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Human Rights & Sovereign Debt Restructurings: A Proposal for an Optimal Outcome

Africa - INTER PRESS SERVICE - Thu, 05/18/2023 - 09:40

UN Secretary-General António Guterres addresses the Opening Ceremony at the 36th ordinary Session of the African Union Assembly in Addis Ababa, Ethiopia. February 2023. On the economic front, Guterres called for more financial support for a continent that is, being hit by a dysfunctional and unfair financial system, inequalities in the availability of resources for the recovery from the COVID-19 pandemic, and a cost-of-living crisis exacerbated by the consequences of the Russian invasion of Ukraine. The financial system, declared the UN chief, routinely denies African countries debt relief, and charges extortionate interest rates, starving them of investment in vital areas, such as health, education, and social protection. Credit: UNECA/Daniel Getachew

By Daniel Bradlow
PRETORIA, South Africa, May 18 2023 (IPS)

Zambia defaulted on its debt in November 2021 but has not yet reached an agreement with its creditors. Its president recently warned that this situation is hurting its citizens and undermining its democracy because “you cannot eat democracy”.

Given their adverse economic, social, and political impacts, it should be expected that human rights considerations would play an important role in sovereign debt restructurings. Unfortunately, this is not the case, even though all negotiating parties have human rights responsibilities or obligations.

It is unclear why these actors pay so little attention to human rights in the sovereign debt restructuring context. One possibility is that they are not sure how to incorporate human rights into their transactions.

This should not be surprising. It is difficult to understand the causal linkages between a sovereign debt crisis and the deteriorating human rights situation that follows. There can be multiple such linkages and the lines of causation can run in different directions.

Consequently, a human rights consistent debt restructuring will be fact and context specific and will require the parties to understand their role in both creating the situation and in mitigating or eliminating the adverse human rights impacts.

This requires the parties to have a common approach to analysing the debt crisis and its anticipated economic, financial, human rights, environmental, social and governance impacts. Thus, they could benefit from having a mutually acceptable set of principles that incorporates all these issues.

In 2021, I received a grant from the Open Society Initiative for Southern Africa to explore the feasibility of my proposal to establish a DOVE (Debts of Vulnerable Economies) Fund. This fund would buy the debts of sovereigns in distress and state that it would only support sovereign debt restructurings that were consistent with widely accepted international norms and standards.

My work on this project revealed shortcomings with all the existing international standards and led me to develop the DOVE Fund Principles. The principles are based on 20 existing international norms and standards developed by states, international organisations, industry associations and civil society organisations. They can provide a common framework for the negotiations between states and their creditors. They are now set out and explained.

The DOVE Fund Principles

Principle 1: Guiding Norms: Sovereign debt restructurings should be guided by the following 6 norms: Credibility, Responsibility, Good Faith, Optimality, Inclusiveness, and Effectiveness.

Credibility: The Negotiating Parties and the Affected Parties are confident that the restructuring process can produce an Optimal Outcome. The “Negotiating Parties” are the sovereign debtor, its creditors and their advisors. The “Affected Parties” are the residents of the debtor country and those individuals whose savings either directly or indirectly finance the debt being restructured.
Responsibility: The Negotiating Parties seek an agreement that respects their respective economic, financial, environmental, social, human rights and governance obligations and/or responsibilities.
Good Faith: The Negotiating Parties intend to reach an agreement that takes account of all their rights, obligations and responsibilities.
Optimality: The Negotiating Parties seek an “Optimal Outcome”, that addresses the circumstances in which the transaction is being negotiated, the parties’ respective rights, obligations and responsibilities, and offers them the best possible mix of economic, financial, environmental, social, human rights and governance costs and benefits.
Inclusiveness: All creditors can participate in the restructuring process and the Affected Parties are able to make informed decisions about how it will impact them.
Effectiveness: The Negotiating Parties should seek an Optimal Outcome in a timely and efficient manner.

Principle 2: Transparency: The Negotiating Parties and the Affected Parties should have access to the information that they need to make informed decisions regarding the debt restructuring.

The creditors have access to sufficient information that they can make informed decisions about the scope of the sovereign’s debt problems, the options for their resolution and their potential economic, financial, environmental, social, human rights and governance impacts.

The Affected Parties should also have access to sufficient information, subject to appropriate safeguards, that they can make informed decisions about how the restructuring may affect their rights and interests.

The creditors should inform the debtor and the Affected Parties about their environmental, social, and human rights obligations and responsibilities.

Principle 3: Due Diligence: The sovereign debtor and its creditors should each undertake appropriate due diligence before concluding a sovereign debt restructuring process.

The Negotiating Parties should utilize a debt sustainability analysis which credibly determines the sovereign’s debt restructuring needs and their impacts.

Principle 4: Optimal Outcome Assessment: At the earliest feasible moment, the Negotiating Parties should publicly disclose why they expect their restructuring agreement to result in an Optimal Outcome.

An Optimal Outcome requires the Negotiating Parties to assess the expected impacts of their proposed agreement on the economic, financial, environmental, social, human rights and governance condition of the sovereign borrower and the Affected Parties.

Principle 5: Monitoring: The restructuring process should incorporate credible mechanisms for monitoring the implementation of the restructuring agreement.

The Negotiating Parties should audit the financial aspects of the agreement and monitor its economic, social, environmental, human rights and governance impacts. This information should be published periodically.

Principle 6: Inter-Creditor Comparability: The restructuring process should ensure that all creditors make a comparable contribution to the restructuring of the sovereign’s debt.

The process should give creditors the confidence that all other creditors are making comparable contributions to an Optimal Outcome.

Principle 7: Fair Burden Sharing: An Optimal Outcome should share the burden of the restructuring fairly between Negotiating Parties and should not impose undue costs on any of the Affected Parties.

Both the debtor and the creditor bear some responsibility for causing debt crises and should absorb some of the restructuring costs. Moreover, they should seek to limit how much of the restructuring costs the Affected Parties will have to bear, considering their relative wealth and ability to absorb losses.

Principle 8: Maintaining Market Access: The restructuring agreement, to the greatest extent possible, should be designed to facilitate future market access for the borrower.

It is an unfortunate reality that debtor countries must seek financing from international financial markets. Thus, the Optimal Outcome should help the debtor regain access to financial markets as quickly as possible.

As the Zambian case demonstrates, the current arrangements for restructuring sovereign debt are sub-optimal. The DOVE Fund Principles seek to overcome this problem by offering both Negotiating and Affected Parties a common conceptual framework that facilitates a fair resolution of the crisis incorporating all its social, environmental, human rights, economic, financial and governance impacts.

They therefore can promote an Optimal Outcome.

Daniel D. Bradlow, Professor/Senior Research Fellow, Centre for the Advancement of Scholarship, University of Pretoria, South Africa
SSRN Author Home Page
www.chr.up.ac.za

For further information on this ongoing project, contact: danny.bradlow@up.ac.za
Business and Human Rights Journal articles for further reading:
1) “Social Bonds for Sustainable Development: A Human Rights Perspective on Impact Investing” Stephen Kim PARK Journal: Business and Human Rights Journal / Volume 3 / Issue 2 / July 2018 pp. 233-255
2) The Record of International Financial Institutions on Business and Human Rights
Jessica EVANS Journal: Business and Human Rights Journal / Volume 1 / Issue 2 / July 2016

IPS UN Bureau

 


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Categories: Africa

Baselstädtischer Schwingertag: Alpiger meistert erste Aufgabe erfolgreich

Blick.ch - Thu, 05/18/2023 - 09:35
Traditionell findet an Auffahrt der Baselstädtische Schwingertag statt. Hier bleibst du Gang für Gang auf dem Laufenden.
Categories: Swiss News

Wichtige Funktion in der Nati: Tanner Richard ist der Bulli-König der WM

Blick.ch - Thu, 05/18/2023 - 09:26
Nach drei Spielen führt Tanner Richard das WM-Turnier in der Statistik der gewonnenen Bullys an. Der Servette-Center verrät sein Rezept.
Categories: Swiss News

New EU renewables rules could be a step back for German biofuels sector

Euractiv.com - Thu, 05/18/2023 - 09:23
The new greenhouse gas emission reduction target for transport fuels under the updated Renewable Energy Directive could reduce the amount of crop-based biofuels used in German road transport if implemented strictly, biofuel producers say.
Categories: European Union

Approval of EU renewables law delayed as France ‘plays hardball’ on nuclear

Euractiv.com - Thu, 05/18/2023 - 09:19
Formal approval of the EU's renewable energy directive has been postponed following a last-minute objection by Paris, which wants further "guarantees" on low-carbon hydrogen derived from nuclear power.
Categories: European Union

Pour le climat, satellites privés et publics volent à l’unisson

Euractiv.fr - Thu, 05/18/2023 - 09:14
Face aux défis du changement climatique, les satellites sont devenus une arme indispensable. Tant pour continuer à l'étudier que pour passer concrètement à l'action, les lancements se multiplient et donnent lieu à une coopération accrue entre agences spatiales et entreprises privées.
Categories: Union européenne

Grèce : les saisonniers privés de leur droit de vote aux législatives

Courrier des Balkans - Thu, 05/18/2023 - 08:53

Les jeunes saisonniers partis travailler sur les îles sont en colère : ils ne pourront pas voter à distance lors des élections législatives. Une mauvaise nouvelle pour Syriza, le mouvement de gauche, favori des jeunes selon les sondages. Reportage.

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Categories: Balkans Occidentaux

G7 : un sommet centré sur les sanctions contre la Russie et la « coercition économique » de la Chine

Euractiv.fr - Thu, 05/18/2023 - 08:53
Les dirigeants des pays du G7 arrivent dans la ville japonaise de Hiroshima, ville symbole de la paix, pour s'entretenir du renforcement des sanctions contre la Russie et de la protection contre la « coercition économique » de la Chine.
Categories: Union européenne

Découvrez le nouveau smartphone Oukitel K16 Fashion et Business: Design Exquis et Portabilité

Algérie 360 - Thu, 05/18/2023 - 08:44

La marque Oukitel lancera le 22 mai le nouveau mini-téléphone mobile professionnel Oukitel K16 fashion business sur le marché russe. Le design de ce téléphone […]

L’article Découvrez le nouveau smartphone Oukitel K16 Fashion et Business: Design Exquis et Portabilité est apparu en premier sur .

Categories: Afrique

Après le premier tour de la présidentielle, ces deux Turquie qui se sont face

Courrier des Balkans - Thu, 05/18/2023 - 08:37

Déjouant les sondages, Recep Tayyip Erdoğan a devancé le candidat de l'opposition, Kemal Kılıçdaroğlu, au premier tour de la présidentielle. Pour Hülya Uğur Tanriöver, sociologue et politologue turque, deux pays bien contrastés se font face, mais l'issue du second tour reste ouverte. Entretien.

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Categories: Balkans Occidentaux

Oroszországot érintő régi határozatokat helyezett hatályon kívül a cseh kormány

Biztonságpiac - Thu, 05/18/2023 - 08:35
A cseh kormány kilenc olyan régi, a múlt század hetvenes és nyolcvanas éveiben hozott határozatot helyezett hatályon kívül, amelyek alapján az egykori Szovjetunió ingatlanokat kapott ingyenes diplomáciai használatra – közölte Martin Dvorák miniszter.

A külügyminisztérium szerint a mai Oroszország ezeket az ingatlanokat már nem diplomáciai célokra használja, ezért nincs ok arra, hogy továbbra is ingyenesen igénybe vehesse őket.

A CTK hírügynökség értesülése szerint a szerdai kormánydöntés összesen 59 ingatlant érint. Elsősorban a prágai orosz nagykövetség mellett lévő lakásokról van szó, de több épületre vonatkozik Brünnben, Karlovy Varyban és más településeken is. Az ingatlanok státuszának megváltoztatása után Oroszországnak adót kell fizetnie használatukért, de a bérleti díjakról is tárgyalások kezdődhetnek.

„Olyan kormányhatározatokat helyeztünk hatályon kívül, amelyek Csehszlovákia megszállása után az orosz tankok árnyékában születtek. Oroszország továbbra is ingyen használja őket. Az ebből befolyó jogtalan bevétel nem használható fel Ukrajna megszállásának támogatására” – mutatott rá Dvorák.

A cseh-orosz viszony az utóbbi években súlyos konfliktusokkal terhelt, a két ország kölcsönös diplomáciai képviselete így a minimális szintre csökkent. Oroszországnak jelenleg csak hat diplomatája dolgozik Prágában. A brünni és a Karlovy Vary-i orosz konzulátusok működését a csehek már korábban betiltották. Oroszország 92 001 négyzetméternyi területet használ ingyenesen Csehországban, míg a csehek 26 875 négyzetmétert Oroszországban.

A cseh külügyminisztérium közölte: felkészült arra, hogy a kormány döntésére Moszkva válaszintézkedéseket foganatosít.

 

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Categories: Biztonságpolitika

Le taux de chômage stable à 7,1 % en France, le halo du chômage en légère hausse

Euractiv.fr - Thu, 05/18/2023 - 08:35
Le taux de chômage stable à 7,1 % en France, le halo du chômage en légère hausse. Le taux de chômage en France reste stable pour le premier trimestre de 2023, à 7,1 %, revenant au niveau enregistré dans les années 1980, selon les estimations de l’Insee publiées mercredi (17 mai).
Categories: Union européenne

Forfait im Rom-Viertelfinal: Swiatek mit Verletzungssorgen kurz vor French Open

Blick.ch - Thu, 05/18/2023 - 08:28
Wimbledonsiegerin Jelena Rybakina erreicht am WTA-Turnier in Rom die Halbfinals, weil Iga Swiatek zehn Tage vor Beginn des French Open verletzt aufgeben muss.
Categories: Swiss News

Franzose lässt Fisch seine Zähne putzen: So verbringen die Ski-Stars die Sommerferien

Blick.ch - Thu, 05/18/2023 - 08:27
Beim Tauchen auf den Malediven, mit der Familie auf Hawaii oder mit Freunden beim Wild-Campen. Die Ski-Stars geniessen nach einer langen Saison ihre verdienten Sommerferien.
Categories: Swiss News

Akanji entscheidet Knüller gegen Real: «Natürlich ist es mein Tor, ich habe den Ball berührt»

Blick.ch - Thu, 05/18/2023 - 08:24
Gehört dieser Treffer Manuel Akanji? «Ja», sagt der City-Verteidiger. So oder so darf sich der Winterthurer nach der Galavorstellung gegen Real Madrid feiern lassen.
Categories: Swiss News

La Hongrie bloque le remboursement des armes fournies par l’UE à l’Ukraine

Euractiv.fr - Thu, 05/18/2023 - 08:23
La Hongrie refuse le déblocage d'une nouvelle tranche de 500 millions d'euros de la Facilité européenne pour la paix destinée à rembourser les armes fournies par l'UE à l'Ukraine.
Categories: Union européenne

Inondations : la Bosnie-Herzégovine, la Croatie et la Serbie de nouveau sous les eaux

Courrier des Balkans / Bosnie-Herzégovine - Thu, 05/18/2023 - 08:21

Fermeture de routes, glissements de terrains, évacuation de la population... La Croatie, la Bosnie-Herzégovine et la Serbie sont à nouveau sous les eaux après des pluies diluviennes. Le pic de la crue est attendu ce jeudi, mais l'on craint une répétition du scénario noir des inondations de 2014.

- Le fil de l'Info / , , , , ,
Categories: Balkans Occidentaux

Inondations : la Bosnie-Herzégovine, la Croatie et la Serbie de nouveau sous les eaux

Courrier des Balkans / Serbie - Thu, 05/18/2023 - 08:21

Fermeture de routes, glissements de terrains, évacuation de la population... La Croatie, la Bosnie-Herzégovine et la Serbie sont à nouveau sous les eaux après des pluies diluviennes. Le pic de la crue est attendu ce jeudi, mais l'on craint une répétition du scénario noir des inondations de 2014.

- Le fil de l'Info / , , , , , ,
Categories: Balkans Occidentaux

Inondations : la Bosnie-Herzégovine, la Croatie et la Serbie de nouveau sous les eaux

Courrier des Balkans - Thu, 05/18/2023 - 08:21

Fermeture de routes, glissements de terrains, évacuation de la population... La Croatie, la Bosnie-Herzégovine et la Serbie sont à nouveau sous les eaux après des pluies diluviennes. Le pic de la crue est attendu ce jeudi, mais l'on craint une répétition du scénario noir des inondations de 2014.

- Le fil de l'Info / , , , , , ,
Categories: Balkans Occidentaux

Inondations : la Bosnie-Herzégovine, la Croatie et la Serbie de nouveau sous les eaux

Courrier des Balkans / Croatie - Thu, 05/18/2023 - 08:21

Fermeture de routes, glissements de terrains, évacuation de la population... La Croatie, la Bosnie-Herzégovine et la Serbie sont à nouveau sous les eaux après des pluies diluviennes. Le pic de la crue est attendu ce jeudi, mais l'on craint une répétition du scénario noir des inondations de 2014.

- Le fil de l'Info / , , , , , ,
Categories: Balkans Occidentaux

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