Globalization Without a Safety Net: The Challenge of Protecting Cross-Border Funding of NGOs

By Lloyd Hitoshi Mayer. Full text here.

More than fifty countries around the world have sharply increased legal restrictions on domestic nongovernmental organizations (NGOs) that receive funding from outside their home country and the foreign NGOs that provide such funding. These restrictions include requiring advance government approval before a domestic NGO can accept cross-border funding, requiring such funding to be routed through government agencies, and prohibiting such funding for NGOs engaged in certain activities. Publicly justified by national security, accountability, and other legitimate concerns, in many instances these measures go well beyond what is reasonably supported by such interests. These measures are often in fact thinly veiled attempts to hinder perceived challenges to governmental authority and to pursue nationalistic political agendas that are on the rise across the globe. Many, perhaps most, of these restrictions therefore violate international law, which provides that the right of NGOs to seek and receive such funding is an essential aspect of freedom of association. Yet affected NGOs cannot rely on international human rights treaties to counter these restrictions because those treaties have limited reach and lack effective avenues for remedying these violations.

There is, however, a growing web of international investment treaties designed to protect cross-border flows of funds, leading some supporters of cross-border funding for NGOs to argue that affected NGOs can instead use these investment treaties to protect such funding. In this Article, I provide the most thorough consideration of this proposal to date, including taking into account not only the legal hurdles to invoking investment treaty protections in this context but also the practical hurdles based on recently gathered information regarding the costs to parties who pursue claims under these treaties. I conclude that while it may be possible to overcome both sets of hurdles in some situations, these hurdles are higher than previous commentators have acknowledged. In particular, overcoming the high costs of bringing claims under these treaties would at a minimum require a concerted effort to fund or reduce such costs through either securing substantial third-party financing or recruiting significant pro bono assistance.

Given these obstacles to invoking the protections of international investment treaties, I then explore the insights that the remarkable growth in such treaties provide regarding the conditions that would need to exist for countries to enact a similar set of agreements to protect cross-border funding of NGOs. I conclude that such conditions are currently absent and that it will take many years to see if they could develop, even assuming many countries continue to increasingly restrict or effectively prohibit such funding. In the meantime, both recipients and providers of cross-border funding for NGOs will need to consider alternate, country-specific strategies that do not rely on international law to counter such restrictions.