corporate responsibility current affairs development poverty

Celebrating an end to the debt vultures

Amongst all the excitement of the election, the last few bits and pieces of parliament business have been overlooked a little. A shame, because a lot has happened, some good and some bad. On the negative side, plans to hold a referendum on electoral reform were scuppered, and the last of the hereditary peers were given a reprieve. (Care to guess which party argued in favour of wealthy landowners maintaining their unelected seats in government?)

On the positive side, a new Bribery Act has finally sorted out the shambles of our corruption laws, something we’ve campaigned for on Make Wealth History.

Another victory was the signing into law of a bill to end so-called ‘vulture’ funds who buy up developing world debt, and then press for payment. The vicious practice involved buying up tranches of third world debt, and then suing the country for non-payment. Some funds even waited patiently until a country received a new grant of aid money before suing, immediately diverting the funds into their own profits.

The last country to fall prey to the cultures was Liberia, which was recently sued for $20 million for an unpaid debt dating back to the 1970s. Previous victims include Madagascar, with a French company attempting to recover $55 million in 2005. Mozambique, Ethiopia and Angola have also been targetted in the past. It is a remarkably callous way to make money, especially when you read the details and fund that the hedge funds issuing the lawsuits are based in tax havens.

The Jubilee Debt Campaign was celebrating last week, after a long running campaign to end the ‘vulture culture’. “This is a landmark law” said Director Nick Dearden. “With this act, the UK has become the first country in the world to stop vulture funds using its courts to profiteer from poverty. It will mean the poorest countries in the world can no longer be attacked by these reprehensible investment funds who grow fat from the misery of others. We now call on other governments, particularly the US administration, to take similar steps to outlaw vulture practices.”

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