The Centre for Financial Accountability (CFA) has accused the Compliance Advisor Ombudsman (CAO), the accountability arm of the International Finance Corporation (IFC), of concealing crucial evidence related to the Tata Mundra coal power project in Gujarat during the period when the case was being heard in U.S. courts. In a press statement released on October 10, 2025, CFA said that the CAO’s final monitoring report, which was completed in 2019 but released only in September 2025, revealed that IFC had failed to take remedial action for years, even as environmental and livelihood harms to local communities worsened.
The statement noted that the delayed publication of the report had significant consequences. While the report confirmed IFC’s continued non-compliance, affected fisherfolk and farmers were simultaneously pursuing a case against IFC in U.S. courts, arguing that the institution should not enjoy absolute immunity when its projects cause harm. The U.S. Supreme Court declined to review the case in 2022, a decision that, according to CFA, might have been different had the CAO’s findings been available earlier. “By withholding the report, IFC effectively denied communities a fair hearing and obstructed access to justice,” the statement said.
Fourteen years after fisherfolk from Gujarat first approached the World Bank Group seeking justice, the CAO closed the Tata Mundra case in September 2025, despite confirming that environmental, social, and livelihood damages remain unresolved. Local communities continue to face the loss of livelihoods, degradation of water quality, rising pollution, and damage to marine life. The fisherfolk and farmers allege that the project, instead of bringing “development,” has left them in deeper distress, with no accountability from IFC or Tata Power, the project operator.
The IFC had invested USD 450 million in 2008 in the 4,150 MW Tata Mundra coal-fired power project, operated by Coastal Gujarat Power Limited (CGPL), a Tata Group subsidiary. Soon after construction began, local residents began reporting large-scale environmental and social impacts, including habitat destruction, pollution, and declining fish stocks. In 2011, the Machimar Adhikar Sangharsh Sangathan (MASS) filed the first complaint to the CAO, followed by another in 2016 from residents of Tragadi village. A CAO compliance audit in 2013 found IFC non-compliant with its environmental and social standards, citing failures in identifying and consulting affected people, assessing impacts, and monitoring the project.
In response, IFC promised further studies and an action plan, but these studies were never shared with affected communities, and no remedial measures were implemented. The 2025 monitoring report found that conditions had worsened since the original complaints, noting that fish stocks had collapsed, groundwater remained saline, and coastal erosion had intensified. Field data showed that fish populations in the Gulf of Kutch had declined by 80% for Bombay Duck and 70% for Anchovy, while high-value species such as lobster and sea bass had nearly disappeared.
Despite this evidence, the CAO closed the case, stating that closure was “procedurally justified” as CGPL had repaid IFC’s loan in 2018, ending their commercial relationship. The CAO admitted that while adverse impacts were “likely attributable” to the IFC-financed project, it was unlikely that IFC would ever act to complete its 2013 action plan or address the violations. Critics argue this allowed both IFC and Tata Power to walk away from the project without accountability, leaving behind devastated communities.
The CFA pointed out that IFC’s inaction was evident as early as 2015 and 2017, when CAO’s earlier monitoring cycles had already noted the lack of remedial steps. Even when IFC retained authority until 2018, no meaningful measures were taken. CFA said that IFC’s claim that nothing could now be done because the loan had been repaid “ignores the reality that nothing was done when IFC had both the authority and responsibility to act.”
Adding to the controversy, IFC has since expanded its financial ties with the Tata Group. In 2023, IFC financed a sustainability-linked bond by Tata Cleantech Capital; in 2024, it supported Tata Housing projects; and in 2025, it reported profits from its equity in Tata Capital. CFA said this shows the weakness of IFC’s accountability framework, which limits responsibility to the duration of financial engagement, while communities continue to face harm.
CFA also questioned IFC’s credibility in light of its 2023 “Remedial Action Framework,” launched under the World Bank’s “One World Bank Group” initiative, which promised stronger prevention, preparedness, and access to remedy. “Its conduct in Mundra shows the opposite: no prevention, no preparedness, and no remedy,” the statement said.
Bharat Patel, General Secretary of the Machimar Adhikar Sangharsh Sangathan, said, “We are shocked that CAO let IFC go easily despite doing nothing to address the serious social and environmental problems it created with its investments in Tata Mundra. We trusted CAO to ensure that IFC would act on its findings. This will be a lesson for other communities seeking redress.”
Joe Athialy of the Centre for Financial Accountability added, “Tata Mundra was a test case for IFC at a time when its Performance Standards and the One World Bank Group strategy were under review. By ignoring CAO’s findings for 14 years, IFC and the World Bank Group have shown that what they are doing is a whitewash and that they do not mean anything good for people or the planet.”
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