UK becomes first country to ban ‘Third World Debt’ profiteering in final hours of Parliamentary session
A landmark bill to protect the poorest countries in the world from profiteering by so-called vulture funds became law today after passing in the House of Lords during the ‘wash-up’ at the end of the Parliamentary session.
The successful passage of the Debt Relief (Developing Countries) Bill, which is the world’s first law to restrict the ability of Vulture Funds to sue some of the world’s poorest countries for full repayment of debts that they have bought up cheaply.
Last November two Vulture Funds were awarded $20 million in the High Court from Liberia – the second poorest country in the world – for a debt dating back to the 1970s. This law is expected to make that verdict unenforceable.
There was an outcry last month after the bill was blocked at third reading by an unidentified Conservative MP – thought to be backbencher Christopher Chope. But the Government made time for the Bill in the wash-up, after securing cross-party agreement with a sunset clause which will mean the law has to be reassessed to be made permanent in a year’s time.
International support for the bill has been expressed by Archbishop Desmond Tutu, President Ellen Johnson Sirleaf of Liberia, and President Bharrat Jagdeo of Guyana.
Andrew Gwynne MP, Sponsor of the bill said:
“I am absolutely thrilled that my bill has been passed into law. It was completely unacceptable that a small number of companies were ever allowed in the UK courts to profiteer off the third world debt market. These “vulture funds” were completely unjust and it is to the credit of this parliament, and the efforts of the Jubilee Debt Campaign that we have finally managed to pass this law. I said I would put a stop to these vulture funds, and I did.”
Sally Keeble MP, who took the bill through the House of Commons, said:
“These vulture funds are international predators. Their victims are the poorest people in the world. It is excellent that at this stage it has been possible to get this piece of legislation on to the statute books to outlaw the activities of these vulture funds. This was a victory for a broad based campaign led by jubilee debt and other NGOs which brought this issue to public attention.”
Nick Dearden, Director of Jubilee Debt Campaign, said:
“This is a landmark law. 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.”
“We hope this is the first step towards creating a more just financial system, which operates for the great majority of people, not a tiny minority of unethical investors.”