Eurodad member SLUG explains international importance of Norway’s debt audit.
The Norwegian government is the first creditor country to commit to auditing the debts owed to the country. The audit, when implemented, will include assessing the legitimacy of the claims and has the potential to set a new precedence in the area of illegitimate debt and creditor responsibility globally. SLUG, the Norwegian Coalition for Debt Cancellation, has published a collection of texts by international debt campaigners and academics sharing their advice on how the audit can be of international importance.
In 2006 the Norwegian government made the bold decision to unilaterally cancel debts based on its co-responsibility as a lender. “It is now generally agreed that the Ship Export Campaign was a development policy failure. As a creditor, Norway shares part of the responsibility for the resulting debts,” the government explained. Last year, SLUG published a report strongly questioning the legitimacy of Norway’s claims on Indonesia. A debt audit would provide an analysis of the legitimacy of these and other claims.
The SLUG report “The Norwegian Debt Audit from an International Perspective”, shows that there are big expectations related to the official creditor audit. Contributors to the report welcome the initiative and feel that if the right considerations are made, Norway will again break new ground in the area of creditor responsibility. They also believe the commitment brings with it responsibilities for the Norwegian government. Three elements stand out as particularly relevant for success:
• The scope of the audit: Contributors to the report conclude that the audit should include national lending practices with the aim of preventing future illegitimate debts.
• Criteria for debt cancellation: While both national and international law, contractual terms and other formal requirements are important, social, economic and environmental consequences of the debts should also be considered. The Eurodad responsible financing charter should be used as a benchmark.
• Practical considerations such as participation, independence and non-bias and transparency of information.
In undertaking the audit, the Norwegian government must take recommendations from experienced debt campaigners and academics into account to ensure that the Norwegian debt audit is a success that can serve as an inspiration and a model for audits in other creditor countries.
Download the report “The Norwegian Debt Audit from an International Perspective”.