Draft Operator Law Will Impart Harmful Restrictions on Kazakhstan Civil Society; Indicative of Regional Trends

The Republic of Kazakhstan, located in Central Asia, borders the Russian Federation to the North and the Xinjiang Uygur region of China to the East.  Kazakhstan gained its independence in 1991, after the dissolution of the Soviet Union.  Since independence, civil society has flourished, with over 400 NGOs, many related to a wide spectrum of human rights causes, established in the last 25 years.  Recently, however, international donors to Kazakh Civil Society Organizations (CSOs) have tightened their budgets, and the government has stepped in to fund the “third sector.”  While the civic space in Kazakhstan is relatively open, when compared to other countries in the region, recent legislation has imposed new restrictions on CSOs.  Despite Kazakhstan’s independence, Russia continues to serve as a kind of political model for the region’s former socialist republics.   With the implementation of the Kazakh “Operator Law” coming just a few years after the approval of the similarly restrictive Russian “foreign agent law,” Kazakhstan seems to be echoing Kremlin policy once again.

In September 2015, the Kazakh parliament introduced legislation that proposed a centralized system for administering grants and funds to CSOs in the country.  The draft law proposed the creation of a “noncommercial operator institution”, through which all state and foreign funding would pass before being allocated to CSOs.  The law also required CSOs to register their activities with the government and submit extensive information to a database managed by the government.  The draft law was approved by the lower house of the Kazakh parliament in early September of 2015 and signed by President Nursultan Nazarbayev on December 2, 2015.

The new Operator Law, together with amendments made to the Criminal Code in January, has the potential to inhibit the operations of CSOs, particularly those related to human rights.  According to the new amendments to the Criminal Code, CSO leaders who fail to register their organization or accept funding while the CSO is unregistered may be punished with up to six years in jail.  Freedom House has tracked the decline of Kazakhstan’s civil society and reports that its “democratic progress” continues to decline. On a scale from 1 (most free) to 7 (least free), Freedom House assigned Kazakhstan a score of 5.75 in 2006 and a 6.50 in 2015.

Kazakh officials in favor of the Operator Law claim that it was designed to “bring greater organization and efficiency to the process of distributing public funds, mediate between state agencies and their suppliers from the CSO community and bring greater transparency to the NGO-state procurement process as a whole.” However, activists and CSO leaders fear that the law imposes restrictive government oversight on Kazakhstan’s civil society.  With a single organization allocating funds to CSOs, the government may withhold money from organizations that it perceives to be threatening.  Historically, Kazakhstan has favored certain CSOs over others, with a higher percentage of government funding being allocated to the construction of schools and hospitals rather than support for human rights initiatives. Hudson Institute stated that this may be due to a general mistrust of the sector after the destabilizing “Orange Revolutions” in the early 2000s.  The Operator Law has the potential to widen the financial chasm between CSOs that the government supports and those that it does not.

Last October, the UN Office of the High Commissioner for Human Rights expressed concerns about the law when spokesperson Cécile Pouilly asserted that, “the scope and the vague wording of these amendments leaves room for broad interpretation, especially in terms of grant making, which may result in an arbitrary and discriminatory application of the law.” Similarly, UN Special Rapporteur Maina Kiai warned that the law, “may not only compromise the independence of associations, but challenge their very existence.” He asserted that financial resources are vital to freedom of association. The NGO community also spoke out against the law with Human Rights Watch urging Kazakhstan to “Amend the law on CSOs so that it meets international standards on freedom of association.”

Undoubtedly, the Kazakhstan Operator Law bares resemblance to the Russian “Foreign Agents” Law that was passed in July 2012.  The Russian law established that any civil society organization that received money from foreign sources, either governmental or private, had to register with the Ministry of Justice as an “organization carrying the function of a foreign agent.” Many have argued that the term “foreign agent” carries with it a heavy Cold War era connotation intended to demonize those civil society groups that carry the label. Additionally, the law states that CSOs are required to submit extensive semi-annual reports and financial records to the government regarding their organizational activities.  Today, over 120 civil society organizations are registered as foreign agents, including many prominent political and human rights organizations.

Unfortunately, a series of amendments made by the Duma in 2014 increased the regulatory power of the “Foreign Agent” Law. These amendments gave the Ministry of Justice full power to register groups as “foreign agents” without the groups’ consent. The 2014 amendments also made it illegal for Russian political parties to be sponsored by or associated with CSOs possessing “foreign agent” status. Much like the Kazakh Operator Law, Russia’s “Foreign Agents” Law allows the government to closely monitor its civil society and prevent threatening or politically uncomfortable organizations from receiving operational resources.  In Russia, as in Kazakhstan, Civil Society Organizations are funneled through a single institution, the Ministry of Justice, which maintains exclusive jurisdiction over the operational power of CSOs.

Douglas Rutzen of the International Center for Not-for-Profit Law asserts that Russia has been a key leader in the increasingly restrictive civil society climate in Eurasia and Central Asia.  Rutzen notes that, while Russia was not the first country to implement laws that inhibit foreign funding, it contributed to the development of similar laws in neighboring countries. Citing Malcolm Gladwell’s 2000 book “Tipping Point,” Rutzen compared restrictive civil society laws to an infectious disease, with Russia as the carrier. The comparison is apt. Since Russia implemented the “Foreign Agent” Law in 2012, over 70 countries have proposed constraints on civil society. Among these, Kazakhstan’s Operator Law is important because it illustrates the extent to which the space for civil society organizations is shrinking on a regional level.

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The FCRA: Modi’s Secret Weapon

On April 30, 2013, the Indian Social Action Forum (INSAF)—an umbrella organization of over 700 civil society organizations—received a non-descript notice from the Ministry of Home Affairs that revoked the INSAF’s registration and froze its assets in an effort to allegedly protect “the public interest.” This was not the first time that the INSAF had encountered resistance to its activities. Both the INSAF and its member organizations had often sparred with the Indian government over issues of environmental policy including the construction of nuclear power plants and the legalization of GMOs. Thanks to an ambiguous new section of the legal code, however, the Indian government has the authority to freeze assets and rescind the registration of organizations that receive unapproved foreign funds and/or pose a threat to “the public interest.” The true motivation behind the deregistration of the INSAF was immediately obvious to the organization’s leadership: they were being targeted for their activism.

Prime Minister Narendra Modi addresses the 2014 UN General Assembly  (UN Photo/Cia Pak)
Prime Minister Narendra Modi addressing the 2014 UN General Assembly (UN Photo/Cia Pak)

The notice delivered to the INSAF in April was issued in accordance with Sections 13(1) and 14(1-2) of the Foreign Contribution Regulation Act of 2010. Based on an older 1973 law designed to shore up foreign currency reserves, the ambiguity of the amended FCRA allows for nefarious government overreach. Section 13(1) states: “Where the Central Government, for reasons to be recorded in writing, is satisfied that pending consideration of the question of canceling the certificate on any of the grounds mentioned in sub-section (I) of section 14…[it may] suspend the certificate for such period not exceeding one hundred and eight days.” Section 14 is more severe: “The Central Government may, if it is satisfied after making such inquiry as it may deem fit cancel the certificate if, in the opinion of the Central Government, it is necessary in the public interest to cancel the certificate…”

Objecting particularly to the ambiguity of Section 14, and drawing significant support from the American Bar Association’s Center for Human Rights as well as the international CSO community, the INSAF filed a strongly worded petition with the High Court of Delhi. In September, five months after the Ministry’s notice had been delivered to the INSAF, the High Court finally dismissed the deregistration and thawed the organization’s accounts. The FCRA, however, was upheld.

The attack on the INSAF was just the beginning. In the last two years, Modi’s government has used the FCRA to target thousands of CSOs that have criticized government policies. On June 9, 2015, 971 organizations, including several prominent public universities and local chapters of international NGOs, were stripped of their registration for accepting unapproved funds. Greenpeace activist Priya Pillai, herself a recent victim of FCRA regulations, noted that “The issue is not related to the source of our funding or FCRA. It is a larger political issue under which NGOs are being targeted and persecuted for working, as well as, raising the voice of the poor, weak, and the deprived.” Ms. Pillai is partially correct. While the government’s use of the FCRA is, indeed, a reflection of larger political issues, repeal of the amended FCRA would be an appropriate first step on the road to philanthropic freedom in India.

In the 2015 Index of Philanthropic Freedom, India maintains a mid-range composite score of 3.2, but in the area of cross border flows it scores just 2.1 out of a possible 5. In his justification of this low score, Noshir Dadrawala of the Centre for Advancement of Philanthropy emphasized the onerous requirements of the FCRA: “It is important to note that no CSO operating in India whether registered or not can receive foreign contributions without first obtaining prior permission from the Home Ministry.” In order for civil society to thrive and international philanthropic funds to flow into India, the government must amend the FCRA and end its attack on the third sector.