Thursday, 6 September 2012

Norway: First creditor ever to carry out a debt audit

On 15 August 2012 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 Norwegian government will be the first to ever carry out a creditor’s debt audit. Since being elected in 2009, the Norwegian government has promised to carry out a debt audit, as well as working to establish binding guidelines for responsible lending. Now Holmås promised that the audit will now be launched, to be followed up with new and stronger guidelines for responsible lending.

The Norwegian government has previously admitted their responsibility as a creditor for dirty debts attached to a particular set of loans for developing countries to buy Norwegian ships. In 2006 the government announced that they would cancel debts for seven countries because the original loans had been a “development policy failure”. 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 current debt to Norway is clearly illegitimate. SLUG shows that the people of Indonesia is still paying for a wave power plant that was never built, and failed technology for sea monitoring systems.

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. In April, the UK government unsuccessfully tried to stop UNCTAD working on responsible lending and borrowing principles. Jostein Hole Kobbeltvedt, Eurodad representative at the UNCTAD expert group on responsible sovereign borrowing and lending, said: “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.” Development Minister Holmås announced that the plan is for the audit to be concluded within a year.

* For more information >>> here

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