AN ANALYSIS OF THE OF NON-GOVERNMENT ORGANISATION REGULATORY BILL
On the 2nd of June, 2017, the National Assembly of the Federal Republic of Nigeria commenced the passage of a Bill for an Act for the Establishment of the Non-Governmental Organizations Regulatory Commission for the Supervision, Co-ordination and Monitoring of Non-Governmental Organizations, Civil Society Organisations and related matters. The Bill popularly called the NGO Bill sponsored by Honorable Umar Buba Jibril has passed second reading at the House of Representatives. The Bill emphasizes the need “to regulate Civil Society Organizations (CSOs) on matters relating to their funding, foreign affiliation and national security, and to check any likelihood of CSOs being illegally sponsored against the interest of Nigeria. The bill which is made up of 8 Parts and 58 Sections, seeks to amongst other things to:
Establish the Non-Governmental Regulatory Commission. Maintain a Register of NGOs with powers to receive audit reports, and to provide policy guidelines to NGOs on aligning their activities to the national developmental plan of the country. Regulate NGO registration which covers incorporation upon compliance with registration procedure, access to facilities provided by government under the Bill to registered NGOs. Empower the Commission’s Governing Board to refuse registration, registration validity for a period of 24 months, renewal of registration thereafter subject to periodic submission of relevant documents, effects of failure to renew registration leading to termination of operations, and deletion of an NGO from the register; and also cancellation/suspension of registration. Issue work permit to expatriates working for a NGO. Criminalise NGOs operating without certification under the Bill. For instance, ‘It shall be an offence for any persons to operate a Non-Governmental Organisation in Nigeria for welfare, research, health relief, agriculture, education, industry, the supply of amenities, or any other similar purposes without registration and certification under this Act’. Defines NGOs ‘to be a private voluntary grouping of individuals or associations not operated for profit of for commercial purposes, but which have organised themselves nationally or internationally for the promotion of social welfare, development, charity or research through mobilisation of resources’.
In this report, we shall attempt an appraisal of the legal and regulatory framework for the operations of NGOs and CSOs in Nigeria and examine to what extent the NGO Regulatory Bill impedes the already existing framework for these groups, as well as the implication of the Bill on the already existing framework.
THE EXISTING LEGAL FRAMEWORK FOR THE ESTABLISHMENMT OF NGOs AND CSOs
The legal framework for the establishment of Non- Governmental Organizations (NGOs) in Nigeria derives from the provisions of the Constitution of the Federal Republic of Nigeria (CFRN)1999 as amended which recognizes the right to peaceful assembly and association. The Companies and Allied Matters Act, CAP C20 Laws of the Federal Republic of Nigeria 2004 (“CAMA”) is the principal legislation that regulates corporate entities registered in Nigeria and the Corporate Affairs Commission (the Commission or CAC) is the supervisory body for registered corporate entities. Under the CAMA, the most commonly used structures for incorporating Not-for-profit organizations are Company Limited by Guarantee or Incorporated Trustees and the procedures for registration are provided for under CAMA.
CONTENTS OF THE NGO BILL 2016
Before going into consider the innovations of the bill, it is important to recall that the 2016 NGO Bill is not the first attempt at regulating NGOs in Nigeria. In 2014, Honourable Eddie Ifeanyichukwu Mbadiwe presented a similar bill before the 7th Assembly, then tagged a “Bill to Regulate the Acceptance and Utilization of Financial/Material Contributions of Donor Agencies to Voluntary Organizations’. The former Bill aimed to curtail NGO access to and the use of funds. The NGO Bill 2016 has received greater attention from CSOs than the other subsisting bills because it contains far-reaching, restrictive provisions than its counterparts. Having passed the Second Reading stage within a short while, the Bill has now been sent to the Committee on Civil Society and Development Partners for legislative input.
The Bill is premised on the argument that NGOs are poorly regulated. Consequently section 1 part 1 of the Bill provides thus: There is hereby established a body to be known as the Non-Governmental Organizations Regulatory Commission of Nigeria in this act referred to as “the Commission” Section 2 sub-section 1 goes further to establish a governing council which shall be responsible for the management of the Commission.
Procedure for Registration
With regard to registration, section 11 of the Bill requires every NGO to be registered with the Commission and sets out the requirements and procedures for registration. Section 11 (2) provides that applications for registration shall be submitted to the Executive Secretary in the prescribed form. An application for registration shall be made by the Chief Executive of the proposed organization and specify the following;
Other offices of the organization, the head office and postal address of the association, the sector(s) of the proposed operations, the location (s) of the proposed activities, the proposed annual budget, the duration of the activities, all sources of funding, the national and international affiliation and certificates of Incorporation Such other information as the board may prescribe.
A certificate is to be issued by the Commission upon registration and it confers legal personality on the NGO. Section 24 of the Bill provides that every certificate issued to an organization shall be in the prescribed form and shall, unless cancelled, be valid for a period of twenty four months (24) from the date of issue. Section 16 provides for renewal of license, failure to renew will amount to termination of operation and will lead to the deletion of the name of the NGO from the register. An organization is obliged under section 17 to renew its license every two (2) years.
Section 15 of the Bill provides that the Commission may refuse registration of an applicant if it is satisfied that its proposed activities or procedures are not in the national interest or on the recommendation of the Nigerian National Council of Voluntary Agencies (a body to be established under the NGO Bill). The Commission may also cancel or suspend a certificate issued under the Bill. However, it should be noted that what constitutes national security threats against the interest of Nigeria is unclear. The parameters for making that determination are also not indicated anywhere in the Bill.
Penalty for Non-Registration
Under section 24(1) of this NGO Regulation Bill, it shall be an offence for any person to operate an NGO in Nigeria for welfare, research, health relief, agriculture, education, industry, the supply of amenities or any other similar purposes without registration and certificate under the NGO Bill. Subsection 2 of this section goes further to provide that a person convicted of an offence shall be liable to a fine of Five Hundred Thousand Naira, or to an imprisonment of 18 months or both.
Pursuant to section 19, the Commission is given the power to review applications for work permits in respect of prospective employees of a registered NGO and make recommendations to the Comptroller of Immigration for the issuance of the permit to the applicant. The section provides further that an expatriate whose term of employment has expired with one organization shall not be employed by another organization under the same work permit.
Collaboration with and Disclosures to the Ministry of Interior
Under the proposed Bill, an NGO is required to not only cooperate with its target constituency in respect of its projects but to also obtain the approval of the Ministry of Interior to ensure that the project is in line with the objectives of the government. The project would also be registered by the Ministry of Interior and any variation of the project shall be communicated to the Ministry of Interior. In applying for the approval of the Ministry of Interior, the NGO is required to provide several information to the Ministry of Interior including the type of activities to be undertaken by the organisation, source of funding, implementation strategies and personnel information.
Disclosure of Sources of Funds
Section 25 of the bill makes a provision to the effect that funds pledged by donors must be disclosed before commencement of the implementation of the project including the identity of the donors, the mode of disbursement and the conditions attached to the funding by the donor. Section 29 also provides that the assets transferred to build the capacity of an organization should be done through the Commission which will identify the operation criteria.
Dealing with Assets of an NGO upon Discountenance of Operation
The Bill provides that assets owned by the NGO through purchase or acquisition with donor funds are the property of the people of Nigeria. Upon discountenance of operations, the NGO shall not dispose of the assets and keep the relevant proceeds. The assets shall be surrendered to the Government as trustee for the people of Nigeria. Furthermore, the Bill provides that NGOs shall require the sanction of the Commission before transferring its assets to a like organization.
NGOs are required to comply fully with the tax laws of Nigeria. An NGO which generates income must declare same to the Federal Inland Revenue Service and obtain a certificate of exemption. Section 33 (1) provides that an organization is expected to comply fully with the taxation and labour laws and the agreements and protocols signed with the Government. The section further provides that an organization must submit a renewal application form with a tax clearance certificate issued by the Federal Inland Revenue Service. Section 33(3) goes on to state that where an organization is involved in income generating activities and the organization should declare details of the activities and income to the FIRS for a certificate of exemption and failure to secure the certificate will adversely affect the re-registration possibilities of the organization.
The Nigerian National Council of Voluntary Agencies
The Bill provides for the establishment of the Council which shall be a self-regulatory agency for NGOs in Nigeria and shall publish codes of conducts which shall apply to its members. Under Part IV, section 35 (1) provides that there shall be established a Nigerian National Council of Voluntary Agencies, as a collective forum of all the voluntary agencies registered under this Bill. The Council shall adopt its own structure, rules and procedures for the efficient administration of its activities. Provided that the first meeting to adopt the structures and procedures of the council shall be supervised by an official designated by the Commission. The council is empowered to develop and adopt a code of conduct and such other regulation as may facilitate self-regulation by the NGOs on matters of activities, funding programs, foreign affiliations, national security etc.
CONFLICT WITH EXISTING LEGISLATION
One challenge which the proposed NGO Bill faces is its impending clash with the regulatory function of the Corporate Affairs Commission CAC and the needless duplication of provisions and regulatory functions espoused in extant laws such as the Companies and Allied Matters Act (CAMA) 2004. An example of such conflict can be seen in the requirement for audit of grants which is already a requirement under the Companies and Allied Matters Act, Chapter C21, Laws of the Federation of Nigeria, 2004.
Should the Bill be passed into law, does that automatically abrogate or repeal CAMA 2004? This is a pertinent question which the legislators must consider in order to avoid a potential conflict of duties between the CAC and the “Commission” contemplated in the proposed NGO Regulation Bill. Furthermore, NGOs also report to the Federal Inland Revenue Service, as well as comply with technical international/national Project Audit Reporting Frameworks as contracted. It may appear that the duties of the Commission under the Bill are already exercised by existing machineries of the state thus creating instances of duplicity/multiplicity of functions. Moreover, our corporate jurisprudence allows certain institutions to lift of the veil of incorporated bodies whenever it becomes necessary to investigate claims of financial impropriety. The State and Federal High Courts, the Corporate Affairs Commission (CAC), Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices Commission (ICPC) among others, are some of the numerous agencies that interpret and/or execute the relevant laws, and are statutorily empowered to investigate claims of financial misconduct against any corporate entity in Nigeria.
For the above reasons, perception is growing that an additional law to replicate these legal provisions and regulatory functions would be akin to over-regulation of the non-profit sector. Apart from the consequence of over-regulation, the NGO Bill’s requirement for compulsory registration of non-profit and non-governmental organizations sharply contrasts with the constitutional guarantees of free expression, public assembly and association rights protected under Section 39(1) of the Constitution. In other words, registration is neither compulsory nor an obligation required of non-profit organizations in the Nigerian 1999 Constitution. This position has also been upheld in a long line of cases by Nigerian courts. In Fawehinmi v. N.B.A (No. 2), Nigeria’s Supreme Court found that an unincorporated organisation can lawfully exist under the laws of Nigeria although it would not be recognised as a legal entity, capable of suing or being sued, but may only act through its appointed representatives.
There is no doubt in mind that the NGO Regulation Bill has raised various eyebrows in recent weeks. The content of the bill has drawn divergent perceptions amongst members of the public and particularly within Human rights and Civil Society crusaders. While some perceive it as an attempt to silence dissenting voices and restrict the space of civil society organizations to operate, others subscribe to its expediency owing to the fact that the non-regulation of the sector has led to a wide spread of corrupt practices and other financial mischief. However, while we subscribe to the view that NGOs cannot be above the law, it is also a fact that there is already a strong body of laws regulating them in Nigeria. Concerns also have to be raised regarding the duplicity of laws and regulatory agencies the NGO regulation Bill portends and also its implication on the overhead cost of governance. In the event that the Bill becomes law, it will be interesting to see what becomes of the CAMA and the CAC in exercising their regulatory roles, questions of regularization of Certificate of Incorporation already issued by the CAC to Incorporated Trustees and Company’s Limited by Guarantee would have to be addressed given that the new bill makes licenses renewable after a period of 24 months. It is our submission that while the Bill addresses the concerns surrounding the unregulated nature of NGO’s, it is imperative that the provisions of the Bill do not usurp existing extant laws and authorities, thus amounting to over regulation and defeating the essence behind regulating such entities.