A recent ruling by the Supreme Court of the United States could pave the way for lawsuits in that country such as the one filed last November by Cuban doctors against the Pan American Health Organization (PAHO) for appropriating part of their salary while working in Brazil.
The nation's highest court ruledthat international organizations based in the United States, such as the PAHO, do not have absolute immunity, and may be sued, in certain cases, in US courts.
The Supreme Court's historic decision, taken with seven votes in favor and one against on February 27, affects International Finance Corporation (IFC), an arm of the World Bank that grants funds for private projects in poor and developing countries.
According to several press reports, the IFC granted 450 million dollars for the construction in Mundra, Gujarat (western India), of a 4,000-MW coal-fired power plant owned by Tata Power. Farmers, fishermen and inhabitants of the area turned to a US federal court in 2015 to denounce the air and water contamination caused by the plant, opened in 2012.
EarthRights International, an environmental defense organization that supported the plaintiffs, argued that the construction and operation of the Mundra plant has destroyed the natural resources on which the inhabitants of the area depend for fishing in the Gulf of Kutch, agriculture, the harvesting of salt, and livestock raising.
It observed that the IFC's own accountability mechanism had harshly criticized the project and found flaws in each stage of implementation.
The company did not comply with the plant's environmental and social action plan, the Supreme Court noted in it ruling of February 27.
IFC recognized having done damage, according to EarthRights International. However, it argued that it enjoyed full immunity against such suits, and stated it simply could not be held responsible.
A lower court and an appeals court ruled in IFC's favor. Nevertheless, the Supreme Court rejected the International Finance Corporation's arguments that allowing certain lawsuits would trigger an avalanche of litigation in US courts and make it more difficult and expensive to finance international projects.
"The IFC's concerns are inflated," wrote Chief Justice John G. Roberts Jr., The Washington Post reported.
There is no "absolute immunity"
After the Second World War, the US Congress granted new international organizations –such as the United Nations and the International Monetary Fund– benefits similar to those granted in the country to foreign governments, including protection against trial.
A subsequent law provided for an exception: foreign governments are subject to certain legal actions in the United States in the area of commercial activity.
In the case of IFC, the Supreme Court ruled that the law grants it only the same protection as foreign governments, and not "absolute immunity."
The decision means that other international institutions would also enjoy limited protection. Therefore, this could set a favorable precedent for the lawsuit against the Pan American Health Organization (PAHO) filed in Miami in November of 2018 by several Cuban professionals who participated in the Más Médicos program, in Brazil. It could also incite new suits.
The Cuban doctors accuse the PAHO of having facilitated a "human trafficking network" and "slavery."
The Cuban professionals went to Brazil as part of an agreement between the governments of Dilma Rousseff and Raúl Castro, in which the PAHO acted as an intermediary.
Havana kept at least 70% of what Brasilia paid for the doctors' services, and the PAHO got 5%.
The plaintiffs estimate that the PAHO made more than $75 million through the program, while some $1.3 billion lined the coffers of the Cuban government.
The US Supreme Court ruling on the case known as Budha Ismail Jam v. International Finance Corp. sends the case back to the District Court in Washington.
"This marks a turning point for IFC and the World Bank," said EarthRights International. "For years the IFC has operated as if it were 'above the law', sometimes pursuing reckless lending projects that have led to serious human rights abuses in local communities." It then abandoned the people to their fates, the organization claims.
Thus far actions like the IFC's in Mundra have been carried out "with impunity," with no accountability for the damage they leave behind, said Marco Simons, general counsel for EarthRights International, quoted by The Washington Post. The decision by the US Supreme Court will help "ensure that development projects do not harm people in need of assistance," he said.
The IFC only invests in projects in poor countries that otherwise could not attract enough private capital. Therefore, it has an immense influence on how the plans are designed and implemented, explained EarthRights International.
The IFC asserts that its objectives are to end poverty and promote prosperity, but without harming people and the environment. To do so it has created a "sustainability framework" that defines the conditions for its participation in its projects, and the obligations of all those involved, to ensure both the positive execution of activities and the protection of communities and the environment.
From the beginning, said EarthRights International, the IFC acknowledged that the Mundra project was "high risk" and had the potential to cause significant harm to surrounding communities if it was not well supervised. Despite this, the former organization explains, it granted the loan for 450 million dollars without taking measures to guarantee protection of the area.