BANGKOK (Thomson Reuters Foundation) - Indian farmers and fishermen on Thursday hailed the U.S. Supreme Court’s decision to revive their lawsuit against an arm of the World Bank over the funding of a power plant they hold responsible for damaging the environment.
The court on Wednesday overturned a lower court’s ruling that the Washington-based International Finance Corp (IFC) was immune from such lawsuits under United States law, and said there are limits to such immunity.
The case will now return to a lower court for further litigation.
“It’s a very significant decision. We have been fighting for many years and at last we have a small victory,” said Bharat Patel, general secretary of fishermen’s group Machimar Adhikar Sangharsh Sangatha, a plaintiff in the case.
“We were discouraged from filing the case, but we persisted because we have suffered a lot,” he told the Thomson Reuters Foundation by phone from the western state of Gujarat.
The IFC provided $450 million in loans in 2008 to help construct the coal-fired Tata Mundra Power Plant in Gujarat.
IFC loans include provisions requiring that certain environmental standards are met.
Lead plaintiff Budha Ismail Jam and other fishermen and farmers living near the plant sued in a Washington federal court in 2015, accusing the IFC of failing to meet its obligations.
They said the 4,000-megawatt plant has had a “devastating and irreversible impact” on the coastal ecosystem, reducing fish stocks, polluting the air and water, and destroying livelihoods.
In 2017, an appeals court noted the damage caused by the power plant, but said it would not reconsider the 1945 International Organizations Immunity Act that shields the World Bank group from being sued in the United States.
The Supreme Court’s decision this week “marks a defining moment for the IFC”, said EarthRights International, a legal advocacy group representing the plaintiffs.
“The possibility of accountability will encourage these organizations to protect people and the environment,” Marco Simons, a lawyer with EarthRights, said in a statement.
The IFC said in a statement it would “work to ensure that this ruling does not affect our ability to deliver for our partner countries and does not hinder our mission”.
Representatives of Tata Power did not respond to an email seeking comment.
The court’s decision is also an indication that IFC’s internal grievance mechanism - which the plaintiffs first approached - had failed, said Rahul Choudhary at non-profit Legal Initiative for Forest and Environment in New Delhi.
“Big infrastructure and utility projects often result in rights abuses, but not everyone can seek remedy in a U.S. court,” said Choudhary, who is not involved in the case.
“The laws, the checks and balances to prevent the abuses are not working. Going to a U.S. court should not be the only way to seek remedy,” he said.
Reporting by Rina Chandran @rinachandran; Editing by Michael Taylor. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's and LGBT+ rights, human trafficking, property rights, and climate change. Visit news.trust.org