International Center for Not-for-Profit Law

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Washington, DC 20036 USA             Wellington, New Zealand

sklingel@icnl.org                                           davidjrobinson@xtra.co.nz

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Civil society, community organisations and the law in Vanuatu

 

 

When people get together with family, friends and neighbours to talk about and work on issues that they care about, they often form a group or organisation. In Vanuatu, as in other countries, there are laws that affect how these organisations are treated by government. For example, whether they have to pay customs or sales tax. This pamphlet outlines the general rules on when it is useful or necessary to register a community group and the advantages in doing this.

 

This area of activity is called civil society. Civil society refers to the area of life and work that sits between personal and family relationships on one hand and government on the other. This is the public area in which citizens outside government can organise and do their work. It is the space in which formal and informal associations formed by citizens operate.

 

In the words of one Pacific Island activist “civil society is people in the community getting together to help each other”

 

This pamphlet looks at how the laws protect the space where this takes place.

 

These associations are commonly known as NGOs (non government organisations) or

CSOs (civil society organisations). We use the term CSO to cover all forms of associations which do not operate to make a profit for private gain including charities and NGOs.

 

Community organisations in Vanuatu include both membership and non-membership organisations, and those acting for the benefit of members and those that operate for public benefit. Some are formal organisations with legal status and some operate informally. Many community-based organisations or associations currently operate without any formal status. This does not affect the effectiveness of their operations or the rights they enjoy as civil society organisations. 

 

The right to form an association for a wide range of community purposes is underpinned by the Vanuatu constitution, as long as the organisation operates within the general rule of law. The Constitution guarantees the fundamental rights and freedoms of individuals including the right to freedom of assembly and association.

 

Many CSOs in Vanuatu are engaged primarily in social development work. They include church-based organisations, special interest groups, broad-based development organisations, trusts, and community-based organisations. In general, these organisations pursue the common goal of achieving a better life for members and people generally, as well as contributing towards the development goals of the country.

 


Why should the law be concerned with these activities?

 

The law

 

  • Protects the space where people can come together to deal with common issues and problems, and to form organisations for this purpose.

 

  • Provides protection for civil society organisations, certainty to funders about whom they are dealing with, and reassurance to government about the consistency of their purpose with national norms and procedures as reflected in the Constitution and laws of the country. 

 

Besides written laws based on international treaties, English Common law or French Civil law, customary law also flourishes through word of mouth in Vanuatu. Despite having little written down, custom or customary law has a great impact on the life of every rural Vanuatuan almost on a daily basis.

 

 

Consistency and Clarity of Laws

 

The various laws concerning the establishments and dissolution of CSOs are simple and easy to follow. This is also true for the special laws for religious bodies, trade unions or professional membership bodies. The various laws leave CSOs to make their own rules or regulate their internal procedures as set out in a constitution or memorandum of association.

 

CSOs can engage in commercial activities so long as they do not become the main activities. They may engage in profit making activities if such activities are connected with and for the furtherance of the objectives of the association.

 

How to register.

 

There are a variety of types of CSOs and NGO organisations in Vanuatu. They range from informal organisations that have no legal status to organisations with formal legal structures. All types acquire the status of a legal entity upon registration under the relevant Act.

 

There are two main forms in which CSOs can be registered in Vanuatu.

 

  1. Charitable Association.
  2. A company limited by guarantee.

 

There are also special laws for churches and religious bodies, trade unions and professional associations.

 

1. Most CSOs in Vanuatu are registered as Charitable Associations which are governed by their Constitution. The CSO becomes a legal personality upon registration under the Charitable Associations Act and can then enter into legal relations with other bodies.

 

2. A CSO can be formed as a company limited by guarantee under the Vanuatu Companies Act. A guarantee company, governed by a memorandum and articles of association becomes a legal entity once it is registered. It is then able to enter into contracts, to institute and defend suits and other legal proceedings and to do all things necessary to achieve its objectives.

 

There are also special laws for churches and religious bodies, trade unions and professional associations as well as provisions for foreign organisations, establishments and professional membership organisations

 

a) Religious Bodies can either be either registered as a Charitable Association or under the Religious Bodies Registration Act.

 

b) Trade Unions become legal persons upon approval of their founding documents by the Registrar of Trade Unions under the Trade Unions Act.

 

c) Foreign Organisations. There is no special provision in the law for foreign organisations. Some foreign organisations such as the Foundation for the People of the South Pacific and Volunteer Services Overseas operate under a Memorandum of Understanding with the Government of Vanuatu. These MOU’s usually include the rights and obligations of local CSOs. Approval requires submitting to the Ministry of Foreign Affairs their founding act and other proof that their internationally agreed obligations have been fulfilled.

 

d) Establishments are educational institutions, sports facilities and health care establishments founded by private groups including schools formed by Church organisations. They each register under the relevant legislation, for example, non government educational institutions are registered under the Education Act

 

e) Membership organisations of professional bodies such as medical practitioners and legal practitioners exist solely for the benefit of their members. They are statutory bodies whose activities are governed and regulated by the enacting statutes.

 

Although Vanuatu law does not distinguish between CSOs acting for public benefit and those acting for the mutual benefit of their members there is a distinction in the tax laws where NGOs providing for public benefit receive special tax exemptions.

 

Unregistered organisations

 

However, all community organisations do not need to register.

 

Your group may simply want to meet to discuss issues of concern and/or carry out local activities without employing staff. In this case there is no requirement to register.

 

Most unincorporated associations are community based and are formed in the villages by groups of men, women and youth either for sports, agriculture or religious purposes. An unincorporated society is not a legal entity and it is based on an agreement (written or oral) between its members. It is usually governed through its constitution or rules. It has no legal personality and cannot enter into legal relations with other bodies. As there is no legislation governing the existence and operation of political parties in Vanuatu they operate as unincorporated associations.

 

Registering can be an advantage if you decide to:

  • take action in a wider area,
  • employ staff,
  • rent or buy property,
  • need or desire liability protection for officers or staff;
  • raise funds from local or international funders.

 

Although it is not compulsory to register an organisation there are some advantages that should be considered when deciding whether to register.

 

 

What are the advantages of becoming registered?

 

Registration can be useful, for example, if your organisation wishes employ staff or to rent or own property. This means that the organisation can act in its own name, with any potential legal liability going to the organisation, rather than to an individual or family. This provides protection for members of the group from anyone taking legal action against them.

 

Registration may also be a requirement of funders, especially international funders.

 

Some tax concessions and exemptions are available to registered organisations.

 

Vanuatu has no taxes on income, capital gains, inheritance or other forms of direct taxation and the only form of tax is indirect taxes on consumption, such as Value Added Tax (VAT), import and custom duties.

 

VAT is not imposed on the supply of donated goods or services by a non-profit body.

Charities, churches, privately funded schools as well as community groups are also exempt from import duties.

 

The authority for determining exemption under the Imported Duties Act is the Director of Inland Revenue and Taxation. The Minister responsible for Social Development can also write a letter to the Director of Inland Revenue and Taxation requesting relief for a community group.

 

International NGOs are exempted from VAT and Import Duties if this is provided for in the MOU signed between the Government and that particular organisation.

 

If you have any questions about registration or the operation of the law affecting civil society and community groups contact:

 

University of the South Pacific Community Legal Centre,

PMB 072 Port Vila, Vanuatu. Phone 2706

 

ICNL Pacific Civil Society Law Programme davidjrobinson@xtra.co.nz

113 Creswick Terrace, Wellington, New Zealand.