nettime: regulating NGOs

[Geert Lovink <geert@xs4all.nl>]

A while ago we posted a critique on the role of NGOs, written by Paul
Stubbs. Here is another, more academic one. A general analysis of NGOs
seems to be necessary if want to come up with a critique on specific
topics, like the role of APC and Soros in the building up of
independant media. It it not enough to complain about their alleged power
and bureaucracy (geert).

For more information:

http://www.qeh.ox.ac.uk/rsp/rpn.htm
or
http://www.ruu.nl/ercomer/wwwvl/wwwvlmer.html

------------------------------------------

Regulating the non-governmental sector: the dilemma
by Eddie AdiinYaansah and Barbara Harrell-Bond


NGOs are believed to be a voice of `civil society'. One 
definition of civil society is that it comprises the `complex network of
autonomous institutions sustained by a "civil" code
of conduct, ... that are distinct from, yet maintain effective
ties with the State'. What constitutes `effective ties with the
State' is the dilemma.
The introduction of regulatory frameworks is a relatively
new activity in many parts of the world. This is a very preliminary
discussion of some of the issues, comparisons of legislation in
Croatia, Kenya, Rwanda and Uganda, and a brief exposition of such
legislation in the UK. The RSP will be producing a more comprehensive
report of its current research on this subject. Your input (copies
of legislation, reports, discussion papers) on this enormously
complicated and contentious field will be greatly appreciated.
With the much greater experience of NGOs in Latin America, our
new Spanish readers are especially encouraged to contribute.

As RPN readers are well aware, NGOs relate in varying degrees
of opposition to, or in concordance with, their government. Because
of the diversity of NGO constituencies, sizes, strategies, structure,
ideologies, specialisations, sources of funding, agendas and power,
it is not possible to describe an average NGO. They may be religious,
secular or affiliated with political groups; be funded by businesses,
foundations, private citizens and governments; specialise in a
technical field or operate for multiple purposes.

Two major factors have encouraged the explosion of non-governmental
activity throughout the world of underdevelopment and in
those regions where states are described as in transition. One factor
is the greater amounts of funding available to NGOs. Increasingly,
donors are using NGOs as conduits for assistance rather than giving
bilaterally to governments. Secondly, with the increasing emphasis
on democratisation and privatisation has come the growth of the
voluntary non-governmental sector. This social phenomenon is being
actively promoted by external organisations, for example, the
UK Charities Aid Foundation, the European Foundation Centre, and
many foundations and other donors.

The roles of NGOs

In a democratic society, NGOs may function to monitor the 
effectiveness of governments in meeting the needs of disempowered sections
of the population. Ideally, the membership of an NGO comprises members
of those groups whose interests are at stake. More often, however,
elites assume the responsibility to represent their interests.
Given the dynamic of society and the failures of all governments
to meet all the needs of their constituents needs which are 
constantly being defined and redefined playing this critical role in a
healthy society which promotes debate and opposition is a vital and an
ongoing dialectic process. Campaigning, lobbying and advocacy
are the normal methods used to leverage public opinion and force
governmental change.

In many cases, the success of such activities can be measured
by the extent to which governments recognise the needs identified
and institutionalise new public services to meet them, or improve
those found wanting. For example, the identification of the unmet
needs of the dying led to the hospice movement being incorporated
into government health services in some western countries.

The other side of the normal `tension' which exists between 
governments and NGOs arises from the need for governments to regulate
their activities. Ideally, the services which NGOs provide (which 
governments have neglected or have been unable to meet) would be carried
out in a highly professional manner. Too often this is far from reality.
Therefore standards must be introduced as well as mechanisms for
monitoring and evaluating NGO work. Since funds are often raised
from voluntary contributions from members of the public, the 
government also has a duty to ensure the financial probity of NGOs.

Bureaucracies established to ensure that standards are met are
usually too overburdened to carry out their task effectively.
Often, evaluations are undertaken only when the problems have
been exposed by the media or when a government has received a
number of complaints from individuals. Moreover, unless an 
investigation of an NGO's activities leads to criminal charges, the
implementation of any evaluation's recommendations depends on the concern
of the organisation's trustees; the UK government itself does not
have the machinery to impose them.

There are some NGOs which organise themselves specifically to
address human rights issues. All governments tend to be threatened
by activities which expose their failures to uphold these rights,
especially those which are enshrined in international human rights
conventions to which they are party. Very few human rights NGOs
are regarded by their governments as nonpartisan, nonsectarian
and nonpolitical. More to the point, the most scrupulous, nonpartisan
human rights organisation faces dangers in an undemocratic society
when its findings are taken up by groups and used in campaigns
to unseat the ruling government. Perceiving its power to be 
threatened by such NGOs, rather than introducing the needed reforms, such
governments are more likely to look for legal or illegal means
to suppress them.

Creating an environment for fostering NGO activity

In the first instance, for the development of the NGO sector,
there is a need for `political space', that is, an environment
in which voluntary associations can organise themselves without
unnecessary obstruction from the state. Such political space also
requires a government that is using its power to facilitate 
development and encourage popular participation, rather than having as its
primary concern the maintenance of its power.

Secondly, since voluntary activities require funding, it is necessary
for the state to provide the `fiscal environment' which promotes
charitable giving. For example, in the UK, a variety of arrangements
have been made which provide tax relief on contributions to such
organisations. In addition, to name but a few methods which are
used, the non-governmental sector may advertise on television
and in the press, organise collections from the public and promote
the funding of their activities through mass mailings.

The new legislation enacted by the Rwandese government (1994)
prohibits foreign NGOs from raising funds in Rwanda, apparently
in order to preserve local sources for their own national NGOs.
It is interesting, however, to reflect on how photographs and
films of the victims and news reports describing events are the
very foundation of foreign NGOs' fundraising campaigns in their
own countries. Collecting such materials are activities which
are necessarily carried out in the country affected by a disaster.
Regulating the non-governmental sector

If Britain's legislation is taken as an example (as Uganda has
done), the reform of legislation to regulate the non-governmental
sector must be a continuous process, which began with the Elizabethan
legislation of 1601 and which has been followed by myriads of
reforms and amendments. The scope and scale of UK charity law
is indeed daunting. Over the years, the reform of legislation
has been prompted by abusive practices of organisations, especially
in the field of fundraising from the public for purposes which
were found not to be charitable.

The administration of charities is now governed by the Charities
Acts of 1992 and 1993. The 1992 Act has been overtaken by the
1993 Charities Act, a consolidation Act which replaces the Charities
Acts of 1960, 1985 and parts of the Charities Act of 1992. These
laws are supplemented by a welter of subsidiary legislation, plus
European Community directives and regulations.

To register as a charity in the UK, one has the choice of either
registering as an `'unincorporated' or a `corporated' organisation.
Those falling under corporate organisations are companies, industrial
provident societies or royal charter bodies. On the other hand,
unincorporated associations include societies, clubs, trusts or
friendly societies. The main difference between corporate or 
unincorporated organisations is that the former has a legal existence
independent of its members while the latter has no separate legal
existence apart from its members. For example, if an unincorporated 
organisation acquires property for purposes of its activities, the
property can only be held on behalf of its members, usually its trustees.

The concept of a Trust is a very old English concept, regulated
largely by judgemade law, which has been used over the centuries
to establish and regulate formal relationships between three parties:
the donor (first party) and the trustee(s) who hold the property
for the benefit of the third party (the beneficiary).

The main advantages of registering as a charity under such laws
are the tax benefits which accrue to the organisation as well
as to those who give the money. Thus the Inland Revenue also has
an interest in overseeing charitable organisations and during
the process of vetting an application for charitable status, the
Inland Revenue is automatically consulted. Since the Inland Revenue
stands to lose tax each time an organisation attempts to register
as a charity, there has been a tendency to introduce stricter
criteria. Sometimes, even after an organisation has been registered,
the Inland Revenue may still refuse tax relief if the income of
the charity is considered not to have been applied to charitable
purposes. Since the Charity Commissioners can register an 
organisation without the agreement of Inland Revenue, the latter has the
option of challenging the registration in the High Court.

Generally, if the Commissioners find against an application, there
is a right of appeal to the Chancery Division of the High Court,
then to the Court of Appeal and, finally, with consent, to the
House of Lords.

To be registered as a charity, an organisation will need to show
that its purposes and objectives fall entirely under one or more
of four headings: the relief of poverty, the advancement of 
education, the promotion of religion, and `other purposes beneficial to
the community in a way recognised as charitable'. The `objects clause'
is the foundation stone of a charity which can do nothing lawfully
which does not fall entirely within its limits.

In applying for registration, the Charity Commissioners will look
not only at an organisation's objectives in relation to the `objects
clause' but also at the answers to a series of questions aimed
at eliciting the organisation's plans. Sometimes there can be
difficulties with registration because the Commissioners are not
satisfied with the wording of the organisation's draft constitution
which has to accompany the application, because they are not 
convinced that the purposes of the organisation are actually `charitable'.

Ironically, despite the long existence of charity law in the UK,
the concept what constitutes charity has never been statutorily
defined. Activities which are construed as `political' by the
Charities Commissioners can cause an organisation to lose its
charitable status. For example, Oxfam was challenged by the 
Commissioners for its campaigning against apartheid in South Africa. Oxfam
argued that apartheid was a cause of poverty and therefore its lobbying
was a lawful charitable activity. The Commissioners argued that
antiapartheid campaigning was plainly political and to protect
its charitable status, Oxfam was forced to withdraw its campaigning
literature on this topic.

Concerns which have led governments to introduce regulation

As was noted earlier, from reading the laws which have been 
introduced in the four countries with which we have been mainly concerned
1989 (Uganda), 1990 (Kenya), 1994 (Rwanda) and the 1994 draft
legislation of the Republic of Croatia it would appear that one
impetus for introducing legislation has arisen because of concerns
over the behaviour of foreign NGOs. Although, for example, British
law may prohibit an NGO from engaging in political activities,
it has no control over what a British agency does abroad except
in so far as it may act through the application of constitutional
conventions where an agency is seen to be compromising British
foreign relations.

As one government official wrote from Croatia, there are some
790 `both local and foreign active NGOs ...It is a fact that foreign
NGOs oppose any attempt to regulate their activities... that the
government [which]... wants to do such could be accused of 
obstruction of democratic institutions of civilian society. In such
situations the government ought to be determined because democracy still
does not mean chaos'. Although NGOs are always accountable 
financially to donors, there are no legal means to regulate their
activities abroad. (Some governments have threatened NGOs' tax status when
they have criticised the foreign policy of the donor government.)
If problems with foreign NGOs have been the primary motivation
for introducing legislation, it behoves foreign NGOs to take note;
it is likely to be the national NGO movements which will suffer
the greatest from attempts by governments to introduce draconian
restrictions on this sector.

Registration and coordination

Governments which depend on foreign aid have good reason to be
concerned about the rapid proliferation of NGO activity in their
countries, especially under emergency conditions. Whether foreign
or national, NGOs today control significant proportions of the
resources available through international aid.

In many countries there has been no method for registering either
foreign or local NGOs. Often governments are not informed of what
each NGO is doing, whether they are actually carrying out their
stated objectives and whether these objectives fit government
policy, their own overall development plans, or actually address
priority needs. Croatians, for example, have not always been 
convinced of the need for the large number of foreign NGOs which are 
intervening on behalf of persons deemed to be `traumatised' or those who
are victims of rape. Rwanda's law goes much further than any of the
others by requiring NGOs to demonstrate the involvement of the
beneficiary community in defining its own needs and in planning
the project before the NGO can be registered. It also requires
that the impact of projects be evaluated and approved by the 
responsible ministry before the NGO's registration can be extended.

Sometimes governments are not even made officially aware of the
presence of a foreign NGO. Although the legislation in the four
countries provides for the registration of NGOs, surprisingly,
all have included provision for exemptions. In both Rwanda and
Uganda there is discretion to exempt an NGO from registration
in emergency situations. In Kenya, this power is vested in the
Minister who may `by notice in the Gazette, exempt such 
nongovernmental organisations from registration as he may determine'. Such 
discretionary powers leave space for abuse. Where not exempted, both Kenya
and Uganda criminalise the activities of an NGO found in breach of
the rules of registration. Staff can be fined and face stiff terms
of imprisonment. (In Kenya, disqualification can lead to a sentence
of ten years.) However, in the case of an expatriate, the Minister
may recommend to the Ministry in charge of immigration that the
nonKenyan be expelled.

Although all organisations providing humanitarian relief are to
be registered, our reading of Croatia's draft legislation suggests
that it would effectively exempt the majority of organisations
from registration and regulation. Exemptions include `foreign
legal persons, religious communities, and domestic legal persons',
suggesting that the responsible ministry or government department
will have no means of establishing whether these exempted 
organisations are carrying out their objectives in Croatia.

Governments are also concerned about their inability to coordinate
NGO activity in order to avoid duplication, to ensure that NGO
work fits in with the government's own development plan or emergency
policies and to ensure the judicious use of funds to meet the
most urgent needs. Both Uganda and Kenya have established NGO
Boards whereas Rwanda has created a coordinating Bureau. In Kenya,
the legislation met with stiff resistance from the NGO sector
which resulted in their proposing alternative legislation to the
government. The drafting group included both foreign and Kenyan
NGOs. While the Kenyan government has not totally bowed to the
NGOs' alternative proposal, it has introduced some amendments
to its NGO Coordination Act 1990.

Sources of funding and accounting

Given that foreign NGOs are major conduits for international 
assistance, governments feel they have a right to know the sources and
amounts of money which are being brought into the country and the purposes
to which they are being put. In Britain, registered charities
are required to provide the Charities Commissioners with annual
audited accounts. Companies registered as charities are subject
to financial scrutiny under both the Companies Act and charities
legislation.

Many foreign NGOs depend on government sources to support their
activities abroad. It is known that some donor governments use
NGOs to transfer resources actively to support opposition groups
(in the case of Renamo, even to transfer arms).

NGOs are the first to demand `transparency' of governments. However,
the suggestion that they should be similarly open about sources
and amounts of their income and expenditures has been almost 
unanimously regarded as an unacceptable intrusion.

Foreign NGOs enjoy significant financial advantages over national
organisations. Legislation provides for customs exemptions to
foreign NGOs, their staff and families; no corresponding benefits
are extended to local NGOs in Kenya, Rwanda and Uganda.

Qualifications of expatriate staff

Since they are not in control of recruiting foreign NGO staff
and many governments have had reasons to be concerned about the
professional claims of these organisations, both Uganda and Rwanda
are now demanding to see evidence of the qualifications of 
expatriates.
However, it is unclear how such evidence can be verified. (In
the case of one UK NGO planning to work in the Philippines, the
embassy in London took responsibility for vetting the NGO before
its staff were provided with entry visas.)

The staffing of NGOs

Normally, foreign NGOs employ local staff but often neglect to
observe local labour legislation. Some do not even provide them
with contracts laying out conditions of service or job descriptions.
An issue which is of great concern, but not adequately addressed
by any of the laws thus far surveyed, is the question of salary
scales.
In recognition of this problem, Uganda has attempted to introduce
regulations on these matters but their ambiguity reflects what
a controversial area this is. The section dealing with staffing
requirements reads: the organisation `shall ensure that any 
remuneration including salaries, allowances, fringe benefits and other
terms and conditions of service of the Uganda employees of the
organisation are reasonably comparable to those for the time being
prevailing in the employment market in Uganda or reasonably comparable to
those of their foreign counterparts'. The interposition of the
word `or' is very unfortunate. It gives the impression that a
foreign NGO can choose whether to pay a Ugandan employee (doing
the same work as the expatriate member of staff) those wages 
prevailing in the Ugandan employment market or pay according to the same
scale considered appropriate to an expatriate. It is unlikely,
given this option, that any NGO would opt for the higher salary
bill.

At the same time, while a foreign NGO may avoid paying local staff
on a par with its expatriates, nevertheless, most pay much more
than can be earned locally. It is well known that one of the major
forces which is weakening local institutions of governance is
the extreme disparity between salaries in the public and private
sector. For example, in Arua, Uganda, the office responsible for
producing medical statistics was operating efficiently until the
one trained official was employed by a foreign NGO as a registration
clerk in a refugee camp. He had been lured by a salary many times
higher than the government had been paying him. Since this officer
could not be replaced, medical statistics are no longer produced.

Another concern relating to the staffing of NGOs is that of 
encouraging foreign NGOs to give preference to employing nationals. Kenya
requires any registered NGO wishing to obtain entry permits for
expatriate employees to show that no nationals with comparable
skills are available or that such expatriates will contribute
towards the training of Kenyans. Rwanda requires NGOs to limit
stringently the numbers of expatriates employed and to indicate
the time frame within which suitable nationals can replace the
foreigners. Uganda simply requires a plan for replacing foreigners
with qualified Ugandans.

Another issue related to staffing is the unfair advantage which
expatriates have over local staff with regard to income tax. While
abroad, expatriates are normally exempt from income tax and they
are also exempted from paying tax in Croatia, Kenya, Rwanda and
Uganda. At the same time, all nationals working for NGOs in these
countries are liable to pay income tax and all NGOs are required
to withhold the tax of their local employees. (Pakistan is one
country where legislation does require expatriate NGO staff to
pay income tax but one former employee there states that his agency's
expatriate staff did not comply.)

Anti-social and criminal behaviour

Governments' concern about antisocial behaviour of expatriate
staff is also reflected in some legislation. For example, Uganda
requires a certificate of clearance on criminal record from the
applicant's country of origin. The scope of this requirement is
unclear. Does it mean that the applicant should never have had
a criminal record? Under the UK Rehabilitation of Offenders Act
1974, once a person's convictions have been spent, the person
is deemed no longer to have a criminal record.

Rwanda provides for criminal charges to be brought against the
staff of the organisation in the event that they are found to
be involved in `antistate or antisocial activities and/or acts
hostile to the welfare and security of Rwandan people'. The limits
and scope of these offences are not defined and appear so wide
as to encompass any activity from the minor (using prohibited
drugs?) to the very serious (importing arms?).

It might be assumed that expatriates guilty of breaches of either
the civil or criminal law should be dealt with under the appropriate
laws of the country in which the offences have been committed.
However, in practice, the tendency is simply to deport them. For
example, after the head of one foreign NGO was apprehended the
third time for dealing illegally in foreign exchange, rather than
being tried in the courts of Malawi, he was simply sent home.
While there may well be cases where governments introduce special
exchange rates aimed to exploit charitable funds coming into their
economies, it is equally worrying to hear of NGOs which make changing
their foreign currency on the black market a regular practice
the dubious justification being that with more money, one can
do more good.

The `agendas' of foreign NGOs

A major concern of governments which is reflected in legislation
is the question of the covert objectives or agendas which are
perceived to have negative political consequences or are in 
contradiction to the ruling party's national objectives.

As noted in the discussion of UK legislation, the purposes and
objectives of NGOs must be to relieve poverty, advance education,
promote religion or to be engaged in other activities which are
beneficial to the community. The laws of the four countries with
which this paper has been principally concerned reflect these
objectives. Rwanda defines an NGO as an organisation which is
nonpolitical, nongovernment, noprofit making and humanitarian.
It goes on to say that an NGO is also an organisation which uses
its own resources in its activities which `join in the national
effort to eliminate poverty and improve people's welfare'. (If
`own resources' refers to voluntary contributions from the public,
would this provision exclude NGOs who receive funds from government
sources?)

Despite references to prohibiting NGOs from having political 
connections or affiliations, Kenya's legislation is unclear. The focus is
on an NGO becoming affiliated to, or connected with, a foreign
organisation or group of a political nature established outside
Kenya without the prior written consent of the NGO Board. It leaves
the question of such political affiliations within Kenya untouched.
There is a surprising lack of reference in the Ugandan legislation
to NGOs being limited to `nonpolitical' activities. Croatia only
emphasises that foreign NGOs undertake the specific activities
which they have been approved to undertake. Its draft legislation,
however, distinguishes between religious organisations, educational
institutions and foundations which are covered by separate 
legislation.

Whatever prohibitions legislation might contain, many governments
are concerned about the hidden agendas of foreign NGOs. For example,
in the mid 1980s, Sudan threatened three foreign NGOs with expulsion
on the alleged grounds that one was actively proselytising Muslims
and the others of supporting the Sudanese People's Liberation
Army.

Conclusion

A major problem facing all governments is the lack of resources
to monitor and enforce legislation designed to regulate NGOs.
To enforce its new legislation, Rwanda, for example, would require
a very large staff of independent researchers to carry out impact
studies. It has also failed to include proper appeal mechanisms
and the requirement that a series of officials must approve 
applications for renewal of NGO registration leaves enormous space for
misuse and abuse on all sides. What can be drawn from this discussion
is that laws can never anticipate change nor encompass all dimensions
of an issue. As the British example demonstrates, NGO legislation
will require regular reform. If NGOs wish to act as a voice of
civil society, it will be incumbent on them to develop effective
ties with their own governments in order to meet each new challenge
as it arises.

Eddie AdiinYaansah: of Grays Inn, Barrister, and SocioLegal
Centre, Wolfson College, University of Oxford.
Dr Barbara Harrell-Bond: Director of Refugee Studies Programme
and anthropologist of law, University of Oxford.
Research funded by ESCOR/ODA.

References


1. Shils E `The Virtue of Civil Society', Government and Opposition,
1992.

Sources

1. Charity Commissioners `Accounting by Charities', Statement
of Recommended Practices (SORPS), 1 February 1995.
2. Chazan N `Liberalization, Governance and Political Space in
Africa' in Hyden G & M Brattan (eds) Governance and Politics
in Africa, 1992, Lynne Rienner, Boulder.
3. European Community `European Community Council Regulation'
COM(94)650 (in the field of employment creation and support to
small and micro enterprises in the Maghreb countries), Brussels,
(final), Brussels, 6 July 1993.
--
*  distributed via nettime-l : no commercial use without permission
*  <nettime> is a closed moderated mailinglist for net criticism,
*  collaborative text filtering and cultural politics of the nets
*  more info: majordomo@is.in-berlin.de and "info nettime" in the msg body
*  URL: http://www.desk.nl/~nettime/  contact: nettime-owner@is.in-berlin.de