February 22, 2023, Washington, D.C.–This week, the International Finance Corporation (IFC) released its long-delayed proposed “Approach to Remedial Action” and initiated a period for public consultation. This follows an external expert review, at the request of the World Bank Board, that called for IFC to ensure access to remedy for frontline communities harmed by IFC- financed projects.
EarthRights International Supervising Attorney Michelle Harrison issued the following statement:
“As the private-sector lending arm of the World Bank Group, the IFC’s stated mission is to reduce poverty and promote development while doing ‘no harm’ to people and the environment. But too often, IFC-financed projects have failed to live up to their promises, resulting in environmental and human rights violations that leave communities worse off. For decades, affected communities and civil society have called on the IFC to provide remedies where it has contributed to such harms. For decades, the IFC has refused to do so.
“The experience of fishing and farming communities living in the shadow of the IFC-funded Tata Mundra Power Plant in Gujarat, India, remains a glaring example of where IFC has failed in its mission and failed in its responsibility to do right by those it harms. IFC provided the keystone funding for the project despite knowing that it would result in irreversible harm to the community and the local environment. As the IFC predicted, the project has destroyed the environment communities depend on for their livelihoods and polluted the air to dangerous levels. Far from lifting these communities out of poverty, as IFC’s financing is meant to do, it left them worse off.
“Rather than set things right, the IFC has denied the communities remedies at every turn. When the IFC’s own internal ombudsman found the IFC had failed to abide by its own standards and commitments at virtually every stage of the project and called for remedial action, IFC chose to do nothing. When the communities, represented by EarthRights, filed suit in federal court in Washington, D.C., in the case Jam vs. IFC, the IFC asserted that it was above the law and that it could not be sued at all, no matter how much harm it may have caused.
“While we are still reviewing the IFC’s draft ‘Remedial Approach’ in detail, at first glance, it is both extremely disappointing and woefully inadequate. Rather than meaningfully engaging with the IFC’s responsibility to remedy harms that it causes or contributes to, this appears to be yet another attempt to evade any measure of accountability. In particular, the failure to address past harms like the harm to the Jam communities – the very cases that led to the external review in the first place – is plainly unacceptable. Failure to do right by these communities – yet again – remains a stain on IFC’s reputation as a supposed development institution and undermines the credibility of any effort with the word ‘remedy’ in it.”