In a landmark decision in 2019, the U.S. Supreme Court ruled in Jam v. International Finance Corporation that international organizations like the International Finance Corporation (IFC), the private lending arm of the World Bank Group, can be sued in U.S. courts, ending the “absolute immunity” from suit that they had long claimed. The Jam lawsuit arose out of IFC’s gross mishandling of the Tata Mundra coal-fired power plant project in Gujarat, India, which has destroyed the livelihoods, environment, and way of life of local communities living in its shadow. The lawsuit, and especially the clash between IFC’s sweeping assertions of jurisdictional immunity on the one hand, and its role in harming communities and the need for remedy to the communities on the other, brought substantial international attention and public scrutiny to the broader accountability crisis at IFC. In particular, the suit revealed that too often IFC-funded projects result in harm to the poorest and most vulnerable – the very people IFC is meant to help – and when this happens, neither IFC nor its borrowers take meaningful action to remedy that harm.
Harrison, Michelle and Marcoux, Shannon, "Legal Risk and Accountability in Development Finance: Lessons from Jam v. International Finance Corporation" (2024). Perspectives. 28.