08 April 2010
Churches celebrate victory over the vultures
Methodist, Baptist and United Reformed Church leaders are
celebrating after the Debt Relief (Developing Countries) Act was
passed in the final hours of the current Parliament sitting.
Vulture funds allow private companies to purchase debt from
creditor companies and countries for knock-down prices. As the
debtor countries have long defaulted on these loans, the companies
then use UK and international courts to sue for the full debt, plus
costs and interest, which means substantial profit for the
company.
The Act will prevent private companies that buy up unpayable debts
from taking the poorest nations to court in the UK to enforce
payment and thereby forcing developing countries into even greater
poverty.
Dr Richard Vautrey, Vice President of the Methodist Conference,
welcomed the passing of the Act. "This bill clips the wings of the
vultures who prey on vulnerable nations and who drive them deeper
into debt and poverty," he said. "We are pleased that our
politicians have woken up to the injustice of private companies
using UK courts to make a profit out of the poorest people in our
world."
Donegal International, for example, bought $15 million of Zambia's
debt for $3.3 million, and then demanded $55 million in the UK
courts, before eventually being awarded $15.5 million. Zambian
presidential advisor, Kalunga- Banda, pointed out that paying
Donegal meant "the treatment, the Medicare, the medicines that
would have been available to in excess of 100,000 people in the
country will not be available."
Revd Jonathan Edwards, President of the Baptist Union of Great
Britain, saw this as another key moment in the drive to deliver a
world free of poverty, saying, "So many Christians and people of
goodwill worked hard through Jubilee 2000 and MakePovertyHistory to
ensure that politicians took action on debt relief. But this action
was undermined by the action of vulture funds in our own courts.
This act will bring an end to vulture culture and stands as
testament to our belief that no one deserves to live in absolute
poverty."
However, the Churches warned that a "sunset clause" contained in
the Act could lead to the legislation lapsing after a year unless
it is renewed by Parliament. Revd John Marsh, Moderator of the
General Assembly of the United Reformed Church, challenged
politicians to use this opportunity wisely. "The debt relief
granted to Haiti after the recent earthquake shows that debt
remains a major challenge to countries that struggle to lift their
populations out of poverty," he said. "We'll keep watching and
campaigning to ensure the 'sunset clause' is used to appraise the
policy, not as a back-door method to scupper a bill that offers
real hope to nations trapped in cycles of debt."