The African Development Bank Group to Launch the African Legal Support Facility

11/05/2009
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Dakar, May 11, 2009-The African Development Bank (AfDB) has announced that the African Legal Support Facility (ALSF) will be launched at a Summit in Tunis in June, 2009. The announcement was made during a Press Conference at the institution’s 2009 Annual Meeting taking place in Dakar, Senegal.

The summit will seek to approve its relevant operational legal documents and put in place its governing organs at the Summit.

So far, the AfDB and 29 Regional Member Countries (RMCs) have signed an agreement establishing the Facility.  Nigeria and several other countries are expected to join the list soon.

The objective of the Facility is to operate as a legal and technical service provider to member countries, allowing them access to sound legal advice and technical assistance in order to resolve commercial creditor litigation and strengthen their negotiation capacity on issues relating to debt management and negotiations of complex transactions.

The Facility is the product of African Finance Ministers who, in June, 2003, sought a mechanism to help Heavily Indebted Poor Countries (HIPCs) address the growing problem of vulture funds. The UN Commission on Africa in 2005 also called for such a facility. The African Big Table in 2007 in Addis Ababa, co-organized for African Finance Ministers by AfDB and UNECA, called for a facility to help RMCs negotiate contracts and create an appropriate, enabling environment with modern, legal and regulatory frameworks for the extractive resource sector.

Speaking on behalf of the AfDB General Counsel, Mr. Aboubacar Fall, AfDB’s Principal Legal Counsel, explained: “the Facility is a demand-driven initiative.” He described vulture funds as those funds obtained cheaply by commercial creditors who buy debts cheaply  from  the debtor countries, often the heavily indebted countries, and lay claim to the full value of such debts. This, he pointed out, is “morally invalid but legally valid.”

Established in December, 2008 with an autonomous legal and administrative personality, the Facility, hosted by the African Development Bank, will deliver two types of services: assistance in Vulture Fund negotiation or litigation, and commercial transactions. Planned activities include minimizing the diversion of debt relief gains; strengthening assistance to HIPCs and Fragile States; providing High Level Legal Expertise to countries in Vulture Fund Litigation; and providing funds for hiring qualified law firms in defence of debtor interests in terms suitable for each candidate debtor nation. It will also use procedures created to build knowledge for future use by Government Negotiators; enhance the fiscal viability of projects, particularly in extractive industries, and organize training for negotiators and legal counsel in member states.

Its statutory organs operate on three levels: (1) a Governing Council of 12 members serving on a rotational basis—each from the African subregions; 4 from OECD countries ; 1 from a non-OECD (Organisation for Economic Cooperation and Development) country, 1 from the AfDB and 1 from other international organizations. (2) A Management Board consisting 5 members; and (3) an Executive Director responsible for the management of the Facility.

The AfDB Board of Governors, in 2008, allocated USD 15 million to launch the Facility and operationlize its activities.  According to Mr Fall, several countries have pledged to contribute to the funding of the Facility.


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Contacts

Emmanuel Ngwainmbi