A Consultancy was conducted by two international consultants, Dr. Leon E. Irish and Prof. Karla W. Simon, principals of ICCSL, and one Bangladeshi consultant, Fawzia Karim Feroze, who were hired by the Local Consultative Group (LCG) of donors in Bangladesh to do a “Scoping Study of the Legal and Regulatory Environment for NGOs in Bangladesh.” The consultancy took place between December 2004 and February 2005. The contracting agency was UNDP, and the contributing donors were NORAD, SIDA, and USAID.
The Report of the Consultancy was accepted by the Local Consultative Group of Donors and passed on to the Government of Bangladesh that it be implemented.
The Consultancy consisted of the following:
- A desk analysis of various documents with regard to the legal and regulatory framework.
- Interviews conducted with NGO leaders, donors, government officials, lawyers, and academics.
- Site visits to NGO facilities in Dhaka and the country-side.
- Preparation and distribution of a lengthy questionnaire to collect hard data on the effect on NGO operations of the current legal and fiscal framework. Evaluation of the questionnaire results.
- Preparation and dissemination of a questionnaire for donors (together with Frank Matsaert of DfID, who is preparing a similar analysis for the World Bank.)
- Holding four workshops – three of which were open to the public and were attended by NGO leaders, government officials, and donor representatives; the fourth workshop was for donors only.
- Holding one large consultative conference, which was attended by NGO leaders, government officials, and donor representatives.
- Discussion of a proposed “Way Forward,” which will include the setting up of Law Reform Task Force; this body will consist of NGO leaders, government officials, lawyers, and academics.
The general conclusions of the Consultancy are as follows:
1. The current legal framework for NGOs in Bangladesh is outdated, confusing, and in need of complete revision. Not only does it tend to focus attention and money on issues that are relatively unimportant – the foreign funding of a few NGOs by legitimate multilaterals and bilateral donors – it also does not impose high enough standards of accountability and transparency on the vast majority of NGOs that receive no foreign funds but that do affect the public interest. With the apparent shift toward more domestic funding for Bangladeshi NGOs, the current regulatory system seems improperly focused.
2. The fiscal framework for NGOs in Bangladesh is not supportive enough of the sector. While income tax exemption is available, there are virtually no provisions for deduction of corporate or individual contributions to NGOs. This is inconsistent with good international practice. In addition, the taxability of income-generating activities needs clarification, and the law should then be consistently applied to all NGOs.
3. There are currently no provisions in law clearly dealing with the issue of political activities by NGOs. This needs to be remedied by adopting rules that clearly forbid public benefit NGOs (PBOs)1 from engaging in partisan political activities. On the other hand, the rules on political activities should also clearly permit PBOs to engage in a wide range of democratic development activities, such as voter education, grass roots lobbying, etc.
4. The effort to reform the current legal and fiscal framework for NGOs in Bangladesh should be undertaken by a Law Reform Task Force. This Task Force should be comprised of NGO leaders (including top officials from the two apex bodies), government officials from ministries with a strong interest in NGO activities, parliamentarians, lawyers, and academics. It should be housed in a neutral secretariat and have a small staff. Technical assistance to the Task Force to structure and inform the process could be provided by the International Center for Civil Society Law.
5. As a part of the legal and fiscal reform efforts, the information technology (IT) capacity of government agencies charged with NGO oversight (including the proposed PBO Commission) should be strengthened and modernized.
6. The law reform process should closely tie into the process of vetting and developing the Bangladesh Enterprise Institute (BEI) standards for NGO governance. Although the proposed standards are both too complex and too weak in enforcement powers, they represent a good start in developing good and enforceable standards for NGO internal governance.
1This is a terminological issue, because the term “PBO” is not in use in Bangladesh at the present time. The general consensus coming out of the workshops and conference, however, is that use of the term “PBO” is acceptable in Bangladesh to differentiate public-interest-serving NGOs from ordinary citizen associations, such as clubs and professional societies.