“Unlocking Opportunities: Association Act 2082 for Inclusive Development”

Nepal’s proposed ‘Association Act, 2082’ if carefully designed & implemented, it can hard-wire alignment with the ‘Constitution’, anchor programs in government priorities and the SDGs, and deliver tangible gains by connecting the Nepal’s current legal framework and international commitments and draws on global good practice—all with an eye to Nepal’s grassroots realities.

The ‘Constitution’ guarantees freedom of association establishment. The proposed ‘Act’ should therefore guide the associations to form and function in the national needs or priorities while mentoring them in the right direction to protect rights, ensure accountability, and guard the grassroots’ realities. The guidance towards the “no-profit” principle and emphasis on livelihoods/employment opportunities could resonate with the Constitution’s directive principles on social justice and equitable development. The explicit requirements of associations’ contribution towards national plans and laws will not only become tidy bureaucracy; but also, it will be the constitutional housekeeping that respects the state’s policy space and guides non-state resources into nationally agreed priorities.

Existing ‘Association Registration Act, 2034 (1977)’ is guiding for registering non-profits at the DAO/CDO level which now becoming the tiered registration (local/province/federal via Social Development Department) seems practically workable—so long as it can clarify ‘who registers and who authorizes’ scope. The proposed ‘Act’s provisions on general member’s access to accounts and public/social audits align with the ‘Right to Information (RTI) Act’s, 2064 (2007)’ spirit of proactive disclosure. The new ‘Act’ envisions the cross-reference RTI duties (and formats) so NGOs/INGOs could publish standard disclosures on budgets, grants, procurement, and results.

The ‘Act’ still should explicitly reference key sectoral frameworks—such as the Compulsory and Free Education Act, 2075 (2018), DRRM Act, 2074 (2017), Environment Protection Act, 2076 (2019), and National Climate Change Policy, 2019—to guide sector-specific programming. It should clearly clarify that technical assistance in education, WASH, health, DRR, environment, climate, inclusion, and related sectors aligns with these frameworks, positioning them as priority compliance standards for all relevant projects.

Currently, SWC exists under the Social Welfare Act, 2049 (1992). The proposal to cancel or merge SWC into the SDD requires an express repeal/amendment of the 2049 Act, and a clear transition plan for files, MoUs, and agreements. Until then, SWC’s legal authority and guidelines should continue.

The layered approvals in the proposed Act—Local/DAO/Province/SDD—reflect Nepal’s decentralization framework. To minimize duplication, registration (legal status) should be separated from program authorization (scope of work) and linked to social audits, disclosure, and local reporting formats. Tiered applications—Local for local projects, DAO/CDO for district, Province for provincial, and SDD for multi-provinces—combined with a unified digital registry (single ID across levels) will ensure records reconcile with MoF IDCP databases. Service categorization aligned with the Local Government Operation Act, along with reasonable scope-change and multi-objective fees, will support IDCP principles of subnational tracking, alignment, and transparency.

The provision on open general membership, honorary memberships without voting rights, minimum seven executive members with inclusion, and bans on holding executive posts in similar other organizations—are sound governance hygiene. To make them bite, the proposed act should mandate board diversity metrics (gender, caste/ethnicity, disability, geography) and publish them annually as well as requirement of a ‘conflict-of-interest policy’ (disclosure of related-party transactions), and requirement of board rotation and term limits (2 tenures in similar position) to prevent capture. All of these operationalize the Constitution’s equality guarantees and Nepal’s treaty obligations (e.g., CEDAW, CRPD) in the voluntary sector’s own house.

The ‘Act’ should build on the IDCP 2019’s call for stronger alignment with national priorities and aid transparency by taking a more robust stance on INGO financial management. There, all resources should originate from abroad, with in-country fundraising and transfers to other INGOs or outside Nepal prohibited, while clearly defining permissible exceptions (e.g., bank interest, asset sales) and compliance protocols to safeguard legitimate operations. External resources—grants, donations, in-kind contributions—and allowable local income must be ring-fenced by project code, and subgrants limited to registered Nepali NGOs through open, competitive processes with a ≤20% admin ceiling.

Program vs. admin costs must be clearly distinguished, with functions like M&E, inclusion, and safeguarding classified as program-enabling, supported by a Standard Chart of Accounts, ensuring frontline staff costs are properly allocated while preventing “creative accounting.” INGOs/DPs should follow transparent selection criteria of NGOs—capability, track record, safeguarding, inclusion, value-for-money, and local presence—with debriefs for unsuccessful applicants and published evaluation matrices. The ‘Act’ should also encourage mergers where missions overlap or viability is weak, offering incentives like fee waivers or fast-track registration. These measures reflect global best practices in value-for-money, on-budget aid clarity, subnational alignment, and localization, while maintaining donor-required transparency.

The ‘Act’ should mandate annual social/public audits with stakeholder and media presence, timely disclosure to local governments, and general members access to accounts with at least 15 days’ notice. Uniform social audit standards must be aligned with local reporting formats and sector norms. Recruitment should be open (minimum 15-day notice, except short-term hires) with published outcomes to curb patronage. Proactive RTI-style disclosure—covering budgets, donor agreements, procurement plans, subgrant awards, and key evaluations—should be required to ensure transparency and accountability.

The ‘Act’ should require all associations to align projects with the SDGs, national periodic plans, and prioritize low-HDI areas, consistent with Nepal’s VNR commitments and SDG localization guidelines. The proposals should map activities to SDG targets and sectoral strategies, justify target groups and geographies using census, HDI, and equity indices, and ensure subnational integration as per IDCP 2019. On climate, environment, and DRR, programs must align with the Environment Protection Act 2019, National Climate Change Policy 2019, and DRRM Act 2017, embedding risk reduction, adaptation, safeguards, and resilient recovery into the log frames.

The ‘Act’ should also define broad sectors—education, WASH, health, digitalization, data systems, DRR, human rights and inclusion, culture, biodiversity, energy, tourism, social protection, poverty reduction, and more—while ensuring focus through evidence-based programming. Every project must use public datasets, share data with local governments in machine-readable formats, and align with national service standards (e.g., Education Act, WASH, DRR, EIA/IEE safeguards, etc.). Mandatory safeguards on protection, gender equality, disability inclusion, and anti-trafficking must reflect as per Nepal’s treaty obligations (ICCPR, CEDAW, CRPD). Technical support should extend to local government’s planning, budgeting, monitoring, and digital infrastructure (registries, e-grievance, open data). ‘Project Advisory Committees’ at each level should include gov. officials, marginalized groups, and experts, with minutes and decisions publicly disclosed.

The ‘Act’ should clearly distinguish between the GA (General Agreement) and PA (Project Agreement) with a streamlined regime where GA should establish an organization’s legal presence, governance, and compliance duties (finance, HR, audits, disclosure), while PA should authorize specific projects—defining scope, budget, locations, partners, results, safeguards, and exit plans—with prior approval from local/provincial authorities and filing at SDD. A one-window digital portal, hosted by SDD and linked to MoF’s IDCP and local MIS, should track GA/PA metadata, cut duplicate filings, and enable national dashboards.

The ‘Act’ should embed grassroots realism across all provisions. Remote mountain and hill municipalities face higher costs and isolation, so hard caps must allow justified flexibility. Inclusion must go beyond checklists—mandating budget tagging for disability, gender, Dalit, Janajati, and remote groups, with reporting on actual beneficiaries. TA should mean co-producing plans, budgets, and audits with municipalities, strengthening core systems rather than one-off trainings. Livelihood projects must align with local market systems and climate realities, embedding adaptation and resilience as per the ‘Climate Change Policy’. Likewise, DRR should not be optional but integral, as the DRRM Act mandates, given rising risks from landslides, floods, earthquakes, and heat stress.

The implementation roadmap must be clear and actionable. The ‘Act’ should explicitly articulate for amendments, formalize SDD’s mandate, and ensure transfer of archives, MoUs, and cases. It should mandate notification of GA/PA rules, define admin vs. program costs, standardize disclosure, and issue procurement and subgrant guidelines. A one-window SDD portal, linked with MoF IDCP and local MIS, should assign unique org/project IDs and automate LG notifications. Oversight should include a tiered approval/social audit matrix and inclusive ‘Project Advisory Committees’ with published minutes. Finance rules must clarify inflows, exceptions, no-transfer provisions, and reconcile with AMIS/IDCP. Safeguards should mandate gender, disability, and human-rights protections with grievance redress. Timely sectoral TA toolkits aligned with government formats should be provided. Social audits must follow a standardized, RTI-linked methodology. Merger provisions should allow voluntary consolidation with fee waivers and tax clarity. Capacity building should train municipal/provincial focal points and CSOs on GA/PA, disclosure, and digital systems. Importantly, an independent review after defined timeframe should refine rules, cost caps, and thresholds.

Linking to international commitments and global best practices is essential. The ‘Act’ should translate Nepal’s VNR commitments into action by mapping proposals to SDGs, prioritizing low-HDI areas, and ensuring subnational approvals and audits. It must embed human-rights obligations under ICCPR, CEDAW, and CRPD through inclusive, accessible, and rights-sensitive programming. By aligning with IDCP 2019 principles—clarity on GA/PA, a one-window portal, and strict finance rules—the Act will reduce parallel systems, enhance value-for-money, and strengthen public trust.

In summary, the ‘Act’ must balance the freedom to organize with the duty to deliver. It should clearly guide on approvals, align projects with government priorities, and channel international funds to local actors/NGOs through open competition. By mandating evidence-based planning, disclosure, social audits, and harmonization with laws on education, DRR, environment, climate, and RTI, the ‘Act’ can turn good intentions into measurable results across different sectors. Anchored in national budgets and federal governance, and guided by inclusion, safeguarding, and results, it can enhance transparency, accountability, and effectiveness, gradually reduce aid dependency, and direct resources to low-HDI communities. With digital mapping, co-financing, and capacity-driven support, the ‘Act’ could transform development cooperation into a tool for inclusive development.

By: Gita Subedi

-The views expressed are solely those of the author, and do not necessarily reflect the position of any organization.