NGO LEGISLATION
THE PROPOSED LAW’S REACH
There’s still time to improve the planned legislation – Dr. Jehan Perera
Recently. the government released a draft law with regard to the registration and supervision of nongovernmental organisations (NGOs). Though this proposed legislation may appear to be an issue that concerns only NGOs, it actually concerns every citizen who values the freedom to organise, support social causes and contribute to national development independently of the government.
The government has justified the proposed law as necessary to meet the requirements of the Financial Action Task Force (FATF), which is the international body that combats terrorist financing and money laundering.
Financial fraud, terrorist financing and money laundering must be prevented, and legitimate organisations should be transparent about their finances and accountable for the funds they receive. Most NGOs already meet these standards through annual audits and stringent donor reporting requirements.
But the problem is that the draft law goes much further than what FATF requires.
Instead of targeting financial crime, it creates a framework that enables extensive government supervision of a wide range of nonprofit activities. It has been drafted in a manner that covers not only traditional NGOs but also trusts, societies, associations, microfinance institutions and many other nonprofit entities, including enterprises already registered under other laws if they are receiving foreign funding.
Companies that undertake corporate social responsibility (CSR) programmes will also come within the law’s reach. If an organisation builds schools, supports environmental conservation, funds community development or provides scholarships, those activities could be subject to supervision by the proposed competent authority.
This should concern the business community since CSR has become an integral part of responsible business practices.
Companies increasingly invest in education, environmental protection, healthcare and community development because they recognise their wider responsibility to society – not because the government requires them to do so. Subjecting these activities to another layer of government control risks discouraging initiative and innovation.
The concern is not with registration itself as many democratic countries require NGOs to register with a designated authority. While a single registration system may improve transparency, what’s concerning are government actions after registration.
Under the proposed law, the competent authority appointed by the minister will have extensive powers to demand information, inspect premises, monitor projects, issue directions, suspend organisations and deregister them.
And since businesses would require periodic renewal of their registration, this may create uncertainty about long-term planning.
Most objectionable is the requirement that NGOs should align with policies of the government. Unlike legislation, policies change. Those who aren’t in government may propose and advocate such changes. They may be in the opposition, or in NGOs or in business. A vibrant economy depends not only on sound financial policies but on strong independent institutions too.
Chambers of commerce, professional bodies, universities, research institutes, charities and community organisations all contribute towards ideas, innovation and constructive criticism. A society in which independent organisations aren’t free to express their opinions is ultimately less dynamic, less innovative and less attractive to investors.
Currently, Sri Lanka is working hard to rebuild confidence after years of economic crises. It seeks foreign investments, export markets and continued access to the EU’s GSP Plus tariff concession, which is linked to democratic governance and fundamental rights.
Therefore, legislation that appears to narrow civic space risks raising unnecessary questions about the country’s democratic directionat precisely the moment it is seeking to strengthen international confidence.
The government still has an opportunity to improve the draft NGO law. Its objective should be a law that targets financial crime while protecting the constitutional freedoms of association and expression.
And as President Anura Kumara Dissanayake has repeatedly spoken about democratic renewal, clean governance and social justice, the draft legislation should reflect that vision.
Most civil society organisations welcome the government’s commitment to tackling corruption, improving accountability and creating a more equitable society. They aren’t resisting financial regulation; they’re only hoping that it doesn’t eventually become a tool for political control.
A confident democratic government doesn’t need to supervise every independent initiative in society. It benefits from citizens, businesses and civil society organisations working alongside it, not under it.
The freedoms protected for NGOs are the same freedoms that will protect businesses, philanthropy and every citizen who wishes to contribute independently to the country’s future.
