The place of socio-economic rights in sovereign debt governance
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Date
2020-03
Authors
Bello, Muhammad
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Publisher
University of the Free State
Abstract
Recurring sovereign debt crises across the world have consistently pushed indebted countries into ‘obligatory dilemmas’, increasingly putting the socio-economic rights of debtors’ citizens in jeopardy and creating a doctrinal tension between debtors’ contractual and treaty obligations. Even the minimum core obligations of state parties to the International Covenant on Economic, Social and Cultural Rights have been losing their functional significance as a result of the recurring circles of debt crises. Therefore, using doctrinal methodology, this research interrogates the extent to which contractual obligations may be honoured where socio-economic rights of debtor’s citizens face clear danger of non-realisation. Unlike previous studies on the subject, this research examines the place of socio-economic rights in all the critical phases of sovereign debt governance using reflexivity of global law as conceived by contemporary transnational legal theorists. It argues that the recurring circles of debt crises are linked to the continuing influence of the dominant private law paradigm in sovereign debt governance. This, the research further argues, could be seen in, first, the creditors’ persistent resistance to a statutory framework on restructuring sovereign debt, the rising trend of creditor litigations, the strengthening of the contractual framework by the creditor-controlled law creating and enforcing institutions, the doctrinal wedge between the public and the private realms and state-centrism under which private entities are largely seen as incapable of bearing socio-economic rights obligations. Second, the creeping effects of the investment treaty regime into the sovereign debt regime demonstrates the penetrating influence of creditordiktat in sovereign debt governance. The research further argues that socio-economic rights can qualify as ‘essential interest’ to ground debt moratorium under customary international law, treaty law and evolving soft laws on sovereign debt. After reviewing relevant cases, the research observes the growing relevance of socio-economic rights jurisprudence in sovereign debt adjudication. It makes a case for the prioritisation of socio-economic rights considerations in debt contracting, restructuring and adjudication through a more concrete recognition of creditors’ socio-economic rights responsibilities. This can be done by recognising the sovereign debt regime as a form of global law which de-emphasises the public-private dichotomy. The research suggests, among others, some statutory reforms to concretely embrace socio-economic rights considerations in contracting and restructuring of sovereign debt and in adjudication of sovereign debt claims by way of a specific treaty, or by taking advantage of both the evolving business and human rights treaty-making process and the incremental soft law development process. In this regard, it suggests a specific recognition of creditors’ standstill obligation to respect socio-economic rights of debtors’ citizens during debt crisis.
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Keywords
Thesis (LL.D. (Mercantile Law))--University of the Free State, 2020, Socio-economic rights - Citizens, Economic rights, Social rights - Law and legislation, Debts, Public, Sovereign debt