Non-Government Organization (Management) Bill, 2070

 In the last two decades, Non- Governmental Organizations have gained strength and prominence in Nepal. The sheer number of Non- Governmental Organizations (NGOs) has rapidly increased due to the emergence of a more favorable environment following the dawn of multi-party democracy in 1990. However, the broad concept of civil society and non-governmental organization is not yet well understood by most Nepalese, including civil society members themselves.

Nepal's commitment to human rights is well reflected in an interim constitution and other policy documents and international treaties that repeatedly affirm the intention to provide Nepali people an open and free environment to enjoy their rights, including the freedoms of assembly, association, information and expression. At the same time, however, NGOs working in different spheres often criticize the existing legal framework for carrying forward the controlling legacy from the previous royal regime. Moreover, NGOs still suspect that the government is trying to restrict NGO space in one way or another. The statements and remarks of government officials and political leaders often lend credence to such suspicions.

Constitutional Framework

The Interim Constitution of Nepal came into force on January 15, 2007. Relevant constitutional provisions include the following:

• Articles 12, 13, 16, 24, 25, 26, 29 and 31, which relate to various individual freedoms, including civil rights (right to life, dignity, equality and freedom, etc.) and political rights (rights to association, expression and exchange of ideas, participation in the state system, etc.)

• Articles 12, 15, 27 and 28, which outline economic rights (rights relating to opportunity for proper employment, freedom from hunger, right to select one's own occupation, etc.)

• Articles 12, 13, 18, 19 and 30, which guarantee social rights (rights to education, health and safety, medical facilities, maternal and infant health care, safety and security of children, etc.)

• Article 23, which guarantees cultural rights (right to participate in religious cultural and traditional practices without hurting the sentiment and dignity of others.

Part 3, Article 12 of the Interim Constitution of Nepal specifically guarantees a set of freedoms for an enabling environment for civil society, including:

• Freedom of opinion and expression;

• Freedom to assemble peacefully and without arms;

• Freedom to form political parties;

• Freedom to form unions and associations;

• Freedom to move and reside in any part of Nepal; and

• Freedom to practice any profession, carry on any occupation, industry, or trade.

Part 4 of the Interim Constitution obliges the State "[t]o implement international treaties and agreements effectively, to which the State is a party." Part 4, Section 34 outlines "Directive Principles of the State" as follows:

•(1) It shall be the chief objective of the State to promote conditions of welfare on the basis of the principles of an open society, by establishing a just system in all aspects of national life, including social, economic, and political life, while at the same time protecting the lives, property, equality and liberty of the people. •(2) It shall be the objective of the State to maintain conditions suitable to the enjoyment of the benefits of democracy through maximum participation of the people in the governance of the country by means of self-governance tribal, linguistic, cultural or regional, and to promote the general welfare by making provisions for the protection and promotion of human rights, by maintaining tranquility and order in the society.

Part 4, Section 35 of the Interim Constitution under "State Policies" suggests the need to enact a legal framework that facilitates NGOs: "The State shall pursue a special policy to regulate the operation and management of public and non-governmental organizations established in the country."

The Interim Constitution envisages popular participation in governance and democratic exercise. Part 17, Section 139 of the Interim Constitution includes the "Provision for Local Self Governance," which states: Arrangements shall be made to setup local self governance bodies to ensure the people's exercise of their sovereignty by creating a congenial atmosphere and thereby ensuring maximum people's participation in the country's governance, and also by providing services to the people at the local level and for the institutional development of democracy, based on the principle of decentralization and devolution of power.

The ongoing constitution making process in the Constitution Assembly since May 2008 is working to draft the constitution in line with the interim constitution, comprehensive peace accord signed in November 2006 and peoples aspirations reflected through inputs and suggestions directly collected by CA members in 2009/10. The thematic reports made public by the different 11 subject committees under the CA have also given enough and independent room for CSOs as a development actor in new Nepal.

National Laws and Regulations Affecting Sector Relevant national-level laws and regulations affecting civil society include:

• The National Directorate Act (1961) (Rastriya Nirdeshan Ain 2018) aims to ensure that professional organizations and groups use their strength for their development, as well as nation building, with pre-approval and consent from the government. CSOs registered under this Act include the Nepal Bar Association, Nepal Press Council, Teachers Union of Nepal, Nepal Federation of Journalist Associations and the NGO Federation of Nepal. Unless formed by the government itself, any group wishing to register under this Act must apply and receive approval from the Cabinet through the relevant line ministry or based on law. For instance, the formation of a single Teachers Union was envisioned in the Education Act. • The Association Registration Act (1977) is the primary framework law for CSOs in Nepal. Registration under the Association Registration Act is required for an organization to function legally. Under the Act, an "association" means an association, institution, club, circle, council, study centre etc. established for the purpose of developing and extending social, religious, literary, cultural, scientific, educational, intellectual, philosophical, physical, economical, vocational and philanthropic activities, and also includes friendship associations.

• The Social Welfare Act (1992) governs the provision of “social welfare” activity and “social service” activity. To receive foreign funding and implement programs with foreign support, local CSOs must receive advance approval from the Social Welfare Council (SWC.

• The Local Self-Governance Act (1999) encourages local government engagement with CSOs in development work. The Act envisions that local governments will facilitate NGOs in the identification, formulation, approval, operation, supervision, and evaluation of the development program. The Act also encourages the private sector to participate in local self-governance to provide basic services for sustainable development.

• The Company Act (2006) (paragraph 19, articles 166 and 167) provides the legal basis to register not-for-profit business organizations and consultancy companies. Registration requires at least five citizens coming together to promote any profession, business, intellectual, educational, social, charity or welfare activities, with a non-profit intent.

On the other hand, there is a lot of misconception regarding the role of the NGOs in Nepalese society. Media, in recent times, have described NGOs/ INGOs as dollar farming agencies. They portray them negatively. However, this is not the reality, as INGOs and NGOs have been making a lot of difference in the rural parts of Nepal, providing the poor and marginalized people with basic services like health, drinking water, sanitation, energy, disaster training, agriculture, environment, education, and livelihood programs. In light of this, the present NGO (Organization) Bill, 2070 aims to regulate the NGOs and provides adequate functioning guidelines.

The present NGO Bill aims to repeal the following statutes: National Guidance Act, 2018 and Association Registration Act, 2034. There are two objective of the Bill: i) the Bill is drafted to institutionalize, regulate, organize all NGOs engaged in social development and nation building fields and ii) to make these NGOs transparent, accountable and responsible management. Moreover, provisions of the Bill are positive. However, the Bill is highly regulative in terms of conducting day to day administrative work which will have a discouraging effect in the NGO sector. There is widespread belief that the NGO sector is unorganized and some are even involved in duping donors with various forms of corruption however; the provisions of the Bill fails to make the NGO sector accountable, responsible and transparent as reflected in its preamble. Giving Chief District Officer (CDO) the jurisdiction to regulate and enforce the provisions of the law is logistically unviable as they are already overburdened with various responsibilities. Meanwhile, the United Nations Office of the High Commissioner for Human Rights (OHCHR) had also expressed concerns over the government’s intention to introduce the Code of Conduct for NGOs under the amended Social Welfare Act saying it could be used to undermine the independence of the NGOs.

It is necessary to bring to attention that even though the registration and renewal of the NGOs as per law was to be done at the District Administration Office, however, the responsibilities of doing so was discharged by Social Welfare Council (SWC). Thus, experts have advocated strengthening and empowering SWC instead of CDO as SWC has the resources, experience and was formed for handling matters governing NGOs. The present Bill does not mention anything about SWC eradicating it in the process. Also, it has been criticized that the Government neither has the resources nor the capacity to effectively implement the provisions of the Bill. The SWC should be established as "One Door Channel" to manage all matters concerning NGOs.

Further, Section 2 sub-sections (d), (e) and (f) of the Bill provides definition of Organization, Society and Trust. The definition provided for the trust also includes the trust set up for individual. To bring private trust under the purview of the Bill will negatively affect the working and functioning of the private trusts. Also, the Bill should accommodate the working calendar of NGOs. Submitting report as per the NGOs calendar will aid in the process otherwise conducting auditing mid-year serves no useful and meaningful purpose. Further, experts have opined that conducting Bi-annual and a final annual financial audit reports under Section 10 of the Bill merely burdens NGOs in terms of finance, time and resources. Moreover, the provision wherein obtaining recommendation from CDO is a prerequisite document for registration of a NGO has been highly criticized. First and foremost, CDO is not in a position to analyze and issue recommendations to all the NGOs. Such recommendations must be issued by concerned departments. Furthermore, experts have criticized the Bill for not having a provision for appeal against non-issuance or refusal to issue recommendation letter.

Section 11 of the Bill stipulates that no more than 25% of the donation money can be allocated for administrative purposes and with adherence to inclusive policy while recruiting the staffs. However, inviting application for recruitment via publication of advertisement in a national daily is putting huge financial burden on small NGOs. Smaller NGOs do not have finance to publish such advertisement as a normal advertisement costs more than rupees forty thousand which, for most small organizations, might be their annual budget.

In addition, setting up various strata to obtain recommendations for registration will dissuade people from running genuine NGO with social and development.

Section 12 of the Bill stated that submitting tri-annual progress report to the concerned department, whom many believe does not have the capacity to read one annual report, and mandatory signing of Memorandum of Understanding with concerned local body is putting unnecessary burden on NGOs working on smaller scale and on a tight budget. Section 19 read with Section 9 of the Bill undermines the autonomy of the NGOs as the concerned Government body has the power to issue directions in administrative process.

Experts also expressed grave concern as the present Bill sets to destroy the NGO movement. The level of restriction and approvals required to run a NGO prevents an Individual from doing so. Instead, NGO will be turned into a quasi governmental body. The present Bill is maliciously drafted to put rein on NGO sector for questioning the government and the Constituent Assembly for its inability to promulgate a much awaited Constitution. The Bill, which is of a national importance, is being introduced into the Constituent Assembly without holding discussions with various stakeholders at grass-root level.

Also, the general categorization of NGOs is absurd and classification based on area/nature of operation should be done and necessary rules and regulation to govern them must be contemplated. In addition, level of control and restriction the Bill seeks to impose on NGOs would have been justified if the NGO was funded by the Government. But the government neither funds nor assists NGOs in their operation. 'Policy contestation' is one of the important function of NGOs. It is NGOs responsibility to contest implementation government policy regarding its correctness.

In addition, the Bill gives the illusion of conducive working environment for NGOs but in reality it imposes high control and restraints on NGOs. NGOs have been providing assistance to people where government has failed to deliver. The political parties which considered NGOs as intrusive bodies have changed their mind and view NGOs as an extended arm of the state. The political parties are considering opening NGOs to assist party achieving their goals and objectives.