China's New Environment Law

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Within less than a month, the latest amended “Environment Protection Law” in China will become effective. The said Law was passed by the Standing Committee of the National People’s Congress this April after three years’ amending process.

The amended Environment Protection Law further clarifies government’s supervision and management duties on environment protection, improves basic environment protection systems, such as ecological red line, pollutant cap control etc., and more importantly, it enhances enterprises’ liability of preventing and curing pollution and strengthens punishment on environment violations. It is called
as “the strictest Environment Protection Law” in history in China and such strictness can be shown as follows:

1. Clarifying enterprises’ responsibility and liability

In accordance with Article 42 of the said Law, enterprises and public institutions which discharge pollutants, shall establish environment protection liability mechanism and clarify the liabilities of the person in charge and relevant personnel. It means that all pollutant discharging enterprises shall have personnel specialized in the environment protection matters and make relevant regulations and rules. In addition, the said article also lists various violations that are prohibited, such as discharging pollutants through underground pipe, diffusing well etc.

2. Strengthening Punishments on violations

In order to solve the problem of “low violation cost, high compliance cost”, the amended Law stipulates the principle of calculating fine by day. In accordance with Article 59, in case enterprises, public institutions and other manufacturing operators refuse to rectify after being ordered to be fined and rectified due to discharge pollutants illegally, the administrative organ which makes the said order may impose a continuous fine equal to the original amount by day since the day after the administrative organ ordered rectification. It means that there will be no cap liability for those who violate the relevant environment laws/regulations. In addition, executives and personnel who is directly responsible may also get administrative detention if their enterprises refuse to carry out government’s orders. It is also worth of attention that any violations by an enterprises/public institution/other manufacturing operator will be recorded in the social credit archive and timely published to the public, which may leads to strictly restrictions in the aspects of IPO, financing or loan etc. The details are still to be clarified by the Environment Protection department and other departments, such as the NDRC.

Apart from stricter provisions on enterprises’ liabilities, the amended Law also includes detailed responsibilities of local governments and more involvement of the public into the environment protection issues. For the latter, citizen, legal person or other organization have right to report polluting behaviors by any work unit or individual to the departments that have duties on environment protection and supervision. Besides, a social organization that fulfills certain conditions in accordance with Article 58 of the Law may bring environment litigation for public interest.

In order to facilitate the upcoming implemented Environment Protection Law, the Ministry of Environmental Protection has drafted a series of interim measurements concerning issues, such as continuous fine calculated by day, environment protection seal and seize etc. According to the official from the said Ministry, the said interim measurements will be issued within the year, and upon implementation of the amended Law, the environment protection departments will conduct a series of actions against environment violations. It is also reported that the Supreme People’s Court is making an judicial interpretation on the said environment litigation for public interest.

Based on the said legislation progress and cooperation between the environment protection departments and other departments (e.g. the NDRC, the Supreme People’s Court), it seems that China is taking this issue very seriously and might take a series of actions to enforce those laws and regulations. Under such circumstance, for the enterprises in China, especially those involve in pollutant discharge, they will face a harsher enforcement environment and a higher compliance risk in the field of environment protection. Thus, it is extremely important for such enterprises to study the new Law and make sure that its pollutant discharge is in compliance with relevant laws and regulations, in order to avoid unnecessary legal risk.

Fei Dang is an Associate in the MMLC Group.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

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