Editorial | Regulatory balance of NGOs

Like leaders of not-for-profit organisations recently quoted by this newspaper, The Gleaner expects full consultation, and open public discussion, on any new legislation governing their operations.  

The bill and-or regulations ought not to be brought to Parliament under the cover of darkness, or slipped between other legislation in the midst of a rancorous debate, and approved before most people realise what has happened. In other words, it must not be like the resolution recently approved by the House of Representatives for application of the General Consumption Tax (GCT) to short-term rental properties.

In that regard, the government should, as a matter of urgency, clearly state what it proposes as the new regulatory framework for non-profits and establish a process of consultations with stakeholders, including individuals and institutions who have a credible interest in the matter.

Non-profits are currently regulated under the 2013 Charities Act, which, it was posited at the time, was intended to modernise, and bring order to, the system. Charities were clearly defined and had to be appropriately registered before they could receive tax exemptions and other beneficial treatment from the government.

However, last month, it emerged that either new legislation, or an overhaul of the current act, was under consideration, but without, so far, the “structured and inclusive engagement” which leaders in the field felt was necessary. The absence of this dialogue, they warned, risked undermining institutions.

“Non-profits are closest to the communities these laws will affect,” said Nancy Pinchas, executive director of the Council of Voluntary Social Services (CVSS), an umbrella and coordinating body for non-governmental organisations (NGOs) engaged in social development.  

“Consultation is not optional, it is essential,” she added.  “Effective legislation must reflect the operational realities of organisations working on the ground every day.” 

Or, as Joy Crawford, executive director of EVE for Life, a charity that advocates for adolescent and young mothers and women facing sexual and gender-based violence, put it: “Meaningful participation strengthens accountability, builds trust, and leads to more equitable and effective outcomes.”

Among the concerns of the heads of NGOs is that a new regulatory framework would make what many believe to be an already onerous compliance system administratively too burdensome, especially for small organisations.  

There are, of course, good reasons for the proper regulation and oversight of this sector, which, by the CVSS’ estimates, in 2021 received donations of J$40 billion. That figure makes the case for proper regulation.

Indeed, Jamaica’s government, like others globally, is under increasing pressure, and scrutiny, to ensure that charities and advocacy groups operating in its jurisdiction is not a front for money laundering, the financing of international terrorism, or to facilitate corrupt business officials or politicians.  Weak regulatory environments can lead to sanctions or outright blacklisting that cut countries off from, or limit their access to, the global financial system or correspondent banking arrangements. Jamaica has had in the past to navigate such threats when international partners claimed the island’s financial systems did not sufficiently comply with global anti-money laundering and anti-terrorism financing regulations.

However, especially with respect to charities and advocacy groups, there must be an appropriate balance between oversight that ensures transparency in their funding sources and operational integrity, and their ability to deliver the services they promise, without having to allocate the bulk of their resources to satisfying compliance rules.

Neither must a new legislation be a backdoor attempt at muzzling or hobbling NGOs that have been vocal in the promotion of human rights, the environment or other segments of national life, to the discomfiture of the authorities. There have been cases of public officials implying that such organisations either supported criminals or that their actions were antithetical to Jamaica’s development.

Other concerns of charities include complaints that expected service standards are insufficiently clear or consistent, as well as duplication in registration requirements, which impact administrative compliance costs.

Given all that is at stake, the Ministry of Industry, Investment and Commerce, under which the agencies that register and regulate non-profits fall, should publish a Green Paper on its ideas for the overhaul of the Charities Act and-or its replacement, and cause those proposals to be subjected to review by a joint select committee of Parliament.