During recent decades, the architecture of international organizations is characterized by proliferation and fragmentation1. New paradigms of international organizations have emerged. In addition to traditional international organizations with treaty foundation, a number of other international organizations have been created which are not established by a treaty but by the resolution of a conference, a decision of the governing bodies of an international organization or of the Conference of the Parties to a multilateral convention, or merely by consensus. Moreover, in the period since 2000, a new dual or hybrid type of international organization has emerged, incorporated under national law but with recognition of international legal personality and privileges and immunities under national law. The establishment of the Global Fund to Fight AIDS, Tuberculosis and Malaria2 and the GAVI Alliance3 epitomize this development. Such organizations have become a new business model for establishing international organizations. In the overall context of these developments, I would like to introduce the Green Climate Fund (Fund) as a new species in the zoology of international organizations.

Special Features of the Green Climate Fund

The Green Climate Fund has very interesting features both from an institutional perspective and as new funding mechanism.

First, while the Green Climate Fund was established under the United Nations Framework Convention on Climate Change (UNFCCC), which is a treaty, the Governing Instrument of the Green Climate was not adopted by a treaty; rather, it was approved by a decision of the Conference of the Parties (COP) to the UNFCCC4.

Second, one of the very important characteristics of the Fund is that it was designed to possess legal personality. The Governing Instrument of the Green Climate Fund incorporates some constructive ambiguity and does not expressly use the term “international legal personality.” Rather, paragraph 7 of the Governing Instrument states:

In order to operate effectively internationally, the Fund will possess juridical personality and will have such legal capacity as is necessary for the exercise of its functions and the protection of its interests.

While opinions vary as to whether the COP was able to establish the Green Climate Fund, there cannot be any reasonable doubt that the Fund is able to operate at the international plane and to enter into agreements with governments and international organizations governed by international law. The Headquarters Agreement between the Fund and the Republic of Korea is a treaty under Article 6 of the Constitution of the Republic of Korea. Moreover, as will be shown, the Fund, as authorized by the Board, is currently negotiating bilateral agreement on privileges and immunities with more than 80 countries, some of which have already been finalized.

Third, the Green Climate Fund is an organization without a formal membership structure. While consideration was given by the Transitional Committee which drafted the Governing Instrument of the Green Climate Fund to include in that instrument provisions on membership5, this eventually was not pursued. This is partially due to the fact that the Green Climate Fund has not a plenary body through which members could act. Hence, the decision on the termination of the Fund, which in other organizations is vested in the plenary body, is taken in the case of the Green Climate Fund by the COP.

Fourth, the Green Climate Fund has a special governance structure which includes the COP, the Board, a Secretariat and independent units. The Fund has greater autonomy than the Adaptation Fund which operates under the authority of the COP. The Green Climate Fund was designated as an operating entity of the financial mechanism under Article 11 UNFCCC “and will be accountable to and function under the guidance of the [COP].” The core of the Fund’s decision making lies with the Fund’s Board which has “full responsibility for funding decisions.” One of the special [Page53:] characteristics of the Fund is that it has independent units (evaluation, integrity, grievance mechanism) which have a direct relationship with the Board, and, to some extent, also with the COP.

Fifth, the Fund’s role is to “promote the paradigm shift towards low emission and climate-resilient development pathways by providing support to developing countries to limit or reduce their greenhouse gas emissions and to adapt to the impacts of climate change”.

Sixth, one of the main characteristics of the Fund is that it is firmly committed to country ownership. The Fund also has a direct access modality, which distinguishes it from other organizations, and is committed to supporting private sector operations. To this end, a Private Sector Facility has been established. Currently, the Fund only operates through accredited entities which can be national, regional or international, and a fit-for-purpose accreditation system for the accreditation of such entities.

The success of the Fund and its role of the Fund in promoting sustainable investment will be assessed against its ability to propose good and innovative projects which promote paradigm shift, maximize direct access and mainstream private sector investments.

Privileges and Immunities, Arbitration and Due Process

Consistent with the focus of this Panel discussion, I will focus in the following sections on options to ensure that the Fund and the persons associated with it are covered by privileges and immunities. In this context, I will seek to explore the relationship which exists between such privileges and immunities and arbitration and due process.

Options for Ensuring Privileges and Immunities for the Green Climate Fund

Privileges and Immunities are important to ensure the effective performance of the Fund’s functions and the operationalization of the Fund’s activities. No international organization will be able to operate properly if it is subject to the laws of all the countries where it is operating. Moreover, in addition to immunity of jurisdiction, other privileges and immunities are required for an organization to perform its functions. On the other hand, immunity of legal process, while important for the independence of any international organization, must not lead to avoidance of just claims. It is necessary to balance these two objectives.

The situation of the Green Climate Fund is special inasmuch as it currently neither covered by the Convention on the Privileges and Immunities of the United Nations (General Convention) or by the Convention on the Privileges and Immunities on the Specialized Agencies. Hence, several options were considered to ensure for the Green Climate Fund and the persons associated with it the grant of privileges and immunities.

Institutional Linkage and Relationship Agreement

The UNFCCC Secretariat and the Secretariat of the United Nations Convention to Combat Desertification (UNCCD Secretariat) are each covered by an institutional linkage under which the General Convention is applicable to the staff of the Secretariat. The Green Climate Fund sought to obtain a similar linkage with the United Nations. Moreover, it explored whether the Fund might be able to conclude a relationship agreement with the United Nations which would allow the staff of the Secretariat to avail of the UN laissez-passer. Both options could not be pursued6.

Bilateral Agreements and Multilateral Agreement

Bilateral agreements are a somewhat tedious, but a quite effective way for conferring privileges and immunities to an international organization. Traditionally, the constituent agreement of an organization contains provisions on privileges and immunities which may be supplemented by bilateral agreements or multilateral agreements or protocols on privileges and immunities. These may be adopted at the same time as the constituent agreement, or subsequently.

The most important agreement is generally the headquarters agreement between the organization and its host country. Such agreements can also be concluded between an entity incorporated under national law as the examples of the headquarters agreements of the Global Fund and GAVI Alliance show, and potentially even to entities without international legal personality. In such cases, bilateral agreements may transform the legal status on an entity.

As regards the Green Climate Fund, it has a firm legal basis for its privileges and immunities in the Republic of Korea based on its Headquarters Agreement, while other country parties to the UNFCCC measures are required to ensure that the Fund and the persons associated with it are [Page54:] covered by privileges and immunities. In response to the report of the Board to the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) at its 20th session, the COP adopted Decision 7/CP.207 which, in paragraphs 21 “urged developing country Parties to enter into bilateral agreements with the Green Climate Fund based on the template to be approved by the Board of the Green Climate Fund, in order to provide privileges and immunities for the Fund.” Consistent with that COP recommendation and reference provisions approved by the Green Climate Fund Board in decision B.08/24, paragraph (b), the Green Climate Fund Secretariat has developed a draft agreement as the basis of s negotiation on an individual basis with the country parties to the UNFCCC.

In addition to bilateral agreements, the Green Climate Fund may in future consider offering to the countries where it is operating to become a party of a multilateral agreement which recognizes the privileges and immunities of the Green Climate Fund. Some country Parties to the UNFCCC may find it easier to become parties to a multilateral rather than to a bilateral agreement.

Unilateral Arrangements Under National Law and Model Laws

Moreover, there are a number of other arrangements which may confer privileges and immunities. There is nothing to prevent a state to grant privileges and immunities to the Green Climate Fund by way of a unilateral undertaking. Moreover, potentially, there may be other ways for conferring privileges and immunities to an entity, eg through parallel legislation of countries based on a model law.

Immunity of Jurisdiction and Due Process

In principle, international organizations enjoy, except in areas which are expressly exempted, absolute immunity from jurisdiction. Nevertheless, such absolute immunity is increasingly viewed in a critical manner and attempts are being made on various grounds to restrict it. Hence, it is pertinent to reflect on the functions and purpose of, and exceptions to, privileges and immunities, and at times, on their very usefulness.

Actually, in some cases, it may be asked whether privileges and immunities really serve a useful purpose. For example, if an international financial institution should decide to establish a special-purpose investment vehicle which has the sole purpose of conducting market-based financial transactions, it may indeed be asked whether privileges and immunities may hinder the achievement of that investment vehicle rather than support it. Also, privileges and immunities may give an entity an unfair advantage towards competitors if an entity is operating exclusively on commercial terms. An organization which is operating exclusively on commercial terms may be better off not claiming privileges and immunities. The same does not apply to international financial institutions which also pursue important objectives of public policy. However, also in the case of these organizations there are increasingly trends to restrict privileges and immunities.

In the case of regional organizations and organizations of limited membership it may pay off to renounce immunity of jurisdiction limited to the enforcement of arbitration awards in those areas where the organization enjoys absolute immunity. Through that small sacrifice, organization gain substantial additional security of the law, as they manage to bring their contractual arrangements under the realm of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (generally known as the “New York Convention”)8.

As is widely known, there have been attempts to transfer the distinction of acta jure imperii and acta jure gestionis which is made in the case of state immunity to international organizations. I always considered this the wrong approach because it does not take into account differences that exist between state immunity and the immunity of international organizations. But this does not mean that international organizations enjoy an untrammelled freedom to conduct themselves as they deem fit.

It is now widely recognized that international organizations are required to guarantee due process in all contractual matters. In fact, this is nothing substantially new as this is the underlying principle governing Article VIII, Section 29 of the General Convention which mandates the UN in to make provisions for appropriate modes of settlement of “Disputes arising out of contracts or other disputes of a private law character to which the United Nations is a party”. Similar provisions are also contained in various headquarters agreements, such as one between the Green Climate Fund and the Republic of Korea9.

However, an obligation for international organizations to guarantee due process exists even in absence of express statutory provisions. This requirement has been derived by the European Court of Human Rights from Article 6 of the European Convention of Human Rights and is affirmed in certain countries based on the principles of national constitutional law. The jurisprudence of the ECHR has far-reaching ramifications and given a new dimension to the requirement for [Page55:] international organizations to adopt equitable dispute settlement procedures. Given the risk that national courts may not recognize the organization’s privileges and immunities, international organizations feel compelled to conduct reviews of their Administrative Tribunals and grievance mechanisms to ensure that these comply with the requirements of due process.

The Green Climate Fund is firmly committed to settle all private law matters through arbitration. We normally use Permanent Court of Arbitration (PCA), International Chamber of Commerce (ICC), or UNCITRAL rules. As regards the PCA arbitration rules 2012, we consider that the GCF is an international organization for the purpose of such rules. The term “international organization” needs to be interpreted taking account of the evolution of international law to comprise institutions like the Green Climate Fund.

A very interesting question is whether the principles that have been elaborated above may also apply in case of claims based on tort. This matter is far from settled. Cases like Bares v Asian Development Bank10, which concerns the death of an ADB staff member stabbed by a security guard, show the great difficulties which courts still have in coming to terms with claims based on tort. Also, the European Court of Human Rights, in the case of the Stichting of the Mothers of Srebrenica11, did not follow the argument of the applicants that the immunity of the UN violated their right to access to court. It appears that the Court was influenced by the fact that the specific case involved the Security Council. Rather than settling the matter, the decision has given international organizations some respite. It is likely that the question whether international organizations are entitled to refuse claims based on tort without considering their substance by invoking immunity will again come to the agenda in the future.


As has been shown, the Green Climate Fund currently needs to negotiate individual agreements with the country Parties to the UNFCCC. Other arrangements may also be considered. The Fund is firmly committed to settle disputes with third parties of private law character through arbitration. Regarding accountability and compliance mechanisms, we are still a fairly young organization and are actively pursuing the establishment of the necessary legal frameworks for such mechanisms.

This article has been prepared by the author in his personal capacity. It does not necessarily reflect the views of the Green Climate Fund Secretariat, or any other organization or institution, or the views of any government which they represent.

See section on “Four Generations”, in: Gerd Droesse. Introductory Remarks and Overview of Publication. In: Funds for Development. Multilateral Channels of Concessional Financing. Asian Development Bank (ADB): Manila, 2011, pp.1-37, pp. 6-33



Decision 3/CP.17, Launching the Green Climate Fund.

See Transitional Committee. Cross-cutting issues in the design of the Green Climate Fund. 1 September 2011 Third meeting, TC-3/INF.1,,p.5

For details, see: GCF. Options for an Institutional Linkage between the United Nations and the Fund. (GCF/B.08/39, 8 October 2014);



Agreement Between the Republic of Korea and the Green Climate Fund Concerning the Headquarters of the Green Climate Fund.

ADB Administrative Tribunal, Decision No. 5, 31 May 1955,

European Court of Human Rights. Stichting Mothers of Srebrenica and Others v. the Netherlands, 65542/12,{“itemid”:[“001-122255”]}; See Nico Schrijver. “Beyond Srebrenicia and Haiti: Exploring alternative Remedies Against the United Nations”. In: Immunity of International Organizations. Edited by N. Blokker and N Schrijver. Brill. Nijhoff. Leiden Boston. 2015, pp. 329-341