International Law And Trade - Organizations A Chinese Corporate Counsel Association Assists Corporate Counsel In The New Market Environment

Sunday, May 1, 2005 - 01:00

The Editor interviews Lin Zhi, Chief Secretary of the Shenzhen Association of Corporate Legal Counselors, Shenzhen, People's Republic of China.

Editor: Mr. Lin, would you tell our readers something about your background and professional experience?

Lin: Permit me to thank you for giving me an opportunity to make the Shenzhen Association of Corporate Legal Counselors known to your readers. As for my background and career, I have been working as a general manager for 15 years and as a lawyer for more than eight years.

Editor: Please tell us about the Association. When was it founded and what is its mission?

Lin: I have been involved with the Association since the initial plans for its organization were discussed in May of 2003. In December of that year it was formally established by a number of Shenzhen enterprises, including business corporations, social organizations and other entities and corporate counsel affiliated with these enterprises, as a non-profit professional organization with a regional focus.

The mission of the Association is to develop and enhance the corporate counsel system; to direct and support the legal operations of the enterprises which constitute the Association's founders; to safeguard their legal rights, and those of their corporate organizational membership; to act as a bridge and means of communication between the enterprises and a variety of governmental agencies; to assist the government in its role of macro-governance; to serve the government in acting to manage and supervise the qualification of corporate counsel; and to serve as a linkage and forum for communication among the participating enterprises and their corporate counsel in order to enhance the legal services they provide to the enterprises.

In carrying out its mission, the Association seeks to accomplish the following tasks:

1. The promotion and implementation of the corporate counsel system in accordance with accepted best practices.

2. The oversight of corporate counsel qualification, including provision for ethical and professional education, inspection and supervision and, where appropriate, disciplinary measures.

3. The organization and conduct of conferences, training programs, workshops and seminars for the purpose of enhancing the contribution corporate counsel make to the success of the enterprise.

4. To counsel and serve the member enterprises in litigation and legal disputes among themselves and with other organizations.

5. To aid member enterprises in their communication with governmental agencies, and to this end to establish a database resource and referral service.

6. To contribute to the development of appropriate legal structures, in conjunction with responsible governmental agencies, through analyzing and refining initiatives and proposals concerning law-making and judicial responsibility.

7. To aid in the promotion of enterprise management reform through the dissemination of laws governing the organization, implementation and conduct of enterprise activities.

8. To disseminate to as wide an audience as possible, through the means of a website and other appropriate means of communication, the experience of corporate counsel in providing efficient and effective services to their enterprises.

9. To initiate and carry on communication and cooperation with corporate counsel organizations both at home and overseas.

10. To carry out all tasks entrusted to the Association by the government in furtherance of the foregoing.

Editor: Who are the members of the Association?

Lin: A considerable number of enterprises constitute our corporate membership, including the Shenzhen Airport, the Shenzhen Development Bank, Shenzhen Yantian Port, Konka Electronics, and so on. In addition, more that 1,000 persons have passed the qualification examination for corporate counsel in Shenzhen, and they are employed in an extraordinary variety of organizations.

Editor: Please tell us about the responsibilities of the position of Chief Secretary.

Lin: The Chief Secretary is in charge of the day-to-day operations of the Association. He coordinates its work among all of its branches and departments and with the enterprise members, and he has responsibility for the implementation of its strategic plans.

Editor: You have referred to the Association's role in the qualification of corporate counsel. How does this work?

Lin: Beginning in 1998, persons desiring to qualify as corporate counsel were required to sit for an examination offered once every two years. From 2003 the examination is given annually. Three of our government ministries - the Ministry of Human Resources, the State Assets Management Commission of the State Council, and the Ministry of the Judiciary - have entrusted the organization and implementation for the examination to the Examination Center of the Ministry of Human Resources. Among the subjects covered are comprehensive laws, the economy, enterprise managements, civil and commercial law and corporate counsel practice. Those who pass the examination and who are to be employed as corporate counsel must be registered, and the Association acts as an agent for registration. Among the responsibilities that the Association has in this process is to assess, on the basis of the applicant's submissions, that he or she is law abiding and has met an appropriate standard of professional ethics. The issuance of a practice or qualification certificate by the Association constitutes proof that the applicant has passed this assessment. The certificate is effective anywhere in China and represents a country-wide work permit.

Editor: The Association administers continuing education and training programs for its members. Would you describe these programs? What subjects are addressed?

Lin: To date, we have conducted a number of programs, and the subject matter is varied. Enterprise law is at the center of what we do in this area, and that includes the manner in which companies conduct their activities, both internally and externally. Contractual issues, including contract dispute prevention and contract dispute resolution, also receive a great deal of attention. Our programs also analyze a variety of foreign trade issues, and we attempt to cover the latest customs policies, customs clearance and the handling of bonded goods. We also offer forums and seminars on the credit issues that Chinese enterprises must address. Intellectual property, trademarks, the protection of corporate assets and property law generally are also subjects that we offer on an ongoing basis, and we attempt to cover the ever changing securities exchange listing requirements, particularly with respect to small and medium-sized companies. All of these matters are of concern to our membership.

Editor: You have also mentioned the role of the Association in acting as a bridge - a conduit for the flow of information - between private enterprise and the government. How does this work?

Lin: In its communication with a variety of governmental agencies, the Association acts to represent the common interests of the corporate counsel community. At the same time, the Association assists the government in advising, on behalf of corporate counsel, with respect to the development and implementation of economic and industrial policies, rules and regulations and statutes. Essentially, the Association is engaged in an attempt to coordinate the business and legal work of corporate counsel among themselves and with governmental agencies.

Editor: You have also expressed the Association's interest in reaching out to corporate counsel associations elsewhere in China and in other parts of the world. What is the Association's goal in this effort?

Lin: We have established contact with associations in Beijing, Shanghai, Guangzhou, Wuhan and Jinan, and we hope to develop links with others in China and, ultimately, across the world. Our goal is to enhance the services that we provide to our members by learning from other organizations, by establishing effective channels of communication and the exchange of information with them, and by arranging for mutual assistance and training. We believe that the experience of others is relevant to our membership, and, at the same time, we believe that we may have experience and knowledge that is of value to them. We are seeking to establish a mutuality of communication that will result in the exchange of knowledge that is valuable to all participants.

Editor: Since China has joined the World Trade Organization, its economy has boomed and the country appears to be taking a major role in the global economy. What has this development meant for your members?

Lin: Since China's accession to the WTO, competition has become more complicated and more intense for Chinese enterprises, and this is true both within the country and in international markets. As competition rules have become standardized and transparent, an increasing number of multinational companies have set up operations in China, and their presence - their competition - has had an impact on just about all Chinese enterprises. At the same time, the access that Chinese enterprises now have to world markets represents a very great opportunity but one that is hardly without risk. These developments have had a significant impact on the corporate counsel community in China. The position of corporate counsel has been strengthened, I believe, by a recognition that controlling legal risk is a key issue - perhaps thekey issue - for Chinese enterprises in meeting the new competition and in adapting to the new market environment.

There are three questions that the Association must address in facing the future:

1. Can we develop a mechanism to prevent, or at least control, legal risk in the construction of modern business enterprises?

2. Can we establish, perhaps as a consequence of communication and collaboration with our colleagues and counterparts in other parts of the world, an administrative structure for corporate counsel within the enterprise that serves to maximize counsel's contribution to the success of that enterprise?

3. Can we develop, in connection with the overall cooperation of Chinese and foreign enterprises, a regional, even global, network of corporate counsel that will serve to integrate the legal service sources available to Chinese enterprises at home and abroad, as well as multinational enterprises conducting operations in China?

While I cannot tell your readers what the answers to these questions will be, I am in a position to say that they will be addressed and that the Shenzhen Association of Corporate Legal Counselors, together with its colleagues in other like-minded professional associations, will be part of that discussion.