Three Gorges Probe

Beijing court rejects Three Gorges lawsuit filed by Ren Xinghui

(April 16, 2010) This is a summary of an article originally published April 12, 2010 in the Outlook Weekly (Liaowang xinwen zhoukan).

After waiting for more than two months, and making three trips seeking a reply from the Beijing First Intermediate People’s Court, Ren Xinghui finally got a clear answer. On April 8, Ren Xinghui was told the Court had decided not to accept his lawsuit and that a written order would be sent him within seven days.

On October 12 last year, as a citizen, Ren Xinghui submitted an application to the Ministry of Finance for information on the Three Gorges Project Construction Fund (the Three Gorges Fund). But he was rejected, so Mr Ren had no choice but to seek judicial relief.

“The Three Gorges project is not only one of the key construction projects in this country, but  it involves government revenue and expenditure. The project is nearing completion, so it is time for the authority to give us the information on how the money raised for the project was spent,” Ren Xinghui said.

But the Ministry of Finance rejected Ren’s application on November 16, saying the revenue and expenditure of the Fund in 2008 was already available on the website of the Ministry, without providing any information about other years.

As early as the 1980s, many people were worried the proposed dam project would become a “fishing project” and hotly debated this issue while the feasibility study for the Three Gorges project was underway. Then, in 2007, the audit report by the National Audit Office confirmed that “improper contract management increased project costs by 488 million yuan RMB (US$61 million). ”

Mo Yuchuan, professor at the School of Law from Renmin University of China, and one of the experts who drafted “The Regulations on the Disclosure of Government Information,” told Outlook Weekly, “information on these funds should definitely be disclosed to the public, and the government department concerned should voluntarily disclose the information in the first place.”

Based on the Regulation, which came into force on May 1, 2008, “An administrative organ shall voluntarily disclose the government information satisfying any of the following basic requirements: (1) Information concerning the vital interests of citizens, legal persons or other organizations; (2) Information that should be widely known by the general public or concerns the participation of the general public,” and “Citizens, legal persons or other organizations may, in light of their special needs for production, living or scientific research, apply to the departments under the State Council, the local people’s governments at various levels and the departments of the local people’s government at or above the county level for accessing the relevant government information.”

The Ministry of Finance rejected Ren Xinghui’s application by saying that the information did not directly affect Ren’s own production, domestic, or research activities. But Ren Xinghui put “scientific research” in the “use of the information required” column in the application form provided by the Ministry.

Professor Mo told the reporter from the Outlook Weekly that when the Regulation was originally drafted, it was proposed that applicants should be allowed to submit applications to government departments in order to access specific and relevant information because it would be too expensive if administrative bodies were obliged to voluntarily disclosed all information concerned. In Ren Xinghui’s case, he was applying for information on the Three Gorges Fund, which can be seen as a form of public oversight. “So his request should be satisfied,” Professor Mo said.

On October 13 last year, one day after submitting an application to the Ministry of Finance, Ren Xinghui also submitted applications to the TGPCC (Three Gorges Project Construction Committee) of the State Council and the Three Gorges Corporation for the disclosure of information respectively, but both rejected Mr Ren’s request for a certain reason.

Demonization or transparency?

On March 18 of this year, this reporter from the Outlook Weekly sent letters to the Ministry of Finance and the Three Gorges Corporation respectively, requesting interviews on the Three Gorges Fund and other matters.

Soon after that, the Press Centre of the Three Gorges Group[fn]Editors note: The Three Gorges Company has changed its name to the Three Gorges Group. The author uses both in this article.[/fn] delivered a reply by phone: “The Three Gorges Fund is a special fund in the state budget, and the Three Gorges Group is only one of the units which uses the fund, so we feel it is inconvenient to be interviewed on your questions.”

The reporter from Outlook Weekly insisted that as one of the units that used the Fund, the Three Gorges Group could talk about that part of the Fund it used, and other financial sources the Three Gorges Group accessed, but no further response has been forthcoming from the Three Gorges Group so far.

On April 7, the Ministry of Finance called Outlook Weekly, saying it’s not convenient to have an interview on the issue.

“We have no choice but to seek the truth on our own, by putting the pieces of the openly published materials together, in an effort to see the whole picture of the cost of building the Three Gorges dam project. ” This is the final sentence in the unpublished report entitled “The Cost of Three Gorges Project” edited by Guo Yushan, director of the Beijing-based Transition Institute and one of Ren Xinghui’s colleagues.

On November 27, 2007, at a news conference by the State Council’s Press Office, Pan Jiazheng, former deputy head of the Leading Group for the Feasibility Study for the Three Gorges project, criticized a group of people for “demonizing” the Three Gorges project.

But on several occasions, Pan Jiazheng offered his thanks to those who opposed the dam project and his respect for their different opinions. The Outlook Weekly has noted that Pan Jiazheng has made that clear to the media on different occasions.

As Guo Yushan pointed out, “The best way to avoid demonization of the Three Gorges dam is to give all parties a fair platform on which they are able to voice their opinions and even debate the issue. With the Three Gorges project approaching completion, a more important way to avoid demonization of the dam project is to be transparent.”

On March 11 of this year, Lu Youmei, former general manager of Three Gorges Corporation, expressed his views to Outlook Weekly: many opponents don’t have a good understanding of the Three Gorges project, he said. And some have even refused to discuss the project in a positive manner, so he “hoped those who oppose the Three Gorge project will take a look at the dam site someday.”

Both Guo Yushan and Ren Xinghui told the Outlook Weekly: they have been looking forward to having such an opportunity to have serious discussions with anybody.

The TG Fund quietly “transformed”

While Ren Xinghui was working hard for the disclosure of information on the Three Gorges Fund, the Fund, it seems was quietly “transformed” without anyone’s notice.

According the “2010 Central Government Budget for Funds” posted on the website of the Ministry of Finance, the budgeted revenue for the Three Gorges Fund in 2010 was 1 billion yuan RMB, while the budgeted expenditure was 4.49 billion yuan, only 5.1% and 22.5% of the previous year’s revenue and expenditure, respectively.

At the same time, in the budget table, a new line item called “State Major Water Project Construction Fund” was added, with both the revenue and expenditure being 18.8 billion yuan in 2010. This item had never been seen before.

It turns out that, on December 31, 2009, the Ministry of Finance issued a “Management Method for the State Key Water Project Construction Fund” approved by the State Council, which states: “The Three Gorges Construction Fund will be smoothly transformed into the State Key Water Project Construction Fund, and the current collection policy for the Three Gorges Construction Fund will remain basically unchanged”, and “the Method will be implemented on January 1, 2010 and the Three Gorges Construction Fund will no longer be collected.”

Accordingly, from January 1, 2010, with the basic completion of the Three Gorges dam project, the Three Gorges Fund stopped collecting revenues, but the additional charge on all national electric power users remains and will continue in the name of the newly established State Key Water Project Construction Fund. The collection period is 10 years, and the money will be used “to deal with problems in the period following the completion of the Three Gorges project.”

Earlier, Ren Xinghui had heard rumors that the Three Gorges Fund would be converted into another fund. So in February 2009 he submitted a letter to the NPC (National People’s Congress), and appealed to the State Council to abolish the Three Gorges Fund because of the imminent completion of the dam project, and in order to reduce the tariff burden on all people. But he also argued for its abolition, in particular, “to prevent the [Three Gorges] Fund from being converted to another fund for use on other purposes.”

Yu Guangyuan, former director of the Bill Office of the Budgetary Working Committee of NPC, told Outlook Weekly that, unlike taxes, which need approval from the legislature, the central government has the authority to establish, adjust, and cancel national funds.

When asked what he plans to do next, sitting on a bench outside the Beijing First Intermediate People’s Court, Renxing Hui said, “If I receive a written order [from the Court] telling me my lawsuit was not accepted, I will appeal.” He also plans to submit an application to the State Power Grid Company for information on the funds spent on the transmission projects related to the Three Gorges dam, “If my application is rejected again, we will have no choice but to continue our work putting the pieces [of publicly published information] together to get the complete picture [of the real cost of the TG dam project],” Ren Xinghui said.

Tang Yaoguo, Outlook Weekly (Liaowang xinwen zhoukan), April 16, 2010

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