Churches celebrate victory over the vultures

Methodist, Baptist and United Reformed Church leaders arecelebrating after the Debt Relief (Developing Countries) Act waspassed in the final hours of the current Parliament sitting.

Vulture funds allow private companies to purchase debt fromcreditor companies and countries for knock-down prices. As thedebtor countries have long defaulted on these loans, the companiesthen use UK and international courts to sue for the full debt, pluscosts and interest, which means substantial profit for thecompany.

The Act will prevent private companies that buy up unpayable debtsfrom taking the poorest nations to court in the UK to enforcepayment and thereby forcing developing countries into even greaterpoverty.

Dr Richard Vautrey, Vice President of the Methodist Conference,welcomed the passing of the Act. "This bill clips the wings of thevultures who prey on vulnerable nations and who drive them deeperinto debt and poverty," he said. "We are pleased that ourpoliticians have woken up to the injustice of private companiesusing UK courts to make a profit out of the poorest people in ourworld."

Donegal International, for example, bought $15 million of Zambia'sdebt for $3.3 million, and then demanded $55 million in the UKcourts, before eventually being awarded $15.5 million. Zambianpresidential advisor, Kalunga- Banda, pointed out that payingDonegal meant "the treatment, the Medicare, the medicines thatwould have been available to in excess of 100,000 people in thecountry will not be available."

Revd Jonathan Edwards, President of the Baptist Union of GreatBritain, saw this as another key moment in the drive to deliver aworld free of poverty, saying, "So many Christians and people ofgoodwill worked hard through Jubilee 2000 and MakePovertyHistory toensure that politicians took action on debt relief. But this actionwas undermined by the action of vulture funds in our own courts.This act will bring an end to vulture culture and stands astestament to our belief that no one deserves to live in absolutepoverty."

However, the Churches warned that a "sunset clause" contained inthe Act could lead to the legislation lapsing after a year unlessit is renewed by Parliament. Revd John Marsh, Moderator of theGeneral Assembly of the United Reformed Church, challengedpoliticians to use this opportunity wisely. "The debt reliefgranted to Haiti after the recent earthquake shows that debtremains a major challenge to countries that struggle to lift theirpopulations out of poverty," he said. "We'll keep watching andcampaigning to ensure the 'sunset clause' is used to appraise thepolicy, not as a back-door method to scupper a bill that offersreal hope to nations trapped in cycles of debt."