SOUTHWEST CHINA: TRYING TO CONTROL FOREIGN NGOS IN A

C O N F I D E N T I A L SECTION 01 OF 06 CHENGDU 000061

SIPDIS

SIPDIS

DEPT FOR EAP/CM
BANGKOK FOR USAID - STIEVATER

E.O. 12958: DECL: 4/2/2033
TAGS: PGOV PHUM CH
SUBJECT: SOUTHWEST CHINA: TRYING TO CONTROL FOREIGN NGOS IN A
TIBETAN PREFECTURE

REF: A. A) CHENGDU 056

B. B) 07 CHENGDU 231

C. C) 06 CHENGDU 925

CHENGDU 00000061 001.2 OF 006


CLASSIFIED BY: James A. Boughner, Consul General, U.S. Consulate
General, Chengdu.
REASON: 1.4 (b),(d)




1. (C) Summary: While it remains unclear what impact recent
unrest in Tibetan areas of China will have on the work of
foreign non-governmental organizations operating in the region,
according to a limited-distribution government document obtained
by the Consulate, Ganzi Prefecture in western Sichuan Province
already issued strict rules on NGO approval and oversight in
November 2007. Foreign NGOs in Ganzi began to face increased
scrutiny during the tense security crackdown that followed a
public call for the return of the Dalai Lama by some Tibetans at
a public event held in the prefecture in early August. As the
new regulations require government officials to assume direct
and personal responsibility for preventing any "improper
activities," local authorities might feel little incentive,
especially in light of the current political environment, to
approve or engage in cooperative activities with foreign NGOs.
End Summary.

New Rules For Foreign, Hong Kong and Taiwan NGOs in Ganzi
-------------- --------------
--------------


2. (C) Ever since the August 1 Litang Horse Race Festival
"Incident" (ref b) in the Ganzi Tibetan Autonomous Prefecture
(TAP),home to 700,000 ethnic Tibetans, foreign NGOs operating
there report political sensitivities in the prefecture have made
their work more difficult. Consulate Chengdu recently obtained
and translated a copy of the new regulations, issued as a
limited-distribution government document, on the management of
NGOs and foreign assistance. The regulations went into effect
on November 11, 2007 and would not have been officially shown to
NGO representatives since they are internal instructions to
government authorities.


3. (C) Foreign NGO representatives, as well as some local
officials with authority over them, have complained for years
about the lack of a legal framework for registering and
regulating NGOs in southwest China. We understand the existence
of various types of NGO's, such as associations (xiehui),
foundations (jijin) and groups (zhuzhi),may have added further
complexity to the Chinese government's attempts to codify a
regulatory framework. Ganzi's new rules, however, have an
intimidating aspect since they focus on managing the risk to
social stability that the foreign NGOs are seen to represent.
The rules require local county authorities to sign documents
accepting personal responsibility for overseeing NGO projects
and preventing any possible "political agendas" from emerging.

Regulatory Gap As Well as Political Anxieties
-------------- -


4. (SBU) Chinese researcher Wang Wei, in an article entitled,
"Studies on the Development of International NGOs in the Ganzi
Tibetan Region," which appeared in the 2006 volume of "Economic
Development and Social Change in the Tibet and Other Tibetan
Regions," printed in Chengdu by the Sichuan University China
Tibetology Institute, highlighted the views of Ganzi Foreign
Affairs Bureau officials:

-- A law on the regulation of foreign NGOs in China is needed to
regularize their status and to make managing foreign NGOs easier.

-- The Foreign Affairs Bureau wants NGOs in Ganzi to be
proactive in informing government departments about the status
of their projects so that the government can perform its
functions of management and coordination. It also requests
foreign NGOs in Ganzi sign the "Guidelines for Implementation of
Foreign NGO Assistance Projects" so that their project can be
added into the government project management system.

-- Ganzi FAO officials do not have enough personnel to follow
NGO activities, lack a legal framework for managing NGOs, and
have difficulty getting cooperation from other government
departments on the management of foreign NGOs.

Background: Foreign NGOs in Ganzi

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--------------


5. (SBU) Wang Wei's article also provides an overview of NGO
work in Ganzi as of 2006. As of 2006, there were 23
international foundations, four Taiwan foundations and four Hong
Kong foundations providing assistance in the Ganzi TAP.
Cumulative assistance provided between 1990 and May 2005 totaled
44.51 million RMB or about USD 6 million. Two thirds of
international NGOs in Ganzi, including The Bridge Foundation,
Winrock International, the Trace Foundation, and Kham Aid, are
based in the United States. Assistance from USAID for the
three-year period August 2004 to August 2007 for Tibetan areas
of China includes some support for the work of Winrock
International, the Kham Aid Foundation, and Flora and Fauna
International. (Consulate Note: USAID funding for Tibetan
areas has been $4m per year since 2004, up to $5m for FY 08.
End Note).

Litang Horse Race Aftermath
--------------


6. (C) On August 1, 2007, the public call made by Tibetans
attending the traditional horse race festival in Litang for the
return of the Dalai Lama resulted in a harsh crackdown by local
authorities. In addition to arrests and conviction of suspected
subversives, the Ganzi TAP also oversaw a "Patriotic Education
Campaign (ref a),which started in Litang itself and then spread
to the entire prefecture in October 2007. As note above, NGOs
operating in Ganzi also felt the fall out. For example,
government authorities began to ask NGOs in Ganzi for: detailed
biographies of all staff; more detailed descriptions of projects
to be provided to the appropriate county foreign affairs office;
more detailed information about foreign NGO workers and project
sites. Some of these new requirements appear in the Ganzi TAP
regulations, issued as an "Opinion" -- see below for Consulate
translation. (Note: "Opinions" are policy statements that are
sometimes combined with specific instructions that might come
from a party committee or government body at various levels.
End Note).

Police NGOs Properly or Face Prosecution
--------------


7. (C) One key passage of the new regulations warns officials
of "sanctions" if NGO management is not done properly: "Taking
responsibility for and actively managing the acceptance and
implementation of assistance projects involving NGOs from
outside the China Mainland is an important part of the social
management function of every level of government. Every country
and functional department must fulfill their responsibilities
and assist foreign affairs offices at every level in the
performance of their work. Any dereliction of duty or
negligence or improper acts, if they result in adverse
consequences, will be attributed to the principal leaders
according to Party and government regulations. Negligence or
acts that constitute a crime will be passed to the courts for
prosecution according to the law."


8. (C) Per our translation, copies of the new internal NGO
oversight rules are being shared not only with the government
offices directly involved but also with: the courts, the Party
disciplinary commission, and the Ganzi military sub-district.


9. (C) Full text of translation follows:

Begin Text

Ganzi Tibetan Autonomous Prefecture People's Government Document
Distributed by Ganzi TAP Government; No. 2007-80

Ganzi Tibetan Autonomous Prefecture People's Government Opinions
on Strengthening Management of NGOs From Outside the China
Mainland and Foreign Assistance (Temporary)

To the County People's Governments, Prefecture Level
Departments, and Units of Prefecture and Provincial Level
Administrative Enterprises:

In order to strengthen the management of NGOs from outside China
Mainland and foreign assistance, regulate foreign assistance and
the acceptance of assistance, and to promote normal
international exchanges and cooperation, based on the specific
circumstances of our prefecture, the TAP government sets forth
the following opinion. Please see that the opinion is

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conscientiously implemented.


I. The scope of the management of the work of NGOs from outside
China Mainland and foreign assistance, the organization
responsible for the work, and work responsibilities.


A. An NGO from outside the China Mainland means an NGO
registered in a region outside the China Mainland (including
Taiwan, Hong Kong and Macao) or foreign country, or a non-profit
civil organization that has received advisory status from a
United Nations advisory Committee.


B. Assistance from an NGO outside the China Mainland refers to
assistance in the form of capital, materials and technology
provided by an NGO from outside the China Mainland for the
public welfare or public infrastructure of our prefecture.


C. The Foreign Affairs Office of the Prefecture and County
People's Governments provide management, supervision and policy
guidance for assistance projects by NGOs from outside the China
Mainland. The concerned departments of the prefecture and the
counties and the management office for the sector that receives
assistance carry out management within its area of competence
and the areas of responsibility specified in this opinion as
well as assist the foreign affairs department in its work.


D. The assistance receiving work unit refers to the
institution, social group, or other social organization that
directly receives assistance or implements the assistance
project. The work responsibilities of the receiving work unit
are:

i. Draft a project proposal based on the type of assistance that
the NGO from outside China Mainland (abbreviated henceforth as
assistance provider) and the actual needs of the assistance
receiving work unit and submit it to management department of
the sector concerned for a preliminary assessment.

ii. Conduct a social stability risk impact assessment on the
project for which assistance is being received and assume
responsibility for this risk.

iii. Conscientiously implement the foreign assistance project.
Make timely reports on the progress of the project to the
foreign affairs department and the management department for the
sector concerned. Manage well the project capital and cooperate
in arrangements for project inspection and auditing.

iv. Summarize and spread the successful experience and fruits of
cooperation gained from the project.


E. The management department for the sector of the work unit
receiving assistance means the sector administrative department
for the institution, social body, or other social organization
that receives or does the actual implementation of the
assistance. The sector management department's responsibilities
are:

i. According to laws, regulations, charters, sector rules or
industrial policy, carry out a preliminary assessment of the
foreign assistance project reported by the work unit receiving
the assistance. If the project is considered feasible, make a
report to the people's governments of the prefecture and county
in which the project is located.

ii. Supervise the implementation of the assistance project by
the work unit that is receiving the assistance.

iii. Strengthen liaison work and cooperate with the foreign
affairs organizations in jointly managing projects with
assistance from outside the China Mainland.

II. Principles for Accepting and Managing Assistance from NGOs
from Outside the China Mainland.


A. Principle of acceptable purpose for cooperation. The
assistance provider in providing assistance must have good
intentions and goals. It must not be involved in splitting the
country, overthrowing the government, or terrorism, nationalism,
extremist religious activities and must strictly abide by
China's laws. The assistance project should be suited to the
social and economic development goals of Ganzi TAP have good
social benefits, economic benefits, and ecological benefits.


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B. Principle that both sides must be willing. Whether the
assistance provider provides assistance and whether the
assistance receiving side receives assistance, depends upon both
sides being willing.


C. Principle that an agreement must be reached on the
assistance. The assistance project of the assistance provider
should be fully discussed with the project receiving work unit,
so that the two sides can jointly define how the assistance is
to be provided, the numbers involved and who is to receive the
assistance and other specific aspects of the assistance
provided.


D. Principle of Management of Funds. The assistance management
funds should be managed in a special account of the assistance
receiving work unit and disbursed as required for the needs of
the project as a special fund for a specific purpose.

The prefecture and county foreign affairs departments should
inform assistance providers of these principles. For projects
that clearly are not in accord with the principles above,
appropriate measures should be taken to guide, redirect, or
reject them. Any assistance project that might harm national
security or the social stability of Ganzi Prefecture should not
be accepted.

III. Acceptance of Assistance Projects by NGOs from Outside
the China Mainland


A. Any assistance provider that wishes to provide assistance to
any work unit or individual in our prefecture should apply to
the foreign affairs department of the prefecture or of the
county people's government and accurately fill out the "NGO from
Outside China Mainland Application Form".

These application forms should include the following: the
purpose the assistance provider in coming to the prefecture; the
background of the assistance provider; status of registration as
a social organization; the person in charge and office of the
assistance provider; and project funds; foreigners working for
the assistance provider, employees, and other units cooperating
with the assistance provider.

Government workers in our prefecture may not also be employed by
an NGO from outside the China Mainland.


B. The assistance provider and the assistance receiving work
unit should discuss the proposed assistance with the department
managing the sector in which assistance is to be provided. If
that department agrees, then it should submit a written
"assistance project plan" to the county government where the
proposed assistance project would take place for examination and
approval. After the county government examines and approves the
proposed assistance project, it is submitted to the Prefecture
People's Government for approval. Once approval has been
received from the Prefecture People's Government, assistance
receiving work unit may receive assistance.


C. The responsible person for the work unit receiving
assistance should sign with the prefecture and county foreign
affairs departments a "responsibility document on assistance
projects involving NGOs from outside the China Mainland",
thereby assuming responsibility for handling abnormal incidents
involving NGOs from outside China Mainland that might arise
during the implementation of the project.


D. In the case of an assistance provider provides capital or
material assistance to an individual citizen, the person
receiving the assistance submits to the foreign affairs
department in the county in which they reside will receive the
application. The foreign affairs department will examine the
matter according to the conditions of the assistance provider
and of the person receiving the assistance. A record will be
made of the assistance received that the person receiving the
assistance will sign for. Once the assistance has been
provided, the foreign affairs department will make a report to
the assistance provider.

IV. Implementation and Supervision of Assistance Projects of
NGOs from Outside the China Mainland


A. Construction projects support by assistance must be in
accord with city or rural planning and the national social and
economic development plan. They must provide social, economic or

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environmental benefits. Requests for land needed for projects
should be reported, examined and approved according to
procedures set forth in the relevant state regulations.


B. The assistance-receiving unit should carry out the
construction project built using assistance according to the
relevant regulations of the administrative departments that
manage infrastructure and construction. Once construction has
been completed, the construction must be approved by the local
construction project quality oversight bureau and other relevant
departments and then the assistance-receiving unit can use it.
Once the receiving unit is using it, the receiving unit should
strengthen management so that it will be used most effectively.


C. The assistance-receiving unit should sign a funds use
responsibility document with the sector management department of
the assistance-receiving unit. Strengthen oversight and
inspections of the receipts and expenditures and management of
the assistance-receiving unit and create an overall project
auditing and oversight system. The auditing department should
audit the receipts and expenditures of the project.


D. Funds must be used only within the scope of the project
agreement. No unit or individual may misappropriate or use
these funds for their own purposes or to arbitrarily decide that
they should be used for some other purpose. If there is
definitely a need to change the purpose of the funds, this
should be discussed and a consensus reached, and then be
approved by the county foreign affairs office.


E. The assistance project funds must be handled according to a
currently accepted financial system and recorded in an
integrated business accounting and management system of the
assistance receiving work unit. The assistance receiving work
unit should establish a comprehensive internal financial
management system including special account management in order
to ensure that special accounts are used for specific purposes.


F. The financial department of the assistance receiving work
unit should establish a method for managing the use of the
project capital. The person in charge of the project is
responsible to the work unit for the oversight and use of the
project funds.

G. The assistance-receiving unit should procure materials
needed for the project strictly according to the project
agreement.


H. During the project implementation period, the assistance
receiving work unit must establish a system for accounting for
materiel received for the project. Purchased or donated
materiel and equipment must be registered and managed so that
they will be used strictly in accordance with the project
agreement. Once the project has been completed, the management
department for the assistance receiving work unit should direct
the assistance receiving unit to make a timely submission of
documentation of funds and property transferred and follow
registration procedures, and manage the assistance assets
together with the all the assets of the assistance receiving
unit.


I. During the project implementation process, the assistance
receiving work unit should make periodic project progress
reports to the department that manages the assistance-receiving
unit. If a serious problem or a sudden development arises, the
department managing the assistance-receiving unit should make an
immediate report to the local foreign affairs department.


V. Termination of the Implementation of Assistance Projects by
NGOs From Outside the China Mainland

If the following occur during project activities, the prefecture
and the county people's government have the authority to decide
to terminate project implementation:

-- Serious violation of the project agreement
-- Suspicion of a political agenda
-- If an event beyond any control occurs that forces termination
-- Other circumstances that force termination of the project

VI. Taking responsibility for and actively managing the
acceptance and implementation of assistance projects involving
NGOs from outside the China Mainland is an important part of the
social management function of every level of government. Every
country and functional department must fulfill their

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responsibilities and assist foreign affairs offices at every
level in the performance of their work. Any dereliction of duty
or negligence or improper acts, if they result in adverse
consequences, will be attributed to the principal leaders
according to Party and government regulations. Negligence or
acts that constitute a crime will be passed to the courts for
prosecution according to law.

Whosoever receives assistance or gifts from the assistance
provider will, according to relevant regulations, will result in
a strict holding to accounts for the leaders of both the
assistance receiving work unit and the management department of
the receiving work unit. If a crime has been committed, the
case will be passed to the courts for appropriate handling
according to law.

(Seal of Ganzi Tibetan Autonomous Prefecture People's Government)

November 4, 2007

Subject categories: Foreign Affairs, Management NGO, Opinion

Copies to Prefecture Party Committee office, Prefecture People's
Congress office, Prefecture People's Consultative Congress
office, Prefecture Party Committee Disciplinary Commission,
Prefecture Court, Prefecture Procuratorate, Ganzi Military Sub
district

Printed by Ganzi Tibetan Autonomous Prefecture People's
Government Office November 6, 2007

Typist: Li Shaorong Proofreader: Zhang Yao (260 copied
printed)

End Text.
BOUGHNER