In a historic 7-1 decision, the U.S. Supreme Court decided today in Jam v. International Finance Corporation (IFC) that international organizations like the World Bank Group can be sued in U.S. courts.
The Court’s decision marks a defining moment for the IFC – the arm of the World Bank Group that lends to the private sector. For years, the IFC has operated as if it were “above the law,” at times pursuing reckless lending projects that inflicted serious human rights abuses on local communities, and then leaving the communities to fend for themselves.
International organizations like the IFC have long claimed they are entitled to “absolute” immunity, even as they engage in commercial activities, like the coal-fired power plant at the heart of this case. Because the relevant statute only gives the IFC the same immunity as foreign governments, and foreign governments do not have absolute immunity in U.S. courts when they engage in commercial activities, the Supreme Court rejected this position: “The International Finance Corporation is therefore not absolutely immune from suit.”
The case involves an IFC-financed power plant in Gujarat, India. The plaintiffs are members of local fishing and farming communities whose livelihoods, air quality, and drinking water have been devastated by the project. They allege that the IFC and the project developers knew about these risks in advance but nevertheless chose to recklessly push forward with the project without proper protections in place.
Read more in this analysis by Earth Rights.