Clean­ing up the NGO sec­tor

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The clear­ance of ‘The Reg­u­la­tion of For­eign Con­tri­bu­tion Bill 2012’ by the Se­nate Stand­ing Com­mit­tee on Fi­nance is be­ing counted as a sig­nif­i­cant mea­sure to deal with cor­rup­tion among NGOS. There are more than 100,000 non-gov­ern­men­tal or­ga­ni­za­tions (NGOS) cur­rently op­er­at­ing in Pak­istan, with 17 agen­cies to reg­is­ter them un­der 12 dif­fer­ent laws. How­ever, no one has any idea, how much funds they gen­er­ate and spend, what are their sources of do­na­tions and what ob­jec­tives they are able to achieve.

Ac­cord­ing to Se­na­tor Tariq Azeem, the gov­ern­ment does not know how many of these NGOS are in fact reg­is­tered and how many are work­ing with­out any le­gal cover, though many of them have been found work­ing against public and na­tional in­ter­est in the re­cent times.

The United Na­tions had been ad­vis­ing the gov­ern­ment about the need for ac­count­abil­ity and trans­parency in the NGO sec­tor, ar­gu­ing that “the cor­rup­tion in Pak­istani so­ci­ety is ram­pant in the NGO and com­mer­cial sec­tor as well. There is also a need to crit­i­cally ex­am­ine the short-cuts that donors have of­ten taken to be able to say to their head­quar­ters that they have ac­tu­ally dis­bursed the re­quired funds.”

The Na­tional Coun­cil of So­cial Wel­fare, an um­brella or­gan­i­sa­tion of the fed­eral gov­ern­ment, says: “In Pak­istan, there is no law which reg­u­lates the for­eign fund­ing to NGOS con­trary to the good gov­er­nance prac­tices in other coun­tries. This has re­sulted in giv­ing birth to NGOS which ad­vance the in­ter­ests of the donors and in cer­tain cases they may also work against vi­tal in­ter­est of the coun­try.

It said, some for­eign NGOS sign mem­o­ran­dum of un­der­stand­ing with the Eco­nomic Af­fairs Di­vi­sion be­fore the start of ac­tiv­i­ties but once the MOU is signed, the EAD has no in­sti­tu­tion­al­ized con­tact with them, pro­vid­ing them am­ple space to op­er­ate the way they like, with­out any check and bal­ance from any quar­ter.

In most cases, the ad­min­is­tra­tive ex­penses of the NGO go be­yond 80 per­cent while re­main­ing funds go for the ac­tiv­i­ties for which do­na­tions were made, ob­vi­ously with lit­tle out­come. In some cases, the phys­i­cal ver­i­fi­ca­tion of fund uti­liza­tion is thwarted by lo­cal rep­re­sen­ta­tives of for­eign NGOS with threats and other dis­cour­ag­ing tac­tics.

Peo­ple as­so­ci­ated with NGOS ex­hibit wealth in their life­styles, rid­ing in lux­u­ri­ous ve­hi­cles and hold­ing func­tions and din­ing at five-star ho­tels, brib­ing pol­icy mak­ers and par­lia­men­tar­i­ans di­rectly and in­di­rectly by ar­rang­ing for them vis­its abroad but there is no public scru­tiny about their ac­tiv­i­ties, fund­ing and ob­jec­tives even though some of their donors might be well in­ten­tioned.

The cor­rup­tion and mis­use of donor funds had be­come such a se­ri­ous is­sue that USAID had to set up its own sys­tem and launch a helpline for com­plaints against mis­use of its funds and point out frauds. That meant that de­spite mon­i­tor­ing from out­side, the reg­u­la­tion of the ac­tiv­i­ties of NGOS was nec­es­sary to know about the im­pact and re­sults that are gen­er­ally now seen on ground. Some Euro­pean coun­tries have had also pointed out prob­lems with funds uti­liza­tion in post-earth­quake and flood re­ha­bil­i­ta­tion process.

Un­der the ex­ist­ing en­vi­ron­ment, the NGOS are not re­quired to de­clare their ac­counts, do­na­tions and gifts they re­ceive from abroad and stay away from public scru­tiny. Even the for­eign fund­ing agen­cies are wor­ried about uti­liza­tion of their re­sources.

The Reg­u­la­tion of For­eign Con­tri­bu­tion Bill 2012 seeks to cap ad­min­is­tra­tive spend­ing at 20 per­cent of to­tal even though the Min­istry of For­eign Af­fairs had ad­vised re­strict­ing ad­min­is­tra­tive ex­pen­di­tures at 14 per­cent in line with in­ter­na­tional prac­tices. The law seeks 80 per­cent of funds for op­er­a­tional pur­pose de­clared at the time of re­ceiv­ing do­na­tions.

The pro­posed law also seeks penal­ties in the form of up to three-years im­pris­on­ment and fine equiv­a­lent to the mar­ket value of fraud­u­lently ob­tained for­eign fund­ing, diver­sion for some other pur­pose and calls for sub­mis­sion of an­nual ac­counts to the Se­cu­ri­ties and Ex­change Com­mis­sion of Pak­istan that would be the sin­gle agency — in­stead of 17 at present — to reg­is­ter non-gov­ern­men­tal or­gan­i­sa­tions.

Un­der the law, the gov­ern­ment and the SECP will have the pow­ers to call for any in­for­ma­tion or doc­u­ment, in­spect and au­dit ac­counts and ini­ti­ate pro­ceed­ings against any NGO or per­son found in­volved in vi­o­lat­ing law of Pak­istan or against the sovereignty, in­tegrity, se­cu­rity, strate­gic, sci­en­tific and eco­nomic in­ter­ests of the coun­try.

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