Events

Speaker Profile

Upendra is Emeritus Professor of Law at Warwick Law School. His areas of research include comparative constitutionalism, social theory of human rights, human rights responsibilities in corporate governance and business conduct, and materiality of globalization.

Abstract

The debt crises affect us all—as citizens, corporations, states, international financial institutions, human rights and movement activists and academics, mass media, and the United Nations systems. These have been debated often in recent times since the Iraq invasion in 2003, the EU austerity constitutionalizing programmes, the global meltdown of 2008 and the similar intimations of a global slowdown since 2015. The IFIs now play a prominent role in the evolution of ‘hybrid legal sphere’ in which enunciations of soft law remain preeminent, a large ‘symbolic’ part (as Celine Tan observes, in the company of cognoscenti). Even so, a recent GA resolution (on 10 September 2015) enshrines nine principles for restructuring sovereign debt: sovereignty, good faith, transparency, impartiality, equitable treatment, sovereign immunity, legitimacy, sustainability and majority restructuring.

This conversation starts with four threshold questions:

1. Do the States, as international legal collective agents have a collective or vicarious human right to incur debts from other states or IFIs/ or others? If so, what is the source and scope of this right? (Presumably, the sage counsel of Polonius to Laertes – ‘neither a borrower nor a lender be’—does not apply in the real world of complex entities that rule over international law, organization, and relations!)

2. If it is a sovereign right under international law, then other state lenders at least have a duty to lend, act as creditors; if so, this raises complex moral and juridical concerns in regard to the power of the lender States to impose ‘economic sanctions’ especially in the name of protection and promotion of the human rights of the individuals and populaces of the borrowing state. [May, for example, the US Holmes -Burton law relating to Cuba, a half-century regime of sections now ended, be read this way?]

3. When may we say in that very name of HR that international or multilateral regimes of sanctions may violate this right of the borrowing states? The relationship between human rights idea, law and jurisprudence to foreign debt is quite complex and contradictory. [Please contrast here, for example, the UN–sanctioned regime against apartheid State of South Africa and on the other the regime of sanctions against Iraq preceding the 2003 invasion under the banner of regime change politics, and Iran and North Korea in the contexts of nuclear proliferation].

4. Alternatively, if it is a privilege-no right relationship, creditor states violate no sovereign right of the borrowing state entity when these impose in the very name of concerns for human rights(HR) some immediate regimes of trade and aid conditionality. IFI exercised regimes of SAP conditionality for the non-European humanity, thus generating inaugural forms of disciplinary and transactional globalization on emergent nations of Global South; incidentally there were not many international stakeholders which regarded such impositions as HR violative. Today, as SAPs reach the shores of Eurozone debt redressal we witness a sea change in global politics critiquing the forms of constitutionalization of EU austerity regimes.

We need a critical sustainable debt discourse [CSD]. Of course, this may appear as pre-critical, were we to fully take account of concerns with the Anthropocene (now upon us)! CSD takes at least two interrelated yet distinct forms: the distinctively juridical and the distinctively ethical. The CSD engages some paradigmatic type concerns: When one may say that the borrowing state to be regarded always as a personification of its peoples’ interests and their human rights? If so the flip–side (where international borrowing may undermine human rights fulfilment) has also to take account of its positive side, such borrowing may well relate to servicing the imperatives of human rights fulfilment (as Christian Barry suggests). Further, when may the international law obligations be disrupted, or reconfigured? Is it possible to establish a causal linkage between borrowing state (or its agencies) and lender institutions (whether in public or private sector) and ultra vires action? What more comprises the excess of authority as a principal? And precisely from what obligations are the present and future generations are released?

This problematic -- known to international lawpersons at least in the languages of ‘odious debt’ --comprised the juridical claim that when the borrower State manifestly incurred debts for ulterior ends and gains, no obligations may ensure for debt repayment. In this register, a corrupt and despotic (even a tyrannous) regime may not bind those adversely affected, including state constituted actually existing present generations and the future peoples, and the environment. When sovereign creditors and lenders and their normative/institutional cohorts exceed their authority by manifest bad faith or mala fides, are the present and future generations of the borrowing state-peoples under obligation to repay? Is it justified to think and act otherwise? Does that justification always aid and abet self-serving ends of regime-based acts of systematic governance corruption?

The doctrine of odious debt raises prima facie extends to the regimes of state succession raising concerns about successor state responsibility. However, one way of revisiting the contexts of the so-called Eurozone crises and attempts to redress these is to address past national fears and traumas. Do, some remarkable innovations (such as the establishment of EFSM (European Finance Stabilization Mechanism, the ESSF (European Financial Stability Mechanism), the 2013 EU treaty on Stability, Coordination and Governance, amidst of course the IMF intervention) constitute an appropriate response to the Greek crises?

In a recent remarkable 2012 essay, Patrick O’Callaghan urges us to re-consider the ways in which the form of collective EU response is rendered distinctive by a reconstitution of the German ways of Strukturwandel. These originated ‘at least in part … by the ... standard historical narrative of the Great Inflation of Weimar Germany, which associates inflation with trauma and catastrophe’ in some lineages of ordo-liberal thoughtways rendered even apt for the resent conjuncture. Does this ensemble of the ‘trusted means of hard economic resolving hard economic cases’ signify some Bergsonian distinctions and reiterations of ‘habit’ and ‘pure’ memory? In all this, one is reminded of the languages of Georg Deleuze, who memorably said that a ‘scar is not a sign of a past wound’ but rather signifies the ‘present fact of having been wounded.’ Entailed here are not some constructions of disembodied history but individual and group memories of suffering, and the public lamentation as a form of resistance to some ways of global governance.

We need to descend further into what Emile Durkheim germinally named as the non-contractual elements in contract as a way of reconstructing the principle of pacta sunt servanda. In the present times theorists of global justice summon us to think anew and afresh about the HR ethic of sustainable global debt discourse. Specifically, Thomas Pogge thus fully urges us to revisit the histories of state’s borrowing privileges in terms that question the minimal standards of contemporary human rights, and relationship between debt and democracy. Kunibert Raffer speaks about wrongful advice and harmful lending practices. Thomas Pogge and Jonathan Shafter (the latter urging a due diligence model) have studied internal and external, democracy reinforcing, aspects of sovereign debt and proposed some innovative norms and mechanisms. Sanjay Reddy has proposed an ingenious scheme which will devise contingent claims financial instruments, aligned to commodity prices or economic performance. Many others speak of creative reform that makes commercial and investment arbitration more transparent and fair. In sum, these proposals seek to extend considerations of global justice and human rights standards to state, and state-like (even state-transcendent institutions, in the domain of lending and debt adjustment. These further invite us to re-think a complex arena concerning the emergent configurations of human rights against global impoverishment.

No doubt, these suggestions and models seem to have little purchase in the present state of world affairs; change in the structure of international law occurs at a glacial pace. We need at least recall the patient evolution of international humanitarian law and the fact that it took the world of sovereign states about one hundred and fifty years to convert into institutional reality the idea of the International Criminal court.