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Dr. Mei Gechlik Founder and Director, China Guiding Cases Project DAI

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Dr. Mei Gechlik Founder and Director, China Guiding Cases Project DAI Dr. Mei Gechlik Founder and Director, China Guiding Cases Project DAI Di Attorney, Beijing Haijia Law Firm Guiding Case No. 5, Monopoly in China’s Salt Industry, and Amendments to the Legislation Law and the Administrative Litigation Law CHINA GUIDING CASES PROJECT June 30, 2015 (Final Edition)* * The citation of this Commentary is: Mei Gechlik and DAI Di, Guiding Case No. 5, Monopoly in China’s Salt Industry, and Amendments to the Legislation Law and the Administrative Litigation Law, STANFORD LAW SCHOOL CHINA GUIDING CASES PROJECT, June 30, 2015, http://cgc.law.stanford.edu/commentaries/13-gechlik-and-dai. This Commentary was written in Chinese by the authors. The English version of this Commentary was prepared by Zeng Cheng, DAI Di, Wenjie Ou, James Yuan, Luping Zhang, and Dr. Mei Gechlik and was edited by Jordan Corrente Beck. The information and views set out in this Commentary are the responsibility of the authors and do not necessarily reflect the work or views of the China Guiding Cases Project. Copyright 2015 by Stanford University 2 Final Edition Guiding Case No. 5, Luwei (Fujian) Salt Industry Import and Export Co., Ltd. Suzhou Branch v. The Salt Administration Bureau of Suzhou Municipality, Jiangsu Province, A Salt Industry Administrative Penalty Case (“GC5”), was released by the Supreme People’s Court of China (“SPC”) in the second batch of Guiding Cases (“GCs”) on April 9, 2012.1 GC5 presents an administrative litigation case involving a private company challenging penalties imposed on it by local authorities claiming to have acted in accordance with local government rules. The company argued that the local government rules established administrative licensing and penalties in violation of upper-level legislation. The local court ruled against the local authorities and the case was selected by the SPC as a GC, giving the ruling guiding effect in the adjudication of similar cases.2 Two major issues are worthy of discussion. First, given that there are other cases involving local government rules that establish administrative licensing or penalties in violation of upper-level legislation, 3 why did the SPC specifically choose a case involving salt industry administration to provide guidance of this kind? Second, have the legal principles regarding the relationship between upper- and lower-level legislation stated in GC5 been incorporated into recent amendments to the Legislation Law of the People’s Republic of China (“Legislation Law”)4 and the Administrative Litigation Law of the People’s Republic of China (“Administrative Litigation Law”)?5 1 《鲁潍（福建）盐业进出口有限公司苏州分公司诉江苏省苏州市盐务管理局盐业行政处罚案》 (Luwei (Fujian) Salt Industry Import and Export Co., Ltd. Suzhou Branch v. The Salt Administration Bureau of Suzhou Municipality, Jiangsu Province, A Salt Industry Administrative Penalty Case), CHINA GUIDING CASES PROJECT, English Guiding Case (EGC5), June 30, 2015 Edition, available at http://cgc.law.stanford.edu/guiding- cases/guiding-case-5. 2 《最高人民法院关于案例指导工作的规定》(Provisions of the Supreme People’s Court Concerning Work on Case Guidance), passed by the Adjudication Committee of the Supreme People’s Court on Nov. 15, 2010, issued on and effective as of Nov. 26, 2010, CHINA GUIDING CASES PROJECT, English Guiding Cases Rules, June 12, 2015 Edition, available at http://cgc.law.stanford.edu/guiding-cases-rules/20101126-english/. 3 See, e.g., 《海口市国土资源局等与林鸿珠等土地行政管理纠纷再审案》（2011）海中法行再终字第 3 号 (Land and Resources Bureau of Haikou Municipality et al. and LIN Hongzhu et al., A Retrial Case on the Dispute over Land Administration, (2011) Hai Zhong Fa Xing Zai Zhong Zi No. 3), available at http://zjbar.chinalawinfo.com/NewLaw2002/SLC/SLC.asp?Db=fnl&Gid=118277313. 4 《中华人民共和国立法法》(Legislation Law of the People's Republic of China), passed and issued on Mar. 15, 2000, effective as of July 1, 2000, amended on and effective as of Mar. 15, 2015, available at http://www.gov.cn/xinwen/2015-03/18/content_2835648.htm (hereinafter “New Legislation Law”). A full text version of the Legislation Law of the People's Republic of China as first passed is available at http://www.gov.cn/test/2005-08/13/content_22423.htm (hereinafter “Old Legislation Law”). 5 《中华人民共和国行政诉讼法》(Administrative Litigation Law of the People’s Republic of China), passed and issued on Apr. 4, 1989, effective as of Oct. 1, 1990, amended on Nov. 1, 2014, effective as of May 1, 2015, available at http://www.spp.gov.cn/sscx/201502/t20150217_91466.shtml (hereinafter “New Administrative Litigation Law”). A full text version of the Administrative Litigation Law of the People's Republic of China as first passed is available at http://www.gov.cn/flfg/2006-10/29/content_1499268.htm (hereinafter “Old Administrative Litigation Law”). Copyright 2015 by Stanford University 3 Final Edition I. The Original Judgment of GC5 and its Selection as a GC 1. The Original Judgment of GC5 On February 26, 2009, pursuant to Articles 23, 32, and 42 of the Implementing Measure of Jiangsu Province on the “Salt Industry Administration Regulation” (“Jiangsu Measure”) issued by the People’s Government of Jiangsu Province, 6 the Salt Administration Bureau of Suzhou Municipality, Jiangsu Province, determined that Luwei (Fujian) Salt Industry Import and Export Co., Ltd. Suzhou Branch (“Luwei Company”) purchased and transported industrial salt without approval and, therefore, imposed administrative penalties on the company. Luwei Company brought a lawsuit. 7 On April 29, 2011, based on the provisions of the Legislation Law, the Administrative Licensing Law of the People’s Republic of China (“Administrative Licensing Law”),8 and the Administrative Penalties Law of the People’s Republic of China (“Administrative Penalties Law”),9 the Jinchang District People’s Court of Suzhou Municipality, Jiangsu Province (the “Jinchang District Court”) revoked the Salt Administration Bureau of Suzhou Municipality’s administrative penalties. The court’s main reasons were two-fold: First, since the laws and the State Council’s Salt Industry Administration Regulation10 did not establish administrative licensing for industrial salt transportation permits, the Jiangsu Measure, a local government rule, could not establish such licensing. Second, since the Salt Industry Administration Regulation did not impose administrative penalties on any enterprises other than salt industry companies for operating salt wholesale business, the Jiangsu Measure could not establish administrative penalties on this behavior. 6 《江苏省〈盐业管理条例〉实施办法》(Implementing Measure of Jiangsu Province on the “Salt Industry Administration Regulation”), passed by the People’s Government of Jiangsu Province on June 27, 1991, issued on and effective as of Oct. 4, 1991, amended four times, most recently on Feb. 16, 2012, effective as of Feb. 26, 2012, available at http://www.changshu.gov.cn/zgcs/Zfxxgk/showinfo.aspx?infoid=2609f4d3-ecfd-4535-a8ef- 5f38ff2b1608&categoryNum=001002002003 and http://www.js.gov.cn/jsgov/tj/bgt/201311/t20131104405412.html. 7 The original judgment of this case does not mention when the lawsuit was brought, but does mention that the People’s Government of Suzhou Municipality issued an administrative reconsideration decision on April 24, 2009. Article 38 of the then-effective Administrative Litigation Law of the People’s Republic of China provides that “[where] an applicant is dissatisfied with an administrative reconsideration decision, [he] may bring a suit to a people’s court within 15 days from the date of receipt of the reconsideration decision.” See Old Administrative Litigation Law, supra note 5, Article 38. Thus, Luwei Company should have brought the lawsuit no later than May 9, 2009. This date is likely not significantly different from the actual date Luwei Company brought suit, even after possible problems relating to the delivery of the reconsideration decision are taken into account. 8 《中华人民共和国行政许可法》(Administrative Licensing Law of the People’s Republic of China), passed and issued on Aug. 27, 2003, effective as of Jul. 1, 2004, available at http://www.gov.cn/flfg/2005- 06/27/content_9899.htm. 9 《中华人民共和国行政处罚法 》(Administrative Penalties Law of the People’s Republic of China), passed and issued on Mar. 17, 1996, effective as of Oct.1, 1996, amended and effective as of Aug. 27, 2009, available at http://www.npc.gov.cn/wxzl/gongbao/2000-12/05/content_5004656.htm and http://www.npc.gov.cn/npc/xinwen/2009-08/27/content_1538233.htm. 10 《盐业管理条例》(Salt Industry Administration Regulation), passed by the State Council on Feb. 9, 1990, issued and effective as of Mar. 2, 1990, available at http://www.saic.gov.cn/zcfg/xzfggfxwj/199003/t19900302_45936.html. Copyright 2015 by Stanford University 4 Final Edition 2. The Selection of the Original Judgment of GC5 as a GC The selection of Luwei (Fujian) Salt Industry Import and Export Co., Ltd. Suzhou Branch v. The Salt Administration Bureau of Suzhou Municipality as a GC was not a coincidence. In fact, the SPC was alerted when this case was being handled. During the two years of the case’s adjudication, the Jinchang District Court reported to and sought instructions from 11 the Adjudication Committee of the Jinchang District Court, 12 the Adjudication Committee of the Intermediate People’s Court of Suzhou Municipality, the Collegial Panel of the Administrative Tribunal and the Meeting of Chiefs of Tribunals of the Higher People’s Court of Jiangsu Province, and, finally, the SPC. After internal research conducted by the SPC and its solicitation for opinions from the Law Committee of the National People’s Congress and the Legal Affairs Office of the State Council, the SPC made its Reply Concerning Instructions Sought on Whether It is Necessary to Apply for Permits Including Industrial Salt Transportation Permits to Operate Industrial Salt Business on January 17, 2011.13 According to the Reply, neither local regulations nor local government rules can establish a system of industrial salt transportation permits and local government rules cannot impose administrative penalties on any enterprises other than salt industry companies for operating salt wholesale business.
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