Document Type

Article

Disciplines

International Law

Abstract

Debt-for-nature swaps link concerns regarding the environment and third world debt in order to confront and focus international attention on both crises.' Debt-for-nature swaps respond to these interests by adapting the ideas of debt-for-equity swaps 2 to create programs that enable developing countries (DCs) to retire a small portion of their foreign debt while simultaneously protecting their undeveloped land.

This comment explores the factors that frustrate the inclusion of traditional enforcement mechanisms in debt-for-nature swap agreements. It explains the basic theory and practice of debt-for-nature swaps, and presents a comprehensive overview of the Latin American ecological and debt crises, and how these crises are interrelated and self-perpetuating. The comment also details the mechanics of a debt-for-nature swap transaction in order to provide the reader with greater insight into the major hurdles that need to be surmounted in order to implement a debt-for-nature swap. Next, the comment turns to the dilemmas faced in monitoring and enforcing debt-for-nature swaps. This section emphasizes the high stakes of dealing with the profoundly complex and volatile issues of foreign debt and the global environment. It illustrates the complications presented by the questions of sovereignty of natural resources and the internationalization of the issue. The comment also points to additional obstacles to enforcement, including the unenforcability of international law in general, the innovative and experimental nature of the debt swapping mechanism, and the fact that no debt-for-nature swap to date has included enforcement mechanisms. The comment explains that the cost of creating agreements that set forth the exact conditions of the swap in great detail and include traditional enforcement mechanisms would outweigh the benefit that such provisions might render." The comment concludes by proposing the most effective means of ensuring that the agreements are performed to the satisfaction of all parties are: (1) to secure strong cooperative relationships between nongovernmental international environmental and conservation organizations in developed countries (international ECOs), which facilitate the swaps, and the local environmental and conservation organizations (local ECOs) and DC governments involved; (2) to structure the agreement to avoid the possibility of breach; and (3) to internationalize the issue and apply external influence. Finally, and most importantly, the comment suggests that a strong commitment by DC governments to follow a course of sensible resource management by taking environmental impact of developmental projects into consideration will ultimately be necessary to help alleviate both the ecological and debt crises.

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