Friday 14 September 2012

NGOs: Greater influence, more responsibility

NGOs are now coming under increasing scrutiny because of their growing influence in their role as a watchdog.
By Khoo Ying Hooi

With the rising influence and visibility of non-governmental organisations (NGOs) such as Suara Rakyat Malaysia (Suaram) in the country, their activities have come under increasing scrutiny.

Questions have been raised about their representation, financial management and governance. This in turn has led to growing pressure on NGOs to improve their accountability and effectiveness.

Ever since the involvement of Suaram in the Scorpene scandal, it has been showered with criticisms particularly from politicians regarding its legitimacy and how much it really represents the interest of its constituents.

Domestic Trade, Cooperatives and Consumerism Minister Ismail Sabri Yaakob claimed that there appears to be a “high level of suspicions” in the accounts of Suaram, which registered under the name of Suara Inisiatif Sdn Bhd.

NGOs in every corner of the world are subjected to greater scrutiny due to their greater influence.

In India, for example, the NGOs there have recently been hit by a new regulation issued by the Ministry of Home Affairs which requires mandatory registration of any overseas funding that they receive. Among those who are affected are Save the Children and Rotary Club of Bombay.

As a result, more than 4,000 organisations in India had their registration cancelled for violations under the Foreign Contribution (Regulation) Act. The law basically aims to regulate flow of foreign funds into NGOs with the intention of preventing any possible use of these funds for activities deemed detrimental to national interest.

In Russia, too, its Parliament last July passed a controversial law describing all those NGOs that received foreign funds as “foreign agents”.

The move by the Russian government has angered the people and sparked protests by numerous leading human rights organisations including For Human Rights Movement.

Self-regulation for NGO sector

NGOs are often seen as a threat to national interest as they are an important apparatus for checking the wrongdoings of the government and as an important advocate for marginalised people.

Most NGOs have their own procedural accountability. However, this also depends on the type of organisation, their composition and forms of funding.

Non-profit accounting is deemed as complicated because fundamentally, the operational method of NGOs is not the same as the government and companies. Its financial management is mainly focused on utilising money, rather than making it.

On the one hand, they have to account for the use of financial resources to donors. On the other, they are also responsible to their beneficiaries – the target group that they are supposed to assist.

In the old days, good values are basically sufficient to prove an NGO’s legitimacy, but with the increasing importance of the NGO sector in their role as a watchdog, there is now increasing pressure on NGOs to also demonstrate to whom and for what they are accountable.

So how can NGOs respond to these challenges?

One way of doing so is through self-regulation. Self-regulation is when NGOs institute their own regulatory mechanisms and supported by several other organisations in the same sector. It is one of the methods for the NGOs to set standards of conduct that they must practise in order to show legitimacy, effectiveness and responsible control of resources.

Make information accessible

There are various benefits of self-regulation. It not only can help strengthen the internal structures and operations of the organisation, it can also help in building public trust. By making public commitments to clear principles, norms and standards, it allows the sector to indicate trustworthiness and professionalism. Most importantly, it can help protect the sector from inappropriate government intervention.

Whenever the relations of both parties – the state and the NGOs – become tense, the government often uses the excuse that the latter’s accountability is inadequate to further dent their credibility, as what is happening to Suaram.

However, working within the framework of self-regulation, the NGO sector can speak with one voice through their collective efforts and thereby prevent more restricted forms of government regulation from being introduced.

Given the increasing influence of Suaram, its legitimacy is not likely to fade any time soon.

NGOs should routinely publish their strategic plans, annual reports, governance and management arrangements, and also financial information.

The process of developing uniformed standards is a long-term effort. So, in the meantime, in order to clear the air, perhaps the easiest way for Suaram is to make information easily accessible to all parties through the channels mentioned.

The current situation will likely be unfavourable to Malaysian NGOs if there is no breakthrough in relations between the government and the NGOs.

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