The Mundra residents hope the US top court will allow them to sue the World Bank’s IFC, which partly funded Tata Group’s thermal power project.

NEW DELHI–Villagers fighting against a controversial Tata Group thermal power plant in Mundra in Gujarat are looking to the US Supreme Court to decide whether they can sue the World Bank’s lending arm for funding the project.

The group’s extraordinary petition against the International Finance Corporation (IFC) was heard last week in Washington and is expected to be decided in the near future.

“The hearing went well. We got 15 minutes to argue and the US government, which is supporting our contention, 15 minutes. The IFC was given 30 minutes to make its arguments as well. It was very systematic. We are hopeful,” said Bharat Patel, general secretary of the Machimar Adhikar Sangharsh Sangathan, a fish workers’ rights organisation based in Mundra taluka of the Kutch district. He said about 10,000 residents of Mundra who live near the coast have been adversely impacted by the plant.

While relatively powerless villagers trying to take on giant corporations eyeing their land is not an uncommon scenario in India, two things set this case apart: one, the affected community has taken a global finance corporation to a US court, and two, the notoriously pro-business Donald Trump administration has thrown its weight behind the petitioners.

Patel’s organisation is one of the six petitioners in the case. The remaining five are fish workers and farmers who live near the contentious power plant in Mundra. Their petition has sought to sue the IFC for partly funding, through a loan of $450 million, the Tata Group’s project, which allegedly “did not comply” with the corporation’s environmental and social action plan designed to protect the surrounding communities. Though it is not a party to the case in the US, the Tata Group has denied the accusations against its crucial Ultra Mega Power Project, which is capable of producing over 4,000 megawatts (MW) of power.

The notoriously pro-business Donald Trump administration has thrown its weight behind the petitioners

HuffPost India has reviewed a copy of the petition, which claims that the project has “devastated” the local environment and way of life of the people in the area. Locals, says the petition, are no longer able to get fresh water because the plant’s construction caused “saltwater intrusion into the groundwater”. Further, it asserts that “the plant’s cooling system discharges thermal pollution into the sea, killing off marine life”, which the fishers depend upon for their incomes and other residents for their nourishment. It also states that “coal dust and ash” are contaminating the surrounding land and air since they are released from a conveyor system that is used to transport coal to the plant.

The IFC has disputed these claims and even argued against the Mundra residents’ right to sue the corporation in US courts by stating that it enjoys immunity under American law.

The US Supreme Court now has to decide if the country’s law gives the IFC immunity from being sued.

Patel, who attended the 31 October hearing in Washington DC, said that he thought the US Supreme Court was taking the time to consider the case in a systematic manner, something he has not seen often in India.

Unlike in India, where a heavy workload and paucity of judges can mean delays of years or even decades, the US Supreme Court only takes up around 100-150 cases each year.

Along with Patel at the hearing was Joe Athialy, executive director of the New Delhi-based Centre for Financial Accountability, who has assisted Patel in his fight. He said that a verdict in favour of the Mundra residents could make “international agencies which fund development projects much more responsible” and give an opportunity to people affected by the project to hold them accountable if necessary.

Athialy’s view is based on his experience of observing many international development finance organisations. In this case, too, he has closely watched the IFC’s processes of dealing with people’s grievances.

In 2011, Athialy helped Patel file a complaint with the Compliance Advisor Ombudsman (CAO) about the project. CAO, the official and independent recourse mechanism for the IFC, looks into complaints from communities that have been adversely affected by the projects it has funded. The CAO’s investigations following the 2011 complaint have been critical of the IFC and the project. The petition filed by Patel and others in the US Supreme Court has also quoted parts of the CAO’s findings, which states that the IFC had done “inadequate supervision of the project”. It further says that the environmental and social action plan of the IFC was not complied with, both during the plant’s construction and operation phases. Yet the IFC did not take any steps to address the situation.

Since the CAO’s probes did not help his cause, Patel tried to impress upon World Bank officials about the need to intervene. In mid-2014, when he visited the World Bank office, he met two Executive Directors who promised that they would take up his concerns to the board but nothing came of it.

It was during this visit that Patel met a member of the EarthRights International (ERI), a US based non-profit, who told him that he could sue the IFC in an American court, since it was based in Washington. Subsequently, two members of the ERI visited Mundra to find out more about the issue and sign an agreement for legal representation of the community in US courts.

Some NGOs and experts have also filed an amicus brief in the US Supreme Court, arguing that the lower courts’ upholding of IFC’s claim to absolute immunity puts it “above the law”.

In 2015, they sued the IFC in the US District Court for the District of Columbia on behalf of the Mundra residents. The IFC responded saying the case had to be dropped since it enjoyed immunity from such legal action, among other grounds. The district court ruled in the IFC’s favour, and an appeal in a higher court also met the same fate. In January 2018, the petitioners filed an appeal in the US Supreme Court, which agreed to hear it in May 2018. A formal hearing was conducted on 31 October and the court is expected to pronounce its judgement anytime between December 2018 and June 2019.

Some NGOs and experts have also filed an amicus brief in the US Supreme Court, arguing that the lower courts’ upholding of IFC’s claim to absolute immunity puts it “above the law”.

But the Mundra activists are not pinning their hopes only on the US Supreme Court. Patel has filed a complaint against the plant with the Gujarat Pollution Control Board as well, which led in a show cause notice to the Tata Group company running the thermal project.

“Let’s see what result comes from the courts there, if it is not favourable, we may approach courts here as well,” said Patel.

The article, first published on the Huffington Post, can be accessed here.

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