The National People's Congress passed the Amendment to the Chinese Environmental Protection Law (the "Amendment") on April 24, 2014. The amended Environmental Protection Law will take effect on Jan. 1, 2015.
The Chinese Environmental Protection Law (the "EPL") was enacted in 1989. The revisions in the Amendment came after 25 years of enforcement. The first draft of the Amendment was introduced in August 2012, and went through four rounds of deliberation before finally being passed by the National People's Congress. Scholars, governmental agencies, companies, and other interested parties had been debating the revisions for almost two years.
Over the past decades, China has grown into the world's largest manufacturer, energy producer, and energy consumer. It has, however, suffered from the side effects of this rapid development. Air, soil, and water pollution have all reached alarming levels, and China has become the greatest polluter in the world.
The original EPL has been enforced without any revisions for 25 years. It was vague in its environmental protection requirements and did not give environmental regulators strong power to punish pollution. It contains only general requirements, such as environmental impact assessments, levying of pollutant discharge fees, and pollution control measures, among other things.
The Amendment adds 23 new articles to the original EPL. The Amendment requires greater transparency in environmental information, gives environmental authorities more power to punish violations, and increases the role of public interest litigation.
Below is a summary of the changes to be enacted by the Amendment.
The Amendment requires greater transparency in environmental information
The Amendment includes a new chapter on information disclosure, which states that citizens, legal persons, and other entities have the right to obtain information about the environment. Transparency of environmental information is expanded in various ways.
In particular, the Amendment requires major polluting enterprises to monitor their pollution data and disclose detailed real-time pollution data to the general public. Fines could be imposed on enterprises trying to forge or falsify the monitoring data, and the responsible managerial personnel may face up to 15 days detention.
When preparing an environmental impact assessment report for a construction project, enterprises are required to explain to, and solicit comments from, any segment of the general public that may be affected by the project. Further, government agencies that are responsible for approving environmental assessment reports shall make the reports public, unless national security and trade secrets are involved.
Environmental authorities at the county level or above are required to put information about enterprises' environmental violations into the "social credit records," and publish the list of violators in a timely manner.
Environmental authorities are given stronger powers to impose penalties on violators
Under the original EPL, the environment authorities could only impose fines for environmental violation and set deadlines for management of pollution. In practice, polluting enterprises often paid one-time fines and continued to pollute, because they found that it was cheaper to pay fines than to purchase or upgrade pollution control equipment. In addition, due to the absence of legal enforcement powers, the environment authorities often initiated one-off inspection campaigns to locate offenders, but had to team up with local courts and police to make sure punishments were imposed and repeat offenders shut down.
The Amendment gives China's Ministry of Environmental Protection and its local offices greater legal power to fight pollution and punish polluters. The punitive actions include:
- Seizing the facilities and equipment that discharge pollutants in violation of laws and regulations;
- Issuing an order to cease or an order to shut down enterprises discharging excessive pollutants in serious cases; and
- Sending cases to law enforcement authorities to impose detention of up to 15 days on the responsible personnel, if the enterprises refuse to (i) stop discharging pollutants after being issued a ban because of failure to obtain a permit; or (ii) stop construction after being issued a ban for constructing without environmental impact assessment.
Also, the Amendment replaces the system of one-off fines under the original law with a system under which fines continue to accumulate each day that the pollution violations continue, without a cap. The new system of fines allows local environment authorities to issue corrective orders to violators to collect fines, based on the original penalty amount, for each day the violation continues. Further, local governments may expand as needed the types of violations that will be subject to continuous daily fines in local legislation. With this new fine provision, businesses are given a financial incentive to stop pollution more promptly and to follow the compliant environmental practices more diligently.
Public interest litigation against polluters
Presently, only one government-sponsored non-governmental organization ("NGO"), the All-China Environment Federation, has standing to file lawsuits against polluters on behalf of those harmed by pollution. Some Chinese environmental NGOs have attempted to bring public interest cases but have failed.
Under the Amendment, environmental NGOs that are registered with governments at or above the city level, have five years of experience in environmental matters and are in good standing, will be entitled to bring public interest litigation. It is reported that approximately 300 NGOs in China will qualify.
Although the legislation allows public interest litigation, the implementation could encounter practical difficulties. We can expect challenges when the changes in the new legislation alter the power of interest groups. We will keep an eye on how things process, and provide further updates as warranted.
In enacting the Amendment, the Chinese government has shown strong determination to fight pollution. The Amendment puts in place a legal framework for the regulators and the public to challenge polluters and pollution. It also formalizes a system by which local governments are evaluated based on their record on pollution issues, rather than solely on economic growth.
It was reported that, following the Amendment, other environment-related laws will likely be revised or adopted. The Ministry of Environmental Protection is working on the revisions to the Air Pollution Prevention Law and the Water Pollution Prevention Law, and also is preparing to draft the Soil Pollution Prevention Law.
Posted with permission from Davis Wright Tremaine LLP, Copyright 2014.
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