Parliament is reviewing the Law on Non-Governmental Organizations, adopted in 1997, as it considers the law “outdated”. The government drafted the law, dividing it into two bills: the legal status of associations and the legal status of foundations. However, citizens and civil society organizations are dissatisfied with these bills and view that it reflects conflicting regulations in the interests of lawmakers.
During the parliamentary session, Minister of Finance B.Javkhlan informed that the legal status of associations is defined in line with the classification of non-profit legal entities specified in the Civil Code.
The minister explained, “A registered non-profit legal entity shall operate in the form of an association and an organization or association without the rights of a legal entity shall operate in accordance with the regulations of an unregistered association or the Civil Code.”
Professional associations with official membership and public legal entities performing public functions must be separated from the unified organizations on a voluntary basis in accordance with the bill. The bill stipulates that in addition to clearly defining their purposes in their rules, associations should explain the direction of their activities in accordance with the International Classification of Nonprofit Organizations, and specify their funds.
It states that if associations are engaged in public benefit activities and enjoy tax exemptions, they must submit financial and tax reports to the relevant authorities. The bill also provides for the implementation of the internal governance of non-profit legal entities. It defines professional associations and economic associations and details their specific requirements and preferential rights to cooperate with government agencies.
The bill stipulates that relations related to the establishment, licensing, registration, reporting, deregistration, registration renewal, revocation and monitoring of branches of international and foreign associations must be regulated by relevant laws. It also contains specific provisions on foreign-funded associations and NGOs.
In particular, in accordance with the bill, associations can obtain their funding from foreign organizations and legal entities if it has legitimate funding. But associations are prohibited from receiving funding from foreign intelligence services, money laundering and terrorist financing organizations, and individuals.
Bill initiators believe that with the adoption of the bill, conflicts within the legal framework will be eliminated, a unified regulation will be created, funding of associations will be stabilized, and tax benefits will be provided.
They view it will be possible to identify persons engaged in business activities under the guise of non-profit organizations, differentiate associations engaged in illegal activities, and hold them accountable. The establishment of the Civil Society Development Support Council and the Fund for Support and Financing of Non-Profit Legal Entities is expected to increase the effectiveness of cooperation and partnership with the government on common civil society development issues, as well as strengthen the capacity of non-profit legal entities. Improving the accountability system will increase public awareness and support, bill initiators added.
CAN LAWMAKERS WITH NGOS APPROVE IT WITHOUT CONFLICT?
According to the state registration of legal entities, there were 1,075 NGOs registered in 1998, but increased to 3,492 in 2005, 6,915 in 2010, 11,879 in 2015, 17,685 in 2017, and 18,000 in 2018. In other words, the number of NGOs has increased almost 20 times in just 20 years. It is important to improve the legal environment governing so many NGOs. However, the new bills have a number of issues.
One of the issues in drafting and approving these bills is the conflict of interest of parliamentarians. As almost all lawmakers run NGOs, there is a clear conflict of interest.
In particular, 58 members of Parliament are directors and board members of 194 NGOs. At most, one lawmaker has eight NGOs and two members have seven NGOs each. More specifically, legislator S.Ganbaatar runs eight NGOs, namely Mongolian National Institute of Politicians, Indago Institute for Policy Studies, Education Standards Evaluation Center, Mongolian National Institute of Pasture Development and Technology, Mongolian National Pastureland Development Association, Institute of Political Leadership, National Institute for the Study of Equipment of Mongolian Military Soldiers and Mongolian National Association for Trade Promotion Cooperation.
Lawmaker N.Uchral, on the other hand, has seven NGOs: Social Democracy Mongolian Youth Association, Central Asian Young Scientists Association, Media Port Television Consortium, Mongolian Franchising Development Association, Nayan Zurgaa Durvun Zuu, Mongolian Royal Academy, Mongolian Young Teachers Association.
It would be unethical for lawmakers with NGOs to discuss and approve these bills on the legal status of associations and foundations. In fact, the Law on Non-Governmental Organization states that NGOs should be independent of the state. However, the Act of Parliament, revised on July 9, 2020, includes a provision that gives a lawmaker the right to hold an elected position in an NGO during his or her term of office. In the past, this was prohibited by law.
Deputy Minister of Justice and Internal Affairs B.Solongoo claims that the adoption of the bill will have a positive effect on the independent operation of non-profit associations. Article 8.1 reflects that functions of the state executive body may be performed by some associations in accordance with the law or on a contractual basis. The list of government functions to be performed by associations will be approved by the government.
In other words, the government will approve the relevant regulations. However, Cabinet members also own non-governmental organizations. In specific, Prime Minister of Mongolia L.Oyun-Erdene has four NGOs, which are Oyun Erdene Khugjil, Setsenkhan Khugjil, Mongolian People’s Party Progressive Union and Institute for Social Democracy. Thus, if the bill is approved, there is no guarantee that there will be no conflict of interest when government members make decisions, possibly in their own interests.
CIVIL SOCIETIES OPPOSE ESTABLISHMENT OF NATIONAL COUNCIL
Civil society organizations are opposing the establishment of a National Council and an attempt to include civil society in only two categories: “associations and foundations”. They are doubtful about the independence of the National Council and its activities. Although they agree that the government should demand transparency from civil society organizations, they view that there is no need to establish the council to evaluate their performance.
Looking back, national councils have never been independent in Mongolia. The Mongolian National Broadcaster, Independent Agency Against Corruption, and large state-owned mining companies have citizens’ representative councils or national public councils. However, in reality, politicians have often used national councils as their shield. As a result, in recent years, party and state-funded NGOs have “survived” and others have been “pushed out”.
In particular, the bill on the legal status of associations provides for the establishment of a nine-member National Council under the government. In accordance with the bill, it will monitor NGOs and instruct them on what to do.
Civil society organizations are the most important component of democracy, balancing the government and correcting wrong policies. However, this provision puts civil society under state control and risk making them into state bodies.
Civil society groups have complained that allowing only associations and foundations to be considered NGOs is a restrictive regulation. Civil society is made up of various non-governmental organizations. In other words, NGOs operating in the field of business should not to be confused with policy NGOs.
Of course, it is true that good and bad coexist in society. Under the guise of a civil society organization, there are non-governmental organizations that work against the well-being of society. The government needs to register these organizations. But non-governmental organizations that unite for the good of society should not be harmed in this cause.
Generally, civil society has always developed organically without government involvement. Therefore, regulating them by the National Council will politicize civil societies and undermine their value.
In connection with this, civil society organizations have called on lawmakers to create a favorable legal environment for civil societies. In specific, Amnesty International Mongolia stated, “It is clear that bills on the legal status of associations and foundations, which are being discussed by Parliament, seek to make civil society organizations dependent on the state. These laws do not allow civil society organizations to be free from excessive government control and interference or conduct open and independent advocacy. Therefore, we call on decision-makers and legislators to adhere to the Constitution.”
Experts urged legislators to listen to views and voices of civil society organizations on issues concerning legislations related to the freedom of association, effective and objective participation in the drafting and discussion of laws, and openness and transparency.
Civil society organizations view that there is a need to enable everyone to exercise their right to freedom of association without discrimination, ensure conditions for registered and unregistered civil society organizations to carry out their activities, legally recognize unregistered associations and allow them to operate freely within the law, and enable them to operate without violence or coercion.
Civil societies have demanded that the bills include regulations that provide easy and accessible registration of legal entities, eliminate any discrimination or harassment, and provide an opportunity for civil society organizations to register by submitting a notice.
Moreover, they raised the issue of authorities failing to provide grounds and explanations for the rejection of registration of civil society organizations in writing without delay and grant the legal right to appeal to a fair and independent court.
They believe that there is a need to recognize the right to establish or join national and international associations, freely define their rules, structures and activities, allow civil society organizations to make decisions without government involvement, and ensure that no one is criminally prosecuted, abused, repressed, intimidated or attacked for exercising their right to associate.
The bill was previously discussed in 2018. Back then, lawmakers and civil societies debated over the bill and couldn’t approve it. The bill, which was widely criticized at the time, is facing problems yet again. Therefore, these bills need to be approved with the participation of civil society and their feedback.
