Abstract
Over the past few decades, sovereign debt crises have become recurring phenomena across the world. Studies have shown the devastating impacts of these crises on the realisation of socio-economic rights. Sovereign debtors constantly face an “obligatory dilemma” of simultaneously satisfying multiple contractual and treaty obligations owed to different constituencies, including to their citizens and private creditors. Unfortunately, there is currently no binding legal framework to deal with sovereign debt crises and, consequently, creditors are unwilling to compromise. Therefore, using Waldron’s theory of socio-economic rights, this article argues for the prioritisation of socio-economic rights considerations during debt crises. It observes a convergence between the areas of business and human rights and sovereign debt restructuring regimes and suggests the employment of the former to achieve this prioritisation. This can be done by taking advantage of the efforts to develop a binding instrument on business and human rights.
Highlights
Holding private creditors accountable for human rights violations remains one of the most debated topics in the field of business and human rights (BHR)
This is partly because it accommodates human rights-based principles. It aligns with the concerns for, and the underlying philosophy of socio-economic rights.[41]. Beside their responsibilities as businesses, private creditors’ associations (with international financial institutions (IFIs) in the case of sovereign debt restructuring (SDR)), may have human rights obligations arising from the effects of their actions
Under the Guiding Principle on Human Rights Impact Assessment (HRIA), private creditors must carry out human rights due diligence, in order to prevent and mitigate the adverse impacts of their activities on human rights.[155]
Summary
Over the past few decades, sovereign debt crises have become recurring phenomena across the world. There is currently no binding legal framework to deal with sovereign debt crises and, creditors are unwilling to compromise. Using Waldron’s theory of socio-economic rights, this article argues for the prioritisation of socio-economic rights considerations during debt crises. It observes a convergence between the areas of business and human rights and sovereign debt restructuring regimes and suggests the employment of the former to achieve this prioritisation. This can be done by taking advantage of the efforts to develop a binding instrument on business and human rights
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