International Organizations

Peter Fischer
Dr. iur. (Vienna) and Dr. h.c. (Bratislava)
Professor of International and European Law

Vienna/Bratislava 2012

TABLE OF CONTENTS
A. Historic and Political Background ................................................................................. 3
1. Substantive Needs ...................................................................................................... 3
a) Case Study: The present fiscal crisis in the European Union and the legal
instruments to cope with it (Rescue umbrella, firewalls)............................................... 4
b) Countermeasures: EFSF/ESM-SixPact-TSCG ...................................................... 5
2. From ad-hoc Conferences (Congress System) to International Organizations ...... 7
3. Organizations based in Vienna................................................................................... 8
B. International Organizations Defined .............................................................................. 9
C. Non-Governmental Organizations (NGOs) ................................................................... 9
1. NGOs Defined.......................................................................................................... 10
2. NGOs and the UN .................................................................................................... 10
3. Categories of NGOs ................................................................................................. 11
(a) Profit making: Trans- or Multinational Enterprises or Corporations ................. 11
(1) Background..................................................................................................... 11
(2) Codes of Conduct ........................................................................................... 12
(3) TNCs Defined................................................................................................. 12
(4) Negative and positive aspects of TNCs .......................................................... 13
b) Non-Profit Making NGOs.................................................................................... 14
(1) Amnesty International .................................................................................... 14
(2) Greenpeace International................................................................................ 15
c) NGOs with and without international legal personality....................................... 16
D. From NGOs to IGOs .................................................................................................... 17
E. Intergovernmental Organizations (IGOs)..................................................................... 18
1. IGOs Defined ........................................................................................................... 18
2. Elements of the definition ........................................................................................ 18
a) Association of States ............................................................................................ 18
b) Treaty ................................................................................................................... 19
c) Common aims in the course of history................................................................. 20
d) Own special organs .............................................................................................. 20
(1) The typical tripartite structure of IGOs .......................................................... 20
(2) Exceptions to the tripartite structure............................................................... 22
3. Categories of IGOs................................................................................................... 23
a) Universal (global) and regional organizations ..................................................... 23
(1) Universal organizations .................................................................................. 23
(2) Regional (and sub-regional) IGOs.................................................................. 24
b) Peace keeping and technical organizations .......................................................... 27
c) General and special organizations........................................................................ 28
d) Traditional and supranational organizations ........................................................ 28
e) Political and non-political organizations.............................................................. 29
4. Membership in international organizations.............................................................. 29
a) Acquisition of membership .................................................................................. 29
b) Termination of membership ................................................................................. 30
(1) Withdrawal ..................................................................................................... 30
(2) Expulsion ........................................................................................................ 31
c) Categories of membership in IGOs...................................................................... 33

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5.

Decision-making and voting procedures.................................................................. 33

a) The rule of unanimity ........................................................................................... 33
b) Majority voting..................................................................................................... 34
c) Equal and weighted votes..................................................................................... 34
6. International Legal Personality of IGOs .................................................................. 35
7. Financing of IGOs .................................................................................................... 36

A. Historic and Political Background

1. Substantive Needs
After the State, the international organization is the second most important actor on the
international scene. According to a recent study by the Bertelsmann Foundation (Berlin) two
of them possess even world power status, namely the United Nations (UN) and the
European Union (EU). Such status is determined in that study based on the factors economic
power, political influence, stability and also effective research and education.
In the past, only States were the principal actors in international relations. However,
during the second half of the 20th century leading statesmen, politicians, scholars and private
individuals became aware that certain problems can only be resolved at a global (universal) or
regional level beyond the limited range of national borders. These problems facing the
international community of States include significant risks such as war, weapons of mass
destruction, poverty and hunger, environmental damages, contagious diseases, terrorism,
organized crime, etc. Furthermore, the removal of trade barriers became a crucial issue after
the catastrophe of World War II. Protectionism was seen as one of the reasons for armed
hostilities and/or war among States. Winston Churchill is said to have coined the slogan:
When goods do not cross borders, soldiers will. The origins of the present European Union,
namely the European Communities, were based on the theory that by removing all trade and
other economic barriers a political union will be established which would make wars among
their members politically, technically and legally impossible. So far, this European dream
has come true.
In general, the desire for peace had been the overall idea for international
organizations, be it on an intergovernmental level (IGOs) or on a private, ie. nongovernmental level (NGOs). Thus military alliances among tribal communities, city states and
later nation states were the first types of international organizations. During the 19th and the
20th century, which may be said to be the cradle of international organizations, many other
aims apart from peace and security constituted the subject for organized international
cooperation.
These subjects or needs included gradually:
Peace and security: UN 1945, NATO 1949, OSCE 1992;
Trade [German Customs Union 1834; European Economic Community (EEC) 1957;
European Free Trade Association (EFTA) 1960; International Standardization

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Organization (ISO) 1 ; United Nations Conference on Trade and Development
(UNCTAD); World Customs Organization (WCO) 2 ; World Trade Organization
(WTO) 1995; North American Free Trade Agreement (NAFTA), European Economic
Area (EEA) 1992, Asian-Pacific Economic Cooperation (APEC), etc].
Financial Matters [Bank for International Settlements (BIS); European Central Bank
(ECB); European Bank for Reconstruction and Development (EBRD); Institute of
International Finance; Inter-American Development Bank (IADB); International
Monetary Fund (IMF); IMF Dissemination Standards Bulletin Board 3 ; World Bank
(IBRD), etc. ]. The most important example is the present European fiscal crisis.

a) Case Study: The present fiscal crisis in the

European Union and the legal instruments to cope with
it (Rescue umbrella, firewalls)
Origin: It had its roots in the exorbitant increase of public debts, in particular by Greece. The
crisis is not such much a crisis of the Euro, which was introduced as a legal tender in 2002,
but of that of those Members of the Euro area which, in violation of the principles governing
the conduct of those States whose currency is the Euro, have accumulated enormous deficits
and state debt. These so-called euro convergence criteria (also known as the Maastricht
criteria) require that the annual government deficit to gross domestic product (GDP) must not
exceed 3% and the ratio of gross government debt to GDP must not exceed 60%.
In the early years after the introduction of the euro these Maastricht criteria had unfortunately
been broken by Germany and France without consequences, although the Treaties provide
sanctions for such misconduct. The Commission simply tolerated the behavior of the two
major States of the Union. And this set a negative example for countries which obtained the
acronym PIIGS: Portugal, Italy, Ireland, Greece and Spain, which were on the brink of default
or bankruptcy. The euro (and some say, even the EU as a whole) was seriously jeopardized.
1

The International Organization for Standardization (French: Organisation internationale de

normalisation, Russian: , tr. Mezhdunarodnaya organizaciya
po standartizacii), widely known as ISO, is an international standard-setting body composed of representatives
from various national standards organizations. Founded on February 23, 1947, the organization promulgates
worldwide proprietary industrial and commercial standards. It has its headquarters in Geneva, Switzerland.
While ISO defines itself as a non-governmental organization, its ability to set standards that often become law,
either through treaties or national standards, makes it more powerful than most non-governmental organizations.[
In practice, ISO acts as a consortium with strong links to governments. (wikipedia 15 August 2011).
2
The World Customs Organization (WCO) is an intergovernmental organization headquartered in Brussels,
Belgium. With its worldwide membership, the WCO is recognized as the voice of the global customs
community. It is particularly noted for its work in areas covering the development of international conventions,
instruments, and tools on topics such as commodity classification, valuation, rules of origin, collection of
customs revenue, supply chain security, international trade facilitation, customs enforcement activities,
combating counterfeiting in support of Intellectual Property Rights (IPR), integrity promotion, and delivering
sustainable capacity building to assist with customs reforms and modernization. The WCO maintains the
international Harmonized System (HS) goods nomenclature, and administers the technical aspects of the World
Trade Organization (WTO) Agreements on Customs Valuation and Rules of Origin.
3
The Dissemination Standards Bulletin Board (DSBB) is published and maintained by the International
Monetary Fund as a service to its membership. It contains: (i) submissions of Fund members that subscribe to the
Special Data Dissemination Standard (SDDS) of information (metadata) on data and data dissemination
practices; (ii) submissions of Fund members that participate in the General Data Dissemination System (GDDS)
on information (metadata) regarding practices on data production and dissemination and plans for improvement
of these practices in place at the time of the original submissions or updates thereof; and (iii) hyperlinks to data
sites not maintained by the Fund.

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b)

Countermeasures: EFSF/ESM-SixPact-TSCG

1.
Three major steps had now been taken: First, The European Financial Stability
Facility (EFSF) and its successor institution, the European Stability Mechanism (ESM),
which is a special purpose vehicle financed by members of the euro area to address the
European sovereign debt crisis. EFSF was agreed by the 17 euro area Member States of the
European Union on 9 May 2010, with the objective of preserving financial stability in Europe
by providing financial assistance to euro area Member States in economic difficulty. The
Facility's headquarters were in Luxembourg City. Treasury management services and
administrative support are provided to the Facility by the European Investment Bank through
a service level contract.
Originally, the EFSF was authorized to borrow up to 440 billion, guaranteed by the EU
Member States. In the meantime, this facility, commonly called the Euro rescue umbrella, was
increased. While EFSF was a provisional measure, ESM has replaced it as a permanent
institution, which entered into force on 1 October 2012, following the removal of legal
obstacles by the German Constitutional Court (Bundesverfassungsgericht) on 12 September
2012. ESM was concluded on 2 February 2012 as a permanent institution to increase the
effectiveness of its forerunner financial institution EFSF and to prevent the risk of financial
contagion. In other words, ESMs aim is also to avoid the spread of the Greek disasters to
Spain and/or Italy. The total capital subscription amounts to 700 billion euro (700 000 000
000!). Austrias contribution is 2.7% and its capital subscription some 19 billion ,
Germanys 27% or 190 billion . Slovakias contribution is 0.8% and its subscription 5.7
billion . After the announcement of the German Courts judgment on 12 September 2012 the
financial markets reacted positively and the value of the euro increased to 1.31 against the US
$. (ratio in July: 1 against 1.21).
2. The second instrument is the EU economic governance six pact, in force since 13th
December 2011, which consists of five regulations and one directive and contains detailed
provisions on deficit and public debt and the application of financial sanctions to euro area
Member States that do not take adequate action. It reinforces the Stability and Growth Pact
(SGP) which had been adopted long ago in the Treaty of Amsterdam of 1997.
3. The Treaty on Stability, Coordination and Governance in the Economic and
Monetary Union (TSCG) which is open to all EU Member States, is the third instrument
functioning as a firewall against deficit sinners and speculators. The Fiscal Compact, as it is
commonly called, is an intergovernmental treaty that was signed on 2 March 2012 by all
Member States of the European Union (EU), except the Czech Republic and the United
Kingdom. The treaty will enter into force on 1 January 2013, provided that twelve contracting
Parties whose currency is the euro have deposited their instrument of ratification, or on the
first day of the month following the deposit of the twelfth instrument of ratification by a
Contracting Party whose currency is the euro, whichever is the earlier.
Once in force the Fiscal Compact obliges ratifying Member States to enact laws requiring
national budgets to be in balance or in surplus within the treaty's definition. These laws must
provide for a self-correcting mechanism to prevent their breach. The treaty defines a balanced
budget in a rather strict manner as one which has a general budget deficit less than 3% of
GDP and a structural deficit of less than either 0.5% or 1%, depending on a countries debt-toGDP ratio. If the ratio is less than 60 percent, then 1% structural deficit would be allowed. If
the structural deficit for the annual account or budget is found to exceed those limits, the

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country will have to correct the issue within the timeline, nature and targeted size deemed
necessary by the European Commission. The 0.5% or 1 % is medium-term objective. When
the ratio of their government debt to gross domestic product exceeds the 60% reference value,
the Contracting Parties shall reduce it at an average rate of one twentieth per year (i.e. 5%) as
a benchmark (Article 4 TSCG).
The treaty contains the obligation to transpose this Balanced Budget Rule into national legal
systems through binding and permanent provisions, preferably constitutional. Such
compliance with its budgetary and other requirements is placed under the jurisdiction of the
European Court of Justice. This contrasts with the EU Treaties which specifically exclude this
jurisdiction. If ratified, any ratifying State may bring enforcement proceedings against any
other ratifying State before the Court of Justice of the European Union, if they fail to fulfill
their obligations under the Fiscal Compact. A state found in breach of its obligations can
ultimately be fined up to 0.1% of its GDP.
Relationship between ESM and TSCG: The granting of financial assistance under ESM is
conditional, as of March 2013, on the ratification of the TSCG by the ESM Member
concerned and on its transposition into national law.
Both instruments are considerable steps towards a Fiscal Union in which under certain
circumstances sovereign budgetary rights of the EU Member States are conferred upon EU
institutions (Commission and Court).
.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.
Further reasons for establishing international organizations:
Environment [Friends of the Earth International; Global Environment Facility 4 ; The
Rainforest Site; Trade and Environment Database; United Nations Environment
Programme; World Meteorological Organization (WMO); World Wildlife Fund
(WWF) etc.].
Human rights, Protection of [Amnesty International, Ethical Trade Initiative (ETI);
European Court of Human Rights; International Labour Organisation (ILO); UN High
Commissioner for Human Rights, etc.].
Health [World Health Organization (WHO), etc.]
Sustainable economic development [Global Futures Foundation; Group of 77;
International Development Research Centre; International Institute for Environment
and Development; International Institute for Sustainable Development (IISD); United
Nations Development Programme (UNDP), etc.].
Emergency/disaster relief [International Committee of the Red Cross or Red
Crescent (ICRC)].

The Global Environment Facility (GEF) unites 182 member governments in partnership with international
institutions, nongovernmental organizations, and the private sector to address global environmental issues.
An independent financial organization, the GEF provides grants to developing countries and countries with
economies in transition for projects related to biodiversity, climate change, international waters, land
degradation, the ozone layer, and persistent organic pollutants. These projects benefit the global environment,
linking local, national, and global environmental challenges and promoting sustainable livelihoods.(wikipedia 15
August 2011). Established in 1991, the GEF is today the largest funder of projects to improve the global
environment.

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Commodities [Organization of the Petroleum Exporting Countries (OPEC)];
International Primary Aluminum Institute (IPAI), etc. ].
These were the primary factors decisive for the setting up of international organizations. As
Derrek Bowett has said, the development of international organizations has been, in the
main, a response to the evident need arising from international intercourse. 5

2. From ad-hoc Conferences (Congress System) to

International Organizations
This need was first met by international conferences, which, however, proved to be
unsatisfactory in the long run, in particular for the following reasons and issues:
Political difficulties on the question which nation should be empowered to summon a
particular conference;
Where should such a conference meet?
Which languages should be used for multilateral negotiations?
For each new problem a new conference had to be convened;
Membership, namely participation in the conference, was decided by the party
convening the conference;
Decision-making was based on the principle of unanimity, ie. each participating State
had a veto-power; etc.
Being a political body, a conference could hardly resolve legal questions.
Nevertheless, history has shown that such State Conferences not only could establish
relatively long lasting periods of peace but could also resolve technical problems.
Examples were the Peace of Westphalia 1648, ending the Thirty-Years War between the
Empire, its States on the one hand, and France and Sweden on the other. It came about at the
Conferences of Mnster and Osnabrck and established a European order until the
Napoleonic Wars at the end of the 18th century. The two peace treaties also provided rules for
the exercise of religion.
The Congress of Vienna 1815 was another decisive precursor of international organizations.
After the Napoleonic wars it had established the Concert of Europe between Austria,
Prussia, Russia, France and England as a quasi-institutionalized system of congresses and
conferences. The Vienna Act of Congress of 1815 did not only re-draw the map of Europe but
also set up rules regarding the free navigation on the Rhine and the Danube, the prohibition of
slave-trade, the ranks of diplomats and, last but not least, established an international
organization of German States, the Deutsche Bund (German Confederation). The political
order of Europe collapsed with World War I, in spite of the two Hague Peace Conferences
1899 and 1907, which drew up rules for the peaceful settlement of international disputes, and
on the law of warfare and neutrality. These rules are to a great extent still in force.
Such an ad-hoc congress or conference system proved to be inadequate to meet urgent
international challenges. Thus during the 19th century modest attempts can be found to
establish institutionalized bodies in which on a permanent basis international issues could be
5

The Law of International Institutions, 4th ed. (London 1982), p.1

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debated and resolved. The first example of this kind is the International Telegraph Union of
1865 which was established with a permanent bureau in Berne, Switzerland. It admitted
representatives of private telegraph companies but without the right to vote. In 1932 it became
the present International Telecommunication Union (ITU) and is the oldest universal
intergovernmental organization (IGO) which still exists.
It was followed in 1864 by the Universal Postal Union (UPU) which is the second oldest
universal international organization and also has its headquarters in the capital city of
Switzerland, Berne. The UPU established that there should be a uniform flat rate to mail a
letter anywhere in the world, that postal authorities should give equal treatment to foreign and
domestic mail and that each country should retain all money it has collected for international
postage.
These two organizations are not only the most prominent precursors of modern international
organizations but also marked the beginning of the transition from the congress or conference
system to the system of international organizations as institutionalized fora and permanent
bodies in international relations. An anachronistic relict of the ad-hoc conference system is
the CSCE, now OSCE (see the following chapter).

3. Organizations based in Vienna

Due to its geographical situation and its status as a permanently neutral State in times of the
cold war, Austria hosts a number of international organizations which are all based in its
capital city Vienna.
These are the
International Atomic Energy Agency (IAEA), since 1957, deals with nonproliferation of nuclear weapons and promotes the safe, secure and peaceful use of
nuclear science and technology.
Organization for the Petroleum Exporting Countries (OPEC), since 1965
(established in 1960 and moved in 1965 from Geneva to Vienna), is concerned with a
fair income of the producer countries and a steady supply of oil of the consumer
countries.
United Nations Industrial Development Organization (UNIDO), since 1967, has
responsibility for promoting sustainable industrialization throughout the developing
world. And the
United Nations (UN) itself has set up its third headquarters in 1979 in Vienna (after
New York and Geneva) where a number of offices and commissions are located, such
as the United Nations Office on Drugs and Crime (UNODC) with two main
components: fighting drugs and curbing international crime; the United Nations
Commission on International Trade Law (UNCITRAL) with the aim to harmonize
and unify the law of international trade and to promote trade as a means of increasing
growth and improving living standards; the United Nations Office for Outer Space
Affairs (UNOOSA) which is responsible for promoting international cooperation in
the peaceful uses of outer space; and the Comprehensive Nuclear-Test-Ban Treaty
Organization (CTBTO) providing for a total ban of any nuclear weapon test
explosion in any environment, but unfortunately, the treaty has not yet entered into
force. Thus the Preparatory Commission has been set up. The
Organization for Security and Cooperation in Europe (OSCE) has, in 1990,
developed from the CSCE (Conference for Security and Cooperation in Europe based

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on the Helsinki-Declaration of 1975), which consisted of a process of irregular
multilateral negotiations without any headquarters or permanent secretariat. In 1992
the OSCE Council decided to create a secretariat in Vienna, which already housed the
Conflict Prevention Centre (CPC), the Forum for Security Cooperation (FSC) and the
only permanent political body of the OSCE, consisting of accredited ambassadors to
the Austrian capital, namely the Permanent Committee, which in 1994 became the
Permanent Council. This Council meets every Thursday in the Hofburg in Vienna.

B. International Organizations Defined

Entities such as the International Association of Chess (IAC) and the UN do not seem to have
much in common; the same applies to an enterprise commercially operating on a worldwide
basis, such as the EXXON Corporation, and the Committee of the Red Cross or the
International Olympic Committee (IOC). Therefore, the phenomenon International
Organization requires a wide definition in order to cover its differing structures and activities
on the international scene. Thus in the widest sense an
International organization is a union or association of States, or of enterprises or of
other national entities set up across national boundaries.
Examples are
Of States:

Of enterprises:

the United Nations Organization (UN);

the European Union (EU);
EU and Croatia (Association);
Transnational Corporations (TNCs); Examples include The Coca-Cola
Company, Sony, Nintendo, McDonalds, Toyota, etc.

Of other national
entities:

Greenpeace, Interpol, Amnesty International; International Olympic

Committee, World Organization of the Scout Movement, International
Committee of the Red Cross, Mdecins Sans Frontires, Oxfam, etc.
The last two categories are (international) non-governmental organizations (NGOs), profitand non-profit-making, while the first category includes international intergovernmental
organizations (IGOs).
Around 30,000 such organizations are active in about 300 countries and territories all over the
world. The Yearbook of International Organizations, published periodically in Brussels,
Belgium, offers further information on theses organizations. In addition, most of them have
also their individual website ((http://www.un.org/; http://www.upu.int/; http://www.icrc.org/;
http://www.amnesty.org/; http://www.greenpeace.org/; http://www.oxfam.org/; etc.).

C. Non-Governmental Organizations (NGOs)

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As indicated above, one has to distinguish between non-governmental and intergovernmental
organizations (NGOs and IGOs).

1. NGOs Defined
NGOs exceed by far the numbers of IGOs and thus must first be taken into consideration.
An official attempt to define NGOs was made by ECOSOC Res. 1296 (XLIV) in June 1968
as follows:
A NGO is any international organization which is not established by intergovernmental
agreement including an organization which accepts members designated by government
authorities, provided that such membership does not interfere with the free expression
of views of the organization.
This definition reveals the difficulties in describing the various forms and structures in which
private persons, associations, enterprises establish instruments for cooperation across national
boundaries. According to the UN`s view, it can only be achieved by way of a negative
approach: entities which are NOT established by an international act, ie. by a treaty, are
NGOs, while those which are based on an international agreement are IGOs.

2. NGOs and the UN

Being itself an IGO why does the UN take care of NGOs? Article 71 UN Charter specifically
provides for suitable arrangements between the UN Economic and Social Council
(ECOSOC) and NGOs.
It reads as follows:
The Economic and Social Council may make suitable arrangements for consultation
with non-governmental organizations with matters within its competence.
By virtue of this provision the Council has established three categories in which NGOs, on
their application, may be placed, namely in
General consultative status; it includes organizations which have a basic interest in most of
the activities of the Council [for instance CARE International, Caritas Internationalis;
Femmes Afrique solidarit; Global 2000; Greenpeace International (it graduated from
special consultative status to general consultative status!); International Chamber of
Commerce (ICC) in Paris; International Confederation of Free Trade Unions; International
Organization for Standardization; International Trade Union Confederation; Mdecins sans
frontires (international); Oxfam International; Socialist International; World Blind Union;
World Muslim Congress; World Organization of the Scout Movement ;World Wide Fund for
Nature International, etc.] 139 NGOs possess general consultative status; the second category
(formerly B) refers to a
Special consultative status which includes organizations with a special competence in some
of the aspects of the Councils work (for instance, Aboriginal and Torres Strait Islander
Commission; Action internationale pour la paix et le dveloppement dans la rgion des
Grands Lacs; Adalah: Legal Center for Arab Minority Rights in Israel; Advisory Committee
for the Protection of the Sea; AIDS Action; Aland Islands Peace Institute; American Society

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of International Law; Amnesty International; Austrian Federal Economic Chamber; Crime
Stoppers International; European Law Students Association; International Air Transport
Association; International Centre for the Legal Protection of Human Rights; International
Driving Tests Committee; International Lesbian and Gay Association Europe;
International Police Association, etc.), and the third category refers to the
Roster. This category includes organizations which, by means of ad hoc consultation, are able
to make a significant contribution to the work of the Council. There are 1,025 NGOs placed
on the Roster (for instance National Rifle Association of America; Institute for Legislative
Action; Soap and Detergent Association; SOS Women, etc.).
There are at present 3,400 NGOs possessing consultative status in the UN. All three
categories may send observers to public meetings. Organizations in the first two categories
may submit written statements for circulations to the members of the Council, while
organizations merely on the roster may be invited to do so. The consultative status can also be
suspended. This presently applies to 78 NGOs.

3. Categories of NGOs
(a) Profit making: Trans- or Multinational
Enterprises or Corporations

(1) Background
In the early seventies of the last century, large business enterprises became subject of UN
concern. Giant corporations, as they were called, were able to influence political affairs and
sometimes even posed a threat to international peace and security. The most prominent
example was the IT&T Case where the US telephone and telegraph company, operating since
the thirties in Chile, was capable to exercise political control over its host country. At the
United Nations Conference on Trade and Development (UNCTAD) in 1972 it was accused of
infringing the sovereignty of a State by assisting to overthrow the leftwing government of
President Salvador Allende who, in fact, was assassinated during the coup and the brutal
dictator Pinochet assumed power in Chile for several years. This scandal caused the UN to
draw its attention to this new phenomenon in international relations. Hearings with
representatives of large corporations were held before the UN bodies in New York and
Geneva, but also before the US Senate.
As a result, the UN General Assembly in 1974 decided to set up a Commission to deal with
the international activities of such corporations. Thus the UN Commission on Transnational
Corporations (UNCTC) was established as a sub-body of ECOSOC with the aim to study
the role of such enterprises and their impact on international relations.
ECOSOC Resolution 1994/1 integrated the UNCTC into the institutional machinery of
UNCTAD, based in Geneva. It should be renamed the Commission on International
Investment and Transnational Corporations (CIITC). This change reflects the more
positive approach towards TNCs which were regarded as indispensable for the economic
development of developing countries. In particular, foreign investments contributed
considerably to the economic growth of former Communist countries in Central and Eastern

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Europe, but also in threshold countries in the Far East, such as Malaysia, Thailand, Singapore,
South Korea, Taiwan and, last but not least, the Peoples Republic of China.
A so-called Global Compact has been established as the official association linking the UN
and large TNCs.

(2) Codes of Conduct

The UNCTC has formulated a Draft Code of Conduct for TNCs which, however has not been
adopted. No agreement could be reached on the question of expropriation/nationalization of
foreign property. While the Western countries demanded therein that such acts shall be
accompanied by prompt, adequate and effective compensation (the so-called Hull
formula), the third world countries and former Communist countries rejected his formula as
constituting a neo-colonialist postulate.
A more successful attempt was made by the UN Sub-Commission on the Promotion and
Protection of Human Rights which has approved Res. 2003/16 on 13 August 2003. Under the
title Norms on the Responsibilities of Transnational Corporations and Other Business
Enterprises with Regard to Human Rights it stipulates that even though States have the
primary responsibility to promote, secure the fulfillment of, respect, ensure respect of and
protect human rights, transnational corporations and other business enterprises as organs of
society are also responsible for promoting and securing human rights set forth in the
Universal Declaration of Human Right of 1948.
This resolution refers to a declaration of the International Labour Organization (ILO), based
in Geneva and composed of representatives from governments, employer organizations and
national trade unions, representing employees and workers. This Tripartite Declaration of
Principles Concerning Multinational Enterprises and Social Policy was adopted by the
Governing Body of the International Labour Office in 1977 and was amended 2000 and 2006.
Both documents as well as the abortive Draft Code of the UNCTC reveal the negative and
positive aspects of the activities of TNCs. Such transparency may have caused many TNCs to
change their policies in relation to host countries and consumers. Consequently, the general
attitude towards such corporations has also changed in a positive sense.

(3) TNCs Defined

Res. 2003/16 defines TNCs as follows:
The term
transnational corporation refers to an economic entity operating in more than
one country or a cluster of economic entities operating in two or more countries
whatever their legal form, whether in their home country or country of activity.
Thus a TNC requires at least two countries the home and the host country to which its
activities extend. The legal form (corporation, company, etc.) does not matter nor does its
activity (production, service facility, trade, etc.).

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The Tripartite Declaration in its version of 2006 does not consider it necessary to define
multinational enterprises but just states:
To serve its purpose this Declaration does not require a precise legal definition of
multinational enterprises. A mere description suffices, as follows.
Multinational enterprises include enterprises, whether they are of public, mixed
or private ownership, which own or control production, distribution, services or
other facilities outside the country in which they are based.
This definition refers also to the question of ownership. State owned enterprises fall also
under that definition. This was previously denied by the Communist countries, in particular by
the Soviet Union, which maintained that since they are under State control, no so-called
corporate misconduct can occur in the international activities of such corporations or
companies. Any code of conduct therefore, would not apply to them.

(4) Negative and positive aspects of TNCs

The UN Commission on International Investment and Transnational Corporations (CIITC),
formerly UNCTC has studied the role of TNC throughout the last four decades and has
identified their negative and positive impact on national relations, which were published in
countless documents. They can be boiled down to the following items:
(a) Negative aspects

Interference with internal affairs and non-compliance with national laws;

Corrupt practices,
Non-compliance with national economic plans;
Transfer pricing (intra-corporate transactions at artificial prices to avoid taxes);
Restrictive business practices (monopolies, cartels, concerted actions, etc.);
Infringing human rights (exploitation of labour, etc.);
Damage to the environment;
Damage to the consumers;
Exploitation of natural resources.

The following actions were, inter alia, suggested by the UN Commission to resolve these
problems:

Consultations;
Strict anti-trust laws;
Joint-venture structure through which some sort of control can be exercised;
Penalties and fines;
Strict environmental laws;
Strict consumer protection laws;
Periodic revisions of eg. oil concession agreements by the UN Commission, etc.

14

The most severe sanction would be the expropriation/nationalization of the foreign investor.
Furthermore, TNCs shall be subject to periodic monitoring and verification by United
Nations.
(b) Positive aspects

Host States often benefit considerably from foreign investments (Far East: South Korea,
Taiwan, China, Singapore, Thailand, Malaysia, etc; Central and Eastern Europe: Poland,
Slovakia, Hungary, Slovenia, Croatia, etc.). In general, the positive aspects outweigh the
negative sides of TNCs activities. They can be summarized as follows:
More efficient utilization of capital, technology and labour were the results of the
Tripartite Declaration of ILO.

Job creating effects;

Transfer of technology;
Positive impact on the balance of payments;
Increase of the host States income through taxes,
Increase of the standard of living;
General improvement of international relations, better climate (peace building factor!).

b) Non-Profit Making NGOs

The vast majority of NGOs are non-profit making. There exist an estimated number of 40,000
which operate internationally.
Two examples are to be discussed here:

(1) Amnesty International

Amnesty International (AI) was founded in 1961 in London following a publication of Peter
Benenson's (a British lawyers) article "The Forgotten Prisoners" in The Observer 28 May
1961. Its mission was (and still is) "to conduct research and generate action to prevent and
end grave abuses of human rights, and to demand justice for those whose rights have been
violated." Benensons original intention was to launch an appeal in Britain with the aim of
obtaining amnesty for prisoners of conscience, as he called them, all over the world. His aim
was to mobilize public opinion, quickly and widely, in defense of these individuals, who have
been arrested for their convictions, the color of their skins, their ethnic origin or their faith
provided that they have not themselves used force or advocated violence.
AI was originally a British organization, but in 1963 an international secretariat was
established. So-called sections were set up in many countries. Leading Amnesty International

15
key figureheads were Sen MacBride and Martin Ennals. While continuing to work for
prisoners of conscience, Amnesty Internationals purview widened to include "fair trial" and
opposition to long detention without trial (Universal Declaration of Human Rights UDHR
Article 9), and especially to the torture of prisoners (UDHR Article 5). Amnesty International
believed that the reasons underlying torture of prisoners, by governments, were either to
obtain information or to quell opposition by the use of terror, or both. Also of concern was the
export of more sophisticated torture methods, equipment and teaching by the superpowers to
"client states".
The organization was awarded the 1977 Nobel Peace Prize for its "campaign against torture";
and the United Nations Prize in the Field of Human Rights in 1978.
There are six key areas which Amnesty deals with:

Women's, children's, minorities' and indigenous rights

Ending torture
Abolition of the death penalty
Rights of refugees
Rights of prisoners of conscience
Protection of human dignity.

Criticism. By 1980 Amnesty International was drawing more criticism from governments.
The USSR alleged that Amnesty International conducted espionage, the Moroccan
government denounced it as a defender of lawbreakers, and the Argentine government banned
Amnesty Internationals 1983 annual report.
Nevertheless, in the field of international human rights organizations (of which there were
300 in 1996), Amnesty has the longest history and broadest name recognition, and "is
believed by many to set standards for the movement as a whole."
AI celebrated its 50th anniversary in July 2011.

(2) Greenpeace International

Another prominent non-profit making (I) NGO is Greenpeace International.
Greenpeace has offices in over 40 countries and its international coordinating body is located
in Amsterdam, Netherlands. Greenpeace states its goal is to "ensure the ability of the Earth to
nurture life in all its diversity" and focuses its work on worldwide issues such as global
warming, deforestation, over fishing, commercial whaling and anti-nuclear issues.
Greenpeace uses direct action, lobbying and research to achieve its goals. The global
organization does not accept funding from governments, corporations or political parties,
relying on more than 2.8 million individual supporters and foundation grants.
History. In 1971, motivated by their vision of a green and peaceful world, a small team of
activists set sail from Vancouver, Canada, in an old fishing boat named Phyllis Cormack,
which was renamed Greenpeace for the protest against nuclear tests. The founders of the
organization were Irving Stowe, Jim Bohlen and Paul Cote, a law student and peace activist.
These activists believed a few individuals could make a difference. Their mission was to

16
bear witness to US underground nuclear testing at Amchitka, tiny island off the West Coast
of Alaska, which is one of the worlds most earthquake-prone regions.
In the fall of 1971 the ship sailed towards Amchitka and faced the U.S. coast guard ship
Confidence. Even though the crew of the Confidence personally supported the cause of
Greenpeace the activists were forced to turn back by the coast guard. Because of this and the
increasingly bad weather the crew decided to return to Canada only to find out that the news
about their journey and the support from the crew of the Confidence had generated
widespread compassion for their protest. After this Greenpeace tried to navigate to the test
site with other vessels, until the U.S. detonated the bomb. The nuclear test gained widespread
criticism and the U.S. decided not to continue with their test plans at Amchitka.
After the nuclear tests at Amchitka were over, Greenpeace moved its focus to the French
atmospheric nuclear weapons testing at the Moruroa Atoll in French Polynesia. Following
violent clashes with French authorities (Rainbow warrior affair in Auckland) the French
government discontinued its nuclear test in this region. The French government had to pay a
large sum of compensation both to the New Zealand government and to the family of the
person killed by the sinking of the Greenpeace vessel rainbow warrior.
Greenpeace regards itself as an independent global campaigning organization that acts to
change attitudes and behavior, to protect and conserve the environment and to promote peace
by:

Catalyzing an energy revolution to address the number one threat facing our planet:
climate change.
Defending our oceans by challenging wasteful and destructive fishing, and creating a
global network of marine reserves.
Protecting the worlds remaining ancient forests which are depended on by many
animals, plants and people.
Working for disarmament and peace by reducing dependence on finite resources and
calling for the elimination of all nuclear weapons.
Creating a toxin free future with safer alternatives to hazardous chemicals in today's
products and manufacturing.
Campaigning for sustainable agriculture by encouraging socially and ecologically
responsible farming practices.

(Official website Greenpeace International).

c) NGOs with and without international legal

personality
The vast majority of NGOs are private organizations which are established under some
national law and do not possess a formal international legal status.
In exceptional cases, however, NGOs do possess such qualification. This applies to the
International Committee of the Red Cross (Red Crescent) which is granted that status by
the Geneva Conventions of 1949 and 1977. Some TNCs may also be granted a restricted
international legal personality.

17

D. From NGOs to IGOs

NGOs were occasionally forerunners of IGOs.
An example can be traced back to the Middle Ages in Europe. The private Association of
Hanseatic Merchants, established around the year 1000 A.D, was transformed around 1350
A.D. into the League of Hanseatic Cities or Hanseatic League comprising temporarily not
less than 200 cities in Western, Northern and Eastern Europe with Lbeck on the Baltic Sea as
the leading power. Members included the cities of Hamburg, Bremen, Wismar, Stralsund,
Rostock, Brgge (Bruges), Cologne, Visby, etc. Prior to the establishment of a trading
alliance between City States it was a Kaufmannsbund (association of merchants) which
became a Stdtebund (League of City States) for the protection of the merchant guilds. Its
main body was the Diet of Lbeck (Hansetag), which could enact binding decisions, including
the declaration of Hanse wars. It can in modern terms be called an IGO, which has replaced
the previous association of hanseatic merchants, in modern terms an NGO.
The legacy of the Hanse is remembered today in several names, for example the German
airline Lufthansa, the Hanseatic cities of Hamburg, Bremen, Lbeck, Stralsund etc. or the
Hanze University in Groningen, Netherlands.
Another historic example is the Taxis Postal Enterprise which was set up in 1505 by a
concession granted by Philip (le Belle), Governor of the Austrian Netherlands, to the Italian
business man Francis of Taxis. He was often called the inventor of the posts because he and
his successors were able not only to establish a well-functioning postal system covering most
of Western, Southern and Central Europe, but also could prove that such a service enterprise
can be a successful profit-making undertaking. The, what was later called, Princely Thurn &
Taxis Postal Enterprise, functioned until the year 1867, when it was expropriated by the
Kingdom of Prussia following its victory over Austria. The need for international postal
communication caused the Community of States to set up the Universal Postal Union
(UPU), which, in fact was established in 1874 in Berne, Switzerland. Today it is the second
oldest IGO which still exists.
A more recent example for a private organization (NGO) to be succeeded by a public
organization, an IGO, is the International Association of the Legal Protection of Workers,
founded in 1900 in Basle, Switzerland, by a group of scholars and administrators which
undertook the study and publication of national labour legislation. In the course of the peace
settlement following World War I the present International Labour Organization (ILO)
was established in 1919 by Part III of the Versailles Treaty. So it is true what D. Bowett gas
said: Private activity led and State activity followed.
The most recent example of this kind is furnished by the International Criminal Police
Organization (ICPO-INTERPOL). It is the worlds largest international police
organization, with 188 member countries. Created in 1923 in Vienna, it facilitates crossborder police co-operation, and supports and assists all organizations, authorities and services
whose mission is to prevent or combat international crime.
INTERPOL aims to facilitate international police co-operation even where diplomatic
relations do not exist between particular countries. Action is taken within the limits of existing
laws in different countries and in the spirit of the Universal Declaration of Human Rights.

18
INTERPOLs constitution prohibits any intervention or activities of a political, military,
religious or racial character.
Its General Secretariat is now based in Lyon, France. The US Lawyer K. Noble was elected
Secretary General of INTERPOL in 2000 and is still in office (2011). INTERPOL President is
Khoo Boon Hui from Singapore (since 2008). In 1969 INTERPOL had received consultative
status as an NGO by the UN and two years later, in 1971, it was recognized as IGO by the
UN.
At INTERPOLs 75th General Assembly in 2006 it was decided to establish the worlds first
international anti-corruption academy aimed at tackling the problem of corruption within
public services world wide. On 17 July 2007 an Agreement between the Republic of Austria
and IPCO-INTERPOL was signed regarding the seat of the Interpol Anti-Corruption
Academy in Austria, which is located in Laxenburg, the former Imperial residence south of
Vienna.

E. Intergovernmental Organizations (IGOs)

They constitute the second most important actor on the international scene, after the State.

1. IGOs Defined
According to a generally accepted view IGOs may be defined as follows:
The term (public) international organization denotes an association of States
established by and based upon a treaty, which pursues common aims and which has its
own special organs to fulfill particular functions within the organization.

2. Elements of the definition

a) Association of States
States are the principle actors on the international scene. They have the power to enter into
associations with other States if they think fit. Statehood is, in general, not only the
prerequisite for the establishment of an IGO, but also for membership. It depends on the three
elements independent government, population and territory. If one of these elements is
unclear or disputed, membership in an IGO can remove any doubt. Thus UN membership,
which is open to all peace loving States, according to Article 4 UN Charter, can remove any
doubt about statehood.
This question was raised when Croatia became UN member on 22 May 1992 while
Yugoslavia still claimed Croatia to be part of the Yugoslav Federation. Thus admission to the
UN implies recognition of statehood.
A special problem is the position of the Republic of China (Taiwan). This entity disposes over
all three elements of a State but membership in international organizations is denied to it by

19
Communist China (Peoples Republic of China) and its followers. Under the name Chinese
Taipei Taiwan is full member of the World Trade Organization (WTO) since 2002 and
possesses observer status since 2009 in the annual World Health Assembly, the principal body
of the WHO. Northern Cyprus and Palestine are not States. Palestine, however, possesses
observer status in the UN, but has submitted an application for UN membership on 23
September 2011 to the Secretary General Ban Ki Moon. Observers participate in the work of
IGOs, but in contrast to members they do not possess voting rights.
Failed States are entities which are unable to maintain a minimum of law and order on a
specific territory. They are, nonetheless, tolerated as members in IGOs in order to avoid a
destabilization of the region. Lebanon used to be an example. Today Somalia is the most
prominent example of that kind.
In exceptional cases also non-State entities may set up an IGO or become a subsequent
member of it. Thus the Holy See (Vatican) is member of the International Atomic Energy
Agency (IAEA) and the European Union (EU) is member of WTO. Also the World Bank
(BANK) is member of its independent sub-organization ICSID (International Center for
Settlement of Investment Disputes), established in 1965.

b) Treaty
A treaty is a formal written instrument between States (and other subjects of International
law). An official definition is contained in Article 2 of the Vienna Convention on the Law of
Treaties, signed at Vienna on 23 May 1969. It reads:
A treaty is an international agreement concluded between States in written form and
governed by International law, whether embodied in a single instrument or in two or more
related instruments and whatever its particular designation.
In contrast to ordinary treaties a treaty establishing an IGO creates a new entity whose organs,
in turn, may enact new legal acts, e.g. by way of resolutions, decisions, recommendations,
etc. The influence of the member States in the decision making process depends upon the
degree of integration a particular IGO possesses. Thus the permanent members of the UN
Security Council have full control over its resolutions, while an individual member State in
the EU can be overruled in the Council.
Due to this peculiarity the constituent instrument (treaty) of an IGO bears special names, such
as Charter, Constitution, Covenant, Pact, etc. The term treaty, however is still in use.
Examples are Treaty on European Union, Treaty on the Functioning of the European
Union, North Atlantic Treaty Organization, etc.
In exceptional cases IGOs can be established by instruments or acts other that treaties: Thus
the Organization of Petroleum Exporting Countries (OPEC), based in Vienna, Austria,
was set up in 1960 by Resolutions adopted at the Baghdad Conference, in which the founding
members Iraq, Iran, Kuwait, Saudi Arabia and Venezuela participated. These Resolutions
were later notified to the UN Secretary General under the name OPEC-Statute, who
published them according to Article 102 UN Charter in the United National Treaty Series
(UNTS), as if the constituted a treaty. It is not quite clear why no formal treaty had been
signed and ratified by the five founding members. One reason might have been that national
Parliaments of any of the signatory States might have refused to give its approval for
ratification. OPEC would then have never come into existence.

20
Another example is ICPO-INTERPOL, which was established in 1923. 1969 INTERPOL
received consultative status as an NGO by the UN and two years later, in 1971, it was
recognized as an IGO by the UN. In 1972 a (bilateral) headquarters agreement was concluded
with France. Since 1954 INTERPOL possesses a Constitution, but no formal treaty between
the 188 member States had ever been concluded.
In general, treaties establishing IGOs are of multilateral character. In rare cases also bilateral
organization may be set up. This applies to free trade areas, such as between the EU and
Palestine, the EU and Israel, or to the customs union between the EU and Turkey.

c) Common aims in the course of history

The common aims of an IGO can be manifold. The original idea of an IGO was to maintain or
to restore peace and security. Thus the desire for peace gave the original impetus for
establishing a union of City States, of tribal units, etc. in the form of defensive (and
sometimes also offensive) alliances. The first alliances can be traced back to the antiquity.
Examples were the symmachia of the Greek City States (Athens, Sparta, etc.) against the
Persian invaders around 400 B.C. Further down in history we find alliances against the
Turkish invader between the Habsburg Empire, the Imperial States and Poland in 1683,
between England, Austria, Prussia and Russia against the French expansion under the
Emperor Napoleon at the turn of the 18th and 19th century; later the alliances of the Allied and
Associated Powers during World War I and the alliance against Nazi Germany. Italy and
Japan by the United Nations during World War II. The last two mentioned alliances gave
rise to the creation of the first universal organization of peace, namely the League of Nations
in 1919 and the United Nations Organization in 1945.
During the 19th and the 20th century the need for improved trade and for other fields, such as
telecommunication, air transport, health, fight against hunger, was decisive for the
establishment of other types of organizations, and commonly called administrative or
technical organizations.

d) Own special organs

The possession of at least one organ, such as a secretariat or a panel to settle disputes among
its members, for the fulfillment of its function, is the minimum prerequisite for an IGO
qualification. Nevertheless, the typical structure of an IGO consists of three organs.

(1) The typical tripartite structure of IGOs

IGOs possess organs of representation and of non-representation. In the former member
States are represented through delegations sent by the member States, while the latter consists
of persons acting independently of member States. They are either international civil servants
or, in the case of judicial bodies (Courts, Administrative Tribunals, etc.), independent judges,
arbitrators etc.
Organs of representation are either
Large organs of representation, commonly called Assembly, General Assembly, Congress,
Conference, General Conference, Council of Ministers, General Council. All members are

21
represented therein; they meet once a year or once in two years. Large organs decide, inter
alia, upon the general policy, budget, admission of new members and upon the statutes of
their civil servants; or
Small organs of representation, in which only a limited number of members are represented.
They are called Board or Council. This organ has to prepare and pursue the policy of the large
organ and must execute its decisions. It meets more frequently or even permanently, such as
the Security Council of the United Nations. Such an organ is sometimes entrusted with special
tasks (UNSC: maintenance of peace and security; assignment and utilization of radio
frequencies: ITU Frequency Registration Board, etc.). The ICAO Council makes the rules for
civil air transport over the high seas for all ICAO members.
The composition of this organ is sometimes partly or fully determined in the Charter. The
IMO Board, for instance, consists of six States with the largest interests in international
maritime trade.
The third organ is the administrative body, the Secretariat. It is headed by a Secretary
General (UN), Director-General (IAEA, WHO) or President (BANK, IMF). He or she is the
highest ranking civil servant of the Organization. He (she) and his (her) international staff are
to observe strict impartiality and loyalty solely vis--vis the Organization. They must not
receive or follow any instruction by their home States. Any international civil servant must
take an oath to that extent when taking up its international office.
A deplorable negative example is furnished by the most recent WHO-Taiwan Case of 2011.
In May 2011 it was revealed that the Director-General of the World Health Organization
(WHO) in Geneva, Dr Margaret Chan, circulated in May 2010 to all delegation of the
Member States a (confidential) internal document in which WHO referred to Taiwan as
being a province of China.
A protest was launched by the European Conservatives and Reformist Group, a fraction of
the European Parliament, led by Dr. Charles Tannock. In its letter, dated 14 June 2011, he
stated on behalf of the European Parliament-Taiwan Friendship Group , which reads as
follows:
We are dismayed at the recent revelation that the World Health Organization refers
in its internal documents to Taiwan as being a province of China.
No United Nations specialized agency has the right unilaterally to decide on the status
in international law of any given country or territory. As you will well know, UN
agencies and their staff are required to remain impartial and not to take instructions
from or show favor to any national government.
We wish to remind you that neither UN General Assembly Resolution 2758 nor World
Health Assembly Resolution 25.1 make any reference to Taiwans status in
international law or its status vis--vis the Peples Republic of China. The WHOs
explicit reference to Taiwan as a province of China has no basis in international law. It
is therefore hard to avoid the conclusion that the Peoples Republic of China has
deliberately sought to compromise the independence and impartiality of the WHO for
its own political purpose.

22
As Director-General of WHO, you are responsible for the internal policy of referring
to Taiwan as a province of China. You are also citizen of, and were nominated for your
post by, the Peoples Republic of China. WHOs continued insistence or referring to
Taiwan as a province of China therefore not only undermines the organizations
credibility but risks calling into question your personal impartiality and integrity.
We believe the WHOs position on Taiwan is politically and morally flawed. We urge
you to change WHOs internal procedures to refer to Taiwan as Chinese Taipei, the
accepted nomenclature that Taiwan uses in other international organizations and
structures.
Finally, we believe that Taiwan, with its excellent healthcare sector and world-class
doctors, has much to contribute to the WHO.
We look forward to your response.
Yours sincerely,
Dr. Charles Tannock MEP
ECR Group
Chairman
European Parliament-Taiwan Friendship Group.
Similarly, the U.S. Senator Sherrod Brown sent a letter of protest earlier in July 2011 to
Director-General Dr Margaret Chan, saying,
By implying that the WHO may declare Taiwan a province of China, WHO is going
beyond its mandate as the world global health authority and is in violation of U.S.
policy. This puts in jeopardy WHOs status as an apolitical organization that aims to
cure the sick and prevent the spread of illness.
In a response letter dated 4 July 2011 Director-General Chan under reference to World Health
Assembly Resolution 25.1 reiterated her position that Taiwan "is not a separate entity but a
part of China".

(2) Exceptions to the tripartite structure

Some IGOs have more; some have less than three organs. Important organizations, politically
and/or economically, require more organs. Thus the UN possesses six principal organs:
Secretariat, General Assembly, Security Council, Trusteeship Council, Economic and Social
Council and the International Court of Justice (ICJ). The same applies to the World Trade
Organization (WTO) which has the Ministerial Conference, the General Council, the Trade
Policy Review Body (TPRB), the Dispute Settlement Body (DSB), the Appellate Body, the
GATT Council, GATS Council, TRIPS Council, etc.
Examples for IGOs which possess less than three organs are Free Trade Areas. A FTA is
officially defined (by Article XXIV para 8b GATT) as a group of two or more customs
territories in which the duties and other restrictive regulations of commerce.. are eliminated
on substantially all the trade between the constituent territories in products originating in such
territories. A prominent example is the North American Free Trade Agreement (NAFTA)
which possesses only a Secretariat, composed of three sections: Canadian in Ottawa, US in

23
Washington and Mexican in Mexico City. These sections are responsible for the
administration of the dispute settlement procedures. FTAs are primitive organizations.
Some writers even maintain that they are no IGOs at all but just agreements. Other
examples are the Association Agreements between the European Union and third countries
(Croatia, etc.) They possess only an Association Council to implement the agreements and
to settle disputes.

3. Categories of IGOs
IGOs may be subdivided into the following categories:

a) Universal (global) and regional organizations

This distinction reflects a long standing and still ongoing theoretical dispute between two
schools of thought. While the Universalists (globalists) maintain that world peace can better
be guaranteed by global organizations whose members consist of disinterested parties in a
given dispute, the Regionalists criticize their lack of local knowledge on matters referring to a
particular region. Both theories have their merits. Political reality reflects both theories.

(1) Universal organizations

are designed to be open to all States on a worldwide basis. It was the predominant model in
particular during and after World War II. The most prominent example is the UN which now
encompasses also its family members. These are organizations of limited competence
which are linked by treaty with the UNECOSOC in order to coordinate their work and to
avoid unnecessary overlapping. They are called UN Specialized Agencies. They comprise
organizations prior to the existence of the UN as well as organizations created afterwards.
Four universal IGOs were in existence before WW II: ITU (1865), UPU (1874), World
Meteorological Organization (WMO 1878) and ILO (1919). During the war the Food and
Agricultural Organization (FAO) was set up in 1943 in Rome to fight hunger. The worlds
economic system was then based on the two universal financial organizations IMF and
BANK 1944) and the trade institution General Agreement on Tariffs and Trade (GATT
1948, at present WTO since 1995). The International Civil Aviation Organization (ICAO)
was established by the Chicago Convention of September 1944. It has its headquarters in
Montreal, Canada. Further Specialized Agencies are the United Nations Educational,
Scientific and Cultural Organization (UNESCO), set up in 1945 in Paris, whose purpose is
to contribute to peace and security by promoting collaboration among the nations through
education, science and culture; the WHO (1946) to fight diseases; the Intergovernmental
Maritime Consultative Organization (IMCO 1957), whose purpose is to adopt the highest
possible standards in matters of maritime safety and efficiency in navigation; the World
Intellectual Property Organization (WIPO), established in 1967, whose purpose is to
promote the protection of intellectual property throughout the world; the International Fund
for Agricultural Development (IFAD 1974, Rome), whose essential task is to mobilize the
agricultural production of food throughout the world, by financing agricultural development;
and the UN Industrial Development Organization (UNIDO) whose aim is the promotion of
industrial development in developing countries (set up in Vienna in 1979); the purpose of the
International Atomic Energy Agency (IAEA 1957, also based in Vienna) is the peaceful
use of nuclear energy. Strictly speaking it is not a Specialized Agency linked to ECOSOC but
is responsible to the UN General Assembly.

24
These are the most important universal (global) IGOs. They are generally concerned with
matters affecting all countries, irrespective of their geographical location. Hence it follows
that theoretically such IGOs should be open to all States in the world. This conclusion,
however, does not always meet the political reality. Thus for political reasons Taiwan is
refused to join the UN, being, however, a member of WTO.

(2) Regional (and sub-regional) IGOs

(a) General Aspects

On the other hand, regional IGOs extend their activities in a specific geographical region.
Almost every region in the world has established its organization.
Apart from the British Empire the Pan-American Union, established in 1908, became the first
formal regional organization. In contrast to the former, it was based on a formal treaty and its
members enjoyed, at least in theory, full sovereignty and independence. It was in 1948 to
become the Organization of American States (OAS). The Pan-American Union was the
model for Count Coudenhove-Kalergis vision of a Pan-European Union as conceived in
1923 in Vienna. It laid the ground for the still existing Pan-European Movement which has
organized a great number of Pan-European Congresses before and after World War II. This
movement has influenced a number of the so-called European Architects, such as the
French Foreign Minister Aristide Briand, Winston Churchill, Robert Schuman, Jean Monnet,
Konrad Adenauer, Paul Henri Spaak, Jacques Delors, etc. and even the US President Harry S.
Truman and his Secretary of State George C. Marshall. A regionalization of (Western)
Europe was also in the interests of the US during the Cold War.
The
(b) Relationship between universal (global) organizations
and regional organizations

is expressed in Article 52 para. 1 of the UN Charter which provides:

Nothing in the present Charter precludes the existence of regional arrangements
or agencies for dealing with such matters relating to the maintenance of
international peace and security as are appropriate for regional action provided
that such arrangements or agencies and their activities are consistent with the
Purposes and Principles of the United Nations.
The concern here is to avoid a conflict between the respective security systems of the United
Nations and the regional arrangements. According to Article 53 UN Charter the Security
Council is empowered (where appropriate) to utilize such regional arrangements or
agencies for enforcement action under its authority. This provision serves as a legal basis for
the NATO peacekeeping operations since 1999 in Kosovo (K-FOR).
In any case, UN law has prevalence over regional arrangements law.

25
(c) Relationship between the European Union as the most
important regional organization and the UN.

This principle of loyalty towards the UN is underlined by the following provisions of the
Treaty on European Union (Lisbon Treaty, TEU) of 13 December 2007:
Article 3 para 5 TEU provides:
In its relations with the wider world, the Union shall uphold and promote its
values and interests and contribute to the protection of its citizens. It shall
contribute to peace, security, the sustainable development of the Earth, solidarity
and mutual respect among peoples, free and fair trade, eradication of poverty and
the protection of human rights, in particular the rights of the child, as well as to
the strict observance and the development of international law, including respect
for the principles of the United Nations Charter.
Article 21 para. 1 and para 2 TEU provide:
The Union's action on the international scene shall be guided by the principles
which have inspired its own creation, development and enlargement, and which it
seeks to advance in the wider world: democracy, the rule of law, the universality
and indivisibility of human rights and fundamental freedoms, respect for human
dignity, the principles of equality and solidarity, and respect for the principles
of the United Nations Charter and international law.
The Union ..shall preserve peace, prevent conflicts and strengthen international
security, in accordance with the purposes and principles of the United Nations
Charter.
Articles 42 para 1 and 7 TEU provide:
The common security and defence policy shall be an integral part of the common
foreign and security policy. It shall provide the Union with an operational capacity
drawing on civilian and military assets. The Union may use them on missions
outside the Union for peace-keeping, conflict prevention and strengthening
international security in accordance with the principles of the United Nations
Charter. The performance of these tasks shall be undertaken using capabilities
provided by the Member States.
If a Member State is the victim of armed aggression on its territory, the other
Member States shall have towards it an obligation of aid and assistance by all the
means in their power, in accordance with Article 51 of the United Nations
Charter.
(d) Regional Organizations in Europe

D.W. Bowett states: The European scene has been remarkable for the growth and
development of international institutions in the post-World War II era; indeed, it has been in
Europe, the traditional centre of nationalism and State sovereignty, that experiments in cooperation have been set afoot which involve restrictions on national sovereignty seen

26
nowhere else in the world. Reasons for this remarkable development are (or were), inter
alia:
Increased inter-relationships caused the need for institutionalized co-operation;
Rapid economic reconstruction required concerted actions;
Ideological appeal of European Unity, a kind of United States of Europe, as
Winston Churchill has put it in 1946;
Fear of Soviet (and subsequently Russian) aggression;
The concept that Europe should speak with one voice in order to be recognized as a
political as well as economic power on a world-wide level;
Removal of trade barriers is to the mutual benefit of all members in an organization,
Community and, finally, Union. The free flow of goods, persons, services and capital
leads to economic growth and to rising standards of living.
Before this background the following organizations were set up in Europe:

The Council of Europe (1949);

The European Atomic Energy Community (EURATOM 1957);
The European Free Trade Association (EFTA 1960);
The European Economic Area (EEA 1992);
The European Union (EU 1992 in the Lisbon version of 2007) and
The Organization for Security and Cooperation in Europe (OSCE 1992).

A special case is the North Atlantic Treaty Organization (NATO 1949): here the notion
regional encompasses a political rather than a geographical notion. The same applies to the
Organization for Economic Co-operation and Development (OECD 1960, formerly
Organization for European Economic Cooperation; OEEC 1948). Both organizations include
also non-European States, such as the US, Canada, etc.
(e) Regional and sub-regional Organizations in the
Americas

The Organization of American States (OAS), established by the Charter of Bogota in 1948,
is designed to form an inter-American collective security system, but also deals with
economic matters; in 1962 it approved the Cuba-blockade;
The North American Free Trade Agreement (NAFTA) was set up by the US, Canada and
Mexico in 1994 and forms the worlds largest free trade area;
The Andean Pact (Pacto Andino) was set up as a sub-regional organization of the Latin
American Free Trade Association (LAFTA, established in 1969, replaced by the Latin
American Integration Association in 1980 LAIA) by the Cartagena Agreement of 26 May
1969 between Bolivia, Colombia, Chile, Ecuador and Peru. Venezuela acceded later. This
organization was designed to move towards closer integration. It is modelled after the
European Communities, possessing, inter alia, a Junta (Board) with competences similar to
those of the European Commission. The Commission is the supreme body and is comprised

27
of a plenipotentiary representative from the Government of each of the Member Countries. It
can be compared with the Council of the European Union. Its headquarters are in Lima, Peru;
Mercosur or Mercosul (Mercado Comn del Sur, Southern Common Market) is a customs
union between Brazil, Argentina, Uruguay and Paraguay, founded in 1991 by the Treaty of
Asuncin, amended in 1994 by the Treaty of Ouro Preto. Its purpose is to promote free trade
and the free movement of goods, persons and capital.
(f) Regional Organizations in Africa including the
Middle East

The original Organization of African Unity (OAU) of 1963 was replaced in 2002 by the
present African Union (AU) which is also modelled after the European Union and comprises
53 member States;
The Arab League is a political organization of comprehensive aims. It was established in
1944 and comprises practically all Arab countries, such as Egypt, Libya, Sudan, Morocco,
Tunisia, Bahrain, Qatar, Oman, Egypt, Mauritania, United Arab Emirates, etc.
(g) Regional Organizations in Asia

The Association of South East Asian Nations (ASEAN) was established by the Declaration
of 8 August 1967 between Indonesia, Thailand, Malaysia, Singapore and the Philippines; its
aims are both political and economic;
The Asia-Pacific Economic Cooperation (APEC) was established in 1089 in Canberra,
Australia and comprises a group of 21 Pacific Rim countries who meet with the purpose of
improving economic and political ties; among its members we find Russia, China, the US,
Canada, but also Taiwan (since 1991) under the name of Chinese Taipei. All ASEAN
countries are also members of APEC.

b) Peace keeping and technical organizations

While the former are primarily concerned with the maintenance of peace, the latter deal with
administrative matters, such as postal and telecommunication, air transport, trade, health,
economic aid to developing countries, etc. A strict distinction can, however, not be made
because technical organizations have also a peace keeping function. When goods do not
cross borders, soldiers will. The best example has been in the past the European Coal and
Steel Community (ECSC), established in 1951 and terminated in 2002, which was designed to
make wars between Germany and France once and forever impossible.
Nevertheless, the distinction is still upheld. A typical peacekeeping organization is NATO,
while the UN Specialized Agencies are technical organizations. IAEA is a peacekeeping
organization (peaceful use of nuclear energy). The UN is hybrid: emphasis is laid on the
peacekeeping function based on the system of collective security and on the principle of
peaceful settlement of international disputes (Articles 2 para. 3 and 33 UN Charter). On the
other hand, ECOSOC (Economic and Social Council) is concerned with matters such as

28
economic development of Third World countries, TNCs, human rights, etc. which are if at
all only indirectly related to the maintenance of peace and security.

c) General and special organizations

This distinction is made according to the ability of State to fulfil the aims and objectives of a
particular IGO. While general organizations are fulfilling tasks which any State can fulfil and
which are of concern for any State, special organizations are dealing with matters reserved to
a limited number of States.
Most organizations are of general character (UN, Specialized Agencies, etc.). Special
organizations are the exceptions. Examples are the Organization for Petroleum Exporting
Countries (OPEC), in which membership requires a minimum amount of oil export. Thus
Indonesia had to withdraw its membership from OPEC in 2008 after it became a net importer
of oil. Other examples are furnished by organizations which are linked to a particular
geographical situation, such as River Commissions (Danube Commission, Rhine
Commission, etc.). Therefore, special IGOs are also called closed organizations.

d) Traditional and supranational organizations

In legal theory a distinction is to be made between
Traditional (international) organizations, and
Supranational (international) organizations.
A traditional international organization is a union of States established by a
multilateral agreement under international law, which has its own autonomous organs to
pursue the common interests of the community of its members. The following four elements
can therefore be identified: (a) a treaty between (b) States; (c) common interests; and (d)
autonomous organs. These four elements are also the framework of a supranational
organization, which, however, possesses a number of additional elements and peculiarities,
which are alien to its traditional ancestor.
By establishing the European Coal and Steel Community (ECSC) in 1951 these
additional elements have been introduced into the world of international organizations. They
can be summarized as follows:

1. The power to bind Member States by legal acts rendered by a majority vote;
2. The exercise of such a power by an institution which is not composed of representatives
of Member States but of independent persons (e.g. the European Commission and the
Courts);
3. The power to enact laws (e.g. regulations, directives) which penetrate the shield or
cover of national law and thus require no further acts (transformation) in order to be
binding in the respective national legal system, and their supremacy over the latter;
4. The binding force of such laws also upon individuals conferring upon them (direct) rights
and imposing (direct) obligations; and

29
5. The compulsory jurisdiction of the European Courts.

e) Political and non-political organizations

Occasionally a distinction is made between political and non-political organizations. While
the former deal with questions related to the maintenance of peace and to the peaceful
settlement of international disputes, the latter are concerned with technical matters.
This distinction is questionable mainly for the reason that every IGO consists of sovereign
States which pursue political aims. Any intergovernmental organization, even a purely
technical one, may maintain or change the power relationship between States. The WHOTaiwan Case of 2011 is the most recent example for this phenomenon, where a technical
organization had been misused for improper political purposes.
In addition, membership in any IGO, be it technical or peace-keeping, can have important
political implications, particular in cases of secessions. Thus the admission of Croatia or
Slovenia to the Universal Postal Union or to WHO in the nineties of the last century marked
an act of recognition: the central government in Belgrade could no longer object to the
statehood of the former constituent subdivisions (Republics) of Yugoslavia, because only
States can be admitted to these UN Specialized Agencies.

4. Membership in international organizations

Members are the core of international organizations (H.G.Schermers). This not only means
that no organization can exist without members but also that any IGO has rules for the
acquisition (and sometime also termination) of membership. These rules are contained in the
basic treaty (charter, etc.).

a) Acquisition of membership
The States which conclude the basic treaty are the original members of the organization.
They lay down the conditions for the admission of new members which have to undergo a
specific procedure of admission. There are no open IGOs. States admitted on the grounds
of such a procedure are widely called other members. The prerequisite to become such
another member are to be divided into procedural and substantive conditions which have
to be fulfilled by the respective candidate.
Examples:
The United Nations.
Article 4 UN Charter provides:
1. Membership in the United Nations is open to allpeace-loving states which
accept the obligations contained in the present Charter and, in the judgment of
the organization, are able and willing to carry out these obligations.

30
2. The admission on any such state to membership in the United Nations will be
affected by a decision of the General Assembly upon the recommendation of
the Security Council.
Following the judgment of the ICJ in the Corfu Channel Case of 1949 (United Kingdom v.
Albania) Albania had been declared being not a peace-loving State.
The European Union.
Article 49 TEU provides:
Any European State which respects the values referred to in Article 2 and is
committed to promoting them may apply to become a member of the Union. The
European Parliament and national Parliaments shall be notified of this application.
The applicant State shall address its application to the Council, which shall act
unanimously after consulting the Commission and after receiving the consent of
the European Parliament, which shall act by a majority of its component
members. The conditions of eligibility agreed upon by the European Council shall
be taken into account.
The conditions of admission and the adjustments to the Treaties on which the
Union is founded, which such admission entails, shall be the subject of an
agreement between the Member States and the applicant State. This agreement
shall be submitted for ratification by all the contracting States in accordance with
their respective constitutional requirements.
Article 2 TEU provides:
The Union is founded on the values of respect for human dignity, freedom,
democracy, equality, the rule of law and respect for human rights, including the
rights of persons belonging to minorities. These values are common to the
Member States in a society in which pluralism, non-discrimination, tolerance,
justice, solidarity and equality between women and men prevail.

b) Termination of membership
Membership in an IGO can be terminated either voluntarily or non-voluntarily: in the first
case it is called withdrawal, in the second expulsion.

(1) Withdrawal
Withdrawal may be based on a constitutional provision. When withdrawal becomes effective,
most rights and obligations of membership will cease. It is, however, not quite clear whether

31
prior binding decisions taken by the organization will remain applicable to the former
member. Since the Treaty of Lisbon withdrawal from the EU is possible.
Article 50 TEU provides:
1. Any Member State may decide to withdraw from the Union in accordance
with its own constitutional requirements.
2. A Member State which decides to withdraw shall notify the European Council
of its intention. In the light of the guidelines provided by the European Council,
the Union shall negotiate and conclude an agreement with that State, setting out
the arrangements for its withdrawal, taking account of the framework for its future
relationship with the Union. That agreement shall be negotiated in accordance
with Article 218(3) of the Treaty on the Functioning of the European Union. It
shall be concluded on behalf of the Union by the Council, acting by a qualified
majority, after obtaining the consent of the European Parliament.
3. The Treaties shall cease to apply to the State in question from the date of entry
into force of the withdrawal agreement or, failing that, two years after the
notification referred to in paragraph 2, unless the European Council, in agreement
with the Member State concerned, unanimously decides to extend this period.
4. For the purposes of paragraphs 2 and 3, the member of the European Council or
of the Council representing the withdrawing Member State shall not participate in
the discussions of the European Council or Council or in decisions concerning it.
A qualified majority shall be defined in accordance with Article 238(3)(b) of the
Treaty on the Functioning of the European Union.
5. If a State which has withdrawn from the Union asks to rejoin, its request shall
be subject to the procedure referred to in Article 49.
Until now, no Member State has indicated its intention to withdraw from the EU. The only
precedent is furnished by the withdrawal of Greenland from the European Community in
1981, in spite of the absence of a constitutional provision to that extent. The problem was
resolved by a special treaty concluded between the EC, Denmark and the then ten Member
States (Greenland Agreement).
Most organizations, such as the UN, do not permit members to withdraw. Nevertheless,
Indonesia withdrew in 1965, even though such withdrawal was not based on the UN Charter.
After 20 months Indonesia revoked her withdrawal. In the eighties the US withdrew form
UNIDO and from UNESCO, but did not (yet) rejoin. In these cases the organizations accepted
the withdrawal.

(2) Expulsion
Expulsion is the compulsory cessation of membership. Many IGOs provide for expulsion of
members which do not fulfill their obligations. Expulsion may be the final means of sanction
in order to persuade a member to observe the rules of the organization. Thus Article 6 UN
Charter contemplates expulsion under the same procedural prerequisites as admission
(recommendation by the UNSC and two thirds majority in the GA) for persistent violation of
the principles of the Charter. The Lisbon Treaty does not provide for expulsion of EU
Member States. The only sanction contained in the Treaty refers to suspension of membership
rights.

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Article 2 TEU provides (EU values)

The Union is founded on the values of respect for human dignity, freedom,
democracy, equality, the rule of law and respect for human rights, including the
rights of persons belonging to minorities. These values are common to the
Member States in a society in which pluralism, non-discrimination, tolerance,
justice, solidarity and equality between women and men prevail.
The sanction Article is Article 7 TEU which provides:
1. On a reasoned proposal by one third of the Member States, by the European
Parliament or by the European Commission, the Council, acting by a majority of
four fifths of its members after obtaining the consent of the European Parliament,
may determine that there is a clear risk of a serious breach by a Member State of
the values referred to in Article 2. Before making such a determination, the
Council shall hear the Member State in question and may address
recommendations to it, acting in accordance with the same procedure.
The Council shall regularly verify that the grounds on which such a determination
was made continue to apply.
2. The European Council, acting by unanimity on a proposal by one third of the
Member States or by the Commission and after obtaining the consent of the
European Parliament, may determine the existence of a serious and persistent
breach by a Member State of the values referred to in Article 2, after inviting the
Member State in question to submit its observations.
3. Where a determination under paragraph 2 has been made, the Council, acting
by a qualified majority, may decide to suspend certain of the rights deriving from
the application of the Treaties to the Member State in question, including the
voting rights of the representative of the government of that Member State in the
Council. In doing so, the Council shall take into account the possible
consequences of such a suspension on the rights and obligations of natural and
legal persons.
The obligations of the Member State in question under this Treaty shall in any
case continue to be binding on that State.
4. The Council, acting by a qualified majority, may decide subsequently to vary or
revoke measures taken under paragraph 3 in response to changes in the situation
which led to their being imposed.
5. The voting arrangements applying to the European Parliament, the European
Council and the Council for the purposes of this Article are laid down in Article
354 of the Treaty on the Functioning of the European Union.
Membership can also be terminated by disappearance of the member or dissolution of the
organization.
Examples:
1990: Unification of Germany, disappearance of the German Democratic Republic.
1991: dissolution of Yugoslavia (SC Resolution: Yugoslavia has ceased to exist).

33
1992: Dissolution of the Union of Soviet Socialist Republics, USSR; Russia becomes
successor State
1990: Dissolution of the Warsaw Treaty Organization (Warsaw Pact).

c) Categories of membership in IGOs

One has to distinguish between
Full members which possess all rights in IGOs, and
Associate members, which possess only limited rights in IGOs; their rights and
obligations are less than those of full members. Associate members may have the right
to sit in the various meetings of the different organs and have a right to speak, but are
barred to vote. Thus the US had such status in the Organization for European
Economic Cooperation (OEEC) between 1948 and 1960.
Both the UN and the EU do not expressly provide for associate membership. Only full
membership is possible in these organizations.
However, a de facto associate membership is granted in the UN to national liberation
movements, such as PLO (Palestine). The same applies to non-autonomous territories which
may participate in some UN organs without voting. In the Economic Commission for Africa,
some non-African States, as well as Namibia before (full) membership, were associated
members.
The EU (and previously the European Community) provides for the conclusion of association
agreements on the basis of Article 217 Treaty on the Functioning of the European Union
(TFEU, ex Article 310 EC Treaty) which reads as follows:
The Union may conclude with one or more third countries or international
organisations agreements establishing an association involving reciprocal rights
and obligations, common action and special procedure.
Such agreements do not grant any rights to participate in the EU itself, but rather create new
separate institutions comprised by the Union and its member States on the one hand and the
associate State or States on the other. Candidate countries are linked to the Union by such
association agreements which, in this case, are designed to prepare for EU membership.

5. Decision-making and voting procedures

In general, decisions are taken in IGOs by way of voting. One has to distinguish between the
rule of unanimity and majority voting.

a) The rule of unanimity

It was originally the only principle in the decision-making in IGO. The voting procedure in
the League of Nations was based on this rule (Article 5 LoN Covenant). It follows from the

34
doctrine of the equality and sovereignty of States; no State can be bound by a decision
without its consent. In the UN Charter the principle of modified unanimity is adopted in the
Security Council. This means that unanimity only among certain States is required.
Thus Article 27 para. 3 UN Charter reads:
Decisions of the Security Council shall be made by an affirmative vote of nine
Members including the concurrent votes of the permanent Members...
This rule of unanimity proved to be open for misuse. States for political reasons would cast a
veto and, by doing this, would paralyze the decision making procedure of the organization.
The UN Charter appears a fairly radical break with tradition up to 1945. It introduced the
majority vote into global (universal) organizations, for there the majority vote became the rule
and only in respect of permanent Members, as seen above, does unanimity remain as a kind of
defensive mechanism which is seen operating in the veto. D. Bowett speaks here of the
decline of the rule of unanimity.
In the EU unanimity was originally required for all Council decision in the Communities. It
was not before the entry into force of the Treaty of Lisbon on 1 December 2009 that this rule
was practically entirely replaced by the majority rule.

b) Majority voting
Majority voting became the general rule both in universal organizations and in the EU. Here
we have to distinguish between
Simple majority: more than 50% of members present and voting;
absolute majority: more than 50% of the members represented in a particular organ
or institution; and
qualified majority: two third, three quarter etc. majority;
Example: Article 49 TEU (admission of new members) requires the European Parliament to
act by a majority of its component members. All other decisions are taken by simple
majority. The Council of the European Union acts principally by qualified majority voting
(QMV).

c) Equal and weighted votes

In IGOs the principle of one State, one vote prevails. However, some organizations allocate
to its members different voting powers, according to size, population, amount of shares in
those organizations, etc.
Examples. BANK, IMF, Council of the EU (up to 2014/2017).

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6. International Legal Personality of IGOs

It concerns the question as to whether an IGO is subject under international rather than
national law of some member State. An International legal person is an entity whose conduct
is governed directly by international law. This is a question of positive law and depends upon
its constituent treaty. Such a legal personality is, however, only rarely conferred upon
expressly by the founding member States. Or, in other words, the constituent instrument is
silent on this question. The founding States usually wish to avoid any implication that the
future organization becomes a super-State.
This applies both to the UN as well as to the EU.
In drafting the UN Charter, the 50 founding fathers at the San Francisco Conference in
1945 apparently had the intention to avoid any implication that the UN was a super-State. A
somewhat timid compromise (D. Bowett) was adopted recognising in Article 104 that
the Organisation shall enjoy in the territory of each of its Members such legal
capacity as may be necessary for the exercise of its functions and fulfilment of its
purposes.
The provisions on privileges and immunities in Article 105 UN Charter also speak only
of a grant in the territory of each of its Members.
These two provisions raise the question as to whether the Organization only had legal
personality under municipal law, or also to some degree, under international law. Legal
personality under municipal law includes the capacity to own and dispose of property,
to litigate and to enter into contracts under municipal law (employment, services, etc.).
Legal personality under international law goes further: It generally includes the treatymaking power, the capacity to bring international claims, etc., but also responsibility in
international law. The duty to make reparations for internationally wrongful acts is the
correlative duty to the right to claim reparations.
The answer to that question to the nature and extent of the UNs legal personality was
authoritatively given by the ICJ in the Advisory Opinion on Reparations for Injuries
suffered in the Services of the United Nations (Reparation for Injuries or Bernadotte
Case 1949). The Court stated that such personality was indispensable to achieve the
purposes and principles of the Charter, and that the functions and rights of the
Organization can only be explained on the basis of the possession of a large measure of
international personality.
The Court held:
That is not the same thing as saying that it is a State, which it certainly is
not, or that its legal personality and rights and duties are the same as those
of a State. Still less is it the same thing as saying that it is a super-State,
whatever that expression may mean What it does mean is that it is a
subject of international law and capable of possessing international rights
and duties, and that it has capacity to maintain its rights by bringing
international claims.

36
The indicia of international personality are
The obligations of the Members towards the organization, such as annual
contributions, and
The legal capacity and privileges provided for in Articles 104 and 105 UN Charter.
The Court also went on to stress that other powers (such as to bring an international claim) not
specifically granted in the constituent treaty could be implied from the very fact of
personality. The rights and duties of an international organization depend upon its purposes
and functions as specified or implied in its constituent documents.
Thus the theory of implied powers was born which subsequently has influenced decisively
the law of international organizations.
As far as the EU is concerned, such an international personality can similarly be deduced
from the pre-Lisbon Treaties which are silent on this issue. As it had been the case with the
UN, the EU member States were concerned of a European super-State (PM Margaret
Thatcher) and of possible United States of Europe. Indicia for such a pre-Lisbon
international legal personality of the EU were the rules on citizenship of the Union, on
acquisition of membership, on the common foreign and security policy (CFSP), and on the
treaty-making power (Article 24 TEU). And last but not least, the EU and not only the
European Communities constituted for more than ten years a political reality on the
international scene.
Following the entry into force of the Lisbon Treaty on 1 December 2009 the issue has been
resolved in favour of an express legal personality. Thus Article 47 TEU laconically says:
The Union shall have legal personality.

7. Financing of IGOs
The general rule is that the financial needs of the organization must be met by member States
contributions. The costs are shared among the member States in accordance with a set
formula which may be laid down in the constituent treaty or determined from time to time by
the relevant organ (e.g. Assemble, Conference, General Conference, etc.). For the most part,
contributions are calculated by reference to national income, frequently with an upper limit
(e.g. UN), so that no State has to bear an excessive burden or can exercise too much influence
on the organization. Certain organizations also finance themselves through loans (interests),
such as BANK and IMF. The European Union (previously Communities) have broken new
ground by introducing export and import duties (common external tariff-CET) and a share of
national value-added-tax revenues as sources of income.
Other sources of financing IGOs are gifts as voluntary contributions and incomes from the
sale of souvenirs or stamps in their own shops.