Is it possible to sue the World Bank?
Contrary to popular opinion, the World Bank (WB) is not entitled to immunity either as an institution or as a legal entity. Section 3 of Article VII of the Charter (articles of agreement) explicitly states that the WB may be taken to court under certain conditions. For example, the WB may be tried by a national court of justice in countries where it is represented and/or has issued bonds [1].
The possibility of bringing an action against the WB has existed since its foundation in 1944 and has never been modified until now for the simple reason that the WB finances the loans it grants to member-countries by borrowing (by issuing bonds) on the financial markets. Originally, these bonds were bought by the big, mainly North-American, private banks. Now, other institutions, including pension funds and trade unions, buy them too.
The WB’s founder countries estimated that they would not be able to sell the Bank’s bonds unless they guaranteed buyers the right to sue the Bank in case of default. This is why there is a fundamental difference between the immunity status of the WB and the IMF. The IMF can have immunity since it finances its loans itself using the money paid in by its members in the form of pro rata shares. If the WB does not enjoy immunity, it is not for humanitarian reasons, but to provide creditors with the requisite guarantees.

It is therefore perfectly possible to sue the WB in the numerous countries where it has offices. It is possible in Djakarta or in Dili, the capital of East Timor, in Kinshasa, Brussels, Moscow or Washington, since the WB is represented in all those countries.

Why sue?
Since the WB has been making loans [2], a good portion of them has been used to carry out policies that had a detrimental effect on the welfare of hundreds of millions of citizens. What do we mean by that? The WB has systematically given priority to loans for big infrastructures such as huge dams [3], investment in industries that extract raw materials (for example, open-cast mines, numerous pipe-lines - of which the most recent are the Chad-Cameroon and the Baku-Tbilisi-Ceyhan [4] pipelines), agricultural policies in favour of “all-export” at the expense of food security and food sovereignty, and power stations which devour tropical forests.

Moreover, the WB has frequently come to the aid of dictatorships known to be guilty of crimes against humanity: there were the dictatorships of the Southern Cone of Latin America from the 60s to the 80s; numerous African dictatorships (Mobutu from 1965 until his fall in 1997, the Apartheid regime of South Africa); regimes of the former Soviet Bloc such as the Ceaucescu dictatorship in Romania; those of Southeast Asia and the Far East, such as that of Marcos from 1972 to 1986 in the Philippines, Suharto from 1965 to 1998 in Indonesia, South Korea (1961-1987), Thailand (1966-1988), up to and including today’s dictatorship in China.

At the same time the WB, along with other actors, has contributed to the systematic destabilization of progressive and democratic governments by withdrawing all aid: this was the case for the Sukarno government in Indonesia until he was overthrown in 1965; the governments of Juscelino Kubitschek (1956-1960) followed by Joao Goulart (1961-1964) in Brazil, finally overthrown by a military coup d’état; Salvador Allende’s government in Chile (1970-1973), and so on.

Next there are all the loans made by the WB to the colonial powers (Belgium, Great Britain, France, Italy, the Netherlands...) to enable them to exploit the natural resources of the countries they ruled until the 60s. All those loans were later included in the external debt of the States when they became independent. For example, the independent State of Congo had to finish paying off the debt incurred by Belgium in its name. The same thing happened for Kenya, Uganda, Nigeria, Gabon, Mauritania, Algeria and Somalia for the debts contracted in their names by the colonial governments.

Then there are the structural adjustment loans that the WB has granted since the 70s. These loans are not designed for any particular economic project - but are intended to help implement global policies with the ultimate aim of completely opening up the economies of the “beneficiary” countries to investments and imports, mainly from the principal shareholders of the WB. This means that the WB supports policies denationalising the assisted countries to the advantage of a few of its members. Thus a handful of industrial powers impose their wishes on the majority of the inhabitants and the countries of the planet. The fact that all their remedies - whether long-term structural remedies or the short sharp shock type - do more harm than good has been demonstrated repeatedly in the string of crises that began with the Tequila crisis that hit Mexico in 1994. The Bank’s new priorities, such as the privatization of water and land, along with its recent refusal to apply the recommendations of the independent Commission on Extractive Industries, clearly indicate that the Bank has no intention of changing its course and that new social catastrophes are in preparation - powerful tsunamis caused by the cataclysmic interventions of the WB!

Who might bring a legal action?

Associations representing the interests of people adversely affected by WB loans and/or by its support for dictatorships could bring an independent action and sue the WB for damages in national courts. Holders of WB bonds - there are not only bankers, but also trade unions - could sue the Bank over the use it makes of the money it borrows from them. There is no guarantee that such lawsuits would be successful, but it is hard to see why citizens’ movements should not use their right to hold the WB accountable for its acts. It is inconceivable that the nefarious practices of an institution like the WB should not one day be sanctioned by a decision of justice.

Why have no such procedures ever been initiated?

The clause of the WB Charter (Article VII, Section 8) which grants immunity to the decision-makers and to officials in the exercise of their duties has tended to obscure the possibility of suing the WB as a legal entity (Article VII, Section 3, see note 1 of this article). Yet it is more important to be able to demand that the WB answer for its actions as an institution than to simply hold its executives to account. Indeed, the same clause of its Charter (Article VII, Section 8) provides for the WB to decide to remove the immunity protecting its directors and officials. Actions could also be envisaged against high-ranking officials after they have left office.
Another reason why so far there have been no actions brought against the WB is that it has taken a very long time for the truth to emerge, and for people to realise just how systematic and generalized the reprehensible practices of the WB are. In the eyes of the citizens, it is often their national governments that are seen to be responsible for the policies demanded by the WB, so its true role passes unnoticed.

Does the U. N. Convention of 1947 not give full immunity to the specialized agencies of the United Nations to which the World Bank belongs?

A United Nations Convention on the Privileges and Immunities of the Specialized Agencies was approved by the General Assembly on 21 November 1947 [5]. Article X section 37 of the Convention, concerning the annexes and the application of the Convention to every specialized institution, states that the Convention “becomes applicable to each specialized agency when it has transmitted to the Secretary-General of the United Nations the final text of the relevant annex and has informed him that it accepts the standard clauses, as modified by this annex (...)”. The Bank sent its copy back.
Annexe VI concerns the International Bank for Reconstruction and Development, and thus the World Bank. And what does it contain? This is where the Bank has actually inserted those of its statutes which specify the circumstances under which it loses its immunity!
Within the United Nations, the World Bank thus prefers to conform to it status as a bank rather than take advantage of the immunity given to the United Nations agencies. Here is the relevant paragraph: “The convention (including the current annexe) will apply to the International Bank for Reconstruction and Development (hereafter mentioned under the name of “the Bank”) with reservation of the following provisions: 1. The following text will replace the one of section 4: “The Bank can only be sued in a court that has its jurisdiction in a member state where the Bank has a branch, where it has appointed an agent in order to accept demands or notice of demands or where it has issued or guaranteed transferable securities””.
It is therefore possible to sue the World Bank under the terms of the 1947 United Nations convention and its annexes.