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January 7, 2015

‘Foreign-funded’

Opinion

January 7, 2015

I read with interest a recent news story on NGO funding. In principle, I agree with the position taken in the story about the state being informed and able to regulate any foreign funding made available to Pakistan through charitable aid, concessional facility or pure lending.
However, a better understanding is needed to see from where, and how, this money comes in and what is the current status of different non-governmental and civil society organisations working in different parts of Pakistan. Besides, it is important to distinguish between local and international organisations working in the country.
As far as legal status is concerned, most organisations in Pakistan are registered under five laws. First and the truly stringent one is Section 42 of the Companies Ordinance where registered organisations are regulated by the Securities and Exchange Commission of Pakistan. Certainly not all but most large national organisations fall under this category. The other major laws include the Trust Act, the Societies Act, the Voluntary Social Welfare Agencies Act and the Cooperative Societies Act. Different government agencies, ranging from ministries and departments at the federal and provincial level to social welfare departments in the provinces register and regulate these organisations.
The debate about bringing all types of organisations under one law has been waged at the national level since the first term of Benazir Bhutto; it took off from an existing earlier debate. The issue has been raised on various occasions under successive governments. However, the nature and demand of the multifaceted work and the social and fiscal environment in which they operate has prevented one single law to be devised for all kinds of outfits.
It is a given that these organisations have to be audited annually by independent and established audit firms, irrespective of where the donations are received from or even if money is generated by some commercial activity.

Their audited accounts have to be submitted to the relevant registering authority. Moreover, if these organisations are legally required to contribute to the Employees Old Age Benefit Institution run by the government, EOBI can and has taken action in the past if the requirement is not fulfilled.
If these organisations have to withhold tax on goods or services, both the tax and the annual returns have to be submitted to the area income tax offices and/or the Board of Revenue – that is, the national treasury. Therefore, the laws are there and are followed by all major and small organisations. If the law of the land in these matters is not being followed by some of these organisations or if there are issues with its enactment by the corresponding government agencies, promulgating a new law will not serve any purpose.
As far as international NGOs and development agencies are concerned, they either have a letter issued by the Board of Investment or they are required to sign a memorandum of understanding/agreement with the government of Pakistan, mostly through the Economic Affairs Division at the Ministry of Finance. In the case of Khyber Pakhtunkhwa, NOCs are required for both national and international organisations from the Provincial Disaster Management Authority for any humanitarian work to be carried out in the province. That has been a long standing practice.
The government of Pakistan can and has asked expatriates associated with international NGOs to leave the country at a very short notice if the state is not satisfied with their conduct. Also, it can and has refused to issue or has not extended or has outright cancelled their agreements to work in a particular geographical area or the whole of country. This has been the case with corporate management organisations working in social and community development as well. Many such cases are already being scrutinised by the government.
Before we come to the issue of foreign funding, let me attempt a rather quick and not exhaustive list of functions and the types of these organisations. The biggest presence across Pakistan in terms of reaching out to people is through the Rural Support Programmes (RSPs), most established by the government itself, and similar organisations that have micro-credit programmes for those who have no access to credit provided by mainstream banking coupled with basic entrepreneurial capacity building and fundamental service provision in the areas of health, education, water and sanitation.
Some RSPs do not even refer to themselves as NGOs; the biggest among them, the National Rural Support Programme (NRSP), came about in Nawaz Sharif’s first term at the government’s initiative. Pakistan Poverty Alleviation Fund (PPAF), an independent company, again established by the government with a major endowment received from the World Bank, is perhaps the biggest funding facility at the moment. Interestingly, the Trust for Voluntary Organisations (TVO), another endowment-based funding facility for small community-based organisations, was established by the government with support from USAID. The Orangi Pilot Project (OPP), founded by the legendary Dr Akhtar Hameed Khan, is another such organisation that has done pioneering work in provision of fundamental municipal services in poorest areas of the country as well as struggling for the land rights for the poor.
The other type of organisations is those that provide human development and rights-based capacity-building support to communities through training, social mobilisation and community organisation. They also do pro-people campaigning for women and child rights, peasant and labour rights, etc. One of the largest among such organisations is Strengthening Participatory Organisation (SPO), a company registered by SECP like most RSPs and PPAF, which was transformed from Pak-Canada Small Projects Office, a project run by the Economic Affairs Division and Canadian International Development Agency (CIDA). Sungi Development Foundation, founded by the late Omar Asghar Khan, is another such organisation which came out independently but is registered as a company and has worked closely with government on various occasions besides being an effective advocate for people’s rights in the Hazara and Malakand divisions of Khyber Pakhtunkhwa.
Then there are organisations of human rights defenders, women rights campaigners and labour rights activists. From South Asia Partnership Pakistan (SAP) to Aurat Foundation (AF) to Shirkatgah to Pakistan Institute of Labour Education and Research (PILER) to the Human Rights Commission of Pakistan (HRCP), there are familiar names in them. Some of these organisations also undertake community development and social mobilisation work. Most such organisations are registered under the Societies Act. Many independent research and policy think tanks are also registered under one of the five laws mentioned above but mostly under the Societies Act. The Sustainable Development Policy Institute (SDPI) and Social Policy Development Centre (SPDC) are two such examples.
All these organisations are audited annually and try to fulfil all requirements set forth by the government in order to operate in their respective geographic and thematic areas. Also, there are quite a few trusts and societies working exclusively for the promotion of education, health and citizens’ rights.
Finally (and the above is by no means an exhaustive typology), there are small community-based organisations at the village and union council level who do a host of activities and are on occasion partners with large organisations. In many cases, their annual budgets are less than the monthly income of corporate executives and media anchors.
Any funding coming into Pakistan and spent by these organisations is under bilateral or multilateral agreements. The government’s own development expenditure in what they call soft areas like education and health is hugely subsidised by foreign donors. It is incomparable in terms of volume to what these organisations collectively spend across Pakistan. Not even a penny of an off-budget programme, money that is not spent by the government, comes into Pakistan without the government knowing it. Therefore, the issue is more with riyal-driven outfits and less with dollar-driven outfits. No doubt all must be regulated but the point is that some are already being regulated. And if some are not, they should be regulated by enacting the existing laws.
We should worry more about the acceptance of aid by the state of Pakistan due to our inability to fulfil the needs of our people and the realisation of their basic human rights on its own rather than trying to discourage and stifle civil society organisations.
The writer is a poet and author based in Islamabad.
Email: [email protected]

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