Legislation to assist debt relief to poorer countries

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A decision made 30 January 2012:

Decision Reference: MD-C-2012-0012
Decision Summary Title :	Legislation to assist in the provision of debt relief to poorer countries		Date of Decision Summary:	19th January 2012
Decision Summary Author:	International Affairs		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Legislation to assist in the provision of debt relief to poorer countries		Date of Written Report:	19th January 2012
Written Report Author:	International Affairs		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Legislation to assist in the provision of debt relief to poorer countries – Report to the States Assembly
Decision(s): The Chief Minister agreed to present a report to the States Assembly entitled ‘Update on progress regarding consideration of legislation to assist in the provision of debt relief to poorer countries’.
Reason(s) for Decision: On 15th September 2011 the former Chief Minister launched a Green Paper consultation in relation to debt relief for poorer countries. This document is available as R.114/2011. This consultation sough views on whether Jersey should consider introducing legislation to limit practices that could undermine international debt relief efforts. Accordingly, the Chief Minister wishes to advise States Members of his decision to enact legislation to limit practices that could undermine international debt relief efforts (MD-C-2012-0011).
Resource Implications: There are no financial or manpower implications.
Action required: The Chief Minister requests that the attached report is presented to the States Assembly at the earliest opportunity.
Signature:		Position: Senator I. J. Gorst Chief Minister
Date Signed:		Date of Decision (If different from Date Signed):

Legislation to assist debt relief to poorer countries - Report to the States

Decision Summary

DATE: 19/01/12

REPORT: Update on progress regarding consideration of legislation to assist in the provision of debt relief to poorer countries

Members will be aware that my predecessor launched a consultation on 15 September 2011 (R.114/2011) seeking views on whether Jersey should consider introducing legislation to limit practices that could undermine international debt relief efforts.

The consultation closed on 8 December 2011. We received 25 substantive responses from private individuals, companies and representatives of non-governmental organisations as well as the United Nations. We also received a large number of pre-prepared postcards and emails flowing from a campaign organised by the Jubilee Debt organisation.

I have considered the responses to this consultation as well as the views of members of the high level working party convened to consider this matter. Together with my Assistant Chief Ministers, I have decided to instruct officials to prepare drafting instructions for legislation to limit practices that could undermine international debt relief efforts. Jersey has a responsibility to play its part in the global effort, expressed in the UN Millennium Declaration, to support debt relief efforts designed to assist the world’s most heavily indebted countries.

The maintenance of the Island’s international reputation in matters of law and commerce remains a key consideration. The proposed legislation will seek to strike the correct and necessary balance between supporting international debt relief efforts and upholding the sanctity of contract law and compliance with our human rights commitments. In doing so, the Island’s reputation will be maintained as a transparent, well-regulated, co-operative and respected international finance centre that is conscious of the contribution it can make to the well-being of the world’s developing and most heavily indebted poor countries.

Background

On 21 July 2009, the UK government consulted on proposals to introduce legislation to prevent creditors of Highly Indebted Poor Countries (HIPCs) pursuing full recovery on their debts through the UK courts and undermining the debt relief effort provided by other creditors (such as the UK government). The consultation generated an email campaign urging legislative action and 23 written responses from businesses, organisations and individuals.

The Debt Relief (Developing Countries) Act 2010 was enacted on 8 April 2010 and came into force on 8 June 2010. In broad terms, it worked to limit the proportion of a sovereign debt recoverable by any commercial creditor (whether primary or secondary) through the UK courts. The permitted recovery levels referenced those set under the World Bank and International Monetary Fund’s HIPC Initiative. The Act was initially temporary, with a ‘sunset clause’ ensuring that it continued in force only until 8 June 2011. In May 2011 the Act was made permanent.

On 7 June 2011, the previous Chief Minister explained to members that a high level working party had been constituted to consider the issue of debt relief, particularly in the context of the Debt Relief (Developing Countries) Act 2010 having been made permanent in the UK. The working party met several times to examine the UK legislation and to consider the case for enacting similar legislation in Jersey and concluded that the issues were of sufficient complexity and public interest to merit a public consultation. The Jersey consultation was launched on 15 September 2011 and closed on 8 December 2011.