World Bank's support of Tata Mundra coal plant condemned

| 7th November 2013
Tata Mundra
Tata Mundra coal fired power station in Gujarat, India, funded with $450 million from the World Banik in violation of its own policies. Photo: Bank Information Centre, .
The World Bank's President Dr Kim proclaims his human and green concerns. But at Tata Mundra in Gujarat, India, his support for a 4,000MW coal fired power plant is devastating poor communities and despoliating their environment.
Dr. Kim's decision to abandon the local fishing communities to their fate flies in the face of all his claims and shows the system for accountability within the World Bank is broken.

Today 68 groups from 28 countries across six continents sent an Open Letter [also reproduced below] to Dr. Kim condemning the World Bank Group’s continued support for the deadly 4,000-megawatt Tata Mundra coal-fired power plant in Gujarat, India.

The letter expresses mounting frustration at the World Bank's policy of saying one thing, and doing something completely different.

In this case, WB President Dr. Jim Yong Kim has made numerous public statements on his commitment to public health and fighting climate disruption, charging the World Bank to learn from past mistakes. Yet he decided to support a $450 million loan for the project from the Bank's International Finance Corporation division.

Following complaints from the communities that will be devastated by the project, the Compliance Advisor Ombudsman (CAO) - the independent accountability mechanism at IFC - carried out a year-long investigation.

The CAO then issued a damning report that found serious lapses in the IFC's processes and decision making. Moreover the CAO report upheld the complaints of local fishing communities, which have been struggling with severe health effects and the loss of livelihoods due to the project.

But instead of withdrawing from the Tata Mundra power plant, or even just offering reparations to residents and drafting a rehabilitation plan, World Bank President Dr. Jim Yong Kim signed off on a response - a response written by the very same people who approved the project at the IFC - dismissing the CAO findings.

Dr. Kim's decision to abandon the local fishing communities to their fate flies in the face of all his claims and shows the system for accountability within the IFC, indeed the World Bank in its entirely, is broken.

Today's action comes on the heels of a letter from over 100 groups in India demanding that the IFC withdraw from Tata Mundra.

On top of its disastrous human and environmental impacts, Tata Mundra is a failing project. Even its backers admit it is running at unsustainable losses. When the project was proposed, Tata Power argued the local impacts were justified because it would provide power for the poor, but this has proved to be a lie. Instead, the company is asking to raise rates for consumers, putting the price of electricity beyond the reach of the people it was supposedly built to help.

But this is hardly surprising. According to the International Energy Agency, if we are ever going to reach 100 percent energy access, over half of services must come from off-grid sources. This means we must start making serious investments in clean, off-grid renewable energy that we can deploy today, without poisoning the air and water, instead of continuing to support centralized coal projects while waiting on costly grid extensions that may never happen.

Dr. Kim's decision to abandon the local fishing communities to their fate flies in the face of all his claims and shows the system for accountability within the World Bank is broken.

The overwhelming response from groups throughout India and the world shows that the call to move from coal to clean energy is not an isolated drive, but rather a global movement that is gaining momentum as communities band together to demand their right to clean air, drinkable water, and access to land and livelihoods.

The 68 groups signing the Open Letter released this statement:

"The worldwide disapproval of Dr. Kim’s actions show that this is not an isolated drive to move from coal to clean energy, but rather a global movement. The clean energy revolution is gaining momentum as communities band together to demand their right to clean air, drinkable water, and access to land and livelihoods.

"The fact is, it's unacceptable to sacrifice local residents to coal development. In fact, it goes against Dr. Kim's public health advocacy, his commitment to fight climate disruption, and especially the World Bank’s new energy strategy. It's time Dr. Kim holds the World Bank Group accountable for its failures and withdraws from the dangerous Tata Mundra project."

Nicole Ghio represents the Sierra Club International Climate Program.

Open Letter - 7 November 2013

To: Dr. Jim Yong Kim, President of the World Bank

Re: Open letter from civil society groups opposing World Bank rejection of CAO findings on Tata Coal Plant

Dear President Kim,

As concerned World Bank stakeholders and contributing taxpayers to our respective government's official aid through the Bank, we are disturbed by your clearance of IFC response to the CAO report on the Tata Mundra coal power project.

In solidarity with the Indian fishing communities, we demand an explanation why you rejected the CAO findings on IFC's policy violations in funding the Tata Mundra coal power plant. What actions will you take to mitigate the adverse impacts and end your financing of the deadly coal project?

Following a complaint from Machimar Adhikar Sangharsh Sangathan (MASS Association for the Struggle for Fishworkers' Rights), an organization of fishing families impacted by the IFC financed 4,000 megawatt Tata Mundra Ultra Mega Power Project in Kutch, Gujarat, the CAO issued a report showing that the IFC committed serious violations of its mandatory safeguards.

The CAO found that "IFC weaknesses in reviewing the client's risk assessment and mitigation did not support the formation of a robust view that the project met the IFC's policy requirements, that IFC did not consider alternative project design to avoid or minimize impacts, and that IFC has not treated complainants' concerns as compliance issues."

However, the IFC rejected the expert findings and issued no remedial action, choosing instead to defend the project decision and client. Even more troubling, despite your work in public health and calls for urgent action to address climate change, your office cleared the response after a month of silence.

Your decision means thousands of fishing and fishworker families will continue suffering from air pollution, contaminated water, and destroyed marine resources that CAO found to be directly linked with the construction and operation of the Tata coal plant. This decision contradicts your decades of public health advocacy and speeches on moving the Bank away from funding fossil fuels.

Mr. President, you must show that you are serious about your statements at previous WB/IMF annual meetings on climate, accountability and learning from past mistakes. The CAO found massive shortfalls at the IFC, showing that the mechanisms to uncover such issues are working. However, while the Tata Mundra project provided an opportunity to prove your commitment to learning from these failures, your clearance of the IFC response continues the lack of public accountability within the IFC.

Unless the findings from the World Bank Group's internal watchdogs, like the CAO and the Inspection Panel, are taken seriously and acted upon, their role is in name only. This decision undermines the mandate of CAO while allowing staff and management to avoid culpability.

Civil society around the world demand you hold the IFC accountable by taking hard but appropriate actions to address the CAO findings, starting with the development of a remedial action plan and the withdrawal of IFC financing from the Tata Mundra coal project.


Jubilee, Australia
Market Forces, Australia
Coastal Livelihood and Environmental Action Network (CLEAN), Bangladesh Initiative for Right View, Bangladesh
Participatory Research Action NetworkPRAN,
VOICE, Voices for Interactive Choice and Action, Bangladesh
11.11.11 Coalition
of the Flemish NorthSouth
movement, Belgium
Carbon Market Watch, Belgium
(Centre national de coopération au développement), Belgium
Center for Environment, Bosnia and Herzegovina
Environment and Society Association, Colombia
Les Amis de la Terre, France
Urgewald, Germany
Abibiman Foundation, Ghana
AKSIi!Ffor gender, social and ecological justice, Indonesia
Debtwatch, Indonesia
Greenpeace Indonesia, Indonesia
Indonesia Civil Society Forum for Climate Justice (CSFCJI),
Norman Jiwan, Indonesia
UKPWR community against Coal, Indonesia
Re:Common, Italy
Japan Center for a Sustainable Environment and Society (JACSES), Japan
Jamaa Resource Initiatives, Kenya
Kosovo Civil Society Consortium for Sustainable Development, Kosovo
Centre for Human Rights and Development, Mongolia
Gobi Soil, Mongolia
OT Watch, Mongolia
Jal Sarokar Kendra, Nepal
BankTrack, Netherlands
Both ENDS, Netherlands
Climate Change Network Nigeria, Nigeria
Alyansa Tigil Mina, Philippines
Quercus - Associação Nacional de Conservação da Natureza, Portugal
Earthlife Africa Jhb, South Africa
National Fisheries Solidarity Movement, Sri Lanka
Taiwan Environmental Protection Union, Taiwan
Zanzibar Climate Change Alliance, Tanzania
Green World Education Foundation, Thailand
Accountability Counsel, U.S.
Bank Information Center, U.S.
Center for Biological Diversity, U.S.
Center for International Environmental Law (CIEL), U.S.
Earth Day Network, U.S.
Feminist Task Force, U.S.
Friends of the Earth U.S., U.S.
Inclusive Development International, U.S.
Institute for Policy Studies, Climate Policy Program, U.S.
Oil Change International, U.S.
Pacific Environment, U.S.
Sierra Club, U.S.
World Team Now, U.S.
Bretton Woods Project, UK
Climate and Health Council, UK
Forest Peoples Programme, UK
Indigenous Peoples Links (PIPLinks), UK
The Corner House, UK
World Development Movement, UK
National Ecological Centre of Ukraine, Ukraine
CHANGE (Center of Handson
Actions and Networking for Growth and Environment), Vietnam
Development Centre (GreenID), Vietnam
Green Innovation, Vietnam
Alpe Adria Green
Climate Action Network (CAN) Europe
Greenpeace International
NGO Forum on ADB, AsiaPacific
SEE Change Net

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