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8 May 2018

Michelle Harrison and Kirk Herbertson, EarthRights International

US Supreme Court to decide whether International Finance Corporation is above the law

Later this month, the U.S. Supreme Court will decide whether to hear a case challenging the International Finance Corporation’s (IFC’s) claim to immunity from being sued. If the Court decides not to hear the case—thereby granting the IFC “absolute immunity” from lawsuits in the United States—it will place international organisations like IFC above the law, creating a new rule of immunity far greater than that of any other entity, government, or person, at the expense of the right to remedy. A decision to hear the case, however, presents a critical opportunity to rectify an accountability gap.

In 2015, EarthRights International filed a lawsuit in a U.S. federal court on behalf of fishing and farming communities in Gujarat, India. The lawsuit asked for compensation from the IFC for its role in financing the destructive Tata Mundra coal-fired power plant project, despite knowing that the project carried grave risks. As the IFC predicted, the project has led to extensive harm – precisely those harms it warned could result if appropriate steps were not taken. Many local communities have lost their access to clean drinking water. Fish catch they depend on for their livelihoods has been severely reduced as a result of the thermal pollution from the plant. Coal ash, coal dust, and other pollutants have contaminated the land and air pollutants are present at levels that are dangerous to people’s health...

The IFC does not deny that these harms occurred, and instead argues that it is immune from being sued in U.S. courts, no matter how much harm it causes. But international organisations do not have absolute immunity...