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Baku – APA. Agiotage around the Azerbaijan office of the US National Democratic Institute (NDI) has again raised questions about the activity of the third sector in the country. Involvement of some members of NGO family in political affairs, some NGOs’ cooperation with a number of international organizations, doubtful moments regarding the grants they receive dramatize the situation even more.

APA's study has found out that the situation in Azerbaijan's NGO sector is really not so good, a number of questions still remain open.

What is an NGO?

Nongovernmental organizations (NGO) are unions voluntarily established by citizens for a common goal. These organizations are created on the initiative of several individuals or legal entities united by common interests, they are established basing on the principle of voluntariness, the main goal is not to derive benefits, the benefit is not distributed among the members.

According to Azerbaijan's law on NGOs, these organizations can be founded and function for the goals not banned by the country's Constitution and laws.

An NGO can not run for presidential, parliamentary or local elections in Azerbaijan, nor offer financial assistance to political parties.

These organizations can observe the presidential, parliamentary and local elections, conduct exit polls in the country.

Foreign legal entities can observe the elections in Azerbaijan only together with the local NGOs.

According to the recent statistics of Azerbaijan's Justice Ministry, 2859 NGOs have been registered in the country. 108 of them are local offices of international or foreign countries' NGOs.

Council on State Support for Nongovernmental Organizations under President of Azerbaijan was established in 2007. The council is functioning as a local donor.

This is statistics. At first sight the existence of so many civil society representatives in a country with 9 million population is a good indicator. But how is the reality and activity?

Rising statistics of donors

NGOs have recently drawn so much attention due to the questions how the head of NDI office in Azerbaijan Alex Grigorievs spent the money he had withdrawn from his personal account in 2010-2012. NDI president Kenneth Wollack said the reports on the organization are not true.

“NDI and its local partners have helped civil society organizations, young future leaders, and other citizens cooperate peacefully and constructively with local governments to improve their communities”.

Kenneth Wollack said NDI observes the principle of transparency while holding these events.

The statement says that NDI office in Azerbaijan was registered at the Justice Ministry.

“Consistent with that registration, NDI has submitted all financial statements, as required by law, to the Ministry of Finance. NDI is in full compliance with local laws, including those that apply to financial disclosure”.

But after the public discussion of the issue, the activities of foreign NGOs and local NGOs funded by them have caused interest. Especially in the last three years this activity has noticeably increased.

The study has found out that 631 grants contracts were recorded at the Justice Ministry.

According to these contracts, AZN 21 638 667 grant was received from 62 donor organizations, seven of them are local donors.

In 2010 270 organizations filed 577 applications to the Justice Ministry.

According to these contracts, AZN 29 200 427, 63 grant was given by 130 donor organizations. 23 of these organizations were local donors, 7 state organizations.

881 contracts were recorded in 2011, totally AZN 32 912 225,27 grant was received from 123 donor organizations. 18 of them were local donors, 10 state organizations.

1054 contracts were recorded in 2012, AZN 39 542 569 grant was received from 131 donor organizations. 16 of these organizations were local donors, 8 state organizations.

Grants were allocated for the appointments shown below

To the same organizations with increasing amounts…

While preparing the study APA also used the official reports submitted to the Justice Ministry and financial reports of NGOs to the donor organizations. Analysis of these reports reveals some interesting facts.

First, it turns out that the organizations, which are donated by foreign NGOs, have a specific framework. These organizations are not interested in changing their partners and getting various reports and references.

For example, the following table contains the list of grants allocated by the US National

Endowment for Democracy (NED) in 2010-2012. The table shows that the grants were allocated to the same organizations.

The same practice is also effective for the US Department of State and the US embassy. In 2010, the Department of State allocated $97,138 to Baku Education Information Center which is chaired by Hikmat Hajizadeh’s wife Bahar Hajizadeh. The Open Society Institute (OSI) gave $100,000 grant to this organization in 2010 and $15,000 in 2011. The US embassy in Azerbaijan has also allocated $3,499 grant to this organization.

By the way, in 2010, the Open Society Institute allocated about $ 2 million grant to the organizations in Azerbaijan. In 2012, the organization weakened its activity in Azerbaijan and applied restrictions on grants.

It is clear in the report that the main media partner of the western donors was the Institute for Reporters' Freedom and Safety (IRFS) Public Union.

For example, in 2011-2012, the International Media Support allocated $79,833 grant to IRFS for several projects. The second partner of the organization is “Yeni Nesil” Journalists’ Union, which received €52,770 grant in two years.

International Research & Exchanges Board (IREX) remained committed to the organizations, which it donates in Azerbaijan. The organization allocated $74,743 grant to IRFS in 2011 and $84,842 in 2012. The second partner of IREX is the Media Rights Institute, which received $57,687 grant in 2011.

The representation of OXFAM, the British humanitarian organization, also cooperated with the same organizations. So, the organization allocated € 97,000 to the Center to Support to Economic Initiatives Public Union (Chairman Azer Mehdiyev) in 2011 and €78,000 in 2012.

In 2012, the same representation allocated €169,000 grant to Women’s Solidarity Public Union (chairperson Ruhangiz Huseynova) and in 2011-2012, €48,332 to Economic Research Center (chairman Gubad Ibadoghlu).

Evangelischer Entwicklungsdienst e.V. (EED) cooperated with only OWRPO – Oil Workers' Rights Protection Organization public union (chairperson Mirvari Gahramanli) and allocated €140,000 grant to this organization in 2011-2012.

Azerbaijan has also received grant from Georgia’s Samtskhe-Javakheti Regional Association ''Tolerant''. Humanitarian Research Society (chairman Avaz Hasanov) received €80,577 grant from this organization in 2012.

Another important moment that attracted attention during the studies is that the largest grants were allocated only to the local offices of international NGOs and foundations. That is, the famous donor foundations allocate largest grants to the local offices of the foreign organizations and in its turn this organization distributes the grants between local NGOs. Thus, the Baku office can maintain more serious control over local NGOs that have received grants.

BP Exploration (Caspian Sea) Ltd is one of the organizations that allocated largest grants. It allocated $197,391 grant to the Eurasia Partnership Foundation (EPF) for the project entitled “Stimulating the development of areas that affect the assets of the company and its activity in Azerbaijan, the program on local government and environment”.

BP Exploration (Caspian Sea) Ltd has allocated $1,260,454 to Qafqaz University for the project “On creation of the laboratory for modern mechanical engineering at the campus of Qafqaz University in Khirdalan.”

The Eurasia Partnership Foundation also received grant from the Belgian Federal Government. €70,348 was allocated for the project “Creation of peace-building Youth Group in the South Caucasus and Turkey”.

The Ministry for European Affairs and International Cooperation of the Netherlands has allocated $300,000 to the Eurasia Partnership Foundation for management of Small Grants Program.

Swiss NGO HEKS/EPER has allocated €137,000 to Internews for the project “Promotion of ideas of regional reconciliation at the community level in Azerbaijan and Armenia and peace-building campaign.”

The United Nations High Commissioner for Refugees (UNHCR) has allocated $1,096,456,10 to the representation of the US Humanitarian Federation “Save the Children” in Azerbaijan for the project “Care for refugees and asylum seekers”.

Abt Associates Inc. has also allocated $466,926 to the same organization for the project “Integration into strengthening health systems in Azerbaijan”.

The OSCE office in Baku has allocated €92,400 to the “Transparency Azerbaijan” Anti-Corruption Public Union to create regional offices in Lankaran and Shaki and €46,900 in Ganja. This organization has also given AZN 46,900 to the Public Union "Democracy and Human Rights Resource Centre" for the office in Sumgayit.

The European Union (EU) Delegation to Azerbaijan has allocated €216,000 to the “Special Economic Program for the blinds”.

“Interesting” grants

The study has found out that some projects to which donor organizations allocate grants are simply symbolic. The analysis shows that there is no need to implement most of these projects in Azerbaijan, or for most of these projects Azerbaijan should be introduced as an undeveloped country. Some of the projects have nothing to do with the activity of the NGO that will implement it. It has also been found out that the names of most of the grant projects do not allow determining their content and results.

For example, Open Society Institute of Switzerland allocated $783 956 to Azerbaijani office of Assistance Foundation of Open Society Institute of the dukedom of Liechtenstein. The project is called "Supporting organizational activities and efforts for establishment of open society".

Open Society Institute allocated $40,000 to "Democracy and Human Rights Resource Center" Public Union.

The European Union allocated € 245,405 to "Leader women" for project “HIV/ AIDS Prevention Among Young Women in the Rural Areas of Azerbaijan: Socio-Cultural Approach to Education, Awareness Raising and Empowerment”. Azerbaijani office of the US Counterpart International allocated AZN 54,086 to this organization for the project "Women's participation in decision-making processes is a means of gender equality".

Germany Institute for Foreign Cultural Relations allocated € 132, 811,30 to "Euro-Atlantic Organization of Azerbaijani Youth" Public Union for "Eurovision promotion in Azerbaijan". $13,486 grant allocated by the Open Society Institute - Assistance Foundation (Budapest) to "Democratic Journalism School" Public Union was also called "Using Eurovision as a means to attract attention to the human rights in Azerbaijan”.

Azerbaijani office of the US Counterpart International allocated AZN 33981 to Tomris Society of Mothers and Sisters for project "Strengthening social participation of women". International Research & Exchanges Board (IREX) allocated $ 14866 to this society for project "New Media Project in Azerbaijan". The same year IREX also allocated AZN 15,300 to "Yeni Fikir" Journalist Solidarity Public Union.

IREX allocated $14,767 to RATI for project “Financing training on civil journalism by RATI Media Art Center for 25-35 young people from abroad”

Quinn Foundation allocated € 54,000 to "Women's Society for Rational Development" Public Union for project "Mother School in Baku".

British Council allocated AZN 620 to “Umidli Gelejek” (Promising future) Youth Organization for organizing the English language courses at boarding schools.

Caucasus and Turkey Regional office of the International Cooperation Institute of Germany People’s Universities Union allocated € 90,000 to "Association of Adults Education" Public Union for project "Cooperation in informal education of adults’ education". And this grant is realized in Azerbaijan - the country, where adults are more educated than youth...

This is the list of the organizations that signed grant contracts and reported about it in 2010-12.

Where are the reports?

Justice Ministry has repeatedly said that grant contracts are hidden, NGOs evade regular reports, therefore, administrative mechanisms were used several times.

In his interview to Azertag State Agency, head of the Presidential Administration Ramiz Mehdiyev said some NGOs functioning in Azerbaijan evade reports, do not comply with the current legislation. Ramiz Mehdiyev said some international NGOs officially registered in Azerbaijan do not submit financial reports, it is not known what a great part of the grants and donations is spent on.

“There is no transparency in this issue. According to the legislation, information about the incomes and spending of local and foreign NGOs can not be state or commercial secret. They are to report to the Finance Ministry, the ministry is to exercise serious control over the fulfillment of the requirements of the law. In a number of cases the real goals of these organizations are uncertain. When the government takes some steps in case of threats to Azerbaijan’s national security, the local activists financed by them, international supporters begin to claim that freedom of assembly, freedom of speech is violated. Sometimes, these fake NGOs do not refrain from using diplomatic protection.”

Ramiz Mehdiyev noted that according to the analyses, even after grants are registered, allocation of funds is continued, no information is given about it.

“Studies also revealed other secret mechanisms. The local office of the international NGO is not registered, but the main organization allocates grants to local NGOs, or the local office is registered, but the main organization continues to directly allocate grants to the local NGOs. Though local offices are not registered, some international NGOs’ main organizations give power of attorney to any person and this person is appointed as a representative. That person begins working in the country. This activity is illegal,” he said.

It was underlined in the interview that the grants are not spent for the intended purpose.

“Actually, some international NGOs are dealing with the issues not related to their mandate. They officially declare grant project, but actually they allocate funds for quite other purposes, in most cases for destructive purposes. Some organizations specialized on education finance non-education projects, the international NGOs specialized on aid to refugees and IDPs finance pro-opposition NGOs. Their donors know very well what the money will be spent on. It means that the real purpose is not to assist the refugees and IDPs, but to extend the circle of their influence. Even some foreign NGOs registered as humanitarian organizations, contrary to the memorandum of understanding are registered at the Ministry of Taxes and engaged in commercial activity.

As mentioned, the materials submitted by the Justice Ministry on the grant contracts

and financial reports for 2010-2012 do not contain the names of some NGOs. Kur Civil

Society, which actively functioned and publicized monitoring in 2010-2012, has not released a financial report. The same can be said about Peace and Democracy Institute, zerbaijani office of Helsinki Citizens Assembly.

Head of Peace and Democracy Institute Leyla Yunus told APA that her organization received no grant in 2010-2012. But she did not say how her organization’s activity was funded.

Kur Civil Society chairman Ogtay Gulalıyev told APA that the organization was not registered at the Justice Ministry.

“We can not receive grants as we are not registered,” he said.

Chairperson of Azerbaijan National Committee of Helsinki Citizens’ Assembly Arzu Abdullayeva told APA that their organization received grant in 2012.

“At that time there was no law requiring the organizations receiving grants to report to the Justice Ministry. The draft law was adopted a month ago. Therefore, we did not report to the ministry.”

Report on 2009 posted on the website of the Justice Ministry says that according to article 223.1 of Azerbaijan’s Code of Administrative Offences, legal entities that do not submit for registration the copies of the decisions and contracts on receiving grants to the relevant executive authority within a month are fined.

This is shown in the “Rules on registration of contracts (decisions) on receiving (giving) grants” confirmed under decree #27 issued by Azerbaijan’s President on February 12, 2004.

A number of amendments were made to the grant legislation in 2009. In connection with the grant legislation, amendments were made to articles 223.1.1 and 223.1.2 of the Code of Administrative Offences on December, 2008 (according to the Code of Administrative Offences, the amount of fine is AZN 2000-2500), this amendment came into force in 2009.

Amendments were made to the law on grants on 30.06.2009. One of the important amendments was that “Operations can not be carried out on the unregistered contracts on giving or receiving grants”.

How are international reports made?

After all these analyses logical end is the reports made basing on the grants allocated for NGOs. Actually, this is the decisive moment. International organizations not only allocate grants for NGOs in Azerbaijan, but also regularly release reports on Azerbaijan basing on their reports.

According to the information received by APA basing on the surveys from the international organizations, reports on countries are majorly based on the materials of NGOs, independent experts and media.

UN and its agencies make reports basing on the official information of the governments and relevant government agencies.

Head of the European Union Delegation to APA Roland Kobia says that the European Union takes into consideration two sources while making annual reports on the progress within the European Neighbourhood Policy.

“First, this is the information given by the government. Materials of the representatives of our delegation are also taken into consideration. We hold meetings with officials, representatives of civil society, collect information from media and make our reports basing on them.”

The reports of the Council of Europe Monitoring Committee co-rapporteurs are prepared basing on the information of the government, international human rights activists. For example, materials of the Human Rights Watch, Human Rights House Foundation, Amnesty International were used in the recent report on Azerbaijan released during the PACE winter session.

Freedom House makes reports with the participation of the organization’s experts and advisers from the concrete country. For example, journalist Khadija Ismayilova and independent researcher Vefa Fetizadeh are the authors of Azerbaijan-related part of the Freedom of the NET 2012. The sources of the report are materials of foreign correspondents, outcomes of the visits of organization’s representatives, views of persons paying visits on the international level, experts on the region, government materials, news articles of local and foreign media.

Amnesty International says it uses wider range of sources. The reports are based on the information given by prisoners, whose rights are violated, by lawyers, journalists, refugees, diplomats, representatives of religious organizations and human rights organizations. The organization said it had cooperated with Eynulla Fatullayev till January 22, 2013.

Organizations like Human Rights Watch, Human Rights House Foundation also get information from local NGOs and media.

And finally ...

So, the scheme is as follows: International donor organizations allocate funds to their local offices. These funds are given by the local offices to the local NGOs as grant projects. Reports are made basing on the projects. Reports are sent to the donor, the donor, which is a secondary organization, sends to the main organization the report based on that report. Basing on the main organization’s report, the US Department of State, Council of Europe, UN, OSCE and others release annual reports on the situation in various spheres.

In a number of cases, in order to cite not only to the materials of NGOs, heads of these organizations or project coordinators also release the opinions of “independent experts”.

Paying attention to the list and political proximity of the Azerbaijani NGO representatives funded by these organizations, of course, there will be no need to think much about the causes why minus prevails over plus in the reports…

One issue should be underlined that the study has been prepared basing on the official materials of the Justice Ministry. The questions whether most of these grants were spent for the intended purpose, whether extra funds were allocated after the grant contract was signed still remain open. Another open question is that the websites of the donor organizations lack section “projects and grants”, or this section is empty. The situation is the same regarding the majority of NGOs. NGOs say the donor organizations do not demand them to release open reports on their websites…

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