The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Civil society groups have until this Saturday to provide the Government with their concerns over a Non-Profit Organisations (NPO) Bill many feel could “potentially decimate” this sector.

Civil Society Bahamas, which purports to represent over 300 non-profit and civil society groups, yesterday said there were numerous sections in the bill “which raise significant concerns for the future health of the civil society sector”.

In a statement, it warned that many groups will be unable to meet “the strict registration, accounting and record keeping demands” set out in the bill given that 40 percent of the industry is thought to operate on an annual budget of $25,000 or less.

And it questioned whether the Registrar of Non-Profit Organisations had the capacity to be converted from an information gatherer to a regulator, expressing fears that the legislation will exacerbate the current two-year wait for registration into “a significant backlog”.

As a result, Civil Society Bahamas called for the Non-Profit Organisations Bill, which was last week passed by the House of Assembly at its second reading, to be combined with the Civil Society Organisations Bill 2015 that has yet to be brought to Parliament. It is also seeking the formation of a “joint task force” to assess regulation and other issues impacting the sector.

The statement said the Civil Society Organisations Bill 2015 already contains “a functional framework for the regulation, standards and accountability of the sector”, and had been widely circulated and consulted on - something it alleged had not happened with the Non-Profit Organisations Bill.

Matt Aubry, the Organisation for Responsible Governance’s executive director, said: “We see great opportunity to work with the Government to expeditiously amalgamate the relevant clauses from this bill into the NPO Bill.

“At a recent meeting between the Attorney General and representatives from Civil Society Bahamas and the Organisation for Responsible Governance, the Attorney General (Carl Bethel QC) was receptive to feedback and agreed to review the NPO 2018 Bill and the Civil Society Organisations Bill 2015 Bill and to consider drafting a new Bill which amalgamates the best provisions of both Bills.

“To this end, he asked Civil Society Bahamas to draft a document by 15 December to advise him of the sector’s concerns regarding the 2018 Bill and provide suggestions to improve the 2015 Bill.”

The Non-Profit Organisations Bill, which represents The Bahamas’ response to demands for enhanced scrutiny of non-profits to prevent their abuse by financial criminals and terrorists, requires all such organisations to be registered with the Registrar of the same name.

To become registered, the legislation stipulates that all non-profit groups must show “evidence” that they are compliant with “Know Your Client” stipulations - meaning that they know the sources of their funding, and the background of these donors.

And the Bill, in a section entitled “reportable donations”, mandates that all non-profits provide the registrar with details on donations that exceed $50,000 - either in total or as a lump sum - and their ten largest contributors every two years. The information is to be kept private by the regulator.

And non-profits with annual gross income above $75,000 will also be required by law to maintain financial statements, showing all income and spending, at their registered offices. They will have to submit “a declaration” that these are available and accurate to the registrar, who can require that these financial statements be produced to it.

The $75,000 threshold may mean the Bill’s impact is not as bad as Civil Society Bahamas fears, but its statement yesterday argued: “The Bill is not supported by a green paper or white paper as required under legislative procedure, and therefore is based on inadequate research to determine its impact on the civil society sector....

“A recent survey suggests that 40 percent of civil society organisations (CSOs) have budgets of less than $25,000 per annum, 73 percent of CSOs have five staff or less, half of which have no staff. Many of these may have to close their doors as a result of enactment of this Bill.”

“Civil Society Bahamas notes that the level of risk of not for profits being used as a vehicles for money laundering and tax evasion in The Bahamas has yet to be researched and established. The OECD notes through its extensive studies that this level of risk and the measures of mitigation vary significantly between different jurisdictions.”

The Financial Action Task Force (FATF), the body monitoring The Bahamas after uncovering “structural deficiencies” in its anti-money laundering/counter terror financing regime, has been the group putting pressure on this nation to enhance regulation of non-profits, believing it to be weak or non-existent.

Dr Anthony Hamilton, vice-president of Civil Society Bahamas, said in a statement: “We are well aware of the importance and timeliness of such a Bill to avoid a potential ‘blacklisting’ of The Bahamas by the OECD, but we see components of this Bill that may create adverse conditions for entities that play a critical role in our national development.

“We feel the Government’s obligations to International regulators can be met without overly penalizing or disincentivising the operation and growth of this critical sector.”

Describing the Bill as “unfairly and overly punitive”, Civil Society Bahamas said: “The Bill does not seem to reflect the scope and operations of the local not for-profit sector. For example, the Bill directs the Registrar to consider evidence of a not-for-profit’s ‘Know Your Client’ compliance when considering registration.

“As the large majority of not-for-profits are small, volunteer-based entities, they would be unable to meet this rigorous criteria usually designated for banks and other financial institutions.”

And it added: “The elements of the Bill require significant capacity for implementation by the Registrar, and changes it from being a repository of information to serving as being a regulator of the sector.

“It is currently taking two years to register non-profits, and the increased information required under this Bill for registration is anticipated to cause a significant backlog and does not augur well, evidencing an equal lack of the Government’s capacity for implementation.”