On the 28th of July, Professor Jia Xijin from Tsinghua University’s School of Public Policy and Management gave a talk at CDB’s workshop on Overseas NGOs Registering in China. Using a selection of data, Professor Jia gave an overall picture of what has happened over the first six months of the Overseas NGO Law being implemented, with particular reference to the registration of overseas NGOs. The following is the text of Professor Jia’s talk. A few minor edits have been made.
I’ve reviewed what’s been going on regarding the implementation of the ONGO Law over the six months that it’s been in force, and I’d like to share it with you today. I take the perspective of an observer to look at the overall situation.
1. Registration: the overall situation
The first thing to look at is timing. The Law was promulgated in April last year, and went into force on the 1st of January this year. First, note that some aspects of the preparatory work had already been completed before the 1st of January. Part of this work included some of the most important supplementary documents alluded to in the Law, including the lists of professional supervisory agencies (PSU). Then there were the procedures for putting activities on record (bei’an), a platform for coordinating implementation, and the Ministry of Public Security’s (MPS) service platform website going live. Then after the 1st of January two more documents were released. One was on taxes, issued by the State Administration of Taxation. The other was about bank accounts, issued by the Bank of China. This was the main preparatory work that took place.
If we look at the implementation by law enforcement, on the MPS service platform there were links for 32 provinces (including municipalities directly under the central government and autonomous regions). Looking at the links themselves, within a month of the Law going into force about half of the provinces had set up webpages and almost half had issued provincial level PSU lists. We know that the MPS itself does not register representative offices; all registrations must be done at the provincial level, and so it’s at this level that the effect of the Law’s enforcement is decided. It’s already been more than six months. So, what is the situation now? There are four provinces that still haven’t set up online service platforms, including Shanxi, Henan, Ningxia, and Inner Mongolia. Inner Mongolia’s platform hasn’t gone live yet; the other three link to the MPS website but there is no other information there. There are still six places that haven’t issued their provincial level PSU lists yet. These are Jilin, Xinjiang Bingtuan (military corps), Shanxi, Henan, Ningxia, and Inner Mongolia. Four of them – Shanxi, Henan, Ningxia, and Inner Mongolia – still don’t have their PSU lists or their links ready. The other two – Jilin and Xinjiang Bingtuan, have their links up but haven’t issued their lists yet. This is how implementation stands at the moment.
Now let’s look at the results of the Law’s implementation. We can see in terms of registrations, the first batch of registrations happened in January in three different places, Shanghai, Beijing, and Guangdong. Between them they had 31 organizations and 32 certificates, as one of the organizations registered two representative offices. Most of them were in Beijing, and all 20 of those were transferring their registrations. These were overseas representative offices of foundations that were originally registered with the Ministry of Civil Affairs (MCA), and were directly transferred from the MCA to be registered with the public security departments. Shanghai had one organization – Project Hope Global – that was originally registered with the MCA. The others were basically economic-related trade associations or chambers of commerce that had originally been registered with the Bureau of Commerce. So, we could say that for the first lot of organizations, it was basically a hand-over process or a process of transferring registrations, and the entities involved were the overseas representative offices of foundations that had originally been registered with the MCA.
Let’s have a look at the timing. To date there’s been a total of 156 organizations registered, and they were basically all concentrated across three months: January, April, and May. Why did we have peaks during these three months? As you can see, they’re all concentrated around the same few days. In other words, we’ve got a number of registrations that came all at once. These include the 32 we saw in January, and then on the 10th of April there were nine in Yunnan. These nine were also transfer registrations. Then there was a big number of new registrations on the 31st of May in Shanghai, these 20 were all under the same PSU, the Shanghai Economic Relations and Trade Commission, so all the newly registered organizations were economic-type organizations – trade associations and chambers of commerce. We can see that the registrations that happened in batches are very obvious, whereas the others are very scattered, with one or two to a province, and there were a lot of cases where it was just one.
If we look at the spread of PSUs, we can see that the greatest concentration is under the State Council. Altogether so far there are 49 ONGOs with PSUs at this level. These PSUs include ministries and departments, national associations, and other bodies at the national level. Altogether there have been 49 cases of registrations with PSUs that have the word “national” in their titles.
Out of the other PSUs, there’s a real concentration in Shanghai, where there are 34. But this isn’t the number of PSUs, this is the number of organizations that PSUs have registered. In Shanghai there are 34, in Beijing 10, Guangdong 10, and Yunnan nine. This is the number of registrations. If we look at the way PSUs are distributed, we can see that apart from the State Council, Shanghai, Beijing, Guangdong, and Yunnan, the majority of other places have only one or two active PSUs.
To date there are still 12 localities that have had no registrations. These 12 provinces haven’t registered a single organization. In over six months, not a single representative office has been registered in these places. These 12 localities include Hebei, Zhejiang, Anhui, Hainan, Qinghai, Xinjiang, Jilin, Xinjiang Bingtuan, Shanxi, Henan, Ningxia, and Inner Mongolia. And among these, Shanxi, Henan, Ningxia, and Inner Mongolia haven’t done their initial preparatory work either.
We can see a number of levels emerging here. At the first level, we’ve got those that still haven’t done any preparation work at all; at the second level we’ve got those that appear to have been getting things done – they’ve issued their PSU lists and set up their links – but in reality haven’t made any progress in their work. Now it might be that the public security departments have moved forward with their work but the PSUs haven’t come and taken the baton; or it could be that there’s some problem in coordination. But what we do know is that in terms of the formalities they’ve been making progress but in reality they haven’t. There are 12 places like this with zero registrations.
Of those that have already begun registering organizations, there are a lot that have only registered one. What we are actually seeing is that there’s only a very limited number that have genuinely begun processing things according to procedure, so that they can register a batch at a time. In all of this, the PSU plays a very big role. Out of those with the greatest numbers of registrations, the Shanghai Economic Relations and Trade Commission has become the PSU for 32 organizations and as I just said 20 of those were all part of the same batch. The other 12 came separately. Also, these weren’t just transfer registrations, a lot of them were new registrations. This is the most striking thing about the Shanghai Economic Relations and Trade Commission. Then there’s the Chinese People’s Association for Friendship with Foreign Countries (CPAFFC), which has become the PSU for seven organizations. This includes some of those organizations that we’ve all been paying attention to, or you could say have a kind of symbolic influence, they’ve actually all got the (CPAFFC) acting as their PSU.
The 11 organizations that the MCA is acting as PSU for are all transfer registrations. They were originally registered with the MCA and now they’ve been transferred to the MPS while the MCA has become their PSU. Altogether 20 organizations have been transferred. For half of them, the MCA is acting as PSU itself. The other half have been spread around under other PSUs.
Let’s have a look at registration based on locality. The distribution of registrations by locality is largely like the distribution by PSU. But there are some differences, particularly when it comes to the registered locations of those organizations under the ministries and departments of the State Council, which can be a bit more spread out. Out of the 49 organizations under national level PSUs, 44 are in Beijing, and the others are spread across Guangdong, Shanghai, Shandong, and Jiangsu. Overall, there are 54 registered in Beijing, 35 in Shanghai, 12 in Guangdong, and nine in Yunnan.
This is a list of all the PSUs to date. In other words, all those that are fulfilling their duties and acting as PSUs. We can see the list issued by the MPS, but the number of PSUs named on that list is far greater than the number we see here. Looking at the different types on the list, altogether there are 15 PSUs that are ministries or departments under the State Council. Between them, they have already begun acting as PSUs for 49 representative offices. At the local level, there’s a total of 41 PSUs, which are now between them acting as PSUs for 107 organizations. Those that are acting as PSUs to a larger number of organizations are the MCA, which has 11 organizations under it, the CPAFFC which has seven，and the State Health and Family Planning Commission which has five. The others have roughly one to three. At the local level, the Shanghai Economic Relations and Trade Commission has become PSU to 32. Then there’s the Beijing Municipal Commission of Commerce, that’s acting as PSU to eight organizations, the Guangdong Commission of Commerce that is PSU to six, and the Health and Family Planning Commission of Yunnan Province that is also PSU to six. For all the others, we can see that the great majority have become PSUs to only one organization.
So, if we look at the spread of PSUs we can see a trend emerging. Only a portion of those that qualify as PSUs are in fact acting on this duty. The relative concentration is also notable. Almost half of the organizations registered so far are concentrated across only a handful of PSUs.
Let’s take a look at this pie chart. It shows the scope of activities of those already registered, including those operating in a single province, in multiple provinces, and nationwide. Each of these make up about a third.
The pie chart shows that it’s not only representative offices registered with PSUs under the State Council that operate on a national level. It’s also common to see those registered with PSUs at the provincial level operating at the national level or across different provinces. This is something that’s being tested out in the process of implementation, as the Law itself isn’t explicit on this. The PSU might be at the national level or at the local level, while all registrations take place at the local level. Before the Law began to be implemented, there was a lot of discussion about whether it would only be organizations registered in Beijing, with a PSU under the State Council, that could operate on a national level. But in practice the Law isn’t being implemented in this way. In other words, there’s no connection between the scope of your operation and the PSU you’re linked to. You can register in any province, and your PSU can be a provincial level one or a national level one, and you can still operate on a national level or across different provinces. It’s quite common for this to happen.
We can see that although the proportion of organizations with PSUs at the national level is higher, there is also a high number that have provincial level PSUs that are operating on a national level, and even more that are operating across different provinces. So, when an organization is registering a representative office we can see this as a kind of interregional registration. For example, I register in Province A, but I want to carry out activities in Province B; I’m registering in Province A but in fact I want to operate in provinces A, B, C, D and E; or I’m registering in Province A but I am active nationwide. All these scenarios are possible. If the PSU is at the local level, you can still operate at the nation level. I imagine that this is something that the MPS has made its own internal coordinating arrangements on, so that it doesn’t matter which province you’re registered in, within their system they can coordinate and unify enforcement. This makes interregional registration feasible.
Then there’s multiple representative offices. We’ve seen that World Vision has registered the most representative offices. There are about ten other organizations that have registered more than one, and most of these have registered two.
2. Filing temporary activities
We’ve just been looking at the situation in terms of registrations, let’s now talk about the filing of temporary activities. When I looked at the data on the 25th of July there were 187 temporary activities that had been put on record. Overall this number is very low. There are already 156 registered representative offices but only 187 recorded temporary activities. Of these activities, it might be that one organization has registered ten. Because an “activity” is a relatively small thing, in fact the progress here has been much slower than it has with the registration of representative offices. At first both those of us who were watching and the public security bureaus might have all been thinking that it would be relatively difficult to register representative offices, so organizations could first put their temporary activities on record and get going with their work, but what we’ve seen in practice is the opposite. It has in fact been the filing of temporary activities that has progressed very slowly. You could even argue that sometimes filing temporary activities is the more difficult thing. This is something that merits watching.
The ONGO that’s put the most activities on record is Oxfam, with a total of 35, followed by the Hong Kong 香港慈善基金会 with 11, and World Vision with ten. The Chinese partner that’s put the most activities on record is Beichuan in Sichuan. This is because back at the time of the earthquake, they set up a work platform. Now they’ve put a total of 17 temporary activities on record.
The places with the greatest number of temporary activities on record are Guangdong, Sichuan, Beijing, Shaanxi, Guizhou and Yunnan. There is some overlap with the provinces we just looked at in terms of the registration data, but there are also differences. Let’s look at the cases where the activities are not in the same place as the location of the Chinese partner organization, so for example when an ONGO finds a Chinese partner organization in Province A but then carries out their activities in Province B. So far there are 15 instances of this happening, in other words the place where the procedure to put the activities on record takes place is not where the activity is to be carried out. These 15 were mostly in Beijing, Shanghai, and Shaanxi. This tells us that it’s relatively acceptable in these three places to put your activities on record there and to carry out those activities in a different province. For example, a college is holding a conference or a university organization is going to carry out poverty alleviation activities in a poor region, so there Chinese partner might be in Shanghai, but the poverty alleviation takes place in a county somewhere else. This is why we get cross-provincial cases.
When the ONGO is doing a project aimed at the vulnerable, the Chinese partner might be a school or a Chinese service organization. The project they’re planning is in another place, for example a poorer place, so we see that sometimes the location of the activities is different from where the Chinese partner organization is based. Also, we’ve seen that Shanghai and Hubei have both undertaken procedures to put activities on record that are national in scope. Although there are only a few examples of this, it’s something very significant. Some activities would be impossible if every specific activity right down to the smallest thing had to be filed, it would be very difficult to achieve, and so what we’ve seen here means that your activities can be big or small, the scope can be tiny or it might even be nationwide. What we’ve seen so far is that the places that have carried out the most filings so far are Guangdong, Beijing, and Sichuan, while there are eight provinces that have put zero temporary activities on the record.
3. Concluding observations on implementation
From this data, we can identify certain trends so far. First of all, in terms of who has been able to register, the majority of those already successfully registered have been transferal registrations. The first batch were all transferals, but then we gradually saw a number of new registrations. The most important question is who will be able to complete a new registration. For those organizations that were already registered in China, the process of transferal was basically just a case of continuing their original situation. But for those that had never been registered in any way with the civil affairs authorities or the departments of commerce, the new registrations are connected to the type of organization and the attitude of the local PSUs.
First of all let’s look at the type. The majority of new registrations have been made by commercial or economic-type organizations, for example economic-related trade associations and chambers of commerce, which have found it easiest to make the breakthrough and register successfully by following the legal procedures. It is also linked to location, for example we have seen a relatively large number of new registrations happening in Shanghai, Guangdong, and Beijing.
Another important factor is the mentality of the PSU. It is very important whether the PSU acknowledges what you do, and whether they see it as something that is going to promote development. If the PSU accepts an organization from the conceptual viewpoint, then the procedures are relatively easy to get through, including the public security department’s coordination on procedures and its approach to service. On the whole it will all go very smoothly. Take for example the Shanghai Economic Relations and Trade Commission. Since there is a long history of experience in managing economic-type organizations in Shanghai, and experience brings a change in thinking, in its own experience the Commission will have realized the value of ONGOs, and so this makes it easy for the idea of an organization to be accepted. Once the idea has been accepted, the different procedures and the cooperation, service and help of the public security department all comes pretty easily. The difficulty lies in that little point right at the beginning that gets the ball rolling.
In fact, it’s not only ONGOs, it’s the same for Chinese organizations. Economic type organizations in China, out of all our domestic social organizations, are always seen as the ones that get priority in development, because economic development brings social development, so people have a better understanding of this kind of organization; they’ve had more experience of them; and they’re seen as more “pure”, with their development aims being more in keeping with China’s own goal of promoting economic development. In comparison with economic organizations, it’s more difficult for other types of organization to find recognition, and this is determined by the experience of the PSU: if its mentality is more open, if it has a broader view of things, then it is more likely to be able to accept other kinds of organizations.
What we’ve seen to date is that based on this, so far only about one third of PSUs have been fulfilling their duty to serve. At present, out of the 42 different agencies named as PSUs on the lists issued by the State Council and the MPS, only 15 are actually shouldering this responsibility. In other words, two thirds are still not acting on their duties. Of course among these there are some that don’t have ONGOs operating in their fields, but for others there are a lot of ONGOs operating, and ONGOs have reached out to them, but they haven’t been willing to act on this responsibility. This presents us with a problem: the Law attaches this responsibility to these PSUs, but if in practice the PSU does not act on its duties, what can be done about it? We’ve seen that in practice at the moment there is no institutionalized channel that can help us address this problem, and even the public security departments have no way around this. There is no way to force them. Unless we are to take them to court that is, but this isn’t a way to solve the problem.
The public security bureaus and the PSUs have done a lot to coordinate work, but this role so far has been up to the individual efforts of people in these bodies and hasn’t become institutionalized. In practice the central problem for those organizations that have not yet registered is still the problem of finding a PSU.
But how can we solve this problem? We can try taking a few different routes. For example, if at the moment there is an agency that doesn’t appear on the list of PSUs but could feasibly be a PSU, the lists can be updated at any time. These lists are only the first version for 2017, and can be updated whenever necessary. So if you can find a potential PSU, but this agency isn’t on the list, it’s not a big problem, you can have the agency go to the public security bureau and apply to become a PSU. That’s one way to go about it.
Another approach would be to try registering in a different locality with a different department. For example if your organization operates on a national level but you’re unable to find a national-level PSU to sponsor you, you could try registering more than one representative office, and you can operate on a cross-provincial basis. For example, if you find it’s difficult to operate in one particular province, but it’s relatively easy in a neighbouring province, you can register or record your activities in the neighbouring province and then carry out your activities on a cross-provincial basis. This is another potential option.
In terms of law enforcement, from January 1st 2017 any behaviour by any organization that has not registered or has not completed procedures to put temporary activities on record could be entering illegal territory. This is clearly unreasonable. But from the way the Law has been enforced we can see how Chinese law and its enforcement have a way of adjusting to each other, our law actually has very broad boundaries, and when it comes to enforcement it isn’t completely inflexible, the boundaries aren’t being so strictly abided by that if you happen to do something touching on such-and-such a clause then someone will come after you to enforce the law. The reality is that there are still a lot of ONGOs that haven’t yet registered or put their activities on record but are carrying out borderline activities.
What do I mean by “borderline”? What I mean is whether an organization should go and register, or whether its behaviour constitutes “activities” as understood in the Law. There are a lot of blurred lines involved here. Our enforcement offices haven’t been completely rigid about things and said “look, if you haven’t put something on record then your every move is in violation of the law.” They are looking at your activities themselves, so that if what you’re doing is something good, and there is no clear illegal practice going on, then the enforcement offices haven’t been utterly inflexible, telling you that your every move needs to stop. What we’ve seen is law enforcement that is combining legality with legitimacy. If your behaviour is quite clearly some kind of illegal behaviour, or by definition you are clearly breaking the law, this may become the basis for the law being enforced, but other than that an enormous amount of behaviour falls into a grey zone. When this is the case the law enforcement departments consider how appropriate an activity is, whether it’s a good thing or not, if there is any problem with any of your behaviour, and if you’re breaking any laws. Where the Law isn’t clear on something, it’s not used as a precedent to enforce the Law.
So, from the first day following the Law’s promulgation we can see that the biggest problems with it is that its definitions aren’t clear and its concepts are vague. The implementation process is actually a process of re-legislating, and in this process we can see that a lot of things that were unclear in the Law have been gradually given some definition in practice. But there are still some problems that have not yet been solved. The first is determining the rules for who the Law is directed at. At the moment the public security departments are working on this. But who exactly is the Law targeted at? The Law just says non-governmental, non-profit social organizations like associations, foundations, think tanks, but this is very vague and these are not legal concepts. This makes it very difficult for the departments charged with enforcement.
In some countries, an organization might be registered as a company, but is also known as an association, a foundation, or a think tank. In this situation, should the organization be seen as falling within the scope of the law? This is something that still hasn’t been completely cleared up, and there is an enormous amount of work to be done here, because every country’s concepts are different. And then there’s the even more difficult issue of defining activities, particularly temporary activities. What is an “activity”? We’ve seen some real chaos recently in the system of putting temporary activities on record. Some are saying that issuing an invitation to someone is an activity. Is that an activity? If that were the case then every time a person comes to work for an ONGO they’d have to go and put it on record. The work involved with that would be something else. And yet some people are still treating this as a temporary activity and going to put it on record. But does it count or not? This is all to the effect that the boundaries of what constitutes a temporary activity just become even more blurred.
For ONGOs, their biggest difficulty is the PSU. Recently we’ve seen further evidence that the responsibilities of PSUs are unclear: what exactly their responsibility is, and how those responsibilities should be fulfilled, what the legal basis to check their performance is, none of this is clear.
Another issue that’s even more important is the problem of incentive. It’s not just a case of avoiding responsibility, in some places the departments of public security even share responsibility with the PSU, but the PSUs are still not willing to play their role. In other words, sometimes it’s not entirely an issue of them worrying about responsibility. A lot of the time it’s that the PSU doesn’t have the motivation, there’s no incentive mechanism to make them do it. We need to ask what can be done about it in this kind of case.
Then there’s the issue of who responsibility falls on for supervision after registration. Should it be the public security bureau or the PSU? In the supervision of activities after registration, so far the problems I’ve seen most of have been related to bank accounts. The Law says they can accept other types of legal income, for example funds not directly solicited or income from services, but their bank accounts can’t play this function, so this is a problem in the management of activities after registration.
In terms of the problem of thresholds to registration we were originally most concerned about, for example registering multiple representative offices, the cost of registration and so on, at the moment, these all seem to be things that the majority of ONGOs can deal with, and are able to solve. The next step is to look at mechanisms to push things forward.