Press Statement | 10.10.2025
Kutch, Gujarat: The Compliance Advisor Ombudsman (CAO) concealed crucial evidence of International Finance Corporation’s (IFC) failure to take remedial action in the case of Tata Mundra from US Supreme Court, the latest CAO Monitoring report reveals.
The final CAO monitoring report, which was completed in 2019 but released only in September 2025, confirmed a pattern of neglect, finding that IFC had done virtually nothing in eight years to remedy harm and that environmental and livelihood impacts had worsened. The delay in publication was particularly consequential: during those very years, affected communities were pursuing a case against IFC in U.S. courts, arguing that the institution should not enjoy absolute immunity when its actions cause harm. The case was dismissed in 2021, and the U.S Supreme Court declined to review it in 2022 – had the CAO’s findings been released to the public, they could have served as crucial evidence, showing that IFC remained non-compliant and inactive in taking corrective action. By withholding the report, IFC effectively denied communities a fair hearing and obstructed access to justice.
Fourteen years after fisherfolk from Gujarat first took their fight for justice to the doors of the World Bank Group, The Bank again failed to deliver any relief to the communities. The CAO, the accountability arm of the IFC in September 2025 formally closed the case on IFC’s investment in the Tata Mundra coal power project, despite confirming that the environmental, livelihood and social harms continue unresolved.
This is despite the fisherfolk and farmers having lost livelihoods, while rising pollution endangers health, water, and marine life. Despite repeated appeals, accountability has been denied, leaving people to suffer the costs of a project that was meant to bring “development.”
A Long Battle for Accountability
In 2008, the IFC invested USD 450 million in the 4,150 MW coal-fired Tata Mundra power project in Gujarat, operated by Coastal Gujarat Power Limited (CGPL), a subsidiary of the Tata Group. Not long after construction began, fisherfolk and local residents began reporting widespread harm including the destruction of natural habitats, increasing water and air pollution, and livelihood and social impacts due to decreasing fish stocks and loss of access to traditional commons.
In 2011, the Machimar Adhikar Sangharsh Sangathan (MASS) filed the first complaint to CAO on behalf of affected fisherfolk, followed by a second complaint in 2016 from Tragadi village residents. Under its accountability mechanism, the CAO undertook a compliance audit in 2013 and found that IFC was non-compliant with several of its own environmental and social standards – including failures to identify and consult affected people, properly assess environmental and social impacts, as well as failure to effectively supervise and monitor the client.
In response, IFC promised more studies, something which they should have done before approving the project and masquerading as a remedial Action Plan. Neither the studies were ever shared with the people, nor any remedial action was taken based on the studies IFC might have commissioned. When the final monitoring report was finally released in September 2025, it found that the negative impacts had only worsened since the complaints were filed and that IFC had taken no meaningful steps to address them.
The 2025 field visit by CAO, carried out before closing the case, reaffirmed what communities have been saying for years: little has changed. Fish stocks have collapsed, groundwater remains saline, coastal erosion has worsened, crops continue to fail, and fisherfolk are still excluded from their traditional drying grounds at Tragadi and Kotadi. According to data collected by local cooperatives, fish populations in the Gulf of Kutch have plummeted by 80% for Bombay Duck and 70% for Anchovy, while high-value species such as lobster and sea bass have nearly disappeared.
Despite this evidence, the CAO formally closed the case, stating that closure was “procedurally justified” since CGPL had fully repaid IFC’s loan in 2018, ending their commercial relationship. While acknowledging that the adverse and continuing impacts were “likely attributable to the IFC-financed project,” the CAO admitted that after such a long lapse of engagement, it was unlikely IFC would ever act to complete its 2013 Action Plan or remedy the violations. In effect, both IFC and Tata Power have walked away from the project, leaving behind a trail of unaddressed harm and communities who continue to bear the costs of their inaction.
Justice Delayed, then Denied
Across the first two CAO monitoring cycles in 2015 and 2017, it was already clear that IFC had taken no remedial action to address the violations identified in its 2013 audit. Until 2018, when CGPL repaid its loan, IFC remained fully obligated to ensure that its client implemented corrective measures. To now claim that nothing can be done because the loan has been repaid ignores the reality that nothing was ever done when IFC had both the authority and the responsibility to act.
Even more troubling, after walking away from the Mundra project, IFC has continued to deepen its relationship with the Tata Group. In 2023, IFC financed a “sustainability-linked bond” by Tata Cleantech Capital, in 2024, it extended support to Tata Housing projects and in 2025, it reported profits from its equity position in Tata Capital. The juxtaposition of these fresh investments with the unresolved legacies of harm in Mundra underscores not only the structural weakness of IFC’s accountability system, which limits responsibility to the tenure of financial leverage, but also a willingness to continue partnering with repeat corporate actors while communities remain without remedy.
This case is not just about one project, it exposes a systemic failure in how international financial institutions handle accountability. The IFC’s much-publicised Remedial Action Framework, launched in 2023 under its ‘One World Bank Group’ initiative, claims to prioritise prevention, preparedness, and access to remedy. Yet, its conduct in Mundra shows the opposite: no prevention, no preparedness, and no remedy.
Quotes
“We are shocked that CAO let go IFC easily despite doing nothing to address the serious social and environmental problems it created with its investments in Tata Mundra, and as reported by CAO multiple times. We trusted the CAO that it will make sure that IFC will act on its findings. This will be a lesson for other communities considering going to the CAO for redress,” Bharat Patel, General Secretary of Machimar Adhikaar Sangharsh Sanghatan (Association for the Struggle for Fishworkers’ Rights) said.
“Tata Mundra was a test case for IFC at a time when IFC is embarking on a process of the review of Performance Standards and when the One World Bank Group strategy is advanced and the IFC’s Approach to Remedial Action is under discussion. This could have been a case to demonstrate IFC’s and World Bank Group’s (WBG) intent and commitment by taking appropriate actions. By not taking any action and ignoring CAO’s findings for 14 years, IFC and WBG established that what they are doing is a whitewash and they do not mean anything good for people or the planet,” Joe Athialy of Centre for Financial Accountability said.
A detailed Summary of the CAO report and a Critique is available.
Contact:
Bharat Patel: +91 94264 69803 – bharatp1977@gmail.com
Joe Athialy: +91 98711 53775 – joe@cenfa.org
