A/HRC/41/51 should also recognize the extraterritorial obligation of States to fulfil economic, social and cultural rights.69 81. National law should provide the basis for regulating the behaviour of abusive noncooperative creditors in restructuring processes by providing that they cannot enjoy better treatment than those that are acting in good faith.70 Guarantees should be provided that the amount of debt recoverable by a vulture fund cannot exceed that recovered by cooperative creditors (A/HRC/20/23 and Corr.1, annex, principle 61). 82. Steps should be taken to regulate the trading of sovereign debt on the secondary market and guarantee transparency. In the absence of an international restructuring mechanism, all efforts must be directed towards achieving a negotiated settlement (ibid., principle 59). 83. Finally, States should assess whether servicing debt owed to vulture funds would result in derogation from their minimum core obligations with respect to economic, social and cultural rights. Debt sustainability analysis should include an evaluation of the level of debt a country can carry without undermining its capacity to fulfil its human rights obligations and the realization of the right to development (ibid., principles 8, 48 and 65). Management of vulture funds 84. Under the Guiding Principles on Business and Human Rights, vulture funds have a responsibility to respect human rights (ibid., principles 11 and 17). 71 That responsibility includes the obligation to assess whether adverse human rights impacts are expected from their activities (A/HRC/17/31, annex, principles 13 (a) and 15). The management of vulture funds must thus refrain from any predatory or obstructive behaviour that could compel States to act in contravention of their human rights obligations in order to repay debts, or that could directly impact the capacity of States to meet those obligations (see A/HRC/40/57, principle 16.3 in relation to principle 15.2). 85. Despite the fact that the general framework is fully applicable to vulture funds, it is not expected that they will adjust their behaviour accordingly, which underscores the need for appropriate national and international regulation. X. Conclusions and recommendations 86. Vulture funds are inherently exploitative. They deploy predatory financial strategies to obtain disproportionate and exorbitant gains at the expense of the realization of human rights, particularly economic, social and cultural rights, and the right to development. Seeking the repayment in full of a sovereign debt from a State that has defaulted, or is close to default, is an illegitimate purpose. In a debt crisis, more than financial obligations are at stake. 87. Excessive claims awarded to vulture funds have allowed them to reap profits at the expense of the welfare and sustainable development of the poorest countries, without taking due account of the negative consequences of such actions on the capacity of a State to fulfil its human rights obligations. 88. The duty to observe due diligence to prevent a negative impact on and potential violations of economic, social and cultural rights applies to all States and stakeholders, including the management of vulture funds. The impact of their activities on the 69 70 71 See “Maastricht principles on extraterritorial obligations of States in the area of economic, social and cultural rights” (2013), principle 32. This encompasses the basic requirements of fairness, honesty and trustworthiness. See UNCTAD, “Sovereign debt workouts: going forward. Roadmap and guide”, p. 22. See also UNCTAD, “Principles on promoting responsible sovereign lending and borrowing” (January 2012). A direct link of causality between the activities of vulture funds and their negative human rights impact is not generally required. See also www.ohchr.org/Documents/Issues/Business/ LetterOECD.pdf. 17