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	Vulture Funds prey on Poor Debtor Nations by Inter Press Service & agencies   August 2009   Over fifty advocacy organisations are calling on the U.S. Congress to put a stop to investment funds which purchase heavily indebted countries debt and jeopardise the impact of bilateral and multilateral debt cancellation to over 30 countries.   The groups - which include the NAACP, the Jubilee USA Network, TransAfrica Forum, Africa Action and others are seeking a stop to what they have dubbed "Very unscrupulous loan transfers from underprivileged countries to rich, exploitive funds".   Vulture funds purchase heavily indebted countries debt at pennies to the dollar and then "aggressively pursue their claims through the seizure of assets, litigation and political pressure, seeking repayments that are far in excess of the amount that they paid for the debt," the groups say.   The strategies used by Vulture funds act in direct contradiction to international efforts to cancel debt for the world"s poorest countries.   "Since 1996 donor countries - including the U.S. have committed 90 billion dollars in bilateral and multilateral debt relief to over 30 countries. Vulture funds profit from this debt relief," Michael Stulman, associate director of policy and communications at Africa Action, told IPS.   Such funds have used U.S. courts as a venue for suing poor countries for the debts they incurred in the past. In one case cited in a letter cosigned by the members of the coalition, FG Hemisphere Fund successfully sued the Democratic Republic of the Congo (DRC) for 105 million dollars for a 30-million-dollar loan incurred in 1980 by the infamously corrupt Mobutu Sese Seko government. A judge in Washington ordered the DRC to pay up to 80,000 dollars a week as a result of the lawsuit.   "The DRC is being forced to siphon these desperately needed resources from initiatives like health care, education, combating HIV/AIDS, and access to clean water to its impoverished citizens to pay off wealthy corporations such as FG Hemisphere," said Melinda St. Louis, deputy director of the Jubilee USA Network.   Jubilee is an alliance of 80 religious denominations and faith communities, development agencies, and human rights groups working for debt relief.   "This runs totally counter to the progress made by the international community on debt cancellation, through the World Bank"s Highly Indebted Poor Country (HIPC) effort," St. Louis said.   In another judgment, Zambia was forced to pay Donegal International 15 million dollars on a debt that Donegal acquired for three million dollars. The judgment represented 60 percent of the debt relief Zambia received in 2007.   "When vulture funds sue for such exorbitant amounts it"s clearly taking away money that should be invested in health, education, infrastructure and other social problems and goes to line the pockets of already wealthy investors," said Stulman.   The civil society groups urge Congress to pass House Resolution (HR) 2932 - introduced on Jun. 18 by Democratic Rep. Maxine Waters and Republican Rep. Spencer Bachus - which would limit the ability of Vulture funds to use U.S. courts to garner exorbitant profits.   "We cannot allow vulture funds to erode the progress that has enabled the world"s most impoverished nations to reduce poverty," said Waters. "Over the past year, we have seen how the actions of a small number of unscrupulous and exploitative investors can hurt innocent people and cause economic chaos. We cannot allow the world"s poorest countries to be exploited by these bad actors," she said.   Of the International Monetary Fund"s (IMF) list of 41 countries eligible for debt relief, at least 20 have been threatened or subjected to legal action by commercial funds who make their profits from recovering loans given to HIPC.   The resolution would serve to both limit the profits which funds could make from trading in HIPC debt as well as require increased transparency from funds filing lawsuits in U.S. courts. Funds would be required to disclose how much they paid for the debt on the secondary market.   Preying on the Poor: “Vulture Funds”, Foreign Debt and Human Rights, by Dr Cephas Lumina.   Dr Cephas Lumina is the UN Independent Expert on the Effects of Foreign Debt and other Related International Financial Obligations on Human Rights.   Dr Lumina is a leading advocate of debt relief to heavily indebted poor countries and of legislation to prevent profiteering by "vulture funds".   "Vulture funds" are operated by private investment firms which purchase poor countries foreign debt at a heavily discounted price and then seek to recover the full amount of the debt, plus interest and late fees, through legal proceedings in countries such as the US, UK and Australia.   According to Dr Lumina, "The settlement of excessive vulture fund claims by poor countries with unsustainable debt levels has a direct negative effect on the capacity of governments of these countries to fulfil their human rights obligations, especially economic, social and cultural rights, such as the rights to health, water and sanitation, food, housing and education." 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	Human Rights organizations & Arab Human Rights Committee engage in dialogue by International Federation for Human Rights (FIDH)   Four international and regional non-governmental organizations (NGOs) met with the newly formed Arab Human Rights Committee in the Headquarters of the League of Arab States.   Representatives of Amnesty International, the International Federation for Human Rights, the Arab Organization for Human Rights and the Cairo Institute for Human Rights Studies welcome this first opportunity for constructive dialogue with the Arab Human Rights Committee.   The Chair and members of the Committee stressed the importance of dialogue between the Committee and NGOs, committed to hold similar meetings with NGOs in the future in every session of the Committee, and highlighted their appreciation to the expertise that the NGOs have in working with other treaty bodies, which the Committee wishes to benefit from.   In the meeting the four NGOs highlighted a number of issues including: the importance of securing systematic access for NGOs to the Arab Human Rights Committee based on clearly and publicly stated procedures; the role NGOs will have in assisting the committee in its work by providing expert advice, preparing country briefings and the wide dissemination of the Committee’s concluding observations;the contribution NGOs can make in raising awareness about the work of the Committee and the need for active civil society engagement with the Committee.   It was also highlighted that the Committee should ground its work firmly in developments achieved so far in international human rights law.   The four NGOs also emphasized the Committee’s responsibility to recognize the important contribution of NGOs and human rights defenders make to the promotion and protection of human rights in the region.   Amnesty International, the International Federation for Human Rights, the Arab Organization for Human Rights and the Cairo Institute for Human Rights Studies welcome this first opportunity for dialogue and expressed their desire to continue this constructive cooperation with the Committee as appropriate.   Background   The Arab Human Rights Committee was established in March 2009 as an expert treaty body of seven members to supervise the implementation of the Arab Charter on Human Rights. Its members come from the United Arab Emirates (Chair), Algeria (vice-Chair), Bahrain, Palestine, Syria, Jordan and Libya. The Committee had three sessions so far, during which it has been discussing procedural aspects of organising its work. As of end of September 2009 ten Arab states ratified the Arab Charter on Human Rights. These are: Algeria, Bahrain, Jordan, Libya, Palestine, Qatar, Saudi Arabia, Syria, United Arab Emirates (UAE), and Yemen. Visit the related web page
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