LATIN AMERICA
Index: Brazil ; Colombia ; Venezuela
1.1. Civil Societies Organizations of Public
Interest are, according to article 1 of the law, “non-profit legal entities of
private law whose social purposes and charter meet the requirements established in this
law”. Twelve activities, listed in article 3 of the law, entitle an organization to
qualify for OSCIP status:
· “Promotion of social assistance”.
This activity has been clarified in article 6 of the decree passed in June. It refers to
the promotion of the development of providing care and assistance to, and of defending and
guarantying the rights of beneficiaries mentioned in the Law on Social Assistance
(families, children, disabled persons…)
· “Free promotion of education”.
Article 6 of the June decree requires the organization to render such services through its
own financial resources and not from fees or donations in exchange for the service.
· “Free promotion of health”.
· “Promotion of nutritional and food
security”.
· “Defense, preservation and maintenance of
the environment and promotion of sustainable development”.
· “Promotion of voluntary work”.
· “Promotion of economic and social
development and efforts to combat poverty”.
· “Non-profit experimentation of new
socio-productive models, and production, commercial, employment and credit alternative
systems”.
· “Promotion of established rights, creation
of new rights and free juridical assessment of other interest”.
· “Promotion of ethics, peace, citizenship,
human rights, democracy, and other universal values”.
· “Studies and research, development of
alternative technologies, production and distribution of information and technical and
scientific knowledge related to the above-mentioned activities”.
1.2. In article 2 of the law are listed the
activities an organization cannot carry out in order to apply for the status of OSCIP. For
example, do not qualify commercial organizations, trade unions, political parties,
cooperatives, public foundations, mutual benefit organizations, for-profit private
hospitals and schools, insurance companies, Social Organizations (regulated by the law n°
9.637 of May 15, 1998).
1.3. The new OSCIP
qualification is granted by the Ministry of Justice. This does not mean that this new
regime will abrogate either the existing status of “public benefit societies”
(which are governed by the law n° 91 of August 28, 1935 and the decree of May 2, 1961 and
are granted tax preferences) or the acquisition of the “certificate of philanthropic
purposes” (which is regulated by the decree n° 2.536 of April 6, 1998). According to
article 18 of the law, it will be possible for a qualifying OSCIP to maintain
simultaneously its old status and the new one, for a period of two years starting with the
entry into force of the law. At the end of these two years, the organization will have to
either choose to remain an OSCIP and therefore lose its prior status, or forego the status
of OSCIP and keep its other status.
1.4. One of the motivations
for the adoption of this new law was the implementation of mechanisms for self-regulation.
Principles of self-regulation are adopted in article 4 of the law where it states that
certain provisions must be reflected in the charter of an OSCIP:
· adoption of practices preventing conflict
of interest,
· creation of a financial oversight council,
· transfer of assets to a similar
organization in case of liquidation,
· transfer of the assets acquired from public
funds to an other OSCIP in case of the loss of the qualification of OSCIP,
· remuneration of directors on a free market basis. This is an
innovation; according to article 1-c of the law on
Public Benefit Societies (1935) and art. 2-b of the decree regulating this law (1961),
directors serving on the board could not receive any remuneration. (Art. 6-c of the decree
of 1961 states that in case of remuneration of the directors, the organization loses its
public benefit status),
· publication of financial reports.
1.5. The new decree helps solve a problem that had
been raised by commentators on the draft law who recommended that a “semi-audit”
be instituted for OSCIPs whose income fall below a certain threshold. Article 19 of the
decree states that OSCIPs will need to carry out an independent audit if their income is
equal or higher than R$ 600.000,00. This rule is also applicable to funds provided by the
government to organizations involved in partnerships.
2.
Partnerships between OSCIPs and the
Government
2.1. The new law establishes a framework for
partnerships between OSCIPs and government bodies. Prior to this law, there were no norms
for social service contracting, and NGOs had difficulty competing with business entities.
The new law provides that cooperative partnerships can be established between the
government and OSCIPs. Article 10 of the law describes which provisions should be
stipulated in the agreement signed by both parties (e.g. the object, means to achieve the
results, estimates on expenses and revenues, obligations of the organization, publication
in the official journal of excerpts from the partnership agreement, and of an explanation
of the operational and financial execution of the agreement, etc…)
2.2. The rules for government contracting with
OSCIPs are stated in articles 23 through 31 of the decree of June 1999. The government
body must open a competition bidding process containing certain minimum information (art.
25). Article 27 stipulates which criteria are to be used in the selection of an OSCIP,
whereas article 28 stipulates which criteria are not acceptable for the selection of an
OSCIP that wishes to engage in a partnership arrangement. The selection is made by a
commission designated by the government body, which is composed at least of one member of
the executive branch, an expert in the field of activity of the partnership, and a member
of the public policy council[1], where
applicable (art. 30). The provisions of article 31 does not allow for the decision of this
commission to be bypassed by the government.
2.3. The law provides, in article 11, how the
supervision of a partnership agreement is to be executed and by which bodies of
government. An evaluation commission participates in monitoring the execution of the
partnership agreement and analyzes its results. This commission is set up by both parties
of the partnership (art. 11.1). It is composed of 2 members from the executive branch, 1
member from the OSCIP and, where applicable a member of the Public Policy Council of the
field of activity related to the partnership (art. 20 of the decree of July 1999).
Documents to be presented to the government at the end of each exercise are listed in
article 12 of the decree.
2.4. The decree also describes the mechanisms
for disbursement of resources by the government to a special bank account established for
the partnership’s purpose (art. 14-15 of the decree).
2.5. Finally, sanctions for the misuse of goods
and resources of public origin are provided for in article 13 of the law. The judge can
decide on “the unavailability of the assets of the entity as well as on the
sequestration of assets of the officers, as well as of public or third sector agent, who
have enriched themselves illegally or have caused damage to public assets”. The
public authorities will then manage the confiscated assets until the end of the legal
action.
By clarifying several issues, as
indicated in this paper, the decree addresses a number of the concerns that had been
raised regarding the possible implementation of law n° 9790. However, the decree
overlooks further regulation necessary to the establishment of accounting procedures for
non-profit entities as is referred to in article 4 (VII)(a) of the law. Further concerns
have been raised regarding the tax benefits of OSCIPs, which would lose those they had
acquired in a previous status. It is suggested that tax benefits for these new
organizations need to be regulated[2].
See also: the Code of Ethics for NGO's in Colombia (in Spanish)
DECLARACIÓN DE PRINCIPIOS DE LAS ORGANIZACIONES NO GUBERNAMENTALES (ONG) DE COLOMBIA
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50
PREGUNTAS, CON SUS RESPUESTAS,
El Nuevo Papel de la Sociedad Civil Organizada en el Proceso Penal Venezolano
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Revised: July 22, 2004.