India - Communities Sue World Bank Group in US for Destructive Coal-Fired Power Plant


EarthRights International (ERI) press release

Date of publication: 
23 April 2015

Washington D.C.- Today fishing communities and farmers from India represented by EarthRights International (ERI) filed suit against the International Finance Corporation (IFC), the private-lending arm of the World Bank Group, in federal court in Washington, D.C. The plaintiffs allege that the IFC caused the loss of their livelihoods, destroyed their lands and water, and created threats to their health by funding the Tata Mundra coal-fired power plant in Gujarat, India.

The 4,150 MW coal-fired power plant, owned by Tata Power, began operating at full capacity in 2013. According to the court complaint, the plant has already dramatically affected the lives of the people who live in its shadow. The thermal pollution discharged from the plant’s cooling system has led to a dramatic decline in the fish populations that local fishing communities depend on.

“The fish catch has been declining since 2011,” said plaintiff Budha Ismail Jam, a local fisherman who lives in a seasonal fishing village known as a bunder most of the year. “I don’t know what other profession I could do to support my family.”

The substantial coal dust and fly ash coming from the plant and its coal conveyor belt is also harming local farms, the quality of fish and salt from the region, and the health of local people. Another plaintiff, Sidik Kasam Jam, explained: “When the conveyor belt runs, the coal dust blows towards the bunder. People have respiratory problems now. The elderly are the worst affected. You can see the dust on the fish we lay out to dry.”

The IFC provided a critical $450 million loan to the project, enabling its construction and giving it immense influence over project design and implementation. The IFC’s stated goals are to end extreme poverty and to carry out its investment activities “with the intent to ‘do no harm’ to people and the environment.” IFC borrowers are expected to take precautions to protect vulnerable communities’ and the environment, an obligation that the IFC is tasked with supervising, monitoring and enforcing.

“The IFC failed on all counts with the Tata Mundra project,” says Rick Herz, ERI’s Litigation Coordinator. “While the IFC purports to support this project in the name of poverty reduction and development, its impacts fall hardest on the poorest and most vulnerable communities.”

From the outset, the IFC recognized the significant risks the Tata Mundra project posed to local communities and their environment. It predicted that without proper management and mitigation, the project could have “significant” adverse impacts that “are diverse, irreversible or unprecedented.” Despite this, the IFC failed to take reasonable steps to prevent harm to nearby communities and failed to ensure that the project abides by the required environmental and social conditions of the IFC’s involvement. Even the IFC’s own accountability mechanism – the Compliance Advisor Ombudsman (CAO) – agreed. In 2013, the CAO issued one of its most scathing reports, finding that the IFC had failed to ensure the project met the applicable Environmental and Social Standards that had been made binding conditions of the IFC’s loan.

“While the IFC is likely to argue that it is immune from suit, no institution should be above the law in a case where the risks were so obvious from the start, and the failure to act so damaging,” said Herz. The lawsuit seeks compensation for harm to property and economic livelihoods, and asks the court order the IFC to enforce the provisions of the loan agreement which were intended to protect local communities and the environment to minimize future harm.

ERI also represents Mr. Ranubha Jadeja, a local farmer, the fishermen’s organization, Machimar Adhikar Sangharsh Sangathan (MASS; in English, the Association for the Struggle for Fisherworkers’ Rights), and the Navinal Panchayat (village), a local government entity.

Valentina Stackl
valentina [at] earthrights [dot] org
+1 (202) 466 5188×100

EarthRights International (ERI) is a nongovernmental, nonprofit organization that combines the power of law and the power of people in defense of human rights and the environment, which we define as “earth rights.” We specialize in fact-finding, legal actions against perpetrators of earth rights abuses, training grassroots and community leaders, and advocacy campaigns, and have offices in Southeast Asia, the United States and Peru. More information on ERI is available at

———————————————————- Indian Communities Suffering from Destructive Coal Plant Sue the IFC in U.S. Courts

Lawsuit joint statement

23 April 2015

Today, Indian fishing communities and farmers represented by EarthRights International (ERI) are suing the International Finance Corporation (IFC), the private lending arm of the World Bank Group, in United States federal court in Washington, D.C. The plaintiffs allege that the IFC, which provided a critical loan for the Tata Mundra coal-fired power plant in Gujarat, India, caused negative impacts on health, property and livelihoods. This lawsuit marks the first time a community harmed by a World Bank Group project has filed a lawsuit in United States court.

The World Bank Group’s lending is meant to provide benefits and opportunities for communities. When the Bank funds destructive projects, its accountability mechanisms, established to receive community complaints, are not always able to provide redress. In this case, the IFC has failed to remedy harm documented by its own accountability mechanism. This is part of a trend we have witnessed, where the World Bank Group refutes and denies findings of its accountability mechanisms, rather than acting to remedy harm, calling into question the Bank’s ultimate goal to end poverty and promote shared prosperity throughout the world.

Carla García Zendejas, Director of the People, Land & Resources Program at the Center for International Environmental Law, issued the following statement:

It is disturbing that even with the protections and systems in place at the IFC to provide remedy for communities they are forced to reach higher and higher to seek justice. Yet again those most vulnerable bear the effects to their health, environment and livelihoods while burdened with ever changing obstacles to seek compensation. This lawsuit highlights not only the issues of accountability at the World Bank Group but also the Bank’s misguided decisions to continue financing coal-fired power plants which are causing devastating human health and climate related harms in already vulnerable and poor communities throughout the world.

Natalie Bridgeman Fields, Founder and Executive Director of Accountability Counsel, issued the following statement:

Despite its claims to alleviate poverty and “do no harm,” the IFC has a terrible track record of causing serious human rights and environmental abuses. The IFC claims to enjoy broad immunity from suit and has traditionally not been held accountable for its abuses. While the IFC’s accountability mechanism often helps shed light on abuses, as it did in this case, the office cannot force the IFC to provide remedy. A lawsuit like this is an important step in strengthening the IFC’s system of accountability and will hopefully encourage the IFC to respond appropriately to findings of its accountability mechanism in the future.

Kristen Genovese, Senior Researcher, Centre for Research on Multinational Corporations (SOMO), issued the following statement:

Remedy should not depend on the willingness of the party who caused or contributed to the abuse. At the IFC, the people who are responsible for responding to allegations of harm are the same ones who designed and approved the project that caused the harm. In this case, as in many before and since, the IFC has demonstrated that it is unwilling or incapable of responding adequately. It is time for IFC to stop playing by its own rules and start respecting national and international law.


Contact: Amanda Kistler, Communications Manager, CIEL, 202-742-5832, akistler [at] ciel [dot] org

Natalie Bridgeman Fields, Executive Director, Accountability Counsel, 415-412-6704, natalie [at] accountabilitycounsel [dot] org Kris Genovese, Senior Researcher, SOMO, +31 65 2773272, k.genovese [at] somo [dot] nl

The Center for International Environmental Law (CIEL) uses the power of law to protect the environment, promote human health, and ensure a just and sustainable society. CIEL is a non‐profit organization dedicated to advocacy in the global public interest, including through legal counsel, policy research, analysis, education, training and capacity building.

Accountability Counsel is a non-profit organization that defends the environmental and human rights of marginalized communities around the world. As lawyers for people harmed by internationally-financed projects, it focuses on innovative ways to provide access to justice.

SOMO strives toward global economic development that is sustainable and fair and toward the elimination of the structural causes of poverty, environmental problems, exploitation and inequality. Through research targeted at achieving sustainable change and strengthening cooperation, SOMO seeks to offer social organisations worldwide, especially those in developing countries, the opportunity to promote sustainable alternatives and to provide a counterweight to unsustainable strategies and practices of multinational corporations.


Destructive Tata Mundra Coal Fired Power Plant

Fact Sheet:

Local fishing communities and farmers represented by EarthRights International (ERI) are suing the International Finance Corporation (IFC) in federal court in Washington, D.C. over the destruction of their livelihoods, loss and damage to their property, and the threats to their health caused by the IFC-funded coalfired power plant in the Kutch District of Gujarat, India.

The Tata Mundra Power Plant

For generations, the Kutch coastline has supported traditional communities who depend upon its natural resources for fishing, as well as farming, salt-panning and animal rearing. Many fishing communities depend entirely on the seasonal fish catch for their livelihood throughout the year.

The construction and operation of the 4,150 MW coal-fired Tata Mundra Ultra Mega Power Plant – built just one mile away from another coal-fired power plant – has fundamentally altered the landscape and threatened the livelihoods, health and way of life of local communities that now live in its shadow. The plant takes in enormous quantities of seawater to use for cooling purposes, then discharges the hot wastewater back into the sea. The thermal pollution has already substantially changed the local marine ecosystem and led to a drastic decline in the fish catch local fishing communities depend upon. Construction of the plant’s massive outfall and intake channels has also resulted in both physical and economic displacement of local fishing communities, and has contributed to saltwater intrusion into the groundwater, destroying vital sources of drinking water and water used for irrigation in an area where fresh water is scarce.

A nine-mile-long coal conveyor belt, which transports coal from the port to the Plant, runs right next to local villages and near fishing grounds. Coal dust from the conveyor and fly ash from the plant frequently contaminate agriculture, fish laid out to dry, homes and property, and threatens human health. Some air pollutants are already present at levels dangerous to human health, in violation of Indian air quality standards, and respiratory problems, especially among children and the elderly, are already on the rise.

The International Finance Corporation

The IFC is the private lending arm of the World Bank Group, which plays a major role in funding private-sector development projects in developing countries. Because it only invests in projects that could not otherwise attract sufficient private capital, the IFC has immense influence over how the projects are operated. The IFC provided a $450 million loan to enable the Tata Mundra plant to be built.

The IFC’s stated goals are to end extreme poverty and boost shared prosperity, and to carry out its investment activities “with the intent to ‘do no harm’ to people and the environment.” The IFC has developed a Sustainability Framework, which dictates the conditions of IFC involvement in projects and the obligations of both the borrower and the IFC to ensure the project promotes positive development objectives while protecting local communities and the environment.

From the outset, the IFC recognized that the Tata Mundra project would likely cause substantial harm to local communities, classifying the proposed project as one with potentially “significant adverse social and/or environmental impacts that are diverse, irreversible or unprecedented.”

Why is it so bad?

The Tata Mundra project purports to be in the name to be in the name of poverty reduction and “development”, but the costs fall hardest on the poorest and most vulnerable communities. The IFC recognized that the project posed significant risk, especially if the project were not well managed and the risks were inadequately mitigated. Yet it failed to ensure that sufficient safeguards were put in place to prevent the very harms that it identified as likely to occur.

The IFC’s own accountability mechanism has sharply criticized the IFC for its role in the project. In
2013, following a complaint by the Machimar Adhikar Sangharsh Sangathan (MASS; in English, the
Association for the Struggle for Fisherworkers’ Rights), the Compliance Advisor Ombudsman (CAO)
issued one of its most scathing reports to date, concluding that the IFC had failed to ensure the project
met the applicable Environmental and Social Standards necessary for IFC projects. It found that despite
predicting the type of harm the project could cause, as well as identifying the issues that would most
likely lead to that harm, the IFC failed to take necessary steps to protect local communities and the

The IFC responded by largely rejecting the CAO’s findings. In a subsequent monitoring report, released in January 2015, the CAO confirmed that the IFC still had not taken meaningful steps to address the identified failings, had failed to remedy the harms that had already been caused by the Plant, and remained out of compliance with its obligations.

Numerous organizations have condemned the IFC for its role in the project and its continuing failure to make things right. In November 2013, 100 Indian civil society organizations signed on to a letter to World Bank President Kim, condemning the IFC’s response to the CAO’s findings and calling on the IFC to withdraw from the project. Later that month, 27 civil society organizations, including Human Rights Watch, Oxfam, and International Rivers, wrote to express concern about the “trend” by WBG management “to refute, deny or otherwise fail to act on critical findings of its accountability mechanisms” using the Tata Mundra project as a prime example.

Who are the plaintiffs?

Plaintiffs Budha Ismail Jam, Sidik Kasam Jam and Kashubhai Abhrambhai Manjalia are fishermen who reside at the fishing harbors (known as bunders) that are closest to the plant, located in between the Plant’s intake and outfall channels. The fishermen live with their families at the bunders for 8-9 months each year during the fishing season, and return to villages further inland during the monsoon season. Tragadi bunder is located directly next to the outfall channel, where enormous quantities of hot water used to cool the plant are discharged each day. Kotadi bunder is located next to the intake channel and close to the coal conveyor belt that transports coal from the port to the Plant. Plaintiff Ranubha Jadeja is a farmer form Navinal village whose farmland has been affected by the increasing salinity of the groundwater and the ash and dust from the plant.

Additonally, ERI also represents the fishermen’s organization, Machimar Adhikar Sangharsh Sangathan (Association for the Struggle for Fisherworkers’ Rights) (MASS) and the Navinal Panchayat (village), a local government entity.

What does this lawsuit mean? Why does it matter?

The IFC’s own accountability mechanism concluded the IFC had failed to abide by the standards and policies that it is required to follow and failed to ensure its client abided by the terms of the loan agreement that were intended to protect local communities and the environment from harmful project impacts. But instead of acting to address its shortcomings, the IFC has failed to remedy the situation. With no other avenue for redress, our clients have turned to the courts in the United States, where the IFC is headquartered.

The IFC is likely to argue that it is immune from suit. But while courts have sometimes found the IFC to be immune, they have found that it is not immune where suit accords with the IFC’s own mission. We share our clients’ belief that no institution should be above the law in a case such as this where the IFC has so obviously failed in its duty to ensure the projects it funds do not harm local communities and the environment, and refuses to make things right. Affected communities must have an avenue for relief when they are harmed. If the IFC will not abide by the findings of its own accountability mechanism, and funds projects in a manner that undermines its own mission, then communities must be able to access the courts.


Lawsuit Accuses World Bank Arm Of ‘Mission Failure’

By Michael Hudson & Barry Yeoman, International Consortium of Investigative Journalists, Huffington Post –

23 April 2015

The World Bank Group caused serious harm to fishers, farmers and villagers in northwest India by bankrolling a giant coal-fired power plant on an ecologically fragile stretch of coastline, a lawsuit filed Thursday in U.S. federal court in Washington argues.

The suit accuses the World Bank Group’s private-sector lending arm, the International Finance Corporation (IFC), of “irresponsible and negligent conduct” in handling its $450 million financing package for the coal plant. Lawyers for EarthRights International, an environmental group with offices in the U.S., South America and Asia, filed the case on behalf of people living and working near the coal plant, which is located along the Gulf of Kutch, an inlet of the Arabian Sea.

The suit, which seeks class action status, argues that the Tata Mundra coal-fired plant has “fundamentally altered the local environment.” Heated water pumped from the plant has drastically reduced catches for traditional fishing clans, and coal dust and fly ash from the plant has contaminated farms and homes, the suit claims.

The plaintiffs in Jam v. IFC seek compensation for harm to local residents’ livelihoods and a court order enforcing the IFC’s standards for protecting people and the environment.

The IFC would not comment directly on the lawsuit’s claims. An IFC spokesperson provided a statement saying that the Tata Mundra plant “provides reliable power to rural and urban-based domestic consumers across the western states of Gujarat and Maharashtra and the northern states of Haryana, Punjab, and Rajasthan.” The spokesperson said the IFC and the plant’s operators have been working to address local community concerns.

In previous statements, the IFC has said that area residents are better off because it helped finance the power plant. “IFC has played a critical role in the Tata Mundra project, both in terms of investing and in providing guidance on environment and social practices,” it said. By developing guidelines to reduce harm to neighbors, and helping Tata implement them, “IFC ensured that the project’s environmental and social impacts are in line with good international industry practices.”

The World Bank Group has two main lenders — the World Bank, which lends to governments, and the IFC, which lends to corporations such as the Tata group, an Indian conglomerate that built and operates the coal power plant.

Thursday’s lawsuit comes amid reports by the International Consortium of Investigative Journalists, The Huffington Post, The Investigative Fund and other media partners that the World Bank and the IFC have regularly failed to enforce their rules for protecting people in the path of development projects.

World Bank Group President Jim Yong Kim said in March that he had “deep concern” about how the bank is handling the social impact of its projects. He announced an action plan for dealing with the concerns.

The IFC has said that its mission is to “carry out investment and advisory activities with the intent to ‘do no harm’ to people and the environment.”

The lawsuit argues that the IFC’s handling of the Tata Mundra project represents a “mission failure” because the plant’s construction and operations have “done substantial harm to local people and the environment.” The suit charges that the IFC knew the plant would have serious social and environmental consequences but moved forward with financing “without taking reasonable steps to prevent the harms it specifically foresaw.”

International organizations such as the World Bank Group generally contend they have a high level of legal immunity, which makes it difficult to sue them. Rick Herz, EarthRights’ litigation coordinator, said his group believes that the circumstances of the case and recent legal decisions will allow the litigants to defeat any claims of immunity.