The West Papua Advocacy Team says ordinary Papuans stand to lose considerable benefits after another leading NGO was banned from working in Indonesia's easternmost region.
Jakarta has refused to renew the agreement under which the Dutch development agency Cordaid has been operating in Papua for over three decades.
Cordaid programmes in Papua have focussed on social and economic development for the poor.
The government has voiced suspicion that Cordaid is supporting Papuan separatism although the agency denies this.
The Advocacy Team's Ed McWilliams says Cordaid's microfinancing programmes have helped large numbers of grassroots Papuan organisations.
"There's no indcation that the Papuan government had anything to say in this decision. And of course it impacts the people of Papua. So once again, I think it's an example of decisions being taken in Jakarta without any consultation with Papuan officials or civil society."
Ed McWilliams
