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A New System of NGO Regulation on the Horizon

The Public Benefits Organisations Act 2012 (the “PBO Act” or “Act”) received presidential assent on 14th January 2013 although it is not yet in force. Its commencement date is to be gazetted by the Cabinet Secretary in charge of Planning and National Development.

Repeal and Transitional Provisions

The PBO Act once implemented will repeal the current Non-Governmental Organisations Co-ordination Act, 1990 (“NGO Act”) and any non-government organisation (“NGO”) registered under the NGO Act will be deemed to be registered under the PBO Act as a public benefit organisation (“PBO”). The NGO will have up to 1 year from the effective date of the PBO Act to seek registration under the PBO Act failing which it could lose its status as a PBO.

PBO’s instead of NGO’s

The Act seeks to provide for the establishment and operation of PBO’s and to harmonise the legal and regulatory framework by providing a new and enabling environment for civil society organisations (“CSO”) engaging in public benefit activities in Kenya.

Salient features of the Act

  • PBO is defined as a registered autonomous, non-partisan and non-profit grouping of individuals or organisations operated locally or internationally, with a voluntary membership or non-membership and engaged in public benefit activities.
  • Public benefit activities are those that support public benefit by promoting the economic environmental social or cultural development of the general public. Other activities involve, lobbying or advocating on issues of general public interest, or the interest of a group of individuals or organization.
  • The running theme is collaboration between PBO and the Government in the advancement of public interests.
  • The Act sets up a regulatory framework, administered by the Public Benefits Organisations Registration Commission, which oversees the registration of PBO’s.
  • Unlike the NGO Act, registration under the PBO Act is voluntary.
  • The effect of registration is that the PBO becomes a body corporate and the PBO derives various benefits, for example tax benefits, obtaining government funding support and contracts, getting preferential treatment in the procurement of goods and services etc.
  • There is emphasis on self regulation, whereby the PBO’s set up independent bodies and mechanisms which collaborate with an umbrella body, to adopt and enforce principles of voluntary self regulation
  • In furtherance of organizational integrity and internal self regulation, emphasis is laid on specific ethical principles and aspirations are laid out in the Act.
  • Structures must be placed for internal governance to promote accountability and transparency. Additionally the Act requires that service in governance must be voluntary.
  • Financial reporting must adhere to general accepted accounting practice applicable to non-governmental organizations.
  • PBO’s with an annual income or expenditure in excess of KShs. 9 Million are required to be audited.
  • The Act establishes a Public Benefit Organisations Disputes Tribunal to hear and determine disputes / complaints or any matter or appeal arising out of any breach of the provisions of the Act.

Please contact one of our lawyers for further information or assistance.