On 8th April 2010 the UK passed the Debt Relief (Developing Countries) Bill. This act restricted the activities of so called ‘vulture funds’. But what exactly are vulture funds and why was this bill restricting their actions so crucial in the campaign against poverty?
The campagn to create and pass this bill into law was run by the Jubilee Debt Campaign, and so we caught up with their Director, Nick Dearden to get some more information about the funds.
As Nick explains, vulture funds are investment funds, usually based in off-shore tax havens, who prey on some of the world’s poorest countries by buying up their debt for vastly decreased amounts (sometimes pennies in the pound). They then go on to sue for the full amount in courts in the UK and US.
Throughout 2010, the Jubilee Debt Campaign’s supporters waged a relentless campaign to get the government to pass a law restricting this activity and in April it was passed into law, meaning heavily indebted poor countries (HIPCs) can no longer be taken to court in the UK and sued for full repayment of these debts.
However, the act does not extend to all developing world countries and so does have its limitations and the US has yet to pass an equivalent law. A further problem may occur when the bill is reviewed in a year’s time, at which point Parliament has the ability to repeal it.
It is vital that this legislation remains in force and is extended to protect all developing world countries from this repellent activity. You can keep updated on the developments in this campaign via the Jubilee Debt Campaign’s End the Vulture Culture pages.