NGO SCORES VICTORY WITH VOLUNTEERISM LAW

UNCLAS YEREVAN 001320

SIPDIS

SIPDIS

DEPT FOR EUR/CARC

E.O. 12958: N/A
TAGS: PREL PGOV AM
SUBJECT: NGO SCORES VICTORY WITH VOLUNTEERISM LAW



1. In an encouraging victory for self-governance, on
September 14, the GOAM approved a draft law pushed by a civil
society NGO. The law would recognize the concept of a
volunteer employee, and put a stop to tax inspectors'
insistence that cash-strapped NGOs pay social security and
income taxes for unpaid workers, as if they were paid staff.
(NOTE: The Professionals for a Civil Society NGO received a
Democracy Commission grant to fund the campaign. END NOTE.)


2. The draft has been in the works since late 2004, when the
Media Group NGO won a first-instance court case against the
local social security agency, which had attempted to collect
social security payments for unpaid volunteers. The ruling
was overturned in appeals. In addition to social security
payments, NGOs have been expected to pay income taxes and
contribute to state pension funds of volunteer workers
exactly as though they were paid employees, according to
Counterpart International's Arsen Stepanyan. Most NGOs in
Armenia depend on volunteer labor, particularly in between
projects, when even an organization's executive director
might work on a volunteer basis. Stepanyan said the tax and
social security collectors don't recognize the concept of a
volunteer employee, and routinely accuse NGOs of paying
employees under the table.


3. COMMENT: The law will go next to the National Assembly,
where we do not believe it will encounter substantial
opposition. This will be a victory of both process and
substance for Armenia's civil society sector; process because
it marks successful legislative advocacy and substance by
freeing NGOs to take advantage of much-needed unpaid labor.
This legal change is also a necessary pre-condition for local
NGOs efforts to become true grassroots movements, instead of
(according to widespread local perception) wholly-owned
subsidiaries of international donor organizations. END
COMMENT.
GODFREY