A/HRC/23/37 and liberalization of finance which have increased these countries’ vulnerability to international financial flows, cannot conceivably play a leading role in resolving the debt crisis in a equitable and sustainable manner. In this regard, there are number of actions that the international community should consider. These are discussed below. A. Reinforcing the principle of shared responsibility 56. Responses to the debt crisis of developing countries have ignored any sense of responsibility on the part of the creditors for its development.58 Thus, creditors have often cast the crisis as a problem of poor debt management on the part of these countries. 59 This is reflected in the design of the current international debt relief mechanisms which focus exclusively on debt management and ignore the role of the lenders. Yet the history of the debt crisis indicates that it is partly attributable to irresponsible creditors (countries, banks and bondholders) who made poor investment and financing decisions, as well as the complicity of the international financial institutions which issued bad policy prescriptions.60 Irresponsible lending has included loans to oppressive regimes; for corrupt, useless or overpriced projects; or on unfair terms, resulting in large burdens of odious or illegitimate debt which are disproportionately borne by the poorest people in the indebted countries.61 Clearly, there is a need to reaffirm the principle of shared responsibility. As underlined in the Monterrey Consensus, “debtors and creditors must share the responsibility for preventing and resolving unsustainable debt situations.” This entails, firstly, accepting that lenders and borrowers have a mutual obligation to ensure that their lending or borrowing behaviour does not contribute to or culminate in unsustainable debt situations. Thus, for example, lenders must not extend loans without conducting due diligence or, in the case of development loans, must not lend for projects that have no developmental benefit for the population of the borrower State. For their part, borrowers must not contract loans that they may not be in a position to repay, or they must not conclude loan agreements in circumvention of the applicable national legal and institutional frameworks. Secondly, it requires that lenders and borrowers accept responsibility for their role in the creation of debt crises and take appropriate remedial action. For the lender, this might entail unconditional cancellation of loans it extended in a profligate manner, while for the borrower, it might require the establishment of a transparent and accountable system for the management of public debt. 57. 58. As part of its re-commitment to the principle of shared responsibility, the international community should work together to develop a framework for responsible financing that not only incorporates the principles of fairness, mutual accountability and transparency, but also enhances the capacity of States to achieve their development goals 58 59 60 61 A notable exception is Norway. In October 2006 the Government of Norway unilaterally and unconditionally cancelled the official debts of around $80 million incurred by five developing countries under its Ship Export Campaign, which it acknowledged as a “development policy failure”. See Government of Norway, Ministry of Foreign Affairs, press release No. 118/06, 2 October 2006; see also A/HRC/14/21/Add.1, paras. 19-25. See Jubilee Australia, Alternatives to debtors prison: Developing a framework for international insolvency, ACFID Research in Development Series Report No. 4, October 2011, pp. 9-10; Sarah Edwards, A New Debt Crisis? Assessing the impact of the financial crisis on developing countries (London, Jubilee Debt Campaign, March 2009), p. 8. See, for example, S. Edwards, A New Debt Crisis?(see footnote 59), pp. 7-8. Jubilee Debt Campaign argues that existing responses to the debt crisis “have ignored any sense of responsibility on the part of lenders and have been aimed at protecting creditors and the financial system.” For a discussion of odious and illegitimate debt, see A/64/289, paras. 8-22. 17