Round table on conceptual and operational issues of lender responsibility for sovereign debt

The round table on “Conceptual and Operational Issues of Lender Responsibility for Sovereign Debt” was hosted by the World Bank following the publication of a draft World Bank discussion paper entitled “Odious Debt: Some Considerations” in September 2007. The event was organized in response to a request by a coalition of civil society organisations (CSO's) interested in discussing the findings of the Bank paper and the broader issues of odious/illegitimate debt and responsible lending.

This outcome report captures some of the main points raised by panellists as well as the discussions with the meeting’s participants which followed. The round table concludes that the unilateral action of Norway to cancel US$80 million owed by five countries acknowledging 'shared responsibility', had helped to facilitate discussions on the issue of creditor co-responsibility among governments, officials and civil society organisations. Main areas covered by the round table included:

• the concepts of odious and illegitimate debt, i.e. what the terms odious and illegitimate debt mean and whether these can be considered well established legal concepts
• consideration of how feasibly these concepts could be applied in practice
• practical approaches to addressing concerns on responsible lending and borrowing in the future

As follow up some civil society organisations suggested that, if the World Bank was indeed serious about the importance of the odious debt issue, it should foster further discussions on the subject, for example workshops with legal experts to discuss different approaches to dealing with the problem. It was also proposed that the World Bank and a Southern CSO jointly appoint an independent auditor to examine a selected Bank credit according to mutually agreed indicators. Finally, CSOs called for the World Bank discussion paper and roundtable outcome report to be discussed by the Bank’s management and Board.