A European statute for associations and NGOs – long overdue recognition for civil society

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As renewed calls to set out EU-wide common standards for NGOs and associations gain momentum, civil society organisations have high hopes of the new European statute for associations, which will give NGOs and associations recognition at EU level and allow them to operate across borders, a right they do not currently enjoy – unlike their for-profit counterparts

Fifteen years after the last failed attempt to draw up rules governing the operations of civil society and public-benefit organisations at EU level, the European institutions are preparing to relaunch an initiative to adopt the European associations statute, which should ensure equal treatment for all NGOs across the EU, regardless of where they operate or how they are funded.

In support of these efforts, the European Economic and Social Committee (EESC) is preparing an information report on the topic. To gather input for the debate, the EESC held a hearing on a European statute for associations and NGOs, bringing together MEPs and academics, as well as representatives of the Council of Europe, civil society and philanthropic organisations.

We are trying to kick-start the debate on establishing the statute. Civil society organisations have been the main promoters of the European project. What we need now is European recognition, in the form of a European statute for associations and NGOs, which would make it possible for civil society to be organised collectively, just as the social partners are, said Ioannis Vardakastanis, rapporteur for the report, opening the hearing.

Calls to adopt the statute have been supported by MEP Sergey Lagodinsky, who is about to present his New Era proposal in the European Parliament. This includes a proposal for a Directive that would lay down common European standards for non-profit organisations (NPOs) and a proposal for a Regulation that would establish a statute for European associations.

The proposed statute would not only harmonise standards Europe-wide, but would create an additional regulatory system, laying down some important principles, such as non-discrimination and mobility. This would allow NGOs to switch seats, work across borders, and become European NGOs rather than just national ones.

Another important issue was the common EU definition of public benefit, a concept which is quite similar across national legal systems. This would prevent the arbitrary treatment of NGOs purely on the basis of their funding.

The proposal on the treatment of NPOs should close the gap between the rules governing their activities and those applying to commercial enterprises.

We have European companies and European cooperatives or economic interest groupings, but so far we have not had the opportunity to create regulations for Europeans who want to engage in non-profit work, Mr Lagodinsky said.

His initiative has been welcomed by European philanthropic organisations, which have long voiced their discontent at not having the same level playing-field as commercial enterprises in the EU.

The single market fully applies to for-profit entities but does not apply to our sector. One might assume that a foreign public-benefit foundation would be recognised immediately in another Member State but this is not the case, said Hanna Surmatz, of the European Foundation Centre (EFC), a leading platform for philanthropy in Europe.

For example, cross-border mergers are very difficult for public-benefit foundations and organisations, unlike for those operating for profit. There is little provision for them in national laws and European legislation does not apply. The transfer of registered offices is equally complicated and often results in NPOs having to set up again in another country.

The proposal was equally welcomed by civil society organisations, which according to the Director of European Civic Forum, Alexandrina Najmowicz, lack proper recognition for the role they play in society and democracy and are often caught between the state and the market.

We can only support this initiative. It is a very good idea to have a legal tool that will lead to the better affirmation of common standards, which are most badly needed in countries where civil society space is shrinking and where civil society is at the forefront of fighting for human rights. We really need legal and administrative recognition, but also political recognition, she said.

When drafting the future statute, attention will also have to be paid to the criteria that must be met by organisations to qualify as European associations.

The Council of Europe (CoE), for example, grants participatory status to those NGOs that respect its values and principles, have a democratic structure and governance, are represented at European level, or are able to bring the Council's work closer to society, said Mary Ann Hennessey, Head of Division in the Directorate General of Democracy at the CoE.

Anna Biondi, Deputy Director of the ILO Bureau for Workers' Activities (ACTRAV), said that the social partners who take part in the ILO's International Labour Conference can challenge the appointment of non-representative organisations.

Current efforts to adopt a statute are not new. According to Oonagh Breen, Law professor at University College Dublin, despite many attempts by many institutions to pass an enabling regulation for NPOs, only one has succeeded – the Statute for a European Cooperative Society, adopted in 2003.

The last proposal on the regulation for the European associations statute dates back to 1991. It was amended in 1993, only to be withdrawn in 2006 on the pretext that it was unlikely to make further progress in the legislative process or that it was no longer relevant.

But the interest has never died away; it is down to lack of political will, Dr Breen said. You can come up with the best proposal and still fall at the final hurdle. That hurdle has most often been unanimity voting in the Council: its last victim was the Statute for a European Foundation, withdrawn in 2015.

Jean-Marc Roirant, former EESC member and expert for Mr Vardakastanis's information report, thought that things might be different this time: The context today seems more favourable to finding a solution. Times are hard, but there is more willingness.