Alvis Xiong
(This drawing shows that “being put on the blacklist, a dishonest person who refuse to pay salaries to workers, is denied for applying for”government’s fund, government purchasing, biding for government project, production license, qualification examination, bank loans, market license, tax priority, honors”, copyrighted at http://www.gov.cn/xinwen/2018-08/24/content_5318132.htm)
- INTRODUCTION
In China, interagency coordination at the level of the central government is a great challenge. A modern government faces complicated social issues and must divide the responsibility and create agencies for specific things. The government ordinarily creates related agencies to deal with the same or similar issues, while the task for each agency is part of a larger whole.[1]
This way, however, produces redundancy, inefficiency, gaps, and profound coordination challenges.[2] Nowadays, many social challenges like air pollution or food safety, involve multiple areas. A single agency with a specific regulation has trouble systematically dealing with those issues. Different agencies must coordinate to achieve a policy goal. Without a good coordination mechanism, on the one hand, agencies cannot provide systematic public service, leading to a vacuum of regulation. On the other hand, the need of reality would cause agencies to expand regulated areas, leading to redundancy and inefficiency.
There must be some ways to coordinate those agencies that directly exert national power. How could China improve the performance of interagency coordination? Generally, one way is to set up new agencies or adjust the responsibilities of old agencies in a new situation. In another way, interagency coordination, requiring no involvement of the legislature, different agencies negotiate and make joint policies or decisions to clarify overlapping responsibilities or achieve some common policy goals. In China, for the second way, there are generally three mechanisms to resolve problems involving different agencies[3]. This blogpost will focus on one of those three mechanisms–the “interagency agreement.”
An interagency agreement (部门协议) is usually signed by two or more agencies that are not affiliated with each other, for the purpose of managing common jurisdictional affairs or achieving common policy objectives. Those agencies achieve some common consensus and agree to take joint actions.[4]
This blogpost sets out observations and analysis concerning recent memoranda of understanding（MOUs) on joint disciplinary-incentive measures （JDIM) in the social credit system. [Translations of many of these measures are available at Chinalawtranslate.com]. These are types of interagency agreements that the government uses to solve varied social problems. The 2nd section discusses the background of the MOUs and the 3rd section uses one example to illustrate the contents and purpose of the MOUs. The 4th section, using information from public news, observes how the Chinese interagency coordination actually works in practice. The 5th section analyzes the legality of these JDIM MOUs.
2. BACKGROUND AND CONTENTS OF JDIM MOUS
This analysis is based on a series of recent interagency MOUs on joint disciplinary-incentive measures (JDIM). Since 2016, more than 35 national-level interagency MOUs on JDIM have been signed and published. [See the list found on the website Chinalawtranslate.com]. These documents are the Chinese government’s efforts to promote the interagency information exchange and the sharing of administrative power. By measures of those MOUs, multiple agencies coordinate and take joint measures to punish a particular set of people, who are described as “dishonest失信”. However, although the word used is “dishonest”, those who are punished are not ordinarily regarded as “dishonest”. The documents are actually for punishing those who violate laws or regulations but under the name of “punishing those who are dishonest.”
The JDIM measures are set under the background of the Chinese government’s ambition to build a “social credit system社会信用系统.” The State Council issued a plan to build a system with big data technologies, in order to “constantly monitor and evaluate companies’ economic as well as non-economic behavior.”[5]
In 2014, the State Council issued the outline for building the social credit system[6], emphasizing the importance of punishment and awards and setting the goal of building a JDIM mechanism. Two years later, the State Council issued another “Guiding Opinion”[7]stating that the government agencies should establish information sharing system, and “on the basis of evaluation and decision for the dishonest made by the government agencies, other agencies should take joint disciplinary measures according to related rules.”
According to this 2016 guiding opinion, many MOUs on JDIM were published, involving four important aspects: 1) Matters that seriously endanger the health and safety of the people, including food and drug, ecological environment, and engineering quality, etc.; 2) Acts that seriously undermine the fair competition of the market and the normal order of the society, including bribery, tax evasion, tax evasion, malicious avoidance of debt, etc.; 3) Avoiding performance duties of a valid judicial judgment or administrative decisions; 4) refusing to fulfill the obligation of national defense.
Generally, each MOU includes the following elements: 1) the targeted actions which are set by a specific agency (the “main agency” in this MOU), 2) the disciplinary measures, 3) the responsible agencies who acquire the list of names of the “dishonest” from the “main agency” and apply disciplinary measures according to the MOU, 4) an information exchange method, 5) when and how to renew the list of names, 6) the legal or administrative authority for each disciplinary measure. As for the correction mechanism and the relief of rights, some MOUs have a specific chapter and more detailed regulations (e.g., the MOU on Airline Prohibition for Specific Serious Credit Loser[8]), but many MOUs just mention “establishing an exit mechanism and complaint system” (e.g., the MOU On JDIM For Serious Credit Losers in The Area of Social Security[9]) or “renewing the name list in time.” (e.g., the MOU on default judgments[10])
3. AN EXAMPLE: THE CONTENTS AND PURPOSE OF A MOU
To illustrate the purposes and contents of an MOU in a more detailed and vivid way, I will take the MOU on default judgments as an example (“JDIM for those who refuse to enforce an effective judgment”, 2016), which is signed by the National Development and Reform Commission (NDRC), Supreme People’s Court of China (SPC) and 42 other national agencies
The MOU was aimed to integrate multiple agencies’ power to solve the SPCC’s long-term problem of “Laolai (deadbeats) 老赖.” In the past, the courts have no effective ways to punish “Laolai,” those who refuse to execute a judgment obligation even though they have the capacity to do so. Unlike in the USA, Chinese courts have the responsibility to enforce their decisions. Every court has its own enforcement division. In China, the authority of the courts is a challenging issue. Without people’s constant respect to judicial authority, even though the courts have issued a decision, sometimes the parties will not fulfill their duties set by the courts. On the other hand, for improving the judicial authority, the decisions must be obeyed. This MOU aims to equip the courts with “teeth” to enhance its capacity to enforce the decision by coordinating the resources within the whole public sector.
This MOU is specifically designed for “Laolai”, referred as “the untrustworthy judgment performer announced by the SPC.” Accordingly, the SPC is the “main agency” who identifies the people committing the wrong, and other agencies are responsible for taking disciplinary measures against the people determined by the SPC. These agencies exchange information by “Chinese social credit system”, which is an online platform that records those who commit the wrong and are therefore defined as “dishonest.” The SPC will provide and renew the list of names to other agencies while other agencies take joint disciplinary measures listed in this MOU. For example, the courts can now provide the “Laolai” list to the transportation agency, who will then limit Laolai’s rights of using public transportation. Until now, the court system has cooperated with 60 national agencies to set 150 joint disciplinary measures and published over 11 million cases of Laolai since 2013.[11]
It is worth noting that the MOU not only lists each disciplinary measure and its responsible agency, but also lists each disciplinary measure’s legal authority, which will be discussed in detail in the 4th section.
As for how to protect the rights of individuals or entities if the government agencies made an error and how to remove a legal or natural person from the blacklist, the MOU on default judgment lacks detailed requirements. It just emphasizes that the agencies should “stop enforcing the disciplinary measure according to this MOU and related regulations.”
In comparison, a 2018 document on restricting people from taking civil airlines [12] ” has a chapter on “the issue of enforced people’s list of names and right relief.” This chapter indicates the specific website where the list of names will be issued. Within 7 days after the issue of the list of names, people could raise an objection. After the list of names was enforced, “those who think they are wrongly included in the list of may file to the related agencies to apply for a review.” This provision lacks additional details.
4. HOW THE INTERAGENCY COORDINATION ACTUALLY WORKS
After having discussed the theoretical interagency coordination mechanisms in the 1st section, I used information from the media about the JDIM to illustrate the actual performance of the procedures–the “interagency joint conference” and the “interagency agreement” as well as how these two mechanisms are combined to achieve those MOUs.
Firstly, the joint conference was established by an order of the State Council. In 2012, the State Council designated the National Development and Reform Commission (NDRC) and the People’s Bank of China (PBC) to lead the interagency joint conference for the construction of social credit systems, requiring all agencies to communicate in a timely fashion and coordinate different opinions in order to promote the implementation of the JDIM mechanism and accelerate the construction of a social credit system.[13]
A 2012 State Council decision on the latest adjustment of the “social credit system joint conference” helped me observe the working process. It indicates:
- main function of a conference, like promoting governments’ sharing of citizens’ credit information;
- conference members;
- working procedures (the conference should be presided by the convener, the meeting should be recorded and issues should be clarified by meeting minutes);
- working office and its duties (the joint conference office is located in the NDRC and the People’s Bank of China, responsible for the organization, liaison and coordination of the joint meeting and other issues);
- working requirements (improving negotiation and information exchange of different agencies).[14]
I found that although the conference was authorized by the State Council, it was the main agencies that were holding the meetings and manage regular work. Even the working office was located in the main agencies.
Then I observed how the “interagency agreement” was signed based on this joint conference. These agencies could improve their negotiation and communication by utilizing meetings and other negotiation mechanisms. For example, the leading agency, NDRC (the National Development and Reform Commission), coordinated different agencies to sign the interagency MOUs to deal with a single agency’s specific problems.
Take the draft process of one MOU (JDIM in the field of bidding, 2016) as an example, the blacklist provider is the SPC. In a press conference for publication of the MOU, the SPC’s enforcement bureau said, “the drafting and issuance of the MOU received strong support from the State Council and relevant departments.” This indicates that the SPC is the initial drafter of this MOU.[15] The “NDRC did a lot of coordination work”, and “the relevant departments put forward a number of suggestions for improvement” in the course of “opinion solicitation.”[16]
Therefore, the joint conference is based on one higher policy goal (“building the social credit system”), and this conference serves as a platform for different agencies to negotiate and communicate. Within the platform’s coordination mechanisms, the agencies drafted and signed many interagency agreements, and these agreements contributed to the building of the higher policy goal. This was how the joint conference and interagency agreements were combined systematically to solve practical problems and improve interagency coordination.
5. THE LEGALITY OF JDIM MOUS
Although these MOUs indicate the Chinese government’s efforts to establish a society ruled by law, there is some room for improvement.
At first glance, the MOU is within a legal framework. Those MOUs are based on several State Council documents. The contents of the MOUs are full of legal terms, articles and detailed enforcement procedures, which indicates the government is notifying the public of its governance rules. Moreover, at least part of the MOUs has a chapter about the relief of rights and avoidance of disciplinary measures. Finally, the attachment of each MOU lists the legal authority of every disciplinary measure.
However, these MOUs on JDIM have some legal flaws. Firstly, some punitive measures lack a legal basis. Secondly, even if the measures have legal authority, the application of the measures on some targeted actions is not legal. Thirdly, there is at least one case where the government just took punitive measure for one action and claimed it could be used to punish other actions.
Firstly, the authority supporting the MOUs sometimes lacks the legality to set some punitive measures The cited articles to support the punitive measures’ legality are usually from varied kinds of documents with different levels of authority, while the MOUs simply combine them together and do not review every article’s effectiveness to establish a disciplinary measure.
For example, in an MOU for “actions threatening hospital order,” one disciplinary measure is a restriction on applying for an Internet information service license. The MOU indicates this measure is delegated by “Measures for the Administration of Internet Information Services (Order No. 292 of the State Council)” and the “Notice on Establishing a Blacklist Management System for Domestic Illegal Internet Stations (Ministry of Industry and Information Technology [2009] No. 371).” The first is a State Council issued document, the second is one order from a State Council department. The distinction is very important because the State Council rules can regulate everything except those are reserved by the law made by the National People’s Congress.[17] But it is questionable whether a low-level regulation (the State Council departmental rules) could set such a disciplinary measure because Article 80 of the Legislation Law indicates that the State Council departmental rules shall not impair the rights of citizens.
Secondly, the measures and products are sometimes mismatched. Whether the punitive measure is legal or illegal, the application of the measure for the MOU targeted actions is sometimes illegal. For example, even in practice it is common for a State Council departmental rule to regulate and put burden on citizens or businesses, a departmental measure is at least targeted to the department’s specific regulatory area, like the Ministry of Industry and Information Technology regulating the Internet industry and deciding who can apply to provide Internet services. The cited articles indicate that the measure is to for those “blacklisted as providing illegal Internet websites.” The MOU expanded the ban of Internet managing service to those whose conduct threatens hospital order. This expansion is arbitrary and capricious, and does not have a legal basis,
Thirdly, in some cases, the cited articles are sometimes textually ambiguous on whether it authorizes such disciplinary measures. Another disciplinary measure for “persons who impair hospital order” is to publicize the information of these people. The cited authority is the Regulations of the People’s Republic of China on Government Information, the 9th article of which states that “The governments shall disclose the information when (1) it involves the vital interests of citizens, (2) It needs to be widely known or participated by the public; (3) it reflects the establishment, functions, procedures, etc. of the governments; or (4) it shall be open to the public in accordance with the relevant laws or regulations.” We could see no article indicating unambiguously that the person shall be publicized on the Internet. It is potentially dangerous that the government could interpret a law aimed to promote government transparency so broadly that the law is used as a punitive measure for a citizen.
Therefore, although the government tries to put the JDIM mechanisms into a legal framework, the legal basis is questionable. It seems that the government is just trying to find any related articles, regardless of whether it is clear, whether it has the authority to set the disciplinary measure, or whether the law or statute actually covers the targeted actions or disciplinary measures.
Yan Weilan, official of the Shanghai Municipal Administration of Industry and Commerce wrote that “it is recommended that the government departments use the legal framework as a basis to scientifically define the behavior of dishonesty, and the governments should clarify the relationship between disciplinary measures and other legal sanctions.”[18] In other words, although the JDIM mechanism is effective in solving some social problems like default judgments, as the sanctions for our citizens, the legality of those punitive measures must be examined more carefully.
6. CONCLUSION
Improving interagency coordination is an important challenge for Chinese government. The cross-agency issues will emerge more often in the future due to the accelerating development of high technology such as artificial intelligence. The new social organization, for example, huge Internet companies, also put challenges on the government’s ability to coordinate limited resources to achieve better supervision on the super private power.
In this blogpost, I used those MOUs on JDIM to illustrate one effective way of the Chinese government’s improving interagency coordination and solving important social problems like “Laolai”. Then I focused on the legal flaws of the authority of the disciplinary measures. However effective the measures are for solving social problems, it should be done under the framework of law. The JDMI mechanism combined with the social credit system would influence every natural and legal person in China. If the agencies could set punitive measures on citizens without the limitation of law, the JDMI itself would become a serious problem. The punitive measures must be examined more carefully.
[1] See Jody Freeman & Jim Rossi, Improving Coordination of Related Agency Responsibilities 3 (2012), at 4.
[2] Id.
[3] Zhu Chunkui & Mao Wanlei (朱春奎 & 毛万磊), Research on the Horizontal Coordination Mechanism of Chinese Government Departments (议事协调机构、部际联席会议和部门协议: 中国政府部门横向协调机制研究), 6 Xing Zheng Gai Ge (行政改革) [Administrative Reformation] 40 (2015).
[4] Zhu Chunkui, at 42.
[5] Meissner Mirjam, “China’s Social Credit System: A big-data enabled approach to market regulation with broad implications for doing business in China”, MERICS CHINA MONITOR 2017. available at https://www.merics.org/sites/default/files/2017-09/China%20Monitor_39_SOCS_EN.pdf
[6] Outline of the Construction Plan for Social Credit System (2014-2020) (Guo Fa [2014] No. 21) ( 关于印发社会信用体系建设规划纲要[2014—2020年]的通知，国发[2014]21号)
[7] Guiding Opinion on Establishing the Joint Incentives for Trustworthiness and the Joint Disciplinary System for Untrustworthiness and Accelerating the Construction of Social Integrity (Guo Fa [2016] No. 33) (国务院关于建立完善守信联合激励和失信联合惩戒制度\加快推进社会诚信建设的指导意见，国发[2016]33号)
[8] Airline Prohibition for Specific Serious Credit Losers (关于在一定期限内适当限制特定严重失信人乘坐火车 推动社会信用体系建设的意见), available at http://www.csrc.gov.cn/pub/newsite/zjhxwfb/xwdd/201804/t20180420_337081.html.
[9] MOUs On JDMI For Serious Credit Losers in The Area of Social Security (关于对社会保险领域严重失信企业及其有关人员实施联合惩戒的合作备忘), available at http://www.ndrc.gov.cn/zcfb/zcfbtz/201811/t20181129_921188.html.
[10] “JDMI for Those Who Refuse to Enforce an Effective Judgment” (关于对失信被执行人实施联合惩戒的合作备忘), available at http://www.creditchina.gov.cn/zhengcefagui/zhengcefagui/201709/t20170916_43853.html.
[11] The JDMI mechanism achieved great progress (最高法不断完善执行信息化系统建设 联合信用惩戒取得重大突破), available at https://mp.weixin.qq.com/s?__biz=MzIzMTA0OTY1Mg==&mid=2650013808&idx=1&sn=7ab8cdcc2324bee6d117024d57d6201a&chksm=f0aab0abc7dd39bda84b2fd116e70b47e8af6843126b1549a89d91c91ee02ea94e54a6299cab&mpshare=1&scene=1&srcid=1116LbA7SFeQvTgTxWoh1esn#rd
[12] “Opinions on appropriately restricting certain serious untrustworthy persons from using civil aircraft to promote the construction of social credit system within a certain period of time”(“关于在一定期限内适当限制特定严重失信人乘坐民用航空器 推动社会信用体系建设的意见发改财金〔2018〕385号”), available at http://www.ndrc.gov.cn/zcfb/zcfbtz/201803/t20180316_879624.html
[13] 九部门发文惩戒招标投标领域失信被执行人, available at http://www.court.gov.cn/fabu-xiangqing-26501.html
[14] The Approval on the Adjustment of the Interagency Joint Conference on Credit Social System(国务院关于同意调整社会信用体系建设部际联席会议职责和成员单位的批复 国函(2012) 88号), available at http://www.gov.cn/zwgk/2012-07/25/content_2191732.htm.
[15] 关于九部门在招标投标领域对失信被执行人实施联合惩戒新闻发布会, available at http://www.court.gov.cn/zixun-xiangqing-26601.html.
[16] Id.
[17] Legislation Law (2015 amended) Article 65.
[18] Researches on some problems of JDMI MOUs (失信联合惩戒合作备忘录若干问题研究), available at https://mp.weixin.qq.com/s?__biz=MzA4NjcxNjkzNw==&mid=2651936214&idx=2&sn=b7c7a6e24c8590a850a78dd9990ac721&chksm=842192b0b3561ba6683ed9c1ee5cb6efc59f91d2e6a2aec0f02a3631277cd3a6c85b81e89fac&mpshare=1&scene=1&srcid=1116R2ZLGlMjSP6SvD450kJW#rd
