China: China’s New Environmental Impact Assessment Qualification Rules

Last Updated: 22 November 2006

By Dorothy Deng and Alex Wang

In October 2005, the State Environmental Protection Administration (SEPA) strengthened the domestic environmental impact assessment (EIA) market by conducting a nationwide review of the environmental impact assessment agencies (EIA Agencies) and re-issuing qualification certificates. This action follows SEPA’s issuance of the PRC Administrative Rules Concerning Construction Project Environmental Impact Assessment Qualifications (EIA Qualification Rules) on August 15, 2005. The new EIA Qualification Rules replaced the old rules promulgated by SEPA in 1999 (Old Rules)1 and became effective on January 1, 2006.

EIA And Related Agencies

China strengthened its EIA system by promulgating the new Environmental Impact Assessment Law (EIA Law) in late 2002.2 Under the EIA Law, EIA is defined as a system for (1) analyzing, forecasting and assessing the potential impact on the environment after implementation of planning and construction projects, (2) establishing strategies and measures to prevent or alleviate adverse impacts on the environment, and (3) implementing follow-up reviews and monitoring.

The EIA Law requires a project developer/owner to submit an "EIA document" to SEPA or its local counterpart before commencing construction of any project in China "EIA documents" are classified into three categories depending on the level of a construction project’s potential environmental impact: (1) where the potential impact is "significant", the developer must prepare an environmental impact report (EI Report) containing a comprehensive assessment of the resulting environmental impact; (2) where the potential impact is "light", the developer must fill out an environmental impact report form (EI Form) containing an analysis or special assessment of certain aspects of the resulting environmental impact; and (3) where the potential impact is "very light", the developer may simply file an environmental registration form, and assembly of an EIA is not required. SEPA formulated and published the EIA Classification Catalogue, from which reference can be made to determine what type of EIA documents are required for a particular construction project.

An EI Report or an EI Form must be prepared and issued by an EIA Agency certified by SEPA. As of August 2005, China had a total of 973 qualified EIA Agencies, among which 4 are foreign-invested (e.g., the Sino-Japan Friendship Environmental Protection Centre and ERM Environmental Resources Management Consulting (Shanghai) Co., Ltd.), and 10 are privately-owned. The majority of qualified EIA Agencies are State-owned enterprises, research arms of universities, and research institutions.3 The EIA service market in China is still highly monopolized by the government.

New Qualification Rules

Qualification Classification

The new EIA Qualification Rules provides for a two class qualification system, Class A and Class B, and EIA Agencies must apply for the proper qualification with SEPA at the national level. Class B EIA Agencies are permitted to undertake EIA and issue EI Reports and EI Forms for projects that require approval by environmental protection administrations (i.e., SEPA’s local counterparts) at or below the provincial level, while Class A EIA Agencies are permitted to do the same for projects that require approval by SEPA at the national level, 4 in addition to those permitted for Class B EIA Agencies. After examination and approval, SEPA will issue a qualification certificate with a four-year term renewable option at its expiration to qualified EIA Agencies.

Furthermore, the new EIA Qualification Rules divide the EI Reports into 11 categories according to the use of the construction projects for which such EI Reports are issued, including textile, agriculture, commercial real estate and marine projects. The EIA Qualification Rules also divide EI Forms into two categories, special EI Forms for nuclear and electricity projects and general EI Forms for all other projects. Both Class A and Class B EIA Agencies may apply with SEPA to prepare and issue any or all of such 11 categories of EI Reports and/or 2 categories of EI Forms by satisfying certain requirements (e.g., a Class A EIA Agency applicant must have at least 3 qualified EIA engineers for each category of the EI Reports it applies for, two of whom must have drawn up EI Reports in the same category before application). Such categories, once approved by SEPA, will constitute the business scope of the EIA Agencies, and the EIA Agencies must conduct EIA within such business scope.

Qualification Requirements

In order to apply for a Class A qualification, an EIA Agency must satisfy, among other things, the following requirements:

(i) be an entity registered in China with fixed assets amounting to at least RMB10 million, with a minimum registered capital of RMB3 million;

(ii) have at least 20 EIA technical personnel, 10 of whom must be qualified EIA engineers registered with SEPA;

(iii) have prepared, in the three years prior to application, at least 5 EI Reports for projects approved SEPA;

(iv) have a sound EIA quality control system; and

(v) have required facilities and computer systems commensurate with the proposed business scope of the EIA Agency.

Class B qualification is subject to a lower threshold. The applicant EIA Agency must have fixed assets amounting to at least RMB2 million, with a minimum registered capital of RMB500,000,5 and have at least 12 EIA technical personnel, 10 of whom must be qualified EIA engineers. All other requirements for Class B qualification are similar to those of Class A, except that an EIA Agency applying for Class B qualification does not need to have any experience as specified in (iii) above.

Continuing Supervision

The EIA Qualification Rules strengthen the continuing supervision powers of SEPA after the qualification certificates are issued to EIA Agencies. SEPA will conduct selective inspections on such EIA Agencies from time to time, publish the inspection results and impose administrative penalties (as discussed below) on those found in violation of relevant rules and regulations.

Liabilities

EIA Qualification Rules require that EIA Agencies be held liable for the conclusions reached in EIAs. EI Reports and EI Forms must be signed by technical personnel, who will be liable for the portions he/she prepared.6

EIA Qualification Rules set forth more severe administrative penalties that may be imposed by SEPA on EIA Agencies than those set forth in the Old Rules. Such penalties include, among other things, (a) reducing the agency’s qualification or revoking such agency’s qualification certificate, imposing a penalty of 1-3 times the fees collected by such agency and de-registering the responsible EIA engineer(s’) qualification, if an EI Report or EI Form is inconsistent with the facts due to dereliction of duty or falsification of facts by an EIA Agency; (b) revoking its qualification certificate if an EIA Agency conducts any EIA beyond its business scope; and (c) suspending such agency’s qualification certificate for 3-12 months for it to rectify an incomplete or mistaken report, and then reducing such agency’s business scope if an EIA Agency is grossly negligent, adopts incorrect evaluation standards or methodologies, or draws an unclear conclusion.

The EIA Qualification Rules do not set forth any civil liabilities on EIA Agencies in regards to project developers/owners that entrust such EIA Agencies to conduct EIA. However, the project developers/owners may seek remedies under the PRC Contract Law7 and other pertinent general civil principles.

Impact On EIA In China

The new EIA Qualification Rules send a message that SEPA will continue to establish higher threshold requirements for EIA Agencies, in addition to stricter supervision of such agencies. The new EIA Qualification Rules also encourage various reforms, including foreign participation in reorganization of the EIA Agencies in order to make the EIA service market more competitive. In November 2005, American-based AECOM acquired 51% of the equity interests of Nan Chang Environmental Protection Research Institute,8 indicating that foreign EIA service providers will play an increasingly more important role in the EIA service market.

Foreign investors that retain an EIA Agency for their construction projects should determine the business scope of the EIA Agency to see whether such construction projects fall within the permitted business scope of such agency. With the implementation of the new EIA Qualification Rules, we expect to see that the quality of EI Reports and EI Forms be improved, and the foreign investors’ risk to incur environmental liabilities due to a mistaken or inappropriate EIA be reduced.

Footnotes

1. Administrative Measures of Construction Project Environmental Impact Assessment Qualification Certificates, promulgated by SEPA on and effective as of March 30, 1999.

2. EIA Law was promulgated by the Standing Committee of the People’s Congress on March 15, 1999, and became effective as of October 1, 1999.

3. This data was disclosed by Zhao Weizhun, a Director with SEPA in charge of EIAs, as published in SEPA’s website on August 25, 2005.

4. Article 23 of EIA Law provides for three types of projects requiring SEPA’s approval: (i) construction projects of nuclear facilities and top-secret projects; (ii) construction projects that straddle the border between provincial-level jurisdictions; and (iii) construction projects entailing approval by the State Council or the relevant central department authorized by the State Council.

5. If the applicant EIA Agency applies only for a business scope to prepare EI Forms, the minimum amount of fixed assets and registered capital is RMB1 million and RMB300,000, respectively.

6. Articles 21 and 22 of EIA Qualification Rules.

7. PRC Contract Law, promulgated by the Standing Committee of the People’s Congress on March 15, 1999 and effective as of October 1, 1999.

8. This news was published in www.cenews.com.cn on November 1, 2005.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions