Shaanxi Mining Disputes Highlight the Difficulties in Developing the Rule of Law

February 7, 2011

While the development of the rule of law remains a stated priority of the Chinese government, political interference with judicial decisionmaking in some cases and with the implementation of some court rulings remains a serious problem. Two mining rights cases in Shaanxi province provide illustrations. In July 2010, a riot in Shaanxi province took place after local officials failed to implement rulings issued by the local Intermediate People's Court. In August, another mining rights case in Shaanxi province came under scrutiny when a confidential letter from the Shaanxi provincial government to the Supreme People's Court, seeking to influence the decision of the Supreme People's Court's, became public. Both cases show that judicial independence remains a key challenge in China.

Case 1

On July 17, 2010, a riot took place in Fanhe village in Hengshan county, Yulin city, Shaanxi province, reportedly causing injuries to 87 people, after local officials failed to implement a court ruling on mining rights, according to a July 19 Economic Information article ( in Chinese). The dispute centered on the right to extract coal from a mine after an allegedly fraudulent change to a mining license affected legal ownership of that right. According to the article, in 1996, when the mine began operations, Fanhe residents held a collective mining license. However, when the license came up for renewal in 2000, an individual from Shandong province changed the license for his own benefit by "using a privately carved seal, alteration of the application form, and other means ..." The change prevented the local village collective from operating the mine.

Representatives of Fanhe village sued the Shaanxi Province Department of Land and Resources under China's Administrative Litigation Law, and obtained a favorable ruling from the Yulin Municipal Intermediate People's Court in 2005. The court concluded that the Shaanxi Land Department had violated the collective's legal rights and ordered the department to restore the mining license to the village collective. In 2007, the Shaanxi High People's Court rejected an appeal from the Land Department, affirming the conclusion reached by the intermediate court.

While the ruling was a clear victory for the village, its implementation proved difficult. According to the Shaanxi Land Department, the court's ruling had no bearing on the mining rights question. In addition, an unnamed source that the Economic Information described as 'an insider' with ties to the local government, noted that an official at the Shaanxi Land Department once said: "a plaintiff winning a case is of no use. Courts can adjudicate however they want. I have my own ways of implementation!" According to the Economic Information article, in March 2010, approximately five years after the intermediate court's ruling, the Land Department sought to sidestep the court's decision by holding a "Shandong [province] Coal Mine Ownership Rights Mediation Conference." The village representatives were invited to the conference, but were prevented from attending on the day of the event.

Case 2

Another case, also involving mining rights and the Shaanxi Province Department of Land and Resources, came to light in August 2010. China Youth Daily (in Chinese) reported that, on August 2, the Xian Geological and Mineral Exploration and Development Institute under the Shaanxi Provincial Geological and Mineral Exploration and Development Bureau had entered into contracts granting to two different companies exploration rights on two overlapping mining sites―effectively selling rights to the overlapping parcel twice.

The Shaanxi Province Department of Land and Resources, the organization responsible for approving mining licensing procedures apparently had permitted both exploration contracts to go forward. In 2006, the earlier of the two contract holders sued the provincial Institute. The Shaanxi High People's Court ruled against the Institute for breach of contract. The Institute then appealed to the Supreme People's Court for a trial of second instance.

During the trial of second instance, the Supreme People's Court reportedly received a confidential letter from the Shaanxi Provincial Government General Office containing the following language: "the Provincial High People's Court decision was based on an incorrect understanding of the underlying documents," and "should this court uphold the provincial court's decision, there will be a serious loss of state owned capital," that "would significantly affect Shaanxi province's stability and development." China Youth Daily, citing unnamed sources, further reported that the Shaanxi Land Department was the likely real party-in-interest and the drafter of the confidential letter. Three years after the appeal, in November 2009, the Supreme People's Court issued a ruling that remanded the case to the Shaanxi High People's Court for further fact finding. At the time of this writing, no further public information is available as to the outcome of the case.

Public Responses to the Cases

The July 17 riot drew national attention to both cases and concern over their impact on the rule of law. People's Court Daily, an official publication of China's Supreme People's Court, published a July 22 editorial that included a collection of comments from members of the public condemning the Land Department's actions and its effect on the rule of law. Huaxi Dushi Daily (in Chinese), a regional newspaper published in Sichuan province, argued that the Shaanxi Land Department's conduct erodes the people's confidence in the legal system and is detrimental to society. On July 20, 2010, three days after the riot, the Supreme People's Court, citing "Opinions on Several Questions Concerning Establishing and Perfecting Execution of Mechanisms to Link Enforcement Across Agencies," made it clear that the Land Department must follow established legal procedures if dissatisfied with the court's ruling, and cannot interfere with legally effective decrees, according to a July 22 Southern Metropolitan Daily article (in Chinese). An August 3 China Youth Daily article (in Chinese) commenting on the earlier mining incident summed up the key challenge: calling on the courts to "resist unlawful intervention" is not enough for the rule of law to thrive in China, because the courts cannot effectively resist repeated attempts at interference unless there is genuine political support for them to do so. In November 2010, the central government released another Opinion (in Chinese) calling for the strengthening of the rule of law, accountability, and transparency. The opinion includes 29 articles on strengthening and improving government based on law. However, as the mining incidents demonstrate, closing the gap between laws on the books and implementation remains a significant challenge.

For more information on the development of the rule of law, see Section III in the CECC 2010 Annual Report.