Non-governmental organizations in Azerbaijan are attempting to force revisions in new legislation that they contend hampers their ability to function, and possibly may lead to lay-offs. Some NGO representatives believe the current organizing effort may strengthen the non-governmental sector over the longer term, even if the legislation produces short-term hardship.

The new Law on Grants, adopted by parliament in December, requires organizations to pay 27 percent of their employee wages into a fund for social insurance and pension contributions. It also requires all groups that give or receive grants to notify authorities of these grants. Advocates worry that this measure could crimp NGOs' work and enable the government to monitor and harass particular groups. The legislation came as a stinging blow to organized activists, who believed they had won a battle against registration requirements in the summer of 2002.

Now, as President Heidar Aliyev prepares for a visit to the United States, which includes a February 26 meeting with President George W. Bush, some NGO activists are mounting an attempt to revise the requirements. Rather than refuse to support the idea of a social insurance fund, for example, organizations are banding together to lobby the government for relief.

NGO employees picketed in central Baku protesting against the new measures on January 22. They have already won an assurance that the payroll tax will only affect agreements and grants that are signed after the law came into effect in January. This means that, in theory, organizations can budget for the additional contributions – if they can find donors to support the social-insurance cost. The government has also agreed to exempt projects supported under a bilateral agreement with the United States. Although this will benefit many projects, it will also mean administrative hassles for organizations that receive support from the United States and from other entities. Such organizations will have to pay contributions on some, but not all, of their funding.

Donors are finding a silver lining in the cloudy legislation. Margo Squire of the Eurasia Foundation, which makes grants in Azerbaijan, believes that NGOs are learning new tactics through the lobbying process and are making important new contacts with the authorities. Although disappointed by the lack of consultation before the law's passage, Squire believes many of the concerns raised by NGOs will eventually be addressed and resolved in their favor. Anar Qasimov of the International Center on Non-Profit Law is less optimistic, but acknowledges that NGOs have established a new dialogue with the authorities. "At least our words will go to the president, so let's believe and hope that we'll get something out of this," he says.

Some NGO advocates express concern about the social insurance fund payments. While the government says the social insurance fund will serve the same altruistic goals that the organizations embrace, many fear the new provisions will compel organizations to lay off workers. Qasimov points out that the obligation can impose severe costs on organizations. Either employees' salaries will have to shrink, or donors will have to make bigger grants to NGOs. He adds that any reduction in salaries will mean that some of the best-qualified people may start looking for other jobs. Roughly 1,000 people work for NGOs in Azerbaijan.

Merethe Kvernrod of the Norwegian Refugee Council says her organization will be forced to reduce staff and cut program activities if the social insurance tax is not reduced. Meanwhile, several NGO representatives are planning to file suit with the Constitutional Court, seeking to overturn the law on the grounds that it hinders Azerbaijan's democratic development.

The notification requirement is also a source of concern among many NGO representatives. Authorities have sought to quell such concerns, saying the existing requirement differs from the measure contemplated in 2002 by not mandating governmental registration of all grants. [For background see the Eurasia Insight archives]. The new law, government officials say, will increase transparency by publicizing NGOs' funding sources. "It's just notification, not registration," says Nazim Isayev, deputy head of the social-political department in the presidential administration, who has worked on government-NGO relations for several years.

"The presidential decree is clear. The Ministry of Justice has no legal right to restrict any activity by an NGO on the basis of the information it will receive on grants. It has no right to become involved in the spending of this money," added Isayev. Most NGO employees in Baku seem inclined to give the government some credit for its response to their concerns, and accept the clarification of the notification procedure.

However, organizations question the timing of the Aliyev administration's action, noting that the laws may make it harder for organizations to protest and document rights abuses in an election year. "I can't say the new legislation is an electoral strategy, but it will cause us problems," Squire says. "It reflects a deeper lack of discussion, trust and collaboration between different sectors of society – NGOs and the government."

Human rights practices have worried international partners of Azerbaijan for years. Lucius Wildhaber, president of the European Court of Human Rights, visited Azerbaijan with colleagues from the Parliamentary Association of the Council of Europe on February 17. Wildhaber urged the country, which is a member of the Council of Europe and the Organization for Security and Cooperation in Europe, to live up to international human rights standards. "It is very important that the Constitutional Court of Azerbaijan uses provisions of European conventions," he said.