Postscript:
At the end of 2020, the final bill, 35646 Social Organizations Transparency Act, was introduced, where the challenged transparency requirements were dropped as a result of the fundamental criticisms described herein. As far as I am concerned, this is real democracy, in deliberative form. Of course, this does not make the criticism any less alarming, but at least in the second instance there is some reflection on the principles of the rule of law that the legislator is supposed to defend.
After several decades of research and practice in the non-profit sector, I have become deeply convinced that this sector forms the buffers of our democratic society based on the rule of law. The resilience of a society is determined by the strength of its 'Civil Society', the hodgepodge of institutions and non-profit organizations that pluralistically seeks the common good. The Netherlands has long been a leading country, with the largest non-profit sector in the world and the largest freedoms in the field of philanthropy[1].
It is therefore certainly dramatic to see that our current government is taking a populist symbol politics out of the drawer that has the same stakes as recent legislation in Poland, Romania and Hungary[2]; countries where civil society is seen as a threat to central authority, countries where 'illiberalism' prevails and where authoritarian leaders are worshipped in contrast to universal values promoted by civil society organizations. Of course, it is mainly the fear of the same Civil Society organizations that, as part of the rule of law and the resilience of a society, can turn the same authoritarian leaders around and hold them accountable for their actions, which means that Civil Society is hated from the start and made an enemy. The Dutch Bill is also contrary to international law and the democratic principles of our legal system.
The Netherlands should keep a distance from this and see the play of these powers from a distance. It owes this to its historical-legal liberal tradition.
Outside the EU, too, there are a whole series of countries that have introduced legislation in recent years that has significantly reduced the scope for civil society, with Russia with its foreign agency legislation stigmatizing international funding of civil society organizations, followed by Israel, India, Mexico and China being the most powerful.
Draft Dutch Bill Transparency of Civil Society Organizations
The 'Transparency of civil society organizations' Bill submitted for consultation received 189 largely very negative reactions from a wide range of organizations[3].
I will focus here on the proposal that a (to be defined) social organization should publish on its website or via the trade register[4] the name and place of residence of any donor or legatee who transfers more than € 15,000 to that organization.
The Bill is motivated by very extreme hypothetical situations, in which a social organization established in the Netherlands is financially dependent on a particular financier who imposes requirements on the management of the social organization, thereby initiating behaviour that 'violates the standards of the Dutch constitution, for example because it is disruptive in nature, punishable in nature or contrary to public order. This may involve anti-democratic, anti-integrative and intolerant behaviour, such as isolation from society leading to alienation and isolation, rejection of the democratic legal order as a form of society, or obstructing others in the exercise of their freedoms such as the right not to be discriminated against. One can also think of inciting and (indirectly) inciting hatred or discrimination. An example is that a financier demands that members of the board of a social organization be replaced by board members who have an extremist course in mind. Or when the administration is forced to invite speakers who reject the democratic rule of law and encourage others to do the same.’[5]
These are therefore clearly examples in the media of financing by 'non-free countries' of mosques spreading a form of Islam that is at odds with the principles of our constitutional state. In the examples that came out, the dubious donors were in the picture of the AIVD and it is then up to the various organs of the government to act. In my contribution of 14 June 2018 External Supervision of organizations that act in violation of public policy[6], I have already explained that in practice the Public Prosecution Service makes little or no use of its powers in relation to foundations, which is a very undesirable situation. The Public Prosecution Service can investigate, request information, suspend and dismiss directors and take provisional measures. It may also request the court to appoint new directors or even dissolve the foundation. It is a missed necessity that the Public Prosecution Service should intervene in foundations, as it does in neighbouring countries. And that seems to be mainly a question of prioritisation and money.
The same of course applies to ANBIs (the technical term for charitable organizations for Dutch tax purposes) and the supervision by the tax authorities. One of the requirements of an ANBI is the so-called disposition requirement, the board of an ANBI must not only be formally but also factually independent and the internal legal order of the foundation must be arranged in such a way that no one, neither a private individual nor a legal entity wherever established, can dispose of the foundation. In practice, in my opinion, the ANBI team is not always critical on this point, as is also evident from the very small number of court rulings on this point.
Violation of international law
The Dutch Bill Transparency of Civil Society Organizations is clearly in conflict with international law[7]. The basic principle is that a state leaves freedom of expression and association (Articles 10 and 11 of the European Convention on Human Rights) intact, including the right of civil society organizations to raise revenues without state intervention. Many people have already asserted the conflict with the right of privacy (article 8 of the European Convention on Human Rights) of the individual donors.
The conflict with international law can only be overcome if the state demonstrates that measures are necessary in a democratic society and, in addition, makes clear why the proposed measures are proportionate, i.e. that the intervention is the minimum necessary to achieve the legitimate objectives. Proportionality therefore requires a pure balance between the public interest and the requirements of the protection of fundamental rights.
The Venice Committee, an advisory committee of the Council of Europe, has demonstrated[8] that “the need for transparency in the internal functioning of associations is not specifically established in international and regional treaties owing to the right of associations to be free from interference of the state in their internal affairs. However, openness and transparency are fundamental for establishing accountability and public trust. The state shall not require but shall encourage and facilitate associations to be accountable and transparent. ”
As such, it is clear that the aim of 'encouraging transparency' as such is not a justification in international law for imposing restrictions on civil society organizations, according to the Venice Commission in several of its Opinions.
This means that it is up to the public authorities to demonstrate the specific problems they wish to overcome with the proposed rule and, moreover, to demonstrate that the proposed measure is proportionate to the objective pursued. There is certainly no such proportionality, if there are other specific regulations which provide for combating activities which are contrary to public order or money laundering, as is the case in the situations envisaged.
The Explanatory Memorandum to the Dutch Bill goes no further than that larger donations may eventually lead to the influence of a social organization and that this influence may subsequently lead to behaviour that is contrary to Dutch public policy. Of course, this merely hypothetical influence and result is not a justification for an infringement of fundamental social rights, as the Venice Commission of the Council of Europe, also considers the following passage from its opinion on Romanian legislation - which was justified by a hypothetical possibility of money laundering - to be testimony to: “As implied by the European Union’s Anti-Money Laundering Directive 2015/849, additional obligations should only be based on a prior risk assessment. Restrictions to the freedom of association can only be justified if they are necessary to avert a real, and not only hypothetical danger. “Pressing social need” for such restrictions, as described in the case-law of the ECtHR, presupposes “plausible evidence” of a sufficiently imminent threat to the State or to a democratic society. The initiators of the draft law refer to the “public concern” and “suspicions” about the legality and honesty of financing of NGOs in Romania, without, however, pointing to a substantiated concrete risk analysis concerning any specific involvement of the NGO sector in the commission of crimes such as corruption, money-laundering and connected crimes. Even if there were indications of money laundering activities on the side of individual NGOs, the correct response to this would be criminal investigations against these particular associations, and not blanket reporting requirements that affect numerous other organizations engaging in entirely legitimate activities”[9].
This Bill is damaging our country's core values
The Slippery Slope of damaging our core values
Rather than entrusting its civil servants with the actual supervision, the drafters of this Bill put the operation of the press into question. Donors should be made public. Journalists love it when they can see exactly who donates how much to which organization; that's enough to create a good selling story. Journalists, however, are not government officials, to whom society can entrust a public oversight task; they serve their own interests, which are primarily commercial.
With this bill, the government is not only guilty of illiberal legislation, which is fundamentally contrary to our principles of freedom and fundamental social rights, but it is also not distancing itself
from an ever-increasingly poisonous lynchial culture, in which philanthropists are gladly declared scapegoats as a declared opponent of power. If you want to understand how this works, read 'The Unbelievable Story of the Plot Against George Soros’[10]. If transparency of donors in relation to the general public were to serve a genuine general social purpose, legislation should at least be introduced in parallel, presumably in the Penal Code, protecting the same donors against unrealistic hate campaigns or even 'nice running stories' on journalistic thin ice.
A legislator who falls into this trap without seeing or wanting to see is guilty of betraying its own values.
Furthermore, a legislator who believes that a Bill on Transparency would prevent a genuine terrorist organization from operating is particularly naive. The bill provides as a sanction that the Public Prosecution Service[11] (yes, again!) can demand compliance with publication of the donors. I do not think that the Public Prosecutor's Office is now suddenly expressing itself in this respect, while, of course, without further investigation it is impossible to check whether the obligation of transparency has been fulfilled. If that research has been done, well, then publication is no longer necessary, I would assume.
Do Not Harm
The conclusion is therefore that this Bill on Transparency is a form of symbolic legislation, which should make it clear to the electorate that the government is really doing something about Salafist and possibly terrorist influences in our country.
Symbol legislation is fine, as long as it does not damage. However, a government should always honour as a paradigm: 'Do Not Harm'. In this case, this is even guaranteed in Articles 10 and 11 of the European Convention on Human Rights.
Well, it is evident that this legislative proposal not only causes great damage to civil society organizations, but, more importantly, leads to a considerably greater inequality between rich and less wealthy citizens. The government apparently does not want successful people to give back to society, they will argue. Society itself does not want it either, as evidenced by the way in which philanthropists are discussed in the media. This is a dangerous trend, which further increases the inequality in our society by giant leaps.
Do Not Harm: delete the bill on transparency of civil society organizations. And make sure that the Netherlands remains a leader in democratic values!
©Dr. Ineke A. Koele, 5 March 2019
Deze blog is ook verschenen op de webportal www.dedikkeblauwe.nl op 6 maart 2019.
[1] https://www.hudson.org/research/11363-index-of-philanthropic-freedom-2015. The Netherlands take the top spot thanks to the country’s open philanthropic culture: NGOs can register almost as soon as they get the appropriate paperwork, limitations on transfers across borders are minimal, and nearly anyone can serve as the head of an organization. As a result, civil society organizations in the Netherlands are almost uniquely free of government control and involvement, the Report reads.
[2]In recent years, these countries have introduced legislation to increase the transparency of civil society organizations. See: https://rm.coe.int/168070bfbb; https://www.osce.org/odihr/336546.
[3] All available on https://www.internetconsultatie.nl/transparantiemaatschappelijkeorganisaties.
[4] The proposal to have civil society organizations publish financial data, which is also included in the bill, is a weak version of a bill that has already been proposed since 2010, which it failed to achieve.
[5] Explanatory memorandum Legislative proposal Transparency Civil Society Organizations
[6] https://www.dedikkeblauwe.nl/news/extern-toezicht
[7] See also in that sense: http://ecnl.org/wp-content/uploads/2019/02/ECNL-Submission-on-the-Dutch-Draft-Act-on-Transparency-of-CSOs-Feb-2019_final.pdf.
[8] Paragraph 224 of the so-called Joint Guidelines on Freedom of Association 2015.
[9] Par. 66 https://www.venice.coe.int/webforms/documents/?pdf=CDL-AD(2018)004-e
[10] https://www.buzzfeednews.com/article/hnsgrassegger/george-soros-conspiracy-finkelstein-birnbaum-orban-netanyahu. An earlier version of this article has been published in the Swiss journal ‘Das Magasin’.
[11]Or a specific interested party, which, incidentally, cannot be a journalist. An interested party must have a respectable interest in disclosure, which is difficult to consider in practice.