Changes Anticipated in the new FNGO law

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As the Standing Committee of the National People’s Congress begins what is likely its final deliberation of China’s Foreign NGO Law (FNGO LAW), Xinhua is already reporting several major changes from the previously released draft of the bill. The Law– which regulates the presence and activities in mainland China of non-governmental, non-profit organizations established overseas (including Taiwan, Hong Kong, and Macao)– has been closely watched by the international community. It is feared that the law’s vague language, burdensome registration requirements, and restrictions on activities would have a chilling effect on beneficial people-to-people exchanges. The law has been widely criticized as overemphasizing national security concerns of having foreign groups working within China, while ignoring the contributions such groups have made. Xinhua reports that efforts have been made to also facilitate the legitimate work of friendly NGOs.

Below is a list of several changes made to the draft law as described by Xinhua, and then some concluding observations.

  1. Change in Scope of “Foreign NGO”

Among the announced revisions, there has been some degree of clarification on the scope of the law. The previous version of the law defined ‘foreign NGO’ as including any “not-for-profit, non-governmental social organizations formed outside mainland China.” According to Xinhua’s new article, the definition has been modified to mean any “not-for-profit, non-governmental social organizations such as foundations, social groups, or think tanks, that are lawfully established outside mainland China. [境外合法成立的基金会、社会团体、智库机构等非营利、非政府的社会组织]. Moreover, the article says that an additional section of the law expressly states that : “ Exchanges and collaboration between foreign schools, hospitals, natural science and engineering science research establishments or academic organizations” and the domestic organizations within these same categories, is to be handled “according to the relevant provisions of national law. ”

While the Xinhua article presents this as a reduction of the scope of covered foreign NGOs, the language they use isn’t quite an express exclusion. The definition of foreign NGO now includes some vague exemplars, but is left unrestricted to those groups by the inclusion of a catch all ‘such as’. The description of the separate article on exchanges between named types of organizations does not define ‘exchanges’ or ‘collaboration’, leaving foreign and domestic organizations guessing what activities might be covered. Moreover, the mention that such activities should be handled in accordance with national law is somewhat confusing, as the FNGO Law, once passed, will itself be a national law.

In reading the earlier draft, and this proposed revision, one can’t help but also think that the drafters lack a full understanding of the range of forms “non-governmental” entities can take, and the diversity of the roles they have played in other countries. Independent, but state-established or state-funded, organizations have made major contributions in education, health and human rights protections globally; but it is unclear if they are non-governmental within the meaning of this law.

2. Changing the Law’s Name

One of the most visible changes announced is a change in the law’s name to the “Law on the Management of Foreign [Overseas] NGOs’ Activities within Mainland China [境外非政府组织境内活动管理法]. This may be in response to one of the most common criticisms of the law, that it acted to regulate all foreign organizations as if they were already suspected of misconduct by making them register with public security forces and emphasizing investigation and oversight of their facilities, funding, and activities. It was suggested that it would be much more legitimate to regulate conduct, allowing for easy registration of foreign groups, but revoking that registration where misconduct could be shown. The extent to which the new name actually reflects a changed legislative outlook remains to be seen, but some of the further changes do make some moves in this direction.

3. Three deleted prohibitions and a new requirement

Three of the most burdensome restrictions on the organizational structure of foreign NGOs’ long-term presence in China are also said to have been removed. The previously released draft requires that organizations with ongoing activities in China must establish a representative office in the mainland, which has no separate legal existence, but is the face of the organization in China. Under the revisions, this general structure will remain the same, but:

  • Organizations may have more than one representative office: Groups with activities across the country may be approved for establishment of multiple offices, and are not to be limited to a single office as stated in the previous draft.
  • No time limits for representative offices: The previous draft gave a 5 year limit on the period for representative offices in the mainland after which they must renew their registration, a restriction said to be removed in the newest version. Given that the law clearly allows for cancellation or revocation of registration for problematic NGOs, there is no real need for compliant groups to be forced to periodically renew.
  • Volunteers and employees may be more freely recruited: The previous draft required that when NGO representative offices hired staff or recruited volunteers, this would be done through designated government departments. Organizations that are holding one-off or short-term activities in China, and have not established a representative office, were forbidden to directly recruit volunteers at all. These provisions are said to be deleted entirely.
  • Greater transparency in financing required: While some requirements were eased, greater public disclosure from registered NGOs will be required. The previous draft already required submission of financial reports audited by local accountants, but now funding sources and spending for all activities must be made fully public. There is no mention of whether groups must still submit activity plans, including spending, on an annual basis- a requirement seen as greatly limiting the flexibility of organizations to respond to new opportunities and events.

4. Simplification of the Procedures for Temporary Activities.

In addition to regulating the long-term presence of foreign NGOs, the draft law also had demanding requirements for foreign organizations launching temporary activities within China. The overly broad definition of ‘foreign NGO’ and the lack of any definition of ‘activity’ meant that an enormous number of exchanges were to be covered by the law. Even if the law is successfully revised to reduce the scope of NGO as suggested, a huge number of activities might still be included: a meeting of a professional association, for example, or a performance by an arts troupe, or a PGA tournament? It has been feared that the lack of clarity, stiff penalties for non-compliance, and burdensome approval requirements might lead groups that were not strongly committed to working in China to abandon their planned activities, particularly if they lack the expertise to navigate China’s laws and bureaucracy.

The new version of the law is said to reduce some of these worries by simplifying procedures for short-term activities, and shifting some of the burden to Chinese host partner organizations. The previous draft required obtaining the consent of a Professional Supervisory Unit, and then also applying for a permit to the police. Under the new draft, the Chinese host or partner is expected to complete necessary reviews and can then file the activity with the police at least 15 days before it occurs. Police of course retain the right to cancel activities that they feel threaten national security, but the phrasing now makes the process sound more ministerial and less like a probing review. None of this will resolve all the problems mentioned, but it does minimize the burden by no longer requiring an application for a permit regarding all activities — a prospect that the police no doubt found just as daunting as the foreign organizations did.

5. Loosening restrictions on recruiting membership?

Some Chinese academics complained that the ban on foreign NGOs recruiting membership within mainland China, was in direct contrast to policies encouraging them to join and establish Chinese branches of international scientific associations and technical societies. While the general principle of non-recruitment remains, the law is said to now allow the State Council to approve the establishment of local branches that may recruit membership. Organizations carrying out short-term activities will still be prohibited from recruiting absent other legal authority.

6. Increasing Routine Oversight

The earlier version of the law already granted substantial investigation and enforcement powers, including access to facilities, limiting incoming funds to designated accounts, cancelling activities, revoking registration, and even administrative detention; but the new version is said to add an additional mechanism, 约谈 or ‘a talking to’. This generally refers to summoning a problematic cadre, or agency, to explain a situation and be given guidance and instruction and is used in a wide variety of situations. It isn’t clear how or when the police might decide to summon an NGO representative for a ‘talking to’, but it likely only creates a clear legal basis for what has been common practice for years.

Where organizations are found to be undermining national sovereignty or encouraging separatism, or having other similar unlawful conduct, the State Council might now also place them on an ‘unwelcome’ list, permanently banning them from establishing a representative office in China.

 

Among these revisions, there are certainly signs of an effort to facilitate some level of exchange and work by foreign NGOs within China. If nothing else, it reflects a recognition that schools, hospitals, and other ‘NGOs’ as defined by this law, make a valuable contribution in a large number of fields.

Many of the most contentious portions of the law are unmentioned as being revised in the article. The national security focus of the law still looks to remain central, with the public security organs, rather than the Ministry of Civil Affairs, likely to remain the registrar for foreign NGOs. Police powers will similarly likely remain broad and unchecked. Under the previous draft, reports on all aspects of the NGOs work must be submitted to police, who can review bank accounts and investigate facilities at will.

Before even registering or holding any activities, however, foreign NGO’s must find a distinct organization to act as their supervisory agency or “professional supervisory unit. (PSU),” unless further revisions to the law are made. The full scope of agencies eligible to be a PSU is unclear, and it is also unclear if they will be willing to take on the added responsibility, and liability, of working with a foreign group whose work plans, financial reports, and activity summaries they must review. It would be regretful, but not surprising, if some groups simply decide they cannot meet these burdens as has happened in other countries with similar legislation, or that the limits on freedom of association are incompatible with their mission statements, and stop exchanges with China.

The law has not been passed yet, and the current draft has not been made public, so there is no way to know what its final content will be. It seems clear that the Standing Committee has taken note of some of the concerns made by foreign and domestic parties during the period of public review, and some effort has been made to minimize the law’s impact on legitimate exchanges. Perhaps Xinhua’s detailed public description of some of the changes to the law, before it has even been announced as voted on, means that they are also still trying to gauge public opinion and decide if further revisions are necessary.

 

 

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About Jeremy Daum 77 Articles

Jeremy Daum is Alex Daum’s dad, Elizabeth Jenkins’ Partner, China Law Translate’s contributing founder, and a Senior. Fellow at Yale Law School’s Paul Tsai China Center.

He translates, writes, edits, does web-design, graphic design, billing, tech support, and social media outreach for China Law Translate.

1 Comment

  1. After reading a book titled “The China Price” I became aware of how the quality of life had changed in many of the rural parts of China. Western business interest seeking/buying manufactured products far lower in cost than their native countries inadvertently promoted a migration of young working people to new industrial areas of China. Surely these new urban dwellers now working in factories did/do support their families at home who quickly began to prosper with every payment from their distant family members. Now it seems organizations (Labor Unions) have grown and are badly needed to protect this new labor force and exploitation by western business corporations.

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