LAO INGO POLICY: OVERSIGHT VS. EFFICIENCY

C O N F I D E N T I A L SECTION 01 OF 02 VIENTIANE 000068

SIPDIS

DEPARTMENT FOR EAP/MLS (EMERY)

E.O. 12958: DECL: 02/11/2019
TAGS: ECON PGOV PROP SOCI
SUBJECT: LAO INGO POLICY: OVERSIGHT VS. EFFICIENCY

Classified By: Ambassador Ravic R. Huso for reasons 1.4 (b) and (d)


1. (C) SUMMARY: The Lao Foreign Minister led an unusually
high profile and public February 5-6 consultative discussion
about proposed revision of the Prime Minister,s Decree 71,
which regulates registration and operation of international
NGOs (INGOs) in Laos. Also attending were vice ministers
from line ministries, vice governors from all provinces in
Laos, and representatives from the more than 160 INGOs now
registered in Laos as well as UN and diplomatic officials.
Although the Lao officials praised INGO contributions in
Laos, they also called for more accountability and
sustainability from INGO projects. This two-day conference
had originally been called to unveil the revised Decree 71,
but negative reactions from the INGO community to the draft
circulated in advance led the Lao side to take a more
measured approach. The main INGO concern in the past has
been the extended time required to gain GOL approval for new
INGO activities, and INGO representatives voiced fears that a
new version of the decree might further slow down the
process. Formation of a joint working group to discuss the
competing concerns of the two sides is the next step. End
summary.


2. (C) Lao Deputy Prime Minister and Foreign Minister Dr.
Thongloun Sisoulith chaired the first ever National
Conference on Cooperation between the Government of Laos
(GOL) and international NGOs (INGOs) in Vientiane February
5-6. More than 160 INGOs are currently active in Laos
according to MFA data -- including 34 from the United States.
INGOs provide approximately USD 35 million in desperately
needed development assistance to Laos annually. The meeting
focus was on proposed revision to the 1998 Prime Minister's
Decree 71 on the Administration of NGOs in Laos. Decree 71
established a three-step process for an NGO to gain
permission to work in Laos: obtaining an "operation permit"
which allows an NGO to meet with GOL organizations to begin
drafting a project proposal; then a "project office permit"
which allows implementation of project activities; and
finally, after carrying out projects in Laos successfully for
five years, a "representative office permit" which allows an
NGO full status.

GOL: We love INGO assistance, but more accountability
needed
-------------- --------------


3. (SBU) Demonstrating the serious nature of this conference,
DPM/FM Thongloun was accompanied by two of the three Vice
Foreign Ministers -- Ambassador Hiem Phommachanh and Bounkeut
Sangsomsack; the Assistant Foreign Minister -- Alounkeo
Kittikhoun; and the senior official who actually manages INGO
proposals made under Decree 71 -- MFA International
Organizations Department Director General Saleumxay
Kommasith. In addition, a number of vice ministers from line
ministries and vice-governors from all of Laos's 16 provinces
attended, with several of each speaking during a session
reviewing current INGO projects. Lao officials praised the
contributions of INGOs to Lao development, but also stressed
the need for more accountability and sustainability of NGO
programs, as well as for longer-term commitments. They also
called for better coordination among the central and
provincial governments and the INGOs. Some also criticized
certain INGOs for having very high administrative costs,
reducing the assistance reaching people in their project
areas. All the vice-governors, however, emphasized that
their provinces would welcome increased assistance from
INGOs.


4. (C) According to VFM Bounkeut, whose portfolios include
supervising the Department of International Organizations,
Decree 71 needs revision because it is not sufficiently
detailed and many elements are unclear. Based on "present
realities," the decree needs to be revised, for example, to
better distinguish among INGOs, associations, foundations,
and clubs. The rights given to approved NGOs as well as
their responsibilities need to be better specified. The
revised process will fall under the supervision of a new
committee made up of twelve senior officials representing
various ministries.

Internationals: Approval process slowing assistance
delivery
-------------- --------------


5. (C) The Australian Ambassador noted that Australia will
increase its international assistance through INGOs to
achieve Millennium Development Goals. She called for a
streamlined process for registration of INGOs and their

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projects and cautioned against "overloading partners with the
process." While noting the need for better INGO coordination
and accountability, the UNDP Resident Representative stressed
the revisions to Decree 71 should "speed, streamline, and
improve" the INGO approval process. She offered UN
assistance in drafting implementing regulations. The EU
Charge d'Affaires also called for simplified registration
procedures and suggested a revised decree also consider
allowing the registration of local NGOs. Speakers from the
INGO community: asked that the new Lao 12-member senior
committee be made responsible for policy rather than actual
process management to avoid slowing down the INGO
registration process; asked for a standardized registration
format; and requested that the GOL formally recognize the
current INGO Network in Laos -- now limited to informal
linkages among INGOs and between INGOs and the GOL.


6. (C) Note: In side conversations, the INGO representatives
expressed concern to PolOff about the GOL decision to revise
Decree 71 to define the approval process in greater detail
and to add a supervisory committee. Under the current Decree
71 process, a number of INGOs in the recent past have been
required to wait for more than one year before finally
receiving permission to undertake projects. More than 80
INGO representatives attended the conference. End note.

Next: Joint Working Group
--------------


7. (C) DPM/FM Thongloun said the next step would be a joint
working group (JWG) to review the revised Decree 71 text
article by article. In response to a suggestion from the EU
Charge, he agreed that representatives of donor countries
would be invited to join the JWG along with GOL and INGO
representatives.

COMMENT
--------------


8. (C) Although the Embassy has seen greater flexibility
recently from the GOL in a number of areas related to our
ownbilateral assistance, INGO representatives indicated that
working in the field in Laos is as difficult as ever, with
the process of registering INGOs, setting up Memoranda of
Understanding (MOUs),and gaining approval for new projects
requiring extraordinary patience. Some INGOs receiving
one-year funding to undertake projects in Laos have been
unable to receive GOL permission before their funding
expires. And despite some critical comments from the
vice-governors and other officials during the conference, the
INGO representatives were clear that the difficulties came
from the central-level officials controlling the registration
process. MFA contacts, meanwhile, have expressed their
frustration at trying to keep track with limited personnel of
the many projects being carried out by a mushrooming
multitude of well-meaning foreigners.


9. (C) That said, holding a consultative National Conference
of this kind is a novel proceeding for Laos and one that the
INGOs welcomed. We were told that DPM/FM Thongloun had
originally scheduled this conference to actually release the
finalized revised Decree 71. The text had been circulated in
advance, but the reaction of the INGO community was
apparently quite negative. In the end, the conference
evolved into discussing the need for revisions to the
original decree. The JWG will have many issues to thrash
out, with the most important being how to balance the
competing objectives of adequate oversight and efficient,
timely development project implementation. Whatever the text
of the final revised decree, of course, its implementation -
rather than just the text itself - will be key.


Huso