“There is no practice of effective cooperation between the institutions of civil society, which leads to their disunity and, as a result, reduces their efforts to defend their legitimate rights and interests,” said Svetlana Ushakova, Director of the Public Foundation “INMIR,” Almaty, in an article written exclusively for CABAR.
Today in Kazakhstan, there is a critical situation in the sphere of legal regulation of NGOs. In particular, it is about the legal regulation of civil institutions and the proposed changes to the legislation on the activities of CSOs (civil society organizations).
A similar negative trend can be observed not only in Kazakhstan, but also in other CIS countries. For example, a law on foreign agents was passed in Russia, and on November 19, 2014, a similar law was adopted in Azerbaijan. The adoption of such laws takes place against the background of discrediting NGOs and their leaders.
I. Tightening of the legislation concerning the activities of CSOs in Kazakhstan.
Lately, government control over the activities of civil institutions, such as NGOs, the media and trade unions, has increased, which significantly narrows their opportunities. Let us consider the issues of legal regulation of each of the three civil institutions.
The basis of media activity is the realization of freedom of expression (freedom of speech). Today, the realization of freedom of speech is limited by a few norms of legislation in Kazakhstan:
In 2010, a new article was added in the Criminal Code of the Republic of Kazakhstan – Article 317-1 “Public insult and other offense against the honor and dignity of the First President of the Republic of Kazakhstan – Leader of the Nation, the desecration of the images of the First President of the Republic of Kazakhstan – Leader of the Nation, impeding the lawful activities of the First President of the Republic of Kazakhstan – Leader of the nation.” Thus, the Criminal Code of the Republic of Kazakhstan now contains five articles providing enhanced protection of moral rights of officials.
The law adopted in 2011 on the introduction of administrative prejudice regarding the libel and insult was not put into effect, because the appropriate changes were notmade to the Code of Administrative Offences. Thus, in spite of such half-measures to decriminalize libel, de facto journalists remain subject tocriminal responsibility.
In 2012, the Concept of the draft of the new Criminal Code of the Republic of Kazakhstan was adopted. The freedom of speech in this Concept is called “an externally socially useful action.” Draft Penal Code (as of February 2014) maintains imprisonment for up to 3 years as punishment for libel. Besides, it introduces a fine of more than $ 30, 000 as an alternative punishment and extends liability cases under this article.
In 2012, the work on a new draft Administrative Code had begun. The draft Code (as of February 2014) preserves all existing sanctions against the media concerning the appropriation of circulation, suspension and termination of the media for administrative offenses.
In June 2014, the two-year work on the development of new Criminal, Criminal Procedure Codes and the Code of Administrative Offences wascompleted with its adoption. These new documents increased the extent of responsibility for libel and introduced criminal liability for spreading false rumors, which provides punishment of up to 10 years in prison. The prosecutor’s office is entitled to extra-judicial blocking of Internet resources for one day. The sanctions in the form of suspension and closure of media for technical errors have also been preserved.
Trade unions are another important civil institution, which aims at ensuring the implementation of such rights and freedoms as the freedom of association and, as a consequence, the right to work without discrimination. In fact, independent and free trade unions are virtually banned today in Kazakhstan.
On June 27, 2014, the President of Kazakhstan NursultanNazarbayev signed the Law of the Republic of Kazakhstan “On Trade Unions” aimed at modernizing the system of trade unions.
The leaders of independent trade unions estimate this law as anti-labor, which denies the right of workers for associations. The Law was adopted, despite the protests of trade unions, human rights activists and the negative assessment of the ILO. This Law and the new versions of the Criminal, Criminal Procedure and Administrative Codes were all adopted on the same day. New amendments introduce a criminal liability for participation in labor conflicts and formulate new crimes and legal terms, criminalizing the activities of trade unions, of the opposition and of civil society organizations.
In particular, in order to create a new trade union, it is necessary to already have a primary organization at enterprises in the same industry. Cross-sectoral and regional organizations are prohibited. In fact, the State Federation of Trade Unions ofKazakhstan (FTUK), the chairman of which is appointed by the President, has monopolized the trade union area.
Under the new law, trade unions are deprived of a number of opportunities to initiate labor disputes and to negotiate with the employer. This fact leads to the conclusion that having the experience of successful strikes at “Kazakhmys” corporation and enterprises of “KazMunaiGas” when workers managed to re-elect the leadership of the trade union committees, the Kazakh authorities now have deleted the very possibility of such precedents.
According to the new Criminal Code, legal entities represented by trade unions, political parties and public associations are now bearing responsibility for provoking labor disputes.
Establishment of unregistered trade unions (and parties), as well as the participation in them, will now be punishable by criminal liability and can end with the imprisonment for up to three months, according to Article 403 of the new Criminal Code. Three-year imprisonment is also provided for organizing and participating in “illegal strike”. “Inciting social discord” also remains a serious crime under Article 164 and is punished by up to 12 years in prison.
Article 398 of the Criminal Code determines the forms of punishment for participating in an illegal assembly and includes a penalty of a fine of 100 minimum calculation indexes (MCI (1 MCI is 1,852 tenge), community service during up to 240 hours or arrest for up to 4 months. Thus, it can now be concluded that any trade union meeting, demonstration or conference can fall under the category of “illegal.” The new law has restricted the opportunity of assembly in indoor areas.
According to experts, after the adoption of the new law “On Trade Unions,” most of the independent associations will not be able to re-register and will be closed.
Non-profit organizations (NPOs)
CSO is a very important civil institution that allows citizens to update various social problems before the government and society and suggest their solutions. CSOs ensure the right to freedom of association in the legislation of the Republic of Kazakhstan.
The Department of Public Information of the United Nations Secretariat defines an NGO as “any voluntary non-profit alliance of citizens, organized on a local, national or international level.” In Western countries, the institute of public organizations is considered an important part of civil society, and foreign funding of such organizations is not reprehensible.
Kazakhstan’s Constitution and laws do not recognize the right of citizens to form so-called informal organizations, i.e., organizations without legal status.
The law enforcement practice of judicial authorities and prosecutor’s office suggests that in some cases, a CSO created by a group of citizens, not claiming the status of a public association and not having the status of a legal entity, is regarded as an unregistered public associationand its organizers are subject to administrativeresponsibility. Unregistered religious groups have similar problems.
Kazakh legislation allows the use of extreme measures, such as the suspension of operations and liquidation of public associations, for any non-significant violation of the legislation of Kazakhstan as a whole, if it is committed after the imposition of an administrative penalty. Public organizations can also bear administrative responsibility for the activities carried out completely within the law, but “going beyond the statutory goals and objectives.” Also, Article 49 of the Civil Code of the Republic of Kazakhstan says that the systematic implementation of activities contrary to the statutory goals of the legal entity may be the basis for its liquidation.
The Criminal Code of the Republic of Kazakhstan contains a number of articles providing for increased criminal liability of members of public organizations and their managers compared with citizens who are not members of public associations. For example, Article 336 of the Criminal Code of the Republic of Kazakhstan establishes criminal liability for “illegal interference of public associations in the activities of state bodies,” and the sanction for members of public associations is a fine or arrest for up to four months, and for the head of the public association – imprisonment for up to one year.
Public organizations pay special attention to the attempts by the government to legalize the repressive policy against independent associations. So, new provisions in Article 403 of the Criminal Code introduce criminal liability for leadership, participation in the activities of unregistered or banned public and religious associations, as well as financing their activities, and provides for a penalty in the form of arrest for up to 3 months. Article 402 of the Criminal Code of the Republic of Kazakhstan provides for the restriction or imprisonment for up to 6 years for the creation or leadership of a religious or public association, whose activity is associated with inciting citizens to refuse to fulfill their civic duties or committing other illegal acts, as well as for the creation or leadership of a party on the basis of religion or political party or trade union financed from sources prohibited by the laws of the Republic of Kazakhstan. Given the lack of clear criteria, definitions and vagueness of the terms used, any opposition organizations and informal groups of citizens can be brought to criminal responsibility, according to this Article.
Quotes of Members of the Parliament of the Republic of Kazakhstan in the media
… The leader of a public association, the person performing managerial functions in a commercial or other organization, often use the financial and other support from those who commit criminal offenses (drugs, weapons, etc.). In addition, these are the persons who managed to legalize their revenues obtained by criminal means, and they still retain links in the criminal environment.
Member of the Parliament of Kazakhstan
… The use of NPOs in the global information space is becoming one of the most powerful tools of influence on the current world events. The “color” revolutions, Internet-uprisings, flash mob revolutions taking place around the world are the evidence of that.
Senator of the Parliament of the Republic of Kazakhstan
In June 2014, amendments were adopted in the Criminal Code and the Administrative Code of the Republic of Kazakhstan, which will take effect from January 2015. The new rules introduce the concept of civil society organizations’ leaders. Virtually any active participant in a civil society organization can fall under this definition.
NGO leaders will be regarded as particularly dangerous for the following offenses:
- Violation of the rights of citizens (Article 145 paragraph 2);
- Incitement of social, national, ethnic, racial, class or religious hatred (Article 174);
- Propaganda and public calls for the seizure or retention of power (Article 179)
- Separatist activities (Article 180)
- Creation and management of an extremist group (Article 182);
- Promotion of terrorism or extremism (Article 254);
- Creating, directing a terrorist group (Article 255);
- Financing of terrorist or extremist activity (Article 256)
- Funding the activities of a criminal group, as well as storage and distribution of assets, development of funding channels (Article 264)
The following problem situations can also be noted:
Article 401 of the Criminal Code (illegal interference of PAs in the activities of government agencies) is formulated in such a way that any interference in the activities of state bodies can be regarded as unlawful.
Article 402 (creation or participation in illegal PAs) is duplicative and formulates crimes too broadly, which could lead to prosecution of public associations and their members at the discretion of government bodies.
Article 403 (Management, participation in the activities of unregistered or illegal public and religious associations, as well as financing of their activities) provides for persecution of PAs if they do not have registration, which does not comply with the international standards.
Thus, the amendments contain a common problem – violation of the non-discrimination principle enshrined in the Constitution of the Republic of Kazakhstan. In these articles, NGO leaders and participants are discriminated on the basis of social or official position, which is prohibited by law.
II. Proposed changes to the legislation on NPOs’ activities in Kazakhstan
NPOs’ activities are regulated by the laws “On Nonprofit Organizations” and “On Public Associations”. Federal funding of NPOs is carried out in accordance with the law “On public social contract.”
Formany years, NPOs have raised the issue of improving the mechanism for financing their activities by the government, improving the social contract mechanism and expanding the forms of government support. In particular, NPOs have spoken about the introduction of a grant mechanism.
In 2012, the Ministry for Culture and Information began to develop a bill on government support of NPOs. The initial purpose of the bill was to create a more efficient mechanism for funding NPOs. For this purpose, according to the NPOs, the bill should have provided the following:
1. The norm about the purchase of NPOs’ services through the public social contract should be taken out of the Law “On Public Procurement.” This will allow not only to avoid dumping, but also to create a mechanism for choosing a supplier, when the experience and qualifications of NPOs, innovative projects and other qualitative features will be the main criteria for selection, not the price the proposed project;
2. Provide advance payments for projects of NPOs within the public social contract (advance payments for NPOs were abolished in 2012);
3. Making grants the main funding mechanism for projects of NPOs;
4. Provide institutional support for NGOs through grants, since the existing mechanism of public social contract does not allow allocating funds for institutional support to NGOs.
The adoption of the law on government grants for NPOs would allow the government to:
The adoption of the law on government grants for NPOs would allow the government to:
(a) Avoid potential problems with the implementation of the WTO principles;
(b) Get rid of the problems with taxation of the allocated funds – non-repayable receipts of NPOs are exempt from both the value-added tax and from the corporate income tax;
(c) Provide funding for NPOs to cover general and administrative expenses (for example, the maintenance of office space), as well as to meet reporting requirements;
(d) Establish more flexible tendering procedures adapted to the social services and the criteria for evaluation of tender proposals, based not on the least (as it is now), but on the best (optimal) price.
(e) Conduct project competitions, not price offer competitions. It will help better use the creative and innovative potential of social NPOs, of which the contest administrator may suspect before the announcement of the call for projects.
The adoption of such legislation will also require the adoption of a related Law “On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan for the organization of the system of government grants in the Republic of Kazakhstan.” This law should provide for amendments and additions to some legislative acts of the Republic of Kazakhstan, regulating the process of planning and development of budget expenditures in the Republic of Kazakhstan, as well as establishing liability for violation of legislation on government grants for NPOs.
In particular, changes should be made to the Budget Code: in order to include government grants in the system of budgetary financing, and to delimitate them from foreign grants, the recipient of which is the Republic of Kazakhstan, the government and state bodies of the Republic of Kazakhstan. It is also necessary to introduce the Budget Code, the provisions allowing to give grants to be exercised in the next fiscal year, as well as long-term grants (over one year).
The Tax Code should be amended to provide exemption from a number of taxes (corporate income tax and personal income tax) for recipients of funds from government grants.
The law “On Public Associations” should be amended in the part concerning the cancellation of the territorial limits for the operation of public associations.
It is also necessary to amend the Code of Administrative Offences and the Criminal Code, in order to introduce the responsibility for violation of the provisions on conflicts of interest during tenders for government grants.
On August 20, 2013, after a lengthy discussion of the necessary changes in legislation, in Astana, the Ministry for Culture and Information (MCI), as adeveloper of the bill “On Government Support of NGOs, “submitted a bill for the final debate before passing it to the parliament. Surprisinglyfor NPOs, thebill did not solve any of the aforementioned problems. Representatives of civil society have noted the following problems of the bill:
- The lack of a grant mechanism or institutional support for NPOs;
- Mandatory entry of NPOs in the Register to participate in competitions for public funding;
- A complex multi-level procedure for registration in the Register;
- An onerous list of documents required for registration in the Register;
- Giving public councils a function to recommend NPOs for inclusion in the Register.
Thus, the bill has significantly worsened the existing order of state funding of NGOs, namely:
- It admitted to the contest only those NPOs that are included in a special Register;
- It introduced a four-level coordination for inclusion of NPOs in the Register, creating opportunities for bureaucracy and corruption at every level;
- It proposed to introduce new community councils in addition to the existing public councils and gave them the right to decide which organization were to be included in the Registry;
- It offered State premiums as a substitute for grants (the developers of the bill do not understand the difference between “state premium” and “grant”: “The state premium” cannot fulfill the function of institutional support for NPOs, as it is awarded for past services and allocated for a limited number of NPOs).
A number of NPOs (more than 100) have criticized the bill and held a wide advocacy campaign, which resulted in the MCI giving its consent to amend the bill. A group of NPOs supported by ICNL has developed the necessary amendments to the bill. In particular, they proposed a definition of grants and described in detail the procedure of awarding grants. The procedure for the inclusion of NPOs in the Registry has also been simplified.
From January to August 2014, the MCI has not taken any action to discuss the bill. In September 2014, a number of NPOs, under the leadership of the Civil Alliance of Kazakhstan, initiated a new bill “On amendments and additions to some legislative acts concerning the activities of non-governmental organizations in the Republic of Kazakhstan.” In fact, it is about the amendments to the law “On public social contract” and one amendment to the Law “On non-profit organizations,” which include the following:
- Changing the name of the Law on Public Social Contract (PSC), which in the new edition will be called the Law “On public social contract, grants and awards for non-governmental organizations in the Republic of Kazakhstan.”
- Amending the definition of “PSC” in order to focus it on the solution of short-term goals in the social sphere.
- The concept of “governmental grant for NPOs” – budgetary funds provided to NPOs, in order to support civic initiatives and capacity building for social work.
- Introducing the notion of “non-state grant for NGOs” – funds to support NPOs at the Operator’s own expense, generated from extra-budgetary sources.
- The notion of “Operator in grant funding” – an organization created by the decision of the Government for target financing of NPOs in the form of grants.
- Government grants will be provided in accordance with the procedure established by the Government
- Non-government grants will be provided in accordance with the procedure determined by the Operator.
- The concept of a “premium” – funds provided to NGOs for their contribution to the solution of social problems.
- Reward will be awarded annually in accordance with procedure prescribed by the Government, based on the recommendations of state bodies and the Governmental Council for Cooperation with NPOs.
- An NPO may receive a premium only once in three years. Self-nomination is allowed.
- The operator shall have the right to attract and use all sources of funding not prohibited by law.
International Center for Non-Profit Law (ICNL)
Comments on a bill of the Republic of Kazakhstan
“On Amendments and additions to some legislative acts concerning the activities of non-governmental organizations in the Republic of Kazakhstan”
1. Grants as an alternative form of financing NPOs to the public social contract
Developers of the Bill propose to introduce a grant mechanism by amending the Law on public social contract, while offering to rename it to the law “On Public Social Contract, grants and awards for non-governmental organizations in the Republic of Kazakhstan.”
Attempt to regulate governmental and non-government grants.
The developers propose to introduce two kinds of grants – governmental and non-governmental, depending on the source of their formation – budget or extra-budgetary funds. This is a very ambitious task – to try to settle in one law both government and non-government funding. No wonder that neither of these two kinds of funding is addressed in the bill in a sufficient degree. Public funding, including the regulation of grants from the state budget or state non-budgetary funds, should be settled in accordance with the budget legislation, the legislation establishing the powers of state bodies authorized to provide grants and monitor their use, which always requires a much more detailed regulation as compared to grants from private sources. As a rule, businesses and individuals can provide grants or donations at their own discretion for any legitimate purpose, and there is no requirement for their detailed regulation. We propose to keep in the Draft Law only the regulation of grants from the state budget and extra-budgetary governmental funds.
Vague concept of a grant.
The concept of a grant, unfortunately, does not reflect the essence of the grant accepted in international standards, since it does not indicate a competitive procedure for awarding it and its target and grant nature. In our set of recommendations, we offer the concept of a grant that best corresponds to the best international practice.
Grant support of an exclusively social sphere.
In addition, in defining the concept of a grant, the developers indicated that grants would only be issued for the work in the social sphere. However, it must be emphasized that NPOs are engaged in publicly useful activities not only in the social sphere, but also in protecting the interests of target groups (rights of the disabled, consumers, or women, for example). They are also engaged in other works important for the government and society, which is, as such, not social in common understanding of social services (for instance, legal services for poorly protected groups, economic and statistical analysis of the situation in the country, increasing legal awareness). The practice of financing of such NPOs through grants is used in many countries around the world, so we believe that such NPOs should be supported through government grants in Kazakhstan, too. Moreover, the division of NPOs into two categories – those working in the social sector and others – is not very effective in practice, because many NPOs are engaged in a wide range of activities. At the same time, this division will allow the operator-manager of budgetary funds to subjectively decide which NPO will receive funding, and which NPO will not receive it, thus creating ground for corruption.
Limited opportunity to use the grant for institutional support.
The bill has a provision that no more than 10% of the grant amount may be spent for the administrative costs and institutional development. This restriction does not meet the interests of the state interested in a strong non-profit sector, which is able to help the government solve important national and social problems. Institutional support helps create strong and sustainable NPOs willing to solve such problems. We propose to remove the limit of 10% or to keep 10%, but to clarify in the bill that the wages, the cost of rent and other expenses for statutory activities are not included in the calculation of the 10%.
Lack of amendments to other laws.
It should also be noted that the bill does not contain the necessary amendments to the Budget and Tax Codes, which would allow the legislation to introduce such a form of financing as grant. Amendments to the budget and tax legislation are the key to make a bill not declarative, but applicable in practice. We are ready to help in development of such amendments.
Lack of the procedure for grants awarding.
The developers do not offer any procedure for awarding grants and leave its development to the discretion of the Government. A grant is a new mechanism, almost never previously used in Kazakhstan. Its effectiveness and feasibility depend on the effectiveness of the mechanism of its awarding. The procedure for grant awarding is the most important part of the grant regulation and should be provided in the law itself, not in a legislative act of lower level. Moreover, in accordance with current practice of law-making in Kazakhstan, the procedure for the development of laws is far more transparent and accessible to the public participation and NPOs, as compared with the development of bylaws. In the process of drafting laws, NPOs have the maximum opportunity to provide their comments to these procedures and help in their development.
It seems necessary to settle in the Bill the procedure for grant awarding. Moreover, the development of this procedure should be based on international best practices and take place within broad consultation, taking into account recommendations of NGOs and the public.
ICNL is ready to provide assistance in the development of the procedure of grant awarding. The procedure for grant awarding in the Bill should include as a minimum:
- The procedure for planning the budget for the grant competitions;
- The procedure for forming competitive commissions of grant competitions;
- The procedure for conducting competitions for grants;
- The procedure for monitoring the execution of the grant.
Grants are deservedly the most common and effective mechanism for funding NPOs around the world, and we hope that within this legislative initiative, the developers will be able to introduce this form of state support for NPOs in Kazakhstan.
2. Changes in the regulation of public social contract.
The developers have made changes in the Bill to the concept of “public social contract,” making for some reason the emphasis on short-term goals in the social sphere, which will be implemented within the framework of this mechanism. We suggest omitting this amendment, since during many years, NPOs have worked to ensure that social contract projects are funded not only for the short-term but also the long-term, depending on the size of the project and its target group. In 2011, such an amendment was introduced to the law on PSC and had already begun to act. Moreover, the possibility of a long-term contract exists in the laws of many countries.
3. The Operator in grant funding of NPOs.
The developers propose to introduce the concept of “the operator in grant funding” as an organization created by the decision of the Government, in order to allocate grant funding among NPOs. Unfortunately, except for this concept, as well as several provisions concerning the formation of the sources of its property and assets, the Bill does not have any procedures for its establishment or designation, the structure of its management, the measures to address conflicts of interest and other important provisions that would guarantee the effectiveness of and transparency of the work of this body. The text does not clarify the role of the Operator in grant funding of NPOs – whether his powers will extend for grant funding allocated from Kazakhstan’s budget or whether he will coordinate any grant funding provided by other donors for NPOs in the Republic of Kazakhstan.
The world practice of grant funding has an experience of creating special bodies (most often Foundations or the Agencies) to support civil society, which are endowed with functions of distribution of grant funding of NPOs. In recent years, there has been a tendency to choose a model where public funding is allocated through special bodies providing grants, created for this specific purpose. Some of the most famous foundations in Europe are the Croatian National Foundation for Civil Society, the Estonian National Foundation for Civil Society Development and the Hungarian National Civil Fund. All of these organizations have powers only during the allocation of funding from public sources.
However, the procedure for creating such bodies is usually an open process that is carried out by public authorities, together with representatives of civil society, communities and other stakeholders.The developers think through the functions: the strategy of such a body, the development of a code of ethics, the measures to prevent conflicts of interest, the development of the criteria for the selection, the procedure for the formation of the competition committee, the procedure for evaluation and the method for monitoring of projects, as well as many other issues in advance. Crudity of at least one of these elements can lead to serious consequences. For example, the lack of rules to prevent conflicts of interest has resulted in a loss of public confidence in the Hungarian National Civil Fund. According to the report by the State Department of audit of Hungary as of 2002, 80% of all government and ministerial allocations for NPOs was based on individual decisions (as opposed to open competition for a grant); moreover, 50% of the funds provided by special state funds were issued without tender procedure. In addition, it was believed that the government’s cooperation with NPOs in Hungary was highly politicized, reflecting the growing pressure of the government against the non-governmental sector as a whole, especially through the creation of quasi-governmental organizations. All this has led to the reorganization of this Fund in 2011, which was replaced by the National Fund for cooperation.
Thus, it is possible to state that today; public authorities in Kazakhstan represented by the Ministry of Culture do not intend to make positive legislative changes in the area of civil institutions such as NPOs, the media and trade unions.
Introduction of amendments to the legislation on NPOs coming from the leader of the Civil Alliance of Kazakhstan already taken by the Ministry of Culture for their submission to the Parliament, pose a significant threat to the development of civil society, including the introduction of so-called “Uzbek model” of funding for NPOs.
In Kazakhstan, there is no practice of effective cooperation between the institutions of civil society, leading to their disunity and, as a result, it reduces their efforts to defend their legitimate rights and interests.
Svetlana Ushakova, Director of the Public Foundation “INMIR”
Source: UN Universal Periodic Review, 20th session of the UPR Working Group, presented on March 15, 2014.
 (Lat. praejudicialis – referring to the previous court decision) – obligation for all courts, dealing with the matter, to accept without checking the facts that were previously established by a legally effective decision made during consideration of another case involving the same persons.
Source: Public Foundation “Adilsoz”
In Kazakhstan, NPOs everywhere are called NGOs – non-governmental organizations, which is not correct in terms of the essence of civil society organizations, but this abbreviation has been widely used in the public sector.
Source: UN Universal Periodic Review, 20th session of the UPR Working Group, presented on March 15, 2014.
 PA – Public associations
NPO – Non-profit organization
Source: Delegation of the International Center for Non-Profit Law (ICNL) in Kazakhstan.