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CHINA LEGAL SCIENCE 2020年第4期 |法治营商环境下外商投诉协调处理机制的实践困境与出路
日期:20-08-26 来源: 作者:zzs

THE PRACTICAL DIFFICULTIES AND SOLUTIONS OF THE MECHANISM FOR COORDINATING AND HANDLING FOREIGN COMPLAINTS IN VIEW OF THE BUSINESS ENVIRONMENT UNDER THE RULE OF LAW


Zhang Demiao & Zhao Jianya


TABLE OF CONTENTS



I. THE NECESSITY OF ESTABLISHING A MECHANISM FOR COORDINATING AND HANDLING FOREIGN COMPLAINTS UNDER THE RULE OF LAW


A. The Connotation of a Business Environment under the Rule of Law

B. The Dispute Resolution Mechanism as an Important Indicator for Evaluating the Business Environment

C. The Logic of a Diversified Dispute Resolution Mechanism

D. A Mechanism for Coordinating and Handling Foreign Complaints as an Important Way to Solve Diversified Disputes


II.  THE CURRENT SITUATION AND PROBLEMS OF FOREIGN-RELATED DISPUTE RESOLUTION FROM THE PERSPECTIVE OF BUSINESS LAW ENVIRONMENT


A. Environmental Analysis of Regulations and Policies for Foreign-related Dispute Resolution

B. The Inaccurate Positioning of Government Functions under the Complaint Mechanism

C. Insufficient Internationalization Level of Dispute Resolution in the International Market


III. EXPLORATION OF THE OPTIMAL PATH FOR MECHANISMS FOR COORDINATING AND HANDLING FOREIGN COMPLAINTS


A. Making Legislation in a Scientific Way and Refining Supporting Measures

B. Strengthening the Functions of the Joint Government Conference: Building a Unified Coordination and Handling Organization for Foreign Business Complaints

C. Establishing a Diversified Mechanism for Resolving Foreign-related Disputes that Integrates Complaint Coordination, Litigation, Arbitration, and Mediation


IV. CONCLUSION




The foreign business complaint mechanism is the content and component of the diversified dispute resolution mechanism, and also the inevitable requirement of further optimizing the business environment. Faced with the problems of decentralized complaint acceptance institutions, overlapping functions, backward service concepts, and insufficient internationalization level of dispute resolution in the current foreign business complaint mechanism, we should deal with them from the two levels of the government and the market, including scientific legislation, transformation of government functions and construction of diversified dispute resolution mechanisms. We should build a diversified dispute resolution mechanism combining complaint coordination, mediation, arbitration and litigation through the establishment of a unified foreign business complaint coordination mechanism, commercial mediation legislation, detailed implementation plan of the law on foreign investment, and guarantee the effectiveness of complaint handling methods, so as to give full play to the important role of the foreign business complaint coordination mechanism in the new era.


The Belt and Road Initiative conforms to the current trend of win-win cooperation, and has resulted in the continuous expansion of China’s geographical pattern of opening up to the outside world. The promulgation of the Foreign Investment Law of China (hereinafter referred to as the Foreign Investment Law) and the Regulations for the Implementation of the Foreign Investment Law of the People’s Republic of China (hereinafter referred to as the Regulations for the Implementation) has served as a signpost for the rule of law in China or a shield of the rule of law for mutual benefit and win-win results. Further improving the mechanism for coordinating and handling foreign complaints will help to improve Chinese business environment and protect the rights and interests of foreign businesses in the field of foreign trade and investment under the rule of law. Based on the current situation of the coordination and handling of foreign complaints in China, this article analyzes the existing problems in the legislative policy environment, government function orientation, and internationalization level of foreign-related dispute resolution in China, and attempts to reconstruct the mechanism for coordinating and handling foreign complaints through scientific legislation, function optimization, and further internationalization. It is hoped that the complaint mechanism will effectively integrate with international commercial mediation, arbitration, litigation, and other diversified dispute resolution mechanisms, and ensure that the settlement of foreign-related commercial disputes is convenient, efficient, and diversified, so as to provide new solutions for China to optimize its business environment and realize deeper and higher-level opening-up.


I. THE NECESSITY OF ESTABLISHING A MECHANISM FOR COORDINATING AND HANDLING FOREIGN COMPLAINTS UNDER THE RULE OF LAW


A. The Connotation of a Business Environment under the Rule of Law


A business environment under the rule of law refers to the application of modern national governance methods to promote an environment for business that meets the basic requirements of law-based society. The academic community has a different understanding of a business environment. Feng Ye believes that a business environment is the sum of the various conditions experienced by market subjects in production and operation activities. According to Wei Xiahai, a business environment can be defined in both a broad and a narrow sense. In the broad sense, it refers to all the factors that affect and restrict the development of a local economy, such as the area’s natural environment, history, and culture. In a narrow sense, it refers only to market access, tax burden, and judicial justice, which are closely related to the government’s public services. Ma Xiangdong believes that a business environment is the sum of the political environment, the economic environment, the legal environment, the international environment, and other external environments that an enterprise is in during the process of starting up, operating, and closing. According to the Regulations on Optimizing the Business Environment, a business environment refers to the institutional factors and conditions involved in the market economy activities of market entities such as enterprises. It is clear that there are many socio-economic factors affecting a business environment, and the legal environment is an essential one of them.


The rule of law is the basic mode of modern state governance, and its implementation is the inherent requirement for the modernization of state governance. The rule of law also entails open and transparent rules and procedures. The best practice of the rule of law is to adapt to the needs of social governance at that time. Adopting the rule of law method to solve social contradictions can reduce conflicts of interest among the subjects of a pluralistic society within the framework of judicial justice. Therefore, judicial protection and alternative dispute resolution mechanisms are essential for creating a good business and market environment. We should explore the innovation and improvement of social governance, establish a reasonable and legal mechanism that can effectively prevent and resolve conflicts and disputes, and realize the rule of law in dispute resolution.


B. The Dispute Resolution Mechanism as an Important Indicator for Evaluating the Business Environment


The concept of a business environment originated with the World Bank’s Business Environment Report in 2003. The World Bank released its country report on China in 2008, and provided detailed data on the business environment in 30 Chinese cities. Since this period, the concept of business environment has become gradually more valued in China. Although the World Bank has not directly provided a clear definition of a business environment, it is generally believed that the business environment in a certain country or region refers to the ease of carrying out economic activities in a certain country or region, and it is an important embodiment of a country or region’s economic soft power and international competitiveness.


According to the Business Environment Report 2020 released by the World Bank, a business environment covers 12 indicators, such as business start-up, project licensing, protection of small and medium investors, cross-border transactions, contract fulfillment, and so on. The purpose of the report was to evaluate these indicators to assess the degree of ease in business conditions in various countries or regions. Foreign-related disputes have different types and characteristics from general civil and commercial disputes due to their special trading objectives, subjects, transaction systems, and supervision systems. The resolution of foreign-related disputes also requires more attention to the values of convenience and efficiency. Meanwhile, dispute resolution methods, measures, and results should be in line with international standards.


C. The Logic of a Diversified Dispute Resolution Mechanism


The diversity of business subjects and the complexity of business behaviors have given rise to the diversification of dispute resolution methods. Whether these commercial disputes can be dealt with fairly, in a timely way, and efficiently is an important factor to be considered in optimizing a business environment. The first concern is whether there are diversified and sufficient approaches to dispute resolution. Only diversified and sufficient dispute resolution mechanisms can meet the different needs of different market entities and different types of disputes; the ability to meet these needs forms the foundation for dispute resolution. Secondly, whether the process of dispute resolution is timely and efficient determines the efficiency of the market economy. Finally, the fairness of the outcome is the ultimate goal of dispute resolution and an important indicator of the optimization of the business environment. All the problems mentioned above need not only the support of the judicial system, but also the help of complaint coordination agencies, government reconsideration departments, mediation agencies, and arbitration agencies. Only when these agencies continuously improve their legal level and capacity can they fairly protect the legitimate rights and interests of various market entities. Therefore, whether a business environment can provide a diversified, efficient, and fair dispute resolution mechanism for market players is an important rule of law issue in the process of social governance and a key factor in optimizing that business environment.


D. A Mechanism for Coordinating and Handling Foreign Complaints as an Important Way to Solve Diversified Disputes


A foreign business complaint mechanism is an inevitable requirement for diversified dispute resolution in a business environment under the rule of law. A pluralistic dispute resolution mechanism refers to a procedural system in which various dispute resolution methods, procedures, or systems exist together in society. These different aspects of the dispute resolution mechanism can meet the diverse needs of social subjects by executing their specific functions and characteristics, coordinating and complementing each other. Although China has not formed a systematic and institutionalized diversified dispute resolution system, and has not established a smooth cohesive procedure for the combination of litigation and mediation, or arbitration and mediation, etc., diversified dispute resolution mechanisms have become the general trend in the international community’s dispute resolution. This trend is notable because, with the development of economic and trade relations between China and countries along the Belt and Road route, commercial disputes continue to increase. Before a foreign-related dispute enters the legal process, the parties usually choose the lowest cost way to handle the dispute, that is, they make a complaint to the relevant department to protect their legitimate rights and interests. In theory, such a choice is very consistent with the investment dispute resolution procedure advocated by Calvinists, which emphasizes the local relief of the host country, including judicial relief and administrative relief.


II. THE CURRENT SITUATION AND PROBLEMS OF FOREIGN-RELATED DISPUTE RESOLUTION FROM THE PERSPECTIVE OF BUSINESS LAW ENVIRONMENT


A. Environmental Analysis of Regulations and Policies for Foreign-related Dispute Resolution


1. There Is a Lack of Foreign-related Dispute Resolution Clauses in the Business Environment Legislation. — Before the State Council issued the Regulations on Optimizing the Business Environment, some provinces and cities had issued local regulations and policies on improving the business environment, such as Guangdong, Liaoning, Hebei, Heilongjiang, Jilin, Shanxi, and Tianjin. Beijing and Shanghai implemented local regulations on improving the business environment almost simultaneously in April of this year. It can be understood from the above legislative provisions on dispute resolution in various municipalities that, although diversified dispute resolution has become an inevitable factor in the legislation of the business environment in various cities, this legislation has contained few clauses concerning dispute resolution, and clauses concerning foreign-related legal dispute resolution have only appeared in the legislation of some cities. At present, there are still some problems in this legislation: first, the contents of the legislation are mostly declarative clauses, which lack operability in practice; second, some of the laws and regulations are too principled, and there are no specific implementation rules that are compatible with these policies and regulations; third, the level of internationalization is insufficient. Only Beijing and Shanghai have currently joined the ‘one-stop’ international commercial dispute resolution platform.


2. The Regulations and Policies on Foreign Business Complaints Are Too Principled. — As early as May 2006, the Ministry of Commerce passed the Interim Measures on Complaints against Foreign-Invested Enterprises (hereinafter referred to as the Interim Measures), and accordingly set up a national complaint center specifically for handling various problems reported by foreign-invested enterprises. However, the Interim Measures makes very general provisions on the subject of accepting complaints and only establishs the preliminary framework for the complaint mechanism for foreign-invested enterprises; moreover, the practice of accepting the complaints of the national and local governments at all levels does not constitute the construction of a complete system.


In January 2015, the Ministry of Commerce publicly solicited opinions on the Draft of Foreign Investment Law of the PRC (hereinafter referred to as the Draft Opinions). The Draft Opinions makes it clear that a mechanism for coordinating and handling foreign complaints should be established, and specifies the responsibilities, institutions, and principles of the center for coordinating and handling foreign complaints, thus establishing the general framework of the mechanism for coordinating and handling complaints. The national foreign investment complaint coordination and handling center will be established by the International Investment Promotion Agency to coordinate and handle foreign investment complaints with great national influence. Local governments at or above the county level shall, when necessary, set up local complaint coordination and handling agencies to accept complaints from their own regions and handle complaints referred to them by national foreign investment complaint coordination and handling agencies.


In March 2019, the Foreign Investment Law was promulgated, becoming a fundamental law for promoting and protecting foreign investment. Article 26 of the Foreign Investment Law stipulates that the state shall establish the complaint mechanism for foreign-invested enterprises to deal with the problems reported by foreign enterprises in a timely manner. Foreign investors or enterprises may apply for coordination and settlement through the complaint mechanism for foreign-invested enterprises, or they may apply for administrative reconsideration and bring administrative litigation.


Compared with the Draft Opinions, the Foreign Investment Law has deleted the detailed provisions on complaint handling institutions, responsibilities, principles, and other aspects of such dispute resolution. It only specified that there should be a complaint mechanism, but gave no specific provisions on how to establish this mechanism. The Regulations on Optimizing the Business Environment, which took effect on January 1, 2020, stipulates that governments at or above the county level and their relevant departments shall establish a complaint mechanism for foreign-invested enterprises, and the Ministry of Commerce shall, in conjunction with other relevant departments, establish an inter-ministerial joint conference system for complaints against foreign-invested enterprises to promote this work at a higher level.


Although the Regulations on Optimizing the Business Environment emphasizes the need to improve the working rules for complaints, improve the complaint methods, clarify time limits, etc., these regulations still lack guiding principles and norms, and contain no clear provisions on how to operate the complaint mechanism for foreign-invested enterprises, how to define the member departments and composition of a joint conference, what decision-making procedures will be adopted by this joint conference, and how to connect and coordinate the complaint mechanism with the administrative review, administrative litigation, mediation, arbitration, and other systems. As well, the relevant regulations issued by various places, such as Guangdong, Shanghai, Dalian and Ningbo, have mostly taken the form of local government regulations, for example, the Complaint Handling Service Measures of Guangdong Province on Foreign-Invested Enterprises of 2014, the Complaint Handling Measures of Shanghai Municipality on Foreign-Invested Enterprises of 2010, the Complaint Handling Measures of Dalian City on Foreign-Invested Enterprises of 2003, the Complaint Handling Measures of Ningbo City on Foreign-Invested Enterprises of 2004, etc. These regulations, which are specific to the coordination and handling of foreign complaints, are at a lower level and are too general in principle. In practice, they are often unable to integrate the coordination and handling agencies and fully implement their role of guiding the coordination of foreign complaints.


3. There Is a Lack of Legislative Guidance on the Connection of Diversified Dispute Resolution Procedures. — The Opinions of the Supreme People’s Court of the PRC on the Establishment and Improvement of the Dispute Settlement Mechanism by Linking Litigation with Non-Litigation issued in 2009 and the Opinions of the Supreme People’s Court of PRC on Further Deepening the Diversified Dispute Settlement Mechanism Reform of the People’s Courts issued in 2016 are both national judicial policies. The former took commercial mediation, people’s mediation, court mediation, and administrative mediation as the main forms of mediation, and commercial mediation as one of the main types of social ‘great mediation’, and created the judicial confirmation procedure for commercial mediation agreement; the latter has made a systematic and comprehensive summary of the regulatory documents concerning commercial mediation since 2009, and has continued to make breakthroughs in some reform measures for the mechanisms for litigation and mediation.


In 2016, the Opinions of the Supreme People’s Court of the PRC on Further Deepening the Reform of the Diversified Dispute Settlement Mechanism of People’s Courts further proposed the establishment of a ‘one-stop’ comprehensive dispute settlement service platform, which requires coordination with comprehensive administrative organizations, administrative organs, commercial mediation organizations, notary institutions, and other social organizations to ensure the implementation of the mediation agreement. Among the local legislation, the Implementation Rules of the Shanghai Court on Judicial Confirmation Procedures of Civil Mediation Agreements issued by the Shanghai High People’s Court in 2016 further detailed the relevant practices of judicial confirmation procedures for mediation agreements within the jurisdiction of Shanghai. In addition, article 118 of the Draft Opinions also proposed that foreign investment disputes should be resolved through consultation, mediation, complaint, reconsideration, arbitration, or litigation in accordance with relevant laws and regulations.


At present, a number of problems in the connection of diversified dispute resolution methods still exist. First, there are no relevant laws and regulations for commercial mediation in China. In the process of using mediation and arbitration, as well as litigation and mediation, to solve disputes, there are no laws and regulations on how to start diversified dispute resolution procedures, how to link procedures, and how to guarantee the effectiveness of settlement results. In practice, disputes can only be solved by referring to the mediation rules of various mediation institutions and the arbitration rules stipulated by arbitration institutions. However, these mediation and arbitration rules differ from the legislation and their scope of application and effectiveness are far less than those of higher-ranking laws. Second, the existing dispute settlement clauses are not clear about the interrelationship, application order, and premise of various settlement methods. These clauses cannot be made operable merely by stipulating the methods of negotiation, complaint, and mediation without mentioning their application order. Third, the legal scope applicable to dispute resolution is not clear. ‘In accordance with relevant laws and regulations’ and ‘linking with relevant departments’ are common expressions in China’s legislative documents. 


B. The Inaccurate Positioning of Government Functions under the Complaint Mechanism


1. Decentralized Institutions with Overlapping Functions. — Decentralization and duplication of functions have become stumbling blocks to the development of a complaint mechanism. According to the provisions of the Foreign Investment Law, the new complaint handling mechanism for foreign investors constructed in China should first change the practice of multi-platform acceptance and cascading treatment. The complaint coordination and handling organization for foreign companies should be a special platform for accepting such complaints. This would not only allow the smooth handling of complaints by foreign companies, but also assist the host country’s timely and effective handling of complaints. At present, China does not have a unified institution that accepts foreign business complaints, and the mechanisms in the provinces and cities are also not unified.


2. Complaint Coordination Has no Substantive Power of Decision. — The ‘letters and visits’ mode of handling complaints makes the foreign-related complaint mechanism useless. According to article 120 of the Draft Opinions, China’s foreign investment complaint institutions handle disputes using a ‘coordination’ method. Article 26 of the Foreign Investment Law also stipulates that the state shall establish a complaint mechanism for foreign investors to handle complaints in a timely way and improve relevant measures. However, after reviewing the provisions on the duties and power of the foreign complaint handling agencies in the Draft Opinions and the specific measures in the Interim Measures, it can be found that the ways foreign-related disputes are handled by the coordination and handling agencies in China amount to no more than forwarding, coordinating, supervising, inspecting, putting forward suggestions, asking for assistance, and other non-substantive practices. It can be said that the ‘coordination’ is achieved without really dealing with the problem. This kind of non-substantive handling method, in essence, performs a function of petition and transfer. It has no legal binding force and cannot effectively solve disputes. On the contrary, it is more likely to aggravate the contradictions between China and foreign countries.


3. Backward Service Concept and Chaotic Process. — A backward service concept and chaotic service process have limited the development speed of complaint mechanisms. Foreign-related legal disputes involve many fields and are highly professional. Foreign-related complaint cases often involve multiple countries, fields, and subjects. These cases require not only professional staff, but also open, inclusive, fair, and just service concepts. According to the author’s survey of S province, there is a shortage of staff in foreign complaint handling institutions in the province. In addition to the lack of language communication skills, the staff are deficient in professional competence, industry knowledge, the concept of service, and policy analysis. Also, there is no complete, strict, and consistent procedure for handling foreign complaints, and no clear and ready-made rules for investigation, coordination, and case settlement. Foreign complaint coordination agencies are still in a relatively closed state and are not known to most organizations and enterprises. The agencies do not contact each other, and rarely communicate with each city to exchange case handling. Therefore, it is difficult to form linkage mechanisms in both vertical and horizontal aspects.


C. Insufficient Internationalization Level of Dispute Resolution in the International Market


1. Lack of Administrative Remedies for Foreign-related Commercial Disputes. — There is no channel of administrative remedy for ordinary foreign-related commercial disputes. At present, the functions of the three types of institutions dealing with foreign complaints are all defined as ‘handling foreign investment complaints’. Therefore, there are no specialized institutions to deal with ordinary foreign trade complaints at either the national level or the provincial level, and there are no corresponding legal provisions. According to the author’s investigation of the foreign investment complaint coordination organization in S province and communication with relevant departments of each organization, institutions in this province have handled fewer foreign-investment complaints each year and investment disputes have been on the decline. According to statistics from the Foreign Business Complaint Center in S province, there were only three investment disputes within the 150 foreign-related complaints handled by the center over the past five years, accounting for less than 2 percent. It has not been decided whether it is necessary to set up a special complaint organization for such small foreign-related trade disputes and assign corresponding functions to it.


2. The Supply of Alternative Dispute Resolution Mechanisms Is Insufficient. — On the one hand, the arbitration system is out of step with international development. First, China’s arbitration system has always adopted a dual-track system, which is applicable to the exclusion of temporary arbitration, that is, formal recognition is given to institutional arbitration and temporary arbitration from abroad, while recognition of domestic arbitration is only given to institutional arbitration according to the Arbitration Law of the PRC, which is not in line with the international trend. Second, China has not yet built a complete online arbitration platform. At present, there is still no specialized online arbitration service institution in China, and only a few arbitration institutions can provide online services. Third, the arbitration industry started late in China. Therefore, the professional quality of its arbitrators has not yet reached the international level, and the credibility of its arbitration has not been recognized by international commercial subjects.


On the other hand, international commercial mediation is still in its infancy. Compared with China’s litigation and arbitration systems, its mediation system has been marginalized in a weak position. The mediation system is often not the first choice in terms of the resolution mode chosen by disputing parties. In terms of legislation, China has the People’s Mediation Law and the Labor Dispute Mediation and Arbitration Law, but there is no single law or judicial interpretation that deals specifically with commercial mediation, only two judicial guidance documents issued by the Supreme People’s Court in 2009 and 2016. The ‘one-stop’ dispute settlement platform established by the International Commercial Tribunal of the Supreme People’s Court emphasizes the need to give full play to the role of international commercial mediation institutions in international commercial mediation. Even so, there are still many problems with the system and mechanism of commercial mediation in China. Firstly, commercial mediation organizations fight alone without forming a joint force and each organization is relatively independent. Secondly, commercial mediation lacks professional talents, and the level of specialization and nationalization needs to be improved. Thirdly, various mediation rules are chaotic and lack the guarantee of the legal system. In addition, the credibility of Chinese mediation is not strong, and it lacks a foreign identity. There is still a long way to go in terms of its competitiveness, attractiveness, and credibility with internationally renowned mediation organizations such as the Singapore International Mediation Center (SIMC) and the UK’s Centre for Effective Dispute Resolution (CDER).


III. EXPLORATION OF THE OPTIMAL PATH FOR MECHANISMS FOR COORDINATING AND HANDLING FOREIGN COMPLAINTS



A. Making Legislation in a Scientific Way and Refining Supporting Measures


1. Legislation on Commercial Mediation. — The legislation of commercial mediation is an inevitable trend for aligning China’s diversified dispute settlement mechanism with the world. In China, mediation has always been regarded as an auxiliary means of litigation and arbitration in legislation. Mediation has had the role of alleviating the pressure of litigation and arbitration. Since there is no special law on commercial mediation, commercial mediation in China is generally non-normative. This kind of non-standardization even develops into arbitrariness, resulting in unfair commercial mediation results, which not only affect the settlement of specific disputes, but also affect the construction of China’s business environment under the rule of law. In order to give full play to the role of commercial mediation in a diversified dispute settlement mechanism, China should first establish the equal legal status of commercial mediation, commercial arbitration, and transnational litigation, and establish the legal authority of commercial mediation. Therefore, legislation on the commercial mediation system must be put on the agenda as soon as possible. While maintaining the existing system of court mediation, people’s mediation, and special mediation, it is also necessary for China to formulate a law which is applicable to international and domestic commercial dispute mediation to promote the specialization, internationalization, and institutionalization of commercial mediation.


2. Promulgating the Implementation Rules of the Foreign Investment Law of the PRC as Soon as Possible and Refining the Implementation Plan. — The promulgation of detailed laws and supporting programs is an effective measure to promote the implementation of legislation. As a special foreign investment code, the provisions of the Foreign Investment Law on the coordination of foreign complaints are still relatively general principles, and there is no corresponding specific implementation plan. In order to make this law more operable, it is necessary to formulate detailed rules for its implementation as soon as possible. Specifically, these rules should cover a number of aspects. Firstly, the publicity, interpretation, consultation, and promotion of relevant provisions of the Foreign Investment Law should be strengthened to enhance society’s awareness of these laws and regulations. This would enable departments at all levels to accurately understand and grasp their core meaning and clarify the responsibilities of all parties. Secondly, it is necessary to establish a legislative feedback mechanism to improve the pertinence and coordination of legislation by soliciting the needs and suggestions of foreign enterprises. Thirdly, legal provisions and policy measures should be further refined and supporting measures should be improved to ensure the effective implementation of laws, regulations, and relevant policies. In particular, complaint coordination should be connected with commercial mediation and arbitration procedures through the dispute resolution mechanism. Finally, the legislature should regularly evaluate laws and regulations and modify or repeal provisions or documents that are insufficient in rationality and legality in a timely manner.


B. Strengthening the Functions of the Joint Government Conference: Building a Unified Coordination and Handling Organization for Foreign Business Complaints


1. A Unified Body to Accept Complaints. — Optimizing the establishment of government institutions is the premise of strengthening government functions. In order to solve the problems of the decentralized institutions and fuzzy function positioning that exist in the foreign complaint handling platform, China should straighten out the functional division of government departments as soon as possible, combine this effort with the reform of local government institutions, actively and steadily implement a system of large departments, and optimize the establishment and function of government institutions.


According to article 29 of the Regulations for the Implementation, the State Council of the PRC and relevant departments shall establish an inter-ministerial joint conference system for foreign business complaints, coordinate and promote the complaint work at the central level, and guide or supervise local complaint work. At the local level, departments or agencies designated by the governments at or above the county level shall be established to coordinate and handle foreign business complaints. Therefore, at both the central level and the local level, multi-department joint construction of a foreign complaint mechanism has become a relatively feasible option at present. The promotion of the joint conference system at the local and even the central level will be conducive to the rapid integration of resources, the development of institutional advantages, and the formation of a joint force for dealing with foreign complaints.


2. Set up a Two-tiered Organizational Structure. — The design of a two-tiered organizational structure can guarantee impartiality and authority in complaint handling work. The Joint Conference Office, as a permanent body responsible for the organization, liaison, and coordination of the joint conference, is not only independent of complaint coordination organs such as the Foreign Investment Complaint Center, the Foreign Investment Management Office, and the Association of Foreign-Invested Enterprises, but also can closely link the above-mentioned organs together to provide common solutions to complaint problems. Therefore, the author believes that an institution similar to the China Association for the Promotion of International Investment can be set up with an independent legal person status and a joint conference office. At the national level, this agency would be called the National Coordination and Handling Center for Foreign Business Complaints and would deal with foreign business complaints that have a significant impact on the country. At the local level, local governments could set up foreign complaint coordination organizations in line with local characteristics, needs, and realities.


A local organ would be responsible for accepting complaints from foreign businessmen or entrepreneurs within its jurisdiction and complaints transferred by the National Coordination and Handling Center for Foreign Business Complaints, and would accept the supervision of the National Center. At the provincial level, the organization would be called the Coordination and Handling Center for Foreign Business Complaints of XX Province, such as the Coordination and Handling Center for Foreign Business Complaints of S Province. The above agencies would ensure the cooperation and performance of the complaint coordination agencies by holding joint meetings and signing specific cooperation agreements. Moreover, the system would not be attached to any administrative organization, which would ensure that the complaint coordination centers at all levels would be truly independent and fair in their handling foreign complaints.


A two-tiered organizational structure for the establishment of foreign investment complaint handling institutions is inspired by the construction of foreign investment complaint coordination and handling institutions in China in the Draft Opinions, which set up such a two-level organizational structure. In the Draft Opinions, the first level is to set up a complaint center nationwide, called the National Foreign Investment Coordination and Handling Center; at the second level, the government at the grassroots level shall, within the scope permitted by law, set up institutions in accordance with local characteristics to handle foreign business complaints within its jurisdiction. The author thinks that this kind of structure is in line with China’s actual national conditions. First, since China has a large population and complaints are distributed across various provinces and cities, the establishment of a handling agency at the national level would lead to excessive pressure on the agency, resulting in the accumulation of cases and thus affecting work efficiency. Second, if only local institutions were set up to accept complaints, there would be no guarantee of the authority of the complaint handling results, which would make it difficult for both parties to accept and abide by them. The results of complaints, especially major complaints, need to be confirmed by a higher level of institution to ensure their authority and impartiality. At the same time, national handling agencies can play a guiding role for local handling agencies. They can solve foreign business complaint cases with great influence nationwide at the national level and provide coordination and guidance for difficult cases encountered by local complaint handling agencies.


Although article 123 of the Draft Opinions stipulates that the government at or above the county level should set up a coordination and handling organization for foreign business complaints according to the needs of the society, the author thinks that a specific definition should be made for the ‘county level’. Through empirical research on the foreign complaint cases in S province, the author believes that foreign business complaint handling institutions in China should only be set up at the central, provincial, and municipal levels, and these institutions should only be official institutions for the following reasons. Since foreign investors, foreign-invested enterprises, and ordinary foreign businessmen are the main subjects of complaints, and the objects of complaints include state administrative organs, state-owned enterprises, private enterprises, etc., such complaints are not only related to the development prospects of Chinese and foreign enterprises, but also represent national behavior, which is related to national reputation and national image. If the coordination organization is set at a lower level, this is not conducive to maintaining the authority of complaint coordination results. There are two reasons for defining such an institution as an official institution. First, investment complaints involve strong policies and represent the behavior of the state, while private institutions cannot represent the behavior of the state due to their own limitations. Second, non-governmental organizations may affect the fairness of complaint coordination and handling results because they expect to make a profit from the complaint handling process.


3. Governments Need to Innovate Process Reengineering. — First, the scope of foreign complaints must be clarified. At present, according to the provisions of the Interim Measures issued by the Ministry of Commerce of the PRC, most of China’s foreign-invested complaint handling institutions position their function as accepting complaints from foreign-invested enterprises and investors whose legitimate rights and interests are infringed upon by administrative acts. Based on an empirical analysis of relevant institutions, the reality is that investment disputes are decreasing and ordinary trade disputes are appearing in large numbers. In order to solve this situation, in which the functional scope of the complaint coordination and handling institutions is inconsistent with the reality, and there are no complaint channels for ordinary trade disputes, the author believes that the functional scope of the foreign complaint coordination center should be redefined and general trade complaints should be included in its scope of complaint acceptance, not only in the field of investment, but also in the field of trade, to constantly improve China’s business environment.


Of course, some scholars believe that such a broad scope for accepting cases would, on the one hand, increase the working pressure on the foreign complaint coordination organization and distract its attention from solving foreign investment disputes. On the other hand, it is not in line with the original intention of the establishment of foreign-invested complaint handling institutions for them to deal with ordinary trade disputes; the way in which such institutions are set up is not conducive to the division of labor and the connection of various modes of dispute resolution. The author believes that the establishment of unified complaint coordination and handling organization for foreign businesses through the joint conference mechanism could closely combine the complaint coordination organizations dealing with investment disputes with the organizations dealing with a large number of trade disputes in practice. The Joint Conference Office would separate investment complaints and general trade complaints. Those belonging to the category of investment would be handled by commercial departments or institutions, while those belonging to the category of general trade would be handled by institutions similar to the Foreign Business Complaint Center in S Province. This could not only conserve judicial resources effectively and reduce working pressure, but also improve the efficiency of dispute settlement through classified treatment. The establishment of this mode would not change the original intention of the complaint coordination organization, but would integrate and optimize its resources according to the current situation, so as to make the best use of existing resources to solve the actual new problems within the current context.


Second, we need to further standardize the workflow of the dispute resolution system. It is necessary to strengthen the management of the process through which foreign complaints are accepted, handled, and given feedback. As for the working process used by foreign complaint coordination and handling institutions, the author thinks that it should be divided into two parts: one would be the working process with which foreign complaint coordination and handling institutions at all levels deal with complaints separately; the other would be the process through which complaint coordination institutions at all levels cooperate with each other.


The Draft Opinions and the Foreign Investment Law have no provisions on the specific working process with which foreign complaint coordination and handling agencies deal with complaint cases. The author believes that this working process can be divided into four stages: filing a complaint, accepting a complaint, coordinating the handling of the complaint (including self-handling, submitting a request for coordination, putting forward suggestions, supervising and checking, etc.), and closing a case. Filing a complaint would be the first step, which could be done online or offline at the convenience of the parties. For the process of accepting a complaint, we can draw lessons from the provisions of articles 8 and 9 of the Interim Measures on the acceptance conditions for a complaint and matters that should not be accepted, that is, the complaint must meet the qualifications of the main body, have a clear object of complaint, a complaint request, facts and reasons, relevant evidence materials, etc. The complaint accepting institution should not accept anonymous complaints, and those who have entered the judicial process or arbitration process, no matter what steps they have taken. Those who have been accepted by disciplinary inspection departments, supervisory departments, or complaint reporting departments should also no longer be accepted. Of course, they should also be analyzed on a case-by-case basis. When a complaint accepting institution accepts a complaint, it should first conduct an examination of whether the entity that filed the complaint is a foreign investor or a foreign enterprise (including ordinary foreign businessmen), whether there is a complaint object, and whether the complaint conforms to the scope that the complaint accepting institution can handle. Secondly, if the complaint is within the scope of acceptance, the complaint accepting institution should make an acceptance decision on the spot. If the material is missing or evidence is missing and this can be corrected on the spot, the party concerned should be informed that it should supplement the relevant materials in a timely manner; if the material cannot be corrected on the spot, the time limit to do so should be three days. For those who do not conform to the scope of complaint acceptance, the accepting institution should inform the party on the spot and, ideally, tell them the organization or department that can solve their problem. Complaints that are in line with the accepted scope should be included in follow-up coordination and handling procedures. After fully analyzing, investigating, and discussing the complaint, the Foreign Coordination and Handling Center for Foreign Business Complaints might form coordination and handling opinions and submit them to the relevant departments, where they could be used to guide the smooth settlement of disputes. The author believes that, from the perspective of fairness, justice, and efficiency, it is reasonable to complete a case within 15 days for a general case and 30 days for a complicated case, and suggests that the results of the handling of the case be publicized to increase the transparency and recognition of the procedure. See Figure 1 for specific operations.



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As for how complaint coordination agencies at all levels should cooperate, the author believes that there should be three levels of agencies: the national level, the provincial level, and the city level. In S province, as an example, the complainant might lodge a complaint with the municipal, provincial, or national foreign business complaint acceptance center. Generally speaking, according to the principle of dependency, if the complaint went directly to the national level, the National Coordination and Handling Center for Foreign Complaints could transfer the complaint to the province where it was located according to the dependency of the object of complaint. The National Coordination and Handling Center for Foreign Complaints could supervise and urge, track, and inspect the provincial institutions. If the complaint was directly filed at the provincial level, the provincial Coordination and Handling Center for Foreign Complaints might handle the complaint directly or, based on the principle of facilitation, transfer it to the corresponding local city to learn about the situation; and the relevant local city would report the handling results after field investigation. For major complaint cases, the provincial Coordination and Handling Center for Foreign Complaints might also report to the National Complaint Center for handling. See Figure 2 for details.


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4. Ensure the Substantive and Effective Handling of Complaints. — An effective handling mode is the key factor to ensure the operation of the complaint mechanism. The validity of foreign complaint handling means the effectiveness of the opinions or conclusions made by foreign complaint handling institutions for resolving disputes through communication and coordination. Whether and to what extent the settlement result of a complaint dispute has validity is related to whether the settlement result has binding force on both parties of the dispute, so as to achieve its final settlement.


 The author argues that, in the future, China should clarify the effectiveness of the results of complaint coordination and handling agencies for foreign businesses, distinguish different handling methods, and grant different effectiveness to different complaint accepting bodies. For example, in terms of self-handling, we can learn from the mode and effect of mediation and arbitration in dealing with disputes. In particular, the signing of the Singapore Conciliation Convention on August 7, 2019 made mediation enforceable and formed a three-way carriage of settlement of foreign-related legal disputes along with arbitration and litigation. Therefore, a mediation or arbitration committee can be attached to foreign complaint coordination and handling institution. When a dispute cannot be resolved in a soft way, the foreign complaint handling institution can be empowered to make a substantive decision to mediate or arbitrate the accepted complaint. This would promote the two parties’ ability to reach a mediation agreement or allow the institution to make a final arbitration award, and thus achieve the real purpose of resolving the conflict. That is to say, the agreement signed by both parties after mediation by the complaint agency would have the effect of an administrative or commercial contract, and its binding force on both parties in the dispute would be ensured by judicial confirmation. The arbitration award made by the arbitration institution would be legally binding and enforceable as of the date of making it. The decision of handling methods, such as coordination, suggestion, supervision, and inspection, would not be legally binding on the ordinary parties in the complaint, but it would be legally binding on the government organs in the complaint, so as to guarantee the government organs would perform their duties and safeguard the legitimate rights and interests of foreign businesses.


C. Establishing a Diversified Mechanism for Resolving Foreign-Related Disputes that Integrates Complaint Coordination, Litigation, Arbitration, and Mediation


1. Cultivation of Foreign-related Legal Talents. — Foreign-oriented high-end legal talents are the inevitable requirement for the establishment of an international and convenient foreign complaint mechanism. First of all, in terms of the Belt and Road construction in China, there are many countries along the route, involving more than 50 languages. Complicated languages have become an unavoidable problem for China in the establishment of a foreign-related dispute settlement mechanism. In view of the fact that most of the relevant WTO legal rules and international laws are based on the common law system, English as the common language for foreign-related dispute settlement mechanisms could realize the unification of economy and benefits, and promote the real internationalization of China’s foreign-related dispute settlement. Secondly, in order to deal with increasingly complex commercial disputes in the international community, a single legal knowledge structure is no longer able to fully cope with the changing real world. The current situation demands that dispute handling staff not only have legal knowledge but also have an international perspective, and are able to tolerate different cultural traditions and respect diversified religious beliefs. Thirdly, in addition to being proficient in the relevant legal knowledge of the country where the business is conducted, these staff should also be proficient in interdisciplinary knowledge, that is, the combination of legal and extra-legal studies, including economics, architecture, transportation, and other disciplines related to people’s lives. At the same time, it is also necessary for these staff to have a good command of the regulations of various departments, international legal provisions, and treaties, so as to avoid the huge legal risks brought to the complainant by the failure of dispute handling staff to systematically grasp relevant international rules and practices when disputes occur.


2. Prioritization of Coordination Mechanism for Handling Foreign Complaints. — From the perspective of dispute resolution, it is not most important whether the handling method can be independent, but rather how mediation, arbitration, litigation, and other procedures can be connected and combined so as to effectively resolve disputes. At present, the more feasible solution is to position the complaint handling mechanism as the procedure that supersedes other dispute resolution procedures, and inform the parties that they should deal with the problem in other ways if it cannot be solved through complaint coordination. For example, many financial institutions set up an internal complaint handling mechanism and regard the complaint mechanism as a pre-procedure for arbitration or litigation, so as to achieve the purpose of effectively diverting disputes. The reasons for putting forward the mechanism for coordinating and handling foreign complaints as such a pre-procedure are as follows. First, it can reduce the cost of resolving disputes to the lowest amount possible, and solving disputes by means of communication, coordination, and mediation can save judicial costs and time costs. Second, it can control the adverse impact of the complaint at the source, and solve the contradictions between China and foreign countries by means of coordinated treatment. It can effectively prevent the expansion of the adverse impact and guarantee the construction of the business environment under the rule of law and the maintenance of the government’s image in China. Third, it can effectively divert foreign-related disputes, reduce the case load of courts, arbitration courts, and independent commercial mediation institutions, and ensure the efficient operation of all dispute resolution platforms in China.


3. Promotion of the Procedural Linkage between the Mechanism for Coordinating and Handling Foreign Complaints and the Administrative Review and Administrative Litigation Mechanism. — The solution to administrative dispute complaints lies in the connection and coordination between the foreign business complaint coordination mechanism, the administrative litigation mechanism, and the administrative review mechanism. The author thinks that the following aspects of these relationships should be considered. Firstly, if an administrative dispute has entered or completed the administrative litigation and administrative review procedure, the foreign business complaint coordination and handling organization should not accept it; in the course of handling the complaint, if the parties concerned submit the dispute to administrative litigation or administrative reconsideration, the complaint handling procedure should be terminated. Secondly, in order to encourage the parties to choose complaint coordination and handling mechanism with lower cost, more convenience, and less social influence to solve investment disputes, the court should establish a pre-litigation notification system, that is, when the parties bring an administrative lawsuit to the court, they should be informed that they can choose to handle the case by the complaint coordination organization, and the different characteristics or legal consequences of the two handling methods should be explained to them. The notification of the court would not mandate how the parties should proceed, but would provide different means of dispute resolution for the parties’ reference. Finally, the judicial confirmation procedure of mediation, arbitration, and other settlement results should be standardized. The parties could apply to the court with jurisdiction to confirm the legal effect of the mediation agreement reached through the intervention of the foreign complaint coordination and handling agency. The court’s decision confirming the validity of the mediation agreement would take legal effect upon delivery to both parties. If one party failed to perform the agreement, the other party could apply to the court for compulsory execution. If one party failed to comply with the arbitration award made by the arbitration institution, the other party could also apply to the court with jurisdiction for compulsory execution in accordance with article 237 of the Civil Procedure Law.


4. Establishment of a Diversified Dispute Resolution Mechanism Combining Complaint Coordination, Mediation, Arbitration, and Litigation. — Given the current situation of the dispute resolution mechanism, the author thinks that a diversified dispute resolution mechanism combining complaint coordination, mediation, arbitration, and litigation procedures could be established based on foreign complaint coordination and handling organizations. For example, the foreign complaint coordination and handling agencies could be used as the foundation of such a mechanism, and then mediation agencies, arbitration agencies, local courts, and other law-related agencies could be added to build a complete alternative dispute resolution (ADR) platform of ‘complaint coordination-mediation-arbitration-litigation’ (as shown in Figure 3). If a complaint case could not be solved after communication and coordination, the parties could choose any other procedure, or switch freely between the procedures of mediation and arbitration, mediation and litigation, and litigation and mediation. In terms of the connection between mediation and arbitration, the author suggests that international commercial mediation should be prioritized. When parties agree to choose an arbitration procedure, they should first accept mediation administered by the arbitration institution or mediation conducted by a specialized institution before entering the arbitration procedure. In terms of the connection between mediation and prosecution, the author suggests that a compulsory mediation system should be established, especially for small-sum cases, and mediation should be set as the necessary procedure before litigation. In terms of the connection among mediation, arbitration, and litigation, the author suggests that the international commercial court should establish a seamless connection with independent commercial mediation and arbitration institutions. After a mediation agreement is reached through mediation or an arbitration award is made by an arbitration institution, the procedural and substantive effect of the mediation or arbitration should then be recognized by the international commercial court.


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IV. CONCLUSION


The business environment is productivity. A world-class business environment requires legalization, internationalization, marketization, and facilitation. Therefore, a high-quality business environment must first have high-quality systems. While establishing and improving a series of legal systems to attract foreign investment, it is necessary to speed up the formulation of supporting implementation rules and policies. Taking the Interim Measures promulgated by the Ministry of Commerce of the PRC in 2006 as the main body of the system and combining it with the establishment of coordination organs such as the Foreign Business Complaint Centre and Associations of Foreign Invested Enterprises, China has actually established a basic version of the mechanism for coordinating and handling foreign complaints. It is not difficult to see that the core of its effectiveness lies not in the innovation of the macro system, but in the implementation of specific rules. Therefore, only by constantly improving the mechanism for coordinating and handling foreign complaints, refining the implementation plan of the Foreign Investment Law, and further strengthening the system’s connection with international commercial mediation, arbitration, litigation, and other dispute settlement channels, can China make concerted efforts to reshape the pattern of its foreign business complaint handling mechanism in view of fostering a business environment under the rule of law.



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