Bilateral ties: US concerned over law regulating foreign-funded NGOs

Olson asks for expediting approval of Arif Habib’s investment in US

Shahbaz Rana April 09, 2015
Olson asks for expediting approval of Arif Habib’s investment in US. PHOTO: AFP

ISLAMABAD: As Pakistan moves to regulate foreign funding of non-governmental organisations under its National Action Plan to counter terrorism, Islamabad has run into concerns from an unexpected source: the United States. US Ambassador to Pakistan Richard Olson met with Finance Minister Ishaq Dar on Wednesday to address some of Washington’s concerns with the proposed new regulations.

“The views of relevant stakeholders and donor agencies should be sought before finalisation of the draft law,” Olson was quoted as saying by the Finance Ministry. Olson said that this would remove the feelings of unease among foreign donors.

The US ambassador expressed these concerns on behalf of local and foreign NGOs that have been worried about high-handedness by government agencies during the registration and monitoring processes for NGOs, many of which are funded by institutions based in the United States, including the US government. Islamabad is in the process of finalising the draft of Foreign Contributions Act aimed at regulating foreign funding. In many cases, the government does not have any records of foreign funding at all.

Dar said that the Economic Affairs Division of the Finance Ministry was working on the draft law for registration and was in contact with donor agencies and international NGOs and seeking their views. He said that all efforts would be made to craft a balanced piece of legislation.

The proposed draft calls for imprisonment for several violations of the law. The government is proposing a one year jail sentence for concealment of foreign contributions. Local and international NGOs would be required to sign a Memorandum of Understanding, assuring the government that they would work within their jurisdictions and will abide by all Pakistani laws.

The Securities and Exchanges Commission of Pakistan was also in the process of scrutinising the record of NGOs already registered. It has recently revoked licences of about 108 such organisations which it deemed were not fulfilling the SECP’s requirements. The SECP has also sought details of bank accounts of these organizations from the State Bank of Pakistan, said SECP chairman Zafar Hijazi.

Arif Habib Group investment

Olson also raised the issue of delay in giving formal approval to the Arif Habib Group, a financial and industrial conglomerate, to make a $300 million investment in the United States. Dar had already agreed, in principle, to allow the Fatima Fertilizer to raise $300 million from international debt markets and invest as equity in a subsidiary called the Midwest Fertilizer in the US state of Indiana.

However, final approval is needed from the Economic Coordination Committee (ECC) of the Cabinet, but the Finance Ministry has not yet formally sought the ECC’s approval. The US ambassador’s intervention highlights Washington’s interest in the project that is expected to generate jobs in an economically depressed area of the United States.

Fatima Fertilizer, the Arif Habib subsidiary that is managing the investment, would issue the seven-year bonds in international markets to raise debt for the initial investment in Midwest Fertilizer. The bonds would be backed by the State Bank of Pakistan (SBP).

Fatima Fertilizer will have a 35% shareholding in Midwest Fertilizer along with management control. The remaining ownership will rest with a consortium of international investors. The plant’s expected production capacity is said to be 2.4 million tons and it will cost $2.4 billion to build.

Speaking to The Express Tribune, Arif Habib, the eponymous chairman of the conglomerate, said that he had also met with Dar last week, urging him to formalise ECC approval at the earliest.

The US ambassador also raised the issue of FBR’s decision to deny input tax adjustments to US firm, Caterpillar.  The minister assured Olson that he had already issued instructions to the FBR to look into this issue and the matter would be resolved in due course.

The US Ambassador also asked Dar to press for an extension in the date for tariff determination by the Oil and Gas Regulatory Authority for two oil exploration companies financed by the United States Overseas Private Investment Corporation (OPIC) as they needed more time to achieve financial close.

Published in The Express Tribune, April 9th, 2015. 

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Other View | 6 years ago | Reply Olson mights have his interests, but a just and peaceful society we have create, can never be left on governments priorities. Say the word "NGOs", and see negative reactions around. Most of today's decision makers and government servants all have studied the syllabi fabricated by General Zia's regime and his crook aides; hence majority does not believe in human rights and keeping accountability checks over governments through citizens voice and citizens' organized actions. On the other side, governments in Pakistan always remained power hungry and never believed in civil rights voice and non-governmental (civilian) accountability check and balance over government affairs. Hence they had to keep choking the citizens-led institutions struggling for accountability, justice, peace and human rights. Trillions of dollars' corruption by all governments in Pakistan has never been a more important issue than blaming NGOs due to few black sheep. Like other conspiracy theories, NGOs or civil society organizations are easy target of myriad allegations mainly of anti-state activities and corruption, although few might be involved in such things due to decades old inefficient (non)regulation by the government institutions who were responsible to do by law. For instance, if an NGO is involved in anti-state activities, whose inefficiency is it??? Of course of the governments, who were more busy in looting governments funds rather than focusing on good governance. Who stops a government to regulate every sphere of life in a country? NGOs are registered legal entities working under state laws. Of course these provide the frameworks on how NGOs will be regulated. Why were those laws no implemented properly? A reactive and yet another conservative regime of Nawaz Sharif and company is pressing already registered NGOs to get registered again; so once again NGOs are the target of hate without justifications. Now, it is another opportunity for PMLN government to choke the voice of the citizens institutions in order to silence the critics of their conservative policies, suppressive and selective service delivery and superficial fancy development projects which are never consulted with the local population while planning or implementing. As I have not ruled out the possibility of some NGOs doing bad, thousands of citizens-led institutions cannot be silenced on wishes of few monarchy-loving rulers. Many people can illogical jump to support government high-handedness on NGOs, because they have never stood in a queue to get food during a humanitarian crisis caused by some natural disaster or the government blunders. I am supporting NGOs because on many occasions I have witnessed them working day and night for the calamity hit people while government officials used to visit and arrange fake relief camps before any high profile visits. Even in normal times, governments don't lend an ear to sufferings of the people. For example, in District Rajanpur, declaring a woman 'kali' and consequently killing or selling her is very common which is brokered mainly by some local politician and we don't have any problem with it. But if any NGO will raise the voice, we will start screaming to call that NGO anti state. Now please tell this man, Mr. Dar, that you will come up with a balanced piece of legislation but NGOs are not working under SECP only. They are registered under 4-6 different laws of the land while your new fancy regulation is focused on SECP controlled NGOs only. We will be happy if this governments binds both the government and non-government actors to strictly follow the accountability checks and public consultations for all the development programs and start public reporting accessible to everyone mainly through online regular reports.
hadi | 6 years ago | Reply Oh man the level of hypocrisy by Pakistanis over foreign donation goes higher then the highest peak on earth! Your entire country including army is run on foreign and us aid. When these same people give meoney to NGO's to fight for civil rights you have huge issues.
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