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Gujarat Fishermen’s victory in US Supreme Court

Gujarat Fishermen’s victory in US Supreme Court

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  • GS 3 || Environment || Environment & Ecology || Sustainable Development

Why in news?

  • The US Supreme Court ruled in favour of a group of fishermen and a Gujarat village panchayat in a suit against the US-headquartered International Finance Corporation (IFC).

Dispute

  • The case, which now goes back to a US district court, relates to alleged pollution caused by a Gujarat-based power plant partly funded by IFC.
  • The coal-fired power plant, near Mundra port in Gujarat’s Kutch district and with a capacity of 4,150 MW, is the country’s first to deploy energy-efficient supercrictical technology (which results in energy efficiency 40.5% higher compared to other coal-based power technologies).
  • Initially conceived by Power Finance Corporation Limited, it was awarded in 2007 to Coastal Gujarat Power Limited, a subsidiary of Tata Power.
  • It reached full generation capacity in March 2013, and has since been selling power to utilities in Gujarat, Maharashtra, Haryana, Punjab and Rajasthan.
  • Of the estimated project cost of $4.14 billion, $450 million was funded in 2008 by IFC, which finances private-sector development projects in poor and developing countries.
    • Asian Development Bank advanced $450 million as loan,
    • Export Credit Agency of Korea extended another $800 million as loan, and
    • CGPL raised around Rs 1.5 billion from Indian banks through debt.

Concerns

  • According to National Fish Worker’s Forum, a nationwide federation of fishermen organisations, the plant operates a cooling technology that requires much more water than the system it got clearance for. The water is eventually discharged into the sea, and the complainants have alleged that it has affected marine life.
    • The company had first got clearance for a closed-cycle cooling system in the Mundra plant.
    • But it got government clearances modified and installed boilers with an open cooling system [which requires three times as much water] and then discharges water into the sea.
    • The outfall canal of the plant discharges hot and saline water at a rate of 600 million litres/hr. It is affecting marine life as well as groundwater sources.
  • The company also dredged the coast and seafloor for their outfall channel and deposited sand near a well, which was a source of drinking water.
  • Complainants add that coal dust and fly-ash from the plant are damaging date palms and chikoo trees in Navinal.

Complaint

  • The plant is located near Tragadi village in Mandvi taluka, and Navinal village in neighbouring Mundra taluka.
  • Tragadi has a colony of fishermen in an area known as Tragadi-Nal while Navinal is rich in agriculture and horticulture.
  • In 2010, fishermen of Tragadi and residents of Navinal came together under the aegis of fishermen’s organisation Machimar Adhikhar Sangharsh Sanghathan (MASS) and complained to the company about damage to the environment.

In US courts

  • In 2015, a suit was filed, through EarthRights International, against IFC in the Federal District Court for the District of Columbia.
  • They contended that the funding agency should be held responsible for air, land and water pollution caused by the plant.
  • Arguing that the IFC internal audit had found environmental violations, they sought damages and injunctive relief.
  • IFC claimed absolute immunity from such litigation under the US International Organisation Immunities Act (IOIA), 1945.
  • The district court ruled in IFC’s favour. In 2017, the petitioners moved the Court of Appeals for the district, which upheld the verdict. The petitioners then moved the US Supreme Court.

Current verdict

  • In a 7:1 verdict, the Supreme Court reversed the Appeals Court judgment.
  • It ruled IFC enjoys only “restrictive immunity” in activities abroad, and remanded the matter back to the lower court for adjudication on damages.

Additional info

International Finance Corporation (IFC)

  • The International Finance Corporation (IFC) is an international financial institution that offers investment, advisory, and asset-management services to encourage private-sector development in less developed countries.
  • The IFC is a member of the World Bank Group and is headquartered in Washington, D.C..
  • It was established in 1956, as the private-sector arm of the World Bank Group, to advance economic development by investing in for-profit and commercial projects for poverty reduction and promoting development.
  • The IFC’s stated aim is to create opportunities for people to escape poverty and achieve better living standards by mobilizing financial resources for private enterprise, promoting accessible and competitive markets, supporting businesses and other private-sector entities, and creating jobs and delivering necessary services to those who are poverty stricken or otherwise vulnerable.

EarthRights International (ERI)

  • EarthRights International (ERI) is a nongovernmental, nonprofit organization that combines the power of law and the power of people in defense of human rights and the environment, defined as “earth rights”.
  • ERI specializes in fact-finding, legal actions against perpetrators of earth rights abuses, training grassroots and community leaders, and advocacy campaigns.
  • Through these strategies, EarthRights International seeks to end earth rights abuses, to provide real solutions for real people, and to promote and protect human rights and the environment in the communities where we work.

Mains question

  • Examine the significance of the recent US Supreme Court verdict that allowed fishermen of Gujarat to prosecute World Bank affiliate, International Finance Corporation (IFC), for negligence and environmental damages.