On the first week of this month, the
Ministry of Civil Affairs (MCA) issued an important draft regulation governing
the registration and management of social organizations (the official Chinese
term for nonprofits) for public comment. The draft Regulation for Registration
and Management of Social Organizations, and instructions for sending in comments,
can be accessed using the links below. The deadline for sending in comments in
September 1.
http://www.mca.gov.cn/article/xw/tzgg/201808/20180800010466.shtml
https://mp.weixin.qq.com/s/ASZYh7SoiVsOUPp6MnRrjA
https://mp.weixin.qq.com/s/ASZYh7SoiVsOUPp6MnRrjA
ChinaLawTranslate has an
English-language translation of the regulation here.
At this writing, the word is that the
MCA has received only around 100 comments, so if you know any Chinese NGOs,
encourage them to submit their comments in the next few days.
Some Background
This draft regulation will replace the
three previous regulations that formed the core of the regulatory system for
social organizations: the "Regulations for the Registration and Management
of Social Groups" issued on October 25, 1998; the "Provisional
Regulations on the Registration and Management of Civil Non-enterprise Units"
issued on October 25, 1998; and the "Foundation Management Regulations"
issued on March 8, 2004. Note: The draft regulation has replaced the term "civil, non-enterprise units" with the much improved "social service organizations".
Given the rapid changes in the NGO sector in China,
including the passage of the Charity Law in 2016, these regulations were seen
by many observers as outdated and in serious need of revision. In the last half
of 2016, we finally saw drafts of revisions to all three regulations issued for
public comment, but then silence for two years before this draft regulation
appeared this month.
Given the very short time frame allowed for public comments, the draft regulation has already stimulated quite a bit of discussion in the sector, including calls to slow down the drafting process to ensure that different views are heard.
For those interested, NGOCN has two
posts here with feedback on the draft regulation:
CDB has also collated a number of
posts about the draft regulation here in Chinese, http://www.chinadevelopmentbrief.org.cn/service/action/topicc.php?topic_id=157
There have also been some forums
organized about the draft regulation. Here's a Weixin
post that has been getting quite a bit of attention citing the views of
Yang Tuan, a long-time and respected observer of the sector, and other analysts
and observers of the sector.
Some Impressions and Comments
I've only had the chance to skim
through the regulation, and the various discussions, but here are some quick impressions and comments based on what I've been reading.
First of all, I'm surprised they
came out so quickly. I was on record that I didn't think we'd see a draft this
year, so now I'm going to eat my words. I’m also surprised that MCA is only
allowing about four weeks for public comment given the importance of the draft
regulation.
Second, the draft regulation is
going in the right direction in terms of creating a more enabling environment
for NGOs, but the details of the regulation are fraught with a number of
problems, including inconsistencies with the Charity Law. Below are some
problems that have been raised:
The draft allows direct registration
(e.g. registering with Civil Affairs without needing a PSU) for four categories
of social organizations: 1) chambers of commerce and trade associations; 2)
science and technology groups; 3) charitable, public welfare organizations; and
4) rural and urban community organizations. One complaint is that the definition
of the third category- charitable, public welfare organizations – is overly
narrow, even more so than the definition of charity and public welfare spelled
out in the Charity Law, and that the definition should be broadened.
Another problem is Article 4 which
prohibits social organizations from engaging in “for-profit business
activities. This seems to be overly restrictive and not in line with the Charity
Law which has a more expansive view of the activities social organizations can
engage in. Article
9 of the Charity Law states that charitable organizations may not have a
“profit-making purpose,” which implies that profit-making activities would be
acceptable as long as they support a charitable purpose.
In another improvement, the draft
regulation allows social organizations to set up branches, but not “regional
branches” so apparently branches can only be set up in the administrative area
in which that social organization is registered, but this is not clearly
stated.
The draft regulation makes it more
difficult for smaller foundations to register. The minimum registered capital
for foundations of 8 million RMB was raised above the 2 million RMB amount
required in the previous regulations, and the 2016 draft regulations. Also the
2016 draft regulations allowed foundations to register below the provincial
level, a move that would have helped smaller, community foundations. This draft
regulation now states that foundations can only register at or above the
provincial level.
There is quite a bit of language in
the draft regulation about the need for social organizations to establish
Communist Party organizations, and carry out Party activities. Social
organizations are required to prepare the conditions, and provide a workplan,
for setting up party organizations. None of this language requiring Party
organizations was in the Charity Law or in the previous regulations.
The draft regulation also spells out
very specific, and onerous, penalties for social organizations that violate
their legal responsibilities, and allows law enforcement wide discretion in
investigating violations. Language clarifying limits on law enforcement
investigative powers should be included to protect the legal rights of social
organizations and their staff.
