Today, the Southern Shrimp Alliance is publishing an updated version of our U.S. Treasury Votes database which tracks the U.S.’s official position on all development projects voted on at multilateral development institutions (MDIs) to which the U.S. is a dues-paying member. This update includes Treasury votes from June and July 2024, with some notable developments over those two months.
As the Southern Shrimp Alliance documented in the August 2023 report A Crisis of Our Own Making, there was a significant uptick in the number of aquaculture projects funded through MDIs starting in 2016, with an average of around six per year from 2016 to 2023. Although no shrimp-specific projects were voted on over the first seven months of 2024, U.S. Directors voted to support a project with a significant aquaculture component – Pakistan’s Sindh Livestock and Aquaculture Sectors Transformation Project – in June 2024.
The Project Information Document (PID) for the Sindh Project makes clear that its proponents seek to increase the supply of farmed shrimp in global markets, arguing that “there is a significant untapped export potential for whole and frozen fish, shrimps, and prawn . . .” Given the devastating consequences that previous MDI-backed shrimp aquaculture projects have had on global commodity prices and on the financial operations of shrimp producers around the world, continued support from MDIs for even greater excess supply of farmed shrimp is a gross misuse of development funds.
While the federal government continues to express support for MDI-funding of projects intended to increase global production of shrimp, U.S. Directors, for the first time, expressly relied upon 22 U.S.C. § 262h in voting in opposition to a project that would contribute to further excess production of another commodity. The “Surplus Commodities Rule,” as set forth at 22 U.S.C. § 262h, requires U.S. representatives at MDIs to “use the voice and vote of the United States to oppose any assistance” for the production of any commodity for export that is in surplus in global markets and for which its export to the United States would cause substantial injury to American producers. Citing this authority, on June 27th, the U.S. Directors voted to oppose funding for the Gunung Steel Project in Indonesia. While the Gunung project involved the production of steel and is not directly relevant to the shrimp industry, the U.S. Treasury Votes database shows that this is the first time in the twenty years of published voting decisions that Treasury has explicitly referenced the Surplus Commodities Rule (code 2 in the Voting Code column) in opposing an MDI project.
As the Southern Shrimp Alliance has previously explained, the Surplus Commodities Rule should have resulted in U.S. representatives expressing opposition to MDI-backed projects designed to increase shrimp production. However, prior to the vote cast last June with respect to the Gunung Steel Project, it is unclear whether the Treasury Department has ever taken steps to follow Congress’s directive. According to public reports, concerns regarding Treasury’s conformity with the Surplus Commodities Rule have been raised with agency staff by Congressional offices. In fact, in November 2024, Representative James Comer (R-KY), Chair of the House Committee on Oversight and Accountability, Representative Clay Higgins (R-LA), and Representative Troy Nehls (R-TX) sent a letter to the Government Accountability Office (GAO) formally requesting that the GAO investigate Treasury’s efforts to adhere to the requirements of 22 U.S.C. § 262h.
In addition to the vote cast in conformity with the Surplus Commodities Rule to oppose an MDI-backed project involving steel, Treasury reported instances in June and July where U.S. Directors declined to support particular MDI projects due to “trade policy concerns.” However, in these instances it is unclear why the U.S. Directors abstained from voting in some instances and voted in opposition in others. For example, Treasury reports on votes taken in 2024 regarding two projects funding the operations of sugar, ethanol, and bioenergy companies in Brazil: (1) Melhoramentos VP and (2) the Zilor Cogen Project. In April 2024, the U.S. Directors voted to oppose an International Finance Corporation (IFC) project, Melhoramentos VP, citing “policy concerns – trade policy concerns.” Yet, two months later in June 2024, the U.S. Directors abstained from voting on another IFC project, the Zilor Cogen Project, citing the exact same “policy concerns – trade policy concerns” as the basis for the abstention.
Previously, the Treasury Department had been more specific regarding the basis for the failure of U.S. Directors to express support for projects intended to increase Brazil’s production of ethanol. Specifically, in December 2018, U.S. Directors abstained from voting on an Inter American Development Bank (IDB) project funding expansion of Brazil’s Delta Sucroenergia, explaining that Treasury had “trade policy concerns on Brazil sugar-based ethanol.” However, just two years later, in December 2020, the U.S. Directors voted to oppose – rather than simply abstain – from an IDB Invest project also involving Brazil’s Delta Sucroenergia. Treasury provided no explanation as to why the U.S. Directors abstained from voting on one Delta Sucroenergia project, while actively opposing another, noting only that the second vote resulted from “Trade related concerns.”
None of the four votes regarding Brazilian production of sugar ethanol relied upon the Surplus Commodities Rule of 22 U.S.C. § 262h. Similarly, when the U.S. Directors abstained from voting in December 2023 on an IFC-backed project intended to support the Ecuadorian shrimp exporter Omarsa, the Treasury Department simply noted “Policy Concerns – trade policy.” This abstention followed two prior votes by U.S. Directors in support of IFC projects promoting Omarsa in November 2015 and October 2017.
Through the publication and maintenance of the U.S. Treasury Votes database, the Southern Shrimp Alliance seeks to address the arbitrary nature of the federal government’s support for the use of U.S. taxpayer funds on projects that cause significant harm to American industries. As the shrimp industry has experienced firsthand, the Treasury Department’s failure to account for the consequences of these development projects has severely harmed American families and small businesses that depend upon the federal government to represent their interests before international, multilateral institutions.