BILL WATCH 72/2021

[11th November 2021]

The Private Voluntary Organisations Amendment Bill
Part 1: The Background to the Bill

The long-awaited Private Voluntary Organisations Amendment Bill was published in the Gazette on the 5th November and can be accessed on the Veritas website [link].

In order to explain the Bill we need first to outline the Act it will amend, the Private Voluntary Organisations Act – which can also be accessed on the Veritas website [link].

The Private Voluntary Organisations Act

Scope of the Act

The Act provides for the registration and regulation of private voluntary organisations [PVOs], i.e. associations and other bodies whose objectives are, broadly:

·        providing for peoples’ physical, mental and social needs

·        rendering charitable relief

·        preventing social distress and poverty

·        providing legal aid

·        animal welfare

·        collecting contributions for the above objectives

Various bodies are excluded from the ambit of the Act.  They are:

·        State institutions

·        religious bodies

·        educational and statutory trusts, and trusts registered with the High Court

·        health institutions and bodies associated with them

·        political organisations, and

·        any other institutions that may be specified in regulations.

So not all non-governmental organisations are covered by the Act:  only those that are PVOs, i.e. those that have the objectives described above, are covered.

Registration of PVOs

It is a criminal offence for a PVO to operate or seek financial assistance from any source unless it is registered.

Registration of PVOs is the responsibility of a PVO Board acting through a Registrar who is the Government’s Director of Social Welfare.  PVOs that apply for registration must give notice of their applications in a newspaper, allowing members of the public 21 days to lodge objections to their registration.

The Board is entitled to refuse an application for registration if it considers the applicant:

·        is not operating bona fide in furtherance of its stated objectives, or

·        does not, in respect of its constitution or management, comply with the Act [it is not clear what this means].

The Board can impose conditions on the registration of a PVO, though the Act does not indicate what sort of conditions it can impose.

The registration of a PVO can be cancelled by the PVO Board for various reasons including:

·        if the PVO pays anyone remuneration that is excessive in view of the funding it receives

·        if it fails to comply with the conditions of its registration, or

·        if the objects for which it is registered are merely ancillary to other objects.

Before cancelling a PVO’s registration the Board must give the secretary of the PVO a reasonable opportunity to show cause why the registration should not be cancelled.

Controls over registered PVOs

The Government (through the Board, Registrar and Minister) can exercise strict supervision and control over registered PVOs:

·        Registered PVOs have to keep accounts and records to the satisfaction of the Registrar and provide the Registrar with whatever reports and returns he or she may require.

·        The Minister can appoint a civil servant to inspect any PVO’s books and accounts and report on them to the Registrar.

·        The Minister can also suspend the committee of a PVO if he or she considers that the PVO has ceased to operate or is being mismanaged or that the suspension is necessary or desirable in the public interest. 

Note: This provision (section 21 of the Act) was declared unconstitutional by the Supreme Court in 1997 because it does not give committee members a right to a hearing before they are suspended.

·        After the committee of a PVO has been suspended the Minister can appoint a trustee to run the PVO for 60 days pending the election of a new committee.  If the Minister has not revoked committee members’ suspension within 30 days, they cease to hold office and are disqualified from seeking re-election unless the Minister revokes their disqualification.

Note:  this was not expressly struck down by the Supreme Court but it follows from the court’s ruling that this too is unconstitutional.

It is noteworthy that the Act does not state expressly why these controls are imposed on PVOs.  One can perhaps infer from the emphasis the Act places on PVOs keeping proper accounts and records, and the fact that the Board can refuse to register a PVO if it is not operating bona fide in furtherance of its objects, that one reason for the controls is to ensure that PVOs take proper care of funds they receive and apply them to the purposes for which the donors intended them.  It is hard to discern any other reason for the controls, and indeed if there were any other reason it would render the Act unconstitutional, as we shall explain in the next section.

The Constitution and PVOs

PVOs, whether they are trusts, voluntary associations or non-profit companies, are protected by section 58(1) of the Constitution, which states:

“Every person has the right to freedom of … association …”

This is a vitally important freedom because all our social interactions depend on associating with other people, and multi-party democracy – one of the core values of the Constitution – depends on it, together with its sister freedoms, freedom of assembly and freedom of expression.

Freedom of association, like the other rights and freedoms in the Declaration of Rights, can be limited by law under section 86 of the Constitution, but any limitation must be “fair, reasonable, necessary and justifiable in a democratic society based on openness, justice, human dignity, equality and freedom”.  Because of the importance of freedom of association, however, the emphasis must be on “necessary”.  A limitation must not just be reasonable or even desirable in a democratic society:  it must be actually necessary.  And there are two further tests, laid down in section 86 of the Constitution, that a limitation must meet:

·        It must not impose greater restrictions on freedom of association than are necessary to achieve its purpose, and

·        It must be the least restrictive means of achieving the purpose of the limitation.

Is the PVO Act Constitutional?

Does the Act in its current form, meet these tests?  Does it comply with the other provisions of the Declaration of Rights in the Constitution?  The answer to both questions is NO, for the following reasons:

·        The reason for regulating and controlling PVOs is not clearly stated.  As we have pointed out, the Act does not say why PVOs must be registered and controlled in order to carry on their activities.  The reason we inferred – to ensure they do not squander or misuse the funds entrusted to them – is a constitutionally valid reason, but there is nothing in the Act to prevent the PVO Board from refusing to register a PVO for other reasons – indeed section 9(5)(b) of the Act provides the PVO Board with another vaguely expressed reason:  that the PVO does not comply with the provisions of the Act. [This is too vague to pass constitutional muster.]

·        Branches of PVOs can be declared to be independent.  Under section 18 of the Act, the Registrar can determine that branches of PVOs are independent PVOs if he or she thinks they are not under the control of their parent PVO.  Such a determination has the effect of rendering the branch illegal (because it is not registered) and it can be made without consulting the parent PVO or the branch concerned, and without affording them an opportunity to make representations.  This violates section 68 of the Constitution, which guarantees to everyone – including PVOs – the right to procedurally fair administrative action.

·        The right to suspend committees is arbitrary.  The committee [often called a Board] of a registered PVO can be suspended under section 21 of the Act and, if the suspension lasts for more than 30 days, banned from being re-elected, without being given a chance to contest their suspension.  Again, this violates section 68 of the Constitution.  As we noted above, the Supreme Court declared section 21 to be unconstitutional in 1997.

In Part 2 of this Bulletin we shall look at the PVO Amendment Bill see if it remedies any of the defects we have noted in the Act and whether the provisions it proposes to insert in the Act are themselves constitutional.