Transcript Rights of Civil Society Organizations (CSOs)

Public Benefit Status Revisited
Daniel Csanády
Department of Social Studies
Budapest College of Management
About the Author
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Public policy advisor in the Hungarian Parliament
Counsellor in the Hungarian Ministry for Culture and Education
Drafter of laws on public benefit status, 1 % non-profit tax
benefit and National Cultural Fund
Counsellor of Hungarian NGOs on EU forums
Assessor of US, UK, NL, EU and EEA/NM donor projects on local
government and NGO development
Consultant on civil society development in Croatia, Bosnia,
Serbia, Romania and Ukraine
Editor of Budapest Review of Law and Politics
Lecturer at various universities on NGO issues
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Overview of Presentation
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Milestones of Hungarian CSO Development
Phases of Hungarian CSO Development
Legislative Initiatives of 1996-97
Ten Years After of 1996-97
Recent Initiatives of Restructuring Contract
Law in Hungary
Recent Developments of Consultation
Standards in Hungary
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Terms and Abbreviations
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Civil Society Organisation = CSO = NGO = VCO
State Controlled Organisation = SCO = GONGO = CIC
Public Benefit Organisation = PBO
Mutual Benefit Organisation = MBO
specific political categories: political parties, religious societies,
self governments of national and ethnic minorities, and social
partners
social partners: trade unions and employer organisations
specific economic categories: cooperatives and mutual societies
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Programme and Task
Same programme as in the UK:
• Private Action, Public Benefit
• Prime Minister’s Strategy Unit, UK Cabinet Office
• PM’s Strategy Unit proposes major shake-up of UK
Charity Law on 25 September 2002
• modernising Charity Law
• improving legal forms for charities and social
enterprises
• ensuring independent, open and proportionate
regulation
• building the public’s trust in the sector
However, our task in the Continent is different.
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Milestones for CSOs in Hungary
Oscillation between civil society development and
state controlled corporatism
• 1987: Reintroduction foundations into the Civil Code
• 1989-90: Freedom of association, including
political parties, and freedom of religions
• 1993-94: Introduction of public law association,
public law foundation and public law company into
the Civil Code, and cut of tax advantages of CSOs
• 1996-97: 1 % tax benefit, and public benefit
status for CSOs
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Milestones in Hungary (cont.)
• 1999-2001: 1 % tax benefit for churches, and
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tax advantage for churches and parishes
2002: Government Strategy for CSOs
2003: National Fund for CSOs, Law on
Volunteers, and Special Foundations for
Political Parties
2004: Accession to the European Union
2005: Consultation process with CSOs on 2nd
National Development Plan for the EU
2006: Law on lobbying
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Transitionary Roles of CSOs
1st Phase: Transition to Market Economy and Liberal
Democracy: mediating social and political
changes
• 1988-90: developing liberal democracy, e.g. political
parties, trade unions, business federations
• 1990-95: developing civil society: providing
missing services, e.g. new cultural, educational
and social services
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Transition in Hungary (cont.)
2nd Phase: Improving Market Economy: balancing
between private and public services
• 1995-97: developing new services: opening new
markets, e.g. environmental protection, science &
technology
• 1997-99: developing new services: breaking old
monopolies, e.g. economic development, education
& research
• 2000-04: developing quality services: providing
services for privileged and underprivileged, e.g.
elderly homes for rich and for poor retired people
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New Roles of CSOs in Hungary
3rd Phase: Improving Participatory Democracy:
mediating social and economic changes
• EU accession generated new opportunities and
threats for quality services,
• to monitor old markets,
• to open new markets again,
• to strengthen local economies,
• to improve communities services,
• To represent members, clients, and beneficiaries
• to participate in local, regional and national
development & planning.
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Missing Roles of CSOs in Hungary
State sponsored service providing function endanger
representative and participative functions:
• petitioning
• advocacy
• lobbying
• consultations
• campaigning
• legitimacy building
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Legislations of 1996-97
• Act. no. CXXVI. of 1996 on donation of one per cent
of the personal income tax by voluntary decision of
the taxpayer
• Act no. CLVI of 1997 on public benefit
organisations
• Model for legislation is not the Charity Commission of
England and Wales
• but the Crown Office of Scotland, and New York
City’s PBO registry
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Act on PBOs
• A so-called sectoral legislation,
• linking together private and public law
regulations,
• defines the scope of public benefit organizations
(PBOs) at the one hand, and
• determines the fiscal preferences they are entitled,
on the other hand.
• Acts on Personal Income Tax, Corporate Tax and
other revenues determine the extent and terms of
priviledges entitled to PBOs.
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Reasons of 1 % Legislation
• Bridging temporary decrease of state subsidies
– fulfilled
• Promoting CSO activities to the larger society
– fulfilled
• Urging on competition for private donations
– fulfilled
• All in all: creating a market of public and private
supports
– basically fulfilled
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Expectations by PBO Legislation
• Restructuring public funding
– partially fulfilled
• Strengthening private funding
– basically failed
• Opening public service market
– fulfilled in quality but not in quantity
• All in all: creating a market of public services
– basically failed
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Optimistic Conference in Poland
• Conference in Krakow of 25-27 May 2000
• on Local Government–NGO Co-operation
• with special attention on the Czech and Hungarian
experiences
• organised by the Krakowskie Forum Organizacji
Sojalnych (KraFos)
• initiated by Ms. Iwona Panlak, President of KraFOS
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Ten Years After
Legal categories of foundations:
• instead of open and closed foundation
• we need non-endowed and
endowed foundations.
Legal categories of donations:
• donation by unilateral will
• sponsorship by bilateral contract
• different kinds of state subsidies
by public law contract.
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Ten Years (cont.)
Exchange of benefits:
• instead of decreasing tax advantages
• increasing of them in needed
• both in terms of quality and quantity.
Strengthening supervision:
• by clear transparency requirements: centralised
mandatory reporting
• by accountability requirements: standardised
operational rules and regulations.
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Improving of Legal Environment
Draft law on general rules of public law contracts
• which is not about public procurement
• which is not about state concessions
• but law of public services and developments
by contracts
Creating national consultation standards
• based on EU regulations, and
• Constitutional rights of consultations
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Contractual Relationships
private law relations
public law relations
e.g. renting or leasing
by private partners
e.g. licensing by
public authorities
mixed legal relations
e.g. providing public
services by private
organisations
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Public law contracts in Europe
• Contracts for public services
• Contracts for aid and development
• Contracts for share of responsibilities
• Contracts for supplementing public licences
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Public law contracts in Hungary
• Although there are special rules for special types of
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contracts in laws for special service areas,
there is no general regulation for contracts by private
and public partners.
Hence, these contracts are ruled by the courts on
private law principles,
but managed by public authorities as administrative
matters.
Hungarian Ministry of Justice prepared a draft in
2006, which was rejected by the Government so far
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Areas of public services involved
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Public education
Adult education
Social services
Child care
Health care
Cemetery service
Chimney service
Waste management
Water management
Public railroads
Public roads and highways
Public shipping and sailing
Public channels of telecommunication
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Public service contracts
Processed by public and private partners
Since responsibility for services rests on a public authority or
agency, it needs extra rights.
• These rights are unilateral intervention and sanction in certain
cases (e.g. special supervision, quality control, termination of
services, ceasing contract, etc.).
• Since responsibility for management and implementation rests
on a private partner, it needs extra guarantees (in case of late
or non-payment, requiring extra qualities or quantities of
services, etc.)
• Extra guarantees are also needed against corruption and other
forms of abuses by power
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Consultation Standards in the EU
Protocol No 7 on the application of the principles of subsidiary
and proportionality, annexed to the Amsterdam Treaty (1997):
• Az Erópai Bizottság COM(2002)704. számú közleménye
„Előrelépés a konzultáció és a dialógus kultúrájának
megerősítésében - Általános elvek és minimális követelmények”
tárgyban
• A Tanács 1083/2006/EK (2006. július 11.) rendelete
Az Európai Regionális Fejlesztési Alapra, az Európai Szociális
Alapra és a Kohéziós Alapra vonatkozó általános rendelkezések
megállapításáról és az 1260/1999/EK rendelet hatályon kívül
helyezéséről
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Consultation Rights in Hungary
• Constitution § 4. - Trade unions and other interest
groups are advocating for employers, employees and
members of co-operatives
• Constitution § 36. - Government duty to consult
CSOs concerning public responsibilities
• Constitution § 61. (1) - Freedom of expression and
access to public information
• Constitution § 64. - Right to petition the
Government either individually or collectively
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Rights Under National Laws
• Act no. IV of 1957 on general procedures of
public administration
• Act no. XI of 1987 on legislation
§§ 19-20, 27
• Act no. LXV. of 1990 on local governments
• Act no XIX of 2005 on the amendment on no LXIII of
1992 on freedom of information and data
protection
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National Laws (cont.)
• Act No. XLIX of 2005 on lobby activity
§ 1 (3) a) and (4)
• Act No. XXIX of 2004 on necessary legal actions for
EU accession §§ 141-43 [Requests, petitions and
reports for public interest] § 148 (2) e)
[Annulations of Act No. I of 1977 on requests,
petitions and reports for public interest]
• Act No. XC of 2005 on freedom of electronic
information
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Correspondence
• For questions, please contact
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Daniel Csanády
[email protected]
or +36-20-9570-470 cell
or +36-1-356-4695 tel./fax
ÁVF Társadalomismereti Tanszék
Villányi út 11-13,
H-1114 Budapest
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