Some Good News Regarding the Overseas NGO Management Law Draft and the Long-Awaited Charity Law

In a difficult year for civil society, we have two pieces of good news for a change. One is that the Overseas NGO Management Law (sometimes translated as Foreign NGO Management Law) draft has yet to be reviewed a third time by the National People’s Congress Standing Committee. Generally after a draft law is reviewed a third time, it is voted on unless significant problems or controversies emerge.

A comparison with the National Security Law is instructive. Both the second draft of that law, and the second draft of the Overseas NGO Management Law, came out about the same time in May for public comment. The National Security Law draft was reviewed a third time at the next Standing Committee meeting on July 1, voted on and passed overwhelmingly with only one abstention. The Overseas NGO Management Law draft, in contrast, has not been mentioned at any of the subsequent Standing Committee meetings. Since the Standing Committee meets every other month, there is still a chance that it could be reviewed in December. Still the delay suggests that the many comments on the draft law coming from both the foreign NGO and business community, and the concerns voiced by various government leaders at the highest levels in both the U.S. and Europe have been heard. In his private meeting with Xi Jinping in Washington, President Obama was said to have voiced his concerns about the law. President Xi said he supported a law to regulate overseas nonprofits, but did not say that he supported the law in its current form. In addition, my sources tell me that there is considerable dissension among various Chinese government agencies over this draft law. In short, there seems to be enough problems and controversies to delay this draft law. It may not be reviewed until next year, if then, and when it is, it may contain some significant revisions. Stay tuned.

The second piece of good news is the long-awaited arrival of the first draft of the Charity Law for public comment[1]. This law has been in the legislative pipeline since 2005 and it has become almost a yearly ritual to predict the law’s appearance and then to be disappointed. It looks that streak of bad luck is about to come to an end. On first glance, the Charity Law draft looks quite good. I’ll write in more detail about it in another post. But let me note three major highlights of this draft law.

One is that it upholds a quite expansive view of charity or philanthropy, what the Chinese call “big philanthropy” (da cishan) in going beyond traditional notions of philanthropy such as poverty alleviation and disaster relief to including the promotion of education, culture, sports, health, environmental protection and “other activities consistent with the societal public interest”.

Second, it appears to allow for the direct registration of charitable organizations, thereby doing away with the old “dual management system” in which NGOs had to find a professional supervising agency before they could register with Civil Affairs. The language in the draft could be clearer on this point, but an article posted on the NPC’s website confirms that this is the intent.

Third, the last article in this draft law notes that “even when a non-profit organization with the purpose of conducting charitable activities is not registered, it can still conduct charitable activities within its limits, but shall comply with the relevant provisions of this Law and benefit from relevant rights and interests according to law.” In the past, I have never seen such a clause appear in any Chinese regulations concerning NGOs. Instead, one usually sees regulations appear (such as a Guangzhou draft regulation which came out last year and has not been heard of since) banning “illegal social organizations (the official Chinese term for NGOs),” referring to organizations that operate as NGOs without having registered. What this clause essentially says is that unregistered NGOs should not be considered as illegal and should be allowed to carry out charitable activities. That is a significant step forward.

Of course, there are some problems with this draft such as continuing to insist on a higher bar for charitable organizations that want to engage in public fundraising, and too much emphasis on compelling charitable organizations to disclose information. I’ll write more on these issues in a later post.

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[1] I’m grateful to ChinaLawTranslate for providing a preliminary English translation. This translation still has a number of problems but is the only English translation available, and the nature of crowdsourced translations is that they will improve over time. China Development Brief should have a more authoritative translation out soon.