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Villagers Celebrate The Historic US Supreme Court’s Verdict Which Ended The Immunity of the IFIs

For Immediate Release

Villagers Celebrate The Historic US Supreme Court’s Verdict Which Ended The Immunity of the IFIs

March 31, 2019, Mundra: The air in Mundra filled with the slogans like Kaun Banata Hai Hindustan, Machuawara, Majdoor, Kisan! (Who makes India? Fishermen, Labourer and Farmers); Ladenge Jeetenge! (We shall fight, we shall win); Aadiwaasi Machhuawara Kisaan Ekta Zindabad! (Long live the unity of tribals, fishermen and farmers), and Poonjipatiyon Ki Dalaai Band karo! Hundreds of people from Navinal and Tagri villages of Kutch and representatives from various social movements and civil society members have gathered to celebrate the historic verdict of the US Supreme Court that ended the absolute immunity enjoyed for long by the International Financial Institutions.
“Is Development only for Tata, Ambani, and Adani? What about the fishermen from Mundra, who live in the open with huts made up of bamboo and gunny bags but feed thousands of people in and outside Gujarat,” asked Medha Patkar, senior activist, Narmada Bachao Andolan and National Alliance for the Peoples’ Movements. “Every citizen has the constitutional right to question anti-people policies,” she asserted. She further said, “We do not have any problem in discharging Sardar Sarovar (Narmada) Dam waters for the benefit of the farmers of Kutch. However, we will fight if it is given to the industries,” referring to the allocation of water for a large number of industries.
She was speaking at the public meeting, organised by the Machimar Adhikar Sangharsh Sangathan (MAAS), Mundra, which witnessed the participation of the hundreds of the villagers affected by the World Bank Group’s International Finance Corporation-funded Tata Mundra Ultra Mega Power Plant. The meeting was organised to celebrate the historic verdict of the US Supreme Court that ended the absolute immunity enjoyed for long by the International Financial Institutions.
During the occasion, representatives from various social movements and civil society members like  Medha Patkar, senior activist of the Narmada Bachao Andolan; Soumya Dutta, Convenor of the Beyond Copenhagen Collective; Nitaben Mahadev, Gujarat Lok Samiti, Sanjeev Danda, Dalit Adivasi Shakti Adhikaar Manch; and Maju Varghese and Anuradha Munshi from the Working Group on International Financial Institutions (WGonIFIs) were also present to extend their solidarity and felicitate the fishermen and villagers who have been at the forefront of this historic struggle.
The petitioners of the case were garlanded and facilitated at the public meeting. Speakers after speakers alluded their courage, encountering hostilities and the broader impact of this victory to the people around the globe, making institutions like World Bank more accountable.
Speaking at the occasion, Soumya Dutta, emphasised that the recent US Supreme Court’s decision to end immunity of the International Financial Institutions is a significant victory of the people fighting to save their dignity, land and livelihood across the world. He stressed that a broader alliance of different sections of the people affected by the project be formed to fight getting justice.
Sanjeev Danda said the US Supreme Court’s verdict is a firm reminder that fishers and poor are not insects that can’t be eliminated easily. He thanked the villagers for their firm resistance against the might of the IFC and Tata.
Nitaben Mahadev expressed solidarity on behalf of organisations in Gujarat and wished the people the best to take the fight to higher heights.
Buddha Ismail Jam, the main petitioner of the case against the ongoing IFC, emphasised the need to stay together. He said, “If we continue to stay strong for the remaining struggle, nobody can snatch justice away from us.”
Gajendra Sinh Jadeja, a co-petitioner of the case and Sarpanch of the Navinal Panchayat in Mundra, listed the problems currently being faced by the fishermen, farmers and pastoralists. He said, “The production of cotton, dates, chikoo has considerably reduced due to the coal-ash, which has also adversely impacted the health of the people. Similarly, the inlet and outlet channel have increased the salinity, thus impacting agriculture. Additionally, the channel has also driven away from the fishes away from the coast, due to which, the fishermen have to travel about 25 kilometres into the sea.”
Bharat Patel, thanked the villagers, civil society and social movements across the country for their solidarity, and the Earth Rights International, for their unflinching support. He asserted that the policies of the IFIs need to be amended and said that they can’t function at the cost of the lives of people. Talking about the further course of action, he said, “We will fight till the ecology is restored; the people who lost their livelihoods are adequately compensated; and the officials of IFC and Tata Power, who conspired to destroy our lives for their greed are criminally charged.”
Background
On February 27, 2019, the Supreme Court of United States, in a historic 7-1 decision, the U.S. Supreme Court decided in Jam v. IFC that international organisations like the International Finance Corporation of the World Bank Group do not enjoy absolute immunity.
The Court’s decision marks a defining moment for the IFC – the arm of the World Bank Group that lends to the private sector. For years, the IFC has operated as if it were “above the law,” at times pursuing reckless lending projects that inflicted serious human rights abuses on local communities, and then leaving the communities to fend for themselves.
In the case of the Tata Mundra, since the beginning, the IFC recognised that the Tata Mundra coal-fired power plant is a high-risk project that could have significant adverse impacts on local communities and their environment. Despite knowing the risks, the IFC provided a critical Rs 1,800 crore (USD 450 million) loan in 2008, thus enabling the project’s construction. Despite this, the IFC failed to take reasonable steps to prevent the harms it predicted and failed to ensure that the project abided by the environmental and social safeguards.
As predicted, the plant caused significant harm to the communities living in its shadow. Construction of the plant destroyed vital sources of water used for drinking and irrigation. Coal ash has contaminated crops and fish laid out to dry, air pollutants are at levels dangerous to human health, and there has already been a rise in respiratory problems. The enormous quantity of thermal pollution – hot water released from the plant – has destroyed the local marine environment and the fish populations that fishermen rely on to support their families. Although a 2015 law required all plants to install cooling towers to minimise thermal pollution by the end of 2017, the Tata plant has failed to do so.
A nine-mile-long coal conveyor belt, which transports coal from the port to the Plant, runs next to local villages and near fishing grounds. Coal dust from the conveyor and fly ash from the plant frequently contaminate drying fish, reducing their value, damage agricultural production, and cover homes and property.
The IFC’s own internal compliance mechanism, the Compliance Advisor Ombudsman (CAO), issued a scathing report in 2013 confirming that the IFC had failed to ensure the Tata Mundra project complied with the environmental and social conditions of the IFC’s loan at virtually every stage of the project. The report recommended the IFC to take remedial action. However, the IFC’s management responded to the CAO by rejecting most of its findings and ignoring others. In a follow-up report in early 2017, the CAO observed that the IFC remained out of compliance and had failed to take any meaningful steps to remedy the situation.
The harms suffered by the people are all the more regrettable because the project made no economic sense from the beginning. In 2017, in fact, Tata Power began trying to unload a majority of its shares in the project for one rupee because of the losses it has suffered and will suffer in future. At the moment, the plant is operating much-below capacity in part because India has an oversupply of electricity.
Please visit here for more background and accessing documents related to the case.
About us:
Machimar Adhikar Sangharsh Sangathan (MAAS) is a trade union of the fish workers in Mundra and a co-petitioner in the historic Budha Jam vs IFC case.
 
Contact:
Dr Bharat Patel (Mundra, Gujarat, India)
General Secretary, Machimar Adhikar Sangharsh Sangathan
+ 91 94264 69803
bharatp1977@gmail.com

The Role of IFIs in the Development Agenda

Ulka Mahajan on the Context of the Role of IFIs in the Development Agenda

Coastal Infrastructure and Fishers Struggle in India

Jesu Rathnam, Convenor, Coastal Action Network, on the coastal infrastructure and fishers struggle in India

BRICS 2017 Offers Nothing New

By Tani Alex

For those closely looking at the trajectories of IFIs, especially the current trends of the New Development Bank (NDB) or the BRICS Bank, well, it’s all pancakes and fritters with news of NDB and BRICS Xiamen Summit all around.

The Bank, with 11 projects of over $1.5 billion already in their sack within a span of two years of their establishment, is targeting to lend $2.5-3 billion this year for ‘sustainable infrastructure’ ventures. In the last few weeks, BRICS witnessed saw a host of activities: NDB’s first regional centre opened in Johannesburg, South Africa; the interim sense of political ease happened between India and China on the Dokhlam issue just a few days before the Summit; the bloc again reinforced south-south cooperation by declaring to focus on the projects in Africa and Latin-America; their first project-financed firm commenced operations at Shanghai Lingang Distributed Solar Power Project (100 MW).

Now that the BRICS teammates have officially drawn the curtains at the finale this week at Xiamen, in their perpetual quest to overturn the western economic order, what were their projected takeaways placed side by side with their subtle agendas?

For our ease, let’s start with the first letter in the acronym coined by Jim O’ Neill of Goldman Sachs. Brazil, slouched under the pressure of staggering recovery from recession and joblessness, urged for economic cooperation in global markets.

Russia wanted to sign an intergovernmental agreement for international information security and did not hesitate to mention its initiative to establish an energy research platform for joint energy investment. They were also candidly advocating against global trade protectionism and for an open multilateral trade system.

Back here, India insisted on a medley of items—stronger cooperation in the financial sector and investment in private entrepreneurship to cater to the financial needs of ‘sovereign and corporate’ entities. Tenacious partnership with International Solar Alliance, birthed by both India and France, was also emphasised upon for ‘mutual gains’ through a comprehensive solar energy utilisation (read further exploitation of land resources for solar parks). Further India displayed vanity in having discovered digital economy as the tool for spurring economic growth and to attack corruption through demonetisation. While the World Bank and International Monetary Fund lauded this move, the citizens, independent experts, and local and international media criticised the reckless experiment thrust down to the country. In fact, RBI’s Financial Year report also indicated towards the monumental failure of the senseless decision. Media reports clamour on the resolution of the member nations to together fight corruption with a dedicated Anti-Corruption Working Group. Well, wait, did we hear anti-corruption? Does this also apply to the leaders of these nations as well, or to the higher management of their extolled NDB? We are reminded of Oscar Wilde, who said that the only thing to do with good advice is to pass it on. It is never of any use to oneself.

With the newly-begun construction of NDB headquarters in Shanghai last week and the sprouting AIIB with 80 members in its kitty, China, which who chaired this year’s Summit, did not miss time in laying bare its agenda – promoting its star project Belt Road Initiative (BRI), which linked its vital China-Pakistan Economic Corridor as well. During the Summit, China did not address its differences with India, which boycotted the BRI meeting earlier in May.

Further, China reiterated the idea of ‘BRICS Plus’ to invite more emerging developing economies to expand BRICS. Towards this end, China also invited leaders of Egypt, Guinea, Mexico, Tajikistan, and Thailand for dialogues on south-south cooperation and global development. It looks like China is on a high to alter the prevailing financial order and form a new open economic order, while critics point towards China’s discriminatory policies and trade barriers to favour local economy.

South Africa, the chair for next year’s Summit, elated by the opening of NDB’s regional centre, shared a concerted approach against global terrorism, while also listing out its goal of achieving the Sustainable Development Goals and Agenda 2063 Africa Union. Interestingly NDB’s only project in South Africa, a $180 million renewable energy project with Eskom, was rejected by the Government. When asked about the rejection, NDB’s Vice-President Leslie Maardop explained that the economic slowdown in the country melted the demand for electricity bringing it to a dip and that South Africa did not need new power supplies.

Let’s also quickly glance at other developments of this week, encapsulated here. The idea of BRICS credit ranking agency, which was pushed by India in Goa last year, was discussed again. Further, resilience and the ability of central banks of member nations to foster cooperation between Contingency Reserve Arrangement (CRA) and IMF was stressed by India. It is interesting to note here that earlier we were made to believe that CRA is an arrangement competitive to IMF and that it did not require dollar denominated IMF backing?

Another curious development during this Summit was the discussion to develop BRICS’ crypto currency, in line with its earlier agreement on lending in local currencies and settlement mechanisms. One wonders, why did the countries, especially China and India, ignore the foresightedness of their central banks, which recently cautioned against virtual currencies?

In retrospect, every year there are tall claims and forged partnerships under the façade of bilateral and multilateral talks among the BRICS members. However, it seems that no member country has given any deliberate and honest assurances pertaining to the human development—not in the parameters of amassing wealth, expanding economic markets or filling the ‘gap’ in infrastructure development alone, but that kind of an integrated growth which carefully avoids human exploitation, political manipulation, natural and human resource extraction, and devastation of natural environments.

India paid over 600 crores between 2009-2015 to the IFIs for not using their loans

~ Maju Varghese

Every year, India pays an enormous amount of money as commitment charges to the multilateral institutions for not utilising the loans sanctioned by them. Investopedia defines commitment charges as the fee charged by the lender to a borrower for an unused or un-disbursed loan since it has set aside the funds for the borrower and cannot yet charge interest.

According to the CAG,  between 2009-2015 India paid commitment charges up to 602 crores to the external lenders. In 2014-15 itself, India was holding Rs. 2,10,099 crores of unutilised funds thus inviting a commitment charge of Rs. 110 crores. Finance Ministry had found that between 1991 and 2009, the government had paid approximately Rs 1,400 crores as the commitment charges for loans not utilised.

The commitment charges are coupled with interest while reporting by the ministry of finance which makes it difficult to understand the charges paid to different agencies in a fiscal year. The CAG observed that putting commitment charges under the head “interest obligation” is misleading as it does not reflect the nature of expenses.

Arun Jaitley, the Indian Finance Minister minister of India, has been raising the issue of commitment charges. In the 94th development committee of the World Bank, he raised the issue of commitment charges which is highest among multilateral development Banks and demanded its withdrawal. This was again repeated when the demand when the CEO of World Bank visited the country and met the Finance Minister. India is among the countries which are graduating from a low-income country to lower middle-income country resulting in loss of concessional finance from IDA loans.

World Bank charges a commitment charge of 0.25 per cent per annum on un-disbursed loans even if they are committed to be drawn in subsequent years. This is in addition to a front-end fee, a fee paid by the borrower to the lender before the loan offtakes, of 0.25 per cent on loan agreement amount (applicable on current loans). These commitment charges begin accruing 60 days after the loan agreement is signed. Despite resistance from the countries, the World Bank has stated that it will not be able to remove commitment charges due to its cost recovery guidelines.

According to the CAG, India had a total outstanding debt of 51,04,675 crores as on March 31, 2015. This increased to around 57,021,582 crores on August 15, 2016, which means a per capita debt of Rs 44,032. This comes to around 41 per cent of the GDP. To service this massive debt, India pays about 36,318 crores as interest payment every year. CAG further reports that in 2014-15, 77 per cent of the long-term internal borrowings and 73 per cent of the external borrowings were utilised for debt servicing, implying that a larger percentage of debt was being used for paying the existing debts. This, in turn, meant the lower percentage of debt was available for meeting developmental expenditure to promote growth.

Swatch Bharat and commitment charges

The World Bank had approved a US$1.5 billion loan for Swachh Bharat Mission-Gramin (SBM-G), Modi government’s much-hyped flag-ship campaign on Sanitation to support the government’s efforts to ensure all citizens in rural areas have access to improved sanitation. The loan sanctioned in 2015 is the Bank’s biggest lending in the social sector.

The mission has provision for incentivizing states on their performance in the Swachh Bharat Mission. The performance of the States will be gauged through an independent survey based measurement of certain performance indicators, called the Disbursement-Linked Indicators (DLIs). However, due to lack of independent verification of results, India missed the first disbursement of the loan. According to the media reports, India is likely to miss the second tranche too. Despite not receiving a single paisa, India has paid the commitment charge, interest, and front-end fees of USD 15.40 million so far.

The payment of commitment charges to the multilateral agencies because of governmental inability to plan and implement shows a lack of seriousness in using public money. CAG has mapped and pointed out the inefficiency of governments in utilising funds. The money that we pay as fine and commitment charges are a waste of public resources as pointed out by CAG in the reports from time to time. The proposal to set up a public debt and management agency for proper planning of external debt is still pending in spite of various statements by the finance minister.

Multiple CAG reports on debt need to be taken on a priority basis, and an oversight mechanism should be created within the parliament of India through a standing committee to look into external debt and also its investments abroad and making it transparent and accountable to the citizens of the country.

Media Coverage

Netindia123.com: Medha Patkar demands more transparency in ADB projects
(May 9, 2017)

Webindia123.com: Medha Patkar demands more transparency in ADB projects
(May 9, 2017)

The Statesman: Call for nationwide protests against ADB’s projects in India
(May 8, 2017)

Business Standard: Medha Patkar demands more transparency in ADB projects
(May 8, 2017)

 Eenadu: Medha Patkar demands more transparency in ADB projects
(May 8, 2017)

Sify.com: Medha Patkar demands more transparency in ADB projects
(May 8, 2017)

The CEO Magazine: Medha Patkar demands more transparency in ADB projects
(May 8, 2017)

Orrisadiary.com: ADB’s 50 years greeted with mass protest at Bhubaneswar, Odisha
(May 8, 2017)

Sambad: ଏସିଆ ବିକାଶ ବାଙ୍କ ବିରୋଧରେ ଆନ୍ଦୋଳନ (May 7, 2017)

The Shillong Times: ADB’s 50 years greeted with nationwide protests (May 6, 2017)

Navratnanews.com: 50 years of Asian Development Bank Destruction, Displacement and Exploitation of Natural resources (May 6, 2017)

Mumbainewsnetwork: ADB’s 50 years greeted with nationwide protests (May 5, 2017)

Daily O: ADB celebrates 50 years, but there’s a problem with development institutions (May 5, 2017)

The Ecologist: Asian Development Bank must end its 50 year addiction to coal!
(May 4, 2017)

The Telegraph: Protests against ADB projects (May 4, 2017)

Emaatimes.com: पटना: टुकड़ों में बंट कर रह गयी बिजली कंपनियां, गरीबों से दूर हो गयी बिजली
(May 3, 2017)

Janjosh.com: अगेंस्ट ADB की बैठक हुई सम्पन्न (May 3, 2017)

TwoCircles.net: Marking Asian Development Bank’s 50 years, protests to take place in over 100 places in India this week (May 2, 2017)

MattersIndia.com: ADB’s 50 years: Protests to take place in several places (May 2, 2017)

National News Analysis: Marking Adb’s 50 Years, Protest Actions To Take Place In Over 100 Places In India This Week (May 2, 2017)

Governance Now: ADB’s 50th anniversary, civil society’s 100 protests (May 2, 2017)

Counterview.org: Anti-ADB protests begin across India: Planks include loss of livelihood of indigenous people, eco-destruction (May 1, 2017)

Ecologise.in: ADB@50, Resistance@50 (April 28, 2017)

Counterview.org: 50 actions of resistance in India at 50 places against ADB’s 50 year of inequitable policies
(April 28, 2017)

 

Press Release

(May 8, 2017) New Delhi: People across India united to resist anti-people policies of ADB and other IFIs
English              हिंदी              

(May 7, 2017) Bhubaneswar:
English              ଓଡ଼ିଆ ଭାଷା              

(07 May 2017) Jhabua: Protest in Meghnagar, Jhabua against ADB and other IFIs
Hindi

(May 6, 2017) Bilaspur: ADB Stop Violating Human Rights and Rights of Indigenous, tribal and forest communities: Stop Supporting Militarisation of our Territories
English

(May 5, 2017) New Delhi: People across India united to resist anti-people policies of ADB and other IFIs
English              हिंदी              

(May 5, 2017) Nagpur: Workers and Hawkers Stages Protests Against Privatisation of Civic Services
English

(May 5, 2017) New Delhi: ADB’s 50 years greeted with nationwide protests
English

(May 1, 2017) New Delhi: Marking ADB’s 50 years, Protest Actions to take place in over 100 places in India this week.
English              हिंदी              ಕನ್ನಡ