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The International Journal
of Not-for-Profit Law

Volume 3, Issue 1, September 2000

A publication of the International Center for Not-for-Profit Law

Table of Contents

Letter from the Editor

Articles

The Relationship Between the Governmental and Civil Sectors in Hungary
By István Csóka

Tax Incentives for Nonprofit Institutions: Analysis of International Experience
By Ignacio Irarrázaval and Julio Guzmán

The Definition of Religion in Charity Law in the Age of Fundamental Human Rights
By Kathryn Bromley

The Taxation of NPOs in South Africa
By Karen Nelson

The Aarhus Convention and its Practical Impact on NGOs Examples of CEE and NIS Countries
By Czelaw Walek

Negative Freedom of Association: Article 11 of the European Convention for the Protection of Human Rights and Fundamental Freedoms
By Wino Van Veen

Creation of a Special Legal Framework for NGOs [Spanish]
By Maria Beatriz Parodi Luna

Reviews

Charity Law
By Kerry O'Halloran
Reviewed by ICNL Staff

Cross-Border Philanthropy: An Exploratory Study of International Giving in the United Kingdom, United States, Germany and Japan
Edited by Helmut K. Anheier and Regina List
Reviewed by ICNL Staff

Case Notes

Central and Eastern Europe:
Serbia

Latin America and the Caribbean:
Venezuela

Middle East and North Africa:
Egypt

Western Europe:
Negative Freedom of Association: Article 11 of the European Convention for the Protection of Human Rights and Fundamental Freedoms

Country Reports

Asia Pacific:
Australia

Central and Eastern Europe:
Regional
| Bulgaria

Latin America and the Caribbean:
Venezuela

Middle East and North Africa:
Regional

Newly Independent States:
Moldova
| Ukraine

North America:
Canada
| Mexico | the United States

South Asia:
India | Pakistan

Sub-Saharan Africa:
Ethiopia
| South Africa

Western Europe:
Regional | Italy | Turkey

International

International Grantmaking

Program-Related Investments: Domestic and International
By David S. Chernoff

New International Grantmaking Website Unveiled
By Rob Buchanan

Review of a New International Grantmaking Website
By Peter deCourcy Hero

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Editorial Board

Country Reports: Middle East and North Africa

Regional

Arab Network for NGOs General Founding Conference

The Arab Network for NGOs, launched three years ago as a response to a recommendation issued by the Second Conference of Arab NGOs, will hold its General Founding Conference in Cairo from October 21-23, 2000.

The Arab Network works to strengthen the capacity of NGOs through providing training, research, developing databases, building networks and organizing events such as workshops. The Networks efforts have aided the NGO sector to become an important partner in the development process of the Arab countries.

In addition to accomplishing the important tasks of adopting bylaws and electing a board of trustees, the conference will explore the substantive issues facing Arab NGOs, such as development, poverty alleviation and the empowerment of women. Of interest to followers of international NGO law will be the Declaration of Transparency and draft legal regulations concerning ethics that the Conference hopes to develop. IJNL will publish a follow up story regarding the Conference in its next issue.

Arab Initiative for Freedom of Association

The “Arab Initiative for Freedom of Association” was established by a group of lawyers and legal experts from Jordan, Lebanon, Egypt, Palestine, and Syria in 1998. It has since expanded its membership and issued several documents that are pertinent to these issues in the Arab region. In addition, a website has been established at www.arabifa.org. The following materials released by the group are published in IJNL with permission of Ghassan Moukheiber. The Arab Initiative seeks to make its information widely available to interested parties, and publication in IJNL is within the spirit of the Initiative. Further discussion of the Declaration of Principles will occur at the General Founding Conference of the Arab Network for NGOs. which will be held in Cairo from October 21-23, 2000.

Background History

The first meeting convened to address the legal issues relating to the regulation of associations in the Arab countries was held in Amman in March 1998 upon the initiative of the Lebanese “Association for the Defense of Rights and Freedoms (ADDL)” and involved legal experts from Jordan, Lebanon, Egypt, Palestine and Syria. This working group was supported by the “Bunian”-Programme, implemented by the German Friedrich Naumann Foundation, co-funded by the European Commission.

These discussions continued on a broader level in a panel discussion (presided by the Moroccan Minister of Justice, Omar Azziman) at the World Bank’s Second Mediterranean Development Forum (MDF2) held in Marrakech in September 1998.

In May and June 1999, the World Bank supported two workshops in Amman co-organized by ADDL and the “Bunian” Program. Launched under the auspices of the Jordanian Ministers of Social Affairs and Justice, respectively. The workshops focused on the regulatory framework governing the relationship between governments and NGOs and the internal democracy and self-governance of the latter. Four more countries were added to the on-going study, specifically: Yemen, Morocco, Tunisia and Algeria. The meetings resulted in the “Declaration of the Principles and Criteria Relating to the Freedom of Association in the Arab Countries” and the “Arab Initiative for the Freedom of Association”. Those documents are attached to this text.

The Arab Initiative for the Freedom of Association

The legal experts and activists in the field of Arab civil society, gathered in a workshop about “the organizational framework of associations in the Arab world – strategies and action plan” held in Amman on 27and 28 June 1999, which was a continuation of studies and research on the association laws in each of Lebanon, Syria, Jordan, Palestine, Egypt, Yemen, Algeria, Tunisia and Morocco, and a follow-up on the issuance of “the Declaration of Principles and Criteria Relating to the Freedom of Association in the Arab countries” (“the Declaration”):

Being aware of the importance of the freedom of Association as one of the fundamental pre-requisites for establishing an effective civil society which plays its natural role in the popular participation into decision–making, complimentary with the State institutions, in the process of effecting a comprehensive and sustainable human development, as well as the importance of the sound internal organization of these associations within a sound and effective internal democratic framework;

Realizing the value of the numerous efforts and initiatives that were carried out in several Arab countries, at regional and international levels, aiming at enhancing the role of associations and their effectiveness from a legal and regulatory perspectives; thus requiring an approach that builds upon such efforts, to launch an initiative grounded in the concepts of coordination, cooperation and joint efforts, in order to allow similar initiatives of civil societies in each Arab country to benefit from it, according to local and national needs;

Now Therefore, the participants agreed to launch an initiative open for the participation of all Arab associations and networks, called: “the Arab Initiative for the Freedom of Association” (“the Initiative”), based on the following:

I: Strategic Objective

Guaranty and materialize the Freedom of Association in every country based on “the Declaration of Principles and Criteria Relating to the Freedom of Association in the Arab Countries”, in order to amend and improve the practices, laws, decrees, statutes and by-laws of associations, and establish the principles and rules pertaining to the sound governance of associations and their internal democracy.

II: Action Plan

  1. Publish and disseminate “the Declaration” through all available media, on the widest possible local, regional and international levels.
  2. Elaborate on the principles and criteria contained in the Declaration and introduce details thereto, in order to make it more appropriate for the drafting an appropriate legislation for each Arab country, and to benefit in this context from national, regional and international expertise.
  3. Participate in the efforts directed towards generating an international instrument that guarantees and promotes Freedom of Association.
  4. Encourage and support civil society within each Arab country to draft proposed legislation that are consistent with the criteria and principles of the freedom of Association contained in the “Declaration”.
  5. Generate a set of best principles and criteria relating to the administration of associations and their internal statutes and by-laws, with the aim of establishing rules and principles of conduct that would improve their administration and enhance their democracy and credibility.

III: Activities

  1. Cooperate with all parties, organizations and institutions that are concerned with the objectives of the “Initiative”, at both the domestic and foreign levels (i.e. regional and international), both governmental and non-governmental.
  2. Devise a plan to publish and disseminate “the Declaration” through all available media and as broadly as possible locally, regionally and internationally.
  3. Collect all documents relating to the Initiative (e.g. laws, international and regional instruments and studies) and make them available for all concerned parties. Particularly, develop an internet web-site dedicated to the “Initiative”, in order to activate the communication, coordination and dialogue between all concerned parties.
  4. Conduct various studies pertaining to the regulation of associations; publish and disseminate successful Arab experiences (e.g. the ones about free formation of associations); encourage and develop the legal culture relating to associations and their freedom.
  5. Exchange expertise and legal advise relating to the freedom of Association and to their regulation.
  6. Develop a “manual” to assist activists in the process of transferring the skills necessary for the improvement of legislation, especially for dealing with the concerned authorities and for training to that effect.
  7. Develop principles and criteria relating to the management of associations and setting their statutes and by-laws, in order to establish rules and conducts that will improve their management and enhance their democracy and credibility. Thereafter, prepare optional forms for Statutes, by-laws and rules-of-order suitable for management and training.

IV: Coordination

  1. The “Initiative” does not constitute a new organization or network; it is rather a project framework open to all parties interested in accomplishing the strategic objective specified in this document.
  2. Every association or body that would have so decided, shall be responsible for the completion or partial implementation of any of the activities specified above or other activities, provided that such implementation is done in cooperation and coordination with the largest circle possible of other organizations participating in the “Initiative”.
  3. In order to assure the sustainability and effectiveness of this framework, the communication and coordination between all concerned parties shall be entrusted to a “communication and coordination point”, assigned in the first stage to each of the “Association for the Defense of Rights and Freedoms (ADDL)” and the Bunian Program.

The Declaration of Principles and Criteria Relating to the Freedom of Association in the Arab Countries

The legal experts and the activists in the Arab civil society gathered during the workshop held in Amman on May 9 & 10, 1999 on the "Legal Framework of Associations in the Arab World":

  1. Realizing the importance of the pivotal roles which associations play, complimentarily with the state institutions and its various authorities, in a large number of functions and fields, the most important being: achieving sustainable human development, promoting citizen interest in public issues, empowering the association’s members, improving their potential, directing their efforts, assuring the association’s institutional continuity and independence, and enhancing democracy, democratic culture and strengthening civil society;
  2. Affirming that associations cannot play these important roles except with due respect being given to the principle of the freedom of association, which is stipulated by most Arab constitutions, article 20 of the “Universal Declaration of Human Rights”, article 22 of the “International Covenant on Civil and Political Rights”, ILO’s “Convention on Freedom of Association and Protection of the Right to Organize”, the declaration issued by the United Nations’ General Assembly titled “Declaration on the Right and Responsibility of Individuals, Groups and Organs of Society to Promote and Protect Universally Recognized Human Rights and Fundamental Freedoms”,
    known in short as: “the declaration for the protection of the human rights defenders”;
  3. Believing that the role played by the freedom of Association in enhancing civil society requires democratic systems, institutions and processes, in addition to a true respect for the rule of law and the independence of the judiciary and lawyers;
  4. Realizing that several problems and impediments face associations in varying degrees in the majority of Arab countries, thus hindering the social development and the development of civic action in these countries, such as the absence of democracy, human rights and fundamental freedoms, the continuity of security as a fundamental perspective for Arab governments reflected in several exceptional laws, the foremost of which are emergency laws. This is compounded by the widening scope of poverty, unemployment and social disintegration accompanied by a rise in the rate of illiteracy, and the deterioration of the educational systems, as well as the continuity of discrimination against women and the neglect of the rights of youth and children;
  5. Noting that the legal systems and administrative practices in the majority of Arab countries, albeit in varying proportions, place impediments and obstacles in every phase of the existence of associations, starting from incorporation, to management, to dissolution, thus constituting severe violations of the Freedom of the Association, which reflects non-commitment to the provisions of the domestic constitution and international instruments. The dangers of these violations are compounded by the lack of awareness about the importance of the freedom of Association and the absence of democratic culture;
  6. Considering that setting principles and criteria, which clarify the extent to which laws may regulate associations without affecting the principle of freedom, is a very important matter, allowing for its dissemination with the broadest possible category of legislators, citizens and associations, and facilitating its distribution and use in Arab and local strategies, in order that Arab legal systems become, in this respect, consistent with these criteria and principles;

Now Therefore, the participants declare the following:

The Principle of the Freedom of Association And the Limits of the Regulation of Association

  1. Every natural or corporeal person enjoys the right to freely participate in the formation and management of associations, and to freely adhere thereto and withdraw therefrom, in order to achieve one or more purposes that do not seek the distribution of profits. The association, in turn, shall enjoy the right to benefit from an independent legal personality enjoying rights and freedoms.
  2. This right shall not be restricted except by provisions stipulated expressly by law and as required in a democratic society. These restrictions shall not be interpreted except restrictively and limitatively; in the event of ambiguity, the principle of freedom shall prevail.
  3. The State, in participation with civil society, shall establish a regulatory framework that encourages the practice of the freedom of association and that strengthens an independent, active and democratic civil society. The public administration shall treat associations equally without any discrimination.

Formation

  1. The fundamental principle, on which the freedom of Association is based, is the right to form associations without the need to obtain a prior permit or license. Thus, associations are formed by the agreement of their founders; their formation can be made public by a previous information/notification, but may not be subject to any previous intervention by the public administration or the judiciary.
  2. The purposes of associations, irrespective of their qualification or the scope of their activities, their charters and by-laws, the personality of their founders, their affiliation or number, may not be a reason to impose any impediments and hurdles on their formation.
  3. The administrative procedures applicable to the formation of associations, even through a regime of information/notification, cannot create obstacles to the formation of associations. Such procedures must be swift, clear, simple, cheap and should not be subject to the discretion of the public administration.
  4. Associations shall enjoy a legal personality, separate from their individual founders, as soon as they are formed by information/notification, along with all the rights attached to this legal personality, such as a separate financial estate, legal standing in courts for all matters relating to their own interests or the fulfillment of their purposes, and the right to own movable and immovable properties, receive donations and aids.

Statutes and By-Laws

  1. The founders of associations enjoy the right to freely set their statutes and by-laws freely without any interference. The public administration may prepare optional forms of such documents in order to assist founders in the formation process and as a service to them.
  2. Associations have the right to freely amend their statutes and by-laws, including their purposes and scope of activities, at any time according to their statutes and by-laws, and following the same principles applicable to the formation of associations, without interference from the public administration.

Management

  1. Associations are managed by the bodies stipulated in their own statutes and by-laws. The public administration may not interfere in or affect the process of their conducting their meetings, elections and activities.
  2. The Freedom of Association principle includes the freedom of adhering thereto and withdrawing therefrom, as well as the right for associations to set the conditions of their membership.
  3. In order to guaranty transparency, publicity and credibility, associations must keep accounting books and records, appoint auditors when necessary, and include in its statutes and by-laws provisions preventing conflict of interests between associations and their members.

Sources of Finance 

  1. Associations have the right to develop their financial resources, including but not limited to: members fees and donations, gifts, grants and aid form any natural or corporeal third-party person, local or foreign.
  2. The State must introduce in its laws, tax and duties exemptions to association, encourage donations and gifts by deducting them from taxes in reasonable rates. However, these privileges and tax exemptions should not become means of interference in the association affairs.

Controls

  1. Freedom of Association does not mean the absence of accountability and control. Associations must therefore be responsible towards any interested party and within the limits of the interest that warrants such controls, through the following bodies:
    1. Members of the association for all its affairs.
    2. Public opinion and society in case there is a legitimate public interest pertaining to the activity of the association (such as financial transparency if the association is seeking public funding).
    3. Ordinary courts.
    4. Public Administration (for financial control only) within the limits of what the association benefits from special tax rules and benefits.

Violations

  1. The governing principle is that penalties must be proportionate to the violations, and that no criminal punishment may be applied to the civil activities of associations or their members.

Dissolution

  1. The principle is that the public administration cannot dissolve associations; associations may not be dissolved except by a resolution passed by its own governing bodies or by a final and enforceable decision of a court, following trial that would have allowed the association the right to defense in a fair and public hearing and in instances that are clearly and limitatively defined by law.

 

 

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