Introduction to Intergovernmental Organizations 

What is an intergovernmental organization (“IGO”)? 

Also known as ‘international organization’, IGOs are organizations/entities established among sovereign nations at the government level (referred to as “member states”) through the conclusion of a treaty between member states. 

Even though the term may not be as well-known as non-governmental organizations (NGOs), some IGOs are actually regularly featured in news and general discussions about developments in international affairs – you may be familiar with some of these intergovernmental organizations without being aware that they are in fact IGOs. Examples of IGOs many of us would have heard about at some point include the United Nations, World Bank, OECD, UNESCO, and Association of Southeast Asian Nations (ASEAN). 

 

How are IGOs formed? 

As mentioned, IGOs are established via treaties which are essentially international agreements that are entered into by nations. Treaties can be either ‘bilateral’ between just two member states, or ‘multilateral’ among three or more member states. Unlike normal contracts made between non-government bodies, the process of concluding a treaty and for it to come into force is more complicated. 

This is due to the nature of the parties involved, i.e. contracting at the highest government levels of each nation, which means that before a nation can agree to be bound by the treaty and to submit part of their sovereignty to be governed under international laws, it needs to meet the nation’s own domestic legal requirements. This includes obtaining parliamentary approval, ensuring that the treaty to be entered into is not contrary to the constitutional provisions of the state, etc. 

As such, treaties often take considerably more time before it can be concluded (depending on the governmental system of the member state, obtaining necessary mandate to enter into a treaty can be a lengthy process). 

 

What are the different types of IGOs?

IGOs may be categorized according to its various characteristics. These categories of IGOs are mainly descriptive and have no legal significance in terms of the laws that IGOs are subject to.

The different types of IGOs are not exhaustive nor mutually exclusive, and generally include:  

1) Size / membership

Membership may be open to any nation in the world (e.g. UN), limited to a specific geographic region (e.g. African Union, European Union) or just a few selected nation (e.g. OPEC comprising of oil producing countries only). 

2) Purposes / functions

IGOs may be established for specific purposes such as knowledge sharing, coordinating efforts to achieve certain goals. Examples include NATO (military and security co-operation) and the IAEA (promoting peaceful use of nuclear energy). 

3) Duration

The IGO may be established as a permanent organization (typically so), or even for just a finite period where the organization will be dissolved or expire once the purpose for which it was formed is no longer required. An example includes the European Coal and Steel Community which was terminated due to the expiry of its founding treaty. 

 

What is the purpose of establishing IGOs?

IGOs may be established for a variety of reasons. In order to coordinate efforts between member states, an IGO may for example be an appropriate vehicle in which to achieve the member states’ objectives. ASEAN for example, was established to, among other things, accelerate the economic growth, social progress and cultural development in the region. Therefore, an IGO is essentially a means to institutionalize international co-operation on the world stage.

Other notable benefits for countries to form an IGO or even for existing non-private organizations to become IGOs include: 

  • Legal recognition as a separate entity governed under international laws and customs;
  • Having a clear legal framework through a treaty with proper enforcement and dispute resolution mechanisms among states;
  • Having a proper bureaucratic structure and organs for decision making and governance; 
  • Diplomatic privileges and immunities for personnel which include greater mobility across countries, exemption from taxes, inviolability of premises and documents, immunity from judicial process; and
  • Access to funding from member nations, rather than from just private sources.

What laws govern IGOs? 

IGOs are primarily governed by the terms of the treaty but as its operating on the international plane, international law would come into play to govern its relations with other states. The treaty itself will be governed by The Vienna Convention on the Law of Treaties (VCLT), which is an international agreement regulating treaties between states. Also known as the “treaty on treaties”, the VCLT establishes comprehensive rules, procedures, and guidelines for how treaties are defined, drafted, amended, interpreted, and generally operated.  

Treaties typically contain provisions which grant IGOs legal personality under international laws. Having legal personality means that IGOs are generally capable of suing and being sued. Having said that, the capacity for IGOs to bring a suit against a non-member state depends on whether the state recognizes the legal personality of the IGO, given that the non-member state is not bound by the treaty that established the IGO. 

In conclusion, due to the ever-increasing rate of globalization and the need for countries to co-operate internationally for a multitude of reasons, the number of IGOs worldwide will likely continue to grow as well. 

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This article was written by Shawn Ho (Partner) and Adryenne Lim (Pupil). Shawn leads the corporate practice group of Donovan & Ho, and has been recognised as a Notable Practitioner, whilst the firm has been recognised as a Notable Firm for Corporate and M&A by Asialaw Profiles 2020 and 2021.  We are also ranked as a Recommended Firm by IFLR1000 2020 and 2021.

Our corporate practice group advises on corporate acquisitions, restructuring exercises, joint venture arrangements, shareholder agreements, employee share options and franchise businesses, Malaysian start-up founders and can assist with venture capital funds in Seed, Series A & B funding rounds.  Feel free to contact us if you have any queries.

 

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