The Handa Center held a panel discussion with our fellow Erica Gould, Stanford Law Professor Jeffrey Fisher, and NGO experts who successfully challenged international organizations' immunity in a U.S. Supreme Court. The case empowers communities that are negatively impacted by international corporations and development projects.
Natalie Bridgeman Fields, the founder and executive director of Accountability Counsel, provided context by describing the “inherently unjust system” whereby richer countries pay into the World Bank Group, and poorer countries borrow from these funds. She said certain World Bank projects were executed “virtually without any rules,” and civil society started organizing in response. They lobbied Congress—and succeeded—in creating accountability offices (AOs) to review such projects.
Michelle Harrison, a staff attorney at EarthRights International, continued, noting that her group had already seen a trend of the World Bank giving loans to companies that wouldn’t have otherwise obtained funding. Their focus is supposed to be development, she said, but time and time again, the people most negatively impacted by these projects are the poorest. Bridgeman Fields asked, “Who’s being harmed by these projects? Indigenous communities.” “We have to ask today: Why is there no accountability?”
“We were kind of stunned by what we found,” Harrison said, when they started looking into legal cases involving development projects by these companies. But the companies had immunity.
With the backdrop set, the presenters then spoke the court case in question, Jam v. International Finance Corporation. The Tata Mundra coal-fired power plant in Gujarat, India, caused widespread pollution and environmental harm to local waterways and farmland, threatening not only those natural resources, but also the livelihoods of the local people who rely on them. The International Finance Corporation (IFC), a private lending arm of the World Bank, provided crucial financing for the Tata Mundra Plant and has specific policies in place to prevent its development projects from causing harm and rights violations. When residents of Gujarat filed a complaint, the accountability office found fault with the way IFC implemented the project, validating the community’s complaints—but nothing came of it.
The teams strategized together, and Stanford Law Professor Jeffrey Fisher argued against the immunity held by international organizations in case that reached the U.S. Supreme Court. The Court handed the Gujarat community a victory and ruled that international organizations have the same immunity as foreign governments—“no more, no less,” in the words of Fisher—meaning they are liable for damages in certain conditions.
The case’s impact is that communities like Gujarat will now have legal recourse against international organizations in U.S. courts. Fisher asked, “What if you opened the floodgates and there are a bunch of cases against these kinds of organizations? How would the courts view this?”
Kindra Mohr, Policy Director at Accountability Counsel, said there is not likely to be a floodgate as such, weighing the options from the point of view of an impacted community: “Do you spend lots of time and money on a court case you might not win, or do you go with mediation on the ground? Most of the time, communities want the second route.” Mohr sees an avenue for improvement on the part of these international organizations as many such institutions are moving toward accountability offices of their own. “No one is saying, ‘Why bother?' This is a watershed moment,” she said, punctuating her optimism. “I think it’s going to go our direction. It’s very exciting.”
“It’s nice to come to a panel like this and do a victory lap,” said Fisher. “You don’t often get to do that.”
This event was co-sponsored by the Program in International Relations and Stanford Environmental Law Society.
Read about the event as covered in the Stanford Daily.