On Monday, the US Supreme Court agreed to hear a lawsuit by farmers and fishermen in western India against a World Bank agency, which financed a power plant they blame for damaging the environment and their livelihoods. The case is about the IFC’s decision in 2008 to provide $450 million in loans for a coal-fired plant operated by a Tata Power unit near Mundra, in Gujarat.
For the first time ever, the court must now consider whether international organizations, such as the International Finance Corp (IFC), are immune from such suits under federal law, according to the advocacy group EarthRights International (ERI), which is representing the plaintiffs.
Although the IFC loans include provisions requiring that certain environmental standards will be met, the submission by the local residents reads that the 4,000 megawatt plant -destined to provide cheap energy and generate jobs – has had a “devastating and irreversible impact” on the coastal ecosystem: Coal ash damages crops, water for drinking and irrigation have been contaminated, while thermal pollution – hot water released from the plant – has also destroyed the local marine environment and the fish populations.
According to Reuters, lead plaintiff Budha Ismail Jam and others sued in federal court in Washington in 2015, saying the IFC had failed to meet its obligations, but a district court in 2016 and the US Court of Appeals for the District of Columbia Circuit in 2017 ruled that the lawsuit was barred, as the IFC is immune from such litigation under a 1945 law.
The question before the Supreme Court now is whether there are limits to immunity for entities like the IFC under the 1945 International Organizations Immunity Act. The court is expected to decide the case in its next term, due for October. Budha Ismail Jam, Plaintiff, said:
We are happy that our voices will finally be heard. We hope this will help us seek justice for our losses.
