JUNE 12-13 DISCUSSIONS OF CHINA'S PROPOSED CHARITY

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 004401

SIPDIS

SIPDIS

DEPT PASS USTR FOR KARESH, ROSENBERG, CELICO, STRATFORD
LABOR FOR ILAB-LI, SCHOEPFLE AND OSEC-OWEN, HUI
TREASURY FOR OASIA/ISA-CUSHMAN
USDOC FOR 4420/ITA/MAC/MCQUEEN AND DAS KASOFF
GENEVA FOR CHAMBERLIN

E.O. 12958: DECL: 06/29/2027
TAGS: PGOV PHUM ELAB CH
SUBJECT: JUNE 12-13 DISCUSSIONS OF CHINA'S PROPOSED CHARITY
LAW

REF: BEIJING 3884

Classified By: Econmincouns Robert Luke, reason 1.4(d/b)


1. (C) Summary: Reftel provided the text of a draft of
China's proposed Charity Law, which would, for the first
time, create a legal means to register non-profit
organizations in China. A participant in a June 12-13
conference on the Charity Law, sponsored by China's Ministry
of Civil Affairs (MOCA) said provisions of the draft law
presented by the Chinese side still suggest a law that puts
more emphasis on controlling civil society than nurturing it.
Foreign experts at the conference reportedly argued for
giving civil society space to flourish, and advised the
Chinese to broaden the definition of what constitutes
charitable activity, and liberalize provisions on fund
raising and tax benefits for donors. Several experts
discussed the merits of a truly independent regulatory body
for charitable organizations. Embassy continues to receive
conflicting information about when the law will be finalized.
Clearly there is much work to be done, and the Government
does not seem inclined to conduct this work in the open.
Embassy will provide conference materials and participant
lists to DRL and EAP/CM separately. End summary.


2. (C) Reftel provided the text of a draft of China's
proposed Charity Law, which would, for the first time, create
a legal means to register non-profit organizations in China.
On June 20, Laboff met with Kelly Lau from Nike Corporation
(protect),who observed a June 12-13 conference for
international experts on the proposed Charity Law, hosted by
China's Ministry of Civil Affairs (MOCA) in conjunction with
the University of British Columbia. Conference presenters
included government and non-government experts on charity
regulation from Canada, Germany, the Philippines, Singapore,
Hong Kong, the United Kingdom, and the United States.
Chinese participants included delegates from MOCA, the State
Council Legislative Affairs Office, the Communist Youth
League, and several Government-affiliated charities, as well
as several Chinese academics from leading law schools. No
independent charities or NGOs participated. The draft law
presented in reftel was not discussed at the conference.
Instead, MOCA circulated a document entitled, "Relevant
Issues on Drafting the Charity Law of the PRC," containing 24
draft articles, including competing versions of some
articles, and invited the advice and comments of all
participants. According to Lau, very few Chinese
participants spoke at all. (Embassy will provide a copy of
this document along with a conference agenda and list of
participants to DRL and EAP/CM.)


3. (C) Lau told Laboff that the MOCA discussion document
suggested a Charity Law that emphasizes controlling rather
than nurturing civil society. The Chinese side appeared
especially concerned about controlling fraud, she said.
According to Lau, Western presenters aggressively argued for
giving civil society space to flourih, and advised the
Chinese to broaden the definition of what constitutes
charitable activity, and liberalize provisions on fund
raising and tax benefits for donors. Several experts
dicussed the merits of independent regulatory bodies for
charitable organizations. On the definition of charitable
activity, Lau said some experts were concerned that such
activities as advocacy, rights education or capacity building
would fall outside the scope of charitable activities as
defined under current drafts of the law. Lau noted that it
would be hard for Nike, for eample, to find an NGO authorized
under such a law that could carry out workers' rights
education. On fund-raising, Lau noted that the provisions
under discussion limited the means by which charities can
raise money, leaving no room, for example, for &fee for
service.8 Some experts advised China to be more specific in
the Law about tax benefits for donors. Lau said some experts
were also concerned about draft provisions requiring
charitable organizations to register their volunteers and
report their names to the government.


4. (C) Lau said that one MOCA official indicated privately
that MOCA hopes to pass the law in the Spring 2008 National
People's Congress session. The Chinese Government will not
likely make it public at any point, nor is it likely to
change much from its current form, he told her. However,

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MOCA Director General Wang Zhenyao separately told Embassy
that the current draft Charity Law is "really bad," and
"won't be coming out any time soon." According to Wang,
Chinese participants found the June 12-13 conference useful,
and realize that the draft Charity Law has a long way to go.


5. (C) Comment: The silence of Chinese participants at the
conference, and the sensitivity with which MOCA is handling
draft legal provisions suggest that the Government is so far
not inclined to conduct its work on the Charity Law openly or
transparently.
RANDT