1

Despite Warnings, China’s Regulators Failed to Stop Tainted Milk

By Jim Yardley and David BarbozaPublished: September 26, 2008

China Photos, via Getty Images

The tainted-milk crisis has devastated China’s dairy industry. Farmers in

Hubei Province poured out milk they could not sell.

2

Tainted milk scandal• Media control

– Editor at Southern Weekend ( 南方周末） reveals prohibitions on publishing tainted milk story before the Olympics

– What does this mean for “thick” rule of law? (stay tuned)

3

Tainted milk scandal• Personnel control

– Sanlu Group• Hebei Province Communist Party appointed the

company’s chairperson, who was also a party official.

• What does this mean for corporate governance?

4

Tainted milk scandal

• Politicization of institutions– Ministry of Health

• Gansu Provincial Health Bureau reports not investigated

• Did the Ministry of Health violate any law?

5

“China milk victim lawyers say pressed to quit,” Reuters 9/28/08

• “Local rights advocates and lawyers have mobilized to support families seeking redress, possibly by suing dairies or officials who failed to disclose the problem.”

• “Chinese lawyers…are facing growing official pressure to abandon efforts [to seek redress], blaming growing government sensitivity over the health scandal.”

6

Introducing “rule of law”

• Rule of law vs. rule by law

• Thin vs. thick conceptualizations of law

7

Introducing “rule of law”

• Rule by law– “Law exists not to limit the state but to serve

its power (Carothers)”– Ruling elites are “above the law”

(not subject to law)– Ruling elites use law instrumentally to control

the polity, society, economy

8

Introducing “rule of law”

• Thin rule of law minimal

• Laws are public, consistent, capable of being enforced

• Ruling elites are not “above the law”

9

Introducing “rule of law” • Thick rule of law maximal

(Carothers, Democracy & Rule of Law Project at the Carnegie Endowment)

– Laws are public knowledge, clear in meaning– Political leaders are equally subject to law– Judiciary is independent– Institutions and personnel are competent– Citizens enjoy

• civil and political rights• right of Habeas Corpus (court decides legality of

detention/imprisonment)• presumption of innocence

– Democracy?– Capitalism?

10

Introducing “rule of law”

• How does Peerenboom characterize the Chinese legal system?

11

Follow up from last class

• Discussion of Chinese law– Penal in nature—oriented toward punishment– Not designed to protect individual rights

12

Confucianism

• “li” 礼 – Correct performance of Confucian ritual– Rules of proper conduct for social relationships – “Etiquette” (gentlemen master “li”)– Everything that makes for harmony– Customary cultural norms

Chaos/disorder comes from failure to live according to “li”

13

Confucianism• Ideal

– Government based on virtue (de, 德 ) and ritual/customary norms of social conduct (li, 礼 )

– If people were cultivated through ritual (li), then an ideal society could be created on the basis of virtue (de).

• The state is the extension of the family– Confucian “3 bonds and 5 relationships”Ruler:ministerFather:sonHusband:wifeElder brother:younger brother Friend:friend

• Five Tenets of Confucius: ruler should be a sage/moral exemplar

仁义礼智信 rén yì lǐ zhì xìn Benevolence/humaneness, uprightness, propriety, wisdom, trust

14

Confucianism• The state is the extension of the family

– Confucian “3 bonds and 5 relationships”Ruler:ministerFather:sonHusband:wifeElder brother:younger brother Friend:friend

• Five Tenets of Confucius (ruler should be a sage/moral exemplar of the following)

仁 rén benevolence/humaneness 义 yì uprightness 礼 lǐ propriety 智 zhì wisdom 信 xìn trust

15

Confucianism

1. Man is, by nature, good• But needs cultivation • Goal is to internalize Confucian norms—not punish

“Li forbids trespasses before they are committed, whereas law punishes criminal acts after their commission.”

• Moral education is first priority in maintaining social order

2. Government should be based on virtue• Emperor, gentleman should be moral exemplars• Ruler should be a sage who takes

– Benevolence (ren)

– Social righteousness (yi)

» As basis for government

16

Confucianism

3. Li is valid because it was created by “intelligent sages of antiquity” (Bodde and Morris 1967:21)

4. Performing one’s duty in accord with one’s status in the hierarchy is key to achieving harmony

five relationships of Confucianism status matters, circumstances matter

Ex: Murdering one’s parents is worse than murdering someone else

Ex: use of torture for commoner but not elite

17

Confucianism

• Emphasis on mediation• “Li” allows for interpretation based on the

situation– laws not public, because would encourage people to

• manipulate the system• i.e., follow the letter NOT the spirit of the law

• Laws are no better than the men who create them so morality of ruler is key

18

Legalism

1. Men (people) are inherently self-interested only by playing on self-interest can state

elicit compliance; state must therefore set up a system of rewards and punishments

● harshly punish anyone who breaks the rulesharsh punishment is a deterrent

● give officials very specific responsibilitiesreward those who fulfill thempunish those who do not

2. Goal: state control over subjects

19

Legalism

3. Law should be – Public– Codified– Applied to everyone (except the ruler himself)

“The ruler creates the law; the ministers abide by the law; and subjects are punished by the law.”

Critique of fact that “li” are unwritten, particularistic, and subject to interpretation

4. Good rules can compensate for a weak ruler

20

Huang-Lao School of the Han Dynasty

• Why does Peerenboom introduce this?– Common to confuse “li” with a kind of natural

law– Traditional reference to restraint on ruler

• Ultimate authority not with ruler but with the Dao/Way 道

• Law also applies to ruler• Apply law not interpret it (Peerenboom)

Contrast: Confucian mandate of heaven ( 天命 )

21

Law in practice

• Elements of both Confucianism and Legalism

• Codes

22

Law in practice

• District magistrate—not specialized– Prefect (zhou) has Bureau of Punishments

• No private legal profession• Societal enforcement of norms

– Clan– Guild– Gentry (define)

• Inculcate norms• Mediate disputes• Impose discipline, sanctions