A harsh new NGO law has foreign organizations scrambling
By Mark Sidel
On April 28, China’s national legislature adopted the highly controversial Law on the Management of Domestic Activities of Overseas Nongovernmental Organizations, also known as its overseas NGO law.
The passage of the law, which has been in the works for over a year, sets the stage for months of anxiety and jockeying as thousands of foreign, Hong Kong, and Taiwanese NGOs, foundations, universities, trade associations, and other nonprofits try to divine how new restrictive rules on registration and operations will affect their work in mainland China.
China’s controls over the domestic activities of foreign nonprofit and educational institutions have long been divided, episodic, and spotty. To deal with the confusing maze of poorly understood and unevenly enforced regulations, some groups have registered as companies, others through the Ministry of Civil Affairs. Thousands more have operated under the radar with Chinese partner organizations. Now, all foreign NGOs will be controlled by the Ministry of Public Security (MPS), China’s huge internal-security apparatus.
The overseas NGO law is the result of significant political tightening in China. Beginning in 2012, when president Xi Jinping took office, domestic and foreign nonprofit groups alike have faced a sharply restricted environment. Labor activists, women’s rights leaders, and others have been arrested; some domestic advocacy groups have been closed; and many domestic nonprofit groups have become far more cautious about the work they do, particularly where it may involve advocacy.
In 2014, as part of these tougher new policies, the leadership decided to shift responsibility for regulating the work of foreign nonprofits in China to the MPS. A law that would govern foreign nonprofit organizations had languished in the civil affairs ministry for several years; once the MPS took over drafting responsibilities, with a major political push from above, things moved quickly.
The result is the law just passed. In most respects, it retains the draconian nature of the earlier draft, with some minor revisions. Foreign nonprofits and foundations must still be registered and authorized through the MPS. They still must find a Chinese partner organization to take responsibility for all the foreign entity’s work in China before the latter can apply for registration with the MPS. Chinese partner organizations must be vetted in advance.
Preferred or approved project lists will be issued by the MPS and other agencies; it is not clear whether projects not listed will be permitted. Groups that don’t plan to have offices in China, but
only intend to conduct what the law calls “temporary activities,” must still register (albeit with less paperwork) and must still have a domestic partner.
Even after a foreign NGO jumps these hurdles, serious restrictions on its activities will remain. Overseas nonprofits will be allowed only to work in certain enumerated fields that include the economy, education, science, culture, health, sports, and the environment. (An “et cetera” at the end of this list indicates that additional fields might be approved.) They can generally only work within the geographic area for which a given activity has been approved.
There will also be ongoing headaches. Each year, foreign NGOs will be required to furnish a report outlining all aspects of their planned work, and must then report when and where it occurred after the year has ended. Their offices and bank accounts will be subject to inspection. Penalties, including detention, will apply for violations — and Chinese organizations or individuals that take funding or other benefits from unregistered foreign groups will also be punished.
Foreign NGOs will not be permitted to fundraise inside of China. And a crucial catch-all provision in Article 5, which seems intentionally vague, prohibits any foreign nonprofit activities that “endanger China’s national unity, security, or ethnic unity,” or that “harm national interests or the public interest,” or even that harm “the lawful interests of legal persons and other organizations.” Even an environmental group working with Chinese groups to file lawsuits against polluters could run afoul of such a rule.
Over more than three decades, foreign nonprofits, foundations, and universities have played an important role, usually welcomed by China, in the extraordinary transformation of the country’s society and economy.
The drafting of this new law, and the centralization of control in the MPS, threatens balanced and effective partnerships built up over decades, and has caused fear that a sharply tightened environment in China means a closing to the world — or at least the most significant retrenchment since reforms began in the late 1970s.
Excerpt reprinted with permission from ForeignPolicy.com.
Mark Sidel is the Doyle-Bascom Professor of Law and Public Affairs at the University of Wisconsin Law School and a specialist in the law and policy affecting nonprofit and philanthropic organizations in China, Vietnam, India, and the United States.