VZCZCXRO2024
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHVN #0291/01 1690939
ZNR UUUUU ZZH
P 180939Z JUN 09
FM AMEMBASSY VIENTIANE
TO RUEHC/SECSTATE WASHDC PRIORITY 2645
INFO RUCNASE/ASEAN MEMBER COLLECTIVE

UNCLAS SECTION 01 OF 04 VIENTIANE 000291 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR EAP/MLS John Emery 
DEPT FOR IIP Jenifer Bochner 
DEPT FOR G/DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PREL SOCI SCUL LA
 
SUBJECT: Lao Government Issues Long-Awaited Decree on Associations 
 
REF: 08 Vientiane 456 
 
¶1. (SBU) Summary.  The Prime Minister's Office has officially 
released the text of the new decree on the formation of non-profit 
associations in Laos, opening the door for Lao-run civil society 
organizations to register legally. Issued on April 29th, the decree 
will permit the formation of non-profit organizations to an 
unprecedented degree.  Although the decree does mandate a great deal 
of administrative control by the Public Administration and Civil 
Service Authority (PACSA), such regulation may in fact help 
strengthen the new associations by institutionalizing norms for good 
governance and fiscal controls from the outset.  International 
observers are by and large very positive about the decree, while 
potential Lao association organizers are more cautious. 
WorldCONCERN and UNDP have both led programs working with PACSA to 
define terms, establish parameters, and recommend language to make 
this decree compatible with international standards for 
non-governmental associations.  To a large extent, they have 
succeeded.  As is often the case with Laos, however, the devil will 
be in the details; impressive appearing  legislation is not always 
implemented the way the Western observers expect. End summary. 
 
-------------- 
The Old World 
-------------- 
 
¶2.  As described in reftel, civil society in Laos is small and has 
little influence.  Organizations were previously allowed to register 
only for limited purposes such as sustainable development or 
agricultural projects.  Associations were allowed to form as long as 
they were "sponsored," in effect, by a Government of Laos (GOL) or 
Communist Party organization.  The Lao Bar Association, for example, 
comes under the supervision of the Ministry of Justice. 
Well-connected individuals who wanted to register an organization 
for non-political purposes could often find a sponsor within the 
government, but there was no transparent mechanism for a civil 
society organization to form and to register. 
 
¶3.  The pre-requisites of civil society as the Western community 
understands them, namely guaranteed freedom of association, 
expression, and media, are not present.  Groups that have registered 
appear to have little interest in political advocacy or attempting 
to change the status quo in any significant way; the primary goal of 
most organizations seems to be disseminating information to a wider 
audience. Almost inevitably, the information is drafted and 
disseminated in tandem with GOL goals. 
 
------------- 
The New World 
------------- 
 
¶4.  Under the new decree, applicants must overcome a set of 
administrative hurdles in order to receive formal registration from 
the GOL.  Under this process - assuming all deadlines are met but no 
one works faster than they must - registration will take 
approximately 7-8 months.  For Laos, the steps are set to occur 
relatively rapidly. (NOTE: It is not uncommon for international NGOs 
to spend one or two years securing a Memorandum of Understanding 
that permits them to work in Laos.) 
 
¶5.  According to the decree, non-profit associations (NPAs) may be 
formed as long as they are consistent with the constitution, local 
and ethnic traditions, and do not threaten national stability or the 
social order.  Founders must be Lao citizens over age 18.  The 
association must have a charter, office, a yet-to-be-defined level 
of assets, and a set number of members depending on whether the 
association is national, provincial, or at the village level. 
Associations may be economic; professional, technical and creative; 
social welfare; and "other." 
 
¶6.  To incorporate legally, the association founder must have a 
"mobilization committee" that drafts the required documents and 
submits them to PACSA, or to local authorities if not a national 
association.  Documents must include the association's proposed 
charter; personal history, certificate of residence, police record 
and diplomas of the mobilization committee members; list of 
association members; and certification of the office.  (Note: 
Article 15 of the decree also lists what must be in the charter.) 
 
¶7.  Within 30 days, PACSA or the local authorities must issue a 
temporary license or reject the application.  Once the temporary 
license is received, the mobilization committee is dissolved and the 
association's general assembly (of all members) must elect executive 
and control boards, approve the charter, and draft a work plan 
within 90 days.  After the general assembly has met, the 
association's new executive board has 30 days to send the report on 
 
VIENTIANE 00000291  002 OF 004 
 
 
the assembly's outcome, revised charter, minutes of the assembly, 
work plan and any other resolutions to PACSA or the relevant local 
authority.  Within 60 days of receiving the general assembly 
reports, the relevant authority must approve or disapprove of the 
charter.  If the charter is not approved, the authority must provide 
"clear and complete explanations in writing" to the association. 
 
¶8.  The decree also describes the duties of each of the 
association's boards and officers, the types of members, required 
meetings, how to dissolve a registered association, and asset and 
financial management (including a provision that limits gross 
overhead costs to no more than 25% of the association's planned 
expenditures).  Associations are also required to submit annual 
reports on both activities and finances. 
 
¶9.  The decree will go into effect 180 days after signing, which 
will be October 29, 2009.  Associations incorporated and operating 
prior to this decree's date will have 90 days after October 29 to 
apply for re-incorporation under the terms of this decree. 
 
----------------------------------- 
There Be Dragons - Lost Continents 
----------------------------------- 
 
¶10.  International observers and consultants have been working 
closely with PACSA to draft the decree, and will now be working to 
ensure that the guidelines for implementation are not so burdensome 
that they make practical application of the decree impossible. 
CONCERN's staff members continue to be optimistic about the 
guidelines, but admit there are some serious holes in the decree 
that will have to be cleared up during the course of drafting the 
application forms and specific rules for implementation. PACSA - 
which knows it must be ready to accept applications on October 29 - 
is already working on those rules. 
 
¶11. For example, the decree states that the association must have 
permission from the "relevant sectors," but does not set out exactly 
how that permission should be obtained. PACSA apparently intends to 
be the one-stop shop for NPA registration, allowing applicants to 
deliver all the forms to the PACSA office for distribution to the 
"relevant sectors" as defined by PACSA's interpretation of the 
applicant's area of work.  However, line ministries and other 
organizations may insist on having applications submitted directly 
to them, which creates another level of bureaucracy and the 
potential for additional political influence and delays to an 
already burdensome process. 
 
¶12.  In fact, the approval process from start to finish is as yet 
unclear. CONCERN hopes that PACSA will be allowed to assume a 
positive response if the deadlines with other offices and agencies 
expire and no objection is formally registered, but that has not yet 
been finalized.  (Note: It would also not be consistent with general 
GOL practice. End note.) The GOL also must approve changes to 
association staffing, funding, and other administrative details, but 
it is not clear that an NPA would have to formally submit a request 
for every staff change prior to making a personnel shift, or would 
be able to document all such changes in an annual report.  The 
contents of the annual report and the reporting requirements for 
registered NPAs are also still unclear. 
 
¶13.  Finally, there is still no answer on how funding will be 
approved, especially if the donors are not Lao.  Currently, the 
Ministry of Foreign Affairs says it must approve all foreign 
donations to Lao NPAs and objects to allowing PACSA to approve such 
financing.  CONCERN staff hope the Prime Minister's office can 
overcome the MFA's resistance in order to streamline the process, 
ensure greater transparency, and keep all NPA-related administration 
within PACSA. 
 
¶14.  The decree also assumes that associations will be staffed by 
full-time workers with some kind of "membership" at large; have an 
office; have specific projects to run; and be funded.  Associations 
such as alumni groups or professional associations are unlikely to 
wish to register under this decree, because usually such 
organizations are little more than ad-hoc groups of like-minded 
individuals together for irregular contact and perhaps the 
occasional conference.  The PAO's enthusiasm for establishing a real 
Lao Fulbright Alumni Association, for instance, was quashed as soon 
as she read the terms of the decree. 
 
---------------------------------- 
Will the Emperor Have New Clothes? 
---------------------------------- 
 
¶15.  CONCERN staff estimate that as many as 60-70 groups will wish 
to register shortly after the decree goes into effect on October 29, 
 
VIENTIANE 00000291  003 OF 004 
 
 
2009, split more or less evenly between "new" associations and those 
that were previously legally established through other mechanisms, 
such as the LUSEA decree (see reftel). In theory, they will 
apparently be required to re-register within 90 days or risk losing 
their formal recognized status.  "New" associations will include 
groups formed and active but not previously registered; and small 
organizations currently operating as parts of legally-registered 
international NGOS, but that have in effect become independent units 
operating under the NGO's umbrella MOU.  The Gender Development 
Group operating under CONCERN's wing is one such organization. 
Their future founder is already working to establish the required 
boards and membership so that the group is prepared to submit 
paperwork as soon as the doors are open. 
 
¶16.  More established Lao nonprofits are less anxious to change 
their status, and far more sanguine about the threat of losing their 
current sponsors or permissions. The Participatory Development 
Training Center (PADETC), established 10 years ago under the 
auspices of the Ministry of Education, has no intention of filing 
paperwork to register under this new decree, according to their 
deputy director.  "The current system works well for us," he said 
carefully, "and we expect the new system to remain somewhat 
flexible."  He also noted, however, that PADETC is fully prepared to 
encourage new Lao NGOs to register, and will share its experience 
with boards and accounting and governance procedures. 
 
¶17.  PADETC - well-connected and well run - may well be correct; it 
is unlikely that PACSA will succeed in breaking more established 
rice bowls when the decree goes into effect.  Organizations with 
established reputations and a good linkage to their current 
supervisory organization may see no need to mess with their 
governance and perhaps unduly burden themselves with new 
administrative constraints unless they are forced to do so by their 
legal hosts.  Post expects that would be unlikely in the case of 
organizations like PADETC, which bring in money and consultants and 
support to the Ministry of Education; and perhaps for the Lao Bar 
Association, where the Ministry of Justice may see a good reason to 
continue to oversee, however lightly, the activities of the 100 
lawyers in the country who do not work directly for the GOL. 
 
---------------- 
Explorers Needed 
---------------- 
 
¶18.  International NGO advisor and consultant Julia Demichelis, in 
Vientiane on a previously-arranged Strategic Speaker Initiative 
program on civil society for the Public Diplomacy Section, told a 
group of Lao NGO workers that while the new decree may look 
burdensome, it was in fact well in line with international best 
practices. She noted that civil society has just as much temptation 
for corruption and poor management as other sectors, and good 
governance from the beginning will help strengthen the associations 
who can comply with these rules. She encouraged the groups, who 
represented associations large and small, Lao and international, to 
share best practices and consult with one another on issues as they 
came up. Two participants began a conversation during the break on 
sharing accounting databases and donor requirements, wondering 
whether their current systems will be sufficient for the new rules. 
Implementing the decree, they agreed, will be a new experience for 
all sides, but "great"...if it works. 
 
¶19.  Comment:  This decree on Lao non-profit associations is clearly 
a step in the right direction for a government that has resisted the 
idea of ceding influence to other organizations, especially Lao 
organizations, whose leaders cannot be summarily deported. Post 
expects that there will be a rush of new, smaller, focused 
organizations that hurry to register, often with significant support 
and backing from an interested foreigner or three. 
 
¶20.  Comment continued:  It also appears - at least at present - 
that the GOL will encourage the formation of such associations to 
take on some of the work it is increasingly expected to support by 
the growing and increasingly educated and urbanized population, but 
does not have the resources to undertake.  An article in the 
Vientiane Times on June 8 says the GOL intends to "hand over more 
development projects to non-government organizations," according to 
an interview with State Administration and Development Department 
Deputy Director General Ampha Simmasone.  The idea, according to 
him, is to "reduce the burden on state agencies by delegating work 
to social organizations." He said that the government intends to 
allow those organizations to accept international funding, and will 
provide "some tax relief" as an incentive.  If true, and the GOL 
does indeed manage to establish a clear, transparent, system with 
institutionalized governance norms, it may well open the doors to a 
much larger, livelier and more effective civil society. 
International donors, Post hears, are waiting in the wings with open 
 
VIENTIANE 00000291  004 OF 004 
 
 
wallets.  New organizations may find themselves with more attention, 
funding, and offers of assistance than they can initially support. 
 
 
HUSO