February 15, 2022, Washington, DC.–This week, prominent economic, legal, diplomatic, and civil society experts – including Joseph Stiglitz, a Nobel Prize-winning economist, and former Vice President and Chief Economist of the World Bank – submitted amicus briefs urging the United States Supreme Court to hear the case Budha Ismail Jam, et al v. IFC, concerning immunity from suit for the World Bank Group and foreign nations. EarthRights International represents members of fishing and farming communities in Gujarat, India suing the World Bank’s private lending arm, the International Finance Corporation (IFC), over its role in funding a coal-fired power plant that destroyed local people’s livelihoods.
In 2019, the Supreme Court ruled that the IFC is not entitled to “absolute” immunity in the case but instead is subject to the same immunity as foreign governments. Applying those rules, the D.C. Circuit Court of Appeals last year ruled that IFC was still immune, in a decision with far-reaching consequences for foreign states’ accountability for everything from price-fixing to financing terrorism.
EarthRights has asked the Supreme Court to again take up the case and clarify the law – not just in this case, but whenever a foreign government is involved in financing or otherwise assisting wrongful conduct.
Marco Simons, General Counsel of EarthRights International, issued the following statement:
“These distinguished experts show, as EarthRights argued, that the DC Circuit’s decision is wrong, and will immunize a wide variety of harmful conduct.
“Since the World Bank Group committed negligence at IFC’s headquarters in Washington, D.C., it should not be immune in this case and must be held accountable for the impacts of this project that it funded. But the DC Circuit decision would allow international organizations and foreign governments to abet wrongful conduct from US soil – such as state-owned banks financing terrorism, or state-owned companies joining with other businesses to commit fraud, breach contracts, steal technology, or fix prices – without any accountability at all.
“In this case, the IFC’s responsibility is clear. From the start, the IFC recognized that the Tata Mundra coal-fired power plant was a high-risk project that would significantly harm local communities and their environment. Despite knowing the risks, the IFC provided a critical $450 million loan, enabling the project’s construction. As predicted, the plant undermined water quality, contributed to air pollution, and harmed crops and fish populations that support local economies.
“The IFC’s own internal compliance office issued a scathing report 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 and calling for the IFC to take remedial action.
“The briefs filed today demonstrate the widespread condemnation among legal academics, diplomats, and civil society experts for the D.C. Circuit’s decision, which immunizes not only the IFC but also a wide swath of harmful foreign sovereign activity.
“As former diplomats, including Joseph Stiglitz, urged the court: ‘The collective experience of amici in many countries teaches that the IFC must be held accountable for the social and environmental impacts of the projects its loans make possible. Internal IFC accountability procedures are ineffective. Judicial review is essential.’
“EarthRights urges the US Supreme Court to take up this case.”
Kate Fried, EarthRights International