The International Interest

India’s growing suspicion of foreign-funded NGOs is part of an emerging global trend

Manmohan Singh complained about “NGO-led protests.” His government froze the accounts of four thousand foreign-funded groups. Adnan Abidi / REUTERS
Elections 2024
01 August, 2014

OVER THE LAST FEW MONTHS, scrutiny of foreign funding for non-governmental organisations in India has been increasing. Although this trend is widely acknowledged, few commentators have pointed out that growing suspicion of NGOs that receive such funding is part of an emerging global reaction to civil society. India has joined the likes of Russia, Egypt, Israel, Venezuela, Bolivia and Ecuador in trying to silence groups that raise objections to human rights violations and environmental degradation. These governments allege that foreign-funded NGOs threaten national security, often conflating such security—which it is their duty to provide—with the economic interests of private corporations that stand to benefit from silencing democratic opposition. What these governments have not done, however, is address the substantive concerns such organisations raise about lapses in due process for those harmed by industrial projects, and about such projects’ long-term environmental impacts.

In early June, an Indian Intelligence Bureau report blaming foreign-funded environmental organisations for a significant slowdown in economic growth was leaked to the press. The report alleged that these groups were acting on behalf of foreign entities rather than in the best interests of the Indian people, and argued that foreign influence should be controlled to protect India’s “national economic security.” It cited examples of non-governmental organisations stalling investments in fields such as nuclear power, coal mining, large-scale infrastructure and genetically modified crops, and raised the spectre of what has often been called a “foreign hand” guiding NGOs.

Around the time the IB report was leaked, in Russia the Ministry of Justice registered five internationally funded NGOs as “foreign agents” under a 2012 law aimed at organisations attempting to influence state decision-making or policies. (Infringements of the statute, which is enforced partly through annual audits and surprise inspections, are punishable by thousands of dollars in fines and up to three years in prison.) A week earlier, the Russian government had issued a notice of violation to a foreign-funded human rights NGO for providing legal assistance to other groups targeted under the law.

This followed similar crackdowns around the world, by governments across the political spectrum. In late December, a high-ranking minister from the office of Bolivia’s president, Evo Morales, announced the immediate expulsion from the country of a Danish-funded rural-development NGO called IBIS, which was accused of political action against the government. IBIS had supported peoples’ organisations expressing concern about the impacts of industrial development and climate change in indigenous areas, and trying to influence democratic decision-making—activities protected under the Bolivian constitution. The minister alleged that IBIS was interfering with the state’s affairs and fomenting conflict. He went on to say that similar action would be taken against any other NGO perceived to be “distorting” its work.

Earlier that month, police in Ecuador raided the offices of the Pachamama Foundation, a US-funded environmental organisation, in the country’s capital, Quito. They came without warning, and informed the staff that the Ministry of Environment had dissolved the foundation. Pachamama was working with indigenous Amazonian leaders to strengthen their communities and protect rainforests from extractive industries. The Ecuadorian government accused it of violating a presidential decree, passed six months earlier, meant to control the activities of NGOs, particularly international ones. The decree gave the state broad powers to dissolve any group determined to be undermining national security by a relevant ministry. (After exhausting all domestic legal avenues, Pachamama announced the formal closure of its Ecuadorian offices in July.)

Similar laws have been effected in numerous other countries. In 2009, Ethiopia passed the Charities and Societies Proclamation, which imposes criminal penalties on organisations engaging in human rights and governance issues that receive more than ten percent of their funding from abroad. In 2011, Israel passed two laws aimed at foreign-funded organisations working within its borders, especially those concerned with controversial human rights issues. Venezuela took paranoia about international funding to an extreme in 2010 by passing the Law for Protection of Political Liberty and National Self-determination, which bans groups dedicated to the “defence of political rights” from accepting funding from any foreign source.

India is very much a part of this growing parade of nations. In an interview with Science magazine in February 2012, the then prime minister Manmohan Singh stated, “There are NGOs, often funded by the United States and the Scandinavian countries, which are not fully appreciative of the development challenges that our country faces.” He referred specifically to “NGO-led protests” against nuclear power facilities, blaming delays in completing nuclear projects on “external forces” and minimising the role of thousands of Indian citizens protesting against plants at Koodankulam, Tamil Nadu.

The prime minister’s comments were followed by increased scrutiny of thousands of internationally funded NGOs. The Ministry of Home Affairs froze the accounts of over four thousand such organisations—more than ten percent of all those with permits to accept foreign funding in India. The ministry also revoked permits for groups such as the Indian Social Action Forum, an umbrella organisation of hundreds of social movements from across India working on issues of economic, social and environmental justice, and including those opposing nuclear power and genetically modified crops. The ministry justified itself by saying the forum’s actions were “prejudicial to the national interest,” but did not provide further details.

Debates about the political agendas of internationally funded NGOs stem largely from Cold War-era concerns about the use of foreign funding to promote competing ideologies and destabilise governments. Strong nationalistic sentiments accompany current restrictions on these organisations around the world. (I work for a US-based NGO, but the views expressed in this article are my own.) Often, groups that resist harmful industrial projects are characterised as acting against the public good or national interest. In some instances, the rhetoric has shifted to portraying NGOs as anti-national, violent, or even terrorist. In an extreme example from 2012, the government of Tamil Nadu brought sedition cases against nearly seven thousand protesters—not foreigners, but Indian citizens concerned about the hazards of having a nuclear power plant in their backyard.

While any individual or group, whether officially registered or not, may pose a threat to national security by importing potentially disruptive ideals, many attempts to restrict the work of NGOs and other civil society organisations conflict with citizens’ rights to free expression and association. Moreover, the national interest is, in many cases, being defined broadly, going beyond matters traditionally associated with security to include economic development and corporate concerns. In Ecuador, Pachamama was accused of taking action against internal state security and public peace; the Russian government claims various foreign-funded human rights groups are undermining its national interest; and, alongside their restrictions on foreign funding, Ethiopia and Venezuela have passed anti-terrorism laws that potentially criminalise legitimate dissent.

International concerns that funding for terrorism could be routed through NGOs have been used to justify such regulations. The Financial Action Task Force, or FATF, an inter-governmental policy-making body linked to the Organisation for Economic Co-operation and Development, promotes legislative and regulatory changes in countries around the world in order to prevent money laundering and terrorist financing, and has formulated recommendations on funding for NGOs and non-profit groups. The FATF evaluates its members’ compliance with its recommendations every year. India is one of the FATF’s 36 member governments, all of which have voluntarily agreed to implement the international standards recommended by the organisation’s experts.

India’s current regulations on foreign funding for political activity, which also cover the sponsorship of NGOs, emerged at the height of the Cold War, and reflect the concerns of that time. During the Emergency, Indira Gandhi’s administration enacted the Foreign Contribution Regulation Act, 1976. This was later repealed and replaced by a stronger law, in 2010, after an FATF report found that India was not in compliance with the group’s recommendations.

The 2010 foreign contributions act expanded regulations to cover foreign funding for NGOs that engage in any type of political activity, including public protest. Civil society groups criticised the changes for giving the government too much discretion in deciding what NGO activities are political. That same year, the IB accused several major civil rights groups of advancing the Maoist cause. This included the People’s Union for Civil Liberties, a group that the government has targeted for decades; it works on controversial issues such as state-sponsored violence in Kashmir and Punjab, and has provided legal aid to accused terrorists. While such groups continue to function, the threat of criminalisation has had a chilling effect on many civil and human rights defenders.

The recently leaked IB report brought the last government’s concerns about NGO activity back into the public spotlight, with the apparent intent of reigniting controversy and clearing the path for the sort of industry-led development promised during the recent general election campaign. The report alleges that, by impeding development projects, foreign-funded NGOs have dented the growth of the Indian economy by between two and three percentage points (a remarkable achievement when one considers that the overall growth rate has recently been hovering below five percent). The report also claims that foreign donors “cleverly disguise” their goals by supporting programmes for justice and the protection of various freedoms and rights. More recently, acting on a second IB report about foreign donations for the environmental NGO Greenpeace and the group’s impact on “national economic security,” the Ministry of Home Affairs revoked its permission to receive international funds (even from other Greenpeace affiliates), froze its accounts and began reassessing its tax compliance.

Much has been written about the hypocrisy of the IB reports. Large amounts of foreign funding flow into India through global financial institutions such as the World Bank, and in the form of private investment. This includes international investment in many of the undertakings opposed by foreign-funded NGOs by entities such as the Korean steel company POSCO, the UK-headquartered mining firm Vedanta, the American agricultural and biotechnology corporation Monsanto, and the Russian government (which is helping finance several nuclear power plants). Moreover, right-wing Hindu organisations benefit immensely from foreign financial assistance, but are not named in the report.

By specifically targeting NGOs that help marginalised Indian communities raise important questions—regarding everything from physical safety to the protection of constitutional rights—the government signals an intent to silence voices that present inconvenient truths to the public. Portraying human rights and environmental NGOs not just as anti-development or anti-corporate but as anti-national and potentially terrorist has grave implications for the future of dissent and democracy in India. The previous government’s strict regulations on foreign contributions are still in place, and many groups are concerned that these will soon be tightened, as a result of the discussion surrounding the IB report, and the continued influence of the FATF.

Ultimately, such legal and regulatory barriers stifle civil society and impinge on fundamental freedoms of expression and association. They cause many legitimate organisations to shut their doors permanently, often to the detriment of minority and marginalised groups. The pursuit of development in India should not and cannot come at the expense of fundamental rights of expression, dissent and debate—freedoms at the core of India’s democratic character.