In­dian Power Plant Pol­lu­tion Case Goes to U.S. Supreme Court

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In a case with po­ten­tial land­mark im­pli­ca­tions, a law­suit brought by a group of In­di­ans against a power plant built in Gu­jarat, In­dia, is go­ing to be heard by the U.S. Supreme Court.

The suit was filed on be­half of lead plain­tiff Budha Is­mail Jam, three other res­i­dents, a lo­cal trade union that rep­re­sents the rights of fish­er­men, and the town of Nav­inal Pan­chayat. The de­fen­dant is the In­ter­na­tional Fi­nance Cor­po­ra­tion (IFC), The World Bank’s pri­vate lend­ing com­pany. The plain­tiffs claim the Tata Mun­dra Ul­tra Mega Power Plant, a 4,150-megawatt coal-fired plant that was funded by a $450 mil­lion loan from the IFC, has “im­pov­er­ished com­mu­ni­ties and lo­cal farm­ers who have had their way of life fun­da­men­tally threat­ened or de­stroyed by the Tata Mun­dra Plant."

The plant is lo­cated in the Kutch dis­trict, Gu­jarat, In­dia. It be­came fully oper­a­tional in 2013. Tata Power, an In­dian com­pany and part of the gi­ant con­glom­er­ate Tata Group, owns the plant, but they have been es­sen­tially try­ing to give the plant away due to its sub­stan­tial debt and con­tin­ued fi­nan­cial losses.

The IFC is head­quar­tered in Wash­ing­ton, D.C.

Nav­inal Pan­chayat, the town named as one of the plain­tiffs in the case, is home to ap­prox­i­mately 3,000 res­i­dents whose pri­mary sources of em­ploy­ment are farm­ing, fish­ing and an­i­mal rear­ing.

Ac­cord­ing to the case fil­ing, “The IFC states that its mis­sion is to carry out in­vest­ment and ad­vi­sory ac­tiv­i­ties with the in­tent to ‘do no harm’ to peo­ple and the en­vi­ron­ment. The Tata Mun­dra Plant is thus a mis­sion fail­ure. The project has al­ready done sub­stan­tial harm to lo­cal peo­ple and the en­vi­ron­ment, and if com­pen­satory, re­me­dial and pre­ven­tive mea­sures are not promptly taken, plain­tiffs will be fur­ther in­jured, their liveli­hoods de­stroyed and the lo­cal en­vi­ron­ment ir­repara­bly harmed, all in fur­ther vi­o­la­tion of the IFC’S mis­sion.”

The law­suit goes on to say that the IFC pro­vided its fi­nanc­ing for the plant de­spite al­legedly know­ing the coal-fired plant and pol­lu­tants as­so­ci­ated with its con­struc­tion and op­er­a­tion would cause sig­nif­i­cant harm to the en­vi­ron­ment. The plant cur­rently con­sumes be­tween 12 and 13 mil­lion tons of coal each year. In op­er­a­tion, it takes in sea­wa­ter to help cool it and then throws out heated wa­ter as a waste by-prod­uct, which kills ma­rine life.

The law­suit says that as a crit­i­cal fun­der in de­sign­ing, build­ing and op­er­at­ing the plant that should never have been funded and built, the IFC “failed to take suf­fi­cient steps or ex­er­cise due care to pre­vent and mit­i­gate harms to the prop­erty, health, liveli­hoods and way of life for many peo­ple who live near the Tata Mun­dra Plant.” The case goes on to state that dur­ing the plant’s de­sign process, the ini­tial ap­proved de­sign

was changed so the in­take and out­fall chan­nels made the en­vi­ron­men­tal im­pact worse. It says that the IFC had full knowl­edge that the project was “ex­pected to have sig­nif­i­cant ad­verse so­cial and/or en­vi­ron­men­tal im­pacts that are di­verse, ir­re­versible or un­prece­dented.” It goes on to say that “the ther­mal pol­lu­tion dis­charged into the sea by the Tata Mun­dra Plant’s cool­ing sys­tem has fun­da­men­tally de­graded the lo­cal ma­rine ecosys­tem where tra­di­tional fish­ing com­mu­ni­ties have fished for gen­er­a­tions, re­sult­ing in the de­cline of crit­i­cal fish stocks and other ma­rine re­sources and threat­en­ing plain­tiffs’ means of sup­port­ing them­selves and their fam­i­lies.” The case fur­ther notes that “con­struc­tion of the Tata Mun­dra Plant and the in­take and out­fall chan­nels has closed off ac­cess routes to tra­di­tional fish­ing grounds, sub­stan­tially in­creased the travel time and costs for fish­ing fam­i­lies and caused sea wa­ter in­tru­sion into the ground­wa­ter along the Mun­dra-mandvi area where plain­tiffs and other mem­bers of the pro­posed class live.”

The 56-year-old lead plain­tiff Jam, who is a fish­er­man him­self, said the de­cline in fish catch, caused by the plant, has af­fected his work so much that he and his fam­ily of a wife, five sons, their wives and 10 grand­chil­dren may all have to move away in or­der to bring in suf­fi­cient in­come to live.

With the fa­cil­ity fully up and run­ning, the to­tal air pol­lu­tants the plant gives off are higher than the stan­dards the IFC has set for it­self. They also ex­ceed what In­dian law re­quires. Be­cause of other eco­log­i­cal dam­age caused by the plant, the wa­ter in the re­gion is now so salty with con­tam­i­nants that it is not safe for peo­ple to drink or able to be used with ir­ri­ga­tion sys­tems by lo­cal farm­ers. Hot wa­ter ex­it­ing the plant’s cool­ing sys­tem has low­ered the num­ber of fish that used to be present near the shore­line.

The fish work­ers’ trade union filed a com­plaint about the plant in 2011. The Of­fice of the Com­pli­ance Ad­vi­sor Om­buds­man (CAO) then de­ter­mined that the IFC did not prop­erly in­ves­ti­gate the en­vi­ron­men­tal and so­cial risks caused by the plant when it was funded and had over­sight re­spon­si­bil­ity for the plant’s de­vel­op­ment. It ne­glected to en­sure that the plant met en­vi­ron­men­tal stan­dards, did not make sure pol­lu­tion was within re­quire­ments and did not prop­erly con­sider what might hap­pen to the re­gion’s res­i­dents when the plant was com­plete.

Ac­cord­ing to Rick Herz, Earthrights In­ter­na­tional’s lit­i­ga­tion co­or­di­na­tor, “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. The law­suit seeks com­pen­sa­tion for harm to prop­erty and eco­nomic liveli­hoods and asks [that] 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.”

The case is com­ing to the U.S. Supreme Court pre­cisely be­cause of the ar­gu­ment about im­mu­nity that Herz men­tioned. In a lower court rul­ing at the D.C. Cir­cuit in 2017, the IFC ar­gued for – and the court agreed – the case that the suit should be barred on the ba­sis of the In­ter­na­tional Or­ga­ni­za­tions Im­mu­ni­ties Act.

Lawyers rep­re­sent­ing Jam and the other plain­tiffs then filed a writ of cer­tio­rari with the U.S. Supreme Court for it to re­view the lower court’s de­ci­sion. When the Supreme Court rules, it could have land­mark im­pli­ca­tions. The rul­ing should read on whether the In­ter­na­tional Or­ga­ni­za­tions Im­mu­ni­ties Act pro­tects cor­po­ra­tions like the IFC for for­eign fi­nanc­ing sup­port the same way in which govern­ments are typ­i­cally pro­tected by the For­eign Sov­er­eign Im­mu­ni­ties Act.

If that hap­pens, the rul­ing could force a very nec­es­sary rais­ing of the bar for ac­count­abil­ity for or­ga­ni­za­tions such as the IFC and its par­ent, The World Bank.

When di­rect for­eign aid is pro­vided by the United States to a for­eign coun­try for in­fra­struc­ture de­vel­op­ment such as power plants, roads and telecom­mu­ni­ca­tions projects, the en­vi­ron­men­tal im­pacts and the hu­man rights and dis­place­ment im­pli­ca­tions of the project are gen­er­ally part of the con­sid­er­a­tions for the projects. There is no such re­quire­ment for or­ga­ni­za­tions like the IFC, The World Bank or even in­di­vid­ual com­pa­nies who may be in­volved in the ac­tual con­struc­tion of such plants pro­vided the work is all done out­side U.S. borders.

The World Bank, the or­ga­ni­za­tion in­volved with the Tata Mun­dra Plant, un­for­tu­nately has a track record of lend­ing with­out en­forc­ing ap­pro­pri­ate stan­dards re­gard­ing en­vi­ron­men­tal pro­tec­tions and hu­man rights. One big ex­am­ple is the Yana­cocha gold mine in Peru, a project owned and op­er­ated by U.S.based New­mont Min­ing Cor­po­ra­tion and built us­ing loans pro­vided by The World Bank. The con­struc­tion re­quired us­ing ex­plo­sives to break apart hills and then ap­ply­ing toxic chem­i­cals to ex­tract the gold ore. Since it started op­er­a­tions in 1993, the mine is still on record as be­ing the big­gest gold mine in South Amer­ica, with a to­tal yield of over 35 mil­lion ounces of gold. It has also de­liv­ered over $2.75 bil­lion in tax rev­enues and roy­al­ties to the Peru­vian govern­ment since that

time. How­ever, it has also un­leashed ma­jor pol­lu­tion into the ground­wa­ter in the form of heavy me­tals and pro­duced at least one ma­jor dump of mer­cury from a truck as­so­ci­ated with the project. An­i­mals and peo­ple in the area have be­come badly sick­ened, and many have died from the con­tam­i­na­tion.

Ac­cord­ing to a study con­ducted by the In­ter­na­tional Consortium of In­ves­tiga­tive Jour­nal­ists and the Huff­in­g­ton Post, The World Bank is in­vest­ing more than ever in large projects that are po­ten­tially highly dam­ag­ing and prone to risks, both to the en­vi­ron­ment and to the peo­ple who live near the projects. That study showed that in the pe­riod from 2009 to 2013, The World Bank and the IFC have funded 239 of these high-risk, high-pay­off projects, in­clud­ing dams, cop­per mines and oil pipe­lines. The rate of fund­ing is twice the level it was in the five years be­fore 2009. The projects are also in­creas­ingly be­ing car­ried out in lo­ca­tions where the fed­eral govern­ments do not tend to en­force reg­u­la­tions and where the laws are not so strict.

The same study also noted that dur­ing the pe­riod be­tween 2004 and 2013, The World Bank made a to­tal of $455 bil­lion in in­vest­ments. Dur­ing that time, a to­tal of 3.4 mil­lion peo­ple lost their homes, lost their land or had their jobs taken away be­cause of roads, power plants and other projects funded by the or­ga­ni­za­tion. It is true that the project man­agers in many cases did pro­vide some com­pen­sa­tion for what hap­pened to the peo­ple, but it is equally true that many re­ceived noth­ing or were forcibly re­moved from their prop­er­ties with­out any court or govern­ment ac­tion to pro­tect them.

The sheer mag­ni­tude of the in­hu­man and eco­log­i­cally de­struc­tive lend­ing pro­vided by The World Bank and the IFC alone is one rea­son this Supreme Court case could have such far-reach­ing im­pli­ca­tions. If the fish work­ers and farm­ers of Nav­inal Pan­chayat, In­dia, win their case with the U.S. Supreme Court, it could open the doors to many other such law­suits around the world.

For those who brought the case for­ward, a win with the Supreme Court is not the end, since all that would be de­ter­mined there is a ju­ris­dic­tional dis­pute. The real fight to de­ter­mine li­a­bil­ity and dam­ages and to get monies back in the hands of the com­mu­nity that has been for­ever harmed at the hands of those who run the IFC and The World Bank is still sev­eral steps ahead.

The AMERO and other peo­ple’s re­gional dig­i­tal cur­ren­cies will help pro­vide an al­ter­na­tive to en­vi­ron­men­tally de­struc­tive de­vel­op­ment.

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