Zhang Hui (Angela)
I. Introduction
When the COVID-19 pandemic started to spread in China in January this year, medical supplies such as masks were in shortage in many Chinese cities. Cities took different actions to resolve the demand for masks, but the health department of Dali City, Yunnan Province adopted a controversial one. On February 2, 2020, the Dali Health Department seized 598 boxes of masks in transit through Dali. Under Chinese law, this is a form of administrative requisition. Qingdao and Shenyang had similar plans until the State Council stopped them.
This ongoing issue stirred a debate online among Chinese netizens and legal professionals. They were concerned that such requisition would threaten the property rights of Chinese individuals, commercial entities, and international investors in China. Thus, behind this Dali incident, the legal issue is: do Chinese local health departments have the power to requisition masks in transit during COVID-19? Who can requisition what and how, is central to this question.
Current Chinese law does not provide direct answers to these questions. This article argues that Chinese local health departments are not authorized to requisition masks in transit during COVID-19, according to the Emergency Response Law (ERL)[1] and the Law on Prevention and Treatment of Infectious Diseases (LPTID)[2]. The following introduces the background of the Dali incident and relevant Chinese laws, and then discusses the definition, subjects, items, and procedure of requisition in emergency situations.
II. Background
The Dali incident was a conflict between the Dali Health Department and two Chongqing corporations. When there were 389 COVID-19 patients in Chongqing, the Chongqing government authorized two Chongqing companies to purchase 598 boxes of masks online from a seller in Yunnan Province. However, the Dali Health Department requisitioned these passing masks by issuing a notice to the companies. In the notice, it cited the ERL, the LPTID, and the Emergency Requisition and Compensation Measures of Yunnan Province[3] as its legal basis.
When the Chongqing government learned that the Dali Health Department requisitioned the masks, the Chongqing government sent a letter to the Dali Health Department demanding it to release the masks. Unfortunately, the Dali Health Department had already distributed them to local hospitals. Two days later, the Dali Health Department promised to return them. Later, on February 24, the Yunnan Commission for Discipline Inspection and Supervision of Communist Party of China sanctioned five Dali administrative institutions and eight leaders of these institutions for violating Communist Party of China (CPC)’s regulations[4], such as the CPC Accountability Regulations[5] and the Regulations on CPC Disciplinary Action[6].
In the Chinese legal regime, the ERL and the LPTID are the principal laws on administrative requisition. The Standing Committee of the National People’s Congress (NPCSC) issued the ERL in 2007 and amended the LPTID in 2013. An amendment of the LPTID is under discussion right now.
Regarding the power of requisition, the ERL delegates it to the State Council and all local governments at and above the county level (hereinafter referred as local governments) and their departments in Article 7 and 12. “The State Council of the People’s Republic of China, namely, the Central People’s Government, is the executive organ of the highest state organ of power; it is the highest state administrative organ.”[7] These constituent departments are established by local governments, and operate under their leadership as well as the operational guidance or leadership of the competent departments at higher levels, according to the Article 64 and Article 66 of Chinese Organization Law for Local People’s Congresses and Local People’s Governments (2015 Amendment)[8]. By contrast, the LPTID delegates such power merely to the State Council and local governments in its Article 45. This remains the same in Article 55 of the LPTID’s 2020 draft revision.
In addition, as to the items that can be requisitioned, Article 52.1 of the ERL defines them as “equipment, facilities, premises, transportation vehicles and other materials from entities and individuals… .” The LPTID defines them as “houses and means of transport as well as relevant facilities and equipment”, and requires compensation to owners of the items. Even though in the 2020 revision draft of the LPTID, the items are extended to “houses, means of transport, relevant facilities, equipment and technical support”, it is still not clear from the text of the draft amendments whether masks in transit are within their scope.
The two bodies of laws raise the following issues: what is the definition of emergency requisition under Chinese law? Do local health departments have the power of requisition? Are masks considered requisition items? Are goods in transit items subject to requisition? And, finally, what is the requisition procedure?
III. What is administrative emergency requisition?
Under current Chinese law, there is no specific legal definition of requisition. For example, in Chinese Constitution Article 13.3, “[t]he state may, for the public interest, expropriate or requisition private property of citizens for public use, and pay compensation in accordance with the law.”[9] Another example is in Article 20 of the Foreign Investment Law (FIL), “[t]he state expropriates no foreign investment. Under certain special circumstances, the state may expropriate or requisition the investment of foreign investors in the public interest according to the provisions of laws.”[10] In these examples, the legislation uses the concept of requisition without giving it a clear definition. It appears in the Emergency Requisition and Compensation Measures of Yunnan Province, but this government normative document is not a binding source for judges in judicial review.
If there is no legal definition of emergency requisition, there is a risk that governments at different levels in different provinces may understand it differently and act accordingly. In that case, people feel insecure about their property rights since governments may exercise their requisition rights with uncertain discretion.
VI. Do local health departments have the power of requisition?
The ERL and the LPTID allocate requisition power to different subjects, which raises confusion among governments in practice, just as the Dali incident demonstrates. There is a split view on this issue among Chinese legal scholars. China’s Supreme People’s Court (SPC) retired judge Cai Xiaoxue in a lecture contends that such power merely belongs to local governments according to the textual interpretation of the LPTID.[11] However, some scholars such as Tang Yong and Wu Kan disagree. They think local departments also share this power, if the “departments” in the ERL are narrowly understood as emergency administration departments that are composed of core local government leaders, not all departments.[12]
I agree with the SPC retired Judge Cai that local health departments lack requisition power. Here are two reasons for this.
First, the LPTID trumps the ERL under the Chinese Legislation Law[13], so local health departments do not have the power of requisition according to the LPTID.
Article 7 and 12 of the ERL delegate the power of requisition to all governments and their departments in response to an emergency incident. By contrast, Article 45 of the LPTID merely delegates such power to local governments, with no reference to their departments. The same is true in Article 55 of the LPTID’s 2020 revision draft.
Article 92 of Chinese Legislation Law that resolves the inconsistency among laws and regulations, stipulates that, “[f]or laws … developed by the same authority, if there is any discrepancy between special provisions and general provisions, special provisions shall prevail; if there is any discrepancy between new provisions and old provisions, new provisions shall prevail.”[14]
This interpretation rule applies in this case because both the ERL and the LPTID were issued by the same institution SCNPC. The LPTID should prevail because it is the special and new law compared with the ERL. The LPTID aims at “infectious diseases”, one type of “emergency incident” defined in the ERL, so the LPTID provisions are special. In addition, the ERL was issued in 2007 while the LPTID was amended in 2013, so another reason why the LPTID should prevail is it is newer. In short, for the discrepancies between the LPTID and the ERL, the LPTID should trump the ERL, so the power of requisition should be exclusive to local governments.
Some may argue that the word “governments” in Article 45 of the LPTID and Article 55 of its 2020 draft revision is a broader concept that could include their constituent departments, so the delegation of the requisition power also applies to local health departments. Nevertheless, here are three reasons why this understanding may not be persuasive.
First, such broad interpretation will be against the plain meaning of the word “governments”. According to the Organic Law for Local People’s Congresses and Local People’s Governments, the concept of “governments” does not include “departments”. Article 64 of this law stipulates that departments are constituent offices established by governments to fulfill certain working requirements. Their administrative power is delegated to them by certain laws and regulations. Thus, the scope of power of “governments” and “departments” is different.
Moreover, such broad interpretation will violate the statutory interpretation maxim expressios unius, which is also applicable in China. According to this maxim, “when one or more things of a class are expressly mentioned, others of the same class are excluded.”[15] Here, governments and departments are of a same class of administrative authority. Therefore, if no laws or regulations specify certain power to local departments, they cannot exercise it. Since Article 45 of the LPTID and Article 55 of the draft revision merely delegate such power to local governments, local health departments are excluded from this delegation.
In addition, such broad interpretation will make the articles of the LPTID incompatible with each other as a whole. In the LPTID, “departments” and “governments” are used separately. For instance, Article 33 of the LPTID stipulates that, “[a]s soon as [the disease prevention and control institutions] receive reports on epidemic situation of infectious diseases under Classes A and B or find the outbreak and prevalence of infectious diseases, they shall report to local health department, which shall immediately report to the local governments and, at the same time, to the health department at a higher level and to the health department under the State Council. ” This shows that the legislation distinguishes between governments and their constituent departments and uses the two terms in different situations. If “governments” in this article is interpreted as including “departments”, then this interpretation would contradict other articles in the LPTID as shown in the example above.
One important reason for this understanding is that higher-level executive branches are generally in a better position of balancing the conflict of interests among their departments and other local governments. Governments generally have more information about emergency incidents and the items to be requisitioned, so they are in a better position to balance the interests of different stakeholders. However, local departments focus more on their own interests and do not have the incentive or pressure to investigate the true owner of the goods. For example, in the Dali incident, the Dali Health Department requisitioned the masks to the benefit of Dali. It did not take the COVID-19 situation in the whole country into consideration. But if it was the Dali government that made this decision, it might have been more careful about the question of legal authority and possible consequences such as the pressure from the Chongqing government and Yunnan provincial government.
Moreover, although the Chinese Property Law[16] provides protection to property right holders from possible infringement of executive branches, because legislation lacks adequate requisition procedures and local health departments usually lack legal counsel, it leaves room for overly broad administrative discretion. It is likely that such administration discretion would put personal property rights in a dangerous position. From this perspective, restricting the requisition power to local governments is to prevent negative consequences of possible abuse of such discretion by local departments.
Thus, in emergency health incidents such as COVID-19, in my view, it is illegal for local health departments to requisition goods under the LPTID. Rather, it belongs to local governments.
V. Can masks be requisitioned?
Although the ERL and the LPTID list the items that can be legally requisitioned, none of them clearly mentions whether masks in transit are within this scope. Behind this issue, there are two questions: 1) can masks be requisitioned? 2) can goods in transit be requisitioned?
In my view, masks can be requisitioned, because their medical function in preventing the spread of COVID-19 enables them to be interpreted as “relevant equipment or facilities” under the LPTID. LPTID Article 45 specifies the items that can be requisitioned as “houses and means of transport as well as relevant facilities and equipment.” Article 55 of its 2020 draft revision extends this scope to include “technical support”. Nevertheless, the meaning of “relevant” is not clear, and the plain meaning of equipment and facilities does not include masks. In this situation, the purposive interpretation approach could solve this ambiguity by referring to the spirit of law. According to Article 1 of the LPTID, its purpose is “to prevent, control and put an end to the outbreak and spread of infectious diseases and to ensure the health of the people and public.” Article 1 of its 2020 draft revision adds “to prevent public health risks and maintain social stability and national security” to the legislative purpose. Here, since people can wear masks to prevent COVID-19 virus from spreading, governments can use them to prevent and control this infectious disease. Therefore, I contend that masks are within the scope of “relevant facilities and equipment”.
Although this conclusion comes from the legal interpretation above, this process takes extra time and energy from governments in emergency incidents. It also creates uncertainty and risks for them to prove masks are within the scope. Although the revision of the LPTID is under discussion, the draft published for public comments still does not clarify the scope of items that may be requisitioned. In this sense, to enable governments to respond more efficiently in addressing emergency incidents such as COVID-19, the legislature should amend the law on this point.
VI. Can goods in transit be requisitioned?
As to the second question, my view is that the goods in transit cannot be requisitioned by local governments. The key point is whether local governments have the power to requisition goods which have no legal connection with their administrative area.
The current LPTID and its 2020 draft revision give a negative answer to this question. According to Article 45 of the LPTID and Article 55 of its 2020 draft revision, local governments can exercise the requisition power within their administrative area, but the goods across provinces can only be requisitioned by the State Council. This provision textually excludes the possibility that governments can requisition the goods in transit, because if it includes this possibility, then it in fact is a cross-provincial requisition. This threatens people’s expectancy for the stability of their property rights. For an instance, in the Dali incident, the masks in transit belong to the Chongqing government. According to the Chinese Contract Law[17] Article 133 and Article 145, the goods in transit belong to the buyer, rather than the seller or the carrier. Thus, what Dali Health Department requisitioned was beyond its administrative area, since the owner of the masks was in Chongqing, so this requisition violated the LPTID Article 45.
Another reason for such understanding is that, requisitioning goods in transit violates Chinese Postal Law[18] and the Interim Regulations on Express Delivery (IRED)[19] by Chinese State Council. According to the Postal Law Article 3.2, “[e]xcept as otherwise provided for by law, no organization or individual shall inspect or withhold mails or remittances.” According to its Article 36, “[f]or the purpose of protecting national security or investigating criminal offenses, the public security organs, national security organs or procuratorial organs may legally inspect and detain the relevant mail… .” Article 4.2 of the IRED has a similar provision. These provisions show that governments or local health departments cannot inspect or withhold goods in delivery without legislative authorization.
Chinese scholars hold different views on this point. Scholars as Tang Yong and Wu Kan support the above argument[20], but others like Professor Shen Kui from Peking University Law School have slightly different opinions. Professor Shen contends that if such interpretation excludes the goods in transit, then in places suffering severely from COVID-19 such as Hubei Province, local governments may not have enough resources to prevent the spread of the infectious disease as quickly as possible.[21] As a result, it may endanger the public health security of the whole country.[22]
One way to address Professor Shen’s concern is that the LPTID authorizes Chinese State Council to requisition goods across provinces. After the outbreak of COVID-19, Chinese State Council issued the Urgent Notice by the General Office of the State Council of Effectively Organizing the Resumption of Operation and Production of Manufacturers and the Scheduling of Key Supplies for Epidemic Prevention and Control on January 29, 2020.[23] In its Article 2, “[t]he Supplies Guarantee Group of the State Council’s Joint Prevention and Control Mechanism for Countermeasures for the Outbreak of Novel Coronavirus Pneumonia shall be responsible for the unified management and allocation of the above key medical emergency supplies, and no local people’s governments may withhold or transfer such supplies in any name.”
Therefore, according to the text and purposes of the laws above, masks are legal items for requisition under the LPTID and the ERL, but the goods in transit are not within this scope according to Chinese Postal Law, IRED, and Chinese State Council’s Urgent Notice.
VII. What is the requisition procedure?
In the ERL and the LPTID as well as the 2020 draft revision of the LPTID, no article defines the procedure for requisition. Besides, no administrative procedure law defines such procedure either. Although Yunnan Province issued a province-level regulative document about it, key procedures are still missing. What is more, this document has no legally binding effect on the judiciary.
Chinese scholars have made proposals for improving the requisition procedure in China. Professors Feng Zhongfeng and Zhang Jianwei advocate that China should learn from Japan and France to establish procedures such as applications, ex-ante investigations, decisions and judicial lawsuits.[24] Professor Wang Jingbo from China University of Political Science and Law compares the procedure in New Zealand’s Civil Defense Emergency Management Act 2002 and the Taiwan Requisition Procedure and Compensation of Goods for Prevention of Infectious Disease. He concludes that several procedural steps are crucial, such as issuing notices, informing remedies and statute of limitations, terminating requisition, returning requisition property, issuing return notice and compensation notice, and giving compensation.[25]
Among them, ex-ante investigations, ex-post hearings and reasonable compensation are meaningful in Chinese context.
1. Ex-ante investigations
Governments should conduct investigations about the legal status of the target items and the pertinent public interests before they undertake emergency requisition. This procedure would help them to determine the owners of the items and to decide whether they are goods in transit, so it can save owners from unnecessary losses. Since administrative requisition is a significant restriction to property rights, and can even be considered a deprivation of private property rights, governments should exercise such power within legal limits.
2. Ex-post hearings
Governments should set hearings after their requisition and before they make decisions on compensation to the owners of the goods. These hearings can serve as a communication bridge between governments and the owners of the requisition items. If this procedure is missing, it is difficult for owners to collect evidence to prove the existence of requisition and their losses accordingly, because in an emergency requisition, governments may not issue relevant documents in time. In this way, the post-hearings provide a platform of direct communication as to the legal basis of requisition and details of compensation, so they can improve the efficiency of compensation.
Thus, the legislation should amend the ERL and the LTPID to include these two necessary procedures.
3. Reasonable compensation
Another problem in Chinese requisition is that the compensation standard is unclear and outdated, which harms the economic interests of goods’ owners.
Neither the ERL nor the LPTID mentions a clear standard for compensation in emergency requisition by governments. Article 45 of the LPTID stipulates that the compensation should be given “according to law”. However, the ambiguity of this standard makes it difficult for governments to figure out which laws they should refer to, since there is no clue about the “laws” in the LPTID. In the government document of Yunnan Province, the standard for compensation is “comparable to the loss”. It flows from the spirit of making self-sacrifices in the planned economy of the 20th century in China.[26] However, Chinese current economic status and improved constitutional protection of private property require the “equitable and reasonable” standard for compensation. For instance, Article 20 of the FIL and Article 21 of Chinese Forest Law (revised in 2019)[27] has adopted the “equitable and reasonable” standard for compensation in expropriation and requisition.
The LPTID’s 2020 draft revision remains unclear on this point and even creates new problems. Article 55 of its draft revision adds that “[i]f there is a continuous need for technical support, it should be provided via government procurement and paid reasonable fees”. What is questionable is that the meaning of “reasonable fees” is not clear in this revision draft. Also, the legislature deliberately distinguishes the way of compensation for requestioning technical support from the compensation for “houses, means of transport, and relevant facilities and equipment”, so it is doubtful if the standards of compensation for these two types are the same. If the standards are different, then what makes technical support so special is also not clear.
Therefore, to protect the property rights of individuals and entities, the legislation should clarify the compensation standard as equitable and reasonable to adapt to the present economic level.
VIII. Conclusion
The incident in which the Dali Health Department requisitioned masks in transit to Chongqing during COVID-19 is a typical example of local government administrative action that reveals several important aspects about Chinese requisition mechanism. Under current Chinese law, it is unclear who has the power to requisition what and how. This is a challenge for some Chinese local health departments trying to perform their administrative duties under the requirement of rule of law.
In my view, Chinese local health departments such as the Dali Health Department are not authorized to requisition masks in transit during COVID-19. This is because they do not have such power under the LPTID, which prevails over the ERL according to the Legislation Law. Also, requisitioning goods in transit contradicts the purpose and texts of the LPTID. In addition, the lack of requisition procedures gives governments unlimited discretion, which threatens the security of private property rights.
Therefore, the legislature should revise the ERL and the LPTID to make them clearer and more consistent on requisition power, and clarify the requisition procedure by incorporating ex-ante investigations, ex-post hearings and an “equitable and reasonable” compensation standard into the law.
References
Cai, Xiaoxue. (2020). What is the boundary of administrative power during COVID-19? Maidu Public Course on Wechat. https://mp.weixin.qq.com/s/mrp5L59JrM8BJfSxY5vHyw
Feng, Zhongfeng & Jianwei Zhang. (2004). Research on administrative requisition. Seeker, 11, pp.90-92.
Investigation report of Dali’s illegal requisition. 2020-02-24. http://www.jjjc.yn.gov.cn/info-62-88840.html
Merriam-Webster’s Online Dictionary of Law. https://www.merriam-webster.com/legal/expressio%20unius%20est%20exclusio%20alterius
Shen, Kui. (2020). Preventing requisition by Dali needs to change laws from three perspectives. Economic Information Daily. 2020-2-25. http://dz.jjckb.cn/www/pages/webpage2009/html/2020-02/25/content_61799.htm
Tang, Yong, & Wu, Kan. (2020). An analysis of legal regulation of emergency requisition from the perspective of “the incident of Dali seizure and requisition masks”. Minzu Tribune, 1-5. 2020-03-24. https://doi.org/10.19683/j.cnki.mzlt.20200309.003
Wang, Jingbo. (2011). On improvement of legal system concerning emergency requisition by government. Administrative Law Review, 4, pp.16-24.
Wu, Jianhua, & Chaochao Lai. (2004). Research on the public law guarantee mechanism of private property in expropriation and requisition. Chinese Legal Science, 6, p.53. doi: 10.14111/j.cnki.zgfx.2004.06.004
Footnotes
[1] Emergency Response Law of the People’s Republic of China. http://english.www.gov.cn/archive/laws_regulations/2014/08/23/content_281474983042515.htm
[2] Law of the People’s Republic of China on Prevention and Treatment of Infectious Diseases (2013 Amendment). http://en.pkulaw.cn/display.aspx?cgid=b34b627b643cd519bdfb&lib=law. The legislation is discussing a revision draft of this law. See http://www.nhc.gov.cn/wjw/yjzj/202010/330ecbd72c3940408c3e5a49e8651343.shtml
[3] Emergency Requisition and Compensation Measures of Yunnan Province. http://www.yn.gov.cn/zwgk/zcwj/yzfb/201911/t20191101_184144.html
[4] More specific information is in the report: The Investigation Report of Dali’s Illegal Requisition. 2020-02-24. http://www.jjjc.yn.gov.cn/info-62-88840.html
[5] Accountability Regulations of Communist Party of China. http://www.ccdi.gov.cn/fgk/law_display/7076
[6] Regulations on CPC Disciplinary Action. http://www.ccdi.gov.cn/fgk/law_display/6343
[7] The State Council. China ABC on English.gov.cn. http://english.www.gov.cn/archive/chinaabc/201911/22/content_WS5ed77233c6d0b3f0e9499854.html
[8] Chinese Organization Law for Local People’s Congresses and Local People’s Governments (2015 Amendment). https://www.pkulaw.com/en_law/c04d6e1ce45a5d48bdfb.html
[9] Constitution of the People’s Republic of China. http://www.npc.gov.cn/englishnpc/constitution2019/201911/1f65146fb6104dd3a2793875d19b5b29.shtml
[10] Foreign Investment Law of the People’s Republic of China. http://fdi.gov.cn/1800000121_39_4872_0_7.html
[11] Cai, Xiaoxue (2020). What is the boundary of administrative power during COVID-19? Maidu Public Course on Wechat. https://mp.weixin.qq.com/s/mrp5L59JrM8BJfSxY5vHyw
[12] Tang, Yong, & Wu, Kan. An analysis of legal regulation of emergency requisition from the perspective of “the incident of Dali seizure and requisition masks”. Minzu Tribune, 1-5. 2020-03-24. https://doi.org/10.19683/j.cnki.mzlt.20200309.003.
[13] Legislation Law of the People’s Republic of China (2015 Amendment). http://eng.mod.gov.cn/publications/2017-03/02/content_4774201.htm
[14] Ibid.
[15] Merriam-Webster’s Online Dictionary of Law. https://www.merriam-webster.com/legal/expressio%20unius%20est%20exclusio%20alterius
[16] Property Law of the People’s Republic of China. http://english.www.gov.cn/services/investment/2014/08/23/content_281474982978047.htm
[17] Contract Law of the People’s Republic of China. http://www.china.org.cn/china/LegislationsForm2001-2010/2011-02/12/content_21908031.htm
[18] Postal Law of the People’s Republic of China. https://www.pkulaw.com/en_law/b826a8bb8a27e1e6bdfb.html
[19] Interim Regulation on Express Delivery (IRED). http://www.gov.cn/zhengce/content/2018-03/27/content_5277801.htm
[20] Supra note 12.
[21] Shen, Kui. Preventing requisition by Dali needs to change laws from three perspectives. Economic Information Daily. 2020-2-25. http://dz.jjckb.cn/www/pages/webpage2009/html/2020-02/25/content_61799.htm
[22] Ibid.
[23] Urgent Notice by the General Office of the State Council of Effectively Organizing the Resumption of Operation and Production of Manufacturers and the Scheduling of Key Supplies for Epidemic Prevention and Control. https://www.pkulaw.com/en_law/3e4440b36e7676afbdfb.html
[24] Feng, Zhongfeng & Jianwei Zhang. (2004). Research on administrative requisition. Seeker, 11, pp.90-92.
[25] Wang, Jingbo. (2011). On improvement of legal system concerning emergency requisition by government. Administrative Law Review, 4, pp.16-24.
[26] Wu, Jianhua, & Chaochao Lai. (2004). Research on the public law guarantee mechanism of private property in expropriation and requisition. Chinese Legal Science, 6, p.53. doi: 10.14111/j.cnki.zgfx.2004.06.004
[27] Forest Law of the People’s Republic of China. https://www.atibt.org/wp-content/uploads/2020/01/China-Forest-Law-Amendment-2020-20191228.pdf
