Norway takes a bold step towards debt justice: First creditor ever to carry out a debt audit
Today the Norwegian Minister of Development Heikki Holmås announced that Norway will make an assessment of the legitimacy of developing countries’ debt to Norway. This means that the government will be the first ever to carry out a creditor’s debt audit.
- This is a historical day! Not only for debt campaigners who have been fighting for this for years, but also for the people across the world that are suffering from unpayable and illegitimate debt burdens,said Gina Ekholt, Director of SLUG, the Norwegian Coalition for Debt Cancellation.
The financial crisis and the Euro crisis leave no doubt that irresponsible lending and borrowing have severe negative consequences for countries and their peoples. Norway is trying to change the rules of the game.
The Norwegian government’s political declaration promises to carry out a debt audit, as well as working to establish binding guidelines for responsible lending. Today, Holmås promised that the audit will be followed up with new and stronger guidelines for responsible lending.
- This is an important step towards more responsible lending practices, and if followed up by other creditors this initiative has the potential of reducing unsustainable and illegitimate debts in the future, said Gina Ekholt.
This is not the first time the Norwegian government demonstrates boldness in the area of debt justice. A decision from 2006 made it to the history books when the government announced that they would cancel debts for seven countries based on their co-responsibility as a creditor. Since then, Norwegian initiatives have led to the establishment of international principles for responsible lending and borrowing in the UN Conference on Trade and Development (UNCTAD). The principles will be applied in the Norwegian debt audit.
- To apply the UNCTAD Principles in the Norwegian debt audit is a solid way of showing that the Norwegian government takes the Principles seriously and that they take their responsibility as a creditor seriously, says Jostein Hole Kobbeltvedt, a member of the UNCTAD expert group on responsible sovereign borrowing and lending.
Norway's dirty debts
The Norwegian Coalition for Debt Cancellation (SLUG) has done its own investigation of debts owed to Norway. The research reveals that a part of Indonesia’s debt to Norway is clearly illegitimate (see report).
- Although we would have liked for the audit to include the Eurodad Charter for Responsible Finance, it will be interesting to see how the UNCTAD Principles can be applied in practice. We expect that the audit reaches the same conclusion; that parts of Indonesia’s debt to
Norway are illegitimate. Any other conclusion would be highly surprising and a demonstration that the principles are too weak,said Ekholt.
-This is an important tool to promote responsible lending and to take responsibility for past loans. We hope that other creditors will be inspired by Norway’s debt audit,said Ekholt.
Holmås announced that the plan is for the audit to be done within a year.
Creditor Responsibility and the Norwegian Ship Export Campaign, By Kjetil G. Abildsnes (SLUG and FORUM)
Eurodad’s Responsible Finance Charter, Eurodad 2011
Is Indonesia’s debt to Norway illegitimate? By Magnus Flacké (SLUG) and Nikmah Khoirun (INFID)
Unctad’s Principles on Promoting Responsible Sovereign Lending and Borrowing, UNCTAD 2012.
Breaking new grounds: International perspectives on a creditor audit in Norway.
Norway makes ground-breaking decision to cancel illegitimate debt (October, 2006)
Oslo: Gina Ekholt, Director of SLUG, the Norwegian Coalition for Debt Cancellation:
+47 959 70 226
Jostein Hole Kobbeltvedt, member of the Unctad expert group on responsible sovereign borrowing and lending:
Tel: +47 92 06 60 25 / e-mail: firstname.lastname@example.org
London: Tim Jones, Policy Officer at Jubilee Debt Campaign:
+44 (0)20 7324 4725 or +44(0)7817 628196
Brussels: Øygunn Sundsbø Brynildsen, Senior Policy and Advocacy Officer at Eurodad:
+32 (0)2 894 46 44