IFC’s kettle of fish

It is extremely gratifying that the carte blanche the Bretton Woods twins and their arms seemingly possess, has been questioned by the United States Supreme Court that in a landmark judgment ruled in favour of Indian fisherfolk from Mundra, in Jam et al. v. International Finance Corp., No. 17-1011. The Navinal Panchayat fisherfolk, their livelihood and environment devastated by the coalfired Tata Mundra Power Plant, having failed to get relief from Indian authorities, had taken the International Finance Corporation (IFC), to the Washington DC federal court in 2015 for “negligence, nuisance, trespass and breach of contract”, seeking damages and injunctive relief from IFC, which had had provided a $450-million loan to Coastal Gujarat Power Limited (GCPL) in 2008. ‘Development’ under the Gujarat model brooks no opposition, especially not when the financier has a towering stature like IFC which funds “private-sector development projects in poor and developing countries”. Indeed, such global lenders have been accused of their missionary zeal getting the better of good sense, driving them ignore the havoc caused for the absolutely poor in the regions they are ‘developing’, even disregarding the terms of the agreement or turning a blind eye to environmental violations. GCPL was committed to complying with an environmental and social action plan to protect areas around the plant and IFC was obliged to keep an eye on proceedings, with the power to revoke financial support in case of violations. The IFC plea for absolute immunity from the suit under the International Organizations Immunities Act of 1945 (IOIA) that grants bodies like itself the “same immunity from suit” as is “enjoyed by foreign governments” secured for it a favourable decision in 2016 but EarthRights International, an advocacy group representing the plaintiffs, swung things in their favour when, in a recent 7:1 decision, the US Supreme Court ruled that the IFC was entitled only to limited or “restrictive” immunity that foreign governments enjoy, invalidating its claim for absolute immunity. IFC’s case was further compromised by its failure to intervene even when the internal audit report confirmed non-compliance with the action plan and commented adversely about the IFC’s inadequate supervision. The travails of these fisherfolk, led by Budha Ismail Jam, were reported internationally though with scant coverage in India, despite documentary evidence that coal dust, ash and water from the plant’s cooling system had destroyed or contaminated much of the surrounding air, land and water. Indeed, the IFC’s cynical case was that such suits would expose international organisations to money damages, render such projects expensive and cumbersome and “bring a flood of foreign-plaintiff litigation into the U.S. courts…” while not denying the charges of ecological damage that the Mundra plant had caused. Apart from a stunning victory for the fisherfolk, this decision may well be a landmark one vis-à-vis far worse violations.