Much like adrenaline responds to stress or threats, public preemptive backlash always awaits to greet new laws. Usually, when draft laws and regulations are introduced, we, the public, tend to perceive them negatively, fearing that they come to take from us or at the very least, impose restrictions.To some extent, this is true.ALSO READ: Bill on NGOs: Civil society asks for clarity on operating budget clauseThe primary purpose of laws is to maintain an orderly, structured, and predictable society. With this mission, laws end up focusing mostly on what is permissible versus what is prohibited. Not so much about our positive guarantees and entitlements.This is what has happened with the introduction of the new draft law governing non-governmental organisations in Rwanda. In the last couple of days, weeks, there has been some fright among NGOs and the public in general, regarding the Bill, mostly on provisions touching on operating budget clauses and general disclosure requirements.The Bill in Article 8 requires, among other things, an NGO “not to exceed 20% of its operating budget in activity programs that are not in the interest of its beneficiaries”.The panic is perhaps justifiable or at least understandable. NGOs like their money. They like their privacy too and until the introduction of the Bill, they have been enjoying one of the most lucrative business models—one that has drawn a significant number of participants. The surge in NGO registrations over the past five years is quite telling.Therefore, I can appreciate why the topic of financial disclosures has become contentious, to the point where it is described as “restricting the independence of NGOs” or imposing “unnecessary burdensome restrictions.”I did not expect this extent of backlash. Because the government's power to supervise NGOs and charitable organisations is a common practice older than many governments and almost essential and considered a given in any mature legal system. For instance, in jurisdictions like the U.S, NGOs (private foundations and charities) are seriously regulated.ALSO READ: Why the unease with new NGO bill when it works for everyone?The U.S Internal Revenue Authority, state governments and in some circumstances, the federal government, all require NGOs to disclose their solicitations, submit annual financial statements and activity plans for transparency purposes. The U.K too has a very strict regulatory oversight over NGOs.The Charity Commission for England and Wales alongside Companies House and other sector specific regulators impose compulsory financial disclosures and spending limitations.Therefore, there is nothing new about Rwanda’s budget disclosure requirements and limits. I understand the discomfort in establishing some budgetary caps, but framing the issue as a matter of state encroachment on the NGOs independence is an exaggeration and disproportionately blown out of context.What about this Independence anyway?When NGOs complain about losing their independence, what do they mean? Does “non-government” mean non-regulable? That we should afford them (NGOs) an exceptional status—give them an entirely free hand? Or do they ask to belong to a ‘governless territory’?What do they really mean by independence? Is it financial—stable, long-term and secure funding sources with no repressive strings attached? Is it about programmatic independence— the ability to deliver need-based programs without external influence? Or organisational independence—the capability to effectively manage budgeting, planning, and human resources?My understanding is that by independence we mean those affordances that allow NGOs to carry out their purposes effectively. Whatever it is, the state also has some compelling interests to be considered on the other hand.State’s interests: A constitutional dutyIt is the state’s constitutional duty to protect the public from any harms including those caused by independent organisations. It is not unheard of or rare to find NGOs serving private interests of the donors, directors and other few members instead of serving the interests of those they claim to serve.There are many reported instances of NGOs engaging in self-dealing, excessive compensation, overt corruption, fraud etc.Therefore, the government establishing some form of limits is in a way to mitigate and curb down the perils that come naturally with private profit pursuits. In fact, it is reported that NGOs within jurisdictions with stronger reporting requirements experience less self-dealing, and because of that, donors exhibit more trust and are likely to extend more funds.From that angle, government oversight is more beneficial than limiting it to NGOs. When the government regulates NGOs, it actually ensures the public's confidence in their operations on one hand, and on the other, donors’ trust.Also to straighten things upFirstly, the 20% cap on spending is not rigid; the same draft law allows NGOs to exceed this limit if they provide prior written justification to the Board, so there is some flexibility in their operating budget.Secondly, if this is an issue of disclosures and privacy, contrary to X’s popular opinion going around about the Bill, this isn’t public disclosure but confidential reporting to a designated authority—the Rwanda Governance Board.Thirdly, the so-called ‘independence’ for NGOs cannot be one-sided. The law on several occasions and accounts invites NGOs to actively contribute to national development programs, and indeed they have been participating. The law also grants NGOs tax exemption. As the saying goes “You can’t have your cake and eat it too”, there must be some allowance for government oversight in return for these benefits and exemptions.Lastly, no legal framework can effectively guard against opportunistic actions by insiders unless it can clearly identify who these insiders are, the activities they are involved in, and has the capability to intervene legally.Therefore, those opposing this draft bill may either be concealing intentions to exploit their purported independence or, giving them the benefit of the doubt, may simply lack foresight regarding the advantages of collaborating with the government. Maybe wait until we have to deal with the state's supervisory failure on NGOs! It could go wrong in many ways.What is certain is that the government has no interest in taking over NGOs; it already has a lot to take on. The government simply wants to ensure that NGOs serve the public interests.The author is an LL.M. candidate at Harvard Law School
