In September 2003, a group of activists from leading Indonesian NGOs[1] made a two-week study visit to the Philippines. The aim of the visit, hosted by Venture for Fund Raising, was to look at the infrastructure of Philippine civil society with a view to taking back ideas that might work in Indonesia and to see how Philippine NGOs are attempting to improve accountability and governance. What did the Indonesians come away with?

Indonesian NGOs in the late 1990s were at a very similar stage in their development to Philippine NGOs after the fall of Marcos in the late 1980s. However, the situation of Philippine NGOs has been easier for a number of reasons:

· The Philippine Government has consistently expressed its commitment to a democratic and participatory governance system. After the fall of Marcos the Constitution gave NGOs a prominent role in the country’s social development and recognized them as the government’s equal partner in service delivery and policymaking.

· Philippines NGOs have successfully, though on a relatively limited scale, developed and implemented a self-evaluation and self-regulation mechanism.

· Tax policy provides incentives for social development initiatives.

The explosive growth in the number of NGOs over the last five years has given rise to widespread public concern about NGO accountability and questions about their mandate and legitimacy as defenders of community interests. In fact a number of dubious NGOs have emerged: some have been established by government agencies and political party activists, others have been engaged in corruption or other criminal activity.

Local participation

Law 22 of 1999 on Regional Government provides for municipal and district autonomy in most government administrative sectors.[2] The complementary Law 25 of 1999 on Fiscal Balance between the Central Government and the Regions provides new formulas for revenue sharing between the centre and local areas. These laws have created new political spaces and openings for Indonesian NGOs to become involved in local governance.

However, unlike in the Philippines, there is no explicit provision for Indonesian NGOs to represent the people’s interest in consultations on local and national issues, or in governance and policymaking. A few local government authorities have made specific provision for NGO participation in local planning processes, but NGO participation is generally formulated as a possibility (‘can’) rather than an obligation (‘must’), leaving NGOs no grounds on which to protest if they find themselves left out. Whether or not NGO participation occurs thus depends mainly on the discretion and ‘goodwill’ of the authorities or on the degree of pressure from NGOs.

In the Philippines, the Local Government Code, ratified in 1991, which stipulates at least 25 per cent NGO representation on local government bodies, seems to be effective. The 1987 Constitution explicitly gives NGOs the power to represent people’s interests. This constitutional right has clearly played an important role in strengthening NGOs.

Regulatory framework

A clear and enabling regulatory framework governing NGO registration has also helped development of the sector in the Philippines. The Securities and Exchange Commission provides a definition of NGOs and can grant them donee institution status and the subsequent privilege of getting a tax break.

In contrast, the changing Indonesian regulatory framework tends to restrict NGOs. Under the previous Law 8/1985 that governed social organizations, NGOs had to undergo a lengthy government registration procedure, though in practice a simple notarial act and registration with a local court is sufficient. Though Law 16/2001 on Foundations was never effected and is currently being reviewed, as drafted it represented an attempt to provide for increased regulation of the sector by detailing a number of requirements for NGOs to be registered.

Given the extent of corruption and abuse within NGOs, it was appropriate to try to regulate NGOs further. However, Law 16/2001 would have had clear negative effects in terms of curtailing their independence. The challenge for the sector, then, is to develop its own internal controls and enforcement mechanisms. In 1998 Philippine NGOs responded to a similar situation by establishing the Philippine Council for NGO Certification (PCNC). This seems also to be effective for enforcing the NGO code of conduct agreed by the members of CODE-NGO.[3] A similar attempt is being made by Indonesian NGOs. However, the prospect will not be so promising until some sort of incentive system, such as tax deductibility for donor and donee, is provided.

1 Public Interest Research and Advocacy Center/PIRAC, Lembaga Penelitian, Pendidikan dan Pengembangan Ekonomi dan Sosial/LP3ES, Sarasehan Warga Bandung/Sawarung, Konsorsium Pengembangan Masyarakat Madani/KPMM, Konsepsi Foundation, Kehati Foundation, and Tifa Foundation.

2 The exceptions are security and defence, foreign policy, monetary and fiscal matters, justice, and religious affairs.

3 The Caucus of Development NGO Networks, a network of networks of grassroots NGOs in the Philippines.

Zaim Saidi is an activist from PIRAC (Public Interest Research and Advocacy Center). He can be contacted by email at pirac@cbn.net.id