Despite the tremendous focus of government and state machinery on the functioning of Non-Governmental Organisations (NGOs), there exists no exclusive legal framework under which the local or foreign NGOs operate in the society. Therefore, the government has to use the existing laws and legal frameworks to monitor and interact with local and foreign NGOs (INGOs).
Legal experts say the legal framework the government uses to interact with NGOs is complex, and there are several laws under which an NGO may be registered.
There are a few initiatives emanating from within the government quarters to provide for an exclusive legal framework for NGOs; however, so far, nothing has come out of these initiatives.
Thus foreign NGOs or INGOs were initially asked to register under an internal document (not a law) of the Interior Ministry. In October 2018, when 18 of these foreign NGOs were informed that their registration applications have been rejected, the Interior Ministry didn’t cite any law in this regard. It was just a whimsical decision under an arbitrary and internal document of the ministry.
At present, it all depends on the choice of an NGO as to which law they would like to be registered under. Some of the laws were enacted in the pre-independence period such as The Societies Registration Act, 1860. This Act applies to charitable societies with a wide range of public benefit purposes. Then there is the Cooperative Society Act, 1925 and The Trust Act, 1882. This last act applies to a private trust with a wide range of purposes.
Other laws under which NGOs are currently registered were enacted in the post independence period such as the Voluntary Social Welfare Agencies Registration and Control Ordinance 1961. This Ordinance defines permissible purposes within the social welfare field. Registration under this legislation is mandatory if the organisations wish to receive government funding. Section 42 of The Companies Ordinance, 1984 applies to not-for-profit companies formed to promote ‘useful objects’. Income Tax Ordinance, 2001 sets out the tax exemptions, which the NGOs are eligible for.
In most cases, registration is not compulsory for local NGOs. However, there are two exceptions: the NGOS that seek government funding are required to register under the relevant law; the government has made it mandatory for INGOs operating to register themselves with the Interior Ministry.
As such, the majority of NGOs can choose whether or not to register, and which regime to register under. A majority of NGOs (65.4 percent) are registered under the Societies Registration Act while around 20 percent of NGOs are not registered under any act.
There are several tiers of government that interact with the NGOs and try to influence policy making in them within the legal framework provided by the laws on statute books. A senior official of the Interior Ministry said that, after the passage of Eighteenth Amendment, the authority to interact with NGOs at the provincial level has been devolved to the provincial governments. The provincial Ministry of Social Welfare and Special Education and the Provincial Social Welfare Departments are responsible for registering and monitoring organisations under the Voluntary Social Welfare Agencies (Registration and Control) Ordinance 1961. At the local level, the District Offices of the Industry Department are responsible for registering organisations under the Societies Registration Act 1860.
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INGOs, on the other hand, are required to register and agree to a Memorandum of Understanding (MoU) with the Economic Affairs Division and Interior Ministry. While there is no legal basis for this expectation, as understood by foreign NGOs, a failure to register can cause problems with other government agencies, which can hinder their work. In addition, the Minister of Interior is responsible for vetting foreign staff before the registration is approved, and grants permission to operate in particular areas.
All NGOs, including INGOs may be eligible for certain tax exemptions. Charities are potentially exempt from tax on most forms of income, provided that the funds are applied solely in furtherance of that charity’s objectives; however such exemption has to be sought through the Ministry of Finance and is not automatically granted.
“Organisations registered under the Voluntary Social Welfare Agencies (Registration and Control) Ordinance 1961 are required to maintain accounts and submit an annual report and audit report to District Officers. The report must detail the management of the agency, its activities and plans for the next year. Accounts and reports are made publicly available,” said an official at the Interior Ministry on condition of anonymity.