Transparency in the NGO sector is essential

Dr. Iftekharuzzaman, Executive Director of Transparency International Bangladesh, speaks in an exclusive interview with PROBE about the corruption and shortcomings of the NGO sector

Interviewed by PROBE, October 16-22, 2009

NGOs are involved in almost all sectors of the country. They often question the transparency and accountability of the government. But how transparent and accountable are the NGOs themselves?

The NGO sector is certainly a most important sector in the country. They play a supportive role to the government in many areas. In fact, there is hardly any area where they are not involved. The programmes of some NGOs of Bangladesh have even been recognized as international models today. With the NGOs playing such a significant role, the matter of their transparency and accountability is certainly an important question. Transparency in the sector is essential.

The demand for good governance, both in the government and the non-government sector, features prominently in the various programmes and work areas of the NGOs. So if we who demand good governance ourselves lack transparency, we can in no way have firm moral footing. While that is true, it is also not correct to make a sweeping assumption that all NGOs lack good governance and transparency.

From TIB’s recent research and my personal studies over the past, what has become apparent is that the many of the inherent problems of the government sector and private sector in Bangladesh, also exist in the NGO sector. The main problem is that as this sector is outside the government sphere and has a system of its own, there is less opportunity for check and balance. Those in the top management of the NGO sector, with exceptions of course, hold all the power. The authority is held solely by the chief executive. The top management wields this unlimited power without any check and balance. Our study points this out.

Because of this unlimited power, we see in many cases that the top posts in the NGOs are occupied by the chief executive’s family members and so on. This is blatant inequity.

This is not only in the top posts. According to the rules of NGO registration, they have to have a board of trustees or board of directors. However, in our country this matter is still a bit unclear. There is a lack of clarity regarding the role of the board of directors or the relation between the board of directors and the management. As a result, while friends and relations are appointed in the top management of the NGO, the board of directors is also often hand-picked. Friends and relations are placed in the board and as a result, the chief executive of the NGO dominates the board as well. This is one side of the picture. Then there are instances where the board is so overpowering, the management can hardly function freely. These are two extreme scenarios. Either the board has no power and cannot ensure a check and balance in the management, or the board is overbearing.

The board of directors or committees is often a sort of syndicate, the same members on the board of various NGOs. It’s an “I love you-you love me” scenario. As a result, they often compromise with the unethical activities of the chief executives.

I wouldn’t go as far as to call it a syndicate. One factor is that there are not too many persons in the country who are suitable to sit on the board of an NGO or even a semi-government body, who have the acceptability or appropriate public profile. So the same person may be on the board of several organizations. That is not a problem. The problem arises if the authority of the board is in the hand of the chief executive because then the board cannot play its proper check-and-balance role. There are many instances where the board meeting isn’t held, but the decisions are approved of by the members. The papers are taken to their houses where they simply put down their signatures. So taking decisions and adopting policies all merge in the hands of the chief executive. The board should be adopting the policies and the management should be implementing these. But the line between these gets blurred. This is a major problem which brings accountability into question.

When an NGO’s corruption surfaces and it has to close down and the general people suffer, what about the board members? Are they exempt from all responsibility?

They certainly can’t escape the responsibility according to the rules, but the problem is that there is no specific law in this regard. Or there is no legal provision to implement the relevant law. Your question is a very relevant one -- who will take the responsibility? The board members must have the awareness that they will also bear the responsibility of the NGO’s corruption, lack of accountability or irregularities. It is because of the failure to define the relationship between the board and the management that this scenario has emerged. The board should be able to question the management, hold it accountable. Because of this shortcoming, in recent times we have seen an unfortunate outcome in several large organizations of the sector.

In recent times we have seen the fiasco of Proshika, Samata and Jubok. But the chief executives of these organizations are not really penalized in the manner of similar persons in other sectors. GSS is an example of this too. Why?

In our country actually corruption in any sector still hasn’t been established as a punishable crime. This is the same in the government and private sector, as well as in the NGO sector. It is a lack of proper implementation of the law which also lets the corrupt NGO leaders off the hook. They manage to save themselves from standing trial. Whether I am in the government sector, the private sector or the NGO sector, if I am corrupt, I should have to face trial. There are laws but this is a matter of law enforcement. If I use resources provided for public interest for my own personal use, to build myself a mansion, the law of the land does not say that I will not be accountable. So it is a matter of enforcing the law.

Civil society doesn’t support corrupt persons of other sectors, but in the case of NGO personalities, they get ample shelter from the civil society.

Up to a point. In recent times, you will see that they get this support only up to a certain point. In the case of the organizations that you mentioned, you will note that they got protection only up to a certain stage. Then under pressure from the people, the stakeholders, they lost this support. The move against them often backfires, though. A chief executive under fire is seen to move away from his post and join the board or some other position from where he can pull the strings. These are flaws in the system which the government should look into.

Then there is the matter of pay scale. Each NGO draws up a salary structure at will, often having no correspondence to the government pay scale. Shouldn’t this be brought under some sort of system?

There are two aspects to this issue. One point is that there is no compulsion for the pay scale in the private or NGO sector to have any similarity with that of the government. After all, the inconsistency between the pay scale and cost of living is one of the main causes of corruption in the government sector. So this failure in the government sector may not be acceptable in the non-government sector. And this is a competitive sector. If you want to get sufficiently capable persons and you are competing with local and international organizations, you have to give them salaries and benefits to adequately cover the cost of living.

Then there is the other aspect. There is no structure in this regard. There are some NGOs where the top level salaries and benefits are so inconsistent with those at the lower level, it creates commotion and discontent among the staff. In the government sector or the garment sector, if the workers are discontent, they take to the streets. But in the NGO sector if there are discrepancies in the pay scale or if money is deducted from the salary on various pretexts, the NGO worker doesn’t have the courage to protest because the authority to appoint lies in the chief executive’s hands. This is a shortcoming.

There is no reason for the pay structure of one NGO to be same as another NGO, but every NGO must have a specific and well-defined salary structure. They must have comprehensive human resource manuals. There has to be a policy regarding how the human resources are utilized.

Maybe the NGO salary structure doesn’t have to be the same as the government’s, but when a district level NGO official gets a monthly salary of 60,000 taka and the DC of that district does not, doesn’t this create a degree of friction?

Yes, this tension does exist. We saw this in a recent study we carried out at a local level. This tension arises not just with the DC, but with other officials at the local level and this is very natural. This should be seen in a different way. Just because I am not being given the salary I deserve, doesn’t mean that someone else shouldn’t get a better salary.

I personally feel that the salaries and benefits in the government must be increased significantly. We are carrying out advocacy in this regard, trying to exert our influence to this end. Again, government service is not only determined by the salary one receives at the end of the month. This is an appointment for life. You have to think of the overall context, the job security, pension after retirement and other benefits. In an NGO, a person may receive a monthly salary of 60,000 taka, but tomorrow if he loses his job, he has no scope to raise his voice. Each NGO must have a well-defined salary structure and the employees must be aware of this otherwise, as things are, a person may join an NGO signing a contract for a certain salary, but be given a smaller pay packet at the end of the month after a series of deductions on various accounts. They have no voice to protest.

NGOs spend crores of taka on various projects, all in the name of the people. Since these projects are said to be in the interests of the people, don’t you think the elected people’s representatives of the concerned areas should have the right to know about these projects?

Not just the people’s representatives, but the common people too must be aware of these projects as they are purportedly in the interests of the people. Here I must mention the right to information act that we now have. This is quite an exception in Bangladesh. In other countries, the non-government organizations are not covered by this law, but in Bangladesh we very consciously carried out advocacy with the government to include the NGO sector in act. As a result, in the case of NGOs, the people have the right to know how the NGOs are functioning, in which areas they are working, where funds are being spent, the aims and objectives of the projects, and so on. The people have the right to this basic information. We in the NGO sector have also been given the responsibility to be pro-active in this regard, to inform the people of these details even before they ask.

Can there be any official system in this regard, so the local leaders, the MPs, the chairmen and others are informed about the details of the projects?

There are no separate laws or regulations in this regard, to inform the MPs or chairmen. But they are citizens of the country and have the right to information like any other citizen. They have the right to know how much my organization spends, how much is being spent on a project and so on. Many NGOs provide such information on their websites. An environment should be created for easy access to such information. If we demand transparency from the government, transparency in the budget, in the expenditure in various sectors, then we ourselves should be ready to offer such information regarding our organizations. It won’t be long before such practices are established.

Do you think the NGO Bureau is adequate to monitor the crores and crores of taka coming in as funds to the hundreds of NGOs for innumerable projects?

Actually only one-fourth, that is 25%, of the foreign development funds coming into Bangladesh goes to the NGO sector. Our development funds are no longer entirely dependent on foreign sources. A large portion comes from our national budget. But this 25% of funding which goes to the NGO sector is definitely a large amount. It is not the responsibility of the NGO Bureau alone to monitor the utilization of these funds.

The NGO Bureau doesn’t have the capacity to carry out this monitoring. When the NGO Bureau was formed with a certain size of manpower, there were only about 60 or 70 NGOs which received foreign funding. Now the number of such NGOs exceeds 2000. The Bureau doesn’t have sufficient manpower or adequate computerization. They lack the facilities to collate relevant information to create a data bank. They don’t even have a vehicle to go to the field for monitoring purposes. We have identified these weaknesses and have included this in our advocacy with the government. This gap must be filled, whether with the NGO Bureau or any other authority. But it must be done.

Then again, the donor agencies also do not have the capacity for proper monitoring. Or they lack the commitment in many cases. For example, in the case of the NGOs that you named, the donors provide crores of taka for various projects. They provided, in some instances, funds hundreds times more than the capacity of the organization. They should have had the responsibility to ensure that the NGOs have the capacity to absorb and utilize these funds properly. So the donor agencies have their limitations, for whatever reason, and they do not carry out their responsibilities properly either.

There is another aspect. According to the law, all non-government organisations must carry out audits. They have to have annual reports, financial reports and so on. But this audit sector is rife with irregularities. You just pay 10 to 20 thousand taka, and you will get a most decent audit report. I am not generalizing. There are many good auditors. But these things are taking place. The auditing system, the financial control system, both internal and external, is not well organized in our country.

Can the NGO Bureau’s monitoring responsibility be decentralized?

We have clearly stated that the capacity building of the NGO Bureau should not be restricted to Dhaka. Their capacity has to be built outside of Dhaka as well. The NGO Bureau doesn’t need any separate offices for this. This responsibility can be given at the local administration unit in the districts, upazilas. Notionally it has been said that the NGOs have to report to them and the DC will coordinate. But how much time can the DC spare for this? He often has up till seven meetings in a single day. He really doesn’t have the time to monitor or carry out this task. Then, to be fair, many NGOs sincerely want to report, but the DC or the concerned officer can’t give them time. This is where capacity building is needed.

There was another point about financial transparency. Whatever we may say, ultimately this transparency must come from within ever organization. No matter what laws we may enforce or what monitoring system we may put in place, there must be self-regulation. Self-regulation is the best regulation.

I have some specific proposals. Every NGO must have a governance manual. This will clearly define the responsibility of the board, how the board will be constituted and so on. The board will be responsible for policy making, etc. It will clarify the responsibility of the management. This is a precondition for governance. This will eliminate any tension and, at the same time, ensure control over the management and also ensure accountability.

A human resource manual is also essential. Many organizations have this, but very perfunctory. These do not contain the guidelines essential for proper human resource development.

Every non-government organization should have a code of conduct or code of ethics. We are advocating this. It is unfortunate that this sector is divided. There used to be an umbrella body, ADAB, but now there are two forums. We are trying to unite the two forums so that there will be a code of conduct in the sector. The umbrella body will give guidelines and the NGOs will each draw up their individual codes of conduct.

Each NGO must have an operations manual. For example, when an NGO develops a project, they discuss with the donors, with the constituents, draw up a need assessment and so on. But when the resources come, how are they spent? How many vehicles will be procured and how will these be utilized? All such matters have to be included in certain guidelines and published. They have to be accessible to the people. And they have to be implemented, to be enforced.

We have spoken about good governance and transparency. The NGO sector in Bangladesh has played a pioneering role in the field of human rights, women rights and so on. However, while they may be advocating women rights, in the organizations themselves they are unable to ensure a gender balance. This problem, of course, is part of the society. But since the NGOs are playing a leading role in human rights, women rights and child rights, they must look at themselves first. They must have a gender policy. You may not be able to immediately ensure a 50-50 gender balance, but the number of women can be increased as much as possible and the rights of the women already in the organization must be ensured. Every organization must have a gender strategy. And having a policy or strategy is not enough; this has to be implemented.

You all carried out a study on the NGO sector. What rate of corruption did you record there?

It wasn’t quantified in that manner, but the picture I have spoken about was revealed. There is a lack of transparency in the management. There is scope for unrestrained wielding of authority by the chief executive or top management. There is no check and balance there. There are financial irregularities, misuse of funds, and misappropriation of resources.

Participatory decision making should also be part of the NGO culture. When the government draws up its education policy, we call for people’s participation in the matter. But do we practice the same? Are at least the staff and the people involved in the NGO included in any participatory process of the organisation’s decision making? This is important.

We have discussed several problems here. These are headaches. But we don’t want to chop off the head because of the headache. All the stakeholders have a joint role here. This definitely includes the government and the NGO sector. The people also have to be actively conscious. We have to make it clear that the NGO sector is accountable.