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17 Jan 2020

Jennifer Hijazi, E&E News (USA)

USA: Lower court to decide on Intl. Finance Corporation's immunity in Indian fishermen lawsuit over pollution from coal-fired power plant

"World Bank coal case a testing ground for climate liability," 15 Jan 2020

A David-versus-Goliath battle between aggrieved Indian villagers and an arm of the World Bank last year led the nation's highest bench to conclude that international financiers aren't immune to challenges in U.S. courts.

Budha Ismail Jam v. International Finance Corp., which is now moving forward in a lower court, could also apply pressure on other global institutions to address climate change protections in their investment strategies, legal experts say.

While the case is still in progress in the U.S. District Court for the District of Columbia, the threat of rising litigation following the Supreme Court's ruling is clear, said Erika Lennon, senior attorney at the Center for International Environmental Law, which has filed briefs in support of the villagers...

Attorneys in the case will lock horns in D.C. District Court today over whether the IFC, a branch of the World Bank that finances private projects in developing areas, should be on the hook for backing a coal plant that ravaged the livelihoods of residents in a nearby fishing village in India's state of Gujarat.

Budha Ismail Jam and other fishermen sued IFC on the grounds that it approved a $450 million loan for the Tata Mundra Ultra Mega Power Project without adequately ensuring that developers would adhere to environmental standards...

Knox cautioned against overstating the implications of the case, but he said the Jam decision reveals opportunities to pursue claims for risky projects outside of remedies available through the IFC or other institutions.

"It does open the door to suits against a class of really important actors in the climate financial world that, before Jam, it looked like couldn't be sued at all," he said.