A/70/275 exceptions to the repayment obligation arise as a pure consequence of economic conditions outside the sovereign debtor’s control. So how are all these considerations relevant in the context of debt restructurings? 49. A serious limitation to the principle of pacta sunt servanda is the set of sovereign obligations in the contemporary global order. If a State and its population must always repay debt under any circumstance, no matter the purpose for which the funds were borrowed, 30 how they were spent 31 or the amount of effort put into reimbursing them, 32 this idea clearly relies on an overly simplistic notion of sovereignty and contract. However, as explained earlier, the economic fate of a given population and its obvious implications in terms of human rights constitute a core element of modern notions of sovereignty. 50. Under certain circumstances, particularly when economic, social and cultural rights at risk, the operation of contract may not be sufficiently compelling to ask the populations of Sovereign States to fully replay their debts in a timely manner. Political institutions shape sovereign borrowing, and lending to sovereign States also shapes their political institutions. That means that, transitively, the capacity of States to respect, protect and fulfil human rights is determined, to some exte nt, by financial transactions. 33 This is the case when the sovereign debt is contracted or (at later stage) renegotiated. 34 The scope of the pacta sunt servanda principle is thus limited by sovereignty and human rights. 51. In light of the erga omnes effects of human rights, none of this should appear to be unusual to lenders: they should look at the consequences of their loans and claims in terms of affecting the capacity of the State to meet basic human-rights requirements. Domestic creditors facing individual consumer debtors may be similarly limited by laws that exempt certain essential property from collection efforts. Valid debt contracts and their renegotiation should be unde rtaken in light of the bounds of legitimate sovereign activity. Since human rights play an important role in defining a core element of modern notions of sovereignty, sovereign debt (and related claims) that may translate into serious damage for the borrower’s population potentially violates human rights law. 33 The outcome of sovereign debt and debt restructurings should take the legal needs and rights of the underlying population into consideration. 52. There is a growing set of international standards suggesting that lenders should consider the consequences of their financial decisions in order to not affect the obligation of States to progressively achieve economic, social and cultural rights, using their maximum available resources (International Covenant on Economic, Social and Cultural Rights, article 2.1). The Guiding Principles on foreign debt and human rights, the Guiding Principles on Business and Human __________________ 30 31 32 33 34 15-12541 See Leader, Sheldon and Ong, David, eds., Global Project Finance, Human Rights and, Sustainable Development, Cambridge University Press, 2011. See A/HRC/28/59. See Reinisch, August, and Binder, Christina, “Debts and State of Necessity”, in Bohoslavsky and Letnar, op. cit., pp. 115-128. See Bohoslavsky, J. P. and Letnar, J., eds., Making Sovereign Financing and Human Rights Work , Hart Publishing, Oxford, 2014. This is something that is becoming clearer and clearer when debt repayment poses a peace challenge to the international community. See Goldmann, M., “Sovereign Debt Crises as Threats to the Peace: Restructuring Under Chapter VII of the UN Charter?”, Goettingen Journal of International Law, 2012, vol. 4. 15/18