Three Gorges Probe

An ordinary citizen probes Three Gorges Dam finances

(February 6, 2010) On January 26, Ren Xinghui, a young Beijing resident, decided to stand up against China’s Ministry of Finance. Why? Because his request that income and expenditures for the Three Gorges Project be made public in accord with China’s National Ordinance on Government Information Release was rejected by the ministry.

Capital outlays for the Three Gorges project have been massive. In 1993, the state estimated that the project would require total static investment of 90 billion yuan. In consideration of price index changes and other factors, the investment was projected at 203.9 billion yuan when a specific financing program for the project was finally formulated. The government later announced that costs could be controlled within 180 billion.

Where were all of those funds supposed to come from?

In 1984, before the project was finalized, the CCP Central Committee General Office and the State Council General Office issued a document indicating that the Three Gorges Construction Fund would be created through profits from the Gezhouba Power Plant that were handed over to the state.

The Three Gorges Dam Project was finally approved by the National People’s Congress in 1992. A meeting of the Prime Minister’s Office of the State Council decided that year that a levy of .003 cents on every kilowatt-hour of electricity consumed nationwide would be used to provide additional financing for the project. In 1994, the levy was raised to .004 cents on every kilowatt-hour consumed. In 1997, it was again raised again to .007 cents in 16 provinces and major cities.

How much money have all of these levies amounted to? The government has never revealed a complete figure.

In June 2007, China Yangtze Three Gorges Project (TGP) issued corporate bonds, and on its prospectus for the bond offering it revealed that “as of the end of 2006, the Three Gorges Construction Fund has already accumulated capital totaling 72.743 billion yuan.

According to projections made by TGP ahead of its 2001 bond issue, the Three Gorges Construction Fund could collect an estimated 103.4 billion yuan between 1993 and 2009 through price increases for electricity, and could gain an additional 10 billion in capital through the Gezhouba Power Plant. The grand total would come to an estimated 113.4 billion yuan.

The careful and precise Ren Xinghui calculated that the Three Gorges Construction Fund accumulated through contributions from each Chinese citizen through their electric bills would exceed the 180 billion yuan estimated cost of the Three Gorges Dam project by more than 50 percent.

The Three Gorges Dam project is a massive public undertaking. Ordinary Chinese have not only borne the burden of added fees on their electric bills, but other inputs into national projects have added to their tax burden. Chinese citizens have a right to inquire and know exactly how big this accumulated capital is, and how exactly it has been disposed.

In the past, of course, there was no conceivable way citizens could check the government’s books. But in May 2008, China’s National Ordinance on Government Information Release formally went into effect, changing the nature of this equation — at least formally, that is. Suddenly, here was a regulation citizens could invoke to defend their right to know.

Article Nine of the Ordinance stipulates that administrative organs should actively make available government information that “concerns the vested interests of citizens, legal persons or other organizations.” Article Ten stipulates that budgets, final accounts reports, and the circumstances of ratification and implementation for major construction projects are all regarded as government information whose public availability should be prioritized.

Clearly, information about the Three Gorges Construction Fund meets the above-listed requirements for release according to the Ordinance. However, the Ministry of Finance has never released this information.

Many have viewed the news of Ren Xinghui’s lawsuit against the Ministry of Finance as a sign of how far China still is from the “sunshine governance” it has been trumpeting for years now.

But the case also clues us in to how things might be changing.

It is interesting, for example, that the original story from The Beijing News about Ren Xinghui’s lawsuit was quickly picked up by People’s Daily Online, and that the Three Gorges website Ren launched with a number of friends remains available still. Moreover, the official Outlook Weekly magazine, published by Xinhua News Agency, has run a number of rather critical reports on the Three Gorges Dam since last fall. All of this would seem to indicate that senior leaders within the party have reservations about the project and its costs.

Ren Xinghui’s request for information release under the national ordinance also suggests the legislation might be useful in expanding the public’s right to know — although the ordinance does need to be improved in practice, and the government needs to show more “respect for the law” by taking greater initiative in releasing information.

When Ren Xinghui applied to the Ministry of Finance for access to information about the Three Gorges Dam, the reason the ministry gave for refusal was that the information he sought “had no direct connection to the special requirements of the applicant in terms of production, life or scientific research.”

The ministry claimed that its decision was based on Article 14 of an interpretive “opinion” on the Ordinance. It did not escape Ren Xinghui’s notice, however, that the article they cited in fact said that information release “was not related to the special requirements of said person [applicant] in terms of production, life or scientific research.” In explaining its decision, the ministry also added the word “direct,” suggesting the information would have to concern Ren directly for him to claim the right to access it.

A friend of mine, who is an expert in this area, tells me that freedom of information laws in various countries are essentially built on two different premises. The first kind are “exclusive” in nature, making very detailed stipulations about what types of information cannot be made public, and providing that all other forms of information are made public. Although many things may be expressly excluded, a clear and substantial space remains for the release of information.

The second kind are “enumerative” in nature, and it is to this category that China’s own Ordinance may be said to belong. These enumerate the categories of information that should be released, and they refrain from making hard-edged distinctions about what cannot be released. While many types of information are stipulated for release under this sort of law, much information that cannot be released (about which stipulations are not expressly made) remains hidden from view.

In my view, China’s government should move in the direction of releasing any information whose release is not expressly prevented by laws and regulations. Information that cannot be released should be subject to express provisions to that effect, stating precisely what cannot be released and why.

The government has no right to concern itself with an applicant’s reasons for wanting access to information. And herein lies the shortcoming of “enumerative” information access legislation – namely, that it leaves open a justification space in which government departments that want to avoid the release of information can make their case, and which is bound to lead to disputes between the government and the public.

In this latest case, in which the Ministry of Finance has refused to provide information about the Three Gorges Construction Fund, we can see just how difficult it is in China to achieve openness of information.

Information about the Three Gorges Construction Fund is not a matter of national secrecy. Members of the public have a right to know. And the government, moreover, has an obligation to make this information public of its own accord, as stipulated by law.

These are financial and monetary issues, but they have bearing on the political system too. Some scholars have estimated that in the next ten years, all least three concrete steps will have to be taken toward political reform in China — intraparty democracy, public budgets and public participation.

In light of these necessary steps, the significance of Ren Xinghui’s active concern over the government’s books speaks for itself.

Qian Gang*, China Media Project, February 6, 2010

* Best known for his tenure as managing editor of Southern Weekend, one of China’s most respected investigative newspapers, Qian Gang is one of China’s foremost journalists. Qian was also a co-creator and executive editor of “News Probe,” CCTV’s pioneering weekly investigative news program with nearly 20 million viewers.

[Qian Gang article posted on China Media Project by David Bandurski, February 6, 2010, 9:45am HK]

English version of the original Beijing News report on Ren Xinghui’s lawsuit, at Probe International’s website

Other details of Mr. Ren Xinghui’s quest for Three Gorges dam financing:

Chinese laws and regulations:

Regulations of the People’s Republic of China on
Open Government Information
(Adopted by the State Council on April 5, 2007; Effective May 1, 2008) by ©The China Law Center, Yale Law School

Opinions of the General Office of the State Council on Some Issues about Implementing the Regulation of the People’s Republic of China on the Disclosure of Government Information
(No.36 [2008] of the General Office of the State Council)

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