This case study supports and illustrates the theoretic factsheet "Legal forms for social enterprises" with practical insights.
Legal structures in Nepal
ECCA, a Nepal-registered NGO active in WASH (Water, Sanitation and Hygiene) has been convinced of chlorine as efficient and affordable solution for water treatment in Nepal. Based on its conviction and aim to reach the BoP with a sustainable but affordable solution, WATASOL a bottled chlorine solution (see picture below), has been introduced in 2008 to the market in the Kathmandu valley.
Today WATASOL is produced with Antenna Foundation's WATA™ technology in ECCA’s lab at its headquarters in Kathmandu. Within the project region stabilized chlorine is sold through students (compare factsheet on social marketing for more information) and through a distributor network in pharmacies.The NGO initiative had though to rethink its production and sales strategy after initial success: In Nepal entities registered as NGOs are restricted from selling products and making profits out of it, even if the profit is used to cover certain costs of social marketing and outreach activities. ECCA had to reflect what solution is most feasible in order to continue its market based initiative. The NGO board decided to establish its for-profit arm Future Now Pvt. Ltd in order to continue the promising approach. Today the limited company markets and distributes the chlorine flasks commercially (as well as other products such as water filters, clean cooking stoves and solar lamps). The profit made is then used to cover some project costs and reinvest it in further NGO activities.
- Starting a market based approach as part of an NGO initiative is likely during its blueprint. Nevertheless is it crucial to reconsider the legal form of the initiative when a certain level of scale has been achieved not to interfere with a countries legal system, as well as to avoid problems of reputation.