NGO and social welfare organisations were found in Nepal ever since the origin of society itself. Even before the unification of Nepal, there were many kinds of social welfare organizations like guthi, parma, dhikur, proportionate to the number of communities and toles. But in modern times, it was not easy to establish an NGO in Nepal till 1950. Even after a democratic movement, development of NGOs was still very difficult because until 1961, permission was required from the prime minister to establish one. The sector saw a very low growth in the period of party-less political system.
Currently, 85,000 NGOs and 270 INGOs are believed to be operating in Nepal. The growing presence of a large numbers of non-government organisations, welfare societies, self-help groups and communities are an urgent requirement in contemporary Nepal. Many people below the poverty line are fighting for their livelihood or living abroad for same. They are hardly aware of the importance of being informed about the government and bureaucracy. Most of them are not aware of the Right to Information Act.
Of the international NGOs, most are registered with the Social Welfare Council (SWC). Only half of them are actively functional, some INGOs are just restricted to the residence or office cabin of their country directors, working for their narrow interests. Because of the lack of internal control and governance, most of these organizations are only accountable to their stakeholders. Stakeholders are any entities having an interest in the organization. They may be of any capacity, from inside or outside an organisation, including beneficiary individuals or groups of society, government of donor country, government of beneficiary country, employees of NGOs and partner NGOS, administration personnel of an organisation, board and advisory members, trustees/founders of NGOs, vendors of goods and services, consultants and auditors among others.
The laws and regulations governing NGOs and INGOs in Nepal are: National Directorate Act (1961), Association Registration Act (1977), Social Welfare Act (1992), Local Self-Governance Act (1999), Company Act (2006), and Income Tax Act (2002). But these laws are not enough for the governance of these organisations, as they are not up to the mark to deal with the complexities in contemporary society.
Most NGOs are registered under the District Administration Office through the Association Registration Act 1977. The registering authority simply registers and renews the registration as required after receiving necessary documents including financial and audit reports. There are no standard reporting requirements or provisions for monitoring and governing registering authorities in any prevailing laws. Neither local administration office, nor SWC, which is specially established to look after NGOs getting foreign aid, is able to govern these NGOs. The reasons may be the government’s lack of attention towards this sector, and lack of required policies, infrastructures and resources.
The government of Nepal is signatory to the Paris Declaration on Aid Effectiveness, and was participant in the follow-up High Level Forum in Accra, Ghana. They are developing a National Action Plan for Aid Effectiveness, based on the recommendations that emerged from the 2008 aid effectiveness survey for the Accra Forum.
In Nepal, Aid Management Platform (AMP) has been implemented in the Foreign Aid Coordination Division (FACD) of the Ministry of Finance (MoF) in order to strengthen government processes as well as to increase transparency and accountability.
The GoN uses AMP as a tool to produce reports, such as the annual aid report. This aid management program was created by Development Gateway in collaboration with the OECD, World Bank, UNDP, and governments of Ethiopia and India. Development Gateway is a non-profit organization that delivers information solutions to the people on the frontlines of international development work. It is headquartered in Washington DC, with project management hubs in Dakar, Senegal and Nairobi, Kenya. Its European affiliate organization, Development Gateway International, is based in Brussels.
I believe that the initiative to install AMP was taken under the influence of, and with support from, donor agencies, but is not a proactive program from the government, and hence, is unlikely to solve the issues of governance. However, it may be a component and tool for gathering the data and reporting the figures of foreign aid, remittance, and donor agencies.
Currently, donor agencies directly providing funding to the government of Nepal have been listed in AMP. This is a good step towards transparency, but may not lead to good governance. Factors which influence governance of organisations are: lack of vision and mission, family-owned NGOs, lack of capacity building within an organisation, general public’s weak access to INGOs and national level authority, donor-driven environment and operation models, lack of one window policy at national level, need and emergence of social audit, reporting and audit being limited to mere formality, lack of SOPs (Standards Operating Procedures) in all levels, lack of awareness in beneficiaries, lack of welfare approach in organisations, big gap between grassroots NGOs and INGOs, absence of experts in related field and operation within organisation, absence of sector-specific NGOs at grassroots level, absence of need-based models at implementation level, absence of centralised control and monitoring, and conflicts of interest in many levels.
Monitoring and regulations, one window policy, and capacity building will lead to better NGO/INGO governance.
There are districts in the Mid-Western and Far-Western regions of Nepal where the level of poverty is believed to be higher than the national average. Most INGOs are working in such districts, but the objective of poverty alleviation has not been achieved. The reason must be the existing gaps between INGOs and their partners that implement programs at grassroots level.
The solutions to these problems include one window policy at the central level, monitoring and regulations at regional level, capacity building in all levels, and post project implementation review from independent auditors or members of professional regulatory bodies like Institute of Chartered Accountants of Nepal (ICAN). Strong regulatory authority with required infrastructure and resources should be established at central as well as district levels. Laws and regulations related to NGOs must also be restructured at central and regional levels. Donor agencies must emphasise capacity building programs of grassroots NGOs.
Inactive NGOs should be reviewed, with strict regulations for either reviving or closing them. Focusing on regulatory reporting from INGOs restrained the inflow and reduced the interest of INGOs towards entering and working in Nepal. Instead, the government should focus on strong governance at operational and management levels of all NGOs and INGOs. Internal governance and control with strong and well tested SOPs should be in place to achieve the real objectives of organizations in the development sector.
Author is a Consultant to NGOs and INGOs in Nepal and India