12 Apr 2024 - by A4ID

A Call not for Charity but for Justice

With Debt Week just around the corner (8th-16th October), Jubilee Scotland held a People’s Debt Tribunal last night in the Scottish Parliament.

The event was organised to raise awareness of the issues affecting some of the poorest countries in the world as a result of their debts and to promote arbitration in cases where disputes exist over the legitimacy and “payability” of their debt arrangements with creditors.

Chaired by John Campbell QC and sponsored by Sarah Boyack MSP, the event was a great success.

The case for the cancellation of the Philippines’ debt to the World Bank was put forward by Lidy Nacpil, coordinator of Jubilee South, with an actor presenting on behalf of the World Bank the case for maintaining the existing debt arrangements. With input from experts specialising in economics and the ethics of such debt arrangements, the case was an effective demonstration of just how complex these kinds of disputes are.

Contracts are of course legally binding, and from a legal standpoint it is hard to imagine a court ruling in favour of the debtor country.

Nevertheless, there are a number of other considerations that question this position and call for the inclusion of the principle of ex aequo et bono into any arbitration process. This rules that an arbitrator or tribunal has the power to dispense with consideration of the law in the strictest sense and instead consider solely what they believe to be fair and equitable in the case in hand.

In the case of the Philippines, for example, this would mean looking at factors such as:

• how and where the World Bank loans have impacted on the Philippines population

• whether the loans have succeeded in achieving their stated objectives and supported the completion of important social and economic projects

• which government administration took on the loan and when

• the conditions attached to the loans

• and how the debt repayments are impacting on the Philippines’ overall budgets for public spending and the achievement of the UN Millennium Goals.

For the Philippines, debt repayments account for approximately 40 per cent of the annual budget and 80-90 per cent of tax revenue. Their current debt stands at around 47 billion US$, whilst many World Bank funded projects have failed to deliver benefits to the Philippines’ population.

There are more poor people in the country now than there were 14 years ago when much of the current debt was amassed and the gap between rich and poor continues to grow. It is on these and similar arguments that the case was made for re-examining Philippines’ debt to the World Bank, and to consider the prospect of its cancellation.

Following last night’s debate, members of the audience were given the chance to ask questions and finally vote on whether, given the evidence and advice they had heard throughout the course of the evening, the Philippines’ debt to the World Bank should be cancelled, in effect taking on the role of arbitrator. The result was a resounding “yes.”

Whilst not an accurate depiction of what an actual arbitration would look like – arbitrations do not after all invite a public audience to watch and participate – the People’s Debt Tribunal was important in demonstrating the merits of bringing together creditor and debtor in a fair, transparent and neutral environment. At present no such option is available and debtor countries remain relatively powerless in the process of debt restructuring.

Through A4ID, Jubilee Scotland has been working with Brodies LLP located in Edinburgh to research and consider the ways in which the Arbitration (Scotland) Act 2010 can be used to promote arbitration in the resolution of debt disputes, such as that between the Philippines and World Bank, and how the Act can be tailored to suit these purposes.

This forms part of Jubilee Scotland’s wider Defuse the Debt Crisis Campaign which continues to fight for debt justice throughout the developing world. As Lidy Nacpil stated, “debt cancellation is a call not for charity but for justice”.



Charlotte Snelling is the Policy and Research Intern at Jubilee Scotland, who are one of A4ID’s Development Partners. For more information please visitwww.jubileescotland.org.uk