from the United States in return for conservation efforts from the debtor nation.

As a condition for participating in the program, a country must have a democratically elected government, keep a good human rights and drug-fighting record and implement economic reforms.