African sovereign debtors in distress face terrible choices. They are often forced to choose between fully paying their creditors and financing the needs of their populations – health, education, renewable energy, water. Discussions with their creditors focus on financial, economic and contractual issues. The environmental and social impacts ofthe UN Global Compact
the OECD Principles of Responsible Conduct for Multinational Enterprises
the World Bank Environmental and Social Framework.
In addition, there are many private financial institutions that have human rights and environmental and social policies that often specifically refer to these international standards.
Third, drawing inspiration from the Vanuatu law students, activists around the world can use the judgment to strengthen their arguments. They can say that creditor and debtor states have an international legal duty to prevent significant harm to the environment and to cooperate to protect the environment. This duty extends to ensuring that companies and individuals subject to their jurisdiction act in conformity with these duties. They can be held legally responsible for failing to comply with these duties.
Finally, there are international mechanisms that non-state actors can use to hold debtors and creditors accountable for failing to perform their duties. These include the National Contact Points. These exist in each state that has signed on to the OECD Principles of Responsible Conduct for Multinational Enterprises. Another possibility is the independent accountability mechanisms in the multilateral development banks.
There are also the courts in the growing number of states in which governments, central banks and private actors have been sued for violating their obligations to climate change.
States and financial institutions, of course, can avoid these consequences by respecting the court’s opinion and developing ways of managing African sovereign debt that comply with its international legal advice.