Introduction

The current Chinese Environmental Protection Law (“EPL”) was last amended in 1989. Many have since voiced the need to revise the law to keep up with the changing economic reality. Earlier this year, the Environment Protection and Resources Conservation Committee (“EPRCC”) of the National People’s Congress (“NPC”) formally initiated the process to update the decades-old EPL. At the request of the EPRCC, the Ministry of Environmental Protection (“MEP”) submitted a proposed new law to EPRCC in July 2011. The text of the proposed law was not made public. According to sources familiar with the matter, the goal for this amendment is not to craft a comprehensive and modern new environmental protection law. Revisions will focus on the areas where inadequacy of the current EPL is most conspicuous. These areas are commonly known as the “eight plus one” areas.

The eight areas that are the focus of this amendment are (1) environmental impact assessment; (2) emission and sewage discharges; (3) enforcement agencies’ power to order remedial and corrective measures to be completed within a specified time period; (4) citizens’ rights in environmental protection; (5) environmental standards; (6) environment survey and monitoring; (7) coordination between local governments for trans-jurisdictional pollution prevention and control; and (8) government obligations and liabilities on environmental protection. The “plus one” element refers to changes to the legal obligations and liabilities section of the EPL, made to facilitate effective enforcement of the law. Sources indicate that proposed revisions to the EPL would result in greater enforcement. The revisions will likely include heavier penalties for violations, clarification of local governments’ obligations, and a relaxed standing requirement for civil actions against polluters.

A. Authorizing Heavier Penalties to Give the EPL Sufficient Deterrence

The current EPL is viewed by many as inadequate because China limits the fine an administrative agency can impose for environmental violations such that the amount fined is often much smaller than the cost of the damage resulting from the violation. The highest administrative fine imposed so far was RMB 9 million ($1.4 million USD), for a violation causing estimated damage of RMB 30 million ($4.7 million USD). This is primarily because the current EPL does not grant enforcement agencies special authority to impose fines exceeding the general limits for administrative fines. In recent years, some local enforcement agencies have gotten around this limitation by assessing a separate fine for each day the violation was not remedied. These agencies take the position that each fine is an independent administrative penalty, thus the total amount imposed is not subject to China’s limits on administrative fines. This practice has won public support. According to experts involved in the drafting process, the new EPL is likely to expressly authorize this current practice, as well as other heavy penalties such as plant closure, to increase deterrence.

B. Clarifying the Environmental Protection Obligations of Local Governments

The proposed new EPL is also reported to contain provisions that impose environmental protection obligations on local governments. In recent years, local governments have generally prioritized economic developments, sometimes at the expense of the environment. News reports have depicted certain local government agencies as providing a “protective umbrella” for polluters. Legislative efforts so far have been focusing mostly on the conduct of polluters, not local governments, notwithstanding the fact that local government policies and decisions frequently have huge implications on the local environment. In a recent lead pollution incident, the local government permitted a lead acid battery manufacturer to build a facility near a residential area, and promised to relocate nearby residents. This promise was not honored, and later some of the residents were diagnosed with lead poisoning. Incidents like this have motivated the public to request clarification of local governments’ obligations for environmental protection.

C. Granting Standing for Public Interest Court Action against Polluters

Under the current law, only persons who can demonstrate economic or physical injury have the standing to sue polluters for damages. According to news reports, the proposed EPL removes this restriction by recognizing in general a citizen’s right to a healthy environment. Thus, individuals and entities will have standing to bring public interest suits in People’s Courts against polluters.

This is consistent with a recent trend in China to allow the public more avenues to challenge violations. The concept of public interest suits is new to China. Earlier attempts by nongovernmental organizations (“NGOs”) to bring civil actions for environmental harm were summarily rejected by courts. However, on October 19, 2011, an intermediate People’s Court in Yunnan Province formally accepted a public interest civil complaint brought jointly by an NGO, a volunteers’ coalition, and the local Environmental Protection Bureau against two companies involved in a Cadmium pollution incident. The Chinese government’s policy change is reflected in the proposed new Civil Procedural Law, which is currently in the legislative process. The proposed law contains provisions that permit NGOs to bring public interest civil actions for environment and consumer protection purposes. The proposed EPL also demonstrates this policy trend.  

Conclusion

Although the details of the revisions have not been disclosed, the new EPL will likely allow stricter enforcement in China. Revising the EPL has already been formally included in this year’s legislative agenda, with the first draft to be submitted to the National People’s Congress Standing Committee in December for the first consideration. Given the legislative process, it is unlikely that the new EPL will be adopted before March 2012, when the current legislative session ends. We will provide further updates as the legislative process unfolds.