Are NGOs immune to conflicts of interest?

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Some NGOs receive EU funding and still engage in lobbying. [eilidh_wag/Flickr]

The EU should keep its interaction with interest groups in check to avoid conflicts of interest. Whether those groups are corporate lobbies or NGOs, the same rules should apply, writes Tamar Kogman.

Tamar Kogman is an associate researcher at NGO Monitor.

Imagine the EU commissioning Volkswagen to lead the implementation of its emission policy, while also paying it to help introduce future testing technologies and draft regulations accordingly. After all, the car manufacturer is an expert with on the ground experience.

The absurdity is glaring, not only because of the emission scandal involving Volkswagen. Such a selection by the EU would completely evade government responsibility for initiating appropriate checks and balances regarding invested parties. Governments must be able to prevent the regulated from dictating official regulations, and not turn a blind eye to bias and conflicts of interest.

As in the example above, it is unacceptable for government bodies to rely on the accounts of stakeholders or to act without independent reviews. The same holds true regarding major government funding for organisations to provide information and analysis on issues in which they have a vested interest.

While such conflicts are clearly unacceptable for businesses, unions, and other lobbies, they are a matter of course for non-governmental organisations (NGOs). European governments provide hundreds of millions of euros to NGOs, with little oversight. German CDU lawmaker Markus Pieper (EPP) recently took up this issue, commissioning a study on democratic accountability and budgetary control of EU-funded NGOs and subsequently drafting a report calling for stricter funding regulations.

Pieper’s report was immediately met with vehement opposition, a recurring argument being that the report unjustifiably singles out NGOs. Belgian Green MEP Bart Staes argued that the report implies that NGOs are problematic. Valentina Caimi, a policy adviser for Social Platform, bristled at the notion that NGOs should be regarded as lobbyists since they are often funded for the provision of specific services.

These two points fail to acknowledge that many EU-funded NGOs do, in fact, carry out lobbying activities, and some are funded for the explicit purpose of lobbying the EU’s own institutions – a dimension that is, in fact, very specific to NGOs. A clear example is Caimi’s own Social Platform, an EU-funded NGO network with stated objectives of influencing EU policies and legislation.

Another example of this phenomenon is the European Peacebuilding Liaison Office (EPLO), a network of NGOs with the explicit objective of obtaining increases in EU grants for peacebuilding activities.

Not only is EPLO EU-funded, it has also established a Civil Society Dialogue Network, linking members of civil society with EU policymakers. The Network is co-financed by the European Union (Instrument for Stability) and EPLO, and managed by EPLO in co-operation with the European Commission (EC) and the European External Action Service (EEAS).

EPLO member organisations include Oxfam International and Cordaid. Together, these two NGOs received €67 million in 2015 for the implementation of EU projects, according to the EU’s Financial Transparency System.

In other words, an EU-funded network lobbies the EU for more money and preferred policies, and its members receive major amounts in a lucrative cycle.

Additional criticism of Pieper’s report focuses on a paragraph that prevents funding to groups that spread falsehoods and with objectives that run contrary to EU values of democracy, human rights and the strategic objectives of European Union institutions. As argued by Caimi, imposing such limitations on funding to NGOs is inconsistent with an article of the EU Treaty, which explains that institutions are required to give citizens the opportunity to exchange opinions and perspectives on areas concerning the EU.

According to Caimi’s reasoning, giving EU citizens and groups the opportunity to express themselves is equivalent to funding them. If that is the case, the EU is institutionally discriminating against all persons and groups not currently receiving EU funds.

Interestingly, those who condemn Pieper’s report do not take issue with the EU’s code of conduct for lobbying, which requires of stakeholders to do their best to ensure that the information they provide is not biased or incomplete. An EP library briefing notes that breaching this code can result in sanctions.

The dissonance, perhaps, is because NGOs are not considered parties that are liable to conflicts of interest, and therefore the EU’s code of conduct does not apply to them. As argued by MEP Staes, 95% of NGOs work for the common good and are not involved in lobbying. According to such logic, NGOs are unequivocally good for everyone, and there is no reason to scrutinise their claims or hold them accountable – even when they are entrusted with taxpayer money. Unfortunately, this is not the case as many NGOs abuse this optimistic misconception and use it for their own self-interested financial and political gain.

In fact, NGOs are currently given astounding leeway in comparison to other interest groups, all while being funded excessively without appropriate accountability. Addressing this anomaly does not single out NGOs. But systematically ignoring it does.

If the EU wants to support a thriving, diverse, and actively participant civil society, it should keep its engagement with powerful interest groups in check – and NGOs must not be an exception.