FPC Report

Recommendations for a Code of Conduct for NPOs

18 September 2005

The Funding for Peace Coalition (FPC) welcomes the initiative of the EU to strengthen the credibility of NPOs in their valuable work around the world. We are pleased to submit respectfully our comments to the Commission on the published Draft Recommendations to Member States regarding a Code of Conduct for Non-profit Organisations to Promote Transparency and Accountability Best Practices.


The FPC welcomes and supports the Commission's initiative and draft document, while noting that there are certain key elements which require significant strengthening; in particular:

  • The need to combat hatred aimed at inciting terror and violence.
  • The need for NPOs to sign a declaration and maintain an agreed set of standards.
  • The need to recognize violence and declare it as such openly.
  • Sanctions against NPOs and officials who deliberately flout the rules.


For the past 2 years, the FPC has concentrated its efforts in highlighting the need to ensure that monies assigned to Palestinians, particularly those designated by various committees within the EU, reach the targeted populations. Our reports and analysis, highlighting ongoing European funding of corruption and violence, can be found on our website at

In view of the current draft proposals, the FPC wishes to stress the press statement of OLAF in March 2005:

....risks of misuse of the PA budget and other resources cannot yet be excluded. This is primarily due to the fact that the internal and external audit capacity in the PA remains underdeveloped.

OLAF made specific recommendations, which, once generalised, should appropriately form the backbone of any work designed to prevent European direct or indirect support of NPOs being diverted towards violence or corruption. These include:

a) Agreements must contain safeguard and monitoring provisions, closely co-ordinated across the international community.
b) A single system of auditing and monitoring shared by all members and duly implemented.
c) Support and controls for internal auditing and on-going monitoring processes.
) Funds circulating outside statutory budgets must also be subject to accountability.
e) Practices, which are considered supportive of terrorism, must be halted. These include paying the salaries of those convicted for violence and other contributions liable to be misunderstood.

The FPC will be pleased to provide further clarification to this submission. Reports and analyses at its website offer significant insights and details relating to the information contained in this submission.

FPC's Recommendations

Combating hatred aimed at inciting violence

The same checks and balances that exist in any democratic and pluralistic central government should also apply to NPOs. This goes beyond the demand for proper accounting and legal procedures.

NPOs should not be allowed to negate the policies of the EU nor encourage hatred of peoples or countries - especially those with friendly ties to the EU. More importantly, NPOs must be accountable for their support, whether financial or otherwise, of downstream individuals, organisations and NPOs.

A clear example is the role of Christian Aid (CA). CA, along with other NPOs such as Oxfam in Holland and Ireland Aid, has provided financial assistance for The Palestinian Centre for Human Rights (PCHR). PCHR has released press statements supporting "military activities" activities against civilians, claiming they are acceptable forms of Palestinian "resistance".

Thus, NPOs in receipt of direct funding from the EU and its member states and who enjoy tax deductible status for their private donors, are currently allowed to support indirectly groups and organisations that promote overseas terrorism. This situation must be seen as unacceptable. It can pose a direct risk of importing that same terrorism to Continental Europe.

Similarly, persons receiving salaries supported by European governmental or NPO budgets must not be allowed to promote terrorism. There are numerous examples in the Palestinian territories, including from mosques whose imams are paid from EU supported Palestinian Authority budgets. They have promoted terrorism aimed at Israel, the USA and various European countries. A single example might be Yusuf Abu Sneina, Imam of the Al-Aqsa mosque. In early September 2005, he called on listeners to his sermon, including the Chairman of the PA, to fight the 'terrorism' of America.

UNRWA, the largest NGO in the region, has a history of allowing its schools, teachers colleges and summer day camps to be used as a platform for preaching intolerance and racism aimed at encouraging terrorism - sometimes including lessons in the specific military skills required. The camps are frequently named after suicide bombers such as Wafa Idris, who blew herself up on January 27, 2002 in Jerusalem.

The Commission is the second largest contributor to the UNRWA general fund. As donor states increase pressure, this tendency to glorify terror has reduced. It is our contention that this elevation of terror will not be totally eliminated until it becomes an uncompromising pre-requisite for receipt of European funding. In short, Europe's policies appear to have had some effect. They must now be applied without reservation.

There is an additional area, where Europe's actions have brought improvement, but have not been pressed to the logical conclusion: the Palestinian school curriculum. European funding (some directed via NPOs) and pressure brought about significant revision of Palestinian textbooks. Much of the blatant anti-Semitism was removed. As documented in the 'textbooks' section of our site, insufficient oversight and determination meant that glorification and encouragement of terrorism was mitigated, but far from eradicated. For example, a Palestinian grade 10 textbook contains references to the anti-Semitic forgery 'the Protocols of the Elders of Zion', detailing it as a genuine document to be believed.

Given this background, it is significant that there is barely a reference in the draft proposals to the promotion of hatred, directly or indirectly, via the spoken or written word. This is a glaring omission.

Those who promote or succour terror anywhere in the world should be placed 'beyond the pale' of European civilised society.

Therefore, the FPC recommends that the EU adopts a policy requiring NPOs sign a warranty, which decries support of hatred and violence. The NPOs should deliver assurances that their funds, efforts and logistical support will not be used in this direction.

Recognising violence for what it is

In recent years, European politicians and civil servants have tried to hide behind a legal veil of ignorance. They have often argued that if an act of terror or incitement cannot "stand up in court", it can be ignored. Such a position enables whole dossiers of evidence to be dismissed.

In its report of August 2004, the FPC detailed over twenty individuals, who had taken part in acts of violence against civilians. All these people received salaries via the Palestinian Authority or were connected to various parts of the UNRWA network in the Palestinian territories. The EU and her member states have been active contributors over the past decade to both of these bodies, both directly and indirectly.

The new laws cannot allow officials to feign ignorance of such actions, allowing for a continuance of contributions while innocents suffer.

Standards, Sanctions and Penalties

It is noted that the proposed draft does not include active prosecution of its provisions. Any guideline must contain clear definitions and guidelines, so that there can be no doubt. Zero tolerance must be the standard. Standards must be fully and properly enforced to the full extent of the law.

NPOs failing to comply should not be eligible for registration. Tax exempt status should be withdrawn. Governmental grants should be unavailable, etc.

Further, specific sanctions should be applied against officers of NPOs in breach of the regulations or who hide important information from auditors. Similarly, officers of NPOs must be personally responsible for ensuring that all its funds are fully accounted for, and can be demonstrated to fall within the guidelines.

In accordance with the regulations and procedures of the EC, similar sanctions must be applied to civil servants or politicians, who may mislead their colleagues and constituencies and these matters.

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