A/HRC/20/23 32. Transparency and participation further require oversight by the relevant representative bodies and civil society organizations. Section III – Operational principles A. External debt General legal and institutional framework 33. Borrower States should have a comprehensive legal and institutional framework that promotes and ensures transparency and accountability in the loan negotiation and contracting as well as public debt management processes. Such a framework should also clarify the roles of different institutions in loan negotiation, contraction, debt management and oversight. 34. Borrower States should set limits for international loans through appropriate budgetary legislation. Any changes to such ceilings should require the approval of Parliament or some other democratically constituted national legislative body. 35. Lender States, international financial institutions and private institutions should have a comprehensive legal and institutional framework that promotes and ensures transparency and accountability in the negotiation and contracting of loans. Decision to borrow or to lend 36. Every Borrower State should conduct a transparent and participatory needs assessment, as part of its annual debt strategy, in order to ascertain whether it has a genuine need to obtain new loans. It is incumbent upon each Borrower State to demonstrate that its decision to borrow has been given the most careful consideration and is fully compliant with the foundational principles identified in Section II above, particularly the need to ensure the primacy of human rights. 37. Prior to obtaining a new loan, a Borrower State should reassess the existing allocation of its financial resources and should satisfy itself that its need for additional funds cannot be met by re-orienting existing budgetary allocation. In addition, if such allocation does not reflect a high priority for human development spending and enhanced protection for the enjoyment of fundamental human rights and freedoms, it should be adjusted accordingly. 38. All lenders should satisfy themselves that a Borrower State has made an informed decision to borrow and that the loan is to be used for a public purpose. They should conduct due diligence or obtain assurances from the Borrower State to ensure that the loan funds will not be wasted through official corruption, economic mismanagement or other unproductive uses in the Borrower State. If any such eventuality is reasonably foreseeable under the circumstances, lenders should not provide the loan or continue with the disbursement of the loan. 39. All lenders should conduct due diligence to ensure that the proposed loan will not increase the Borrower State’s external debt stock to an unsustainable level that will make debt repayment difficult and impede the creation of conditions for the realization of human rights. Lenders should satisfy themselves that, even with the new loan, the Borrower State is still capable of servicing its external debt without compromising its ability to perform its international human rights obligations as mentioned in section II. 40. Lenders should not finance activities or projects that violate, or would foreseeably violate, human rights in the Borrower States. To avoid this eventuality, it is incumbent upon 15