NPCSC Grants Broader Legislative Powers to Shanghai & Hainan, Widens Scope of Public Interest Litigation by Procuratorates

The NPC Standing Committee (NPCSC) concluded another busy session on Thursday, June 10 with the adoption of eight bills. Two of them—the Anti–Foreign Sanctions Law [反外国制裁法] and the Data Security Law [数据安全法]—have already received worldwide attention and are sure to generate additional commentary in the days and weeks to come. Rather than adding duplicative coverage (beyond our Twitter thread on the sanctions law), we will try something new in this post-session recap. We will steer clear of the two blockbuster bills and will instead focus on two themes found in last week’s other legislation that may have escaped your attention.

Broader Legislative Authority for Shanghai & Hainan

The types of Chinese legislation grew by two on Thursday as the NPCSC granted broader legislative power to Shanghai and Hainan Province.

First, the NPCSC adopted a decision authorizing the Shanghai legislature to enact “Pudong New Area regulations” [浦东新区法规] for the megacity’s sprawling Pudong New Area, home to one of China’s financial hubs. Such regulations must be based on “the practical needs for reform and innovation in Pudong” and follow constitutional provisions as well as the “basic principles” of statutes and the State Council’s administrative regulations. So long as they meet those requirements, Pudong New Area regulations may “adapt” [变通] the provisions of statutes, administrative regulations, and departmental rules (issued by State Council agencies). In other words, they may conflict with national legislation as long as they follow the “basic principles” of statutes and administrative regulations. And such “adaptive provisions” will trump conflicting national legislation within Pudong.

The NPCSC’s decision broadens the Shanghai legislature’s authority because ordinary local legislation must not contradict statutes or administrative regulations. This greater legislative authority is said to have been modeled on the authority of localities encompassing Special Economic Zones (SEZs)—the four cities of Shenzhen, Zhuhai, Shantou, and Xiamen, and Hainan Province—to enact “SEZ regulations” [经济特区法规]. SEZ regulations, too, can “adapt” (i.e., contradict) statutes and administrative regulations as long as they follow their “basic principles.”

To illustrate, consider Shenzhen SEZ’s food safety regulations. A provision permits the city’s food-safety and consumer-protection agencies to stop investigating a food-safety complaint if they discover that the complainant is a so-called “professional fraud-fighter”—someone who knowingly buys products with food-safety violations, files complaints, and relies on the resulting compensation or rewards as the main source of income. (The agencies must still consider such complaints in monitoring food-safety risks.) The national Food Safety Law [食品安全法] requires, however, that food-safety agencies investigate all complaints without exception. Yet Shenzhen’s regulations were ruled as a permissible exercise of the city’s legislative power as an SEZ.

Second, the new Hainan Free Trade Port Law [海南自由贸易港法] authorizes the Hainan legislature to enact “Hainan Free Trade Port regulations” [海南自由贸易港法规] for the Hainan Free Trade Port (FTP), which covers the entire Hainan Island. This grant is both narrower and broader than the NPCSC’s grant of authority to Shanghai. It is narrower because the Law imposes subject-matter limitations on Hainan FTP regulations. They must concern “trade, investments, and related regulatory activities” and be based on the “actual circumstances and practical needs of building the Hainan FTP.” (Like Pudong New Area regulations, they may also “adapt” the provisions of statutes and administrative regulations so long as they do not contravene their basic principles.)

The grant to Hainan is at the same time more expansive, because for the first time a local legislature is allowed to legislate on matters within the NPC(SC)’s or State Council’s exclusive authority (subject to the latter’s approval). The NPC and the NPCSC, for instance, have the exclusive authority to enact new taxes or create new crimes. Now, with the NPCSC’s approval, Hainan may do so as well. The NPCSC’s and the State Council’s veto may appear a significant limitation on Hainan’s new power, but there is a reason to believe their approval would be no more than a formality, given the central leadership’s strong support for Hainan FTP to experiment with new policies and “open up at the highest level.”

Thus, since the Hainan FTP Law came into effect last Thursday, the Hainan people’s congress and its standing committee have become the only local legislature in China that wields three kinds of legislative power: Like all other local legislatures, it may enact local regulations [地方性法规], but as the legislature with jurisdiction over the (overlapping) Hainan SEZ and Hainan FTP, it may adopt SEZ regulations and Hainan FTP regulations as well.

New Areas for Procuratorial Public Interest Litigation

In two other bills adopted on Thursday, the NPCSC authorized the procuratorates to file public interest lawsuits in two new areas: workplace safety and military personnel protection.

Public interest litigation by the procuratorates is a relatively new practice originating in late 2014, when the Communist Party decided to explore the establishment of such a system. In July 2015, the NPCSC authorized the Supreme People’s Procuratorate to pilot this type of litigation in a few provinces for two years. Then on July 1, 2017, the pilot’s expiration date, amendments to the Civil Procedure Law [民事诉讼法] and the Administrative Litigation Law [行政诉讼法] took effect, codifying the procuratorates’ new authority.

Chinese law differentiates between two types of public interest litigation: civil lawsuits against private entities for conduct harming the public interest; and administrative lawsuits against administrative agencies for unlawful action or inaction that harms the public interest. Civil public interest litigation initially covered only environmental protection and resource conservation as well as food and drug safety. Administrative public interest litigation was first limited to the same two areas, plus state-owned assets protection and transfer of state-owned land use rights. The 2017 amendments did also leave room for introducing new areas in the future.

The NPCSC did so last week. The new Law on the Protection of the Status, Rights, and Interests of Military Personnel [军人地位和权益保障法] (effective Aug. 1, 2021) allows the procuratorates to bring public interest lawsuits against those who “infringe on military personnel’s honor, reputation, and other relevant lawful rights and interests,” thereby “seriously affecting the effective fulfillment of their obligations and mission and harming the societal public interest” (art. 61). The new amendment to the Workplace Safety Law [安全生产法] (effective Sept. 1, 2021) extends public interest litigation to workplace safety violations that “result in risks of major accidents or in major accidents,” thus harming “the State’s interest or the societal public interest” (art. 74, para. 2 as amended).

These two provisions came after the Party had decided in late 2019 to widen the scope of public interest litigation. Before last week, the NPCSC had already twice broadened the procuratorates’ mandate. The 2018 Heroes and Martyrs Protection Law [英雄烈士保护法] authorizes them to sue over conduct infringing on “the heroes and martyrs’ name, likeness, reputation, or honor that harms the societal public interest.” More recently, the revised Minors Protection Law [未成年人保护法] that took effect on June 1 permits the procuratorates to file public interest lawsuits when “the lawful rights and interest of minors are infringed upon” and “the public interest is implicated.”

The procuratorates’ power to initiate public interest litigation will likely continue to grow in the near future. The pending Personal Information Protection Law [个人信息保护法] (likely to pass within the year) includes a provision allowing them to sue personal information handlers who unlawfully handle personal information, thereby “infringing on the rights and interest of a large number of individuals.” Procuratorates nationwide, moreover, are experimenting with public interest lawsuits in new non-statutory areas, such as disability rights, women’s rights, public health, and poverty alleviation. Some of them could soon be codified as well.

On Thursday, the NPCSC also approved the Stamp Tax Law [印花税法], effective July 1, 2022; and a revised Military Facilities Protection Law [军事设施保护法], effective August 1, 2021. We unfortunately are not able to provide summaries of them for lack of time and expertise.

Taige Hu contributed research

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