Foreign Contribution Policy for NGOs

In Human Rights Commission of Pakistan vs. Federation of Pakistan (2024 LHC 3763), the Lahore High Court dealt with a constitutional petition challenging the "Policy for Local NGOs/NPOs Receiving Foreign Contributions-2022," issued by the Federal Government to regulate foreign funding of Non-Governmental Organizations (NGOs) and Non-Profit Organizations (NPOs). The petitioners argued that the policy infringed upon their fundamental rights, particularly the right to carry out lawful business activities under Article 18 of the Constitution, and that the Federal Cabinet lacked legislative authority to introduce such a policy without the sanction of law.

Background:

The petitioners, including the Human Rights Commission of Pakistan, sought relief from the High Court, asserting that the policy imposed unreasonable restrictions on NGOs and NPOs' ability to receive and utilize foreign funds. The policy required that these entities enter into Memorandum of Understanding (MoUs) with the Ministry of Economic Affairs (MoEA), subject to clearance by security agencies. The petitioners claimed that the policy was an executive overreach, lacking legislative backing, and violated Article 18 of the Constitution, which guarantees freedom of trade, business, and profession.

Key Issues:

Legislative Authorization for Executive Action: Whether the Federal Cabinet had the authority to frame and enforce a policy regulating foreign contributions to NGOs and NPOs without legislative backing.

Compatibility with Article 18 of the Constitution: Whether the policy imposed unreasonable restrictions on the right to trade and carry out professional activities, as guaranteed under Article 18 of the Constitution.

Role of Security Agencies in the Policy: Whether the involvement of security agencies in clearing NGOs and NPOs for foreign contributions was lawful and constitutionally valid.

Court's Analysis:

Legislative Authorization: The Court emphasized that the executive branch cannot impose policies that restrict fundamental rights without legislative authorization. It found that the policy in question lacked any reference to a specific law empowering the Federal Cabinet to regulate foreign contributions through MoUs. The Court held that the Federal Government's authority must stem from statutory law, and the mere reliance on the Rules of Business, 1973, was insufficient to justify the policy's imposition.

Article 18 and Reasonable Restrictions: The Court reiterated that while the right to trade and business is not absolute, any restriction must be reasonable and imposed through law. In this case, the policy introduced restrictions without the backing of legislation, violating the constitutional requirement that such restrictions must be prescribed by law. The Court declared that executive action alone cannot curtail constitutionally guaranteed rights without proper legislative sanction.

Involvement of Security Agencies: The Court criticized the involvement of unidentified security agencies in the policy, deeming it an unlawful intrusion into the rights of NGOs and NPOs. It found that the policy granted broad, undefined powers to security agencies without statutory backing, making their involvement arbitrary and unconstitutional. The Court ruled that the Federal Government could not delegate such critical decisions to agencies without clear legislative authorization.

Court's Conclusion:

The Lahore High Court allowed the petitions and declared the "Policy for Local NGOs/NPOs Receiving Foreign Contributions-2022" unlawful, invalid, and of no legal effect. The Court held that the Federal Cabinet lacked the authority to introduce such a policy without legislative backing, and the restrictions imposed under the policy violated Article 18 of the Constitution. It further ruled that the involvement of security agencies in the clearance of foreign funding was unlawful and could not stand without proper legal authorization.

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