Agreement Between the Government of the United States of America and the Government of Bolivia Concerning the Establishment of an Enterprise for the Americas Environmental Account at the National Fund for the Environment, Washington, 1991

________________________________

The Government of the United States of America and the Government of Bolivia (‘the Parties’),

Seeking to implement the Enterprise for the Americas Initiative,

Desiring to enhance the friendship and spirit of cooperation between these two countries,

Desiring to promote environmentally sound and sustainable economic development,

Recognizing that environmental protection, conservation, and sustainable natural resource management are key elements in building an ecologically and economically sound future for all countries in the Western Hemisphere,

Wishing to follow upon the Agreement between the Parties Regarding the Reduction of Certain Debts Owed to the United States Government and its Agencies (the ‘Debt Reduction Agreement’), of August 22, 1991, which reduces certain debt owed by the Government of Bolivia to the Government of the United States of America, through the exchange of old obligations for a new obligation (‘New EAI Obligation’),

Have agreed as follows:

The purpose of this Agreement is to provide for the establishment of an Enterprise for the Americas Environmental Account (‘the Account’) and its Administrative Council (‘the Council’) at the National Fund for the Environment (‘FONAMA’), in order to preserve, protect or manage the natural and biological resources of Bolivia in an environmentally sound and sustainable manner.

1. The Government of Bolivia shall establish an environmental account at FONAMA in accordance with the decrees and laws of Bolivia. Any monies credited to the Account, or grants made from the assets of the Account, shall be free from any taxation, levies, fees or other charges imposed by the Parties to the extent permissible by law.

2. Subject to Article IV of the Debt Reduction Agreement, the Government of Bolivia shall ensure that the entire amount of interest owed on the New EAI Obligation falling due on or after the date of entry into force of this Agreement shall be credited to the Account and deposited in local currency in an Operating Account at the Central Bank of Bolivia in accordance with the payment schedule at Appendix B of the Debt Reduction Agreement. FONAMA shall promptly notify the Council in writing when the Government of Bolivia makes a deposit in the Operating Account pursuant to this paragraph. Any interest which becomes due on the New EAI Obligation prior to the date of entry into force of this Agreement, or subsequent to the termination of this Agreement pursuant to Article X, shall not be credited to the Account, but shall be deposited in U.S. dollars in the appropriate U.S. Government account.

3. Monies from other sources, including public and private creditors of the Government of Bolivia, in the form of local currency or other currencies, may be credited to the Account and deposited in the Operating Account with the mutual agreement of the Parties and prospective donors. Once credited to the Account, these monies shall be subject to the requirements and conditions agreed to between the donor(s) of such monies and the Parties, so long as these terms are consistent with this Agreement.

4. Deposits credited to the Account shall be the property of FONAMA until they are disbursed pursuant to the procedures set forth in Article VII. 5. The Government of Bolivia, in consultation with the Government of the United States, shall select an investment agent, who shall establish an Investment Account to which payments deposited in the Operating Account shall be transferred as directed by FONAMA, and remain there pending approval of disbursements by the Council pursuant to Article VII. Upon the Council's approval of such disbursements, FONAMA shall direct that funds necessary for such disbursements be transferred from the Investment Account to the Operating Account. The investment agent shall be charged by FONAMA with the investment of the monies in the Investment Account. Returns on investment shall be deposited by the investment agent in the Investment Account and remain there until transferred as directed by FONAMA to the Operating Account.

6. The investment agent shall be required to make every effort to ensure that such investments yield a positive real rate of return in terms of U.S. dollars. To the extent that prudent investment practices are not accomplishing this goal, FONAMA shall promptly bring this matter to the attention of the Council and the Parties for consideration by the Parties with a view toward identifying appropriate corrective measures.

1. The Government of Bolivia shall ensure that the Enterprise for the Americas Administrative Council is established for the Account.

2. The Council shall consist of seven members as follows:

A. Two representatives appointed by the Government of Bolivia:

(1) the Secretary General of the Environment of Bolivia, as head of the Bolivian representation and chairman of the Council;

(2) the Executive Director of FONAMA. B. One representative appointed by the Government of the United States of America.

C. Four representatives from a broad range of Bolivian environmental and local community development nongovernmental organizations, and scientific and academic bodies, proposed by the Government of Bolivia in consultation with these groups. These representatives shall be approved jointly by the Parties, appointed by the Government of Bolivia, and shall constitute a majority of the members of the Council.

3. Council members representing each Party shall serve at the discretion of that Party. Council members described in paragraph 2(c) above shall serve for a period of three years and may be removed by the Government of Bolivia only to the extent permissible under Bolivian laws and decrees. Consecutive terms of service shall be permitted.

4. A Council member may not participate in the discussion or approval of any proposed grant which, if approved, would result in a financial benefit for the member, any member of his family, or an organization in which the member or any member of his family has a direct financial interest. Further, a Council member may not participate in the discussion or approval of any proposed grant to an organization which the member represents.

1. The Council shall be responsible for overseeing and directing the administration of grant activities funded pursuant to this Agreement. The Parties shall ensure that the Council has the necessary authority to carry out the functions assigned to it in this Agreement.

2. The Council shall:

A. Instruct FONAMA to issue and widely disseminate a public announcement of the call for grant proposals which states the criteria for the selection of projects eligible for grant assistance, and the qualifications of organizations eligible to receive grant awards.

B. Review all proposals for grant assistance submitted to FONAMA or submitted to the Council and referred to FONAMA by entities described in Article VI.2 of this Agreement, and as appropriate, approve grants to such entities for the activities enumerated in Article VI.1 of this Agreement. Such review shall include approval of work plans and disbursement schedules for approved projects.

C. Instruct FONAMA to announce publicly grants approved by the Council.

D. Receive and certify FONAMA's programmatic and financial evaluations of each project funded by the Account.

E. Determine if independent evaluations and audits of individual projects are needed.

F. Present to the Parties annually:

(1) a proposed annual program, by October 1, covering the following Bolivian fiscal year (January 1 - December 31); and, in addition, a report on the proposed activities of the Council covering the period following the entry into force of this Agreement through December 31, 1992, to be submitted by May 1, 1992;

(2) an annual report on the activities funded by the Account during the previous Bolivian fiscal year, which shall include on-going multi-year projects, by April 1;

(3) an annual financial audit by an independent auditor covering the previous Bolivian fiscal year, by April 1. 3. Proposed grants with life-of-project total from the Account in excess of US $100,000 shall be presented by the Council to both Parties. If either Party disapproves of such a grant, that Party must notify the Council of its disapproval, in which case the Council may not award the proposed grant. Proposed grants not disapproved by either Party within 45 days of presentation to the Parties' members on the Council shall no longer be subject to either Party's disapproval.

4. The Council shall adopt by majority vote procedures for its operation, provided that the majority includes the affirmative votes of the representatives of the Parties appointed in accordance with Article III.2.(A).(1). and (B). No disbursements pursuant to Article VII may be made prior to the adoption of these procedures.

5. The Council shall meet at least once every four months.

6. The Council shall ensure that performance under grants and other agreements is monitored by FONAMA to determine whether time schedules and other performance goals are being achieved. Grant agreements shall provide for periodic progress reports from grantees to FONAMA and the Council. Such reports will review all project components essential to the successful achievement of the goals of the project. Such reports should be received from grantees at least annually.

7. Unless the Parties otherwise agree by exchange of diplomatic notes, funds drawn from the Account for the administrative expenses associated with the operation of the Account shall not exceed 10 percent per annum of the annual payments made by the Government of Bolivia and credited to the Account. This amount shall include the financial audit required by Article IV.2.F. but shall not include independent evaluations and audits requested by the Council pursuant to Article IV.2.E. FONAMA shall be responsible for preparing a budget for these administrative expenses, which must be reviewed and approved by the Council, including the affirmative votes of the representatives of the Parties. During the fiscal year, FONAMA will manage these funds to cover all its expenses (staff, equipment, and operations) and those of the Council associated with the operation of the Account.

8. The Council's organizing statutes, written policies, operating procedures, minutes of meetings, and reports shall be retained by FONAMA in the files of the Council. A permanent record shall also be maintained on the decision criteria used by the Council in the awarding of grants. The above records shall be kept current by FONAMA and shall be open for public inspection.

The functions of FONAMA shall include:

Managing and making disbursements from the Operating Account pursuant to Articles II and VII. Monitoring the management of the Investment Account pursuant to Article II. Preparing the project portfolio to be reviewed by the Council.

Tracking project progress and reporting to the Council.

Conducting internal programmatic and financial evaluations of the projects funded.

Organizing and providing administrative support for the meetings of the Council.

1. Activities that may be funded under this Agreement are:

(i) restoration, protection, or sustainable use of the world's oceans and atmosphere;

(ii) restoration, protection, or sustainable use of diverse animal and plant species;

(iii) establishment, restoration, protection, and maintenance of parks and reserves;

(iv) development and implementation of sound systems of natural resource management;

(v) development and support of local conservation programs;

(vi) training programs to strengthen conservation institutions and increase scientific, technical, and managerial capabilities of individuals and organizations involved in conservation efforts;

(vii) efforts to generate knowledge, increase understanding, and enhance public commitment to conservation;

(viii) design and implementation of sound programs of land and ecosystem management;

(ix) promotion of regenerative approaches in farming, forestry, fishing, and watershed management;

(x) agriculture-related activities, including those that provide for the biological prevention and control of animal and plant pests and diseases, to benefit the environment; and

(xi) local community initiatives that promote conservation and sustainable use of the environment.

2. Organizations which shall be eligible for grants from the Account are:

A. Bolivian nongovernmental environmental, conservation, development, educational, and indigenous peoples organizations, duly registered with the Government of Bolivia;

B. other appropriate local, regional, or national nongovernmental entities;

C. in exceptional circumstances, public institutions of Bolivia.

3. The eligibility of a particular organization for funding for a specific project shall be determined by the Council.

4. The Council shall give priority to projects that are managed by nongovernmental organizations and that involve local communities in their planning and execution.

5. Grants shall be awarded to organizations on the merits of proposals presented to the Council, without regard to whether the proposing organization is represented on the Council.

1. The Council shall authorize the disbursement of grants by FONAMA from the Operating Account to organizations eligible under Article VI.2. when it approves a proposal eligible under Article VI.1. All such disbursements shall be made pursuant to a project grant agreement.

2. Upon receipt of requests for disbursement from grantees, FONAMA shall promptly review such requests and, as appropriate, make timely disbursements pursuant to respective grant agreements. The Council's operating procedures shall establish a time frame within which FONAMA shall review such requests and, consistent with project grant agreements, make disbursements.

3. Approval by the Council of the budget for the administrative expenses associated with the operation of the Account pursuant to Article IV.7 shall constitute authorization for FONAMA to request the transfer of funds from the Investment Account to the Operating Account and to disburse funds from the Operating Account to meet such expenses.

1. Upon the request of either Party, the Parties shall consult concerning the implementation or interpretation of this Agreement. These consultations shall take place within 60 days after the request for consultations is received in writing from the other Party.

2. Either Party may request consultations with the Council and the other Party after reviewing the Council's reports and audits presented pursuant to Article IV.2.(F). These consultations shall take place within 60 days after the request for consultations is received in writing from the other Party.

3. The Parties will meet to review the operation of this Agreement three years from the date of its entry into force.

1. If at any time either of the Parties determines that issues requiring consultation under Article VIII have not been satisfactorily resolved, such Party may notify the other Party in writing. In addition, the representative of such Party on the Council shall immediately inform the Council that such notification has been sent.

2. Upon receipt of such written notification from the Government of the United States of America, the Government of Bolivia shall immediately instruct FONAMA to suspend disbursements under Article VII of this Agreement.

3. Upon providing such written notification to the Government of the United States of America, the Government of Bolivia may immediately instruct FONAMA to suspend disbursements pursuant to Article VII of this Agreement.

4. a) Suspension of disbursements shall mean that no further approval of grants will be undertaken until the Parties agree to resume such activity. b) Disbursements pursuant to previously approved grant agreements shall proceed unless a specific grant agreement is suspended pursuant to that grant agreement. c) Notwithstanding paragraph (b) above, should the Parties jointly certify in writing to the Council that the manner in which a grant agreement was awarded was inconsistent with Article III.4. or the operating procedures of the Council, the Parties may require FONAMA to suspend disbursements pursuant to that grant agreement.

5. If the Government of Bolivia fails to suspend disbursements under Article VII of this Agreement within 10 working days of receiving written notification from the Government of the United States (‘the notification period’), the Government of the United States may, at its discretion, require that interest payments on the new obligation referred to in Article II of this Agreement falling due subsequent to the notification period be made in United States dollars and be deposited in the appropriate United States Government account.

1. Either Party may terminate this Agreement upon six months written notice to the other Party.

2. No disbursements from the Operating or Investment Accounts shall occur after a Party has given notice to terminate this Agreement, unless the Parties agree to permit disbursements. The termination of this Agreement shall not prevent expenditures of funds disbursed before notice to terminate is given.

3. Upon termination of this Agreement, the disposition of amounts remaining in the Investment and Operating Accounts, or any other account established pursuant to this Agreement, shall be subject to a formula to be mutually agreed upon by the Parties. Such a formula shall provide that those funds which derive from interest payments on the New EAI Obligation will, at the discretion of the United States Government, be converted into United States dollars and deposited into the appropriate United States Government account.

1. This Agreement shall enter into force upon signature and shall remain in force unless terminated by the parties in accordance with Article X. 2. This Agreement may be amended by exchange of diplomatic notes between both Parties.

3. Nothing in this Agreement shall prejudice other arrangements between the Parties concerning debt reduction or cooperation and assistance for environmental or conservation purposes.

IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed this Agreement.

DONE at Washington, in duplicate, this 26th day of November, 1991, in the English and Spanish languages, both texts being equally authentic.

FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA: E.U. Curtis Bohlen

FOR THE GOVERNMENT OF BOLIVIA: Jorge Crespo-Velasco