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China - NGO Law Monitor - Research Center - ICNL http://www.icnl.org/research/monitor/china.html[11/9/2012 4:19:31 PM] announced a Cooperative Agreement on Advancing Integrated Reforms in Civil Affairs with the municipal government of Shenzhen, a major economic area in the southern province of Guangdong and China’s original special economic zone. Under the Cooperative Agreement, Shenzhen will serve as an “experimental site” for reforms in a wide range of civil affairs for assessment by the Ministry of Civil Affairs and other government agencies. Shenzhen is the largest Special Economic Zone in China and located in the southern province of Guangdong which borders Hong Kong. Shenzhen's reforms include new steps in the registration and management of social organizations, including allowing certain categories of social organizations to register directly with the Shenzhen Civil Affairs Bureau without the sponsorship of a professional supervisory agency (normally a government agency). Under the old "dual management" system, social organizations were required to find a supervisory agency as a sponsor before they were allowed to register. Such steps mark the first real potential reforms in the “dual management” structure of Chinese social organizations in several decades. The Cooperative Agreement also allows Shenzhen to take over regulatory jurisdiction over domestic and foreign foundations based in Shenzhen; reform and expand government contracting with social organizations to provide social services; develop new measures to encourage charitable giving (including potential new tax incentives at the local level); and reforms in other areas of civil affairs. Activities under the Cooperative Agreement will be carried out from 2009 to 2015 and continuously assessed by the Ministry of Civil Affairs and other government agencies for potential expansion in other areas of China. [1] Direct local regulation of social organizations and foundations in addition to national regulation is also starting in other areas of China. Until recently, local civil affairs and other governmental units merely implemented national regulations on social organizations, foundations and other groups without the power to directly regulate at the local level. The power to directly regulate at the local level is, of course, a key step in giving provincial and local authorities real legal authority over the nonprofit sector. Over the last few years, a few provinces and province-level municipalities have followed Shenzhen's lead and with the blessing of the Ministry of Civil Affair, begun issuing e-formal regulations and other legal documents governing the various forms of charitable and nonprofit groups that are based in or active in their jurisdictions. Jiangsu and Hunan provinces, for example, have issued local-level regulations governing foundations and fundraising. Guangdong, Shanghai, Beijing, Chengdu and other provinces and cities are carrying out their own local legislative experiments governing the registration and management of different categories of social organizations. Jiangsu led the way in the provincial regulation of philanthropy in October 2007 with the first sub-national regulations on foundations, the Jiangsu Province Interim Regulations on the Supervision and Management of Local Foundations, which have been implemented by provincial measures for approving, inspecting and requiring annual reports from foundations in addition to the national rules on these matters.[2] In an even more important local experiment that is being assessed at the national level (like the Shenzhen measures that are being undertaken under the 2009 Cooperative Agreement) the Jiangsu provincial people’s congress adopted what may be the first provincial regulations on charitable organizations in January 2010. Under the Jiangsu Provincial Regulations on the Advancement of Charitable Activities, Jiangsu is now expected to adopt a range of rules and measures to regulate, encourage and manage its rapidly growing charitable sector. [3] [1] Chinese text of the Cooperative Agreement. [2] Chinese text of the Jiangsu regulations on foundations [3] Chinese text of the Jiangsu regulations on charity Yunnan has also been experimenting with regulations governing the registration and management of international NGOs in the province. Over the last two decades, Yunnan has become a popular destination for international NGOs and provincial authorities have for the most part welcomed them because of their contribution to the local economy. But the province’s attitude has changed in recent years as they face the challenge of managing a growing number of international and domestic nonprofits that are not registered with Civil Affairs. In December of 2009, the province issued the first-ever regulations in China specifically governing international NGOs. This development deserves scrutiny because it may serve as a model for future national regulations governing international NGOs. The Yunnan Province Interim Regulations Standardizing International NGO Activities provides international NGOs with a way of gaining legal status in the province through a registration process known as bei’an ors depositing their file on record with the provincial Civil Affairs Department. Interviews with NGOs in Yunnan indicate that the regulations are being welcomed by international NGOs which have been operating in China for years without legal status. At the same time, the regulations are also requiring international NGOs to submit to much more paperwork and control and discouraging some partnerships between international and Chinese nonprofits. As part of the registration process, international NGOs are required to report and get approval for every project they operate in the province and for every partnership they engage in with Chinese nonprofits.
China - NGO Law Monitor - Research Center - ICNL http://www.icnl.org/research/monitor/china.html[11/9/2012 4:19:31 PM] Of all the local experiments, Guangdong province’s have been the boldest and garnered the most attention because of its size and importance in the national economy. In November of 2011, the Guangdong Civil Affairs director announced that the province would be making it easier for several different categories of social organizations (social services, charitable organizations, etc.) to register by doing away with the professional supervising agency requirement. The province would also decentralize the authority to register social organizations to the township and subdistrict levels of government, open up the space for trade associations by allowing more than one association per sector, and encourage more government purchasing of services provided by social organizations. If implemented, the Guangdong regulations would be the most liberal in the country, and serve as a bellwether for similar changes in the national regulations governing social organizations. Guangdong’s reforms have been actively promoted by the province’s top leader, party secretary Wang Yang, who is a member of the Politburo, and mentioned as a candidate for the Politburo Standing Committee – China’s most powerful decision-making body - when it changes its leadership in the fall of 2012. Wang Yang is generally seen as a more liberal-minded leader due in part to his public position in support of nonprofits. The Minister of Civil Affairs, Li Liguo, recently was quoted endorsing the Guangdong reforms raising expectations that the more Guangdong model will be used as the blueprint for revisions to the national-level regulations governing registration and management of social organizations. In addition, other news out of Guangdong shows that the reforms are expanding and making their way down to the local level. Recently, Guangdong announced it would also relax restrictions on fundraising for nonprofits, and interviews with Guangdong NGOs and academics indicate that Guangdong will also be issuing more favorable regulations governing the tax deductibility of charitable donations. The Fate of the Charity Law and Other National-level Legislation While local legislation has been making significant headway, national-level legislation appears to be on hold. The long-awaited revisions to the regulations governing the registration and management of social organizations, and the Charity Law, have both been delayed, despite rumors that their passage is imminent. The Charity Law, in particular, received a boost in 2011 due to a series of scandals that enveloped the charitable foundation sector. One example was the Guo Meimei incident that implicated the Chinese Red Cross and exemplified the lack of transparency and accountability in China’s philanthropy sector. These scandals raised awareness among both government leaders and society of the pressing need for a Charity Law to regulate philanthropy and fundraising. Late in 2011, it was announced that the Charity Law was been included on the legislative plan for the 11th National People’s Congress (NPC) Standing Committee for 2011. The reports note that the NPC generally agrees with the content of the Ministry of Civil Affairs draft legislation and asks the State Council Legal Affairs Office (the State Council is the highest executive body in the Chinese government) to review the legislation and submit it to the NPC for consideration. Given that the Charity Law was also included on the 2010 legislative plan, and has been with the State Council for some time, it is difficult to know whether this announcement represents any significant progress in the Charity Law’s passage. Certainly, the significantly increased public scrutiny and discussion over this last year of problems and scandals in the philanthropic sector has placed more pressure on lawmakers to get the Charity Law approved. But given the legislative logjam in the State Council, it is difficult to know when the Charity Law will be reviewed and sent to the NPC for approval. The Guangdong and Yunnan Experiments in 2012 In early 2012, Guangdong province was still in the news as the trailblazer in reforming the registration and management system for nonprofits. In January, provincial authorities announced that by July 2012, they would eliminate what has been the main obstacle to nonprofit registration: the requirement to find a professional supervisory unit that would sponsor the nonprofit. They also announced a series of other measures that made Guangdong the most open province with regard to nonprofit registration and management. This push for a more open environment for nonprofits has been credited to Guangdong's top leader - provincial party secretary Wang Yang who is also a member of China's Politburo and possibly may enter the Politburo Standing Committee - Yang has come out publicly to state his support for nonprofits and criticize local bureaucrats for not making it easier for nonprofits to register. Since then, the Minister of Civil Affairs has come out endorsing the Guangdong reforms, raising expectations that the long-awaited national-level revisions to the nonprofit registration and management regulations would incorporate the Guangdong measures. These recent developments that can be seen as a continuation of the CCP's emphasis on "innovative social management" in the 12th Five Year Plan (2011-2015) issued last year. Innovative social management refers to the government carrying out innovations in the way it regulates or manages society and societal organizations (China's term for nonprofits).
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