On February 27, 2019, the US Supreme Court in a 7-1 decision ruled that international organisations like the International Finance Corporation (IFC), a private-lending arm of the World Bank Group, do not enjoy absolute immunity as they indulge in the commercial activities.
The case pertains to the 4,000 MW Tata Mundra Ultra Mega Power Plant, in which IFC invested Rs 1800 crore rupees in 2008. While doing that, the IFC itself classified this project as a category A project with potentially significant adverse social and environmental impacts that may be diverse or irreversible. In 2011, the villagers affected by the project approached Compliance Advisor/Ombudsman (CAO), IFC’sgrievance redressal mechanism, to complain about the various environmental and social impacts on fishing communities. Some of the specific issues raised were related to the deterioration of water quality and fish population, blocked access to fishing and drying sites, forced displacement of fishermen; community health impacts due to air emissions, and destruction of natural habitats, particularly mangroves. In its report, the CAO observed that IFC failed to ensure an honest environmental and social assessment; IFC’s inadequate attention to the requirement of biodiversity conservation; and serious lapses in IFC’s review and supervision. The IFC responded to CAO by brushing aside its findings and defend the Tata-Power-owned Coastal Gujarat Power Limited, the operator of the thermal power plant.
It is in this context the Buddha Jam and other villagers, who part of Machimar Adhikar Sangharsh Sangathan and the Navinal Panchayat, with the help from the Earth Rights International — a nongovernmental and nonprofit organisation which takes pro-bono takes up the cases related to human rights and the environment— filed a suit against the IFC in federal court in Washington, D.C. to seek damages for the loss of their livelihood; destruction of their land and water resources; and adverse impacts on the health. The lower court and the federal court rejected the case on the basis that IFC, the private lending arm of the World Bank Group, has absolute immunity and thus cannot be sued in the US Courts.
The petitioners approached the US Supreme Court to challenge the inherent bias towards the IFC. The US Supreme Court finally vindicated the stand of the affected community that International Financial Institutions cannot enjoy absolute immunity and could be tried in the Court of Law for their criminal acts. While doing this, the Supreme Court also reversed the judgment of the United States Court of Appeals for the D. C. Circuit and opened the suit for further proceeding.
More about the case: https://www.cenfa.org/projects-in-focus/tata-mundra-ultra-mega-project/