The Proclamation for the Registration and Regulation of Charities and Societies was passed by the government-dominated 547-seat parliament with 327 members in favour and 79 against.
"The non-governmental organisations [law] will redefine their areas of operation," Berahnu Adelo, an official in the Prime Minster's office, said in Addis Ababa. "Those that are working more on development will continue with us."
Meles Tilahun, a whip in parliament, told IRIN in December: "The law is needed to create a conducive environment for NGOs and CSOs and provide a separate legal framework for them. It does not mean to shut them down."
The bill was passed on 6 January during an ordinary session of the House despite strong objections by opposition politicians who are a minority. Mesfin Nemera of the Oromo Federalist Democratic Movement party walked out.
"I simply do not have [the] language to express what this law is [about]," Beyene Petros, chairman of the United Democratic Forces party, told IRIN. "It is a scheme to stifle societal activity and voluntary initiatives which would assist both political and economic progress in this country."
Critics argue that the new rules, especially on foreign funding of local NGOs, would hurt human rights groups critical of the government and could disrupt aid operations by such groups.
The government, however, says charities have been used by political activists who are working on "other issues", not "catastrophes that required aid and assistance", according to a September 2008 statement.
Eshetu Bekele, head of the National Task Force on Enabling the Environment of Civil Society Organizations in Ethiopia, said the new law could restrict funding and the scope of charities’ activities.
"There are organisations that are very fragile in their capacity and organisational structure," he told IRIN in Addis Ababa. "Those might close down."
Former UN High Commissioner for Human Rights, Mary Robinson, told IRIN: "I am very concerned about this legislation. It is regrettable to have legislation which might close the enabling space for civil society because it is actually part of the development of a country."
The law establishes an oversight agency, rules and supervision for the establishment of trusts and endowments, societies and charities. Rules governing fund-raising, membership and governance are detailed.
It also sets tough penalties and powers to investigate and oversee charities, and restricts activity in human and democratic rights, gender or ethnic equality, conflict resolution, the strengthening of judicial practices or law enforcement.
Only Ethiopian charities or societies with no more than 10 percent of their spending coming from "foreign sources" would be able to work in those areas.
The law has been criticised by Human Rights Watch, Amnesty International, the development committee of the European Parliament, the civil society lobby group CIVICUS and the US government.
This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions