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Symposium on India’s Engagements and Experiences with Accountability Mechanisms of Multilateral Development Banks
The Inspection Panel is completing 25 years in its role, as an accountability mechanism of the World Bank. As you are aware, the Bank’s failure to comply with its operating policies was seen by the entire world in the Bank’s financing with the Sardar Sarovar Dam project on River Narmada. The tenacity of massive grass-roots uprisings from our communities in the 80’s and the sustained hard work of our social movements along with our resoluteness to link it with international coalitions to question the hegemony of the Bank, subsequently led the Bank, for the first time, to commission an independent review of its project. The Independent Review Committee (Morse Committee) constituted by the Bank in 1991 to review the social and environmental costs and benefits of the dam, after years of consistent struggle by Narmada Bachao Andolan (Save Narmada Movement) and its allies led to a demand from the civil society around the globe for the creation of a grievance redressal system for project-affected communities, which ultimately pressurized the Bank to constitute the Inspection Panel in 1993. We expected this might be a crucial backstop and an opportunity for us to raise our issues of livelihoods, economic loss, displacement from our lands, alienation from natural resources, destruction of environment and threat to our biodiversity and cultural hotspots, where Bank invested in large, supposedly ‘development’ projects like mega dams, energy and other infrastructure projects. Yet, the outcome we expected rarely delivered sufficient remedy for the harm and losses people have experienced over the years.
A number of accountability mechanisms over the next couple of decades in several development finance institutions were formed following the model of World Bank, commonly known as ‘Independent Accountability Mechanisms’[IAMs]. Each year the number of complaints rise which is an indication of the increasing number of grievous projects happening around the world. While IAMs of most MDBs are advertised to provide strong and just processes, many of our experiences imply that the banks are accommodating practices which suit their own needs and their clients, which are borrowing countries and agencies, and not the people for whom the IAMs were built to serve.
Many a time, we have been disappointed by these mechanisms, since these are designed by the banks who are lending for disastrous projects in our lands. And as a result, the already existing narrow mandate of IAMs is further restricted.
In our efforts to hold the lending bank accountable, the communities are always presented with the arduous process of learning the complex formalities and detailed procedures to initially approach the IAMs and get our grievances registered. Our many years’ time and energy then is channelised into seeing through the various cycles of these complaint handling mechanisms, that our entire efforts go into this process, and often our complaint gets dropped off in midst of the procedural rules of the IAMs. People are made to wait many months to clear procedural levels and our cases with the IAMs get highly unpredictable. Further, we face intimidation and reprisals from the state and project agencies for having contacted the IAMs who themselves do not possess any authority to address the violations hurled out to us when we seek dignity, fair treatment and justice from them. There are many of us who feel a loss of morale after long years of struggling with lenders when we fail to see concrete benefits or changes in our circumstances, by which time considerable irreplaceable harm is already done to our lives, environment and livelihoods.
In this manner, our immediate and larger goal of holding banks for their failure to consult with and obtain consent from communities before devising action plans for our lands, water and forests is deflected in the pretext of problem-solving and grievance hearing offered to us in the name of IAMs.
With over 50 registered complaints sent to different IAMS from India in the past 25 years, many more left unregistered due to technical reasons and only a few got investigated, assessed and monitored at different levels, we have a baggage of mixed experiences with the IAMs. A few of the prominent cases from India apart from Narmada project are Vishnugad Pipalkoti Hydro Electric Project [WB’s IP], Tata Mega Ultra-01/Mundra and Anjar [IFC’s CAO & ADB’s CRP], India Infrastructure Fund-01/Dhenkanal District [IFC’s CAO], Allain Duhangan Hydro Power Limited-01/Himachal Pradesh [IFC’s CAO] and Mumbai Urban Transport Project (2009) [WB’s IP].
As we now know, what is being witnessed recently is an influx of approved and proposed investments majorly in energy, transport, steel, roads, urban projects, bullet trains, industrial zones/corridors, smart cities, water privatization and other mega projects in India. This has been financed from different multilateral and bilateral sources, foreign corporations, private banks as well as Export-Import Banks (ExIm Banks). It has become a brutal challenge for communities, social movements and CSOs, with lenders and governments constantly shutting their eyes and ears to us who demand accountability for their actions. A compelling and timely need has arisen among diverse groups amongst us to gather together and critically analyze the various trajectories of our engagements with accountability mechanisms of MDBs in order to bring together past 25 years’ learning, insights and reflections of various actors of this accountability process. This urging demand is also an attempt to define the collective experiences in India among our social movements, projected-affected communities and CSOs with IAMs and lending banks, especially appropriating the global political opportunity of Inspection Panel celebrating its 25 years this year.
The schedule and list of speakers will be shared soon.
It is noteworthy that currently, coal-based power projects are under threat due to lack of coal linkages and power purchase agreements, thus stalling many existing power projects and discouraging many companies from expanding to new coal power projects. This would give a boost to hydropower projects in many regions, especially in the Himalayan regions.
Press Release:People’s Movements Determined to challenge the unbridled expansion of infrastructure financing by international financial institutions
Chennai: June 4, 2018
• Peoples Movements & CSOs to organise Peoples’ Convention on infrastructure financing coinciding the 3rd Annual Governors Meeting of Asian Infrastructure Investment Bank (AIIB) in Mumbai
• Determined to challenge the unbridled expansion of infrastructure financing by international financial institutions
Posing a challenge to the rapid expansion plans of international financial institutions like AIIB, people’s movements, civil society organisations and their allies are holding a Peoples’ Convention in Mumbai just days before the 3rd Annual Meeting of AIIB. This was announced by the Working Group on International Finance Institutions (WGonIFIs) in a press conference in Chennai today. WGonIFIs is a platform of a large number of people’s movements and CSOs fighting against negative impacts of large infrastructure projects, financed by international capital, like bullet trains, energy projects, large commercial ports and transport projects.
“Looking at the history of IFI investments in India, like that of the World Bank, where a large number of people has been severely impacted due to rapid expansion of mega infrastructure projects, we are concerned that a new infrastructure investment bank like AIIB without even the basic social environmental safeguards will take away people’s rights over natural resources, deprive them of their livelihood and impact the climate, causing irreversible damages”, energy and climate change expect Soumya Dutta said.
In the Chinese led bank AIIB, India holds the second largest shares, next to China and is a favourable destination of their investments securing 25% of the already approved lending. Within a short span of 3 years, India received loans worth $1.2 bn, out of a total $4.4 bn. The approved projects for India include transmission lines in Tamilnadu, rural roads in Madhya Pradesh and Gujarat, 24 X7 electricity for Andhra Pradesh, financial intermediary India Infrastructure Fund. The highly controversial Amravati capital city project is under the consideration of AIIB Board. Another $3 bn worth projects are in the pipeline for India.
Senior activist Jesuratnam from the Coastal Action Network, Tamilnadu said that “Infrastructure banks like AIIB is likely to investment in projects like Sagarmala which has three coastal economic zones in Tamilnadu comprising of ports, roads and associated infrastructure which will disrupt fishing operations and livelihood of fisherpeople. Large-scale infrastructure will not only displace and destruct the livelihoods but lead to disruption of coastal ecology and public indebtness”.
People’s organisations, CSOs and concerned citizens, under the aegis of WGonIFIs will be holding a Peoples’ Convention in Mumbai from June 21-23, just days before the official annual meeting which will be held in the same city from June 25-26. The Convention will bring together people fighting against large infrastructure projects, and people negatively impacted by the international financial institutions financed ‘development projects’ in the country.
Some of them include, National Alliance of People’s Movements, Bhumi Adhikaar Andolan, National Fishworkers’ Forum, Natioanl Hawkers Federation, Narmada Bachao Andolan, North East Peoples’ Alliance, Guajrat Khedut Samaj and All India Union of Forest Working People.
“The program will bring voices from across the country who are affected by large infrastructure projects and will devise strategies to make financiers accountable to the people’, co-ordinator of the People’s Convention Maju Varghese said.
The People’s Convention will witness coming together of over 250 groups, deliberations in around 20 parallel workshops on the impacts of international lending, cultural expressions of protests and mass action.
For more information on the Peoples Convention visit http://www.wgonifis.net
Contact: Maju Varghese: firstname.lastname@example.org | 8826249887
April 9, 2018: 62 Civil Society Groups from four continents issued a public statement to express their concern about the Asia Infrastructure Investment Bank’s (AIIB) ongoing Board meetings in which it is being proposed to empower Bank’s Management to approve some projects.
“The forthcoming Board decision to delegate responsibility to AIIB Management to approve its projects represents a fundamental shift in the way the AIIB is governed. Such a radical move should not happen without significant public debate and at a minimum full disclosure and discussion around the thresholds for such delegation,” the groups argued.
The statement, which was endorsed by grassroots organisations, research and advocacy organisations, and individuals, observed that this proposal raises questions on the governance at the AIIB — the world’s newest multilateral development bank — as the Board members are accountable to their governments, which are also shareholders of the Bank. Shareholder governments, in turn, are responsible to their citizens for ensuring that the Bank upholds its environmental and social standards in its lending operations. “Transferring the right of approval from the Board to Management undermines this crucial chain of accountability,” the groups emphasised.
Responding to the news that ‘thresholds’ could be set for determining which projects will still come before the AIIB’s Board, the grassroots organisations argued that such thresholds are not meaningful regarding potential harms to local communities and the environment.
The civil society groups requested that the Board defer its decision on the process of approval until further discussions have taken place among key stakeholders.
Via electronic mail
Asian Infrastructure Investment Bank B9 Financial Street
Xicheng District Beijing 10033
People’s Republic of China
19th January 2018
Mr Joachim Von Amsberg, Vice President, email@example.comDr. D.J. Pandian, Vice President, firstname.lastname@example.org
Mr Dong-Ik Lee, Project Team Leader, email@example.comMr. Hamid Sharif, Director General, CEIU, firstname.lastname@example.org
Mr Yuanjing Sun, Principal Communications Officer,email@example.comMr. Oliver Barron, Executive Officer, Office of the President, firstname.lastname@example.orgMembers of the Board of Directors of the AIIB
Re: The AIIB’s investments in financial intermediaries: CSOs call for disclosure and accountability
Dear President Jin,
We write to you as representatives of civil society organizations to draw your attention to concerns associated with the AIIB’s investments via financial intermediaries (FIs), including infrastructure funds.
We note that the AIIB has, in 2017 invested in three FIs – the Indonesia Regional Infrastructure Development Fund, the India Infrastructure Fund, and the Emerging Asia Fund – and that further FIs are on the proposed projects list, including the India National Investment Infrastructure Fund. In addition, we have learned that the AIIB is in the process of developing a strategy for investment in equity and funds. This is an opportune moment for the AIIB to consider the lessons learned from other development finance institutions to avoid the pitfalls and reputational risks associated with FI lending.
While investing in FIs can help mobilize funds and attract private capital for economic development, this form of third-party or ‘hands-off’ lending also comes with significant risks – in particular around clients’ adherence to environmental and social (E&S) safeguards. In recent years, the International Finance Corporation (IFC) – over half of whose investment portfolio is channelled via FIs – has come to acknowledge these risks, and has taken some steps to address them. Following critical findings from both the IFC’s own accountability mechanism, the Compliance Advisor Ombudsman (CAO) and from civil society, the IFC’s CEO, Philippe Le Houérou, has committed to reduce high-risk lending through FIs, saying “we will reduce IFC’s own exposure to higher risk FI activity and apply greater selectivity to these type of investments, including equity investments.”1
In March 2017, the CAO released its third monitoring report on the IFC’s financial sector portfolio..2The report examined actions taken by IFC to address the findings of the CAO’s 2012 Audit of a Sample of IFC Investments in Third Party Financial Intermediaries, in which the CAO found, among other things, that the “result of [IFC’s] lack of systematic measurement tools is that IFC knows very little about potential environmental or social impacts of its F[inancial] M[arkets] lending.”3In this year’s update, it is of particular concern that the CAO found that the “IFC does not, in general, have a basis to assess FI clients’ compliance with its E&S requirements.” As the CAO states, this is highly problematic in relation to FI clients that are supporting high-risk projects, and “where IFC does not have an assurance that the development of a client’s ESMS [Environmental and Social Management System] is leading to the implementation of the Performance Standards at the sub-project level.”4
Independent research carried out over the last year has supported these findings. Inclusive Development International (IDI) conducted a financial investigation to track IFC’s investments in financial intermediaries to their end use. This research only examined the business of a tiny segment of the 700 financial institutions and 220 private equity funds in the IFC’s FI portfolio; however, IDI found more than 130 projects and companies funded by two dozens IFC intermediaries that are causing or are likely to cause serious environmental harms and human rights violations. The projects are located in 24 countries and come from a range of high-risk sectors, including energy, industrial agriculture, mining, transportation, infrastructure, and even private military contracting. In each of these cases, it is apparent that IFC’s environmental and social Performance Standards are not being applied. IDI has detailed these findings, in collaboration with Bank Information Center, Urgewald, 11.11.11, Ulu Foundation and Accountability Counsel, in a four-part investigative series, entitled Outsourcing Development: Lifting the veil on the World Bank Group’s Lending through Financial Intermediaries.
Responding to these problems, the IFC’s CEO recently announced that the IFC has cut its high-risk lending from 18 to just 5 investments5, and has committed to increasing the number of FI investments ring-fenced for such ends as climate mitigation and women-owned SMEs6. In addition, the IFC has also begun “tracking FI clients’ exposure to coal and plans to incorporate a reporting requirement on coal exposures in legal documents with all new FI clients”.7
In this context, we urge the AIIB to learn from the IFC’s problematic experience with its financial intermediary portfolio and act to avoid the associated social, environmental and reputational damage. The AIIB can do so by putting in place robust policies and systems around financial intermediary investments to ensure transparency, accountability and efficient channels of communication with all stakeholders. These requirements, in AIIB’s policies, investment decision-making and contracts with FI clients should be mandatory and include:
- Scrutinising the existing project portfolio and pipeline of proposed FI clients to ensure that all projects are in line with the bank’s policies and strategies;
- Ensuring that the proposed FI client has in place a robust environmental and social management system before the investment is approved;
- Reviewing the track record of the FI client in applying the environmental and social framework and making this assessment public;
- Ensuring that FI clients require sub-projects to be compliant to all AIIB policies especially the Environmental and Social Framework (ESF), Complaints Handling Mechanism (CHM), Public Information Policy, and all relevant sectoral strategies and guidelines. This should enable FI sub-projects to remain accountable to AIIB oversight and due diligence at all levels of the project cycle;
- Monitoring the proposed client’s social and environmental due diligence and supervision of its investment; and
- Ensuring FI sub-project affected communities have access to redress, including through the AIIB’s accountability
In addition, it is crucial that the AIIB contractually require the FI client to disclose publicly all of its investments and permit the AIIB to disclose the information on its website. This will help ensure that affected communities and other stakeholders are aware that the sub-projects must comply with environmental and social standards and can alert the client, the AIIB, and its Board at early stages if those standards are not being met. A provision requiring this disclosure of FI sub-projects should be included in the AIIB’s forthcoming Public Information Policy. In this regard, as a first step, the AIIB could follow the ADB’s policy requiring 120-day public disclosure of draft environmental and social assessments “where the subprojects financed by the FI … through either credit-line, other loans, equity, guarantee, or other financing instruments, have the potential for significant environmental or social impacts.”8
In any case, funds routinely disclose a range of information. For example, PT. Indonesia Infrastructure Finance, a financial intermediary with equity held by the ADB, the IFC, and PT. SMI, where the AIIB’s Regional Infrastructure Development Fund will be housed, discloses all subprojects and discloses environmental and social impact assessments.9Other funds, routinely disclose a range of information.10
In addition, DJ Pandian told NGOs in Jeju during the AIIB AGM that he can see no obstacle to disclosing publiclyhighriskAIIBsub-projects supported by private equity funds. Such information would enable the Board, bank management, civil society and potentially affected communities to monitor whether the AIIB’s standards are appropriately applied to these investments, greatly increasing transparency and facilitating and incentivising better management of the environment, social, and governance issues acrossAIIB’s financial sector portfolio.
We look forward to your response to these concerns and your commitment to ensuring that the AIIB takes on the lessons learned at IFC to reduce high-risk FI lending.
Rayyan Hassan, NGO Forum on ADB
On behalf of:
Kindra Mohr, Accountability Counsel
Kate Geary, Bank Information Center-Europe
Elizabeth Summers, Bank Information Center
Anna van Ojik, BothEnds
Luiz Vieira, Bretton Woods Project
Paolyel MP Onencan, Buliisa Initiative for Rural Development Organization (BIRUDO) Uganda
Sarah Wykes, CAFOD
Wawa Wang, CEE Bankwatch Network
Joe Athialy, Center for Financial Accountability, India
Frances Witt, Christian Aid
Hasan Mehedi, Coastal Livelihood and Environmental Action Network, Khulna, Bangladesh
Heinz Hödl, Coordination Office of the Austrian Bishop’s Conference for International Development and Mission (KOO), Austria
Shalmali Guttal, Focus on the Global South
Helen Tugendhat, Forest People (FPP)
Dr Eduardo Tadem, Freedom from Debt Coalition (FDC), Philippines
Katharine Lu, Friends of the Earth, USA
Manana Kochladze, Green Alternative
Calvin Quek, Greenpeace East Asia
David Pred, Inclusive Development International
Karavali Karnataka Janabhivriddhi Vedike, INSAF
Andi Muttaqien, Institute for Policy Research and Advocacy (ELSAM), Indonesia
Jocelyn Soto Medallo, International Accountability Project
Kate Horner, International Rivers
Maurice Ouma Odhiambo, Jamaa Resource Initiatives, Kenya
Sukhgerel Dugersuren, OT Watch and Rivers without Boundaries, Mongolia
Nadia Daar, Oxfam
Eugene Simonov, Rivers without Boundaries International Coalition
Thilak Kariyawasam, Sri Lanka Nature Group
Stephanie Fried, Ulu Foundation
Korinna Horta, Uganda
7 IFC 2017 Improving IFC’s Approach to Environmental and Social Risk Management: Listening, Learning, and Adapting (updated April 2017). See: https://www.ifc.org/wps/wcm/connect/77c11449-261e-484b-a885-f9d77b087386/Improving-IFCs-+Approach-to-ES-Risk-Management-Updated-April-2017.pdf?MOD=AJPERES
8 ADB Safeguard Policy Statement, 2009. SAFEGUARD REQUIREMENTS 4: SPECIAL REQUIREMENTS FOR DIFFERENT FINANCE MODALITIES
10 In addition to PT Indonesia Infrastructure Finance see, for example, the India Infrastructure Fund (IDFC) http://www.idfc.com/alternatives/infra-equity/portfolio_companies.htm.
The Asian Development Bank was conceived in the early 1960s as a financial institution that would foster economic growth and cooperation in Asia. India was a founding member of the Asian Development Bank (ADB) and is now the fourth-largest shareholder. ADB commenced operations in India in 1986 and has approved 240 loans totalling $36.8 billion.
Asian Development Bank (ADB) has grown to be the third largest source of development finance in the Asia-Pacific region, next to the World Bank Group and the Japanese Government. Documents published in 2017 reveals that from a lending portfolio of just over $3 billion during the first decade, ADB has expanded its lending to $123 billion during the last 10 years.
However, the Mid-term Review (MTR) of ADB’s strategy for 2015 and 2020 have acknowledged that the Asia-Pacific region faces widening inequalities in income and access to economic and social opportunities. Increased investment in infrastructure has failed to provide inclusive growth and social protection to the vulnerable sections of the populations including the workers and women.
India had about 84 ongoing sovereign loans from ADB amounting to $11.9 billion at the end of 2015. Currently, we have about 170 active projects in the country of ADB alone. The massive Vizag-Chennai corridor, the numerous urban development projects across the country, the ReNew clean energy projects in Andhra Pradesh, Gujarat, Jharkhand, Madhya Pradesh, Telangana and Karnataka, are only a few of the 50 odd active and approved projects. Further 23 projects have been proposed to the ADB waiting for approval. These are just projects covered by ADB, adding them to the projects funded by all IFIs shows the extent of their influence in almost every sector – energy, infrastructure, health, etc. The scale of land grab, loss of livelihood, environmental destruction has been completely overlooked by both the IFIs and the government. The rampant privatisation of all the sectors, including health care, is going to affect all those who would not be able to afford health care. In such a time, holding the development banks accountable has become imperative for one’s survival with some modicum of dignity.
ADB Investments in India. Source: Answer by the government to the parliament of India
ADB 50 campaign in India
The first week of May 2017 was marked by actions across the country against ADB and other IFIs. It coincided with ADB’s 50 years celebrations in Manila. The massive protest actions were intended to send a strong message to the ADB and other IFIs of the havoc their investments have caused. Thousands of people, in over 140 locations spread in over 21 states in India and over 80 organisations, came together to make this campaign a massive success. These protest actions are both a reminder of the reckless lending of ADB and hope to continue the struggle against the IFIs and their inequitable development model.
The coming together of so many organisations resulted in a wide range of programmes, including the public meeting, lectures, demonstrations, and human chains. Activists also made short video clips highlighting the impacts of the investments by IFIs. The protests actions raised concerns about investments of IFIs like World Bank; International Finance Corporation; Japan Bank of International Corporation (JBIC); Asia Infrastructure Investment Bank; New Development Bank; Exim Banks of Korea, United States, China among others. Many of these agencies are co-financiers, with increasing investments in the infrastructure and cross border projects, thus causing irreversible damage to the people and environment, while their policies to safeguard the harm caused by their investments are made opaque and watered down.
The actions mentioned above on the occasion of 50 years of ADB are a part of the continuous struggle of the people from all the regions that have been affected by the projects.
After a Judge declared World Bank immunity cases “wrongly decided,” the communities affected by the Tata Mundra project approach US court to review “absolute immunity” doctrine
Communities harmed by Tata Mundra coal power plant in India continue to seek justice from World Bank Group’s International Finance Corporation
July 26, 2017, Washington, D.C., and Mundra: After a federal judge in US declared that the cases giving the World Bank Group an “absolute immunity” from lawsuits were “wrongly decided,” the communities affected by private-lending arm of the World Bank Group have filed a petition asking the full D.C. Circuit Court of Appeals to revisit its immunity doctrine.
In June, a three-judge panel of the D.C. Circuit, in the case Budha Ismail Jam v. IFC, had ruled that the International Finance Corporation (IFC), the private-lending arm of the World Bank Group, could not be sued for its role in the controversial Tata Mundra coal-fired power plant, which has devastated fishing and farming communities in Gujarat.
In its June ruling, the panel, citing the legal precedents, concluded that the IFC is immune from suit in this case. Justice Nina Pillard, however, wrote a dissenting opinion criticising those decisions as “wrongly decided” and suggested that the full D.C. Circuit, which has the authority to change the law of the Circuit, should revisit those cases.
“The panel’s ruling gives international organisations like the IFC an unparalleled immunity, insulating them from legal accountability regardless of how much harm they cause,” said Richard Herz, senior litigation attorney at ERI, who argued the case for the plaintiffs. “Such sweeping immunity, which is far greater than the privileges enjoyed by sovereign foreign governments, is inconsistent with multiple Supreme Court precedents, and is contrary to the IFC’s development mission,” added Herz.
“We will not give up our struggle for justice,” said Budha Jam, a plaintiff in the case, after the verdict.
“This decision tells the world that the doors of justice are not open to the poor and marginalised when it comes to powerful institutions like IFC,” added Gajendrasinh Jadeja, the head of Navinal Panchayat, a local village involved in the case. “But no one should be above the law.”
It is noteworthy that the plaintiffs filed suit against the IFC in April 2015 over the destruction of their livelihoods and property and threats to their health caused by the IFC-funded plant. The IFC recognised from the start that the Tata Mundra plant was a high-risk project that could have “significant” and “irreversible” adverse impacts on local communities and their environment. Despite knowing the risks, the IFC provided a critical $450 million (Rs 1800 crore) loan in 2008, enabling the project’s construction and giving the IFC immense influence over project design and operation. It failed to take reasonable steps to prevent harm to the local communities and to ensure that the project abides by the required environmental and social conditions for IFC involvement.
The plant has destroyed the local marine environment and the fish populations that fishermen like Jam rely on to support their families, and vital sources of water used for drinking and irrigation. Coal ash contaminates crops and fish laid out to dry and has led to an increase in respiratory problems.
The IFC’s compliance mechanism, the Compliance Advisor Ombudsman, issued a scathing report in 2013 confirming that the IFC had failed to ensure the Tata Mundra project complied with the conditions of the IFC’s loan. Rather than follow CAO’s recommendation for remedial action, rejected most of its findings, and ignored others. Plaintiffs had no other recourse but to sue IFC. In its ruling last month, the panel recognised the “dismal” situation of the affected communities, noting IFC did not deny that the plant had caused substantial damage and yet found IFC could not be sued.
The harms suffered by the communities are all the more regrettable because the project made no economic sense from the beginning. In fact, in the past month, Tata Power, which owns the plant, has begun trying to unload a majority of its shares in the project for 1 Rupee because of the losses it has suffered and will suffer going forward.
On appeal, the plaintiffs argued that IFC has waived immunity because this suit promoted the IFC’s mission, which includes the goals of reducing poverty without harming its projects’ neighbours. The IFC interestingly argued that it is not bound by its own mission.
“The court’s judgment supports the arrogance of lenders like IFC, who disregard the law, their own safeguard policies, and even the findings of their accountability mechanisms,” said Dr. Bharat Patel of Machimar Adhikar Sangharsh Sangathan (Association for the Struggle for Fisherworkers’ Rights), which is a plaintiff in the case. “This sends the wrong message to institutions like IFC – that you can continue to lend money to bad projects, causing irreversible damage to people and environment and no law will hold you accountable.”
The plaintiffs are optimistic that the full D.C. Circuit will reconsider the case.