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7 Conn. J. Int'l L. 123 (1991-1992)
Debt-for-Nature Swaps in Latin American Countries: The Enforcement Dilemma

handle is hein.journals/conjil7 and id is 129 raw text is: COMMENT DEBT-FOR-NATURE SWAPS IN LATIN AMERICAN COUNTRIES: THE ENFORCEMENT DILEMMA INTRODUCTION Debt-for-nature swaps link concerns regarding the environment and third world debt in order to confront and focus international atten- tion on both crises.' Debt-for-nature swaps respond to these interests by adapting the ideas of debt-for-equity swaps2 to create programs that enable developing countries (DCs) to retire a small portion of their for- eign debt while simultaneously protecting their undeveloped land.3 This comment explores the factors that frustrate the inclusion of traditional enforcement mechanisms in debt-for-nature swap agree- ments. 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- 1. WORLD RESOURCES INSTITUTE, NATURAL ENDOWMENTS: FINANCING RESOURCE CONSER- VATION FOR DEVELOPMENT 8 (Sept. 1989) [hereinafter NATURAL ENDOWMENTS] (available from World Resource Institute, a center for policy research, Washington, D.C.); see also Barbara J. Bramble, The Debt Crisis: The Opportunities, 17 ECOLOGIST 192 (1987) [hereinafter The Debt Crisis]; Betsy Cody, Debt-for-Nature Swaps in Developing Countries: An Overview of Recent Conservation Efforts, Congressional Research Service, Library of Congress, Rep. No. 88-647 Summary (Sept. 26, 1988); Stein Hansen, Debt For Nature Swaps - Overview and Discussion of Key Issues, I ECOLOGICAL ECON. 77 (1989); Andrew N. Hultkrans, Greenbacks for Greenery, 73 SIERRA, Nov./Dec. 1988, at 43-44; Tamara J. Hrynik, Comment, Debt-for-Nature Swaps: Effec- tive But Not Enforceable, 22 CASE W. RES. J. INT'L L. 141 (1990). 2. Debt-for-equity swap investors purchase a portion of a DC's foreign debt and exchange it for an equity interest in a local business as an investment for profit. Cody, supra note 1, at 1-2. Economist Allan Meltzer developed a plan in which creditors would retire a certain amount of DC debt in exchange for partial ownership in a national monopoly or other national holding. Steven M. Cohen, Give Me Equity or Give Me Debt: Avoiding a Latin American Debt Revolution, 10 U. PA. J. INT'L BUs. L. 89, 109 (1988). 3. Timothy B. Hamlin, Debt-for-Nature Swaps: A New Strategy for Protecting Environmen- tal Interest in Developing Nations, 16 ECOLOGY L. Q. 1065, 1066 (1989).