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China ride for non-government organisations may be rocky

HONG KONG (SE): “The Chinese party-state is tightening the vice on both foreign and domestic non-government organisations (NGO) sending strong new signals of its determination to repress unwelcome foreign influences and activities that spread western values,” Stanley Lubman, from the Berkley School of Law at the University of California, says in an article published by ChinaRealTime on June 16.

Commenting on a draft of the Foreign NGO Management Act, which was released in May and anticipated by personnel from some organisations in China to come into force sometime this month, Lubman says, “(It) doesn’t just threaten to damage Chinese civil society, but also demonstrates a strong willingness to use legislation to assert authoritarian government without procedural justice.”

However, Beijing is presenting the act as providing protection for foreign and local NGOs by offering them an easier path to registration.

“The Chinese government places great importance on the management of foreign NGOs in China,” Gou Shengkun, a state councillor and minister for Public Security, told a gathering of NGO representatives and foreign diplomats in Shanghai on July 25.

In introducing the Foreign NGO Management Act, he said that his government wants to better promote international exchanges and cooperation, and assist foreign NGOs to function affectively in line with the principles of a socialist country and to give them better legal protection.

Gou said that the bottom line purpose of the act is to create a more pragmatic atmosphere within which foreign NGOs can operate.

Elizabeth Leclaire notes in China Briefing (July 29), “Governments across the globe have consistently acknowledged the benefits of non-government organisations in combating environmental and social crises, and China’s leaders have recently pushed for an increase in foreign NGOs through the nation.”

Although foreign NGOs have contributed money and manpower, technology and expertise to China to assist with its development challenges since the 1980s, the responses from Beijing have ranged from tolerance to suspicion.

A frequent complaint made by foreign NGOs in China relates to the initial difficulties of gaining registration, as up until now, the sponsorship of a Government Supervisory Entity had to be secured before any registration could be pursued.

This persistently proved to be exceptionally difficulty, as even when local officials were personally quite enthusiastic about the work of the organisation, they were often fearful that someone higher up would disagree with their decision, which would cause trouble for them, especially where foreign personnel may have contact with Chinese nationals.

Consequently, the end result was often a refusal, leaving the organisations in a quandary.

The new act has dispensed with this condition, which Guo says leaves the NGO with a lot more freedom.

However, Leclaire notes, “The law also includes several complicated stipulations that a foreign NGO must carefully abide by so as to not expose itself to legal liability.”

Lubman believes that this is the sticking point, as they may be charged with and punished for offences such as subverting state power, destroying ethnic harmony, spreading rumours and other things that endanger state security, or the national or public interest.

The scope of activity, while broad, is strictly limited to education, health, charity, environmental protection, culture, science and technology, sport and the economy.

But the nature of an activity is not defined or described, and approval for each and every activity must be sought from the appropriate Professional Supervisory Unit. The draft also lacks guidelines of which unit is appropriate.

Finally, approval must be sought from the Public Security Bureau, which can issue Registration Certificates valid for five years.

While Beijing is promising free access to a flow of what it calls legitimate funds from abroad, the term is not defined and, in the same way as the fields of operation, leaves them open to interpretation by local officials.

However, while the act says it is legitimate for foreign NGOs to use interest earned on local bank accounts, accepting local donations is strictly prohibited.

Another added condition is that the NGO must have already existed for two years and prove that it can carry legal liability, which basically means it must be capable of paying compensation for what may be considered a breach of contract.

Leclaire says that even a fine for a minor offence could be as much as 200,000 yuan ($250,000).

An alternative way of registering is through a Temporary Permit, but this method requires a Chinese sponsor. The legal firm, Pillsbury Winthrop Shaw Pittman, says in its Client Alert on June 18, “It appears from the draft law that obtaining a Temporary Permit will not be easy.”

As with legislation covering the practice of religion, these notions are not clearly defined or described, which gives police extremely broad powers to search premises and confiscate documents or detain people without a warrant.

“The scope of the law’s coverage appears limitless,” Lubman says.

However, it is not only foreign NGOs that are coming under the spotlight, but also domestic ones, of which there are about 500,000 registered and 1.5 million unregistered.

A new regulation will require them to establish Party Organised Groups to better guide their development, which previously was allowed, but now will become compulsory.

As Zhang Xixian, from the Central Party School, told the People’s Daily, “They are better focussed on leading the organisation in following core values of the Communist Party.”

Lubman quotes Zhang Taisu, from the Law Faculty of Duke University, as saying in ChinaFile that it would be optimistic to think that repression is not going to worsen.

“Now not only are human rights being targeted, but a wide range of other organisations hoping to integrate needed social services into Chinese society could be affected,” Lubman explains.

Leclaire says that technically the act encourages foreign NGOs to establish in China, but the numerous regulations may discourage them.

What will happen with local Church- and faith-based charities that have registered as NGOs is unclear, but some foreign faith-based organisations that have previously tried to register say they may have to think about it again.

In order to avoid some of these complications, one option for many organisations is to register as a for profit business either inside or outside China, or operate without any registration at all—a dicey option.


Pillsbury Winthrop Shaw Pittman suggests that foreign NGOs intending to operate in China should consider how to enhance their relationship with existing partners in China and work to establish contact with more partners, rather than worrying about how the Public Security Bureau will enforce the law.