The FCRA Threat

10 Sept 2010

Déjà vu – FCRA comes to haunt Church and NGOs once again

By John Dayal

The more things change, the more they remain the same. Jean-Baptiste Alphonse Karr’s aphorism fits the Foreign Contribution Regulation Bill, whose many incarnations, including the latest last month, continue to haunt civil society and non governmental organisations, including major initiatives not only of the Christian churches, but also such biggies as and the Ma Amritanandamayi, Satya Sai Baba, both god-persons also noted for their development work at the grassroots in south India.

Not surprising, really, for the FCRA has an evil history – it was conceived in sin, so to speak, and nurtured in suspicion and hate. Ten years ago in a Christian magazine, I had defined the FCRA as “an illegitimate child of the State of Emergency” that was imposed by the then Prime Minister Indira Gandhi in 1975. The law was brought about to curb foreign money coming to certain institutions associated, ironically with Jay Prakash Narain and some Gandhians, who, she feared, were hell bent on fomenting a coup against her.

Successive governments chose not to repeal the FCRA though they demolished several other measures she had installed during the Emergency. The 1977 elections that threw her out and brought the first Janata party into power, with Morarjee Desai as Prime minister, Atal Behari Vajpayee as foreign minister, George Fernandes as Industry minister and Lal Krishan Advani as Information and Broadcasting minister retained it. Charan Singh and Rajiv Gandhi, in their premierships, also retained the law, as did Rajiv’s cabinet colleague turned foe, Vishwanath Pratap Singh, socialist “Young Turk” Chandrashekhar, “poor farmer” Deve Gowda mild mannered “punjabiyat” ambassador Inder Kumar Gujral when it came their turn to rule. Each found some reason to stick with the FCRA despite a sustained outcry by civil society and developmental NGOs who saw in it nothing but memories of a tyrannical and dictatorial period in India’s history.

The Bharatiya Janata party-led National Democratic Alliance government of Prime Minister Atal Behari Vajpayee was arguably the worst ever in its record of misusing the FCRA provisions to curb dissent and throttle the voices of civil society. Their home minister, “Iron man” Lal Krishan Advani added innuendo to the normal rhetoric, repeatedly insinuating that Christian organisations were receiving massive funds for conversions, and Muslims were getting money for setting up madrasas to teach terrorism. Ministers from Mr. Advani downwards hinted they had direct evidence of all this, but each one of the worthies has shied away from the open demand by human rights groups and Christian organisations that the government publish a White Paper on the entire FCRA issue, pointing out which organisation has received what money and from whom, and how it has spend it.

There was reason for the government’s coyness, and the reason remains valid even as the United Progressive Alliance revives a Bill and rushes it through Parliament in the Monsoon session without much ado. They even forgot that the Bill was discussed in a parliamentary committee chaired by a very hostile Mrs Shushma Swaraj of the BJP, and also consisting of Mr Advani, and the Congress MP Pondicherry, now minister, who vehemently opposed representations from the Church – Senior Advocate Julian Francis was one of the main experts, and the All India Christian Council made a written representation -- maintaining that the Bill would prevent terrorism while also preventing forcible and fraudulent conversions , obviously to Christianity, though they did not say it is so many words.

VANI, the network of voluntary associations, and the Commonwealth Human Rights Initiative have kept up the pressure on government on the FCRA all these years. Religious organisations, smug in their cocoon of ignorance and temporary safety, never did quite make a loud enough noise to get earlier, and far friendlier governments, to repeal the FCRA. VANI has often pointed out that the FCRA has done more harm than good. It failed to curb militancy, whether it was in Punjab or Kashmir, and it certainly failed to curb criminals as FERA had failed against money launderers. The criminal mind always found an alternate route.

If honest investigations were to be done, many things would be clear. Terrorists, Muslims, Sikhs, Maoists or Hindus, or other insurrectionist groups, do not get their money from banking channels which the FCRA imposes. They get their money through Hawala or the underground drug, gun-running and the human trafficking rackets use.

The bulk of the money through banking channels and the FCRA accounts is also coming not to Christians and Muslims alone, but to others – major Hindu sants and godmen among the,. The Sangh Parivar has never bothered to submit its own accounts.

FCRA has hurt innocent NGOs and well-meaning social workers. It has led to the fattening of crooked chartered accountants and consultants who specialize in expediting FCRA clearances, obviously in league with corrupt officials and politicians. It has also led to corruption among some sectors of civil and religious society. Well meaning religious persons with orphans to look after, schools to run and charity work to do, have taken the short cut, at the behest of their consultant, and have parted with money to officials in the government to get their coveted FCRA clearances. And of course, it has been used as an instrument of official blackmail and persecution.

As the All India Christian Council and other NGOs are pointing out to President Pratibha Patil, urging her not to sign the new Bill, and to Mrs Sonia Gandhi to put it in cold storage, the FCRA 2010 seems harsher than even it was during the BJP’s regime. With five year limits, an open targetting of the Christian work in India and sundry other penalties, it makes long term social development activity all but impossible.

The following issues are identified as crucial by experts:

1) Limited registration period and arbitrary powers: Under the FCRA 2010 an NGO is required to register itself every five years. In contrast no company receiving funds from abroad is required to reregister itself periodically. In the old law the registration was required to be done for one time only. This limitation creates planning and functional uncertainty for the civil society group and its supporters. It also places the CSO at the mercy of unfettered executive discretions including that of the district administration every five years. The law mentions no grounds on which registration and renewal may be denied. The law mentions that the Government will give reasons in writing but does not define what reasons are acceptable as valid and what evidences will base them. We believe this will create an atmosphere of continuous intimidation and provide enhanced opportunities for rent seeking.

2) No FCRA registration for organisations declared as being political in nature: The Government is given blanket powers to define what kinds of organisations will be labelled as being 'political in nature'. This vague phrase can be utilised against anybody whom the establishment wants to target without reasons directly connected to 'internal security'.

3) CSOs may be prevented from investing funds: Given the poor levels of support from government bodies, particularly in CSOs engaged in governance reform and rights-based work and the dwindling levels of foreign aid and assistance, it is responsible housekeeping and correct strategy for CSOs to save, earn interest and invest whenever possible. The FCR Bill prevents CSO from using the funds for ‘speculative’ activities. The Government has been given the power to determine what kinds of activities are 'speculative'. This amounts to unjustifiable interference in internal management. Charity status already curtails and defines CSO financial horizons and this restriction is not there on CSOs getting domestic or public funds. This is clearly discriminatory and prevents CSOs from trying to become self-sustainable. Charity status already curtails and defines CSO financial horizons. This power is open to abuse and substitutes government for the policy setting bodies of the CSO and can be used to squeeze the CSOs financial possibilities and viability, say for instance by preventing investment in mutual funds.

4) Prohibition on transfer of foreign contributions: The Bill prohibits the receiving organisation from transferring the funds to any person who is not registered under the same law. Will this provision be invoked to prevent payment of salaries to the CSO staff and consultants? The text of the law is not clear on this point.

5) Arbitrary Search and seizure powers: As with the 1976 FCR Act officers have the power to conduct search and seizure operations. However, the 1976 FCR Act specifically required search and seizure to be conducted according to the procedure laid down in the Criminal Procedure Code (CrPC). However FCRA 2010 states that the CrPC will not be followed if its procedures are inconsistent with the provisions of the Act. This is extraordinary. The CrPC provisions provide due procedure to be followed by officers doing search and seizure. This is an essential protection for ensuring that nothing is done in an arbitrary or unfair manner and the CrPC forms part of the fundamental protections available under the ordinary Indian law. There is no reason whatsoever to by-pass these or to single out CSOs receiving foreign funds in this manner. We believe this dilution of due process is unconstitutional and signals the thin end of the wedge whereby future laws can more easily dilute constitutional protections act by act.

6) The FCRA 2010 goes against the National Policy on Voluntary Organisations: The National Policy on Voluntary Organisations adopted through the Planning Commission in 2007 has as one of its primary objectives the following: "To enable VOs to legitimately mobilise necessary financial resources from India and abroad." (emphasis added). In this policy (attached) finalised after the first draft of the FCR Bill was prepared in 2006, the Planning Commission encourages Governments to liberalise and rationalise the existing rules and procedures that govern the working of CSOs. Most importantly the policy promises to review and simplify FCRA provisions that apply to CSOs .The FCR Act 2010 does not simplify anything. Instead it complicates the legal and administrative environment much more than before by placing enormous discretion in the hands of officers to determine whether a CSO will be allowed to function or not. While the legal regime for foreign investors is being increasingly liberalised, the environment for CSOs is being restricted to discourage any contributions. There is no reasonable justification for such measures.

7) The Donors are also not spared. What happens to the donor who gives funds and the NGO gets suspended; the government takes the money and the donor loses out. This is a positive disincentive to donors, whose number has decreased anyway after the economic meltdown in the West, and the very slow recovery.

According to the Union Home ministry, annual accounts were submitted by 18,796 out of 34,803 Associations for the year 2007-2008, which were registered under FCRA up to 31 March 2008. These associations reported receipt of foreign contribution amounting to Rs. 9,663.46 crore Among the definite purposes for which foreign contribution was received and utilized, the highest amount of foreign contribution was utilised for Establishment Expenses (Rs. 3,421.95 crore) followed by Rural Development (Rs 1,781.38 crore), Relief/Rehabilitation of victims of natural calamities (Rs 1,689.08 crore), Welfare of Children (Rs 1,333.40 crore) and Construction and maintenance of school/college (Rs 1,206.47 crore).

Experts have pointed out that if government has any concerns that the there is inadequate compliance with reporting the cure lies in strengthening overseeing bodies like the charities commissioner and the registrars of societies rather than penalising a whole sector and creating ever more procedures which will only burden these bodies more.

“We are law abiding people, and our record proves it. And our work is entirely in the public domain, entirely transparent, properly audited and for the good of the people not reached sometimes even by the state agencies. We request your urgent intervention to prevent the operationalisation of what is an entirely unfair and discriminatory Act which imposes harsh and debilitating restrictions on our work in education, health and development amongst Dalits and the poorest of the poor of India. Your withholding assent to the FCRA 2010 Bill will allow us to continue our work,” these groups have told President Pratibha Devisingh Patil in their mass representations.

But in real terms, there is no place for such a law in a democracy. Laws such as FEMA – the Foreign Exchange Management Act – for the corporate sector and other statutory provisions not only take care of all concerns but prevent the isolation and targetting of the apolitical social sector, of which the Christian church is such an important part. FCRA will always mean a knuckle-duster, if not a bludgeon, in the hands of a blackmailing regime, or a crooked District Collector.

First published in Indian Currents magazine, New Delhi.