Document ID: ./input/supremecourt_opinions/opinions/18pdf/17-1011_mkhn.pdf
Page Number: 8.0

Cite as:  586 U. S. ____ (2019) 

5 

Opinion of the Court 

developed areas, thus supplementing the activities of ” the
World  Bank.    Articles  of  Agreement  of  the  International 
Finance Corporation, Art. I, Dec. 5, 1955, 7 U. S. T. 2193,
T.  I.  A.  S.  No.  3620.  Whereas  the  World  Bank  primarily 
provides  loans  and  grants  to  developing  countries  for
public-sector  projects,  the  IFC  finances  private-sector
development projects that cannot otherwise attract capital 
on reasonable terms.  See Art. I(i), ibid.  In 2018, the IFC 
provided some $23 billion in such financing. 

The IFC expects its loan recipients to adhere to a set of
performance  standards  designed  to  “avoid,  mitigate,  and
manage  risks  and  impacts”  associated  with  development 
projects.  IFC  Performance  Standards  on  Environmental 
and  Social  Sustainability,  Jan.  1,  2012,  p. 2,  ¶1.    Those 
standards are usually more stringent than any established 
by  local  law.  The  IFC  includes  the  standards  in  its  loan 
agreements and enforces them through an internal review 
process.  Brief for Respondent 10.

In 2008, the IFC loaned $450 million to Coastal Gujarat 
Power  Limited,  a  company  located  in  India.   The  loan 
helped finance the construction of a coal-fired power plant
in  the  state  of  Gujarat.    Under  the  terms  of  the  loan 
agreement,  Coastal  Gujarat  was  required  to  comply  with
an  environmental  and  social  action  plan  designed  to  pro-
tect areas around the plant from damage.  The agreement 
allowed the IFC to revoke financial support for the project
if  Coastal  Gujarat  failed  to  abide  by  the  terms  of  the 
agreement.

The project did not go smoothly.  According to the IFC’s
internal  audit,  Coastal  Gujarat  did  not  comply  with  the 
environmental  and  social  action  plan  in  constructing  and
operating  the  plant.    The  audit  report  criticized  the  IFC
for inadequately supervising the project.

In 2015, a group of farmers and fishermen who live near
the  plant,  as  well  as  a  local  village,  sued  the  IFC  in  the
United States District  Court for the District  of Columbia.