March 14, 2001
Donald Hobbs, General Counsel
Border Environment Cooperation Commission
Ciudad Juárez, Chihuahua, México
Dear Mr. Hobbs,
The Texas Center for Policy Studies appreciates the opportunity to comment on BECC's proposed modifications to its "Private Sector Projects" criteria. TCPS supports the need to modify the criteria in its present form to provide greater clarity to private industry - particularly with respect to the new types of projects covered in the mandate expansion - and to invite greater private sector participation to access NADBANK capital.
Nonetheless, we believe there are two areas in which the new proposed criteria either violate the spirit of the original charter establishing the BECC (and NADBANK) or do not represent good public policy. First of all, we are fundamentally opposed to the possibility of providing public grant funds for private projects which are intended solely to meet the requirements of the private entity (see A (5)). While grant funding has been provided to construct wastewater treatment plants that are operated by private companies in several BECC-certified projects, the wastewater treatment plant itself is ultimately owned by the public, not the private entity (i.e. BOT agreement). We suggest adopting some clear language limiting the possibility of any private project being eligible for grant funding. One possibility would be to eliminate the possibility for solely private projects, but allowing for some grant funding for projects sponsored partially by the private sector. For example:
Projects sponsored entirely by the private sector are not eligible for receiving grant funding from the BECC. The BECC's Board of Directors may authorize grant funds for projects sponsored partially by the private sector if: a) the grant is determined to be necessary for project implementation; and b) the project is proven to provide a substantial community benefit.
In addition, it is not clear from the proposed criteria whether or not, private projects would be eligible for NADBANK grant funds if certified by the BECC. BECC should coordinate with NADBANK's General Manager and Board of Directors to see if they have established a policy on this issue. TCPS believes that neither BECC nor NADBANK grant funds should be provided to solely private projects.
Secondly, the private project certification criteria must make it clear that all private projects must comply with all certification criteria. Currently, A) 4) states "Projects sponsored entirely or partially by the private sector must comply with all applicable certification criteria," suggesting that some certification criteria may not be applicable, without any definition of what those might be. Instead, the word "applicable" should be stricken from the proposed text.
In addition to these two fundamental concerns, we have several suggested language changes to provide greater clarity to the proposed criteria. In the opening paragraph of the proposed criteria, the last sentence should be changed to:
In this sense, the BECC considers that one of its responsibilities is to contribute to establishing mechanisms and incentives necessary to ensure an increasing and sustained participation of the private sector in the development of environmental infrastructure, based on addressing a human health and environmental need, technical and financial feasibility, sustainability and community participation.
Reason for change: The proposed language would match the present certification criteria language, reinforcing the need to meet basic certification criteria. On the other hand, "social validation" and "technological feasibility" are not defined anywhere in the present criteria or charter and could lead to confusion. In particular, social validation could be construed to mean validation by authorities rather than by the surrounding and wider community.
In section A) 1), the first sentence ("Private projects requesting BECC certification must respond to an environmental infrastructure need or must address an environmental pollution problem in the border region.") to read "Private projects requesting BECC certification must address a human health and environmental need and provide a high level of environmental protection in the border region."
Reason for change: The existing language says projects must either respond to an infrastructure need or address a pollution problem. Instead, to be consistent, the proposed criteria should adopt the language directly from the present certification criteria.
Finally, while it is understandable that BECC would not want to set specific fees in these proposed private sector certification criteria, the language should be clarified to make it clear that the fee must be paid, whether or not BECC ultimately certifies the project. The present language gives the appearance that private industries will pay a fee to have their project certified, rather than to have the opportunity to have the project certified. Another possibility is to have two fees - a Step I administrative fee, and a Step II review fee. Instead, the language could read:
"The sponsors of private projects must pay an upfront Administrative Fee when submitting a Step 1 Certification form. If the Step I form is approved, sponsors of private projects must pay an additional Certification Review Fee after a Step II application for certification is considered administratively complete. The amount of the Certification Review Fee will be established by the BECC based upon the size and complexity of the project and the material and human resources used during the certification review process."
I look forward to speaking with you about this and other issues in the coming weeks.
Sincerely,
Cyrus Reed
Project Director
Texas Center for Policy Studies