Legal landscapes at both the national and local levels are crucial to create an enabling environment for community groups. Having rules and regulations will acknowledge local organizations for specifying and ensuring a level playing field with different types of enterprise, who can support the groups. Lack of a specific legal framework or a weak legal framework for Community Based Organizations (CBOs) may impede their development in a given territory. Bhutan does not have any legal framework to govern CBOs. A CBO is an organisation operating at a local level to promote the wellbeing of the members of the community.
The legal framework would not only monitor cooperative legislation in the country, but also provide a constructive assessment and recommendations to improve the recognition and support given to cooperatives. For business to thrive, it needs to be underpinned by a strong legal framework with certain feasible parameters.
However, business law for local organization is one of those elements that are taken for granted until something goes wrong. Local business too contributes towards the economic growth and it is part of the fabric of a successful economy.
Rooted with Buddhist values such as the non-Government Organizations or volunteerism, Bhutanese society is depended very much on helping each other. The traditional belief systems and community practices emphasize is placed on the principles of national self-reliance, community participation, and social cohesion.
Again, with development, Civil Society Organizations, cooperatives and CBOs have increased in Bhutan for different purpose. CBOs play vital role in community development and contributes towards achieving national goal of self-reliant and Sustainable Development Goals.
However, CBOs in Bhutan are discouraged to operate with no laws to govern themselves in accordance with the Act. With fear of possible legal complications in future, some CBOs had become defunct.
One case is Chuzagang Saving Group (SSG). It is a CBO under Chuzagang gewog, Sarpang. It is sort of local cooperative set up in 2004. This CBO focused on financial elements in the community, like lending and savings. The sole objective of establishing this group was to improve the livelihood of community through scaling to commercial farming. It was operated from homes with no appropriate office.
During the resettlement in the southern foothills of Bhutan, starting a new life after migration was hard. People from different dzongkhags with different culture had to resettle together. The land were not green orchards and fields like today. The wilderness of area gave tough life with no proper roads and electricity. Gradually, the livelihood of people improved.
The local administration managed to facilitate the welfare of people. Agriculture extension officers for better farming trained the people of nine chiwogs of Chuzagang. People were encouraged to form agriculture cooperative to benefit villagers by the gewog and agriculture officials. Inspired and understanding the scope of the mutual cooperative, from the 50 villagers attended the training, 13 members came to form SSG initially. There were six male and five female members. The members deposited Nu 50 as monthly member fees for three months and later it raised to Nu 100 to broaden the scope. After few years, the monthly deposit ceiling was raised to Nu 100.
It was reviewed in 2009 and the members sought for registration from the concern agency to operate with legal rights. However, registration was not granted.
After the setup, the group provided loans to the villagers with the highest ceiling of Nu 1,000 per an individual. The interest rate was at par with the Bhutan Development Bank Limited, (BDBL).
The chairperson of CSG, Yangzom said that the status of the CSG is in “indescribable stage.” She stated that the group could not continue its operation due to certification failure adding it also lacks educated human resource. “If there were strong and educated members, the group would have succeeded,” she said.
The chairperson pointed out that there are no proper records and no proper management system nor “the relevant agencies supported the group.”
There were misunderstanding among the members and about Nu 0.6 million are defalcated according to the information from non-members. Few years back, the members shared about Nu 15,000 each and there is still controversy on sharing the remaining amount.
Few people have borrowed the money from the group and still did not pay back.
In initial state of resettlement, the secretary of the group, Nima said that the loans had benefited the villagers. “There were no crops nor fruits grown at the time of new settlement. Loans from CSG benefited the members and others as well to buy stationeries and dresses, and pay school fees of school going children,” he added.
To benefit the community in formal way, the group approached the gewog office to obtain the licence. The group had Standard Operating Procedures (SOPs). For the time being, CSG was instructed to operate with internal service rule until the legal permission is granted according to the secretary. “It never happened,” he added.
The former chairperson of the group, Ap Sangay said that upon members lacking literacy, the saving group did not get any appropriate support. He too pointed out that the group lacked coordination and members were discouraged to work.
Another group member Nima Dorji said that after change of chairperson, the monthly collections were discontinued. “The clients did not pay the loan even after the maturity date,” he said.
Later the group with the assistance from the ministry of agriculture and forests procured the rice and maize pounding machines. The members hired the operator and provided the service to the villagers at minimal rate. However, with the dwindling financial state, the group could not pay salary to the operators. The milling machines set up for agriculture improvement infrastructure are kept idle since the start of pandemic at machinery house-Shawapong village.
Meanwhile, the agriculture extension officer of Chuzagang gewog, Tashi Dawa said that gewog officials, particularly from the agriculture sector pushed and provided necessary help. He said that the group was asked to show records and allow auditing.
However, the agriculture extension officer pointed out that no one was found accountable and responsible. “The flaw in the management must had led to failure of functioning of the CSG,” he added.
Chuzagang Gup Karma Tshering said that the group is in the dilemma status. However, he said that being newly elected Local Governance (LG) leader, he does not have much understanding about the group and need to study further should there be, any possible help can be extended by the gewog administration.
Nimaling-Shawapong Tshogpa Nima Dorji said that the present LG leaders did not get any written or verbal complaint from any of the CSG members.
Some members from the group had filed case against the management on fund misuse in the gewog office. However, the gewog dismissed the case after finding inadmissible.
Bhutan do not have specific laws for CBO and it does not empower CBOs to function without fear for possible litigations. Though Royal Monetary Authority approved the private money lending rules and regulation in 2017 which restricts private money to Nu 500,000 per person, there is need for separate rules for CBOs for a local level in small amount. The need is felt by the CBOs.
The article has been published with support from Bhutan Media Foundation (BMF)
Sangay Rabten from Thimphu