POLICY BRIEF NO. 7: Local Initiatives and Incremental Measures

This month sees more news coming from Guangdong, Nanjing and Beijing all having to do with different local approaches aimed at lowering the barriers to registration for NGOs (or social organizations using the Chinese terminology.)  In Guangdong, questions are raised about the implementation of a new regulation aimed at allowing social organizations to register directly given recent developments in the labor sector.  These developments were mentioned in last month’s update.

One development is a crackdown on several labor NGOs registered as businesses, such as Zhang Zhiru’s labor NGO, Chunfeng Labor Dispute Services Agency.  In some cases, this crackdown has taken the form of the landlord telling the NGO the lease is up.  In more blatant cases, such as Shidai Women’s Labor Agency, local government agencies came to inspect the NGO and informed them they would have to close.

The other development mentioned is the creation of a Federation of Social Service Organizations for Guangdong Workers under the Guangdong All-China Federation of Trade Unions (ACFTU).  The idea here seems to be to use Party-controlled “mass organizations” such as the ACFTU to create a legitimate platform for labor NGOs to provide services to workers. This arrangement is described as an intermediate step for labor NGOs to gain some form of legal recognition (in Chinese, the term used is bei’an or document filing system) that may eventually help them gain legal registration.

Labor NGOs in China have generally been seen as more sensitive and observers questioned whether they would be treated the same way as less sensitive NGOs and allowed to register directly under the new Guangdong regulations. These new developments suggest that local authorities may be trying to push labor NGOs into a more regulated, supervised space.

In Nanjing, the city’s Civil Affairs Department announced it would lower the registration requirements for social organizations, such as lowering the registered capital requirement from 30,000 yuan to 5,000 yuan.  In addition, the Nanjing City Civil Affairs Department will devolve the authority to register and manage three categories of social organizations (charitable, social welfare and social service) to the district/county level.

Beijing will explore ways to lower the registration threshold for social organizations by carrying out a document filing system (bei’an) which will allow grassroots organizations to file with designated “hub” (shuniu) social organizations. Since 2009, 27 “hub” organizations were approved for various sectors such as labor, youth, women, law, etc.  For example, the All China Federation of Trade Unions would be the hub organization for labor, the All China Youth Federation would be the hub for youth, and so on. The idea is have these “hub” organizations essentially serve as the “professional supervising units” for grassroots organizations, thereby making it easier for the latter to register at a later date. In reality, this experiment has been difficult to implement because “hub” organizations do not necessarily want to take on this additional responsibility, and because of coordination difficulties between these “hubs” and Civil Affairs offices.

Incremental Measures

In addition, various incremental measures appeared over the last month to clarify and regulate different aspects of NGO and foundation work.  As with previous initiatives this year, most of these measures can be seen as stopgap measures carried out in the absence of more fundamental reforms that have been put on hold with delays in the Charity Law, and the revision of the various measures for registration and management of social organizations.

In mid-July, the Guangdong provincial government recently issued the “Provisional Measures on Government Procurement of Social Organization Services,” clarifying the scope, procedures, and funding arrangements for government procurement of social organization services. The main sectors covered by these Provisional Measures are education, sanitation, culture, community affairs, care for the elderly and disabled, industry accreditation and auditing, scientific research, law, and policy research. An important issue will be finding an independent third party institution that can evaluate the social organization’s performance without interference from the government.

At the end of July, the Ministry of Civil Affairs issued “Selected Regulations Standardizing the Behavior of Foundations (Trial)” (hereafter “Selected Regulations”) to standardize the behavior of foundations in the following areas: receiving and using donations; transactions, cooperation and increasing the value of foundation assets; and public disclosure of information.

The Selected Regulations contain revisions based on public comments solicited from an earlier draft.  One clause that attracted comments was the one that stated that “foundations should not fund for-profit organizations.”  Since many of the more grassroots NGOs are registered as businesses, some observers felt that clause would prohibit foundations from funding these “business-registered” NGOs.  In response to this concern, that clause was changed to read “foundations must not fund activities with a for-profit goal.”

In early August, the State Council issued “Views on the Promotion of the Work and Development of the Red Cross Society.” This document is clearly a response to the scandals that took place in the Red Cross last year, and can be seen as an effort to strengthen accountability and transparency in the Red Cross.  It calls for centralizing the Red Cross so that local Red Cross offices are more closely tied to the higher level Red Cross office, rather than to the local governments, in terms of supervision and guidance.  It also talks about the importance of strengthening transparency, and details plans for the Red Cross to build a new online platform to track donations.

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