Law

Guangdong Government Implements New Scheme to Promote Civil Society Organisations and Outsourcing of Social Services

The Department of Civil Affairs of Guangdong province is planning to pass a scheme to promote and relax some of the existing restrictions on civil society organisations (CSOs, known as social organisations in China). The scheme under examination is called the Scheme on Further Developing and Regulating Social Organisations of Guangdong Province[NOTE1]. The proposed scheme, to be effective from 1 July 2012, will change the existing restrictions on the registration of social organisations. Social organisations are legally registered and administered under the dual supervisory system which necessitates the organization to seek the prior approval from an official, administrative body authorized by the government of provincial level or above to act as its supervisory unit. Approval from the supervisory unit is needed before the organization could file a registration to the Ministry of Civil Affairs.

Social governance reform was brought up in the CCP’s 17th Plenary in which the social sphere was included as the fourth pillar besides political, economic and cultural construction. Since then Guangdong province, the pioneer of the economic reform, was delegated to pilot the social governance reform which focused on minimizing the role of the state in the provision of public and social services and promotion of the CSOs. The Scheme put forth by the Ministry of Civil Affairs in Guangdong provides the implementation details, to be generalized in the province and promoted to the rest of the country.   

Eight types of civil society organisations are the first to benefit from the legal relaxation under the Scheme including: (1) the industrial associations, (2) trade associations registered in other provinces, (3) organisations serving the living of the mass, (4) charity organisations, (5) social service organisations, (6) rural-urban grassroots organisations, (7) organisations that have relation/affiliation to foreign organisations, and (8) nexus organisations[NOTE2].  

According to the Regulations for Registration andManagement of Social Organizations and the ProvisionalRegulations for Registration and Management of PopularNon-Enterprise Work Units (promulgated in 1998), a social organization is subject to double administrative control. The Ministry of Civil Affairs is responsible for registering a social organization, and the supervisory unit is responsible for the organization’s daily operations. Before a social organization can get legal registration, a certificate of permission from a supervisory unit is needed, known as “finding a mother-in-law”. The supervisory unit must be a government organ or party organization related to the organisation’s area of work at the provincial level or above, or a body it authorizes. The mandatory affiliation subjects the CSO to the scrutiny of the supervisory unit over its political position, financial activities, personnel management and its foreign relations. Apart from the requirement of a supervisory unit, Article 13 of the Regulations for Registration and Management of Social Organizations enforces the “one organization in one sector/area of service” system: "If in the same administrative area there is already a social organization active in the same or similar area of work, there is no need for a new organization to be established”.

The new Scheme of the Ministry of Civil Affairs of Guangdong Province pledges to simplify the CSO registration. Instead of securing a prior permission to affiliation and supervision from a government or party organ, the applying CSO can register directly with the Ministry of Civil Affairs[NOTE3]. The role of the supervisory unit is lessened to management focusing on the work, administration and capacity building of the CSO. More flexibility is given to the “foreign” trade associations. Previously only the provincial ministry was authorized to register a provincial level “foreign” trade association ie trade association originated in other provinces, to set up a branch organisation in Guangdong province. The authority is now delegated to the county and city bureaus. The smaller scale “foreign trade associations” of the city level originated outside Guangdong are now allowed to operate in the province. In the same stroke, more flexibility is given to the county under the preliminary registration system under which the city and county bureaus are now authorized to approve the registration of the district, community-based CSOs which are not yet able to satisfy all the conditions for official registration.

The Scheme also pledges to scrap the “one organization for one sector” system, to be initially piloted in the industrial associations to “introduce competition”. Industrial associations are encouraged to form based on the same work, the same production process and the same service. To improve the effectiveness of the industrial associations which are criticized for being administration dependent, they are further encouraged to re-structure and establish inter-regional branch organisations. Their membership is allowed to extend to Hong Kong, Taiwan and Macau enterprises legally registered in Guangdong province. The healthy development of effective industrial and trade associations are believed to be a pre-condition to the regional, industrial collective negotiation which the provincial government and the trade union federations are heavily promoting. The industrial and trade associations are expected to be more representative of their members across region to protect their interests, and more effective than before in performing the functions and services delegated or procured by the government.
 
Financing and Capacity Building of the CSOs
Relaxations are specific regarding the charity organisations which are permitted to register under their names rather than bearing the titles of the “mother-in-law” to wash away the administrative colour implicated by the supervisory unit. The government also supports a higher degree of diversified financing by delegating the authority of registering private foundations, including foreign ones, from the provincial ministry to the city and county bureaus. Charity program funding from the commercial, financial institutions are encouraged. Private funding sources shall couple with public funding budgeted from the local government to set up the CSO Incubation Fund and CSO Incubation Centres to provide training to the CSO staff for establishing sound administrative and financial system, as well as support their programs.

Delegation and Outsourcing of Social Services
Piloted in Shenzhen in 2008 and limited to a few cities in the province previously, the government is now planning to formalize and extend the outsourcing and government procurement of social services from the CSOs. A catalogue of social services to be outsourced and guidelines on the outsourcing agents, the consultants, the tender procedure, the contract, the appraisal mechanism, the service rates and payment, as well as the remuneration protection of the staff of the outsourcing agents etc will be developed. Not limited to the provincial and municipal level anymore, the city and county government are encouraged to procure from the CSOs services under the authorized areas and procedures.

Management of the CSOs
To replace the dual supervision by the “mother-in-law” and the Ministry, the management of the CSOs will be subject to appraisal schemes and third-party assessment of their performance, aside from the annual review by the Ministry. Organisations rated 3A and above are eligible to outsourcing services from the government.

IHLO

NOV 2011