General Laws Amendment Act represents a ‘battle won’ for NPO sector, but key concerns remain

The public consultation process behind the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act brought together representatives of civil society committed to challenging the more problematic aspects of the proposed legislation, as it related to the nonprofit sector.

The final act, which was signed into law on 22 December 2022, saw certain concerns of civil society organisations addressed, while others went unresolved. It has enacted amendments across five South African acts, including the Nonprofit Organisations Act of 1997, with the intention of addressing deficiencies identified in the Financial Action Task Force’s  Mutual Evaluation Report of South Africa from October 2021.

When the bill was originally opened for public comments on 27 September 2022, a key concern among civil society organisations was the proposed universal mandatory registration of all nonprofits operating in South Africa with the Department of Social Development’s NPO Directorate. The requirement was seen by many as impractical and unconstitutional.

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“[This] has been addressed in that the mandatory registration is now confined to organisations based in South Africa… which are carrying out projects in or transmitting funds to other countries,” said Nicole Copley, founder of ngoLAW, which provides legal advice and assistance to nonprofits.

“There are still many who are not happy with the reduced mandatory registration ambit… but, on the whole, civil society feels that a major battle has been won here.”

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William Bird, director of Media Monitoring Africa, questioned the act’s compulsory registration requirement for NPOs that provide humanitarian, charitable, religious, educational or cultural services outside South Africa, without providing charitable donations.

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“It means any [South African] nonprofit entity that works, for example, in the [African] region is then going to be forced to register,” he said. “You’re back at the same point that we were, which is this compulsory registration of these entities with no reasonable justification for that limitation.”

Bird further highlighted the possibility of registration being unjustly withheld or called into question for civil society organisations that clash with the government.

“[The act] is just simply not clear enough,” said Dale McKinley, a research education officer with the International Labour Research and Information Group, on the conditions around compulsory registration.

“When things are not clear in legislation, they cause problems, because then the interpretations and enforceability are left up to selective and subjective interpretations of legislation.”

Copley considered it unlikely that the compulsory registration requirement would be abused, as the act only allows registration to be refused for noncompliance with the minimum governance requirements for NPOs or a failure to provide organisational details as required.

Maverick Citizen reached out to the Treasury about civil society concerns related to the General Laws Amendment Act, but had not received a response at the time of publishing.

NPO Directorate

NPO Amendment Bill