Notes from the Field

Reforming Administrative Dispute Resolution in China

September 18, 2013

Mr. Wang’s house, located in the center of a coastal city in southern China, was demolished recently to make room for commercial development. He was not properly consulted during the planning process nor was he informed of the compensation level associated with the demolition. He was unhappy with the way things were handled, but more importantly, he was troubled by the reality that he could not afford to purchase a new apartment with the compensation he received.

China construction

In China, urbanization has caused the relocation of many residents from their homes.

To express his discontent with the situation, Mr. Wang applied for administrative reconsideration with the city Legislative Affairs Office (LAO) with regard to the land requisition and housing demolition permit issued by the local land resources bureau. In many parts of China, the story would typically end here since local governments tend to be reluctant to interfere with land-taking decisions because land usage fees paid by commercial real estate developers constitute a large portion of their incomes. In those cases, nothing would really happen with the reconsideration request, and grievances would not be taken any further. However, to Mr. Wang’s great surprise and relief, his case was not only successfully accepted by the LAO, but he also received a favorable outcome – higher compensation for the demolition of his home. Throughout the reconsideration process for his case, Mr. Wang also came in contact with a group he had not heard of before – the administrative reconsideration committee (ARC). The ARC, together with the city LAO, played a significant role in successfully working with the local land resources bureau to revise the compensation scheme.

A common view in the field of administrative law is that it’s preferable to review and resolve disputes between citizens and the state within the government administrative system, rather than through the courts, which should be used only as the last resort. For example, in the United States, citizens need to “exhaust” options for administrative remedies, including review by administrative law judges within agencies and any further administrative appeals, before bringing their cases to court. In South Korea and Taiwan, administrative reconsideration committees have been established for many years and have played important roles in resolving disputes and protecting citizen rights. This has several advantages: administrative agencies understand their own technical areas better than courts; and the administrative reconsideration process is usually more informal, thus cheaper and faster, and can be used to review not only the legality but also the soundness of a government agency’s actions.

Despite the advantages associated with resolving issues in the administration system, administrative reconsideration is still relatively under-utilized in China. A significant reason for this is the lack of independence and authority by the reconsideration authorities. In China, when citizens are dissatisfied with a specific agency action, whether it is an administrative penalty decision or a land requisition approval (such as in the case of Mr. Wang), they can apply for administrative reconsideration to have this action reviewed. Currently, those with reviewing authority are local government (through the LAO) at the same level as the agency in question, or the same functional agency but from an upper-level of government. For example, the actions of a municipal land resources bureau can be reviewed either by the municipal LAO or by an upper-level land resource bureau. One challenge that faces the LAO is that it has historically been a relatively weak agency due to the fact that it is not in charge of any particular industry or sector. Also, traditionally, there has not been strong emphasis placed on rule of law within the Chinese government system, which weakens the LAO’s existing scope of work. As a result of these two factors, it has been difficult for the LAO to revoke government agency actions. However, recently, the LAO has been gradually gaining importance and authority within the Chinese government system due to the increased recognition and promotion of rule of law.

When citizens repeatedly fail at receiving redress through reconsideration, they eventually lose confidence in the process and no longer utilize this particular avenue to seek redress. Currently, the lack of trust in the administrative reconsideration process has been prompting Chinese citizens to either bring their cases directly to the courts or resort to the Xinfang system, i.e., citizens sending letters “xin” or paying visits “fang” to relevant authorities in the hope of getting their complaints and grievances addressed. However, the Xinfang system was originally developed only as a conduit to solicit social input and does not have clear or effective procedures for resolving disputes. To strengthen the reconsideration process and to address the increasing number of citizen disputes with the government, the Chinese central government launched the administrative reconsideration reform in 2008.

The reform has two main components. The first is to remove reconsideration authorities, along with appropriate staff and budget resources, from government agencies and situate them completely within the LAO. This restructuring centralizes the reconsideration cases for more streamlined review and investigation by LAO’s specialized reconsideration staff. The LAO is also responsible for the “rule of law” component of the performance evaluation of government agencies. This means that when findings show improper action on the part of an agency, the LAO can work with that particular agency to voluntarily revoke those actions as a way to maintain good standing in its annual performance evaluation.

The second aspect of the reform is the establishment of administrative reconsideration committees (ARCs) at the LAO consisting of standing members (LAO leaders and senior reconsideration staff) and non-governmental, non-standing members (university professors, lawyers, and technical experts). At some reform pilot locations, all reconsideration cases are reviewed and voted on by ARC members, whereas in others, the ARC only makes decisions on “important and difficult” cases. To a large extent, ARC decisions are respected by the government, allowing them to immediately become the final judgment in cases. In instances where the government does not agree with a decision, the ARC would reconvene and obtain a two-third majority vote before re-presenting the decision to the government head for formal issuance.

The reform efforts piloted in the various localities throughout China are beginning to yield positive results. Since 2008, for example, there has been an overall increase of administrative court litigation cases in one province in Southern China; however, in one city in that province – a reconsideration reform pilot city – administrative litigation cases experienced a significant decrease. At the same time, in that city, administrative reconsideration case numbers increased by 50 percent in the same period. At another pilot location, none of the administrative reconsideration decisions became the subject of court litigation, suggesting that citizens were satisfied with the reconsideration decisions and did not feel the need to resort to the judicial system for another round of review. The above results indicate that since the reform, an increasing number of citizens in pilot locations are now applying for reconsideration and that it has played an important role in resolving citizen disputes with the government.

The administrative reconsideration reform is a complex and major undertaking that should be approached within the context of and in conjunction with the overall administrative dispute resolution system in China. The pilot reform efforts have achieved tangible results thus far. Now is a critical moment for the Chinese government to capture lessons learned and utilize experiences gained from the pilots to build momentum and push forward the next phase of the reform. The government should also grasp this opportunity to strategically overhaul the design and operation of the administrative dispute resolution system as a whole to allow more citizen disputes with the government to be resolved effectively within the legal framework.

The Asia Foundation’s programs in China support administrative law and governance reforms, including in the area of administrative reconsideration, through research and documentation of reform pilots, experience sharing, and capacity building for relevant stakeholders.

Ji Hongbo is a senior program officer in The Asia Foundation’s China office. She can be reached at jihongbo@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

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