On 24 April 2014, the Standing Committee of the National People’s Congress (the “NPC”), China’s paramount legislature, adopted a revised version of the Environmental Protection Law (the “EPL”).

This new law marks the first amendment to China’s environmental legislation in 25 years, and will take effect on 1 January 20151.

The new EPL is much stronger than its previous version, and has the potential to greatly improve China’s environmental protection regime. As a revolutionary concept, the revised law establishes the principle that environmental protection comes first. This stands in contrast to the previous requirement that environmental protection work should be coordinated with economic and social development. It contains 70 articles, compared with only 47 in the original law. As Chinese Premier Li Keqiang declared China’s “war on pollution” in March 2014, and pledged to tackle it with the same resolve with which China battled poverty. This new law promises to greatly serve China in its mission to protect the environment.

Severity of China’s environmental problems

China’s economy has been flourishing since the Chinese government adopted its open door policy in 1978. This rapid economic development over the past three decades and China’s massive population has led to serious pollution problems. Protecting the environment is critical not only for China’s economic growth, but for the health of its people.

History of environmental protection laws

China adopted its first EPL in 1979, just one year after introducing its economic reform and open door policy. Over the past two decades, the Chinese government has promulgated a series of environmental laws, including the Marine Environment Protection Law, Water Law, Air Pollution Prevention and Control Law, Water Pollution Prevention and Control Law, Noise Pollution Prevention and Control Law, Promotion of Recycling Economy Law and the Environment Impact Assessment Law.

Despite the aforementioned series of laws regarding environmental protection, the EPL, which was last revised in 1989, was gravely outdated and ineffective. Like many other laws in China at the time, the EPL’s provisions were vague, containing only general requirements for such items as environmental impact assessments (“EIAs”), the levying of fees, and pollution control measures. Under the existing regime, it was easy for enterprises to pay the low one-time fees for violations but continue to pollute the environment.

A proposal for amending the 1989 EPL was first submitted to the NPC in 1995. From 1995 to 2011, 78 proposals calling for amendments to the 1989 EPL were submitted to the NPC. From 2008 to 2010, the Environment Protection and Resources Conservation Committee of the Standing Committee of the NPC conducted an assessment of implementation of the 1989 EPL.

In 2011, the Standing Committee of the NPC decided to start the process to amend the 1989 EPL. At that time, the outlook for China to formulate a strong EPL was bleak. There was considerable pressure to update the outdated and insufficient law of 1989, but traditional forces that wanted to weaken the revised law seemed to control the process. An ambitious initial proposal from the Ministry of Environmental Protection (the “MEP”) was rejected from the beginning. The NDRC and the Environmental Protection and Resources Conservation Committee of the NPC, as the most powerful representatives of economic interests, took over, and the latter assumed the drafting responsibility. As a result, the Committee released a first public draft version on 31 August 2012 that was weak in terms of environmental protection.

It was at this time that a broad coalition of proponents of stricter environmental protection voiced their displeasure with the draft. The MEP publicly released a list of 34 arguments against this version. Then, the Environmental Protection and Resources Conservation Committee, which had been previously charged with drafting responsibility, was required to relinquish its drafting duties in favour of the Law Committee of the NPC, which was more environmentally friendly. The second draft version put forward by the Law Committee in mid-2013, clearly reflected the strength of the MEP and the trend towards environmental protection.

Beginning in mid-2013, the environmental proponents grew more vocal, leading an intense debate that delayed the swift approval of the draft. Although a draft law usually undergoes a maximum of three rounds of review, in April 2014, the Standing Committee of the NPC was forced to call an unprecedented fourth review, an event previously unheard of in Chinese law-making. Further provisions to bolster environmental protection were added.

As a consequence, the fourth draft turned out to be vastly different from what observers had expected in 2011. This new law contains many provisions that promise to strengthen environmental protection in China. Moreover, the revision process itself signaled the growing influences of environmental considerations and public opinion in Chinese lawmaking. Indeed, the public exerted great pressure on environmental opponents, which was crucial to the success of the new law.

Consequences of violating the law

Prior versions of the EPL provided for low penalties for violation of the law, which did not effectively deter polluters. During the discussions over the amendment to the EPL, lawmakers complained that one reason for environmental pollution was that the cost of abiding by environmental legislation was greater than the cost of violating the law. Indeed, an example given by Xin Chunying, deputy director of the Legislative Affairs Commission of the NPC Standing Committee, was that an electricity generator complex with a production capacity of 100,000 kilowatts must pay between RMB 500,000 and RMB 600,000 in environmental protection fees to control pollution. However, if the factory merely shut down its pollution processing equipment and did nothing to protect the environment, it was only liable for a fine of RMB 10,000.

The new law proposes that the government implement a pollution permission management system, whereby enterprises, public institutions, and other emitters may discharge pollutants only within the scope of such authorizations. The corresponding punishment for polluting enterprises, public institutions and other production managers is quite severe, and is based on the number of days over which the pollution occurs2. This stands in contrast to the 1989 law, which permitted environmental authorities to impose only one-time penalties. Because the maximum amount of the penalties was also very low, enterprises were not deterred from polluting. However, the revised law now means that if an enterprise illegally discharges pollutants without obtaining a pollutant discharge permit and is fined and ordered to stop the discharge, but fails to do so, the authorities can continue to penalise the pollutant each day using the original fine rate, beginning from the day after they ordered the correction3. Furthermore, local governments may strengthen these daily penalty provisions by enlarging the scope of violations that are subject to continuous daily fines4. To make matters worse for polluters, the fines now have no upper limit.

Besides monetary fines, the new law stipulates that responsible persons would face up to 15 days’ detention for various types of misconduct by their respective enterprises, including evading EIAs and refusing to suspend production after being issued a ban; discharging pollutants without a pollutant discharge permit, and failing to stop after being issued a ban; or avoiding supervision by forging monitoring data or improperly operating pollution prevention equipment5. The detention time would depend on the impact of the violations. Responsible persons would face the same punishments if their enterprises produce or use forbidden pesticides and fail to correct their misconduct6.

Environmental impact assessments

An EIA is a formal process used to predict the consequences to the environment, whether positive or negative, of a plan, policy, program, or project before it is implemented. An EIA proposes measures to reduce the impact to an acceptable level, or to explore new technological solutions to the problems. Under the previous law, provisions for EIAs were weak. Thus, in the past, many construction projects were either initiated with faulty EIAs or without EIAs at all. If a project failed to submit an EIA report, the environmental agency could only order construction to stop and the EIA to be completed. A company that did not make up the EIA later could be fined a maximum of RMB 200,000. However, large state-owned enterprises and other companies often found it less expensive to pay the fine than to commission an EIA. This meant that an EIA was not done until after construction was finished.

In contrast, the new law now directs central and provincial level governments to carry out EIAs for their economic and technological policies. It also proposes that environmental agencies can put a stop to construction of projects that lack EIAs, impose a penalty, and order them to restore the site to its original condition7.

In addition, the new law provides for an approval system for regional restrictions, giving environmental protection agencies greater powers to coordinate regional emissions. The agency will have the authority to refuse any new project which increases pollution to the region where total emissions exceed the standard. Environmental agencies will be able to halt the approval process for EIAs of related projects in regions where total emissions of national key pollutants exceed the standard8.

The new law also proposes that organizations in charge of EIAs and supervision would bear joint liability for misconduct9. Local officials may be demoted or dismissed for misconduct such as covering up environmental wrongdoing, falsifying data or requesting that others falsify data, neglecting to publicize required environmental information, or failing to issue orders for closure to enterprises which illegally discharge pollutants10. Furthermore, if the offenders’ behaviours constitute crimes, they will be held criminally liable.

Other main features

The new law prescribes important provisions relating to public information disclosure. According to the draft, companies that are major polluters must make the following information available to the public: main pollutants, methods of discharge, concentration and amount of emissions, excess emissions, and construction and operation of pollution prevention facilities11. Those breaking the law will be liable.

Also, the new law includes provisions on transparency, such as requirements for real-time pollution data monitoring, and criminal penalties for those who evade such monitoring systems or forge monitoring data12. The new law forbids improperly operating pollution prevention equipment. Environmental monitoring institutions and organisations that set up, maintain and operate environmental monitoring equipment and pollution prevention facilities that are found guilty of deceptive behaviour will be held jointly liable13.

Another revision to the new law concerns “integrated prevention and control”. The draft proposes that the government establish key areas across various administrative regions in order to integrate prevention and coordination systems to curb air and water pollution and ecological damage, as well to implement unified planning, standards, monitoring and prevention measures14.

The new law also promotes studies on the impact environmental pollution has on public health, and encourages the prevention and control of pollution-related diseases15. It includes provisions for battling smog16. It also strives to make the public more conscious of environmental protection by encouraging citizens to heed environmental protection laws and develop habits to save water and energy17. It asks the government to adopt measures to deal with garbage and promote recycling18. It also encourages civic action in environmental pollution by protecting whistleblowers, and declares June 5 as Environment Day19.

Legislation on public interest litigation still needs work

Despite the positive reforms introduced by the new law, it is not without problems, and further improvements are still needed. In the case of public interest litigation, although great strides have been made, work remains to be done.

The revised draft has expanded the scope of environmental public interest litigation by allowing for nongovernmental organizations to take legal action against polluters on behalf of the public interest. The new EPL grants Chinese NGOs broader ability to bring environmental suits on behalf of the public than in previous versions. It allows all societal organisations registered with the Civil Affairs Agencies of Municipal People’s Governments (with jurisdiction of districts) or above levels, including municipal (prefecture), provincial and central governments, to initiate public interest lawsuits20. However, such organisations must not profit financially from these lawsuits21.

In the past, it was difficult to bring a lawsuit in China in this regard due to the lack of a legal basis. In fact, initial drafts of the amendment granted the right for litigation to only one NGO, the All-China Environment Federation, a de facto government-owned organisation under the control of the MEP. The third draft version of the EPL allowed all societal organisations registered with the Ministry of Civil Affairs to file lawsuits, but this meant little in a practical sense, as only a few environmental NGOs, predominantly those with a government background, are registered at the central level, and would have excluded most NGOs. It was primarily because of the dispute over this issue that the draft underwent a fourth review. However, in its final version, this provision could prove to have a great impact. The ability of environmental NGOs to initiate lawsuits could greatly assist environmental protection agencies in the mission to protect the environment, as environmental protection agencies may have problems such as insufficient staff and resources as well as weak law enforcement power.

However, despite the apparent progress of the new law with respect to environmental litigation, the possibility for bringing a lawsuit remains limited. The new law provides that only organisations registered above the city level will be able to bring lawsuits. This means that many NGOs registered below the city level or as enterprises are barred from litigation. Besides, the legal procedure for registering an NGO is quite difficult, further limiting the number of NGOs that can participate. Also, the definition of “city” remains unclear. In China, there are different levels of city, including those at the provincial, local, prefecture, and county levels, and the lack of a clear definition could lead to debate and confusion over which NGOs could qualify. Finally, the current environmental public interest litigation allows only for lawsuits to be filed against polluters. It is still not possible for NGOs to file lawsuits against the authorities themselves if they fail to properly enforce the law.

Implementation could be an issue

Another concern regarding the new law is that implementation may prove to be difficult. There is an institutional challenge, as local governments still rigidly control personnel and finances at Environmental Protection Bureaus. It is still uncertain to what extent local bureaus will be able to avail themselves of their powers under the new law to punish violators. It also remains to be seen whether the new law will promote a general trend towards EIAs in legislation. However, if these provisions can actually be implemented, they will serve to greatly strengthen the punishment of environmental wrongdoers.

There is another potential change which could facilitate implementation of the new EPL. The expansion of the MEP’s powers, although not written into the new law, is rumoured to be under discussion. The MEP might assume environmental responsibilities which currently belong to other ministries. In effect, this would integrate environmental management within one organisation. If this actually occurs, it has the potential to make the implementation of the new law even stronger.

Conclusion

Although China has waited a quarter of a century for an amendment to the 1989 EPL, proponents of strong environmental legislation were generally pleased with this new version. This revised law will be instrumental in confronting the environmental challenges that China faces after 30 years of rapid economic development. The EPL now provides environmental authorities with powerful tools to deal with China’s environmental problems, which collectively amount to one of China’s biggest challenges of this century. Although the new EPL is a welcome change, it is not without problems. Whether the new law can actually be implemented and how it holds up in practice remains to be seen.