Abstract
International development projects have a history of creating problems on the ground. Debates about the benefits of top-down development, the need for community buy-in, and the importance of community participation in development have been ongoing and have focused on how to prevent environmental and social harms to local communities. More recently, the conversation has shifted to focus more on the importance of providing remedy for harms, with a focus on development finance institutions (DFIs). DFIs have embraced internal, independent mechanisms to provide a process for accountability when a community suffers harms, but those mechanisms are not externally enforceable. They rely on the DFI, which caused the harm in the first place, to voluntarily comply with the accountability mechanism’s findings and recommendations. Much like development projects themselves, this produces mixed results. Most importantly, while the DFI might stop or change what it is doing, it will rarely pay individual community members for the harms they suffered.
What if there were a way for communities to use a domestic legal system to sue a DFI for the harms that the community suffered because of the development project? This Comment seeks to articulate the tort duty that DFIs owe to affected communities. This Comment argues that a DFI owes a duty of reasonable care to a community when the project has a development purpose and the institution plays a significant role in the design, approval, or implementation of the project. Reasonable care, akin to due diligence, requires the institution to follow its own environmental and social policies and comply with industry standards. This Comment considers these issues.
Development projects provide stable electrical grids, business opportunities, agricultural expertise, and other benefits. Shouldn’t a legal system incentivize these projects to engage in strong environmental and social practices as well? At the very least, shouldn’t a development institution provide remedy to individuals when a project causes death, loss of livelihood, or displacement?
