[WSMDiscuss] Fwd: Gujarat Fishermen’s Landmark Victory in US Supreme Court Goes Unreported in Indian Media

Ashish Kothari chikikothari at gmail.com
Tue Apr 2 17:47:37 CEST 2019

This judgement may set an important precedence for holding institutions 
like the World Bank accountable for their actions that destroy 
environment and livelihoods.


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Ashish Kothari
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-------- Forwarded Message --------
Subject: 	Gujarat Fishermen’s Landmark Victory in US Supreme Court Goes 
Unreported in Indian Media
Date: 	Tue, 2 Apr 2019 18:55:38 +0530
From: 	Vinay Baindur <yanivbin at gmail.com>
To: 	South Asia MDB Watch <mdbsouthasia at yahoogroups.com>, WBI Crit 
<wbindiacrit at lists.riseup.net>, Coalition for Environmental Justice in 
India <coalition-for-environmental-justice-in-india at googlegroups.com>


  Gujarat Fishermen’s Landmark Victory in US Supreme Court Goes
  Unreported in Indian Media

Local fishermen said a power plant financed by an arm of the World Bank 
led to air, land and water pollution. The group tried to claim absolute 
immunity, but the US Supreme Court did not agree.

Gujarat Fishermen’s Landmark Victory in US Supreme Court Goes Unreported 
in Indian Media

The US Supreme Court. Credit: Reuters/Erin Schaff/File Photo

The Wire Analysis
The Wire Analysis <https://thewire.in/author/the-wire-analysis>
<https://thewire.in/category/world/all>2 HOURS AGO

A landmark legal victory 
<https://www.supremecourt.gov/opinions/18pdf/17-1011_mkhn.pdf> secured 
by Indian fishermen belonging to the Kutch district of Gujarat in the 
United States Supreme Court in the last week February went completely 
unnoticed by the Indian media.

The US Supreme Court, in a 7:1 decision, with one judge abstaining, 
ruled on February 27 that the International Finance Corporation (IFC), 
an arm of the World Bank, financing the construction of a power plant at 
Mundra, Gujarat, is entitled only to limited or “restrictive” immunity 
that foreign governments currently enjoy. Therefore, its claim for 
absolute immunity from suit, filed by local farmers and fishermen 
alleging air, land and water pollution in the surrounding area of the 
plant, is not valid, the court said. The plaintiffs were led by Waghers, 
<https://www.worldpoliticsreview.com/trend-lines/27621/the-u-s-supreme-court-sent-a-wake-up-call-to-development-banks-will-they-listen> a 
group of Muslim fishermen who have been fishing in the Mundra waters for 

Chief Justice John Roberts delivered the opinion of the court, in which 
Justices Thomas, Ginsburg, Alito, Sotomayor, Kagan and Gorsuch joined. 
Justice Breyer filed a dissenting opinion. Justice Kavanaugh, the latest 
appointee to the court, took no part in the consideration or decision of 
the case.

The International Organisations Immunities Act of 1945 (IOIA) grants 
international organisations such as the World Bank and the World Health 
Organisation the “same immunity from suit …as is enjoyed by foreign 
governments”. At the time the IOIA was enacted, foreign governments 
enjoyed virtually absolute immunity from suit. Today, that immunity is 
more limited. Foreign governments are not immune from actions based upon 
certain kinds of commercial activity in which they engage.

The IFC finances private-sector development projects in poor and 
developing countries around the world. About ten years ago, the IFC 
financed the construction of the coal-fired Tata Mundra Power Plant in 
Gujarat, by providing $450 million in loans in 2008 to Coastal Gujarat 
Power Limited. Under the terms of the loan agreement, Coastal Gujarat 
was required to comply with an environmental and social action plan 
designed to protect areas around the plant from damage. The agreement 
allowed the IFC to revoke financial support for the project if Coastal 
Gujarat failed to abide by the terms of the agreement.

Internal audit said plant did not comply with action plan

According to IFC’s internal audit, Coastal Gujarat did not comply with 
the environmental and social action plan in constructing and operating 
the plant. The audit report criticised the IFC for inadequately 
supervising the project.

In 2015, a group of farmers and fishermen who live near the plant, as 
well as a local village, sued the IFC in the United States district 
court for the District of Columbia. They were led by the lead plaintiff, 
Budha Ismail Jam. They claimed that pollution from the plant, such as 
coal dust, ash and water from the plant’s cooling system, had destroyed 
or contaminated much of the surrounding air, land and water. Relying on 
the audit report, they asserted several causes of action against the 
IFC, including negligence, nuisance, trespass and breach of contract.

Also Read: Farmers Protest in Gujarat as Government Starts Taking 
Possession of Land Acquired in 1997 

The district court concluded that the IFC was immune from suit because 
the IOIA grants international organisations the virtually absolute 
immunity that foreign governments enjoyed when the IOIA was enacted.

The IFC argued before the US Supreme Court that affording international 
organisations only restrictive immunity would defeat the purpose of 
granting them immunity in the first place. It would expose international 
organisations to money damages, which would in turn make it more 
difficult and expensive for them to fulfil their missions, it argued. 
“Allowing such suits would bring a flood of foreign-plaintiff litigation 
into the U.S. courts, raising many of the same foreign-relations 
concerns that we identified when considering similar litigation under 
the Alien Tort Statute”, the IFC contended.

Mundra power plant. Credit: Wikipedia

IFC did not deny allegations

Significantly, the IFC did not deny the allegations of environmental 
pollution that the Mundra plant caused to its surroundings.

Disagreeing with this, Justice Roberts opined:

    The IFC’s concerns are inflated. To begin, the privileges and
    immunities accorded by the IOIA are only default rules….Notably, the
    IFC’s own charger does not state that the IFC is absolutely immune
    from suit.

Restrictive immunity hardly means unlimited exposure to suit for 
international organisations, the majority Judges held.

Holding that the IFC is not absolutely immune from suit, they reversed 
the judgment of the US Court of Appeals for the DC Circuit, and remanded 
the case for further proceedings consistent with their opinion.

Petitioners, who included farmers and fishermen from Kutch, Gujarat, 
sued the IFC for damages and injunctive relief in federal district 
court, but the IFC claimed absolute immunity from suit.

The IFC is designated as an international organisation under the IOIA. 
One hundred eight-four countries, including the US, are members of the 
IFC. The IFC is charged with furthering economic development “by 
encouraging the growth of productive private enterprise in member 
countries, particularly in the less developed areas, thus supplementing 
the activities” of  the World Bank.

Whereas the World Bank primarily provides loans and grants to developing 
countries for public-sector projects, the IFC finances private-sector 
development projects that cannot otherwise attract capital on reasonable 

The IFC expects its loan recipients to adhere to a set of performance 
standards designed to avoid, mitigate and manage risks and impacts 
associated with development projects. Those standards are usually more 
stringent than any established by local law. The IFC includes the 
standards in its loan agreements and enforces them through an internal 
review process.

Interestingly, the plaintiffs in the case first approached the IFC’s 
internal grievance mechanism for relief, but in vain.

Writing in /World Politics Review/, Elliot Waldman observes on March 11:

    Whether courts agree that a loan to the Tata Mundra Ultra Mega Power
    Plant project has “sufficient nexus to the United States” is
    unclear, but lawyers for Earthrights International, the advocacy
    group that represented the Indian plaintiffs, believe they have a
    good chance of success. At least one other case, involving farmers
    in Honduras
    <https://earthrights.org/case/juana-doe-et-al-v-ifc/#documentsff69-1a905f26-f4b6> who
    say that an IFC-supported company used death squads to terrorize
    them and dispossess them of their land, is likely to move forward as
    a result of last month’s ruling.

Meanwhile, international lawyers have hinted 
<https://www.devex.com/news/calls-for-stronger-accountability-after-ifc-supreme-court-ruling-94387> that 
the judgment could lead to calls for strengthening internal 
accountability mechanisms of organisations like the IFC.

Indian governments turned a blind eye

But the worrying thing from the judgment is how the Centre and the state 
governments, through their Pollution Control Boards, turned a blind eye 
to the environmental pollution, which the local fishermen alleged, as a 
result of the functioning of the Mundra plant.

Should not the Indian government have at least belatedly come forward to 
bear the litigation expenses of the Mundra farmers and offer help in 
further litigation in the lower courts in the US following this landmark 
judgment? May be that would be too much to expect from the current 
governments at the Centre and in Gujarat, hardly known for their 
concerns for environmental pollution caused by mega projects.

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