Heart of Gold: It Isn't Easy Doing Good -- The NGO

UNCLAS GUANGZHOU 011657

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EB, DRL, R, E, EAP/CM, EAP/PD, ECA
STATE PASS USTR FOR STRATFORD
USDOC FOR 4420/ITA/MAC/MCQUEEN, CELICO, DAS LEVINE
USPACOM FOR FPA

E.O. 12958: N/A
TAGS: PHUM ECON SOCI KPAO PINR CH
SUBJECT: Heart of Gold: It Isn't Easy Doing Good -- The NGO
Registration Odyssey in South China

REF: GUANGZHOU 7743

(U) THIS DOCUMENT IS SENSITIVE BUT UNCLASSIFIED. PLEASE
PROTECT ACCORDINGLY. NOT FOR RELEASE OUTSIDE U.S.GOVERNMENT
CHANNELS. NOT FOR INTERNET PUBLICATION.

Summary
--------------


1. (SBU) While headlines trumpet the growth of Chinese
civil society, philanthropy, and volunteerism as part of a
budding harmonious society, the truth in South China is that
legal status is out of reach for most non-governmental
organizations (NGOs) - foreign and domestic. In this legal
gray area NGOs can still provide services but their advocacy
role and ability to reach out to the general population is
strictly limited. Through 30 interviews with NGO,
government, and university officials Congenoff tracked the
path of NGOs on the registration odyssey in South China.

What is an Official Chinese NGO?
--------------


2. (SBU) While NGO is a common term that refers to an
organization that carries on certain activities it has a
very specific legal definition in China that refers only to
organizations registered with the Ministry of Civil Affairs
(MCA). In order to be a legal NGO (with one or two minor
exceptions) an organization must be registered with the MCA
as a social organization (a membership organization for a
specific activity),a foundation (a fund to disperse money
for projects) or a non-profit professional institution
(private school, research institute or hospital). While
government NGOs (GONGOS) technically fall under this law
their case is handled separately in septel. There are other
creative ways of registering, such as registering as a
normal business through the business bureau (septel),but
that is, strictly speaking, illegal because all NGOs are
legally required to have registration through the MCA.
Since the registration requirements for the aforementioned
three types of MCA registration are similar their cases are
handled together below.

Looking for a Sponsor to Lend a Hand (And a Reputation)
-------------- --------------


3. (SBU) The largest stumbling block in NGO registration is
finding a `professional leading organization' (sponsor or
mother-in-law agency) to help you register with the Ministry
of Civil Affairs. A professional leading organization can
be a government ministry or mass organization (such as the
Women's Federation, Communist Youth League or China Labor
Union). Before a NGO can begin registration it must have
already found its government sponsor. Actual sponsor
responsibilities only involve reviewing yearly financial and
program reports but the underlying (and widespread) rule is
that a sponsor will be fully responsible if something goes
wrong with a NGO's activities.


4. (SBU) In interviews with local government and NGO
officials it was commonly stated that there is little
incentive for a department such as the Ministry of Education
or the Public Security Bureau to be adventurous enough to
become responsible for an independent organization. In
addition most sponsors will only help one NGO of a certain
type. For example, the Bureau of Environmental Protection
reportedly will not sponsor additional NGOs because it
already is a sponsor to a government-associated non-
governmental organization (GONGO). MCA officials stated
that the rule was not that strict but any decisions about
whether to sponsor a NGO or not are completely up to the
government department.


5. (SBU) The Guangzhou and Shenzhen municipal and Guangdong
Provincial MCA offices all stated that they play no formal
role to help NGOs find a sponsor. Some local NGO officials
charged that the MCA has even been blatantly obstructionist
in rejecting and discouraging departments to act as sponsors
for certain organizations. In one case a NGO's founder was
reportedly told that its sponsor's activities didn't

sufficiently match its own and the MCA could not give him
any other suggestions for government departments that could
serve as a sponsor because the list of potential sponsors
was secret. MCA said there is no guide or list to help
people locate the government department that matches their
activities but that it ca give advice in an informal way.

Friendship Only Goes So Far
--------------


6. (U) While it is logical that many government departments
are unwilling to assume responsibility for sponsoring a new
unknown NGO even NGOs that have a long history of unofficial
government cooperation often have little luck with
registration. Unregistered NGOs, particularly health-
related NGOs, commonly and openly work with government
departments for activities. The Disabled Federation works
with Habitat for Humanity to build houses and with Handicap
International on prostheses programs, the Shenzhen and
Nanning Centers for Disease Control (CDCs) work with AIDS
Care China, Chi Heng Foundation, and Doctors without Borders
on AIDS care while Handa (leprosy rehabilitation) works
closely with government dermatological institutes. All of
these organizations have been cooperating with their
government unofficial partners for several years, despite
their "illegal" unregistered status. However, almost every
organization stated that official NGO registration
sponsorship was a slim possibility.

A Question of the Bottom-Line for Sponsors
--------------


7. (SBU) Certain government departments can also face
financial risk in sponsoring a NGO. Currently, many
international donors are wary of giving money directly to an
unregistered NGO because it has no legal "non-profit" status
and often cannot have a legal organizational bank account.
In order to give money to a local unregistered NGO the
international donor would have to place the money directly
into the NGO director's personal bank account - a situation
its board of directors would not allow. Some intrepid
unregistered NGOs have been able to work out an
accommodation with its unofficial government partners. The
international donor will give money directly to the related
government department and it will be charged with
cooperating with the unregistered NGO for disbursement and
programming. For example, the Bill Clinton Foundation
distributes free anti-retro viral drugs (ARV) for the
treatment of children with HIV and the Ministry of Health
(often through the CDC) relies on NGOs to help identify the
children, and develop adherence counseling programs to
ensure implementation of the program. This still is
technically "illegal" because the NGO is unregistered but
NGOs, particularly in the health sector, have been able to
use this system effectively with little interference from
the MCA.


8. (SBU) In some cases this kind of cooperation works very
well and in some there are charges that the government
partner will skim 10-20% of the money off the top or only
institute its own token program and use the donor money for
everyday expenses. None of the NGO officials interviewed
specifically named their partners but only they had "heard
of it happening". While this system is effective for
funding programming, it can undermine a government
department's willingness to become an official sponsor to a
NGO. If a government office helps a NGO to obtain official
status, the NGO will then have legal non-profit status, be
able to have its own organizational bank account and be able
to independently pursue international donor funds. NGOs
could be motivated to eliminate the "middle-man" or to act
more independently. Most importantly, the government
department can lose one of its sources of program funding if
the NGO is directly funded by the international donor.

Fire Safety First!
--------------


9. (SBU) Even if the sponsor requirement is met there are
many other hurdles that must be overcome in order to be able

to register. During the course of the registration
investigation (every applicant in Guangdong Province has a
personal site visit by a MCA investigator),Huiling is a
local organization that runs a school, adult workshop and
kindergarten for disabled people that is majority-run by
`lay' Vatican-associated Catholic priests from Hong Kong.
During their MCA investigation the staff was told its
kitchen is too small for the kindergarten and violated fire
safety codes. When asked if they considered trying to raise
the funds for the renovation they felt that it would still
be hard to get registration. A municipal MCA official (in a
different city) also listed office fire safety codes as one
of the main pitfalls organizations run into during the
registration process. According to the registration
department of the Guangzhou Municipal Association for
Industry and Commerce there is no systemized fire code
inspection or site investigation for normal businesses.

The Bureaucratic Maze
--------------


10. (U) Another municipal MCA has a six-month `pre-
registration' process all NGOs that want to register as
social organizations (the most common NGO type) are required
to go through that it is not mandated by the 1998 law. In
order to have the mandatory pre-registration process begin,
all proof of rental agreements (with original house deed),
sponsorship agreements, necessary deposits, and paperwork
must be ready. After the pre-registration is over there is
a period of six months of review where the NGO has to pay
rent on facilities (and the MCA investigator visits every
NGO) but is not allowed to hold activities until the
certification is complete.

Utility Equals Survival
--------------


11. (SBU) In this climate most NGOs don't bother to
register. All unregistered NGOs staff spoken with seemed to
judge their prospect for survival on sheer usefulness of
their programs and ability to avoid controversy. Huiling
officials see their kindergarten as in danger because there
are so many kindergartens in the area that can accept people
with mild disabilities but are relatively secure that their
adult home for moderate and severely-mentally handicapped
people (that shares the same illegal status) will not have
problems because it is the only organization that provides
this kind of service in the area. Health-related NGO
officials were even more secure in their status because they
provide such a stable source of international funding and/or
recognition for the local CDCs and hospitals that they are
not concerned about being shut down by the MCA. In
addition, there is no system in place for the MCA or the
police to enforce registration laws, so if a NGO avoids
controversy and focus on providing services only they can
usually avoid trouble.

...Unless There is Bad Press
--------------


12. (SBU) As issues ebb and flow so does the government's
favor and their blind eye to "illegal unregistered NGOs".
For example, after a group of HIV-positive people from Henan
Province protested in Beijing the topic became more
sensitive. The news story is complicated as it is said that
the patients witnessed the high standard of care at the
Hubei Province Medecins sans Frontieres (MSF) clinic and
became incensed and decided to protest (with some
encouragement from Aizhixiong, a Beijing-based AIDS
unregistered NGO). The end result is the advanced stage of
negotiations for a new Henan MSF clinic was abandoned and
another AIDS NGO in our area (that also operates in Hubei)
was told informally by a Department of Health official to
avoid programs with Henan people until the furor died down.
The surveillance on his organization, not only in Hubei, but
also here in Guangzhou has greatly increased. Additionally,
a request from Congenoff for a meeting with the Nanning,
Guangxi Province MSF clinic was referred to the Beijing
Headquarters (this had not been done on a previous visit)
and then refused. Through the Guangxi CDC, Congenoffs were

still able to visit the MSF clinic and speak with their
staff but only on a brief, informal basis.

....Or You Try to Organize Workers
--------------


13. (SBU) Last year when the NGO environment was generally
seen as tense a newspaper article in Hong Kong about labor
conditions in Guangdong Province landed the Chinese Womens
Working Network (CWWN) in hot water (septel). While it had
cooperated with the Department of Health in the past over
health issues many of their activities involve trying to
organize female migrant laborers in the Pearl River Delta to
demand their rights. They received an order to register
their center as a NGO through the MCA immediately. Since
they had no hope of finding a government sponsor they closed
up shop and set up temporary offices, moving 3-4 times in
one year.

Comment
--------------


14. (SBU) The bad news is that it is still extremely
difficult to be able to legally register as a NGO through
the MCA unless the NGO founders are exceptional or
exceptionally well-connected. The good news is you can
mainly operate without registration, though it is
technically illegal. Based on discussions with 22 different
NGO organizations and researchers (not including the eight
government departments also interviewed),it was clear that
Guangdong and Guangxi follow national trends in having a
much larger proportion of NGOs unregistered than registered.
The advocacy role is largely vacated in Guangdong and
Guangxi as HIV/AIDS NGOs focus on the at-risk populations
only, disability NGOs focus on providing services, and legal
aid NGOs focus on education instead of public advocacy.
NGOs are doing great at providing government-type social
services but are lacking in public information, advocacy
activities. Even the local Greenpeace office seems to be a
quieter, defanged version of its international (or even Hong
Kong) self. All of the NGOs interviewed do an incredibly
large amount of work with a high level of enthusiasm and
have an impact on their target audience, but as long as NGOs
are confined to the legal sidelines their ability to build a
strong civil society is marginalized.

Dong