ISLAMABAD: The government plans to tighten the regulatory mechanism for international funding to non-government organisations (NGOs), and the Securities and Exchange Commission of Pakistan (SECP) has been given the task to formulate a law in this regard.

The law will regulate international and local NGOs and individuals receiving and utilising foreign contribution.

Currently the total number of NGOs registered with the SECP is only 634. The figure is not even one per cent of total 64,000 companies registered with the regulator.

Under the proposed law, all NGOs will have to be registered with the SECP which will also ensure that funding is utilised for the same purpose it has been received for, an official of the commission said.

The draft law is being finalised and likely to be forwarded to the Ministry of Finance next week.

A recent meeting chaired by Secretary Law and attended by representatives of SECP, Economic Affairs Division (EAD), Ministry of Finance, State Bank and the Federal Board of Revenue (FBR) discussed the new law.

NGOs will be required to seek registration with the EAD and sign an MoU with the division over project details. This registration and MoU will be valid for five years and is renewable.

Currently, the NGOs are registered at four different government offices starting with Societies Act 1860 falling under the provinces. Most of the local NGOs, madressahs, etc are registered under this law. However, they can operate at the national level.

The second law applicable at the district level is the Social Welfare Law.

The third law in this regard is the Section 42 of SECP, where registration is made under the head of ‘not for profit organisations’.

The fourth one is the ‘Trust’ and many key social welfare organisations like Shaukat Khanum, Hamdard etc are registered as trust.

However, NGOs have apprehensions over the proposed law as they fear that mandatory registration with SECP would add to bureaucratic hurdles for them.

“It takes too long to get registered with SECP so they will have to increase its capacity. The SECP needs to establish more offices in provinces to facilitate the registration of NGOs,” said Tahir Mehdi, belonging to development sector in Lahore.

He said that usually the governments take decisions aggressively but within few years all the checks and requirements becomes a burden on the departments.

“We file mandatory compliances every year but the relevant department in Lahore just dumps those reports in the dark room and there is no check even if anybody has filed incorrect details,” he added.

“The main issue is the NGO sector was devolved to provinces. However, the government, instead of strengthening the provincial departments, wants to drag the sector back to the federal level,” said Naseer Memon of Sustainable Participatory Organisation (SPO).

Published in Dawn, January 9th, 2015

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