Chief Justice John Marshall, writing for the United States Supreme Court in its 1819 decision in McCullough v. State of Maryland, et. al., quoted from Daniel Webster's argument in the case, "The power to tax is the power to destroy." Indeed, as the Chief Justice said:
British author of numerous books and speaker of international fame, Os Guinness, tells the story in his book, Unriddling Our Times: Reflections on the Gathering Cultural Crisis.
The point Os Guinness makes in presenting this story is quite different than some of the ideas that it prompts in my mind. My guess is that Os Guinness' point is much more appropriate to the overall theme of his book than to anything I might add here by the use of that story, although there are some themes that might be common to both of our purposes. But, it is important to know the times, and what we should do. That is important for all of us, but if we are going to advance the cause of civil society, it is especially important.
Nevertheless, too often when dealing with government legislation, administrative regulation, or executive fiat, there are no "whys." Theoretically, in the case of judicial review and/or litigation, the rationale for the decision of a court may be explained. Similarly, when a tax related issue, such as the tax exempt status of an organization, or the deductability of a gift, is determined, there may be some answer to the why question. But, too often, the actions of government authorities may seem arbitrary and contrary to reason or good policy.
One of our contemporary obsessions to "know in order to predict in order to control" may lead to information junkies, web-surfing, trivial pursuit players, and naval gazing trendspotters. And, isn't it true that much of what we have available through our technology, new media, and the like leads us in this direction; where we have the world at our fingertips. There never seems to be a place for a "why."
Rather than "I think, therefore I am," of René Descarte, we have "iPhone, therefore iAm," of Steve Jobs. Well, maybe not really. But, today, our electronic and digital equipment have redefined how we think and communicate with others, and how we access the world of information. Many people now locate self-discovery and human knowledge, not in their own thinking, but in the smartphone. It is at this point that the question arises as to how both the digital sector should be regulated, if at all, by government, and how the third sector should be regulated by government, if at all, in the context of the digital age with all the new media capability.
Moreover, as Steve Jobs is reported to have said, "You can't just ask customers what they want, and then give it to them. By the time you get it built, they will want something new." While people may want freedom to make their economic choices, including their giving to charity, and civil society organizations want the freedom to fulfill their purposes, whether charity, education, or advocacy, without government interference through tax policy and regulation, whenever there is a scandal, or failure on the part of a nonprofit organization, or when there is a public outcry against self-dealing within the sector, including what may be regarded as excessive executive compensation, there are calls for government intervention and regulation of the sector.
But, as I was again reminded of various legislative and government sponsored initiatives in the area of nonprofit law, and of the recent death of Steve Jobs, and his visionary leadership, I thought of this story of Primo Levi. I hope that these ideas will emerge over the next few posts, and here in particular. You see, the challenge is knowing the moment. Not only is this important in considering the role of government vis a vis civil society, but also by making sense of our situation by reading the signs of the times and assessing the significance of the moment.
One of those signs is government budget cuts due to soaring deficits. This not only affects charitable organizations which have over the years relied on government funding, and have not built of their own constituencies of private funding. Indeed, as I have written before, both the government funding of civil society organizations and their programs, and the withdrawal of that funding raise questions in my mind as to the very nature of civil society and its role in society.
But, it also affects government policy regarding taxes. Thus, in the United States, the present administration is proposing the elimination or reduction of tax deductibility for gifts to tax exempt organization based on certain income levels of the donors. To the extent that tax policy serves as a motivating factor for giving, and the amount of giving, reducing the tax consequences of donations from higher income donors could affect the ability of NPOs to carry out the purposes for which they were established, often at a time when government is cutting back on its own provision of social services and funding to independent charitable organizations that are meeting some of those needs for social services.
Changes in tax laws also affect what organizations may be entitled to tax exempt status and the effect that has on the donor public that may also seek to have its gifts treated as tax deductible. For example, a recent decision (1 December 2010) by the High Court of Australia seemed to prompt this very discussion. In Aid/Watch Incorporated v. Commissioner of Taxation, the question was whether or not Aid/Watch was a "charitable institution" for the purposes of Australian tax exemptions and concessions.
Aid/Watch had been incorporated in 1993 pursuant to the Associations Incorporation Act of 1984 and endorsed as a "charitable institution" and thus exempt from income tax liability, as well as for other purposes under other laws. Aid/Watch was an organization concerned with promoting the effectiveness of Australian and multinational aid provided in foreign countries, by means which included investment programs, projects, and policies. It researched, in partnership with people that were recipients of the aid and nongovernmental organizations, and brought to light through publicly released reports, and campaigns to change the way aid was delivered.
The Commissioner of Taxation revoked these endorsements in October 2006, and affirmed the revocations in March 2007. The Administrative Appeals Tribunal set aside the decision of the Commissioner and determined that Aid/Watch was a "charitable institution." On appeal by the Commissioner, the Full Court of the Federal Court set aside the earlier decision and affirmed the decision and objection of the Commissioner. Aid/Watch appealed to the High Court.
The definition of charity in Australia was largely derived from English common law, and specifically from the Statute of Elizabeth (1601) "An Acte to redresse the Misemployment of Landes Goodes and Stockes of Money heretofore given to Charitable Uses." But first, some context.
Although the High Court noted that:
As Ludwig von Mises wrote, "The funds that a government spends for whatever purposes are levied by taxation." Moreover, the very existence of the state suggests that there is also growth of the state. "As long as many people want government to use its power to tax and regulate to benefit them at the expense of others," the state "will retain its power and continue to grow."
Rulers, being human, have wants they wish to fulfill, things like doing good as they see it, power, glory, money, pride, respect, adulation, security of or in office, aiding the poor (or rich), ending capitalism, spreading democracy, and the like. Tax increases allow rulers to gain from them as long as the cost in votes is not excessive. Further, taxation provides incentivees to institute programs that ultimately distribute wealth and create dependency. These ideas cut across both the role and vitality of the civil society sector, and particularly, with regard to the purposeful choice in the realm of voluntary behavior to improve life, and similarly, with regard to the purposeful choices of individuals in both their voluntary behavior to improve life and voluntary contributions to causes they believe will improve life and the physical and spiritual welfare of people.
There are also attempts by the government to regulate the entire sector through registration and other regulatory examples. Such has been the case in Cambodia, for example. But, while we may think of this story somewhat extreme, is the position of Cambodia for its reasons much different than the position of the Australian Commissioner of Taxation for his reasons, namely the limitation of some kind of benefit conferred by government on certain types of NGOs?
Prior to its Annual General Membership Meeting in Zurich, Switzerland, The Cooperation Committee for Cambodia (CCC) asked ICFO to join in a joint statement in opposition to the Cambodian draft Law on Associations and Non-Government Organizations. The membership of ICFO agreed and joined others in the statement prepared largely by NGOs operating in Cambodia, and supported by a legal analysis prepared by International Center for Not-for-Profit Law (ICNL).
I suppose that there are any number of countries that have, or are in the process of establishing laws that, in some way, attempt to provide for a government based regulatory scheme for the third sector. Nevertheless, over the past two years, it is the Cambodian draft Law on Associations and Non-Governmental Organizations that has attracted international attention and pressure to change. First, some history and context to the debate.
ICNL, in its report on Cambodia and the third draft of the Law on Associations and Non-Governmental Organizations, noted in its Introduction that:
In June 1995, the Council of Ministers of Cambodia initiated the idea of a law that would provide for the regulation of NGOs and local associations. The Council of Ministers assigned to the Ministry of Interior the responsibility for drafting such a law. A year later, a draft text consisting of 10 chapters and 35 articles was ready, but its examination and consideration was suspended because of disagreements as to its content.
Five years later in September 2000, the Council of Ministers asked Prime Minister Hun Sen for advice. However, he responded that he did not want to make it a priority and preferred to enforce a text that regulated the procedure for creation of NGOs and local associations, without defining their activities and role. Five years later, there were two laws, one dealing with terrorism and the other with money laundering. The Ministry of Interior, together with other Ministries, the World Bank, and representatives of Civil Society.
Sieng Lapresse, the Undersecretary of State, Ministry of Interior of the Kingdom of Cambodia reported in 2008 that:
According to a press communiqué issued on 3 December 2008 by the Cambodian Human Rights Action Committee (CHRAC), a coalition of 21 NGO members, there were enough legal frameworks controlling the work of NGOs, whether it be the Constitution of Cambodia, the UNTAC transitional law or the Prakas issued by the Minister of Interior concerning the registration of NGOs, to which the new codes of civil procedure have been added.
NGO representatives also feared that the government might control the funding they received, which would allow ministers and high ranking official to put pressure on their work.
To make matters worse, the Prime Minister was quoted as saying: "Every NGO wants the government to have transparency but NGOs themselves don't have transparency. Which source does the money come from" What and where do they spend the money to?"
Noting a number of other quotes from government officials that are critical of NGOs, LICADHO stated that Cambodian authorities have failed to justify the NGO law on the grounds of security or anti-corruption, and that "These quotes provide a clear indication of the government's true motivation in passing an NGO Law: nothing to do with crime, terrorism or transparency, but everything to do with political control."
In order to understand what is happening now in Cambodia, it is important to note that over the past years, several drafts of such a law have been proposed. The first draft was released on 15 December 2010. The second draft was released by the Royal Government of Cambodia on 24 March 2011. The translation of this draft was provided by the Office of High Commissioner for Human Rights (OHCHR) on which we relied in our review in ICFO and on which ICNL relied during its review. The ICNL report is available for examination at: http://www.licadho-cambodia.org/reports/files/152JointstatementCommentsOnCambodian2ndDraftLaw-Eng.pdf
As noted by ICNL, the major issues in the second draft included: a registration process that would allow for the exercise of "unbounded government discretion," a reduced by high minimum membership for associations, the limitation of eligible founding members for both associations and NGOs to Cambodian nationals, inadequate standards to guide government determination of suspension or termination of an association or NGO, barriers to the registration and activities for foreign NGOs, and constraints on associations and NGOs through notification and reporting requirements.
Inasmuch as the Royal Kingdom of Cambodia has withdrawn the second draft, and released a third draft of the proposed law, no further comment or analysis is required here. Suffice it to say, this third draft has not been received with unalloyed enthusiasm either. But, more later about it in the next post.
For now, it is sufficient to observe that the issues at stake in Cambodia are far wider than any single incident, person, proposed law, or country. Notwithstanding the protests and gatherings, such as "Occupying New York," representative democracy and market capitalism seem to be riding quite high in much of the world, an urgent question persists not only for Cambodia, but for all of us: Is the cultural order of our societies -- the world of families, churches and synagogues, or Buddhist temples, schools, colleges, the media, entertainment -- doing a good job of cultivating free, responsible citizens. Or, as Os Guinness wrote, are we seeing not only corruption at vital points, but widespread compliance with that corruption that makes all of us accomplices to our own decline?
It seems appropriate also to recognize the Cooperation Committee of Cambodia (CCC). In its partnership with national and international CSO networks, CCC brought the case of the unintended development impacts of the draft law on Associations of Non-Government Organizations for global attention and scrutiny. These efforts have made the government of Cambodia rethink and further revise the draft controversial legislation.
First, the vision of CCC is a strong and capable civil society, cooperating and responsive to Cambodia's development challenges. Its mission is to be a professional organization of non-government organizations in Cambodia providing for high quality services to civil society and influencing Cambodia's development partners with a collective voice.
Thanks to the global CSO solidarity spirit and the collective efforts to preserve and maintain much needed democratic space to function and exist to serve the poor and vulnerable people,efforts continue to encourage the government to take less restrictive measures to regulate the sector. While much attention has been give to the developments regarding the Law on Associations and Non-Government Organizations, ICFO pledged its support to the call for further review of the proposed legislation. Another common belief shared by both ICFO and CCC is our strong belief in the need for CSO good governance. ICFO highly credits the work of CCC in developing a Code of Ethical Principles and Minimum Standards of professionalism, integrity, and accountability. The Code aims to maintain and enhance standards of good organizational practice and to ensure the public trust in the integrity of individuals and organizations that make up the NGO sector.
In order to accomplish these goals, CCC provides training and Open Forums for CSO Development Effectiveness. However, its activities go beyond this. CCC is a membership organization that includes within its membership criteria, a monitoring scheme with appropriate certification which reflects the organization's successful completion of CCC's review of its documentation and compliance with the Code of Ethical Principles and Minimum Standards.
One may wonder why the Kingdom of Cambodia believes that there is a need for a law, such as the draft Law on Associations and Non-Government Organizations. Although the Prime Minister asserted that "Every NGO wants the government to have transparency but NGOs themselves don't have transparency," it appears that what is promoted by CCC is much more significant than what might result from the legislative process. Moreover, the danger appears to be stated by the National Assembly President: "Today, so many NGOs are speaking too freely and do things without a framework. When we have a law, we will direct them." This appears to be a misunderstanding of the concept of civil society.
Perhaps, the power to regulate may indeed be the power to destroy. And in Cambodia, with a growing and increasingly vibrant NGO sector, and an effective and significant self-regulatory or independent monitoring scheme, such as provided by CCC, one might wonder why a government would seek to exercise that power to regulate, and ultimately destroy. Perhaps one could explain this to the German-funded Sahmakum Teang Tnaut (STT), the NGO advocating for the urban poor, which for six years provided services and advice to urban communities.
As The Wall Street Journal reported on 20 September 2011,
In the meantime, as the debates concerning the Law on Associations and Non-Government Organizations continue, Cambodia worries about long-term flood fallout. Flooding has spread across 17 of Cambodia's 24 provinces, killing 247 people as of 17 October 2011, and forcing the evacuation of 34,000 households. It has destroyed more than 200,000 hectors of rice fields which is nearly 10 percent of the country's harvest. The flooding has destroyed more than 1000 schools and some 2,400 km of roads, exceeding the devastating floods of 2000.
The power if congress to create, and of course, to continue, the bank, was the subject of the preceding part of this opinion; and is no longer to be considered as questionable. That the power of taxing it by the states may be exercised so as to destroy it, is too obvious to be denied.And, I suspect that the power to regulate also is the power to destroy. This is part of the theme of this post.
British author of numerous books and speaker of international fame, Os Guinness, tells the story in his book, Unriddling Our Times: Reflections on the Gathering Cultural Crisis.
Prisoner 174517 was thirsty. Seeing a fat icicle hanging just outside his hut in the Auschwitz extermination camp, he reached out the window and broke it off hoping to quench his thirst. But, before he could get it to his mouth, a guard snatched it out of his hands and dashed it to pieces on the filthy ground.
"Why?" the prisoner burst out instinctively.
"Here, there is no why," the guard answered with brutal finality.
That, for Primo Levi, the Italian Jewish scientist and writer, was the essence of the death camps -- places not only of unchallenged arbitrary authority but of absolute evil that defied all explanation. In the face of such evil, explanations born of psychology, sociology, and economics, were pathetic in their inadequacy. One could only shoulder the weight of such an experience and bear witness to the world.Forty years later, on 11 April 1987, Primo Levi plunged to his death, joining a long and sad list of the victims of Nazi atrocities who took their own lives. Although he survived the experiences of Auschwitz, eventually got married and had children, wrote books and won literary prizes, he saw his core mission in life as bearing witness to the truth of the horrors on that period of history and guardian of the memory.
The point Os Guinness makes in presenting this story is quite different than some of the ideas that it prompts in my mind. My guess is that Os Guinness' point is much more appropriate to the overall theme of his book than to anything I might add here by the use of that story, although there are some themes that might be common to both of our purposes. But, it is important to know the times, and what we should do. That is important for all of us, but if we are going to advance the cause of civil society, it is especially important.
Nevertheless, too often when dealing with government legislation, administrative regulation, or executive fiat, there are no "whys." Theoretically, in the case of judicial review and/or litigation, the rationale for the decision of a court may be explained. Similarly, when a tax related issue, such as the tax exempt status of an organization, or the deductability of a gift, is determined, there may be some answer to the why question. But, too often, the actions of government authorities may seem arbitrary and contrary to reason or good policy.
One of our contemporary obsessions to "know in order to predict in order to control" may lead to information junkies, web-surfing, trivial pursuit players, and naval gazing trendspotters. And, isn't it true that much of what we have available through our technology, new media, and the like leads us in this direction; where we have the world at our fingertips. There never seems to be a place for a "why."
Rather than "I think, therefore I am," of René Descarte, we have "iPhone, therefore iAm," of Steve Jobs. Well, maybe not really. But, today, our electronic and digital equipment have redefined how we think and communicate with others, and how we access the world of information. Many people now locate self-discovery and human knowledge, not in their own thinking, but in the smartphone. It is at this point that the question arises as to how both the digital sector should be regulated, if at all, by government, and how the third sector should be regulated by government, if at all, in the context of the digital age with all the new media capability.
Moreover, as Steve Jobs is reported to have said, "You can't just ask customers what they want, and then give it to them. By the time you get it built, they will want something new." While people may want freedom to make their economic choices, including their giving to charity, and civil society organizations want the freedom to fulfill their purposes, whether charity, education, or advocacy, without government interference through tax policy and regulation, whenever there is a scandal, or failure on the part of a nonprofit organization, or when there is a public outcry against self-dealing within the sector, including what may be regarded as excessive executive compensation, there are calls for government intervention and regulation of the sector.
But, as I was again reminded of various legislative and government sponsored initiatives in the area of nonprofit law, and of the recent death of Steve Jobs, and his visionary leadership, I thought of this story of Primo Levi. I hope that these ideas will emerge over the next few posts, and here in particular. You see, the challenge is knowing the moment. Not only is this important in considering the role of government vis a vis civil society, but also by making sense of our situation by reading the signs of the times and assessing the significance of the moment.
One of those signs is government budget cuts due to soaring deficits. This not only affects charitable organizations which have over the years relied on government funding, and have not built of their own constituencies of private funding. Indeed, as I have written before, both the government funding of civil society organizations and their programs, and the withdrawal of that funding raise questions in my mind as to the very nature of civil society and its role in society.
But, it also affects government policy regarding taxes. Thus, in the United States, the present administration is proposing the elimination or reduction of tax deductibility for gifts to tax exempt organization based on certain income levels of the donors. To the extent that tax policy serves as a motivating factor for giving, and the amount of giving, reducing the tax consequences of donations from higher income donors could affect the ability of NPOs to carry out the purposes for which they were established, often at a time when government is cutting back on its own provision of social services and funding to independent charitable organizations that are meeting some of those needs for social services.
Changes in tax laws also affect what organizations may be entitled to tax exempt status and the effect that has on the donor public that may also seek to have its gifts treated as tax deductible. For example, a recent decision (1 December 2010) by the High Court of Australia seemed to prompt this very discussion. In Aid/Watch Incorporated v. Commissioner of Taxation, the question was whether or not Aid/Watch was a "charitable institution" for the purposes of Australian tax exemptions and concessions.
Aid/Watch had been incorporated in 1993 pursuant to the Associations Incorporation Act of 1984 and endorsed as a "charitable institution" and thus exempt from income tax liability, as well as for other purposes under other laws. Aid/Watch was an organization concerned with promoting the effectiveness of Australian and multinational aid provided in foreign countries, by means which included investment programs, projects, and policies. It researched, in partnership with people that were recipients of the aid and nongovernmental organizations, and brought to light through publicly released reports, and campaigns to change the way aid was delivered.
The Commissioner of Taxation revoked these endorsements in October 2006, and affirmed the revocations in March 2007. The Administrative Appeals Tribunal set aside the decision of the Commissioner and determined that Aid/Watch was a "charitable institution." On appeal by the Commissioner, the Full Court of the Federal Court set aside the earlier decision and affirmed the decision and objection of the Commissioner. Aid/Watch appealed to the High Court.
The definition of charity in Australia was largely derived from English common law, and specifically from the Statute of Elizabeth (1601) "An Acte to redresse the Misemployment of Landes Goodes and Stockes of Money heretofore given to Charitable Uses." But first, some context.
Medieval England, combining Christian ideals, Roman precedents, and Common Law, permitted charitable donors to entrust property -- usually to the church or other public authorities -- for charitable purposes. These endowments were part of a complex of activities involving the Crown, noble families, the church, municipal bodies, gilds, and other essentially public entities through which poverty, dependency, and other needs were attended to.
* * *
Few laws are more important -- or more misunderstood -- than Elizabeth's 1601 Statute of Charitable Uses. The preamble to the Statute sets forth the purposes for which property might be set aside for charitable purposes and, at the same time, provides a rich overview of the range of philanthropy in Elizabethan England.Examining the Statute of Elizabeth and the precedent established over the centuries in England, US, Canada, and Australia since, the High Court of Australia noted that there were four principal divisions for charitable trusts, namely, trusts for the relief of poverty, for the advancement of education, for the advancement or religion, and for other purposes beneficial to the community (perhaps best expressed by the word, "eleemosynary").
Although the High Court noted that:
[A] a trust with a principal purpose to procure a reversal of government policy, or of particular administration decisions of government authorities, is proscribed as a trust for "political purposes"; this is so whether the government is that in England or elsewhere. Such trusts, even if otherwise within the spirit and intendment of the preamble to the Elizabethan statute, can never be regarded as being for the public benefit in the sense require for a charitable trust.It held that the system of law that applied in Australia applied to Aid/Watch and that the activities of Aid/Watch met two characteristics indicative of charitable status. Moreover, although there was, in the law, an exclusion of "political objects" as charitable, the purposes and activities of Aid/Watch did not fall within any area of disqualification "for reasons of contrariety between the established system of government and the general public welfare." Accordingly, Aid/Watch was held to be a charitable institution within thee meaning of the relevant legislation.
As Ludwig von Mises wrote, "The funds that a government spends for whatever purposes are levied by taxation." Moreover, the very existence of the state suggests that there is also growth of the state. "As long as many people want government to use its power to tax and regulate to benefit them at the expense of others," the state "will retain its power and continue to grow."
Rulers, being human, have wants they wish to fulfill, things like doing good as they see it, power, glory, money, pride, respect, adulation, security of or in office, aiding the poor (or rich), ending capitalism, spreading democracy, and the like. Tax increases allow rulers to gain from them as long as the cost in votes is not excessive. Further, taxation provides incentivees to institute programs that ultimately distribute wealth and create dependency. These ideas cut across both the role and vitality of the civil society sector, and particularly, with regard to the purposeful choice in the realm of voluntary behavior to improve life, and similarly, with regard to the purposeful choices of individuals in both their voluntary behavior to improve life and voluntary contributions to causes they believe will improve life and the physical and spiritual welfare of people.
There are also attempts by the government to regulate the entire sector through registration and other regulatory examples. Such has been the case in Cambodia, for example. But, while we may think of this story somewhat extreme, is the position of Cambodia for its reasons much different than the position of the Australian Commissioner of Taxation for his reasons, namely the limitation of some kind of benefit conferred by government on certain types of NGOs?
Prior to its Annual General Membership Meeting in Zurich, Switzerland, The Cooperation Committee for Cambodia (CCC) asked ICFO to join in a joint statement in opposition to the Cambodian draft Law on Associations and Non-Government Organizations. The membership of ICFO agreed and joined others in the statement prepared largely by NGOs operating in Cambodia, and supported by a legal analysis prepared by International Center for Not-for-Profit Law (ICNL).
I suppose that there are any number of countries that have, or are in the process of establishing laws that, in some way, attempt to provide for a government based regulatory scheme for the third sector. Nevertheless, over the past two years, it is the Cambodian draft Law on Associations and Non-Governmental Organizations that has attracted international attention and pressure to change. First, some history and context to the debate.
ICNL, in its report on Cambodia and the third draft of the Law on Associations and Non-Governmental Organizations, noted in its Introduction that:
Cambodia is an example of a post-conflict society in which traditional forms of civil society organizations (CSOs) were devastated and then re-emerged in new forms as part of the reconstruction process. CSOs include Buddhist institutions, trade unions, media associations and non-governmental organizations (NGOs). In 1989 the first humanitarian international NGOs (INGOs) arrived and the establishment of local NGOs soon followed.
The Royal Government of Cambodia (RCG) and development partners recognize that NGOs and INGOs have made an important contribution to rehabilitation, reconstructions and development in the past 30 years. NGOs are view as important partners in the delivery of basic social services. Formally the RCG has a number of mechanisms that involve NGOs in national development strategy formulation and policy implementation and dialogue. In practice, however, NGOs have limited influence on government strategy and policy and limited space for dialogue.
Beyond the service provision sphere, the environment for NGOs is very different. NGOs involved in advocacy, legal rights and human rights are seen by the RCG as unwanted opposition and the environment for their activity is restrictive. The power of the Cambodian People's Party (CPP) is increasing and the Cambodian State is becoming increasingly authoritarian. There is widespread concern from NGOs and other stakeholders on key issues relating to the increased violation of land rights and restriction of fundamental human rights, such as the freedom of expression and freedom of assembly. Human rights defenders are continually the target of threats and attacks. The recent UN UPR's [Universal Periodic Review] submission and outcomes document this.The legal framework in Cambodia has been governed by the Constitution. There have been no specific implementing laws, although there have been different registration requirements for INGOs and for local NGOs. In the case of the former, registration included the requirement to conclude a Memorandum of Understanding with the Ministry of Foreign Affairs. In the case of the latter, they were required to register with the Ministry of Interior. As stated by ICNR, the current legal framework was open to discretion and its implementation "saddled by a weak understanding of the concept of civil society." This latter subject has been a matter of substantial interest and concern on my part as reflected in a number of earlier posts.
In June 1995, the Council of Ministers of Cambodia initiated the idea of a law that would provide for the regulation of NGOs and local associations. The Council of Ministers assigned to the Ministry of Interior the responsibility for drafting such a law. A year later, a draft text consisting of 10 chapters and 35 articles was ready, but its examination and consideration was suspended because of disagreements as to its content.
Five years later in September 2000, the Council of Ministers asked Prime Minister Hun Sen for advice. However, he responded that he did not want to make it a priority and preferred to enforce a text that regulated the procedure for creation of NGOs and local associations, without defining their activities and role. Five years later, there were two laws, one dealing with terrorism and the other with money laundering. The Ministry of Interior, together with other Ministries, the World Bank, and representatives of Civil Society.
Sieng Lapresse, the Undersecretary of State, Ministry of Interior of the Kingdom of Cambodia reported in 2008 that:
Thirty-five NGOs agreed on the principle of a law, but asked for some time to examine the text. However, a few NGOs like ADHOC, LICADO, and the Cambodian Centre for Human Rights strongly disagreed and estimated that such a text could impose high pressure on them and hinder their freedom. Their reaction caused the suspension of the examinatrion of the text by the World Bank and the dossier is still dragging on today.NGOs, some of which have been active in Cambodia for over 15 years, were worried that the draft law's true purpose might limit their scope of activity and independence. They also did not see why the draft law was so suddenly a priority for adoption when there were other laws, such as the anti-corruption bill, still on the waiting list for approval by the Council of Ministers.
According to a press communiqué issued on 3 December 2008 by the Cambodian Human Rights Action Committee (CHRAC), a coalition of 21 NGO members, there were enough legal frameworks controlling the work of NGOs, whether it be the Constitution of Cambodia, the UNTAC transitional law or the Prakas issued by the Minister of Interior concerning the registration of NGOs, to which the new codes of civil procedure have been added.
NGO representatives also feared that the government might control the funding they received, which would allow ministers and high ranking official to put pressure on their work.
We heard that the funding would have to come first via the Ministry of Economy. If that is the case, our work will be neither efficient, nor independent. Also, it will be difficult for us to pay our employees on time, and this is without mentioning problems of corruption within the Ministry.Moreover, according to Ou Virak, president of the Cambodian Centre for Human Rights (CCHR),
Another sensitive topic: according to the lines of the draft law, associations and NGOs must not lead any activity serving the interests of political parties or bring in means intended to support them financially or morally. "If this point is approved, then my NGO will have to close down, because we will not be able to talk politics. The thing is, we work on the question of Human rights, and it is in direct connection with politics. This also means that we will not be able to shake the hands of politicians either.In June 2009, the Cambodian League for the Promotion and Defense of Human Rights (LICADHO) issued a briefing paper, the subject of which was: Is an NGO Law in Cambodia Justified? Although there appeared to be some government justification for such a law on the basis of alleged crime and terrorism, LICADHO concluded that there appeared to be "no need for additional legislation in order to prosecute terrorists and other criminals, the fear here is that terrorism was merely being used to push through an unwarranted law.
To make matters worse, the Prime Minister was quoted as saying: "Every NGO wants the government to have transparency but NGOs themselves don't have transparency. Which source does the money come from" What and where do they spend the money to?"
Noting a number of other quotes from government officials that are critical of NGOs, LICADHO stated that Cambodian authorities have failed to justify the NGO law on the grounds of security or anti-corruption, and that "These quotes provide a clear indication of the government's true motivation in passing an NGO Law: nothing to do with crime, terrorism or transparency, but everything to do with political control."
In order to understand what is happening now in Cambodia, it is important to note that over the past years, several drafts of such a law have been proposed. The first draft was released on 15 December 2010. The second draft was released by the Royal Government of Cambodia on 24 March 2011. The translation of this draft was provided by the Office of High Commissioner for Human Rights (OHCHR) on which we relied in our review in ICFO and on which ICNL relied during its review. The ICNL report is available for examination at: http://www.licadho-cambodia.org/reports/files/152JointstatementCommentsOnCambodian2ndDraftLaw-Eng.pdf
As noted by ICNL, the major issues in the second draft included: a registration process that would allow for the exercise of "unbounded government discretion," a reduced by high minimum membership for associations, the limitation of eligible founding members for both associations and NGOs to Cambodian nationals, inadequate standards to guide government determination of suspension or termination of an association or NGO, barriers to the registration and activities for foreign NGOs, and constraints on associations and NGOs through notification and reporting requirements.
Inasmuch as the Royal Kingdom of Cambodia has withdrawn the second draft, and released a third draft of the proposed law, no further comment or analysis is required here. Suffice it to say, this third draft has not been received with unalloyed enthusiasm either. But, more later about it in the next post.
For now, it is sufficient to observe that the issues at stake in Cambodia are far wider than any single incident, person, proposed law, or country. Notwithstanding the protests and gatherings, such as "Occupying New York," representative democracy and market capitalism seem to be riding quite high in much of the world, an urgent question persists not only for Cambodia, but for all of us: Is the cultural order of our societies -- the world of families, churches and synagogues, or Buddhist temples, schools, colleges, the media, entertainment -- doing a good job of cultivating free, responsible citizens. Or, as Os Guinness wrote, are we seeing not only corruption at vital points, but widespread compliance with that corruption that makes all of us accomplices to our own decline?
It seems appropriate also to recognize the Cooperation Committee of Cambodia (CCC). In its partnership with national and international CSO networks, CCC brought the case of the unintended development impacts of the draft law on Associations of Non-Government Organizations for global attention and scrutiny. These efforts have made the government of Cambodia rethink and further revise the draft controversial legislation.First, the vision of CCC is a strong and capable civil society, cooperating and responsive to Cambodia's development challenges. Its mission is to be a professional organization of non-government organizations in Cambodia providing for high quality services to civil society and influencing Cambodia's development partners with a collective voice.
Thanks to the global CSO solidarity spirit and the collective efforts to preserve and maintain much needed democratic space to function and exist to serve the poor and vulnerable people,efforts continue to encourage the government to take less restrictive measures to regulate the sector. While much attention has been give to the developments regarding the Law on Associations and Non-Government Organizations, ICFO pledged its support to the call for further review of the proposed legislation. Another common belief shared by both ICFO and CCC is our strong belief in the need for CSO good governance. ICFO highly credits the work of CCC in developing a Code of Ethical Principles and Minimum Standards of professionalism, integrity, and accountability. The Code aims to maintain and enhance standards of good organizational practice and to ensure the public trust in the integrity of individuals and organizations that make up the NGO sector.
In order to accomplish these goals, CCC provides training and Open Forums for CSO Development Effectiveness. However, its activities go beyond this. CCC is a membership organization that includes within its membership criteria, a monitoring scheme with appropriate certification which reflects the organization's successful completion of CCC's review of its documentation and compliance with the Code of Ethical Principles and Minimum Standards.One may wonder why the Kingdom of Cambodia believes that there is a need for a law, such as the draft Law on Associations and Non-Government Organizations. Although the Prime Minister asserted that "Every NGO wants the government to have transparency but NGOs themselves don't have transparency," it appears that what is promoted by CCC is much more significant than what might result from the legislative process. Moreover, the danger appears to be stated by the National Assembly President: "Today, so many NGOs are speaking too freely and do things without a framework. When we have a law, we will direct them." This appears to be a misunderstanding of the concept of civil society.
Perhaps, the power to regulate may indeed be the power to destroy. And in Cambodia, with a growing and increasingly vibrant NGO sector, and an effective and significant self-regulatory or independent monitoring scheme, such as provided by CCC, one might wonder why a government would seek to exercise that power to regulate, and ultimately destroy. Perhaps one could explain this to the German-funded Sahmakum Teang Tnaut (STT), the NGO advocating for the urban poor, which for six years provided services and advice to urban communities.
As The Wall Street Journal reported on 20 September 2011,
The government is responding with criticisms and threats of its own, often targeted at Western aid givers.
Last year, officials in Phnom Penh threatened to expell the UN's country head and later warned all embassies and diplomatic missions not to try to "criticize or give lessons" to the Cambodian government. A visit by UN secretary general Ban Ki-moon proved disastrous, as Prime Minister Hun Sen threatened during a meeting to close the UN's local human rights office and prematurely shutter Phnom Penh's UN-backed war crimes tribunal, according to Cambodia's foreign minister.As tension rise, both internationally and domestically, between governments, and between the CSO, NGOs, and INGOs and the Government of Cambodia, maybe the citizens and sector are discovering, like Primo Levi, that there is no "why" there.
In the meantime, as the debates concerning the Law on Associations and Non-Government Organizations continue, Cambodia worries about long-term flood fallout. Flooding has spread across 17 of Cambodia's 24 provinces, killing 247 people as of 17 October 2011, and forcing the evacuation of 34,000 households. It has destroyed more than 200,000 hectors of rice fields which is nearly 10 percent of the country's harvest. The flooding has destroyed more than 1000 schools and some 2,400 km of roads, exceeding the devastating floods of 2000.
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