China Development Brief 2013 (Winter)
UPDATE This article originally appeared in the China Development 2013 (Winter) quarterly print edition. Since it was written there have been a number of developments in the drafting of the law. CDB has published news summaries on them here, here, and here. Currently the draft is set to be reviewed by the end of this year by the NPC. Furthermore, as of Summer 2015 a law that specifically covers overseas NGOs in China is in the advanced stages of being drafted (see here for the translated draft and analysis). At the time this article was written it was thought that issues pertaining to the administration of overseas NGOs could be included within the charity law.
According to a Legal Daily (法制日报) report on 10th November 2013, a draft for the charity law was included as one of the “first class projects” of the Standing Committee of the 12th National People’s Congress’s (NPC) legislative plan. According to the plan, the NPC Internal and Judicial Affairs Committee (全国人大内务司法委员会) would lead the drawing up of the draft. Before the draft is submitted to the Standing Committee of the NPC for examination, they will solicit advice from all sides and carry out extensive research.
Since news about a “charity law” was first released in 2005, there have been announcements made about its introduction almost every year. However, nine years have passed and the Chinese charity law is still stuck in the “draft” stage. How has it been 9 years with no result? When will the charity law become official?
On 21st November 2005, at Zhongmin Plaza close to Beijing’s southwest 2nd ring-road, the China Charity Conference “charity legislation and government policy” forum was underway. The Ministry of Civil Affairs legal Office Director at that time, Wang Laizhu, handed out a stack of printed material, and introduced to about a hundred participants the “concept of the charity promotion legislation”. Although the stack of paper he handed out contained around 50 or 60 pages, he was very cautious, and only disclosed the details about the framework. He refused to disclose the finer details to the media.
Director Wang was one of the people drafting the charity law. Two months before the Conference, a draft for the “charitable activity promotion law” (慈善事业促进法) legislative proposal (later changed to “charitable activity law” (慈善事业法), “charity law” (慈善法) for short) was officially put forward to the NPC and the Legislative Affairs Office of the State Council by the Ministry of Civil Affairs. Even at the start of the China Charity Conference, the future prospects of the legislative application were not clear. Director Wang revealed that not long ago he and a representative of the NPC General Office talked about a “charitable activity promotion law”. However, the representative said it was the first he had ever heard about it. In addition, there was some objection to the proposed law from within the Ministry of Civil Affairs (MOCA) because there were more important laws that were still to be drafted such as the “public assistance act” (社会救助法) and so on, so the charity law was ranked low on the list of MOCA priorities.
Along with Director Wang, Xu Anbiao, then Chairman of the National Law Office of the NPC law committee participated in this forum. Although he was not present at the forum venue, he submitted a thesis on “the issues about public welfare legislation”. The paper revealed that calls for drafting legislation for promoting public welfare and charity were constantly increasing. During the 3rd session of the NPC meeting in 2005, 222 NPC deputies put forward 7 proposals, some called for the drafting of public fundraising laws (社会募捐法) while others called for the drafting of charity promotion laws. In addition, many representatives put forward plenty of ideas and suggestions about public welfare legislation. Scholars and experts such as Wang Ming, Zhou Junye, Wu Yujing, Chen Jinluo, Deng Guosheng, and Huang Haoming discussed this topic in a lively manner, a very different one to that of the cautious and subdued officials. Some of the more optimistic experts even said they thought the charity law would be officially launched in two years.
After the China Charity Conference, “China’s charity law should be drawn up as soon as possible” became the consensus from within the industry. Since then, charity legislation has made its way into the public domain and the Ministry of Civil Affairs also quickly organized several charity law draft meetings.
In 2006, after the New Year’s holiday had just ended, the State Council published a second document, the “Charity Promotion Law (Ministry of Civil Affairs Department draft)”. This appeared as part of the “2006 State Council Legislative Plan’s” secondary list1. Although it did not make it onto the primary list2, but for China’s charity industry this was already progress that could be celebrated.
Shelving the draft
In January 2007, the Ministry of Civil Affairs posted on their official website a “2006 Development in Civil Administration Statistical Bulletin” (2006年民政事业发展统计公报) that stated that the “the charity law draft is already finished”. Some scholars optimistically expressed that the charity law could be issued in 2007.
However, then the situation changed. There is no mention of “the charity law” in the “Standing Committee of the NPC’s Legislation and Supervision Plan in 2007” published right after the Bulletin. The NPC is the country’s organ of supreme power, and the legislative procedure is made up of three stages: submission, examination, and voting. The State Council has the right to propose a bill to the NPC (or standing committee), but it cannot make decisions regarding the examination of, and voting on, the bill. Therefore, the lack of mention in the NPC’s 2007 Plan meant that the 10th NPC had effectively left the charity law task to the next NPC.
In August 2007, the Vice Minister of the Ministry of Civil Affairs, Dou Yupei, said at a press conference held by the National News Office that there had been a few amendments made to the charity law draft. However, he was unable to say the specific date it would be released. According to legal procedures, after the charity law has been reviewed by the Ministry of Civil Affairs, it still had to be submitted to the State Council for further analysis, and then the State Council had to present it once again to the NPC for a final review.
The earthquake in Wenchuan in 2008 and other natural disasters caused China to advance into a “new era of charity”. At that time all aspects of charity were met with an enthusiastic response, and charity legislation received renewed attention. In October 2008 – five months after the Wenchuan earthquake – the Standing Committee of the 11th NPC published its legislative plan and the charity law was part of its primary legislative projects (altogether there were 49). As the authority that deals with the submission of requests or drafting is under the State Council, theoretically this meant that the law would now be submitted to the NPC before it changed term in 2013.
In 2009, in the Legislation Plan of the Standing Committee of the NPC, “charity law” was listed as one of seven preparatory projects, which means that the charity law can enter into the Standing Committee of the NPC’s examination if “the parties involved pay close attention to the research and drafting work”. However, in that year’s State Council legislation plan the charity law draft remained stuck in “the legislation items that need to pay close attention to research and be submitted on time” category.
According to media reports, in 2010 the charity law draft had already been sent from the Ministry of Civil Affairs to the State Council. On the 29th-30th of July, the State Council Legislative Affairs Office, the Ministry of Civil Affairs and others, held a seminar in Suzhou on Sino-British charity legislation. The Director of the State Council Legislation Office presented information on the draft that stated that at that time the draft contained 9 chapters and 59 articles. According to the presentation the content mainly covered the following aspects: charity organizations, charitable donations, charitable volunteering, charitable trusts, and the management, as well as support and encouragement, of overseas charity organizations’ activities in China. The Legislative Affairs Office also revealed that the drafting of the law they would rectify long-standing issues regarding the registration of charity organizations.
This seminar gave the charity world high hopes for the charity law. However, in the legislation plan of the Standing Committee of the NPC and the State Council, the status of the law remained unchanged. In 2011, the status of the charity law in the State Council Legislation Plan then got downgraded to the third level, along with the revisions to the three main regulations related to charity and NGO work (the Regulations on Registration and Administration of Social Associations; the Interim Regulations on Registration and Administration of Private Non-enterprise Units; and the Regulations on Administration of Foundations). This downgrading implied that there “needed to be a greater focus on research”. The drafting of China’s charity law seemed to be stuck in a dilemma.
The torturously prolonged drafting of the charity law has come about because of a diversity of opinions about the role of charity in today’s China.
In 1991 the “Chinese Encyclopedia” defined the term “charity” as: “through sympathy, pity or religious belief, send money or material goods to those in need, or provide other practical aid to social programs […] with a heavy religious and superstitious hue, its aim is to do good things for good press […] for a small number of people it is only a kind of temporary passive relief […] the social consequences are still disputed.” According to Chinese Academy of Social Sciences (CASS) Professor Yang Tuan, who has always strongly supported the charity law, at that time any news reports that were about “charity” still had to gain approval from superiors.
In 1998, the Yangtze, Nen and Songhua river basins all experienced extensive flooding. People from all over China made donations, and in that year the amount of donations doubled and “charity” made a comeback. However, there are still huge differences in the understanding and position of charity in China and it is said that the primary reason for the Chinese charity law draft being shelved and “in need of being actively focused on” was due to the difficulty reaching consensus on key issues.
The Department Head of the State Council Office of Legislative Affairs, Zhu Weiguo, has promoted the charity law. He once mentioned that the many aspects of the charity law such as legislative purpose, policy orientation, and management systems “have not yet matured to the stage to form a consensus and we still haven’t formed a clear standpoint and methodology for certain key issues.” Professor Yang, Deng Guosheng and other scholars who had previously participated in the drawing up of the charity law draft also revealed that the reason the charity law was taking so long to be implemented was because there were dissenting opinions on some fundamental issues.
The first big issue is about how charity is defined. The academic community has long debated the definition of “public welfare” (公益) and “charity” (慈善) but still haven’t reached an authoritative conclusion. For this reason, the top priority of the charity law is to define “charity” and categorize “charity organizations”. The Ministry of Civil Affairs has been dealing with different draft versions of the law which have varying definitions of the term “charity”. The initial draft proposed by the Ministry of Civil Affairs categorized public welfare donation recipients received under “the public welfare donations law” as “charity”. However, other departments disagreed. The opposing view thought, the resolution of the 4th plenum of the 16th CPC Central Committee would be to integrate “the development of charity” into the social security system, thus, charity should be used as a supplement for social security, and be incorporated into the social security system. Afterwards, the Ministry of Civil Affairs modified the draft, highlighting content such as: “providing for disaster relief, the poor, elderly and help for orphans”, and topics within the “broad sense of charity” such as culture, education, scientific research, environmental protection and so on were not mentioned. However, this once again ignited debate amongst scholars and officials.
The second issue is how to determine the relationship between the various charitable bodies. Charity includes regulatory departments, charity organizations, volunteers, donors, beneficiaries and many other participants. Balancing out the interests of all these actors represents a big challenge for the charity law. For example, is charity for the benefit of the people or the government? Are government departments eligible to raise money? Although the “China Charity Development Guidelines” (中国慈善事业发展指导纲要) that came our between the 11th 5 Year Plan and the 12th 5 Year Plan explicitly stated that “government supervised, non-government operated, industry self-disciplined, and public monitored are principles of charity management operations”, the power, responsibility and interests of the government and charitable organizations has not been at all clear in the last few years. An example of this are the disputes about donations that occurred after the Yushu earthquake.
A third big issue is the registration system of charitable organizations. The existing “dual management” system has been criticized for many years and both the charity industry and scholars hope to get rid of the “professional supervisory units”. However the government is less willing to do so.
Finally, how overseas organizations are managed is also a big challenge. Six or seven years ago, “the color revolution” theory was much discussed, and government departments were unable to decide on the right thing to do about overseas organizations in China. In 2010, Yunnan province implemented “the interim regulations on standardizing the overseas NGOs’ activities”(规范境外非政府组织活动暂行规定); through the use of a “filing system” a few questions were solved. However, whether local experience can rise to become national standards remains inconclusive.
Breaking the ice
There has been local innovation of the problematic dual registration system. By the end of 2006, the Shenzhen NGO Administration Bureau (深圳民间组织管理局) had implemented the direct registration of industry institutions, the first of its kind in China. Two years later, the scope of registration had been expanded; the Shenzhen Civil Affairs Bureau became both the registration department and professional supervisory unit for social organizations in the categories of “business and economic”, “social welfare”, and “public welfare charities”.
In 2009, the now frustrated Ministry of Civil Affairs changed their ideas for implementing national-level legislation, to push for reform “from the bottom up”. One measure was to support Shenzhen in its “experiment”. MOCA signed an “agreement of the comprehensive reform to promote civil administration” that gave Shenzhen unprecedented policy space, including in the area of implementing a direct registration system for social organizations. In the following few years, Guangdong, Beijing, Tianjin, Sichuan, Jiangsu and other places all tried similar experiments. However, in the absence of the national-level legislation, the dynamics and pace of reform in these places was slow and cautious.
On 23rd December 2011, the Minister of the Ministry of Civil Affairs, Li Liguo, expressed that he wanted to boost the reform and innovation of social organizations’ management system at the National Civil Administration Conference. One specific measure was to promote the experience in Guangdong, pushing public welfare charities, social welfare, social services and other domains of social organizations to directly register at the Civil Affairs Department, without the requirement of finding a professional supervisory unit. After Li aired his opinions, ten provinces, autonomous regions and municipalities including Shanghai and Hebei responded to “the new deal on social organization registration” throughout 2012. By the end of 2012, 19 provinces were piloting the direct registration of social organizations.
Along with the launching of these local experiments, the central government also signalled that they were open to the end of the duel-management system. During the NPC and Chinese Political Consultative Conference (CPCC) in 2013, “The Institution Reform and Function Transformation of the State Council Scheme” (国务院机构改革和职能转变方案) proposed the establishment of four kinds of social organizations that may “directly register at the Civil Affairs Department without the consent of a professional supervisory unit”. At the end of March, the General Office of the State Council issued a notice that required amendments to the “Regulations on the Registration and Administration of Social Associations” and other administrative laws and regulations should be completed before the end of December 2013, in order to realize the direct registration of the four kinds of social organizations. This represented a huge breakthrough at the central government level.
Looking to the future
Prior to the convening of the third plenum of the 18th CPC central committee on the 30th October 2013, the Standing Committee of the 12th NPC legislation plan was published. The charity law once again appeared on the list of “first class projects” (47 in total). However, this time there was another change: “the department that submits the drafts for examination or the department that leads the drafts” changed from being the State Council to the Internal and Judicial Affairs Committee of the NPC.
Professor Wang Zhenyao, who has a thorough understanding of China’s legislation rules and methods, was very excited to see this news. Two months before, the China Philanthropy Research Institute had organized a two day seminar on charity legislation, and officials from the NPC Internal and Judicial Affairs Committee were in full attendance. Wang Zhenyao excitedly said to his colleagues about the inclusion of the Law in the NPC legislation plan: “don’t think that this is an insignificant change, from administrative legislation to NPC legislation, this means that the legislation process is more transparent and open with a higher degree of participation from society.”
According to the design of China’s system, the NPC, State Council, Central Military Commission, the Supreme People’s Court, the Supreme People’s Procuratorate, every special committee or delegation of the NPC, and over 30 representatives of the NPC, jointly possess the right to propose a bill to the NPC (or the Standing Committee). In reality, China has always had a policy of “department legislation”(部门立法), where relevant legislative drafts are drafted by the corresponding departments and even corresponding offices, signed by the department heads and then submitted to the legislative office of the State Council for examination or correction. After examination by the State Council it is then submitted to the NPC by the Prime Minister. For the charity law, this lengthy process meant that it had already passed through layer upon layer of administrative departments for examination and approval, and this presented an impassable “administrative legislation” logjam. Consequently, the Chinese Charity Legislation Research Group led by Wang Zhenyao recommended “opening the door on legislation and strengthening social participation”.
According to Wang Zhenyao, with the NPC now taking the lead the drafting of the Law can be optimized. The NPC can detach itself from the interests of administrative departments, mobilize public participation, and express the demands of corresponding interests. A consensus can thus be formed from all participants.
In mid-July 2013, the Minister of the Ministry of Civil Affairs, Li Liguo announced at “the National Civil Affairs Legislation Meeting”, that the priority of the Ministry in legislative affairs of 2013 was to “cooperate” with the NPC and the State Council to draft the “Public Assistance Act” and the “charity law” . Li’s use of the word “cooperation” was a signal that the work to draft the legislation had been transferred from administrative departments to the organ of supreme power. When the legislative plan of the Standing Committee of the 12th NPC’s was released three months later, this subtle but important change was confirmed.
Will the NPC Internal and Judicial Affairs Committee now achieve what others have failed to do? Chinese charitable organizations and Chinese society will just have to wait and see.
this refers to legislative projects that need to be researched without delay and be submitted when the time comes, altogether there were 108 such projects in 2006 ↩
referring to the key legislative projects that they strive to launch within the year, in total there had been 48 projects in this category in 2006 ↩