Several professionals and professional associations have praised the recent signing into law, of the Companies and Allied Matters Act (CAMA), 2020. Yet, little connection is being made between its laudable provisions on the ease of doing business and the threats that the law may pose to civic space and freedom of association. Non-Governmental Organisations (NGOs) are expressing concern that the ‘Part F’ provisions of CAMA regulating the incorporation and operations of NGOs, referred to as Incorporated Trustees may be applied to threaten and shrink civic space. NGOS are particularly worried about the provisions of section 839 of CAMA that give the Corporate Affairs Commission (CAC) powers to suspend the trustees of an association and appoint an interim manager or managers to run the affairs of an association.
839 (1) The Commission may by order suspend the trustees of an association and appoint an interim manager or managers to manage the affairs of an association where it reasonably believes that —
(a) there is or has been any misconduct or mismanagement in the administration of the association;
(b) it is necessary or desirable for the purpose of —
(i) protecting the property of the association,
(ii) securing a proper application for the property of the association towards achieving the objects of the association, the purposes of the association of that property or of the property coming to the association,
(iii) public interest; or
(c) the affairs of the association are being run fraudulently.
The section empowers the Commission to among other issues, appoint managers for an association, in “public interest.” Although the Act gives the Commission such powers in the event of misconduct, mismanagement or fraud in the affairs of an association, the concern among NGOs is on the subjective and discretionary nature of these determinations. There are also powers in the Act for Trustees to be suspended by an order of court upon the petition of the Commission or one-fifth of members of an association, providing reasonable evidence in support of their petition. NGOs have fought back for several years against government plans on regulation and worry about possible political use of regulation to stifle NGOs that are critical of government.
The new CAMA was passed by the National Assembly in the thick of the COVID-19 pandemic and without an opportunity for a public hearing that such a contentious law would normally require. NGOs also worry that the onerous provisions of the Act which create additional reporting burdens, including bi-annual rather than the usual annual filing of returns to the CAC (section 845) may create challenges for NGOs struggling to survive. There is also the worry that the philosophy of NGOs being the private initiatives of individuals and vehicles for their delivering and filling the gaps in governance is being jeopardised by these provisions.