North American Development Bank

___________________________________ OVERVIEW


“One of the most fundamental rights of a human being is to be able to live in a healthy environment”


Established with headquarters in San Antonio, Texas, the North American Development Bank (NADB) “is a binational financial institution capitalized and governed equally by the United States and Mexico for the purpose of financing environmentalprojects certified by the Border Environment Cooperation Commission (BECC)” (nadb.org). Both institutions collaborate together with communities and project sponsors to address infrastructure necessities and health issues caused by environmental pollution to the residents of the border region.


In order to support the North American Free Trade Agreement, the NADB, along with its sisterinstitution, BECC were both created in response to address concerning environmental issues across the U.S.-Mexico border region. Operations of both these institutions commenced in November 10, 1994 under the “Agreement Between the Government of the United States of America and the Government of the United Mexican States Concerning the Establishment of a Border Environment Cooperation Commission and aNorth American Development Bank” known as the Charter.


The Charter sets forth the purposes and functions of NADB as a development financing institution and its capital structure and organization. Both NADB and BECC must abide to the governance of a common board of directors, the Board (nadb.org).


The Bank’s mission “is to serve as a binational partner and catalyst in communities along theU.S.-Mexico border in order to enhance the affordability, financing, long-term development and effective operation of infrastructure that promotes a clean, healthy environment for the citizens” (nadb.org)





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_________________________________BACKGROUND


The San Antonio-based financial institution was created in response to the health and environmental issues emitted by theNorth American Free Trade Agreement (NAFTA) signed by President Bush in 1992 and officially implemented in the Clinton administration on January 1, 1994. As many positive outcomes NAFTA promised, it, too, had its negative impacts. The Agreement needed to address concerning health and environmental issues, which nonetheless were already existent in the area, but would continue to rise due toincreased activities across the border. Low salary wages and environmental regulations encouraged U.S. business production to relocate in the U.S.-Mexico border region, increasing the number of maquiladoras as well as the population density in the area which would severe and worsen contamination issues already present.


Throughout the NAFTA debates, negotiators identified the necessity to findfunding sources to finance environmental improvements in the border region. Fortunately, both U.S. and Mexican governments anticipated NAFTA would trigger economic activity concentration in this area and realized it would worsen the pollution in the area without a binational effort to address infrastructure development.


In October 1993, the United States and Mexico agreed to establish aninstitutional structure to promote border environmental cleanup. The Border Environmental Cooperation Agreement authorized the establishment of the two bilateral institutions, the North American Development Bank (NADB) and the Border Environment Cooperation Commission (BECC) to assist border communities in financing environmental infrastructure projects. The NADB assesses the financial feasibility ofBECC-certified projects and offers financing as accordingly needed. The BECC fosters public involvement through public comment process on proposed projects and offers technical assistance for the projects.


The Border Environmental Cooperation Agreement was signed in 1993 and is one of the latest agreements between the Mexico and U.S. attempting to coordinate border sanitation by addressing...