International standards and the current national problems OF ngos.

This lecture is dedicated to the current problems of NGOs in Ukraine which can be solved by the implementation of the international (including European) standards of NGOs and civil society. Attention is paid to the activity of the UN, the Council of Europe and the OSCE. The text of the standard is cited, the status of the standard (treaty / non-treaty) and the ways of its implementation in Ukraine are discussed. Special attention is paid to the decisions of the European Court of Human Rights that are related to the NGOs.

Learning outcome:

By the end of the lecture students should be able to analyze how to use the international standards of NGOs to improve the Ukrainian legislation in order to solve the current problems of NGOs in Ukraine.

Key terms of the topic:

International standards	European Court of Human Rights
European standards	Ratification and implementation

The most influential organization that creates international standards in the field of human rights and civil society is the United Nations Organization (the UN). The UN is an international organization founded in 1945 after the Second World War by 51 countries committed to maintaining international peace and security, developing friendly relations among nations and promoting social progress, better living standards and human rights. The work of the UN reaches every corner of the globe. Although best known for peacekeeping, peacebuilding, conflict prevention and humanitarian assistance, there are many other ways the United Nations and its System (specialized agencies, funds and programmes) affect our lives and make the world a better place. The Organization works on a broad range of fundamental issues, from sustainable development, environment and refugees protection, disaster relief, counter terrorism, disarmament and non-proliferation, to promoting democracy, human rights, gender equality and the advancement of women, governance, economic and social development and international health, clearing landmines, expanding food production, and more, in order to achieve its goals and coordinate efforts for a safer world for this and future generations.

UN’s Universal Declaration of Human Rights guarantees the freedom of associations (Article 19) and so do the International Covenant on Civil and Political Rights (Article 19(2)), see Lecture 1 for the details.

Describing the activity of the UN in the field of the civil society, the researchers attract the attention to the fact, that the UN recognized non-governmental organisations (NGOs) as legitimate international entities at its birth (see UN Charter, Article 71). From that time forward, a host of UN treaties and declarations set standards, primarily the rights of association, peaceful assembly and expression, which guarantee the existence and operation of NGO. The protections in the International Covenant on Civil and Political Rights (Articles 19, 21 and 22) are echoed in a host of other instruments, many of which mandate that the rights must be secured without distinction as to race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status (P. Armstrong).

UN standards do not provide a definition or required terminology for NGOs. They also do not set out rules regarding necessary procedures for establishment, operation or termination of NGOs. However, certain principles are clear. Governments have discretion in the manner in which NGOs are established and regulated, as long as national law and practice do not effectively render freedom of association meaningless. Freedom of association is a right and entitlement, and not something that must first be granted by the government to its citizens. Thus, there should be no pre-condition for individuals to associate with one another and NGOs need not acquire formal legal status in order to exist. The state legal apparatus should facilitate, promote and protect the existence and operation of organizations. This includes the ability of NGOs to "solicit, receive and utilize resources." (Declaration on Human Rights Defenders, Article 13) Once organizations exist, they should have the same rights and obligations and be entitled to do what individuals can lawfully do, without being subject to any special requirements because of their status as separate legal entities. NGOs can pursue their objectives as long as they and the means employed are lawful (P. Armstrong).

All of the mentioned above UN documents (Universal Declaration of Human Rights, International Covenant on Civil and Political Rights and Declaration on Human Rights Defenders) are the treaty standards and are obligatory for the states that ratified them. Ukraine has ratified all these documents and they are integrated into the national legislation, including the text of the Constitution.

Some of the important international standards for the civil society and the third sector in Ukraine were created by the Council of Europe. The main documents for the NGOs, created due to the efforts of this organization, are:

- European Convention on Human Rights;

- European Social Charter, Revised;

- European Convention on the Recognition of the Legal Personality of International Non-governmental Organisations;

- Convention on the Participation of Foreigners in Public Life at Local Level;

-Framework Convention for the Protection of National Minorities.

Practically all of these treaty standards are ratified by Ukraine. But most of them proclaim the freedom of associations in its different aspects. However, freedom of association is effective only where it goes hand-in-hand with legislative measures facilitating its exercise and respecting the value of NGOs' contribution to society. Although they can be fostered by passing favourable legislation, awareness of and respect for NGOs' contribution develop only where NGOs themselves undertake to behave in a responsible, efficient and ethical manner (Fundamental Principles on the Status of Non-governmental Organisations in Europe). But in the case with the NGOs, non-treaty standards (without the status of the convention) are more important because they have more details about the development of the civil society and its institutions. These non-treaty standards are the “Fundamental Principles on the Status of Non-governmental Organisations in Europe and Explanatory Memorandum” (2002) and “The Legal Status of Non-Governmental Organisations and Their Role in a Pluralistic Democracy: Guidelines to promote the development and strengthening of NGOs in Europe” (1998).

Fundamental Principles on the Status of Non-governmental Organisations in Europe and explanatory memorandum was introduced by the participants at the multilateral meetings held in Strasbourg from 19 to 20 November 2001, 20 to 22 March 2002 and 5 July 2002. This non-treaty document has 2 parts: one part for the principles on the status of NGOs in Europe and the second part to explain the meaning of every principle in details.

This document is very important for Ukraine, as it holds the principles that are already in use in the biggest part of the European democracies. In the majority of member states the freedom of associations is reflected in a flourishing voluntary sector; the number of associations registered in the countries concerned is estimated at 2 to 3 million, and this figure does not take account of unofficial, unregistered associations, of which there are many in certain countries. The number of non-governmental organisations (hereinafter – the NGOs) is therefore increasing, and this trend is inextricably linked to the ideal of freedom and democracy which guides the Council of Europe and its member states.

The aim of the Fundamental Principles on the Status of Non-governmental Organisations in Europe is not to offer model legislation concerning NGOs but to recommend the implementation of a number of principles which should shape relevant legislation and practice in a democratic society founded on the rule of law. The European Convention on the Recognition of the Legal Personality of International Non-governmental Organisations (ETS No. 124) deals with existing NGOs which already have legal personality in the state where they are headquartered and wish to have this legal personality recognised by other states in which they intend to carry out some of their activities. On the other hand, the fundamental principles seek to promote national legislation which assists the setting up of NGOs and which, among other things, lays down arrangements for the acquisition of legal personality in the NGO's state of origin, regardless of whether the NGO's work is to be purely national or international as well. National law should provide NGOs with a flexible legal framework, enabling them to meet the recommendations contained in the fundamental principles. All legislation on NGOs should be devised in consultation with representatives of the NGO sector.

This document sees NGOs as the essentially voluntary self-governing bodies, which are not therefore subject to direction by public authorities. The authors pay attention to the fact, that terms used to describe NGOs in national law may vary, but they include associations, charities, foundations, funds, non-profit corporations, societies and trusts. Among these NGOs the text gives examples of certain forms, but the list is not exhaustive. This list does not include trade unions and religious congregations, but these certainly have a special place among NGOs. In some countries these bodies, or some of them, come within the ambit of legislation on associations, whereas in others they are covered by separate laws. Since Convention No. 124 did not expressly exclude these bodies from its scope, the participants decided to make no explicit mention of trade unions and religious congregations in the fundamental principles. Political parties are expressly excluded from the ambit of the fundamental principles as, under most national laws, they are the subject of separate provisions from those applicable to NGOs in general.

The next very essential part of the document states that NGOs encompass bodies established by individual persons (natural and legal) and groups of such persons. They may be national or international in their composition and sphere of operation. This recommendation is very essential for Ukraine, because of two reasons. Firstly, the legal persons in Ukraine are limited in the abilities of founding NGOs in comparison with the natural persons. Secondly, NGOs in Ukraine have 3 statuses: local (which is about to be cancelled), national and international.

The document makes a clear distinction between associations and foundations. An association means "a number of persons uniting together for some specific purpose". A foundation is "an identified property devoted to a given purpose". For now, the Ukrainian legislation does not have this distinction in the NGO legal acts – and this causes a lot of inconvenience and confusions for the national NGOs.

The next principle is very essential for the Ukrainian tax legislation. The principle states that NGOs do not have the primary aim of making a profit. They do not distribute profits arising from their activities to their members or founders, but use them for the pursuit of their objectives. In Ukraine a lot of NGOs trying for years to prove to the tax authorities they are nonprofits – and yet, pay taxes like the commercial companies. This drawback of legislation has even the worse effect while the financial crisis.

One more principle is essential from the point of view of the tax law (but is important for the constitutional law as well). NGOs with legal personality should have the same capacities as are generally enjoyed by other legal persons and be subject to the same administrative, civil and criminal law obligations and sanctions generally applicable to them. Now in Ukraine it is not implemented. For example, the legal persons, founded to gain profit, can select either the normal or the simplified tax regime. Such ability does not exist for NGOs (though Russian Federation and many other countries have already proved it is very fruitful when it comes about the strengthening of the civil society institutions).

According to the next principle, an NGO with legal personality may engage in any lawful economic, business or commercial activities in order to support its non-profit-making activities without there being any need for special authorisation, but always subject to any licensing or regulatory requirements applicable to the activities concerned. In Ukraine it is possible, but it leads to the loosing of the nonprofit status and so – the tax relieves.

When it comes about the establishment of the NGOs, the Ukrainian legislation is also the subject to review. For example, in Ukraine it is impossible to create some types of NGOs for “any person, be it legal or natural, national or foreign national, or group of such persons” – and according to the Fundamental principles, they should be free to establish an NGO. The explanatory note says: ‘two kinds of restriction are encountered in practice in some states: firstly, on the establishment of NGOs by foreign nationals and, secondly, on establishment by legal entities. There are no grounds for these restrictions’. There are also some difficulties in establishing an NGO by way of a gift or bequest, the normal outcome of which is the creation of a foundation, fund or trust according to the Ukrainian legislation.

Acquisition of legal personality is a core chapter of the Fundamental principles. This chapter is essential for Ukraine – as it is much quicker and cheaper to register a business company now, than an NGO. In comparison with that it is interesting to know that in some states NGOs automatically have legal personality from their establishment.

Ukraine is among the majority of states, where the acquisition of legal personality is governed by rules and a procedure. So the national legislation about NGOs has the long way ahead. According to the Fundamental principles, the registration procedure must be as simple and undemanding as possible and must not entail the exercise of discretion. For that reason the applicable rules must be clear and easily accessible by NGOs, which is not always the case among states. One means of guaranteeing such accessibility is publication of an explanatory guide to the process by the relevant authority. This may not be possible in all states for budgetary reasons, but in any event the registration authority should provide NGOs with all the information and assistance they may need.

Fundamental principles are also very clear about different ways of the public support given to the NGOs. NGOs are sometimes better placed than the state to answer certain needs of society, for instance in welfare and health matters. As a result, states often decide to grant them support, in the form of direct grants or preferential tax treatment. There should be clear, objective standards for any eligibility of NGOs for any form of public support, such as cash and exemption from income and other taxes or duties on membership fees, funds and goods received from donors or governmental and international agencies, income from investments, rent, royalties, economic activities and property transactions, as well as incentives for donations through income tax deductions or credits. In granting such support, relevant considerations may be the nature of activity that the NGO undertakes and whether or not it exists for the benefit of its membership or for the benefit of the public (or a section of this). Such support may also be contingent on an NGO having a particular status and be linked to specific requirements for financial reporting and disclosure.

The public should also be able to ascertain which NGOs have received support and on what grounds. The authorities must also be able to verify that associations seeking support or preferential tax treatment do, indeed, serve a non-profit-making purpose, as in some countries tax advantages attract certain entities to apply for NGO status when it would have been more appropriate for them to have been established as commercial companies.

As a result, the majority of states make the granting of public support contingent on compliance with certain criteria and, above all, with the NGO's fulfilment of a public interest objective. In some states this may entail recognition of a special status or classification as an organisation in the public interest, which enables the NGO to receive donations and enjoy tax advantages, while at the same time ensuring the protection of third parties. Since the granting of public support is to a large extent conditional on the objectives and activities of an NGO, it is normal that any major change in those activities or objectives may result in review, alteration and even termination, of public support.

‘ The legal status of NGOs and their role in a pluralistic democracy ’ is one more important non-treaty standard created with the support of the Council of Europe. This document contains guidelines to promote the development and strengthening of NGOs in Europe. It was adopted by the multilateral meeting organised by the Council of Europe in cooperation with the Japan Foundation in Strasbourg, 23 - 25 March 1998.

In comparison with the Fundamental principles, this standard deals with the most important problems of the NGOs. One of such problems is the registration of the NGOs. According to the guidelines, the administrative process for the registration of NGOs should be applied with a minimum margin of discretion provided. The government ministry or agency responsible for the registration of NGOs should publish rules and regulations applicable, and forms that explain the process. It should provide assistance to NGOs that are seeking formal legal status, and it should be required to provide a written statement of reasons for any refusal to register an NGO.

The next important question, according to that standard, is the non-profit status of the NGO. Laws governing NGOs should provide that no net earnings or profits of an NGO may be distributed as such to any person. NGOs should be allowed to engage in economic activities as long as the principal purpose of the NGO is to pursue a public purpose or the mutual benefit of its members. If an NGO does derive net profits from an economic activity, they must be used for the public or mutual benefit purposes for which it was formed, and they must not be distributed to any person. This principle of non-distribution is the most important feature distinguishing NGOs from for-profit entities.

One more problem is a two-sided dialogue between the state authorities and the NGOs, which will lead to the mutual understanding and the society benefit. NGOs and governments should in each appropriate sector establish mechanisms for dialogue, consultation and exchange in a spirit of openness and with the overriding objective of searching for optimum solutions to society's needs and problems.

Such consultative mechanisms are neither a competition with nor a replacement for the roles played by political parties, trade unions, employers' associations or commercial lobbies. The existence of and participation in government-NGO consultative mechanisms neither guarantees nor precludes government subsidies, contracts or donations to individual NGOs or groups of NGOs. No consultation should be viewed by government as a vehicle to coopt NGOs to government priorities, nor by NGOs as an inducement to abandon their goals and principles. It goes without saying that such government-NGO consultations should take place at all stages of the drafting of legislation and administrative decrees that affect and frame NGO status, financing or spheres of influence. NGOs should acquire the expertise to make competent input to all aspects of such discussions, whether political or technical. Appropriate training in relevant fields including managerial skills should be encouraged.

The problems for such a mutual effective dialogue are the problems for the biggest part of the European countries, not only for the young democracies like Ukraine. That is why the standard states, that government-NGO trust and partnership take time to establish and develop. In some countries it may be found useful for the government to designate an office or a person as the focal point for channeling NGO contacts.

‘The legal status of NGOs and their role in a pluralistic democracy’ also pays attention to the self-development of the third sector of the society. According to its norms, self-regulation is most prevalent and successful in countries where the legal system for NGOs is most highly developed. This suggests that both the laws governing NGOs and the sector's own awareness of the need for ever higher standards go hand in hand. Responsible NGOs are increasingly aware that the success of their sector depends to a large extent on whether the public regards it as efficient, effective, and ethical. Further, self-regulatory codes are often developed to enable groups of NGOs working in a specific sector to deal with the particular needs and challenges of that sector. The document recommends the adoption and internal enforcement of a clear, strong code of conduct is a powerful statement to donors, beneficiaries, and other interested parties that the NGO has standards and takes meaningful steps to enforce them. Replicated by numerous NGOs in any society, the process of adopting and enforcing codes of conduct can measurably raise the actual and perceived status and integrity of the sector.

Ukraine recognises the importance of the decisions of the European Court of Human Rights and always follows them. According to the international duties of Ukraine, these decisions are obligatory for our country. On January, 1, 2011 there were more than 35 decisions of the European Court of Human Rights concerning the freedom of associations. One of the decisions was on the case of Koretskyy and others v. Ukraine (Application no. 40269/02).

Mr. Koretskyy and other applicants live in Kyiv, and on 7 June 2000 the applicants and two other persons founded an association named “Civic Committee for the Preservation of Wild (Indigenous) Natural Areas in Bereznyaky” (“Громадянський Комітет за збереження дикої (корінної) природи Березняків”, the “Civic Committee”). Mr Koretskyy was elected as the Civic Committee’s head. On 27 July 2000 the applicants filed an application for the State registration of the Civic Committee together with a copy of its Articles of Association with the Kyiv City Department of Justice. The Civic Committee is a non-governmental (NGO), non-profit organisation.

On an unspecified date the application and Articles of association were returned to the applicants and they were advised to make changes to the text, which were noted down by the City Department in the same documents. In particular, several sentences and paragraphs were crossed out, including paragraphs 3.1, 5.1 (d), and 6.4. Some other parts of the Articles were rephrased or amended, like, for instance, the word “lobbying” in paragraph 4.2 (e) was replaced by “submission of propositions” and the phrase “to carry out non-governmental ecological expert examinations” in paragraph 5.1 (i) was reformulated to the effect that the Civic Committee could carry out ecological expert examination on a “voluntary basis”.

According to the applicants, on 6 September 2000 they submitted the redrafted version of the Articles of association, in which the Department’s amendments were partially accepted. The Government denied this.

By the letter of 18 September 2000, the City Department informed the applicants of its refusal to register the Civic Committee on the ground that its Articles had not been drafted in accordance with the domestic law. In particular, the Civic Committee’s status was not indicated; the provision that the Civic Committee could have representative offices in other cities and towns of Ukraine did not correspond to the provision that its activities were to be carried out on the territory of Kyiv; the Articles listed two aims of the organisation instead of one aim and tasks; the Executive Board of the Civic Committee was entrusted with economic (“господарські”) functions while section 24 of the Associations of Citizens Act envisaged that the economic activities of an association could only be carried through separate legal entities which it could establish for that specific purpose; and the provisions that the Civic Committee could carry out publishing activities on its own and involve volunteers in its activities as members were contrary to the same law. Finally, the applicants had not taken into account all the corrections made to the text of the Articles of association and they had submitted a copy of the document showing that they had paid registration fees, while the original was required.

The applicants continued to negotiate with the registered body, but also to carry out certain activities of the Civic Committee, in particular, publishing Articles on its behalf in various newspapers.

On 30 November 2000 the applicants lodged a complaint with the Pecherskyy District Court of Kyiv, seeking the annulment of the City Department’s decision not to register the Civic Committee. They alleged a violation of their right to form an association and the right to freely choose its aims and areas of activities. They also argued that the reasons for the refusal to register their association had been based on an incorrect interpretation and application of the relevant law by the City Department. Furthermore, according to them, the City Department had failed to take into account the amended version of the Articles of Association, which they annexed to their complaint to the court.

Within the period of 2 years the applicants used all the legal possibilities to solve their case in the Ukrainian courts. Finally, on 14 March 2002 a panel of three judges of the Supreme Court rejected the applicants’ request for leave to appeal in cassation, finding no grounds for examination of the case by the Civil Cases Chamber of the Supreme Court.

On 7 July 2002 the applicants decided to liquidate the Civic Committee and discontinued its activities.

Using the European Convention on Human Rights, the Ukrainian Constitution, the Laws and bylaws of Ukraine, the European Court of Human Rights came to such overall conclusions:

- that there has been a violation of Article 11 of the Convention.

- that each applicant should be awarded EUR 1,500 in respect of non-pecuniary damage (Mr. S. Koretskyy claimed EUR 6,000) and the other applicants claimed EUR 3,000 each in respect of pecuniary and non-pecuniary damage. They stated that, given his managerial responsibilities in respect of the Civic Committee and his professional experience in the field of ecology of more than thirty years, Mr. S. Koretskyy’s moral suffering because of the violation of his rights under Article 11 of the Convention had been greater than that of the other applicants. The applicants did not specify the nature of the pecuniary damage they had allegedly suffered);

- that the applicants should be awarded the requested sum of EUR 1,600 for costs and expenses in the proceedings before the Court.

As for the Ukrainian legislation on the NGOs, the Court did not find it necessary in the circumstances to determine whether the fact that the authorities made changes and amendments to the text of the Articles of association, thereby indicating the provisions which they thought were not in compliance with the law and proposing the wording which, according to them, would satisfy the existing legal requirements, raises a separate issue under Article 11 of the Convention.

After the decision acquired the legal force the Cabinet of Ministers of Ukraine gave the task to the Ministry of Justice to work out the draft law ‘On Civic Organizations’. In 2008 the Verkhovna Rada received this draft law (registration # 3371). But on March, 11, 2010 the draft law was called back by the subject who initiated it in order to ‘give the way’ to the newer draft law with the same title (registration # 4633). This draft law was also called back, and now the Verkhovna Rada works on the draft law ‘On Civic Organizations’ registration # 7262, introduced on October, 18, 2010.

One more international organization that pays a lot of attention to the development of the civil society in the participating states is Organization for Security and Co-operation in Europe (OSCE). With 56 States from Europe, Central Asia and North America, the OSCE is the world's largest regional security organization. It offers a forum for political negotiations and decision-making in the fields of early warning, conflict prevention, crisis management and post-conflict rehabilitation, and puts the political will of its participating States into practice through its unique network of field missions. The OSCE has a comprehensive approach to security that encompasses politico-military, economic and environmental, and human aspects. It therefore addresses a wide range of security-related concerns, including arms control, confidence- and security-building measures, human rights, national minorities, democratization, policing strategies, counter-terrorism and economic and environmental activities. All 56 participating States enjoy equal status, and decisions are taken by consensus on a politically, but not legally binding basis.

In the sphere of the freedom of associations OSCE encourage its participating States to adhere to their commitment by:

- developing supportive regulatory framework for NGO law reform when necessary;

- provide registration procedures for NGOs that are quick, easy and inexpensive;

- provide a clear and concise legal framework for NGOs;

- fully support the United Nations General Assembly Draft Declaration on the Right and Responsibility of Individuals, Groups and Organs of Society to Promote and Protect Universally Recognized Human Rights and Fundamental Freedoms.

OSCE participating states have through various international instruments committed themselves to ensure the freedom of association in the region and allow members of the civil society to carry out their tasks without undue governmental interference. It is essential that the member states live up to these commitments and protect the right to freedom of association in their countries in theory as well as in practice (M. Bideke).

Mandatory reading:

1. Vinnikov Alexander. Legal Mechanisms for NGO-Government Partnership in Ukraine. The International Journal of Not-for-Profit Law, Volume 6, Issue 3, June 2004 (the text is included).

2. Case of Koretskyy and others v. Ukraine (Application no. 40269/02). Available at the Official Web Site of the European Court of Human Rights (the text is included).

Recommended reading:

Constitution of Ukraine. Chapter XI. Available at: http://www.mfa.gov.ua/data/upload/publication/mfa/en/159/constitutioneng2.doc

Law of Ukraine ‘On Civic Associations’ (1992). Available at: http://www.legislationline.org/documents/action/popup/id/7132

Fundamental Principles on the Status of Non-governmental Organisations in Europe and explanatory memorandum (2002). Available at: http://legislationline.org/documents/action/popup/id/8082

The Legal Status of Non-governmental Organisations and their Role in a Pluralistic Democracy (1998). Available at: http://legislationline.org/documents/action/popup/id/7982

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