U.S. judge nixes lawsuit against World Bank over power plant in India

Reuters News
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Posted: Mar 30, 2016 4:37 PM

By Sebastien Malo

NEW YORK (Thomson Reuters Foundation) - A U.S. federal judge has dismissed a lawsuit filed by Indian fishermen and farmers who sued the World Bank over a loan for a power plant they claimed ravaged the environment.

The World Bank's International Finance Corporation (IFC) is shielded by immunity and cannot be sued in the United States, the U.S. District Court judge ruled.

The IFC loaned $450 million to help build the coal-fueled Mundra power plant in India's coastal region of Gujarat, which became fully operational in 2013.

The Indian company that carried out the project, Coastal Gujarat Power Limited, a subsidiary of Tata Power, said it would create jobs, benefit 16 million domestic consumers and provide competitively priced electricity to industry and agriculture.

But fishermen, farmers and others living near the plant said it took a huge toll on the environment.

Saltwater leaking from the plant made groundwater undrinkable and unfit for irrigation, hot water from the cooling system harmed the fish catch and air quality suffered, they said in the U.S. lawsuit filed last year in the District of Columbia.

Their way of life could be "fundamentally threatened or destroyed," the complaint said, accusing the IFC of irresponsible and negligent conduct in financing and supervising its loan.

But U.S. District Court Judge John Bates in a ruling last week said under the International Organizations Immunities Act, the IFC is immune to prosecution in the United States.

The Indians plan to appeal, the U.S. nonprofit EarthRights International, which filed the lawsuit, told the Thomson Reuters Foundation.

"This is a fight for our lives and livelihood," Gajendrasinh Jadeja, head of Navinal Panchayat, a village that is a party in the case, said in an email.

"We believe we will prevail," Jadeja said.

An IFC spokeswoman said the organization would not comment on active legal matters.

A plan being implemented by Coastal Gujarat Power, however, includes what she called "mitigation measures," she said, but she did not elaborate.

The World Bank and IFC have come under criticism by groups that contend their focus on big projects can disrupt the environment and displace people.

The IFC, with 184 member countries, is the "largest global development institution focused exclusively on the private sector in developing countries," according to its website.

(Reporting by Sebastien Malo, Editing by Ellen Wulfhorst. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, land rights and climate change. Visit http://news.trust.org)