By Corporate Crime Reporter
A federal district court in Washington, D.C., ruled last week that the International Finance Corporation (IFC), the private lending arm of the World Bank Group, has absolute immunity and thus cannot be sued in the United States.
Fishing communities and farmers represented by EarthRights International (ERI) filed suit against the IFC last year over the destruction of their livelihoods and property and threats to their health caused by the IFC-funded Tata Mundra coal-fired power plant in Gujarat, India.
The IFC moved to dismiss the case, arguing that it is not subject to the authority of U.S. courts, no matter how harmful or illegal its actions may have been.
The district court concluded that it was required to find that the IFC is entitled to absolute immunity based on previous decisions from the D.C. Circuit Court of Appeals.
The plaintiffs had argued that recent Supreme Court cases addressing immunity overturned the D.C. Circuit’s decisions.
The district court did not consider that argument, but instead held that it should be heard and decided by the D.C. Circuit on appeal.
“The IFC’s sweeping claims of immunity are deeply problematic both from a policy perspective, and in light of recent Supreme Court caselaw. We feel confident that the appellate court will agree,” said Rick Herz, ERI’s litigation coordinator.
From the start, the IFC recognized that the Tata Mundra project was a high-risk project that could have “significant” and potentially “irreversible” adverse impacts on local communities and their environment.