Skip to main content

US Supreme Court order "clears way" to file case on IFC funding of Tata Mundra plant

Counterview Desk
The Centre for Financial Accountability (AFC), a New Delhi-based NGO, referring to the US Supreme Court 7-1 order in the Jam vs International Finance Corporation (IFC) case, allowing individuals and organizations to sue international organizations like the World Bank Group, has said has said that this has opened the way to sue IFC funding of the power plant in Mundra, Gujarat.In a communique issued following the order, AFC, which is backing the members of local fishing and farming communities in the case because, allegedly, their "livelihoods, air quality, and drinking water have been devastated by the project", has said, "The IFC and the project developers knew about these risks in advance but nevertheless chose to recklessly push forward with the project without proper protections in place."

Text of the communiqué:

In a historic 7-1 decision, the US Supreme Court has decided in Jam v International Finance Corporation (IFC) that international organizations like the World Bank Group can be sued in US courts.The Court’s decision marks a defining moment for the IFC – the arm of the World Bank Group that lends to the private sector. 
For years, the IFC has operated as if it were “above the law,” at times pursuing reckless lending projects that inflicted serious human rights abuses on local communities, and then leaving the communities to fend for themselves.
International organizations like the IFC have long claimed they are entitled to “absolute” immunity, even as they engage in commercial activities, like the coal-fired power plant at the heart of this case. Because the relevant statute only gives the IFC the same immunity as foreign governments, and foreign governments do not have absolute immunity in US courts when they engage in commercial activities, the Supreme Court rejected this position: “The International Finance Corporation is therefore not absolutely immune from suit.”
The case involves an IFC-financed power plant in Mundra, Gujarat. The plaintiffs are members of local fishing and farming communities whose livelihoods, air quality, and drinking water have been devastated by the project. They alleged that the IFC and the project developers knew about these risks in advance but nevertheless chose to recklessly push forward with the project without proper protections in place.
The complainants originally tried to raise their concerns through the Compliance Advisor Ombudsman (CAO), the IFC’s internal grievance mechanism, but when the IFC’s leadership ignored the grievance body’s conclusions, they reluctantly filed suit in the United States as a last resort. The EarthRights International represented the villagers, along with the Stanford Law School Supreme Court Litigation Clinic.
The IFC is headquartered in Washington, DC, along with the rest of the World Bank Group, because the US government is by far the largest shareholder in these organizations. The US government has long supported the villagers’ interpretation of the law: that international organizations can be sued for their commercial activities or for causing injuries in the United States. The US Departments of Justice and State submitted an amicus curiae brief in support of the plaintiffs’ position, as did members of Congress from both parties.
The IFC argued that allowing it to be sued would be disastrous, but the Supreme Court, in an opinion by Chief Justice John Roberts, found these concerns to be “inflated.” The Court noted that, unlike many international organizations, the IFC’s founding members did not grant the organization absolute immunity in its charter.
The case is Docket No 17-1011. Justice Brett Kavanaugh recused himself, because he was on the US Court of Appeals for the DC Circuit when the case was heard there. Justice Stephen Breyer was the sole dissenter, arguing that a “broad exposure to liability” for international organizations runs counter to Congress’ original purpose in providing immunity.
Now that the Supreme Court has established that the World Bank Group can be sued, the case will return to the lower courts for further litigation.
Another case against the IFC is also expected to proceed in the U.S. District Court for the State of Delaware. The case, Juana Doe et al vs IFC, involves IFC projects that have been linked to murders, torture, and other violence by paramilitary groups and death squads in Honduras. EarthRights International represents the plaintiffs, whose identities are kept anonymous to protect them from retaliation.
Statements
  • “We are extremely happy with the decision of the Supreme Court of US. This is a huge victory for the people of Mundra in particular and other places in general, where World Bank’s faulty investments are wrecking communities and the environment. This is a major step towards holding World Bank accountable for the negative impacts their investments are causing.” – Dr Bharat Patel, General Secretary, Machimar Adhikar Sangharsh Sangathan, one of the plaintiffs in the case
  • “We are delighted with this judgment. This is a victory of all who have fought for a more accountable World Bank since the past many decades world over and has fought valiant struggles against Bank-funded projects on the ground, exposing the monumental human and environmental costs of their lending. This judgment will strengthen communities’ efforts to hold the Bank accountable and is a step in the direction of bringing accountability in financial institutions.” – Joe Athialy, Executive Director, Centre for Financial Accountability, New Delhi
  • “Immunity from all legal accountability does not further the development goals of international organizations. It simply leads them to be careless, which is what happened here. Just like every other institution, from governments to corporations, the possibility of accountability will encourage these organizations to protect people and the environment.” – Marco Simons, General Counsel, EarthRights International
  • “The commercial activities of international organizations such as the IFC can have a significant impact on the lives of Americans and others around the world. We welcome today’s decision.” – Prof. Jeffrey Fisher, Co-Director, Stanford Law School Supreme Court Litigation Clinic
Background
From the start, the IFC recognized that the Tata Mundra coal-fired power plant was a high-risk project that could have significant adverse impacts on local communities and their environment. Despite knowing the risks, the IFC provided a critical $450 million loan in 2008, enabling the project’s construction and giving the IFC immense influence over project design and operation. Yet the IFC failed to take reasonable steps to prevent the harms it predicted and failed to ensure that the project abided by the environmental and social conditions of IFC involvement.
As predicted, the plant has caused significant harm to the communities living in its shadow. Construction of the plant destroyed vital sources of water used for drinking and irrigation. Coal ash has contaminated crops and fish laid out to dry, air pollutants are at levels dangerous to human health, and there has already been a rise in respiratory problems.
The enormous quantity of thermal pollution – hot water released from the plant – has destroyed the local marine environment and the fish populations that fisherfolk like Mr Budha Ismail Jam rely on to support their families. Although a 2015 law required all plants to install cooling towers to minimize thermal pollution by the end of 2017, the Tata plant has failed to do so.
A nine-mile-long coal conveyor belt, which transports coal from the port to the Plant, runs next to local villages and near fishing grounds. Coal dust from the conveyor and fly ash from the plant frequently contaminate drying fish, reducing their value, damage agricultural production, and cover homes and property.
Some air pollutants, including particulate matter, are already present at levels dangerous to human health, in violation of Indian air quality standards and the conditions of IFC funding, and respiratory problems, especially among children and the elderly, are on the rise.
The IFC’s own internal compliance mechanism, the Compliance Advisor Ombudsman (CAO), issued a scathing report in 2013 confirming that the IFC had failed to ensure the Tata Mundra project complied with the environmental and social conditions of the IFC’s loan at virtually every stage of the project and calling for the IFC to take remedial action.
IFC’s management responded to the CAO by rejecting most of its findings and ignoring others. In a follow-up report in early 2017, the CAO observed that the IFC remained out of compliance and had failed to take any meaningful steps to remedy the situation.
The harms suffered by the plaintiffs are all the more regrettable because the project made no economic sense from the beginning. In 2017, in fact, Tata Power began trying to unload a majority of its shares in the project for one rupee (a few cents) because of the losses it has suffered and will suffer going forward. At the moment, the plant is operating at only one-fifth capacity in part because India has an oversupply of electricity.

Comments

TRENDING

Allow international human rights observers, media to access Kashmir: US lawmakers

Counterview Desk
In a letter to US Secretary of State Mike Pompeo, two members of the American Congress, Pramila Jayapal and James McGovern, raising "significant concerns" about what they call "humanitarian and human rights crisis in Jammu & Kashmir”, quoting "credible reports" from journalists and advocates on the ground" have said that "the Indian government has detained thousands of people with no recourse, imposed de facto curfews on residents' and cut off internet and telephone access in the region.”

Rescind Gates Foundation award to Modi, demand three Nobel Peace laureates

Counterview Desk
In a major boost to those opposing the award to the Gates Foundation’s proposed to be awarded to Prime Minister Narendra Modi for his Swacch Bharat Abhiyan, three Nobel Peace Prize laureates, Mairead Maguire (1976), Tawakkol Abdel-Salam Karman (2011) and Shirin Ebadi (2003), have in an open letter called upon Milinda and Bill Gates to withdraw their decision, stating Modi is allegedly involved in human rights violations.

Gujarat's incomplete canals: Narmada dam filled up, yet benefits 'won't reach' farmers

By Our Representative
Even as the Gujarat government is making all out efforts to fill up the Sardar Sarovar dam on Narmada river up to the full reservoir level (FRL), a senior farmer rights leader has said the huge reservoir, as of today, remains a “mirage for the farmers of Gujarat”.
In a statement, Sagar Rabari of the Khedut Ekta Manch (KEM), has said that though the dam’s reservoir is being filled up, the canal network remains complete. Quoting latest government figures, he says, meanwhile, the command area of the dam has been reduced from 18,45,000 hectares (ha) to 17,92,000 ha.
“According to the website of the Sardar Sarovar Narmada Nigam Ltd, which was last updated on Friday, while the main canal, of 458 km long, has been completed, 144 km of ranch canals out of the proposed length of 2731 km remain incomplete.
Then, as against the targeted 4,569 km distributaries, 4,347 km have been constructed, suggesting work for 222 km is still pending. And of the 15,670 km of minor canal…

Now clampdown on rally, arrest of pro-freedom activists in Pak-occupied Kashmir

Counterview Desk
In a fresh evidence, international human rights organizations are not just confining their attention on the Indian state of Jammu & Kashmir (J&K), whose special status was taken away by the Government of India in early August, leading to an unprecedented clampdown on the region. They have simultaneously begun focusing on the Pakistan-occupied Kashmir (PoK), where the situation is said to be worsening.
Thus, the International Human Rights Council ((IHRC) Hong Kong (HK), a top human rights organisation, said to be working towards to the promotion peace, equality, fundamental rights and social justice “as enunciated in the UN Human Rights Charter and other instruments of human rights”, has noted now a new wave of independence movement has struck PoK.  With offices in US, UK, Switzerland and Hong Kong, and having Kirity Roy and Lenin Raghuvanshi as IHRC office bearers from India, in a statement, it has claimed that on September 7 one of the biggest pro-Independenc…

Ceramic worker dies: 20,000 workers in Thangadh, Gujarat, 'risk' deadly silicosis

By Our Representative
Even as the country was busy preparing for the Janmashtami festival on Saturday, Hareshbhai, a 46-year-old ceramic worker from suffering from the fatal lung disease silicosis, passed away. He worked in a ceramic unit in Thangadh in Surendranagar district of Gujarat from 2000 to 2016.
Hareshbhai was diagnosed with the disease by the GCS Medical College, Naroda Road, Ahmedabad in 2014. He was found to be suffering from progressive massive fibrosis. He is left behind by his wife Rekha sister and two sons Deepak (18) and Umesh (12),
The death of Hareshbhai, says Jagdish Patel of the health rights group Peoples Training and Research Centre (PTRC), suggests that silicosis, an occupational disease, can be prevented but not cured, and the Factory Act has sufficient provisions to prevent this.
According to Patel, the pottery industry in the industrial town of Thangadh has evolved for a long time and locals as well as migrant workers are employed here. There are abou…

Bullet train impact report Japan agency property: Govt of India tells Gujarat NGO

The National High Speed Rail Corporation Limited (NHSRCL) has told Gujarat-based environmental organization, Paryavaran Suraksha Samiti (PSS) that the detailed report of Japanese International Cooperation Agency (JICA) representatives on their visit to Gujarat and Maharashtra assess the impact of the Mumbai-Ahmedabad bullet train project on farmers is not its property, but that of JICA.

NHSRCL letter to PSS, signed by activists Rohit Prajapati, Krishnakant and Swati Desai, comes following the latter’s request to it on June 10 for the report. PSS was one of the NGOs that represented JICA on the project, saying, if implemented, it would adversely impact farmers, even as pointing towards the fact that the project itself is unviable and Indian Railways needs to invest, instead, more on upgrading the present railway infrastructure.
Following the NHSRCL reply, PSS has shot a second letter to JICA, insisting that the latter should share a copy of the report, even as providing details of the …

Karma tribal festival an occasional to campaign for tribal rights: IPMSDL

By Our Representative
The International Indigenous Peoples Movement for Self Determination and Liberation (IPMSDL), in a solidarity statement has suggested that the current Karam festival of Central India -- which seeks to promote sisterhood, friendship, cultural unity, and closer link to nature -- should be the occasion to campaign against alleged efforts to violently drive away forest dwelling communities from their forest homes.
"Millions are threatened to lose lands and livelihood under the implementation of Forest Rights Act (FRA) of 2006", the statement States, adding, "As corporate interests continues to enter tribal territories and extract profit from its natural resources, indigenous people are pushed to further marginalization and discrimination."
Asserting that indigenous movement in India "remains steadfast in keeping their culture, deeply linked to their lands alive by carrying out their heritage and struggles", IPMSDL, even as extending "…

Report on "torture" in Kashmir jails: 44% detainees stripped naked, 29% electrocuted

Counterview Desk
A recent report titled “Torture: Indian State’s Instrument of Control in Indian-administered Jammu & Kashmir”, published by the Association of Parents of Disappeared Persons (APDP), has claimed to build “on the body of human rights documentation on torture” in Jammu and Kashmir (J&K) through an examination of 432 case studies. It seeks to focus on "the trends and patterns, targets, perpetrators, contexts and impact of torture" in the state.

Amidst Modi celebrations, thousands protest 'massive' submergence in Narmada Valley

By Our Representative
Thousands of women and men gathered on at the Shaheed Stambh in Badwani, Madhya Pradesh, to raise their voice against what they called "the destruction of the Narmada Valley", protesting against Prime Minister Narendra Modi and Gujarat BJP rulers for celebrating the Sardar Sarovar dam being filled up to the full reservoir level (FRL) on September 17, which also happens to be Modi's birthday.
Calling it a black day for the people of the Valley, whose villages and farms got submerged because of highest-ever water level having been achieved in the dam, the Narmada Bachao Andolan (NBA), which organised the parallel rally across the border with Gujarat, regretted in a statement that Modi's celebration at the dam took place amidst " martyrdom of the Valley".
The demonstration in Badwani was preceded by a vehicles rally, which took rounds of the city streets. They were joined by people from several villages of Dhar district. They gather…

Narmada valley: SC notice to Gujarat, MP, M'rashtra on submergence sans rehabilitation

By Our Representative
Thr Supreme Court has issued notice to Gujarat, Madhya Pradesh and Maharashtra governments following a Narmada Bachao Andolan (NBA)-backed petition seeking the explanation as to whether large areas of Narmada Valley have gone into submergence by filling up the Sardar Sarovar dam up to the full reservoir level (FRL) without rehabilitating the project affected families (PAFs).