DEVELOPMENT-BRAZIL: New Law to Regulate NGO Alliance with State

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Aug 3 1998 (IPS) - Non-governmental organisations (NGOs) in Brazil, which employ more people than the central government, may soon be recognised as public in nature if a new draft law is approved by Congress.

The bill submitted to Congress by the Brazilian government after a year of debate and discussions is designed to regulate and facilitate the alliance between NGOs and the state.

The aim is to liberate the energies of the so-called “third sector” and provide transparent procedures for formalising its public function and association with the state, said Augusto Franco, an adviser with the governmental Community of Solidarity Programme, in charge of social projects.

Franco was the main communication link for the 90 NGOs which participated in drawing up the draft law, which defines Organisations of Civil Society (OCSs) and the agreement they can sign with the government to implement public projects as partners.

Brazil’s present legislation sets a number of bureaucratic restrictions on non-profit organisations wishing to register as philanthropic or “public interest” entities. It also limits the government’s relationship with the private sector to contracts or “convenios” (agreements).

The former is for companies and other for-profit organisations, and must be preceded by a call for bids and additional lengthy procedures. The latter slaps a number of restrictions on the use of public funds, prohibiting, for example, the payment of current expenses such as salaries.

The current regulations fail to take into account the new state- OSC relationship, while hindering and distorting cooperation, said Franco. He added that their main concern was to make NGOs accountable for funds provided by the state, demanding numerous documents and detailed accounts.

The new law, on the other hand, will focus on the results of the previously agreed-on projects and compliance with the objective of benefiting society. Such control of the ends rather than the means will make the relationship more transparent and less bureaucratic, while strengthening the third sector, according to Franco.

The draft law also distinguishes between non-profit entities that exercise a public function, like environmentalist groups and human rights and cultural advocates, and entities like clubs which only benefit their members.

The Community of Solidarity Programme, presided over by First Lady Ruth Cardoso, is the government body with the strongest interest in strengthening the third sector, which it estimates to be comprised of some 250,000 organisations, whose social projects are mainly implemented by NGOs and city governments.

The Programme has created a Network of Information on the Third Sector (RITS), which begins to operate on the Internet this year with the aim of stimulating interaction among NGOs and between NGOs and society as a whole.

Brazil’s third sector offered close to 1.4 million jobs in 1995, 2.5 times the number of people employed by the central government, according to the Institute of Studies on Religion (ISER), which contributed to an international study by the Johns Hopkins University in the U.S. state of Maryland. (Brazil has a total population of around 165 million).

The number of people employed by the sector, whether drawing salaries or working as volunteers, climbed 45 percent from 1991 to 1995, far outstripping the 9.7 percent and 27 percent growth among public sector functionaries and private sector jobs respectively, said Leilah Landim, the coordinator of the Brazilian part of the study.

Education and research absorb one-third of all personnel of NGOs, health, social assistance and culture also employ large numbers, while environmentalism employs only 0.22 percent of the total.

Franco said the number of NGOs has remained steady since 1995, due to scarcity of resources and especially because of a shrinking in aid from Europe.

But the third sector has won increasing support from the business sector. A movement of large companies which publishes a “social balance sheet” has been stimulating the private sector to finance social projects and be held accountable for actions which affect society.

Many of the companies involved in the project have set up their own foundations for implementing social actions and have banded together in the Group of Institutes, Foundations and Companies (GIFE), designed to foment development of the third sector.

Evelyn Ioschpe, president of GIFE, says private sector foundations contribute 300 million dollars a year to non-profit activities.

Ioschpe welcomed the new initiative, noting that up to now Brazil had done little to become familiar with and recognise the role of the fast-growing third sector, while the government had “hindered voluntary action by citizens and companies.”