China considers revised law to boost Red Cross transparency

BEIJING  -- China is considering setting up an information disclosure system and allowing third-party auditors to supervise the use of donations to Red Cross societies nationwide, according to a bill unveiled in the top legislature on Monday.

The bill to revise the Law on the Red Cross Society was brought up for a first reading at the ongoing bimonthly session of the Standing Committee of the National People's Congress (NPC).

Red Cross societies should regularly publicize information about donations they receive and how they are spent, according to the draft.

The societies should also establish a system for financial management, internal control, public auditing as well as supervision and examination of their funds and assets, the draft stipulates.

Independent third-party agencies should be hired to audit the sources and use of donated money and materials, and the results should be reported to the board of directors of Red Cross societies, according to the bill.

The draft says a board of supervisors should be established at Red Cross societies at various levels to supervise the board of directors and its executive committee.

According to Monday's bill, those creating, publicizing and spreading false information to denigrate the Red Cross Society of China (RCSC) may bear civil or criminal liability.

The revision aims to improve supervision and internal governance of Red Cross societies in response to public concern, said Wang Longde, deputy head of the NPC's Education, Science, Culture and Health Committee, during the session, which runs from Monday to Saturday.

The draft is the first attempt to revise the law in more than two decades since it was enacted in 1993.

China's Red Cross societies have grappled with a trust crisis in recent years.

The reputation of the RCSC took a major hit in 2011, when a woman calling herself Guo Meimei, who claimed to work for an association affiliated with the organization, posted photographs showcasing her lavish lifestyle online. This led to speculation that charity money might have been embezzled to fund her extravagances.

A third-party investigation said neither "Guo Meimei" nor her apparent wealth had anything to do with the RCSC. But it also pointed out that serious flaws existed in the management of the China Business System Red Cross Society, one of the RCSC's fund-raising groups.

As the largest organization of its kind in China, the RCSC, which boasts over 98,000 sub-organizations and more than 26 million members, plays a major role in providing humanitarian assistance nationwide.