How to get funds into conflict zones
17 April 2019
Getting funds and resources to people in places experiencing violent conflict can be far from straightforward. Delayed payments, restrictions on purchasing certain goods and services, or a lack of access on the ground can all slow down and even prevent the delivery of much needed support.
This is a very real concern for all of us working in the humanitarian space. At the recent Bond Conference, I explored how to get funds into conflict zones.
Using a case study on Syria, we had a very practical and informed discussion with fellow panel members from Barclays and the UK’s Department for International Development (DFID), as well as experts in the audience.
The session demonstrated the almost impossible task for international non-governmental organisations (INGOs) to be certain of the implications of the various legal and regulatory regimes in play.
Here are my highlights from the session
- Getting funds into conflict zones needs clarity to save lives
Working in conflict zones to deliver aid is a vital part of what humanitarian INGOs like Islamic Relief Worldwide (IRW) do – it’s why we exist. After all, conflict brings displacement, loss of livelihoods and unspeakable trauma.
Unfortunately, the increasingly complex and uncertain processes involved in providing goods, services and funds is having a serious effect on the ability of INGOs like IRW to do so. The lack of clarity on the various sanctions regimes is creating a risk environment that is having an adverse impact on charities' operations, moving us away from rather than towards localisation, and does not adequately balance the risk against the work that we do.
- Charities now require a substantial risk management function which has implications for smaller charities and localisation
IRW, a large INGO, has increased its in-house legal, compliance and financial expertise to respond to increasingly difficult sanctions regimes and de-risking by banks. We are fortunate to have the support of a major UK bank that is committed to the INGO sector, with whom we maintain a close relationship. Being responsive to donor requirements is also essential and creates a further and different set of obligations.
However, an unintended consequence of such requirements is that only large, Western aid agencies can manage the risks of transferring funds into conflict zones. Reduced access to funds has a negative impact on local humanitarian and development organisations in crisis-affected countries. These are the same organisations that need to be supported to grow, to meet the sector’s aim of increasing localisation.
- The prejudice faced by Muslim organisations puts lives at risk
One of the advantages of Muslim charitable organisations is the ability to reach certain conflict zones not easily accessible to others. Non-Muslim and secular agencies also rely on Muslim partners to deliver aid within conflict zones in Muslim-majority countries.
Unfortunately, increasing prejudice and stereotyping directed at Muslims, and charities that source donations from Muslim populations, is very evident. In fact, our experience is borne out by research done by Dr Gordon and colleagues from the LSE on "The impact of bank de-risking on the humanitarian response to the Syrian crisis". The much higher levels of scrutiny applied to Muslim charities severely constrains their ability to operate, threatening the lives of people in need.
- Greater regulatory and financial alignment is underway through engagement and dialogue cross-sectorally
To address the impact of counter-terrorism legislation, sanctions and other regulatory or licensing regimes, the government has established a multi-stakeholder working group on INGOs’ operations in high risk jurisdictions. This group comprises of representatives from three sectors – government and regulators, the banking sector, and INGOs. IRW is pleased to be part of and contribute to this very positive dialogue.
In conclusion, we owe it to all those devastated by conflict to push for coherence, consistency and clarity in how we facilitate our work in conflict zones. IRW is encouraged by the progress so far, but we all must redouble our call for action on this critical issue.