NGOs need standards to improve good governance<\/p>\n
Rustam Ibrahim, Senior Research Associate, Institute for Economic
\nand Social Research Education and Information (LP3ES), Jakarta<\/p>\n
As one of the most important elements of the civil society,
\nthousands of new NGOs have cropped up in different provinces with
\nmostly two purposes: To monitor the government and other public
\ninstitutions and to take part in assisting different groups of
\npoor people who have suffered the most from the economic crisis.<\/p>\n
We find today many \"watchdog\" organizations. They include
\ncorruption watch, government watch, judicial watch, parliament
\nwatch, police watch, army watch, media watch and so on which
\ncould never exist in the New Order era.<\/p>\n
The involvement of NGOs in poverty reduction programs and the
\nlike has increased due to changes in the stance and policies of
\nthe government towards NGOs.<\/p>\n
Sometimes with the pressure from donor agencies, the
\ngovernment has created more space for NGOs to take part in
\ngovernment programs, notably those related to poverty
\nalleviation.<\/p>\n
However, the freedom has not been supported by legal
\nstipulations and\/or moral principles regarding NGOs' operation,
\nwhich is harming their image. There are three negative forms of
\nnewly formed NGOs:<\/p>\n
First, NGOs set up by government officials, business people or
\npeople aiming for profit. NGOs are set up just to grab government
\nprojects financed with overseas loans, as donor agencies require
\nthat the projects should be carried out by NGOs.<\/p>\n
Secondly, groups who claim to be NGOs and are very active in
\npractical politics. They are formed to support (or reject)
\ncandidates for the posts of governor, regent or mayors.<\/p>\n
Thirdly, \"exploitive NGOs\" who carry out control also with the
\npurpose for profits; their findings, related to irregularities
\ninvolving government officials or the private sector, are not
\nmade public, and instead are used to blackmail these sectors.<\/p>\n
Any organization should maintain at least five
\ncharacteristics. First, non-governmental; NGOs should be
\nindependent, autonomous and separated from state or government
\norganizations. The question is whether NGOs formed and managed by
\ngovernment officials still can be called NGOs.<\/p>\n
Another issue is how the term \"non-governmental\" can be
\ntranslated into NGO governance and how to resolve conflicts of
\ninterests. This is because the concept of conflict of interest
\nseems to be little known and neglected among many in Indonesia.<\/p>\n
Second, non-partisan; NGOs should not be in any way related to
\npolitical parties. Many political party officials have formed
\nNGOs, and many NGO activists have become party executives.<\/p>\n
Third, voluntarism. In any NGO, a number of people must
\nvoluntarily contribute their views, time and energy, without pay.<\/p>\n
They include the founders and members of the advisory board,
\nsupervisory board, board of trustees, and board of directors.
\nThey should be differentiated from NGO executives and staff who
\nare professionals and receive salaries.<\/p>\n
But sometimes the board of directors also serve as executives.
\nAside from the absence of effective control mechanisms (checks
\nand balances), this makes everybody in the organizations salary
\npeople. The concept of voluntarism thus becomes vague.<\/p>\n
Fourth, NGOs are non-profit organizations. A surplus of
\nrevenue must not be divided among founders and members of NGO
\nexecutives. This differentiation from profit organizations must
\nbe very clear.<\/p>\n
But sometimes founders and board members form business
\nenterprises (with funds from their NGOs, aimed at making them
\nless dependent on donors) and later become members of their board
\nof commissioners or board of directors.<\/p>\n
They receive big salaries and dividends. Unfortunately when
\nthis business entity succeeds to make big profits, the profits
\nare not used to meet the needs of the NGO which set up the firm.<\/p>\n
Fifth, NGOs must meet the needs of society, the poor, the
\noutcast and others whose rights are violated. NGOs help people to
\ndevelop their potential and fulfill their rights through direct
\nand indirect action. NGOs also air their concerns about
\ngovernment policies and actions which affect society.<\/p>\n
A lack of these characteristics show the problem in NGO
\ngovernance. Many NGOs do not have written standard operating
\nprocedures which, among others things, stipulates salary systems,
\nrights and obligations of employees, procedures of goods
\nprocurement, procedures of money spending, and so on.<\/p>\n
Further, many do not have accounting systems in line with
\ngenerally accepted principles; many NGOs have never made public
\ntheir reports on their activities and financial reports.<\/p>\n
Any programs or forms of activities carried out by NGOs should
\nbe based on ideal values which are formulated into vision,
\nmission and goals of the organizations. They are called moral
\nvalues.<\/p>\n
Several of the above points are now in Law No. 16 Year 2001 on
\nFoundations which became effective on Aug. 6, 2002 (But some
\narticles may be amended to be made effective next year). This law
\naffects NGOs because some 90 percent of NGOs here are legally
\nfoundations.<\/p>\n
Among others, the law regulates that annual reports must be
\nmade public on the notice board at the foundation's office. Also,
\nany foundation which acquires funds from the state and from
\noverseas which amounts to Rp 500 million (US $60,000) or more, is
\nsubject to making their annual report public through Indonesian
\nlanguage daily newspapers. They are also subject to be audited by
\npublic accountants.<\/p>\n
An effective enforcement of this law would lead to good
\ngovernance among many NGOs which are legally foundations, though
\nstrong criticisms are understandable from NGOs who see the
\ngovernment is going too far in regulating NGOs.<\/p>\n
The regulation would indeed entail uniformity in NGOs
\norganizational structure -- foundations must have advisory,
\nsupervisory and management boards.<\/p>\n
Also, the ruling that the legal status of foundations must be
\nratified by the Minister of Justice has raised fears that this
\nwill lead to red tape and further corruption, collusion and
\nnepotism (KKN), and target organizations which are disliked by
\nthe government. This view cannot be separated from NGOs'
\ntraumatic experiences in the New Order era.<\/p>\n
Self regulation is another way to improve NGOs -- either by
\nefforts of respective organizations or that of NGOs as a
\ncommunity which could formulate a code of ethics and standards
\nfor activities and good governance.<\/p>\n
The existence of healthy and strong NGOs -- in that they are
\nformed voluntarily, not oriented to profits, independent of the
\ngovernment, transparently managed, democratic, accountable and
\nare oriented to and represent public interest -- has since long
\nbeen the concern in the international community.<\/p>\n
Donor countries have placed an even greater emphasis on the
\nimportance of involving NGOs in designing, planning and
\nimplementing development projects by developing participatory
\ndevelopment systems.<\/p>\n
The governments of borrowing countries are required to create
\na conducive situation for the growth and development of NGOs by
\nformulating laws and regulations which can encourage NGOs to
\nincrease their contribution to national development.<\/p>\n
But governance reform must become an important focus for civil
\nsociety organizations themselves so as to develop NGOs which are
\neffective, efficient, professional, transparent and accountable.<\/p>\n
The above is abridged from the writer's presentation at the
\nASEAN People's Assembly earlier this month in Bali. The writer
\nwas director of LP3ES from 1993 to 2000.<\/p>",
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