World Bank can be sued for environmental and health issues
The U.S. Supreme Court (SCOTUS) issued a landmark decision last week in Jam v. International Finance Corporation, ruling for the first time that the World Bank can be sued for environmental and health issues where its investments in foreign development projects are alleged to have caused harm to local communities. This decision could make it possible for millions of people around the world to seek compensation for environmental destruction and health issues that are related to internationally financed development projects. The decision overturned a decades-old presumption dating back to the founding of the World Bank in 1945 that the International Finance Corporation (IFC), a Washington, D.C. based branch of the World Bank Group that finances private-sector projects in developing countries, and other bank-affiliated organizations are fully immune from such suits.
The Jam lawsuit was filed in 2015, on behalf of a group of farmers and fisherman in Gujarat, India, and alleges that a coal-fired power plant, which was built with a $450 million IFC loan, caused loss of livelihood, property damage, and threats to the plaintiffs’ health due to issues related to contaminated water and its impact on fish populations. The lawsuit alleges that IFC did not take steps to mitigate the environmental harms it predicted could occur from the project which resulted in not only environmental but also social harms. Now that SCOTUS has resolved the fundamental immunity issue, the case will return to lower courts for further litigation and battles over the facts of the case.
The World Bank and its affiliates are vital sources of funding for international development projects, some of which are highly controversial. An ongoing series by the International Consortium of Investigative Journalists has found that more than 3 million people, across every continent, have been physically or economically displaced by World Bank-funded projects over the past decade.