World Bank Funds Tied to Pollution in India

     WASHINGTON (CN) – A World Bank-funded power plant in India destroyed the lands and livelihoods of hundreds of farmers and fishermen and endangered their families’ health, residents claim in Federal Court.
     Lead plaintiff Budha Ismail Jam and three other affected residents sued the International Finance Corp. on behalf of the “impoverished fishing communities and local farmers who have had their way of life fundamentally threatened or destroyed by the Tata Mundra Plant,” in Kutch District, Gujarat, India.
     A local trade union representing fisher-workers’ rights and Navinal Panchayat, a village near the plant, are also named as plaintiffs. Navinal village has about 800 homes and 3,000 residents whose livelihoods depend on farming, fishing and animal rearing, according to the complaint.
     Before the Tata Mundra Ultra Mega Power Plant, a 4,150-megawatt, coal-fired plant, began operating at full capacity in 2013, International Finance Corp. provided a $450 million loan to the project.
     A subsidiary of Indian company Tata Power owns the plant in question, while IFC is the private-lending arm of the World Bank Group.
     “The IFC states that its mission is to ‘carry out investment and advisory activities with the intent to “do no harm” to people and the environment,'” the lawsuit states. “The Tata Mundra Plant is thus a mission failure. The project has already done substantial harm to local people and the environment, and if compensatory, remedial and preventive measures are not promptly taken, plaintiffs will be further injured, their livelihoods destroyed, and the local environment irreparably harmed, all in further violation of the IFC’s mission.”
     IFC’s financing came despite its alleged knowledge that the coal-fired power plant would cause significant harm to the environment and surrounding communities.
     “The IFC acted negligently and irresponsibly at all phases of this project – in its appraisal, in the disbursement of funds, and in its supervision and monitoring of the project and the impacts on local communities and the environment,” Michelle Harrison, one of the attorneys behind the April 23 complaint, said in an interview. “The IFC approved the critical funding that enabled the project to go forward without taking reasonable steps to prevent the harms it specifically foresaw and it subsequently failed to enforce provisions of the loan agreement intended to protect the affected communities and the environment. And, despite the fact that its own accountability mechanism has sharply criticized the IFC’s acts and omissions with respect to this project, the IFC has still failed to remedy the situation.”
     Tata Mundra got its initial environmental clearance from the Indian government in 2007, along with another power plant that was built just a mile away, around the same time. Both plants have allegedly raised eyebrows because of their environmental impact.
     Tata Mundra, which burns about 12 to 13 million tons of coal a year, takes in enormous amounts of seawater and discharges heated water into the sea through a large outfall channel.
     “The Tata Mundra Plant is located in an ecologically rich, but fragile, portion of the Kutch coast in Gujarat, India,” home to communities of farmers and fishermen, the complaint states.
     IFC’s funding was critical to getting the project off the ground, and it “failed to take sufficient steps or exercise due care to prevent and mitigate harms to the property, health, livelihoods, and way of life of many of the people who live near the Tata Mundra Plant,” the complaint continues.
     Residents say the project saw changes to its initial design for intake and outfall channels, which made the environmental impact even greater, and that the IFC knew the project was “expected to have significant adverse social and/or environmental impacts that are diverse, irreversible, or unprecedented.”
     “The thermal pollution discharged into the sea by the Tata Mundra Plant’s cooling system has fundamentally degraded the local marine ecosystem where traditional fishing communities have fished for generations, resulting in the decline of critical fish stocks and other marine resources, and threatening plaintiffs’ means of supporting themselves and their families,” the complaint states. “Construction of the Tata Mundra Plant and the intake and outfall channels has closed off access routes to traditional fishing grounds, substantially increased the travel time and costs for fishing families, and caused sea water intrusion into the groundwater along the Mundra-Mandvi area where plaintiffs and other members of the proposed class live.”
     Jam, a 56-year-old fisherman who lives in a seasonal fishing village known as a bunder, claims the decline in the fish catch has affected his livelihood and may force him and his wife, five sons, their spouses and 10 grandchildren to move away.
     “The fish catch has been declining since 2011,” a press release quotes Jam as saying. “I don’t know what other profession I could do to support my family.”
     Before the plant began to operate, Jam’s family earned about 500,000 rupees ($8,000) a year. He and the other 21 members of his family now earn close to 150,000 rupees ($2,400) a year, according to the complaint.
     “Due to the increasing salinity, farmers can no longer use their groundwater to irrigate, nor for drinking water, and local villages must now purchase fresh water elsewhere,” the complaint adds. “Farmers have had to shift the crops they grow, or rely only on the crops they are able to produce during the short monsoon season, when irrigation is not required. Farm laborers have had to find new ways to support themselves, often leaving their families for extended periods of time to find work in Mumbai or elsewhere.”
     The coastal area affected by the plant was allegedly one of the few in the district with groundwater fit for drinking and irrigation. Residents say they relied on the water to grow cotton, wheat, coconut, millet and dates.
     “Because of the Tata Mundra Plant and its coal conveyor system, which brings coal to the plant from a port nearly 9 miles (14 kilometers) away, coal dust and fly ash periodically cover homes, property, burial sites, crops, salt resources, and fish laid out to dry before they are processed for sale,” the complaint states. “The dust and ash contaminates drying fish, reducing their value, damages agricultural production, and threatens human health.”
     Changes to the air quality in the area are also apparent, residents say, pointing to an increase in asthma and respiratory problems among local residents.
     Children who play near the outfall channels suffer from skin conditions caused by the polluted water, the lawsuit adds.
     Air pollutants the plant gives off exceed IFC standards and the limits imposed by Indian law, and the water is now too saline for human consumption, a problem for hundreds of residents, according to the complaint.
     Residents say the IFC violated its own policies in approving the loan and failed to supervise and intervene when the plant fumbled environmental safeguards.
     After the fisher-workers’ union filed a complaint in 2011, the IFC’s accountability mechanism, the Office of the Compliance Advisor Ombudsman (CAO), found that the IFC failed to sufficiently assess environmental and social risks associated with Tata Mundra, such as pollution control standards and resident displacement issues, and to ensure that the plant would abide by environmental standards, according to the complaint. It says the IFC nevertheless disregarded most of the CAO’s findings.
     The CAO’s January 2015 monitoring report found that the IFC failed to remedy the injuries to local communities, according to the complaint.
     “The IFC should have ensured the project did not go forward unless and until sufficient precautions were taken to minimize and prevent foreseeable harms to our clients and their environment,” Harrison said in an email. “It should have ensured these precautions were taken before funds were disbursed, and should have taken remedial action to address the harms that have already occurred.”
     The plaintiffs seek an injunction and compensatory and punitive damages for negligence, breach of contract and other claims.
     They are represented by Jonathan Kaufman and colleagues with EarthRights International.
     “While the IFC is likely to argue that it is immune from suit, no institution should be above the law in a case where the risks were so obvious from the start, and the failure to act so damaging,” Rick Herz, EarthRights International’s Litigation Coordinator, said in a statement. “The lawsuit seeks compensation for harm to property and economic livelihoods, and asks [that] the court order the IFC to enforce the provisions of the loan agreement which were intended to protect local communities and the environment to minimize future harm.”
     Representatives for the IFC have not returned requests for comment.

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