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Sullivan, Peter "Opening Statement at the Joint Symposium on Insolvency and Secured Transactions Law Reform" [1999] ADBLPRes 2 (25 October 1999)

Opening Statement at the Joint Symposium on Insolvency and Secured Transactions Law Reform

Distinguished guests, ladies and gentlemen:

I am very pleased to open the Joint Symposium on Insolvency and Secured Transactions Law Reform. I would like to extend a warm welcome to all the participants in this Symposium. I am pleased to note that we have participants from a wide cross-section of the Bank's developing member countries, government, legislative bodies, the judiciary, the private sector, law firms, international consultants, and local consultants. We also have representatives from multilateral organizations, including UNCITRAL, the World Bank, IMF, and UNDP.

Ladies and gentlemen, allow me briefly to introduce ADB to those of you who may not have had direct contact with our organization. ADB is the leading regional development bank for Asia and Pacific, owned by 57 member countries. In recent years, Bank assistance to developing member countries has averaged over $7 billion per year. This includes annual grant assistance of over $150 million. To meet the changing and increasingly complex needs of the developing member countries, ADB is evolving from a project lender into a broad-based development institution. The Bank is vitally concerned with issues of good governance, which we consider indispensable for sustained development and effective social and economic management. The rule of law is at the heart of good governance. In this context, the Bank has funded numerous law-related technical assistance projects in its DMCs, including regional TA projects on Insolvency and Secured Transactions Law Reform under which the present symposium is being organized.

The recent Asian financial crisis has taught us the important lesson that well-developed insolvency and secured transactions systems facilitate the efficient allocation of resources, foster economic growth, and may help to accelerate the recovery of an economy in distress. Efficient and uniform insolvency and secured transactions regimes are important elements of a sound legal framework for the financial and corporate sectors. During the Asian financial crisis of the past two years, many DMCs have taken important measures to address problems arising from inadequacies of insolvency and the secured transactions regimes. These measures have addressed a wide range of problems, including incomplete legislation, inadequate institutional capacity, inconsistent application of enacted legislation, and excess or lengthy enforcement procedures. There are positive experiences in many countries that we hope can be shared during the Symposium.

However, despite major efforts, many outstanding issues remain. Fragmented legislation and registration systems for many types of movable collateral create uncertainty. There are many unresolved issues related to legal processes for establishing the priority of claimants over collateral. At the same time, courts are congested and informal mechanisms are insufficient as alternatives to judicial enforcement. These issues need to be addressed at the national and regional levels if legal frameworks are to serve corporate rehabilitation and restructuring and the development of debt financing as an engine of economic growth. Training those responsible for the administration and enforcement of secured transactions and insolvency laws will enhance their awareness of these laws and their application, both within DMCs and in cross-border transactions.

The Bank has financed technical assistance to support insolvency and bankruptcy law reform and secured transactions registration systems in several DMCs. The Bank recently approved two regional TA projects, on insolvency and secured transactions. These are intended to frame broad strategies for legal reform and best practice based on comparative country experience, and will receive valuable inputs from the current Joint Symposium. This Joint Symposium will explore ways of integrating secured transactions and insolvency legal regimes, so that these interconnected law reform efforts proceed in a coordinated fashion.

ADB will be working closely with OECD, the World Bank, and APEC on the themes being discussed here this week. As the development bank dedicated to Asia, it is the Bank's intention that this Joint Symposium can contribute to developing and tailoring insolvency and secured transaction regimes that are appropriate for the countries of the region.

I would like to express my special thanks to our consultants, resource persons, and experts from the countries of the region for their contributions to this Joint Symposium. I expect that there will be a lively discussion on problems, experiences and lessons learned, and that this will lead to valuable conclusions and recommendations.

Your contributions and ideas are of vital importance in developing comprehensive recommendations on insolvency and secured transactions law reform that can be shared by us all. I wish you the best of success in this Joint Symposium.

Thank you.