There is recent good news on the area of Vulture Funds. Vulture Funds are speculative ventures where companies buy up debt to get it back from the debtor often at highly inflated prices. They are effectively legalised loan sharks. Recently, Jersey has been the centre of a court case which reached the Privy Council, and while the Jersey courts allowed the Vulture Fund to claim the debt, the highest court of appeal blocked that. The debt relating to the Congo was originally a loan from the former Yugoslavia to Zaire which was bought up by the Vulture fund for $3.3m; the claim was for $100m.
The privy council has blocked a multimillionaire speculator from taking up to $100m (£64m) from the Democratic Republic of the Congo (DRC) for a decades old debt that started out at $3.3m. Peter Grossman, who runs so-called "vulture fund" FG Hemisphere, had tried to exploit a legal loophole to demand the impoverished African nation pay back the debt. But the privy council overturned a previous court ruling allowing FG Hemisphere to demand the multimillion-pound payout from DRC's state-owned mining company. (1)
It's a good example of the judicial system working well, where local jurisdictions - in this case Jersey - cannot simply decide matters of justice for themselves; which makes the idea of independence proposed by Senator Philip Bailhache more problematic: if Jersey was independent, they would be literally, a law unto themselves. History has shown that small jurisdictions need an oversight from a broader legal system to ensure justice does not degenerate into tyranny.
The principal time period over which Jersey did exercise almost complete autonomy was during the period immediately after the Reformation, and up until the restoration of Charles II - and the proper lines of legal appeal at the same time. During that period, countless Islanders were imprisoned, stripped and shaved for witches marks, and many burnt at the stake by the orders of the Civil authorities - effectively, local law became legal murder. In England, of course, the breakdown of the chain of command with regard to circuit judges came later - during the Civil War, and it is no coincidence that also saw the local authorities prosecuting witches, without the guiding hand of a central legal oversight.
With regard to the Vulture funds, legislation was originally promised by Senator Terry Le Sueur, who in 2007 stated that:
I am sure that the latter is not being "simply left to rest" and I have urged all firms involved in international activities to be aware of, and refrain from, activities involving 'vulture funds'. I have been given an assurance that they will, and we all recognise the potential harm this could cause to Jersey' s reputation, as well as to the 'victims' of the vulture fund.
Of course, as we all know from a recent Scrutiny report, Terry's preferred strategy was to let matters drift by and do nothing unless he was forced to do so, so not surprisingly nothing was done. When asked questions in 2007, he noted that a "high-level working party" had been set up to look at the issue; when asked of the membership, he fudged with a reply that is really laughable:
At this stage this has been a very hastily produced answer and I do not have details of the composition of that working party, other than to know it is in existence and it is working. In due course I hope to be able to present those details to the Members.
But as we know, he never did!
Nick Dearden, Director of Jubilee Debt Campaign, said: "We welcome the fact that these funds will not flow into the coffers of a secretive vulture fund which tries to unfairly profit from the past debt distress of impoverished countries. Jersey now needs to do what it should already have done - pass a law to make such cases unprofitable for the vultures.
But there are good signs for believing that Jersey is putting its house in order. Asked questions in the States on Vulture funds, Senator Ian Gorst stated:
The U.K. is currently the only jurisdiction/country in the world that has such legislation. We are proposing to be at the forefront as well of such legislation. Earlier this year in late January, I instructed the drafting of such legislation and I hope that I will be in a position to lodge during September.
Obviously this is a piece of legislation similar to the United Kingdom's in that the aim is to ensure that debt relief efforts for developing countries are not interrupted by those who are not abiding by the rules agreed upon by the Paris Club nations and are recovering debts outside of the Common Reduction and Decision Point factors, so it gets quite technical. That is what we are talking about and that is what I am committed to delivering. (2)
Let's keep an eye on September 2012, and keep up the momentum.
Links
(1) http://www.guardian.co.uk/business/2012/jul/18/privy-council-vulture-fund-drc
The privy council has blocked a multimillionaire speculator from taking up to $100m (£64m) from the Democratic Republic of the Congo (DRC) for a decades old debt that started out at $3.3m. Peter Grossman, who runs so-called "vulture fund" FG Hemisphere, had tried to exploit a legal loophole to demand the impoverished African nation pay back the debt. But the privy council overturned a previous court ruling allowing FG Hemisphere to demand the multimillion-pound payout from DRC's state-owned mining company. (1)
It's a good example of the judicial system working well, where local jurisdictions - in this case Jersey - cannot simply decide matters of justice for themselves; which makes the idea of independence proposed by Senator Philip Bailhache more problematic: if Jersey was independent, they would be literally, a law unto themselves. History has shown that small jurisdictions need an oversight from a broader legal system to ensure justice does not degenerate into tyranny.
The principal time period over which Jersey did exercise almost complete autonomy was during the period immediately after the Reformation, and up until the restoration of Charles II - and the proper lines of legal appeal at the same time. During that period, countless Islanders were imprisoned, stripped and shaved for witches marks, and many burnt at the stake by the orders of the Civil authorities - effectively, local law became legal murder. In England, of course, the breakdown of the chain of command with regard to circuit judges came later - during the Civil War, and it is no coincidence that also saw the local authorities prosecuting witches, without the guiding hand of a central legal oversight.
With regard to the Vulture funds, legislation was originally promised by Senator Terry Le Sueur, who in 2007 stated that:
I am sure that the latter is not being "simply left to rest" and I have urged all firms involved in international activities to be aware of, and refrain from, activities involving 'vulture funds'. I have been given an assurance that they will, and we all recognise the potential harm this could cause to Jersey' s reputation, as well as to the 'victims' of the vulture fund.
Of course, as we all know from a recent Scrutiny report, Terry's preferred strategy was to let matters drift by and do nothing unless he was forced to do so, so not surprisingly nothing was done. When asked questions in 2007, he noted that a "high-level working party" had been set up to look at the issue; when asked of the membership, he fudged with a reply that is really laughable:
At this stage this has been a very hastily produced answer and I do not have details of the composition of that working party, other than to know it is in existence and it is working. In due course I hope to be able to present those details to the Members.
But as we know, he never did!
Nick Dearden, Director of Jubilee Debt Campaign, said: "We welcome the fact that these funds will not flow into the coffers of a secretive vulture fund which tries to unfairly profit from the past debt distress of impoverished countries. Jersey now needs to do what it should already have done - pass a law to make such cases unprofitable for the vultures.
But there are good signs for believing that Jersey is putting its house in order. Asked questions in the States on Vulture funds, Senator Ian Gorst stated:
The U.K. is currently the only jurisdiction/country in the world that has such legislation. We are proposing to be at the forefront as well of such legislation. Earlier this year in late January, I instructed the drafting of such legislation and I hope that I will be in a position to lodge during September.
Obviously this is a piece of legislation similar to the United Kingdom's in that the aim is to ensure that debt relief efforts for developing countries are not interrupted by those who are not abiding by the rules agreed upon by the Paris Club nations and are recovering debts outside of the Common Reduction and Decision Point factors, so it gets quite technical. That is what we are talking about and that is what I am committed to delivering. (2)
Let's keep an eye on September 2012, and keep up the momentum.
Links
(1) http://www.guardian.co.uk/business/2012/jul/18/privy-council-vulture-fund-drc
(2) Hansard
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2 comments:
Hi Tony.
Just put up Audio of the biast Interviewing on our BBC Local Radio. I know I can here you say Biast & BBC don't go together ? But have a Listen, see what you think.
You & your reader's can Listen HERE
TJW.
Hi Tony.
Just put up Audio of the biast Interviewing on our BBC Local Radio. I know I can here you say Biast & BBC don't go together ? But have a Listen, see what you think.
You & your reader's can Listen HERE
TJW.
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