Odious Debts Online
August 7, 2008

Details of the World Bank’s invite-only, day-long roundtable on illegitimate debt in April are now available online here [PDF] .

The World Bank convened the roundtable in response to feedback from civil society groups (CSOs) to its September 2007 discussion paper, “Odious Debt: Some Considerations.” CSOs generally lambasted the release as one-sided and for failing to engage with important arguments posed by the doctrine of odious debts; a move, or lack thereof, viewed by longtime debt campaigners as dismissive.

Highlights from the roundtable record [PDF] on the subject of “Odious Debts and International Law” follow — speakers were not identified (in “order to facilitate frank discussion”):

“The current international financial system cannot answer the question of how to bring about justice if the population of a country has been harmed by a project. Furthermore, criminal investigations by successor regimes could have a sobering effect on creditors. An alternative to criminal investigations could be the setting up of truth commission.”

“The World Bank staff’s discussion paper is an important step forward. The mere fact that the Bank has taken up the issue is indicative of the importance of the issue. Nevertheless, the Bank’s paper is very dismissive of the doctrine of odious debt, since it argues that there is little agreement on a workable definition of odious debts. Of concern is how the Bank arrived at this conclusion, said one speaker.”

“Unlike the World Bank’s conclusion, the International Law Commission did not dismiss the concept of odious debt. Article 38 of the 1983 Convention on Succession of States in Respect of State Property, Archives and Debts adopted the approach that it would first examine each particular type of succession of states, as the rule to be adopted might well settle the issue and dispose of the need to draft a general provision on the matter. Therefore the issue was implicitly recognised, although perhaps not in the express language of the treaty. It is also recognised in customary law in terms of peremptory norms of general international law. In this regard the Bank staff’s paper falls short of making a convincing argument.”

Of further interest: the Bank will hold a conference on debt relief in low-income countries this October. On the agenda: a look back at 12 years of the HIPC Initiative and “a way forward” beyond the current process. The forum will provide CSOs with another opportunity to discuss odious debt. To that end, he Bank is inviting CSOs to bring forward “concrete cases” that provide evidence of “impropriety and/or damaging consequences” in regard to Bank financed activities.