NGO Bill: Slouching toward totalitarianism?

The release of a draft of the Non-Governmental Organisations (Registration and Supervision) Act, L.D.-O. 6/2026, is praiseworthy. This will allow all who care about democratic values to study the text and assess its implications.

The implications are serious. If the draft is made law as is and its provisions are fully implemented, the democratic society that we are accustomed to will be severely eroded. The draft is anchored on the belief that almost all altruistic activities must be subject to Government direction; that all activities other than profit-making economic activities must be performed by the state or under its strict supervision.

The central issue is what falls within the authority of the Competent Authority (CA) (the term is evocative of emergency regulations) appointed and accountable to the Minister. Introduction of “non-profit oriented” as the criterion for inclusion is surprising, coming from a non-capitalist political party. In keeping with its recent track record, the Government leaves untouched profit-making activities. For now, at least.

Ambiguous language 

The badly drafted and lengthy section 2, read in conjunction with the interpretation section, appears to drag within the scope of regulation all social service and non-profit oriented activities with the exception of religious organisations, licensed banks, public limited companies, private limited companies, cooperative societies, partnerships and sole proprietor establishments, school development societies, alumni associations, and trade unions. Political parties are not exempted in the current draft. This is possibly a mistake.

Some provisions in s. 2(1(c ) suggest ambiguously that the objective is to regulate “a foreign or local funded guarantee limited company, an offshore company or an association incorporated or registered, as the case may be, under the provisions of the Companies Act, No.07 of 2007, which receives foreign funds to engage in any non-profit oriented activity or voluntary social service activity in Sri Lanka.” Does the last clause “which receives foreign funds . . . “ apply to all the described entities?  Would a fully locally funded entity that does not receive foreign funds for any purpose be outside the scope? 

Are entities described in s. 2(1)(g)(iii) as having the “the purpose of which is either to serve the general public, including the needy, the sick, persons who are disadvantaged, destitute, orphaned or affected by natural disaster, or to serving the interest of their members or to strengthening the civil society through advocacy or consensus building” brought within the scope irrespective of foreign funding? 

The hostility to non-profit oriented activities is best illustrated by section 2(3) which exempts companies but requires that they report any non-profit activities that they engage in to the CA for supervision as projects. This subjects Corporate Social Responsibility (CSR) activities of for-profit companies (and even the activities deemed to be non-religious of religious organisations) to the intrusive attention of the CA.

What does the Government want of NGOs?

According to section 15(2)(b), it is their duty to “align with the policies of the Government.” Are these policies only those that have been formally approved by Cabinet? Leaving aside the problem of finding these documents, this is better than leaving it to the CA to decide after the fact what policies the NGOs failed to align with. Does the term “policies” include legislation?

Does “align” mean absolute fealty? Periodically policies and laws are amended or replaced. Will advocacy for changes to existing policies be interpreted as failure to align? Is lobbying for changes in policies or laws reserved for profit-driven firms and unincorporated entities formed by less than five citizens and foreigners (s. 2(1)(g)), and individuals?

But the larger question is why every non-Governmental organisation in the country should be compelled to align with the policies of transient Governments?

Another duty set out in s. 15(2)(d) is to “not induce or cause to induce any public disorder which affect safety and interests of the general public.” Who defines what the interests of the general public are? How does one differentiate between “peaceful assembly” guaranteed by the Constitution and “public disorder”? The drafters should read the Supreme Court’s Janaghosha decision (Amaratunga v. Sirimal and others (1993) 1 Sri L.R. 264).

Section 15(2) also requires accounts of NGOs to be audited annually and to submit in a timely and prescribed manner the annual report, periodical returns, the audit of accounts, and any other document required by the CA. Failure to do so may be punished by a penalty of up to 100,000 rupees without recourse to the courts.

The attempt to cast the net as widely as possible in terms of subjecting non-profit oriented and altruistic organisations to State supervision has resulted in an ungainly and difficult-to-implement Bill. Foundations, trusts and entities incorporated under the Companies Act are dragged in within the scope of supervision by the CA, as are all non-profit oriented activities of conventional firms, some activities of religious organisations, and so on

The CA has the powers under section 5 to enter the premises of NGOs with and without search warrants, examine information and records and make copies and extracts thereof, attend executive committee and general meetings, and request and obtain actions plans progress reports, staff details, fund flow and account details. The CA is also empowered to facilitate, coordinate and evaluate programmes and projects implemented by NGOs.

The CA may suspend (s. 16), designate as inactive (s. 17) or deregister NGOs (s. 18). 

A saving grace?

The attempt to cast the net as widely as possible in terms of subjecting non-profit oriented and altruistic organisations to state supervision has resulted in an ungainly and difficult-to-implement Bill. Foundations, trusts and entities incorporated under the Companies Act are dragged in within the scope of supervision by the CA, as are all non-profit oriented activities of conventional firms, some activities of religious organisations, and so on.  

Replicating a pattern in recent legislation such as the Right to Information Act and the Personal Data Protection Act, the Government’s reach appears to exceed its grasp with this Bill. Both the above statutes are not fully enforceable by the bodies that can realistically be funded by fiscally constrained Governments. As a result many entities subject to the provisions of these Acts flout them knowingly or unknowingly. The regulators are too busy responding to issues and disputes that come up to pay attention to the little stuff. 

The 2026 Budget allocated three million rupees for the recurrent expenses of the NGO Secretariat. Massively larger amounts will be required just to manage the registrations and renewals of a much larger number of NGOs and projects. Attempts will be made to generate funds by jacking up registration fees under s. 9, but the current draft does not allow for a separate fund, so these revenues will go to the Consolidated Fund and the CA will be dependent on budgetary allocations and cadre approvals. As the RTI Commission has bitterly learned, this is an unpleasant existence. And it’s wishful thinking that the malnourished CA paying Government salaries will be capable of evaluations and even effective supervision. 

It is highly unlikely that a resource-constrained CA will be able to “develop appropriate methodology to identify, assess and understand money laundering, terrorist financing and financing of proliferation of weapons of mass destruction risks of non-Governmental organisations, and conduct monitoring of non-Governmental organisations on a risk-based approach” (presented in bold face to emphasise its importance) and to effectively control such actions (s. 4). Why does the Government believe that the CA will have the necessary expertise that is now being developed at the well-endowed Central Bank and the FCID? The latter have easy access to information within banks unlike the CA.

But none of this will stop a vindictive Government from stifling alternative organised voices by selectively applying the broad and vaguely defined powers given by the legislation. This Bill is a frontal assault on our fundamental rights. This is why this Bill must be defeated even before it makes it to the Supreme Court for review.