MAEMA: Amend Public Benefit Organisations Act immediately - Daily Nation

Amend Public Benefit Organisations Act immediately, for it is quite toxic

Sunday May 5 2013


Tucked somewhere in one of the schedules to the new Non-Governmental Organisations Act is the requirement that all the 8,500 NGOs currently registered in Kenya must seek re-registration within one year after it comes into force.

We understand that the rationale for this provision is to clean up the official register by weeding out the so called “bogus” or “brief case NGOs” that have given the sector a bad name.

In my opinion, this reason, while valid, does not provide sufficient justification for the re-registration of all NGOs. The implications of such a requirement are far-reaching, draconian and disproportionate.

In law, the process of re-registration creates a brand new legal entity, separate and distinct from the previous NGOs registered under the repealed law. Apart from the cost of registering the new entity, there will be the cost of winding up the previous entity.

All commercial contracts entered into by the previous organisation with suppliers, contractors, and partners will have to be terminated since they cannot be taken over automatically by the new entity without a formal process involving the consent of the other party to the contract. Such termination may entail substantial financial implications.

All the assets and liabilities of the previous entity will have to be formally transferred to the new entity. The transfer of some assets like motor vehicles and land will require registration at the relevant government registries upon payment of the relevant charges and taxes.

The employees of the existing NGOs will have to be transferred to the new entity (subject to their consent) or be declared redundant by the current employer.

The employees who, for any reason, refuse to take up employment with the new entity would have to be paid their redundancy dues in accordance with the Employment Act. The cost of redundancy can be substantial unless the employees waive the right to their dues.

Work permits are not transferable. Accordingly, all the permits held by the expatriate staff of the existing NGOs will automatically expire and new ones obtained by the new entity.

Because these will be lodged as new applications, there is no guarantee that they will all be granted. Besides, until the new work permit is issued, the relevant expatriate will not be entitled to work for the new entity.

There will also be adverse implications on donor funding and projects funded by specific donors. There should be no assumption that the new entity would be entitled to use such funding or to implement the projects initiated by the previous entity without the donor’s express consent.

Leases for office space currently occupied by existing NGOs would have to be transferred to the new entity subject to the concurrence of the landlord, which might not necessarily be forthcoming ,especially if the tenant-landlord relationship has not been a happy one in the past. The registration of a new lease has cost implications in terms of legal fees and stamp duty.

All statutory registrations in force such as PIN, PAYE, NHIF, NSSF, and VAT will fall away and the new entity will have to reapply for them.

The requirement for re-registration is also susceptible to abuse by the registering authority, which might decline to re-register NGOs perceived to have been “unfriendly” to the government or the NGO Board itself.

The cost implications, loss of valuable management time, operational and administrative difficulties and the inconvenience arising from the requirement for re-registration, all call for a re-thinking of the justification for this odious requirement.

In my opinion, it should be enough to require existing NGOs to simply furnish the authorities with an updated set of information or documents.

Another contentious revision is that all NGOs, which had been exempted automatically lose that status and must seek registration (not exemption) within three months after the commencement of the new law.

Indeed, save for international NGOs, which have a narrow window for applying for exemption, there is no room under the Act for any Public Benefit Organisation (PBO), to seek exemption under any circumstances. So, in the event of a disaster in Kenya requiring an immediate response, there is no room for a PBO to seek exemption from registration to enable it to lawfully undertake the emergency function.

Nothing short of amending the above provisions will save the Act from being judged, on the whole, a bad law. Let’s not kill a fly with a sledge-hammer.

Mr Maema is an advocate of the High Court of Kenya and a partner at Iseme, Kamau & Maema Advocates. ([email protected])