It was just a matter of time. The disaster of the attempted deregistration of thousands of non-profit organisations in 2013-14, the growing paranoia within the ruling party about a third force in South Africa that plans to destabilise the country, and its distrust of foreign entities that operate here, has led to a desire to develop a new framework for the functioning of civil society organisations in the country.
This is not new. In 2014 the government issued a proposed new policy framework for South African civil society and it was clear that it was giving thought to a new NPO Act. Under the guise of providing for simplification of the registration process for NPOs, there were hints at compulsory governance codes. The idea of a new regulatory authority and tribunal emerged, both of which had investigative and enforcement powers, including the ability to enforce punitive measures. In addition, it was mooted that NPO tribunal determinations or verdicts would bind all parties and therefore court appeals would not apply.
A recent Africa Confidential article indicated that the South African Presidency and not the Department of Social Development was busy drafting legislation that would affect foreign funding for local organisations and compel the licensing of international NGOs. The article suggests that such organisations would be required to reveal their sources of funding and the “affiliations” of their directors, both of which would need government authorisation. They could be deregistered if their activities were judged (by who we don’t know) to be associated with efforts relating to regime change. How do South African or international entities incite regime change in a democratic country if there is a transparent and clean government, and why should they?
The paranoia within government was revealed by our Minister of State Security, David Mahlobo, who claimed that South African individuals and organisations were collaborating with external “forces” to undermine and destabilise South Africa. He indicated that he believed there were entities masquerading as NGOs and were merely “security agents that are being used for covert operations” including student protests. In addition, the ANC Secretary-General, Gwede Mantashe, also complained that the West was focusing on regime change in SA and that meetings were taking place in the US Embassy in Pretoria to further this agenda.
There is now clearly proposed action around a new NPO bill. The reasons offered by the Department of Social Development for new legislation are that the current regulatory framework for non-profits is fragmented (but it certainly is not impossible to navigate); that the current framework is one-size fits all (and that could change with a few minor amendments to the Act allowing smaller organisations not to require audited financial statements for example); and increased demand for registration (so bring in more people). What was wrong with the 1997 legislation? Well, clearly, too supportive of civil society and too focused on an open society. The purpose of the original 1997 Act was to encourage and support NPOs to contribute towards meeting the many needs of the country’s diverse population by creating an enabling environment for such organisations to flourish and play a role in the “upliftment and care for South Africa’s communities and environments”.
The framework of the existing 1997 Act reflects South Africa’s commitment to the values of a constitutional democracy along with a free and open society. Most important, Chapter 2 of the 1997 Act includes the following clause: “Within the limits prescribed by law, every organ of state must determine and co-ordinate the implementation of its policies and measures in a manner designed to promote, support and enhance the capacity of nonprofit organisations to perform their functions.“ This is a critical component of the Act, although it has barely been applied by our current government. At the same time, registration with the existing NPO Directorate is voluntary, but registration for tax exemption with the SA Revenue Services is deemed more important by the sector because it is imperative that non-profits are tax exempt as they do not distribute their income to shareholders, but reinvest it for the public good. The experience of the sector has been very low efficiency in the NPO Directorate and relatively high efficiency on the part of SARS. This has further reinforced the lower priority given to the NPO Directorate.
When the NPO Directorate was initially established in 1997, it was held in high esteem and there was great promise that it would provide support for the non-profit sector, even including draft codes of non-profit management and governance and training programmes to upskill NPO management. However, this was not to be. Besides gross understaffing and huge inefficiencies, the directorate tended to play a passive role and sometimes served as a repository for ANC deployees to keep an eye on the non-profit sector. The department now seeks to establish a new entity and this begs the question – why does government insist on starting again with a new entity when it had a perfectly good plan which it did not implement effectively? Surely it would be more cost-effective to adequately resource the existing directorate with the funding it requires and provide staff and leadership who are dedicated to the non-profit community than starting again with huge costs involved.
When reviewing the recent presentation from the Department of Social Development, two elements were slipped into the presentation without much ado. First, as outlined in the Africa Confidential report, compulsory registration of foreign entities. The fixation with foreign entities is of concern, taking into account government’s preoccupation and paranoia on plots and plans to overthrow our democracy. There is validity in the concern about money laundering and possible support for terrorist organisations, but mere registration is not going to solve those issues, and will create difficulties for the many international funders in South Africa who will probably fall under this new legislation.
In addition, money laundering and support for terrorism could be home-grown and are not necessarily linked to foreign organisations present in the country. Our civil society is supported not only by local corporates and philanthropists, but also by a number of global philanthropic foundations. It is these that are already under threat in our BRICS partner countries where the same paranoia exists and although the South African government is trying to minimise this in their documentation, it is clear that this is going to be a big issue for our civil society if the proposed legislation goes through. From being an open society, we are moving into a society of fear and distrust where suspicion lurks behind every action that is not driven by the governing party itself. This indicates a lack of confidence and trust in our Constitution and democracy on the part of those currently in power.
Secondly, new institutions would be established to oversee our civil society sector. A completely new “Office of the Registrar of NPOs and the Registrar” will replace the NPO Directorate and the NPO Director. The new office is meant to provide for efficient registration and create awareness of good non-profit governance, both elements already provided for in the 1997 Act. In addition, an Arbitration Tribunal will be established with dispute resolution powers. If these powers are the same as those conceptualised in 2014, then this could remove organisational capacity to seek redress in the courts if they are deregistered.
Where could this go? Our civil society could end up merely as a set of organisations that provide services to the public in the areas of health and education, as long as the services are aligned with government policy. The constitutional right to freedom of association will be discouraged and organisations that seek to contest government activity (or lack of activity) could be hamstrung through bureaucratic contestation in the new institutions (particularly the tribunal) that are proposed to govern our non-profit organisations. It is up to the civil society sector to be vigilant and to engage with government to ensure the freedom, viability and vibrancy of the sector. DM
Shelagh Gastrow is a director of GastrowBloch Philanthropies, a philanthropy advisory service that helps individuals and families integrate their wealth and their values into meaningful and effective philanthropy. From 2002-2015 she was founder and executive director of Inyathelo and focused her efforts on strengthening civil society and promoting philanthropy in SA. Her work in philanthropy has gained public recognition locally and internationally.
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