World Bank’s immunity: A legal landmark

26 August 2010


Please find the editorial from New Age 14th June, you all know the movement against blanket immunity to the World Bank World Bank
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The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

, in fact it was originated from a case lodged by one of the World Bank employee, she won the case. World Bank was presserizing goverment to give blanket immunity, even law was drafted even placed in the parliament, due to the movement from progressive foreess, the initiative was turned down
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A legal landmark

FINALLY, Ismet Zerin Khan’s perseverance has won the case; not only her perseverance but principles have won. Justice has been done after long ten years. The case has also established that no foreign law can be imported, in the name of World Bank’s immunity, to determine the admissibility of the rights of a citizen of Bangladesh. Ismet Zerin was external affairs officer in the World Bank. Her services were terminated by the bank in 2001 in an action which Ismet Zerin, whose name as well as visage was already familiar to TV watchers of this country as an English news reader, felt was illegal and arbitrary and she filed a suit. Apparently, this was an employer-employee dispute of the commonplace kind but it claimed national attention because some other relevant factors had been introduced during the proceedings which even, directly or indirectly, had implications concerning national sovereignty.
Firstly, the World Bank is a giant international organisation not averse to grating on nationalist sensitivities and so it was to be made sure that the financial behemoth was acting within the rules. Secondly, at one stage the bank invoked its supposed immunity from legal obligations of Bangladesh.
The issue of immunity for the World Bank which it supposedly enjoys in 184 countries across the world came under public discussion in Bangladesh when legal proceedings were brought against the bank by Ismet Zerin for unfair dismissal. In 2001 she filed a lawsuit against her employers seeking justice. In 2002 the bank’s own internal administrative tribunal found that the treatment meted out to her ‘fell short of appropriate standards of procedural justice which caused her harm for which she is entitled to be compensated.’ But though the claim for compensation was admitted she was not reinstated. This was a moral defeat for the bank yet the employee was not reinstated and she had to wait for the ruling of a senior assistant judge of the district court asking the bank to reinstate Ismet Zerin to her position and to pay her all arrears and benefits. The judgement further said the plaintiff should be considered still in the service.

The case can be considered a landmark in the legal history of Bangladesh. It has been established that if an organisation wants to operate in Bangladesh, it will have to operate within the law of the land, however big and financially well-grounded that organisation may be. We also think that the other countries in which the World Bank says it enjoys immunity from the host countries’ laws should also rethink their legal position in this regard.



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