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US court dismisses Kutch fisherfolks' lawsuit against IFC funding of Tata power plant

By Our Representative
In a major setback to the fisherfolk of Kutch, Gujarat, who have been claiming that their livelihood has been adversely affected by the Tatas' coal-based ultra mega power plant (UMPP) at Mundra, the US District Court of Columbia has given clean chit to the International Finance Corporation (IFC) on the ground that IFC’s "direct involvement" in the Tata Mundra plant did not occur in the US but in India.
Pointing out that the post-approval disbursement of funds could be considered IFC’s failure to ensure proper design, construction, and operation of the plant, the court, however, ruled that mere transfer of funds from the US was not enough to establish “substantial contact” between the US and the complainants.
Fisherfolk Budha Ismail Jam and others filed suit in the US stating that IFC failed to look into destruction of livelihood while funding the project to the tune of $450 million out of tits total cost, $4.14 billion. The Earth Rights International (ERI), a US-based non-governmental, nonprofit organization, specializing in legal actions against perpetrators of earth rights abuses, had taken up the case on behalf of Kutch fisherfolk.
Suggesting that allegations of harm to the fisherfolk were "abstract" in nature as these did not happen in the United States, the court said, even if one accepted that all the allegations were true, the complainant could not established that the lawsuit was “based upon” conduct “carried on” in the US.
In fact, the court argued, the allegation that IFC had failed to ensure the plant was designed, constructed and operated with due care so as not to harm the local community's property, health, and way of life has not been established as having been carried on in the US; "instead, it was focused in India, where the plant is and the harms occurred", it insisted.
The lawsuit had sought to argue that IFC, private arm of the World Bank, was responsible for livelihood loss of Kutch fisherfolk by funding the Tata Mundra project
Given this framework, the court concluded that "the lawsuit does not fall within the Foreign Sovereign Immunities Act's (FSIA’s) commercial activity exception because the suit is not, at its core, based upon activity — commercial or otherwise — carried on or performed in the United States."
"Accordingly", the court ruling, signed by district court judge John D Bates, said, "IFC is immune from suit, and this Court will grant IFC’s motion to dismiss for lack of subject matter jurisdiction." A separate order will be issued on this date.
The lawsuit had sought to argue that IFC, which is the private arm of the World Bank, was "liable for property damage, environmental destruction, loss of livelihood, and threats to human health arising from the construction and operation of the coal-fired Tata Mundra Power Plant in Gujarat, India."
The court previously dismissed the suit arguing that IFC enjoyed absolute immunity under the International Organizations Immunities Act (IOIA). This led the complainants to approach the US Supreme Court, which reversed and remanded the case, holding that international organizations did not enjoy absolute immunity; instead, they enjoyed immunity enjoyed by foreign governments under FSIA.
Back to the Columbia district court, IFC sought to dismiss the complaint, arguing that IFC was immune from suit "even under the more limited immunity granted to foreign governments under the FSIA."
While the complainants countered that IFC was not immune because the suit fell under FSIA’s commercial activity exception, the court rejected it, saying, this did not apply here because the complainants had failed to establish that their suit was based upon conduct carried on in the United States.

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