Policy for NGOs getting foreign funding declared ‘of no legal effect’, SHC

KARACHI: The Sindh High Court has declared that a policy notified in 2013 for regulating the non-governmental organisations (NGOs) receiving foreign funding was of no legal effect as the federal government did not take any step to provide the legislative cover to it.

An NGO petitioned the SHC in 2019 against the NGOs Policy 2013 formulated by the Economic Affair Division (EAD) with the approval of the Economic Coordination Committee (ECC) asking NGOs utilising foreign funding to get prior registration with the government and, subject to concurrence, sign a memorandum of understanding containing the information specified by the government.

While allowing the petition, a two-judge bench headed by Chief Justice Ahmed Ali M. Shaikh observed that in the light of the plethora of judgements and principles laid down by the superior courts, it was manifest that the ministry of finance, revenue & economic affairs or EAD was neither vested with such powers nor competent under any law to regulate or curb the petitioner’s operations through a policy, which has no constitutional strength or legislative mandate or legal sanctity or backing of enabling law, as such it did not carry any weight.

The counsel for the petitioner NGO Marie Stopes Society contended that the NGO was registered under the Societies Registration Act, 1860 and providing family planning service and ante- and post-natal care for mothers and newborn through its healthcare clinics and the petitioner was operating through funding from foreign charitable and aid organisations.

The lawyer further asserted that firstly, the petitioner had applied for registration in terms of the impugned policy, but the same was allegedly placed in cold storage and then an appeal under clause 7 of the Policy was filed and the same was declined.

He argued that the policy, purported to determine the legal character and obligations of the organisations receiving foreign funding, issued through a notification which prima facie was an attempt by the executive of the state to legislate and the same was amounted to a violation of the Constitution.

He maintained that the policy itself recognised the need for legislation and was nothing but a stop-gap arrangement and lacked any force of law.

The deputy attorney general opposed the petition and argued that Article 90(2) of the Constitution allowed the prime minister to perform his functions either directly or through a federal minister, the ECC of the cabinet, thus the notification/policy issued in pursuance of the decision of the ECC was lawful.

He submitted that after rejection of a request, the petitioner had preferred an appeal, which was also rejected in 2019 due to lack of security clearance with a direction to apply afresh for any new foreign funding project as terms of the policy.

The DAG further submitted that as the judgement of the superior courts operated prospectively the policy issued in the year 2013 aimed to ensure accountability, transparency and securing the interests of the country.

However, the bench noted that the DAG could not show any document to establish that the impugned notification/policy had any backing of the law or the EAD was vested with such powers to issue/promulgate and implement the notification/policy.

“Interestingly enough the Notification was issued in November 2013 and till date no legislation for a regulatory framework for foreign economic assistance flowing outside governmental channels is enacted nor there anything on the record or submitted by the learned DAG that the Policy was placed before the Cabinet for decision/approval, as the case may be.

“It is crystal clear that the impugned letter dated 09.01.2019 rejecting the petitioner’s application for signing MoU and the decision on the appeal preferred against such order in terms of the policy is lacking reasoning,” the court ruled in its order.

“We, therefore, arrived at an irresistible conclusion, that the impugned Notification/Policy dated 28.11.2013, which per Respondent was a stop-gap arrangement and in response of which the Federal Government did not take any step to provide a legislative cover, is of no legal effect,” declared the SHC.

Published in Dawn, February 1st, 2022

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