Saturday, 13 March 2010

Beijing tightens rules on foreign funding of NGOs

The central government has tightened restrictions on overseas donations to independent domestic non-governmental organisations in a move that experts and NGO workers fear will threaten the survival of the mainland’s fledgling civil society.


Guanyu 道 said...

Beijing tightens rules on foreign funding of NGOs

Verna Yu
12 March 2010

The central government has tightened restrictions on overseas donations to independent domestic non-governmental organisations in a move that experts and NGO workers fear will threaten the survival of the mainland’s fledgling civil society.

Under regulations that came into effect this month, independent NGOs that accept donations from overseas donors face more scrutiny than ever.

The central government refuses to allow independent NGOs to register as non-profit organisations, so most are forced to register as companies and are liable to pay tax.

But now the State Administration of Foreign Exchange is requiring NGOs to meet a new set of conditions, among them the presentation of certificates of registration of the overseas donor organisations abroad and a notarised donation agreement.

Religious groups are also required to obtain approval from the authorities before accepting donations worth more than 1 million yuan (HK$1.13 million).

NGOs connected to the government are exempted from the rules.

The move has sparked outrage among independent grass-roots NGO workers, who fear it is the latest step by the government to restrict their work.

“Obviously this is targeting funding [from abroad] for independent NGOs,” said Wan Yanhai , head of outspoken Aids organisation Aizhixing. “This gives the government even more control. The new policy is a weapon that targets NGOs, it’s a gun in their hand.”

The central government increasingly realises the value of NGOs’ community work but also distrusts their motives, especially those that receive funding from abroad.

The closure last July of Beijing-based civil rights group Open Constitution Initiative, which received grants from the Yale University law school, is still fresh in many NGO workers’ memories. The non-profit group annoyed the government with a series of high-profile cases, including providing legal aid to victims of tainted baby milk formula. Apart from being fined 1.4 million yuan for tax violations, its founder Xu Zhiyong was detained for weeks.

Wan said grass-roots NGOs already faced a plethora of bureaucratic procedures and were subject to scrutiny from various government departments including tax, commerce and state security authorities.

Wan has been detained and questioned from time to time over his projects. “This is very upsetting ... I’m prepared to close any time,” Wan said. “I’ve worked hard for 16 years in this area and now I realise not only are they not grateful, they actually want to do away with us.”

Although the new rules do not apply directly to international groups, the move nonetheless signals a further restriction on NGOs’ overall operating environment. Last month, a notice attributed to the Ministry of Education appeared on the websites of several mainland universities saying Oxfam Hong Kong was an organisation with “ulterior motives”.

NGO workers say the bureaucracy involved under the new rules is unworkable and fear funding will be severely delayed or cease altogether because of the procedure’s complexity.

“If the government wants to seriously implement this rule, there will be big problems because many organisations might not be able to access their funding,” independent NGO researcher Fu Tao said.

He said one NGO tried to get a donor’s agreement notarised but was told the overseas donor organisation had to be present on the mainland to sign a document to prove the authenticity of the donation.

Deng Guosheng, an associate professor at Tsinghua University, said grass-roots NGOs that received funding from overseas had been looked on with suspicion in recent years, especially after the “colour revolutions” in former Soviet states.

“The government is worried about a colour revolution,” he said. “They are quite cautious about anti-China forces that are giving donations, but in the process they might have gone a bit overboard.”

Guanyu 道 said...

The head of a workers’ rights NGO who declined to be named said the government’s focus in the foreseeable future would be on social stability, fuelling its suspicions of the motives of NGOs funded by foreigners.

“If you do what they don’t like, they can use this rule to investigate you at any time,” he said.

While the government may not intend to stifle the non-profit sector, the fact that it feels that there is a continual need to regulate its funding and activities means the road ahead will be a lot harder for NGOs, analysts say.

“Its paternalism,” said Nick Young, former editor of the English-language China Development Briefing, which was forced to close under government pressure in 2007. “They want the children to have certain freedoms, but only if they use them in the right way.”