Stephen Oakley

Statement and Testimony Before the Foreign Affairs Committee on  American Compassion in India: Government Obstacles

delivered 6 December 2016, Washington, D.C.

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[AUTHENTICITY CERTIFIED: Text version below transcribed directly from audio.]

Mr. Oakley: Good Morning Mr. Chairman, Ranking Member Engel...Members of the Foreign Affairs Committee:

My name is Steven Oakley. I'm Compassion Internationalís General Counsel. It's my privilege to speak with you today on the topic of Compassion's specific experience in India, and the reason that Compassion is, really, weeks away from permanently withdrawing its operations in India.

By way of brief background, since 1952 it's been the mission of Compassion to help children living in extreme poverty around the world. And today Compassion is the world's largest child sponsorship NGO with 1.9 million children in 26 countries in Asia, Africa, and Latin America.

Compassion has been in India since 1968, and four five decades now Compassion has worked without incident under the authority of successive Indian governments.

That roughly changed in 2013 when Compassion encountered the first of a series of legal and regulatory attacks. This came about in the form of tax cases [in] which the government assessed over 18 million dollars in corporate income tax on the charitable donations to our locally incorporated South India entity. That was followed by a series of different attacks: Intelligence Bureau Investigations, Enforcement Directorate cases.  You have before you as an exhibit to my brief a copy of the Ministry of Home Affairs order, which is a prior approval order, that prevents Compassion from getting any money into India without the advanced clearance of the ministry, which we have found to be a fiction. Finally both of the FCRAs [Foreign Contribution Regulation Act] of Compassion's locally incorporated entities have been denied.

We have sought legal advice from multiple lawyers, chartered accountants in India. To a person, they have assured us and provided us the advice that our operations are legal and lawful under the laws of India. And to a person, they have suggested that, to the extent the law's being broken in India, it's being broken by the Indian government.

In advancing extremely aggressive and legally unsupported interpretations of existing law, knowing that charities often lack the resources or expertise to challenge these interpretations; and when they do, the challenges will take years in court; in discussions with other faith-based NGOs, and my own reading of the relevant portions of the Indian Constitution, their Tax Act, and their adversary laws -- I have come to the conclusion that Compassion is experiencing an unprecedented, highly coordinated deliberate and systematic attack to drive Compassion out of India.

Anecdotally, Iím hearing similar stories from other faith-based and civil society organizations. The reason, apparently, is the government of India wrongly believes that faith-based organizations are using humanitarian efforts to convert Indians to Christianity. These attacks are occurring under the guise of regulatory compliance. These reasons are a fiction. It is religious discrimination, pure and simple. The behavior of the Indian government towards Compassion and other faith-based NGOs is, in my view, illegal. It is inconsistent with the values of freedom of expression and freedom of religion which the Indian Constitution specifically guarantees.

Now, as a committee, why should you care?

First, as one of the largest NGOs in the world, as the number one importer of foreign NGO currency into India, if Compassion is forced to withdraw, in my view this represents a green light to the Indian government to take the same or similar action against a range of other faith-based and secular NGOs. That's a real risk.

Second, if the rule of law is breaking down in India, as I believe it is, that impacts not only civil society organizations, not only the NGO sector. That presents a real risk to foreign business in India, to United States businesses in India. The rule of law is essential for all corporations, including not-for-profits and for-profits.

Finally, you should care because the Indian government has made no plan, no provision whatsoever, for the 145,000 children that Compassion cares for in India. There is no plan for them when we depart.

To that end, I have three requests. First, we humbly ask that this committee demand that the Indian government immediately rescind the prior approval order, which our counsel tell us was illegally issued and is illegal under their law.

Second, we ask that this committee demand that the Indian government reinstate the FCRAs of both of Compassion's locally incorporated field offices in India that have operated for over a decade, successfully. Our counsel tell us the revocation was illegal.

Third, we ask that you continue to make the fair treatment of NGOs in India a precondition across a spectrum of other issues between the India and United States -- link it to other issues that India cares about. Consequences only have value if they result in changed behavior. So I ask that you send the Indian government a strong message that this matters to the United States. Again, there is no plan for these children if we depart. So we ask you to ask the Indian government to reconsider its decision.

Thank you very much. I'd be happy to take your questions.


  Chairman Royce: We are fairly familiar with the operations of Compassion because they also operate in Indonesia, a country that likewise would be concerned about conversions and activity. And what we have found is that largely this is a myth. They're not involved proactively in doing that. It's a rumor. And so the suggestion, which I think is an easy one to resolve the issue, is that if you have a particular channel partner -- you know, there's 580 channel partners that's involved in that -- all right, you take that off the table. But you allow the rest of the families here in the United States to write those checks to continue to support that effort, and to not only give moral support, but give the opportunity for those younger kids in these families in situations that are so challenged, where they can actually complete their education. I mean it -- it just seems to me that there's the makings here for a compromise in this which keeps the program open.

And maybe I -- maybe I could ask Mr. Oakley on that -- on that question. For going forward, is there -- is there an opportunity to -- to move forward in a way that would guarantee the support for the destitute that rely on the -- on the contributions that come into the country?

Mr. Oakley: Thank You, Mr. Chairman. Currently, no. There -- There is no path that we see, as long as the current MHA [Ministry of Home Affairs] order, the prior clearance order which you all have a copy of, is in place. That order prevents Compassion's funds from being credited to the recipients without the prior approval of the Ministry of Home Affairs. We worked for seven months to obtain that prior approval and we've been unsuccessful.

Chairman Royce:  So, let us say for a minute though that -- that there was a change of heart and a decision to go channel partner by channel partner -- You've got 580 channel partners -- and to just review the channel partners. And those that are not engage in activities -- I -- I mean it seems rather dogmatic to shut down the largest program, whole scale, that offers financial support to this sector in India.

Mr. Oakley: Thank you. We completely agree. And of course, we have submitted over 120 channel partners for review by the Ministry of Home Affairs. To this point, they have not even responded to our requests for that prior clearance for that group. And, in point of fact, some months ago, when we first heard that there were a few -- they described it as a "few black sheep in the flock," we said, "Tell us who those black sheep are and we will within 24 hours separate our partnership with them to alleviate all of your concerns." So that -- that was our offer to them. Subsequently, we agreed to not partner with any channel partner that had not received its NGO before the deadline to -- excuse me, its FCRA before the deadline to receive it. And that, too, did not produce any desired results. Our inability to communicate with MHA directly has been a source of significant frustration.

Chairman Royce: So there's the outline, obviously, for a resolution that would fit within their perspective if the decision could be made to look individually at these channel partners and then release the funds.

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  [Representative Karen Bass: I would also like to know more about Compassion's work.]

Mr. Oakley:  Thank You, Congress[wo]man. Briefly, in terms of the work that we do in India, across the world really, we believe in holistic child development, so we're interested in the physical, mental, emotional, and spiritual needs of a child to break the cycle of poverty. I will tell you one of the things I find most interesting about this specific case with India. We push approximately 45 million dollars a year in aid just to India. And by the income tax, by their own calculation, the Income Tax Commissioner of India has evaluated our operations at length and determined that nearly 4 percent of that 45 million dollars a year is for moral and spiritual values education. The remaining 96 percent, the overwhelming majority, is for all the types of humanitarian interventions you're used to seeing: provision of nutrition, food, clothing, medicine, school tuition, etc. 

Representative Karen Bass:  And so it's my understanding you work with the children that are designated as undesirable.

Mr. Oakley: Correct. Our population, our criteria for entry into our program, is that you're either a child in poverty, as defined by the World Bank, less than a $1.90 per day; or extreme poverty of less than $1.25 per day. That is the only criteria. There is no condition based upon religion or any other category.

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  Representative Matt Salmon: I just have two questions, and they're, I  think, very similar in nature. Question number one is: Does the Indian government have the capacity to fill the void that has happened with these -- these children, services for these children? Do they have the -- even have the capacity to -- to fill the void? And second, if they do are they doing anything to try to fill that void?

Mr. Oakley: Thank you, Congressman Salmon. The answer's no. Currently, the worldwide population of children in poverty is around 300 million. And unfortunately, one-third of those, over a hundred million of those, are in India alone. So, Compassion is actually just dealing with a very, very small fraction of that 145,000 children that are under our care. There will be no provision for them in the eventuality that we have to exit the country. They will become part of that 100 million who are either entirely underserved, or, under reached.

Representative Matt Salmon:  My experience has been in dealing with humanitarian crises all over the world that the best delivery of services bar none that I've seen anywhere on the globe have been faith-based NGOs and faith-based initiatives and I think it'd be really tragic really tragic if we're not able to get the Indian government to rethink this whole process in the name of the of the children. And I applaud you for your wonderful, wonderful work. And I think it's incumbent on us -- we do have a great relationship, bilateral relationship with India. But even when you have great relationships, even in marriage, you -- when you have a great relationship. I married 37 years have a great relationship and my wife still tells me when I do things wrong and I love her for it. It's a great thing and I think that with even with a great partner like India we should be very, very outspoken about resuming the great work that you're doing in getting those children cared for. So thank you very much.

Mr. Oakley: Thank you for that comment. And I'd just like to reiterate that our desire is overwhelmingly to work with the government of India to resolve this. We've been there for almost 50 years and we'd love to be there for another 50. We believe that the diversity of India, religiously, ethnically, is a strength, not a weakness. They should lean into that, and we will help them as part of helping all of their poor kids.

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Chairman Royce: I think you have about three weeks left before the decision to just have to vacate entirely the...program in India?

Mr. Oakley: Correct, Mr. Chairman. We've -- We've simply run out of funds. We are unable to get funds into the country. We are actually faced with the problem that if we depart we may not have funds to pay the legally obligated gratuity and severance benefits for our employees.  There -- There are 6000 people in India who are employed by Compassion funds through our channel partners. We have no provision for winding up in an orderly fashion if we can't work with the government.

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  Representative Jeff Duncan: Thank you, Mr. Chairman. First off, I want to thank you for your unwavering support for what Compassion International is doing and -- and your focus on the children in India. I was proud when Prime Minister [Narendra] Modi came and spoke to a Joint Session of Congress last year. And I want to use my time to call on him at this point and the Modi government to end the preapproval requirement for Compassion, so that money can flow to where the rubber meets the road and where the needs are -- are most dire.

Mr. Oakley, how many children qualify as living in extreme poverty globally?

Mr. Oakley:  Currently, extreme poverty would be 300 million, as I mentioned earlier, and about a third of that exists just in the nation of India, and a -- a fair bit in the South Asia area as well.

Representative Jeff Duncan:  Right. Does Compassion accept children of all faiths?

Mr. Oakley: Absolutely. There's no criteria of religion for admission to our program; simply economic need.

Representative Jeff Duncan:  So, my understanding is Compassion really focuses on holistic child development programs. Is the spiritual component of Compassion's holistic approach contextualized in any way?

Mr. Oakley:  Thank you. Yeah, absolutely. We operate in 26 countries in -- in all three areas of the world -- Asia, Africa, and Latin America. And we understand, we recognize very well that each of those is very different. We have to contextualize our programming, both for the region that we're in, and it has to be contextualized from an age perspective. So, to the extent that there is a spiritual and values-driven component to our programming, it is age appropriate; it's culturally appropriate. We teach values that transcend all of the world's great religions. The values that we're teaching in India would be values taught by the Hindu faith, by the Muslim faith, Buddhist faith. They would transcend each of those religions.

Representative Jeff Duncan:  So let me ask you this: If Compassion has dig exit India, what are the implications for other faith-based NGOs there?

Mr. Oakley: This is the concern I -- I mentioned at the outset that troubles me greatly because so many NGOs that are operating in India are doing so on budgets that are much smaller than ours. They don't have the network that we have. Certainly access to this forum is -- is not something that is available to them easily. And if Compassion were to exit India I -- I really do feel that we sort of represent the canary in the coal mine -- that if if we go, the Indian government has taken down the largest child sponsorship agency in the world, the larger -- the largest importer of foreign NGO funds into India. They understand at that point there is very little to stop them from taking the same type of action against other NGOs.

And I  appreciated the comments of my colleagues earlier [regarding perceived] anti-national activities and anything the government doesn't agree with. It's not just the faith based NGO community. It's -- It's a number of civil -- civil society organizations that have expressed opinions or have policies and platforms that are in opposition to those of the government, or perhaps simply not as aligned as the government would prefer. That -- That is not -- I hope that is not anti-national activity in India. So the trend here -- I like to look at trends, where -- where is it going? -- the trend is heading in the wrong direction. And this would be a significant bellwether to the Indian government that their effort to stop NGOs that have positions with which they do not agree is working.

Now, the government of India -- we do not intend to tell them what to do or how to do what they do. They are a sovereign nation. But they are also signatories and have ratified the ICCPR [International Covenant on Civil and Political Rights]. And those provisions -- by signing and ratifying that document they've agreed to allow the freedom of expression of religion, freedom of political speech, all of those freedoms. So those are under attack and they fail to recognize that using policy in this fashion, and using regulatory requirements and legal requirements in this fashion, and then not following their own legal requirements in doing so: It's in violation of their own law, and it's in violation of international law.

Representative Jeff Duncan: Right. I don't intend any of my comments to trample on the sovereignty of India, but this is an urging of the United States Congress, to the Modi government, to embrace an organization that's filling a void. To piggyback on what Mr. Salmon said, the Indian government doesn't have the capacity to help the children that Compassion and other NGOs help. And so, let me ask you this: Are there any other preapproval requirements in any other countries that Compassion helps?

Mr. Oakley: No. We currently do not have a preapproval requirement in any of our 26 countries. And I can tell you from personal experience, I've spent the last three years working on this case. This is our hardest country to work in from a political and regulatory perspective.

Representative Jeff Duncan:  I'm about out of time. Let me just ask this final question: Has Compassion broken any laws in India.

Mr. Oakley:  None.

Representative Jeff Duncan:  Wow. Okay.

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  Representative Steve Chabot: Mr. Oakley, is -- is there any action that the Indian government could take to enable Compassion to continue its operations in India?

Mr. Oakley: Yes, there is. Thank you, Congressman. I believe the immediate step that would allow us to restore operations in the next three weeks would be rescinding the MHA's prior approval order of February of 2016; and...that would allow funds to move directly from us to the 500-plus channel partners that are supporting the 145,000 children. Secondarily, we have to be able to pay our -- our field staff on the ground. We have two locally incorporated entities, one in Kolkata, one in Chennai. Presently, both of those charitable entities have had their FCRA is revoked, although they'd been in place for more than a decade. If those were restored, because we think the revocation was in violation of law; certainly, there was no notice, no indication as to why they were revoked -- if those were restored, we can continue to pay our people who are assisting the children under our sponsorship.

Representative Steve Chabot:  Thank you. And if they would take that action, how many children would be affected, and what would that effect beyond on their lives?

Mr. Oakley:  So, presently -- we had 145,000 children under our care as of this summer. Because of our decision to unilaterally, as a gesture of good faith, drop our partnership with any channel partner that had not received its FRCA as of the end of September, we actually departed 15,000 children at that time. So the 130,000 that are remaining are still under our care, although the operations for many of them are suspended at this time. If those operations could be restored quickly, the aid that we give -- the food, the medicine, the school tuition -- is critically important because the school year is just about to commence in February in India, and you have to enroll your kid and you have to pay tuition there. They have uniform requirements, all of these things. All of that could be restored and could be restored quickly. And our commitment to the Indian government would be: We will be as transparent, as open, as cooperative as we can with you. If you are concerned about any project, and whether or not there's anti-national or conversion-type activity going on at that location, tell us. We will work with you. We will eliminate that partner for as long as you have a concern about that partner. That dialogue has been something that has eluded us thus far.

Representative Steve Chabot:  So if the Indian government would take the action that you've recommended and that's the number of children that would be affected, on -- on say a typical day, what -- what are the -- the types of things that that -- that you all do, and what impact on a daily basis would it have on these children's lives?

Mr. Oakley:  Absolutely. In India, that is a fairly high touch country for us, U.S. dollars go a long way. That's a very efficient place for us to operate. So the contact time with a child is quite high. Our programs run five to six days a week. These are child development centers that are attached to the local Christian church. They will receive 1-to-2 meals a day there. They will receive medical treatment if they need it, evaluations as to their their health. They will also receive tutoring across the -- that's age-appropriate related to the studies that they're doing. In some cases we have medical interventions that are much higher needs -- surgeries, those types of things. Those will occur as well on a regular basis, particularly given the size of the population that we have in India. It is our largest country at present.

Representative Steve Chabot: Okay. Thank you. And then, finally, if the Indian government does not take this action that we -- we've discussed here, is there some other organization that's ready to step in and -- and aid those children in the ways that you just described?

Mr. Oakley:  That's a fantastic question. We have wrestled with that at length as part of withdrawing. If we were forced to withdraw, we would very much desire to do so in an orderly fashion that's compliant with the law, as well as make provision for the transfer of some of those children to other NGOs operating in-country -- secular, faith-based -- just provide for them. We've done some preliminary analysis on that point. We think we could transfer potentially 10 to 15,000 children, nowhere near the 130,000 that we currently care for. The primary problem is -- is distance. You have to be able to travel by foot typically to a child development center to receive the services we provide. So we have to find an equivalent somewhere within foot distance and -- and that can be very hard.

Representative Steve Chabot:  So it would be safe to say that if they -- if the government doesn't take that action, there are some children that are going to inevitably fall through the cracks here.

Mr. Oakley:  Not some. It -- It'll be more than 80 percent.

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  Representative Randy Weber: Mr. Oakley you said earlier the ICCPR was ratified by India. What is that?

Mr. Oakley: Apologies for using the acronym. It's the International Covenant on Civil and Political Rights. India is a -- is a country that has ratified it, and those obligations -- countries commit to those obligations understanding that they supersede their local law, that they are committing to those -- that those -- those commitments will then be embedded in international law.

Representative Randy Weber:  When did they sign that?

Mr. Oakley:  i do not have the date, Congressman.

Representative Randy Weber:  How many countries have signed it, do you know?

Mr. Oakley:  I believe the vast majority of the countries of the world. There are perhaps one or two that have either not ratified it or done so with reservations that have gutted it.

Representative Randy Weber:  Any teeth to that agreement? I mean if they don't -- if they don't hold up their end of the bargain or -- or live up to that agreement, what happens?

Mr. Oakley:  Well, functionally, and this is true with most of the international covenants, enforcement is difficult, at least at a legal level. Typically, what happens is there is dialogue around it raising awareness of the violations. It's almost a -- an approach of shaming a country into abiding by their -- their international commitments. The other approach, which we do not desire, is to litigate this issue, which would take more than a decade. And it would really be a behalf -- on behalf of the other NGOs who are remaining in India.

Representative Randy Weber:  Would, in your opinion, would it be worthwhile to have a resolution expressing the sense of Congress that they think India has violated this, and it's going to have a dire effect on their most unfortunate?

Mr. Oakley:  I think a resolution like that would be incredibly helpful from our perspective, but -- but we're not alone. I think this would be incredibly helpful from the perspective of my colleagues here today and the broader civil society community.

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  Representative Reid Ribble: I will guarantee you  before this day is out, I will either have someone tweet at me, or put a Facebook posting, who have seen this. And they're going to ask this question. I would like to give you an opportunity answer it because you're going to be better equipped to answer it. And this question is not based in cynicism. It's just going to be a question they're going to ask. And they're going to ask me:  If the Indian government doesn't want you there, and given that the needs around the world are so great, why would you not just redirect the money to other needs -- to the Bolivians, or the Hondurans, or the Ethiopians? Would you mind answering that question for those folks?

Mr. Oakley:  Absolutely. Thank you for the question, and thanks for your support and your son's support as well. There are several answers to the question. One is simply, as I mentioned earlier, the extraordinary need in India. It has more children living in poverty than any other single country on Earth. So it is a great place for us to work with the poorest of the poor. We could exit and apply those funds elsewhere, and certainly those funds would be well utilized elsewhere. That's not our hope. We've been in India for a very long time. We see that the people of India, the people that we work with, the parents, the people within the poorest communities that we operate in, they want us to stay in India. They are incredibly grateful for the services we provide.

And so I think Compassion -- I'm speaking for myself but, I believe, for my organization as well -- we go where the greatest need is. To the extent we can work in conditions of extreme poverty, that's where you're -- you get the most bang for your buck in terms of outcomes. By working with children you have a much more -- you have a longer runway for those outcomes to be effective. We've had [an] independent third-party, peer-reviewed analysis of our program, which determines that it works. So so by -- by operating in a country like India -- which has over 130,000,000 Muslims; it's got more than 50 million Christians; it's a diverse country religiously, in terms of ethnicities, languages -- this is an extraordinary opportunity to help change the face of India by raising up its poorest children.

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  Representative Dana Rohrabacher:  Is this is part of a bigger picture of -- in this part of the world, maybe Hindu fanaticism?

Mr. Oakley:  Thank you for the question, Congressman. It -- It's difficult for me to get into the mind of another individual, let alone a political party in -- in a country. I can tell you that based upon the timing of our challenges, having operated successfully for -- for 45 years, and then to have a series of incredibly rigorous challenges in a very compressed period of time, in the last three years, in multiple contexts, so across different divisions of the Indian government, and then looking at our own operation and recognizing that nothing has changed -- everything that we are doing is the same; and then personally I have sat with six different law firms and multiple chartered accountants in India and asked this very question: Are we legally compliant? Is there something that we're doing that in fact breaks the law? And to a person, I've heard that, no, you're operating within the law. And -- And again, as I mentioned in my opening comments, to the extent that the law's being broken, it's being broken by the Indian government.

Now, motive is difficult to understand. I will tell you that we operate 26 countries, so I get a fairly high level view of what's happening around the world. And I see the rise of nationalism as being particularly concerning. It is very concerning in the Indian context, in part because of the numbers of minority groups that I mentioned earlier. And, my view, and I believe, the view of our organization is that a test of a democracy is how it treats its poorest, its most vulnerable, its smallest minorities -- not whether or not it is pandering to the desires of the majority. So, from my perspective I think something has changed in the last three years and the trend is going in the wrong direction.

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  Chairman Royce: As we heard today, Compassion is helping Indian children, who are living often less -- on less than a dollar a day, and they are in desperate need. And we are all very worried that their support, support coming from our constituents, will end -- and will end in a matter of three weeks if we do not figure out a resolution to this. And that would be a tragedy. So I think I can speak for the committee and asking that those in India involved in this decision focus on this immediate resolution so that we can then go on to focus on all the other issues that bring our two great democracies together.

1 Audio edited to include only Mr. Oakley's Opening Statement and Selected Testimony to Members of the House Foreign Affairs Committee. Entire Video of Committee Hearing is located here.

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