ISLAMABAD: The Economic Affairs Division’s (EAD) decision to exert greater control over the funds that are available to international non-government organisations (INGOs) is at the heart of the controversy that has led to the booting out of at least one INGO and has strained relations between international donor agencies and the government of Pakistan, sources told Dawn on Friday.

According to a list of documents, which the EAD has ‘required’ all INGOs operating in Pakistan to provide since May 2014, the government’s objective seems to be keeping tabs on the sources of their funding and further spending.

Of the 12 documents required by the EAD – as indicated on their official website – half contain information related to an organisation’s financial matters.

For example, when an INGO applies to solemnise a memorandum of understanding (MoU) with the EAD, the applicant is required to submit audit reports for the previous three years, copies of their tax returns from the past five years, financial statements from the past three years, evidence that the organisation has been paying withholding tax, the profile of all proposed projects with their specific locations in Pakistan, details of the requisite in-hand human and financial resources as well as capacity and the source of funding or donations for each project and each donor.

EAD sets tough conditions for registration; officials admit govt wants control over spending of donor funds

If this wasn’t enough, the EAD requires other specifics including detailed organisational profiles of current and potential staff members (local and foreign) along with an explanation of the administrative and operational hierarchy, proof of registration or incorporation in the country of their origin, a memo or article of association or constitution, proof of local residence (such as a lease agreement) and a letter of recommendation and endorsement by a competent officer of the relevant embassy in Islamabad.

A former federal secretary who was involved in the formulation of these conditions told Dawn the main issue was ‘off-budget’ grants, which other governments provided to Pakistan. Unlike ‘on-budget’ grants, which is money routed through government channels, off-budget grants are routed by the donor country to organisations of their own choosing to carry out projects of their liking. This is the head under which INGOs receive their funding.

Arguing that the government must have the complete picture about the money coming into the country, even through ‘off-budget’ grants, the federal secretary admitted it would be difficult to restructure the way the money flowed considering the clout international donors had.

“The idea behind putting these conditions in place was to get as much control as the government could possibly have over INGOs’ operations.” The secretary also said that the government had the authority to cancel any INGO’s NOC if they exceeded their specific mandate.

Talking about the sudden action taken by the government against Save The Children, Nargis Khan, a policy adviser at the Pakistan Humanitarian Forum (PHF), told Dawn that the forum had not received any official confirmation from the government regarding decisions relating to any INGO.

PHF represents over 50 INGOs working in Pakistan and coordinates humanitarian relief efforts in times of crisis, such as floods.

“However, the INGO registration process has been slow and lacked clarity. PHF is concerned about the impact of this on principled humanitarian action and basic life-saving interventions.”

She also said that this humanitarian assistance was provided at the invitation of the government and “reaches some of Pakistan’s most vulnerable people and may be disrupted by the current disabling environment for INGOs.”

When asked about the EAD’s extensive documentary requirements, Ms Khan said INGOs already provided the government with all required documentation. “PHF understands the government’s right and duty to create and implement policies that regulate INGOs in Pakistan and we strive for improved coordination and a constructive and transparent relationship.”

Published in Dawn, June 13th, 2015

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