US judge nixes lawsuit against World Bank over Gujarat power plant | india | Hindustan Times
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US judge nixes lawsuit against World Bank over Gujarat power plant

A US federal judge has dismissed a lawsuit filed by Indian fishermen and farmers against the World Bank over a loan for a power plant in Gujarat they claimed ravaged the environment.

india Updated: Mar 31, 2016 13:01 IST
The World Bank’s International Finance Corporation (IFC) is shielded by immunity and cannot be sued in the United States, the US district court judge ruled.
The World Bank’s International Finance Corporation (IFC) is shielded by immunity and cannot be sued in the United States, the US district court judge ruled.(webdata - Fotolia)

A US federal judge has dismissed a lawsuit filed by Indian fishermen and farmers against the World Bank over a loan for a power plant in Gujarat 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 US district court judge ruled.

The IFC loaned $450 million to help build the coal-fuelled Mundra power plant, which became fully operational in 2013.

The 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 US 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 US District Court judge John Bates in a ruling last week said under the International Organisations Immunities Act, the IFC is immune to prosecution in the United States.

The farmers plan to appeal, the US 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 spokesperson said the organisation 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.