On 23 February 2021, the Cabinet passed a resolution approving the Draft Act on the Operations of Not-for-Profit Organizations, developed by the Office of the Council of State, and assigning the Ministry of Social Development and Human Security to hold public hearings for it. The Ministry of Social Development and Human Security is currently allowing citizens to submit their opinions about the legislation via website until 25 March 2022, before forwarding it to the Cabinet and the House of Representatives.
The Thai Lawyers for Human Rights (TLHR) under the management of the Rights for Justice Foundation is of the opinion that the Draft Act on the Operations of Not-for-Profit Organizations stands to severely violate the people’s freedom of association, and, therefore, opposes the said legislation with the reasons elaborated below.
1. The legislation is unnecessary
While the Draft Act on the Operations of Not-for-Profit Organizations specifies the reason for the legislation, which is “to ensure the operations of NPOs in the Kingdom are done with openness, transparency, serving the public interest, and also upholding public order or good morals of the people”, the Memo of the Office of the Council of State Attached to the Draft Act on the Operations of Not-for-Profit Organizations Finished Matter No. 1621/2564 did not describe the problems on which the law was based. TLHR finds that the above text is too broad and fails to provide an adequate understanding about the necessity for the law, as it does not address the problems, in present or past, related to the operations of not-for-profit organizations (NPOs). Given that the current way NPOs operate does not cause any problems, the legislation has not been necessary in the first place and, thus, is inconsistent with Section 77 of the 2017 Constitution obligating the state to only “introduce laws only to the extent of necessity, and repeal or revise laws that are no longer necessary or unsuitable to the circumstances, or are obstacles to livelihoods or engagement in occupations, without delays, so as to abstain from the imposition of burdens upon the public.”
2. Overbroad, redundant, and overly burdensome control of all types of organizations.
Section 3 provides a definition of a not-for-profit organization as “a collective of private individuals who form themselves as any form of grouping to conduct activities in society without intending to seek profits to be shared. However, it shall not include a group of people gathering to implement a particular, one-time activity, or conduct an activity to serve only the interests of the group, or a political party.” Section 5 requires that NPOs established by virtue of any specific law also be subject to the provisions of this Act.
Given the above definitions, the law not only covers non-governmental organizations (NGOs), but also other forms of civic groups, including those of workers, community members, conservationists, or political activists. However, subjecting the registration, reporting, and operations of such a large variety of organizations to the same set of criteria would place excessive burdens for small-sized organizations and/or newly emerged groups.
Moreover, this Act applies to organizations established by virtue of other laws, including association, foundation, and company. This means that these organizations have redundant legal burdens in addition to the compliance with the respective law.
3. The Committee can easily be dominated by the government.
In the implementation of the Draft Act on the Operations of Not-for-Profit Organizations, the Committee for the Promotion and Development of Not-for-Profit Organizations, chaired by the Minister of Social Development and Human Security, shall be the main mechanism with the powers and duties described in Section 11. According to Section 6, the Committee is composed of up to 21 members, consisting of ten government officials and no more than seven representatives from NPOs and no more than four experts who are appointed by the Minister. Clearly, the twenty-one-member Committee will be under the dominance of the state via the chair and lacks checks and balances through a meaningful public scrutiny.
With regards to the key objectives of the Draft Act on the Operations of Not-for-Profit Organizations, we can see that the government seeks to (1) have NPOs disclose information related to the organization and its income and expense (Section 19 and 22), (2) ensure that NPOs’ operations do not affect security (Section 20), and (3) control the funding or donations from foreign sources (Section 21).
4. Duty of Disclosure
Section 19 requires that information regarding the organization’s founding objectives, implementation methods, sources of funding, and names of persons involved be made easily accessible to government agencies and the public. In case of the failure to disclose or concealment of such information, the registrar may issue a warning and designate a period for correction. If the NPO is yet to rectify its action after the said period, it will be ordered to halt its operations until doing so.
The duty to disclose information lacks clarity in terms of the scope of information to be disclosed and the reporting frequency (monthly or annually). Normally, lawful juristic persons are already required to report such information to the relevant agency on a regular basis each year. However, such a requirement may be too burdensome for smaller organizations, or even larger ones as well, if required to do so more frequently.
At any rate, another point of concern is donations, either through bank transfer or donation box. The fact that NPOs have to disclose sources of funding means that donors must submit the proof of payment. This extra step may deter donors from donating altogether, as some may find it too burdensome or not wish to have their personal information publicly shared. In turn, this will negatively affect both the donation volume as well as the organization’s sustainability.
In addition, Section 22 requires that NPOs receiving donations prepare an income and expense report to be made publicly available. The provision contains the same penalty, halting of the operations, as Section 19.
5. Section 20 is aimed to halt the operations of NPOs
Section 20 of the Draft Act on the Operations of Not-for-Profit Organizations is deemed the riskiest of being used to restrict the operations of NPOs. While Section 17 of the Draft Act on the Operations of Not-for-Profit Organizations assures that “an NPO has the rights and freedoms to perform an activity to serve social interest or public interest according to its founding objectives”, the general provisions guaranteeing rights and liberties are found as part of the “requirement under Section 20”. Section 20 prohibiting NPOs from acting in a manner which affects security is considered ius singulare, which allows the government to broadly interpret it to halt the operations of NPOs.
Section 20: A Not-for-Profit Organization must not operate in the following manner:
(1) Affect the government’s security, including the government’s economic security, or relations between countries.
(2) Affect public order, or people’s good morals, or cause divisions within society.
(3) Affect public interest, including public safety.
(4) Act in violation of the law.
(5) Act to infringe on the rights and liberties of other persons, or affect the happy, normal existence of other persons.
If any NPO is found to violate this provision, the registrar will give a warning asking the NPO to stop such act or rectify it. In case the NPO fails to do so, the registrar may order it to cease its operations altogether.
TLHR finds that the text in Section 20 allows for a broad interpretation by the registrar. Even when NGOs or civil groups are complaying with (1) – (5), such broad wording and interpretation can still potentially lead to the halt of their operations. For instance, the work of NPOs to submit urgent appeals, communication, or alternative reports to a UN or human rights treaty mechanisms may be interpreted as affecting security or international relations. A movement to demand legal amendments or institutional reforms may be seen to cause divisions in the society and fall within the scope of Section 20. Therefore, the provision is likely to severely impact the operations of NPOs, which, in turn, also results in a restriction of people’s freedom of expression.
In any case, the NPO’s failure to comply with Section 20 (1) – (5) is already a violation of existing laws. There is no need to have a redundant provision. For example, if an NPO acts in violation of the law (4), it shall be subject to the penalties prescribed by that law. Having another provision can lead to double punishment and contradicts the legal principle to not punish a person twice for the same offence. Moreover, the extent to which the offence violates the law may vary. In short, using a broad language to encompass all potential causes to cease the operations of NPOs is thus inappropriate and likely to be disproportionate to the act and possible outcomes.
Another problem that may arise is when an NPO has multiple work units or branches. The registrar may find that one particular unit or branch of an organization has acted in violation of the provision in whichever manner, but issues an order ceasing the operations of the organization as a whole. In this case, such a penalty would not be proportionate as well.
6. Control of the receipt of funding or donations from foreign sources
Section 21 requires that NPOs receiving funding or donations from foreign sources act as follows:
(1) Inform to the registrar the name of the foreign funding sources, the bank account receiving the funds, the amount received, and the purposes for the disbursement of the funds.
(2) Must receive foreign funding only through bank account notified to the registrar.
(3) Must use the foreign funding only the purposes notified to the registrar in article (1).
(4) Must not use foreign funding for any activity characteristic of pursuing state power, or to facilitate or help political parties.
TLHR is of the opinion that an overly complex process can potentially obstruct NPO’s access to funding. Until now, the domestic funding has already been inadequate for non-profit work in the country. Inability to comply with this can lead to fine of up to two times the amount of funding received from the foreign source.
7. Weak review mechanism
According to Section 23, in case an NPO is ordered by the registrar to stop its activities pursuant to Section 19, Section 22, or to stop its operations pursuant to Section 20, the NPO may appeal the order of the registrar to the Minister within 30 days, whereby the filing of the appeal does not lead to a compromise of the NPO’s obligation under such order. This means that the registrar’s order takes effect immediately.
TLHR considers that the order to cease the operations has serious impacts, particularly because such order is equal to a capital punishment to the affected NPO/juristic person. The discretion or the use of power under the provisions solely by a single organization, that is the state authority, which takes immediate effect without a clear designated timeframe for the decision of the appeal to be made by the Minister (which is also a single organization), undermines the security and certainty of NPOs’ operations.
While NPOs may lodge an appeal to the Minister, the decision of the Minister, which is itself a single organization, can be delayed and lacks checks and balances. NPOs disagreeing with the Minister’s decision can further file a case to the Administrative Court; however, that process alone can take years. The lengthiness of the whole process means a missed opportunity for the NPO to work on their issues.
8. Heavy penalties disproportionate to the act.
In addition to the penalty of halting its activities and operations, which is nothing less than a capital punishment for the organization, the Draft Act on the Operations of Not-for-Profit Organizations prescribes criminal penalties of fines that are not proportionate to the act.
- Section 25. If an NPO fails to disclose the information pursuant to Section 19 or information relating to incomes and expenses pursuant to Section 22, it shall be liable to a fine not exceeding 50,000 baht and a daily fine of 1000 baht until the act has been rectified.
- Section 26. If an NPO refuses to halt its operations pursuant to Section 20, it shall be liable to a fine not exceeding 500,000 baht and a daily fine of 10,000 baht until the act has been rectified.
- Section 27 prescribes fines of up to two times the amount of funding received from the foreign source.
- Section 28 requires that the person responsible for the operations of the NPO shall be held liable to the same punishment as the NPO. This section is vague as to what extent the “person responsible” will be interpreted – only the board or also the management and/or staff? This provision contains non-technical language that can be interpreted broadly, yet prescribes criminal penalties. Will punishing both the organization and the person responsible be considered redundant? What difference does it make if the person responsible is a juristic or natural person?
9. This draft act undermines the freedom of association
Section 42 of the 2017 Constitution and Item 22 of the International Covenant on Civil and Political Rights both guarantee the right to freedom of association, which is a basic human right under a democratic government. Nevertheless, the Draft Act on the Operations of Not-for-Profit Organizations, which applies to a large variety of organizations, specifies additional duties of disclosing information and income and expense report under Section 19 and 22, prohibits activities that affect security under Section 20, and controls the receipt of funding from foreign sources under Section 21. This makes the people’s effort to organize more difficult. In some cases, their activities could be interpreted by authorities as affecting security and could not be executed in the name of the organization undermining the exercise of democratic rights and freedoms.
10. Not only NGOs, but people will also take the hit.
The draft act, though targeting NPOs and thus generally perceived as applying to NGOs only, in fact, also regulates other forms of people’s movement and organizations. The fact that people cannot organize freely may, in turn, affect their basic rights or welfare.
Although some people may think that the freedom of association is not relevant to them, it is more than likely that they have enjoyed the benefits as the historical result of the activities by these organizations/movements. For example, the minimum wage and labor rights, such as maternity leave and sick leave, are the fruits of people coming together to demand these rights. In the future, if the fight for a welfare state is won, everyone in the society will benefit one way or another. Farmers’ groups cannot survive economically, if they do not organize themselves to call for price support or government’s interventions. As such, if people cannot organize freely or are restricted in the way they carry out activities, they will stand to lose their rights or potential benefits in the future, even though they do not exercise those rights or freedoms themselves directly.
Given the above-mentioned reasons, TLHR would like to express our stance to oppose the Draft Act on the Operations of Not-for-Profit Organizations, and will follow its development, as it may be reviewed by the House of Representatives soon.