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Draft Charities and Societies Proclamation
Implications for INGOs and Donors
Ø Prohibition of Activities
Ø Foreign charities (the definition of which applies to INGOs) are prohibited from taking part in several categories of activities:
Ø The advancement of citizenship or community development;
Ø The advancement of human and democratic rights, conflict resolution or reconciliation or the promotion of harmony or equality and diversity amongst nations, nationalities and peoples or different religious groups;
Ø The promotion of sustainable development of the nations, nationalities and peoples;
Ø The promotion of the efficiency of the justice and law enforcement services;
Ø If these categories are loosely interpreted they could include the full range of development programs implemented by INGOs;
Ø Certainly they are meant to include all donor support for democratization, human rights and conflict management that does not pass directly through government institutions, i.e. through the DIP, or that can be considered as long-term capacity building – for some donors these prohibitions could mean the complete closing down of democracy and governance activities;
Ø Registration Requirements
Ø Registration applications must include a declaration that the charity will spend more than 70% of its assets on charitable purposes – many INGOs are not able to achieve this balance of programmatic vs. administrative expenditures;
Ø Approval of the Charities Agency is required to establish branch offices – delays could affect an INGOs ability to rapidly respond to a humanitarian emergency;
Ø Unlawful charities and societies are defined as those not registered within the prescribed time limits. An INGO that provides support to an ad hoc group that is not registered will be subject to prescribed administrative or criminal penalties as an accomplice – prohibited support includes allowing an unlawful group to hold a meeting on the INGO premises, procuring subscription or aid for it and disseminating information about the group;
Ø License certificates must be renewed every year after confirmation that audit and performance reports are complete and accurate which includes verification that 70% of costs were for its constitutive purpose (unless good cause can be demonstrated) – INGOs currently endure long waits to complete initial registration processes and it can be expected that these will be multiplied as the Agency begins to apply this rule;
Ø NB that the Ministry of Foreign affairs has stated that to qualify for registration as an NGO, an INGO must demonstrate that it will make 2,000,000 ETB in additional resources available for its activities in Ethiopia, above and beyond the donor funding it receives for a specific project; 1,000,000 of this must be deposited in a blocked account that will only be released once operations have started; Otherwise INGOs will be considered donor “consultants” and will not receive the benefits of registration, i.e. ability to open bank accounts, secure telephone lines and internet access, etc;
Ø All of the powers granted to the Agency to institute inquiries, to search records, to enter places of business, to oversee administrative costs, to protect property, to remove and replace officers and to cancel or dissolve a charity appear to apply to all charities – the broad definition of which includes INGOs.
Major Issues of Concern
Art. 2(3) which defines Ethiopian Charities and Societies excludes those Ethiopian organizations that receive money from foreign sources greater than 10% of their total assets. This appears to be unrealistic in a country where most of the CSOs are highly dependent on foreign aid, and the level of domestic financial support is almost zero. If Local NGOs choose to receive funding from Foreign sources in the amount that exceeds 10% of their total budget, the law considers them as Foreign NGOs. This means that local NGOs of these categories are automatically barred from activities that are not allowed to be undertaken by Foreign NGOs. More so, they lose their right for appeal to the Court.
This is the second form of organization envisaged by the Draft Proclamation but with severe restrictions that affect their very existence and freedom of operation. Foreign NGOs are not allowed to work on the following activities (Articles 16 (3), F, j, l and M), namely: the advancement of citizenship or community development, the advancement of human and democratic rights, conflict resolution or reconciliation, the promotion of harmony of equality and diversity among nations, nationalities, and people or different religious groups, the promotion of sustainable development of the nations, nationalities and people of Ethiopia, the promotion of the efficiency of the justice and law enforcement services. In addition, these type of organizations do not have any chance to got to court for any administrative decisions which will be made against them by the Agency.
This is the third aspect of the draft which needs serious consideration. Almost in all cases the decision of the Agency is final, appeal is possible to the Minister of of Justice. ONLY Ethiopian NGOS have the right to appeal against the decision of the Minister to the Federal High Court but this appeal is restricted only to error of laws and not facts although most of the decisions relate to facts than laws.
Excessive and unwarranted power to the Agency
The law mandated the Agency with too much excessive power which goes from enacting rules (as a Parliament), conducting in investigation (as a police) and giving decision (as court). The principle of separation of power has gone for good. The Agency can conduct an investigation against any organization at any time as it deems necessary, it can attend the meeting of organizations or assign the police to do so, seize property, appoint and dismiss officers of the organization, transfer the property of one organization to another, etc. All these are possible for the agency without having any court order. No due process of law.
Income tax against Society
Those organizations which are established in a form of society will be subject to income tax except for the contribution of their members. Accordingly, any assistance to this organization in monetary form will be subject to 35% income tax, which really affect donors contribution.
The draft consists of 125 provisions, and out of these 25 entail penal and administrative sanctions. The administrative sanction some times can be given against individuals (and not just organizations), which is really against the Constitution and international human rights instruments ratified by the country. Better to call it a criminal code than a law enacted to safeguard freedom of association. Organizations can be cancelled for the simple reason of not submitting their reports on time.
Religious and Professional Associations
The draft law considers religious and professional associations in similar category as development NGOs. In their nature, they are typically unique and they deserve to be regulated by separate acts such as RELIGIOUS LIBERTY ACT, PROFESSIONAL ASSOCIATIONS’ ACT, etc. Certainly, as the law stands now, will call for serious concern of the relatively stable organized communities, including the religious institutions and professional associations.