Legislation

Main environmental regulations

What are the main statutes and regulations relating to the environment?

The Environmental Protection Law is the basic legislation for environmental protection in China. In terms of pollution prevention and control, there are some laws such as the Marine Environmental Protection Law, the Law on Prevention and Control of Atmospheric Pollution, the Law on Prevention and Control of Water Pollution, the Law on Prevention and Control of Environmental Noise Pollution, the Law on the Prevention and Control of Environmental Pollution Caused by Solid Wastes, the Law on Soil Pollution Prevention and Control and so on. There are also provisions on environmental pollution tort damages and environmental pollution crimes in Chinese civil and criminal legislation. In the National Human Rights Action Plan in China, in a total of three issues, environmental rights are stipulated as an important part of citizens’ economic, social and cultural rights.

Integrated pollution prevention and control

Is there a system of integrated control of pollution?

According to the provisions of the Environmental Protection Law, China implements comprehensive licence management for enterprises’ pollutant discharges. The Ministry of Ecology and Environmental Protection in China has formulated the Measures for Pollutant Discharge Permitting Administration (For Trial Implementation) and List of Pollutant Discharge Permit Management for Stationary Sources, implementing comprehensive control of water pollutants discharge, atmospheric pollutants discharge and other pollutants discharged by entities included in the list.

Soil pollution

What are the main characteristics of the rules applicable to soil pollution?

The Law on Soil Pollution Prevention and Control came into effect on 1 January 2019 and stipulates the prevention, risk control and remediation of soil pollution. Under the principle of ‘whoever pollutes the environment shall eliminate and control the pollution’, the parties liable for soil pollution shall have the obligation to carry out the soil pollution risk control and remediation. If the parties liable for soil pollution cannot be identified, the parties with land use rights shall carry out the soil pollution risk control and remediation. The expenses incurred for carrying out and organising the investigation of the soil pollution situation, soil pollution risk assessment, risk control or remediation, pollution effects assessment, remediation assessment, or later-stage management shall be borne by the parties liable for the soil pollution.

Regulation of waste

What types of waste are regulated and how?

According to the Law on the Prevention and Control of Environment Pollution Caused by Solid Wastes, ‘solid waste’ means articles and substances in a solid or semi-solid state or gases in containers that are produced in production, living and other activities and have lost their original use values or are discarded or abandoned even though they may not yet have lost their usefulness, and articles and substances that are included in the management of solid wastes upon the strength of administrative regulations. For the prevention and control of environmental pollution by solid waste, the state implements the principle that any entity or individual causing the pollution shall be responsible for it, in accordance with law. Manufacturers, sellers, importers and users shall be responsible for the prevention and control of solid waste pollution produced thereby. China has also enacted the Circular Economy Promotion Law, dealing with waste issues in accordance with the principles of reduction, reuse and recycling. Regarding the import of waste, the existing Law on the Prevention and Control of Environment Pollution Caused by Solid Wastes prohibits the import of solid waste listed in the list of prohibited imports. But the revised draft version, promulgated on 5 July 2019, stipulates that the state will gradually basically import zero solid waste.

Regulation of air emissions

What are the main features of the rules governing air emissions?

The Atmospheric Pollution Prevention and Control Law has made specific provisions on the prevention and control of pollution from burning coal and other energy, industrial pollution, pollution from motor-driven vehicles and vessels, dust pollution and agricultural pollution. Entities that discharge pollutants in the air must obtain a pollutant discharge licence that meets the national and local standards on atmospheric pollutants discharge. In addition, there are requirements for environmental protection and energy efficiency for industrial boilers and coal-fired power plants in China. China also has energy efficiency requirements for buildings.

Protection of fresh water and seawater

How are fresh water and seawater, and their associated land, protected?

The Water Law stipulates the development, utilisation and protection of water resources. In China, water resources are owned by the state. The State Council exercises ownership of water resources on behalf of the state. Water in the ponds of rural collective economic organisations and in reservoirs constructed and managed by rural collective economic organisations shall be used by those organisations. The state applies the systems of water licensing and paid use of water resources according to law. Discharge control of water pollutants is mainly regulated in the Law on Prevention and Control of Water Pollution. In addition to the protection of marine ecology, the Marine Environmental Protection Law also stipulates specific provisions for the prevention and control of pollution caused by land-based pollutants, coastal and marine construction projects, vessel pollution and dumping of wastes.

Protection of natural spaces and landscapes

What are the main features of the rules protecting natural spaces and landscapes?

China has enacted the Regulations on Scenic and Historic Areas and the Regulations on Nature Reserves to protect natural spaces and landscapes. The term ‘scenic and historic area’ means an area that has aesthetic, cultural or scientific value, a concentration of natural and anthropological sites and a beautiful environment and is suitable for tourism or for scientific and cultural activities. Scenic and historic areas can be used as the basis of protection. Nature reserves are areas delimited according to relevant laws for special protection and administration in places where typical natural ecological systems and precious, rare and vanishing wildlife species are naturally concentrated, or on dry land, water areas on land and sea areas where protected objects such as natural sites of special significance are situated. Nature reserves may be divided into three parts: the core zone, buffer zone and experimental zone. Entry is prohibited to the core area. Only scientific research and observation are allowed in the buffer zone. Activities such as scientific experiments, educational practice, visits and tourism may be carried out in the experimental zone. In addition, China is currently actively promoting relevant legislation on national parks.

Protection of flora and fauna species

What are the main features of the rules protecting flora and fauna species?

China has the National List of Key Wildlife Protection, the National Protected List of Terrestrial Wild Animals with Important Economic and Scientific Research Values and the National List of Key Protected Wild Plants, implementing directory management for wildlife. The specific requirements for protection are stipulated in the Wild Animal Conservation Law and the Regulations on Wild Plants Protection. In addition, the Forest Law and the Grassland Law also have provisions for plant protection.

Noise, odours and vibrations

What are the main features of the rules governing noise, odours and vibrations?

There are Sound Environmental Quality Standards in China, as well as noise emission standards such as the Noise Standard for Industrial Enterprises and the Environmental Noise Emission Standard for Construction Sites. The main legislation for the prevention and control of environmental pollution caused by noise and vibration is the Law on Prevention and Control of Pollution From Environmental Noise, in which the competent administrative department for environmental protection under the State Council and local people’s governments at or above the county level exercise unified supervision and administration of the prevention and control of environmental noise pollution throughout the country and within their respective administrative regions. The competent administrative departments for public security, communications, railways and civil aviation, as well as harbour superintendency administrations at various levels, shall, within their respective functions and duties, exercise supervision and administration of the prevention and control of noise pollution by traffic and social activities. The prevention and control of odour is mainly stipulated in the Law on Prevention and Control of Atmospheric Pollution.

Liability for damage to the environment

Is there a general regime on liability for environmental damage?

Damage caused by environmental pollution is mainly stipulated in the Tort Law of the People’s Republic of China. There is no definition of environmental damage in existing laws in China. At present, the system of compensation for damage to the ecological environment is being set up on a trial basis. According to the Reform Plan of Compensation System for Ecological Environment Damage issued by the General Office of the State Council of the CPC Central Committee, ecological environment damage refers to the adverse changes in environmental elements such as atmosphere, surface water, groundwater, soil and forests and biological elements such as plants, animals and microorganisms due to pollution of the environment and destruction of ecology, and the degradation of ecosystem functions formed by the above elements. The scope of compensation for ecological environmental damage includes reasonable expenses such as removal of pollution, restoration of ecological environment, loss of service functions during restoration of ecological environment, losses caused by permanent damage to ecological environmental functions and investigation and appraisal of ecological environmental damage compensation.

Environmental taxes

Is there any type of environmental tax?

The Environmental Protection Tax Law stipulates that within the territory and other sea areas under the jurisdiction of the People’s Republic of China, the enterprises, public institutions and other producers and operators that directly discharge pollutants to the environment shall pay environmental pollution tax. There is no double taxation in principle in China.

Hazardous activities and substances

Regulation of hazardous activities

Are there specific rules governing hazardous activities?

There are no specific rules governing hazardous activities in China.

Regulation of hazardous products and substances

What are the main features of the rules governing hazardous products and substances?

The Chinese regulation of governing hazardous products and substances is mainly reflected in the safety regulation of hazardous chemicals. China has formulated the Regulations on the Safety Management of Hazardous Chemicals to implement directory management for hazardous chemicals. However, there is no systematic system of safety in the market entry of hazardous chemicals. At present, market access for specific chemicals is prohibited mainly for the purpose of fulfilling relevant international treaty obligations.

Industrial accidents

What are the regulatory requirements regarding the prevention of industrial accidents?

There is an Emergency Response Law in China. People’s governments at all levels and their relevant departments, enterprises and institutions are responsible for emergency response activities, including prevention and preparedness, surveillance and warning, response operations and rescue, and post-emergency response rehabilitation and reconstruction in accordance with the provisions of the Emergency Response Law. People’s governments at or above the county level establish mechanisms for public monitoring of environmental pollution and organise the formulation of early warning plans. Enterprises and institutions shall, in accordance with the relevant regulations of the state, formulate emergency plans for environmental emergencies and submit to the environmental protection administrative department and relevant departments for recordation.

Environmental aspects in transactions and public procurement

Environmental aspects in M&A transactions

What are the main environmental aspects to consider in M&A transactions?

The main consideration of environmental factors in the acquisition of assets is the assessment and analysis of land pollution. The Technical Provisions on the Evaluation of Soil Pollution in China issued by the Ministry of Environmental Protection provides guidance and norms for soil pollution assessment. When purchasing shares, whether the company belongs to an industry in the list prohibited and limited by the state should be considered, and the environmental credit of the company should be investigated to see if the company has administrative penalties and compensation for environmental pollution.

Environmental aspects in other transactions

What are the main environmental aspects to consider in other transactions?

In financing, IPO, real estate transactions, company reorganisation and bankruptcy procedures, due diligence is required. The status of the enterprise’s environmental compliance, environmental credit, and whether there is a major environmental pollution compensation lawsuit should be investigated so as to control the transaction risk.

Environmental aspects in public procurement

Is environmental protection taken into consideration by public procurement regulations?

According to the Environmental Protection Law, government agencies and other organisations using fiscal funds shall, when purchasing and using products, equipment and facilities, give priority to those that are energy-saving, water-saving, material-saving or otherwise conducive to protecting the environment. The Circular Economy Promotion Law also stipulates that entities and individuals purchasing goods with funds from the public finances shall give preference to energy-saving, water-saving, material-saving and environment-friendly products and recycled products.

Environmental assessment

Activities subject to environmental assessment

Which types of activities are subject to environmental assessment?

According to the Law on Environmental Impact Assessment, for construction projects that have an impact on the environment within the territory of China and other sea areas under the jurisdiction of the People’s Republic of China, the environmental impact assessment shall be conducted in accordance with the law. The environmental impact report for a construction project must be submitted by the construction entity to the environmental protection administrative department that has approval authority in accordance with the provisions of the State Council.

Environmental assessment process

What are the main steps of the environmental assessment process?

Unless the state requires that it is necessary to keep the information confidential, for construction projects that may impose significant environmental impacts and for which it is necessary to work out a report of environmental impacts, the construction entity shall, before submitting the project for examination and approval, seek the opinions of relevant entities, experts and the general public by holding demonstration meetings, hearings or by any other means. The Measures on Public Participation in Environmental Impact Assessment issued by the Ministry of the Ecological Environment make specific provisions for public participation.

Regulatory authorities

Regulatory authorities

Which authorities are responsible for the environment and what is the scope of each regulator’s authority?

Environmental protection supervision system in China is unified supervision combined with supervision by other departments. The environmental protection administrative department of the State Council generally supervises and administers the national environmental protection work, while the environmental protection administrative departments of the local people’s governments at and above the county level generally supervise and administer the environmental protection work within their respective administrative regions. The relevant departments of the people’s governments at and above the county level and the environmental protection departments of the armed forces supervise and administer resource protection, pollution prevention and control, and other environmental protection work in accordance with the provisions of the relevant laws.

Investigation

What are the typical steps in an investigation?

Environmental protection regulatory authorities have the power to conduct on-site inspections of enterprises, institutions and other producers and operators that discharge pollutants. The person under inspection shall truthfully report the situation and provide the necessary information. According to Measures for Environmental Administrative Punishment, when investigating and gathering evidence, there shall be at least two investigators who must show their Chinese environmental supervision certificates or other administrative law enforcement certificates and make on-the-spot inspection records and on-site inspection sampling, and produce a monitoring report.

Administrative decisions

What is the procedure for making administrative decisions?

The Measures for Environmental Administrative Punishment stipulate the general procedures of environmental administrative punishment, including case filing, investigation and gathering evidence, case examination, notification and hearing, and handling decisions. At the decision-making stage, the parties shall have the right to make statements and offer a defence, and to request a hearing. In making the final administrative penalty decision, it is also based on the Guidance on Further Normalising the Discretion of Environmental Administrative Punishment issued by the Ministry of the Ecological Environment. The ‘three systems’ - the administrative law enforcement publication system, the recording system of the whole process of law enforcement, and the legal review system of major law enforcement decisions - shall be fully implemented in administrative procedures.

Sanctions and remedies

What are the sanctions and remedies that may be imposed by the regulator for violations?

The Measures for Environmental Administrative Punishment stipulate that the types of environmental administrative punishment include a warning; fines; an order to stop production for rectification; an order to stop production, business operation or close down; temporarily withholding or revoking a licence or other certificates that are in nature a licence; confiscating illegal gains or illegal properties; administrative detention; and any other type of administrative punishment as prescribed in any law or administrative regulation. The party concerned may legally apply for an administrative reconsideration or bring an administrative lawsuit against the administrative punishment decision if the party concerned refuses to accept the decision.

Appeal of regulators’ decisions

To what extent may decisions of the regulators be appealed, and to whom?

If the party concerned refuses to accept the decision, it may legally apply for an administrative reconsideration or bring an administrative lawsuit against the administrative decision or act. The reasons for the appeal include that the administrative decision made by the environmental administrative department is illegal, the administrative decision should be revoked or changed, and that the environmental administrative department is required to perform certain statutory duties. The provisions of the Administrative Litigation Law shall be applicable to the initiation, acceptance, jurisdiction and execution of environmental administrative litigation, including the procedures for filing a complaint, accepting a case, trial and judgment.

Judicial proceedings

Judicial proceedings

Are environmental law proceedings in court civil, criminal or both?

Environmental litigation includes civil and criminal proceedings. Environmental civil litigation is generally filed by the victim because of the damage caused by the defendant’s environmental infringement, demanding compensation for damages and stopping the infringement. The Civil Procedure Law of the People’s Republic of China also stipulates public interest lawsuits. For conduct that pollutes the environment, infringes upon the lawful rights and interests of large consumers or otherwise damages the public interest, an authority or relevant organisation as prescribed by law and procuratorate may institute an action in a people’s court. The reform plan establishing a compensation system for ecological environment damage stipulates that after damage to the ecological environment has occurred, the people’s government shall have the right to bring an action for compensation for damage to the ecological environment to the court. Environmental criminal litigation is initiated by the procuratorate organs in the name of the state to investigate the criminal liability for environmental pollution. Incidental civil lawsuits may also be filed in environmental criminal litigations.

Powers of courts

What are the powers of courts in relation to infringements of environmental law?

For violations of environmental law, the court has the power to conduct criminal trials for environmental crimes; investigate the criminal liability of violators; conduct mediation or trial of environmental civil cases; promote the settlement of environmental civil disputes; adjudicate environmental administrative cases according to law; and supervise the law enforcement of administrative organs.

Civil claims

Are civil claims allowed regarding infringements of environmental law?

Laws in China stipulate civil claims against violations of environmental law. If damage is caused by environmental pollution or ecological damage, tort liability shall be borne in accordance with the provisions of the Tort Law of the People’s Republic of China. In addition to compensation for losses, the way to bear tort liability includes cessation of infringement, removal of obstruction, elimination of danger, restoration to the original status and so on.

Defences and indemnities

What defences or indemnities are available?

According to the Tort Law of the People’s Republic of China, where any dispute arises over environmental pollution, the polluter shall assume the burden to prove that it should not be liable, that its liability could be mitigated under certain circumstances as provided for by law or to prove that there is no causation between its conduct and the harm. Where the environmental pollution is caused by two or more polluters, the seriousness of liability of each polluter shall be determined according to the type of pollutant, volume of emission and other factors. Where any harm is caused by environmental pollution through the fault of a third party, the victim may require compensation from either the polluter or the third party. The Environmental Protection Law stipulates that the time limitation for instituting an environmental action for damages shall be three years, starting from the time when a party knows or should have known the harm caused to the party.

Directors’ or officers’ defences

Are there specific defences in the case of directors’ or officers’ liability?

According to Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues concerning the Application of Law in the Handling of Criminal Cases of Environmental Pollution, the offender can claim that they adopted timely measures to prevent the loss from expanding or to eliminate pollution; that they have made compensation for all damage; that they have vigorously repaired the eco-environment; that they committed the act for the first time; and that they repent of the offence as justification. They may be determined to fall under minor circumstances and be exempt from charges or criminal punishment. Where an entity commits any crime as specified in this Interpretation, persons who are directly in charge and other directly responsible persons of the entity shall be convicted and punished, and a fine shall be imposed on the entity.

Appeal process

What is the appeal process from trials?

According to the Civil Procedure Law, against a first instance judgment of a local people’s court a party shall have the right to file an appeal with the people’s court at the next higher level within 15 days from the date of service of the written judgment. An appellant shall submit a written appeal through the original trial people’s court. In civil cases, the people’s courts shall apply the ‘final after two trials’ system in accordance with the provisions of the Civil Procedure Law. Apart from first instance judgment of the Supreme People’s Court, appeal may be made to a people’s court at a higher level at most once.

International treaties and institutions

International treaties

Is your country a contracting state to any international environmental treaties, or similar agreements?

International environmental treaties to which China is a party include the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, the Convention on International Prior Informed Consent Procedure for Certain Trade Hazardous Chemicals and Pesticides in International Trade Rotterdam, the Stockholm Convention on Persistent Organic Pollutants, the Vienna Convention for the Protection of the Ozone Layer, the Montreal Protocol on Substances that Deplete the Ozone Layer, the Convention on Biological Diversity, the Convention on International Trade in Endangered Species of Wild Fauna and Flora, the Convention for the Protection of the World Cultural and Natural Heritage, the United Nations Convention on the Law of the Sea, the International Convention on Civil Liability for Oil Pollution Damage, the International Convention for the Prevention of Pollution from Ships, and the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter etc.

International treaties and regulatory policy

To what extent is regulatory policy affected by these treaties?

As a state that is party to international environmental treaties, it is necessary to comply with its obligations under the treaty, which will naturally have an impact on Chinese law. For example, the Marine Environment Protection Law in China provides for the implementation of a contingency system for major marine pollution incidents. This is fulfilment of China’s treaty obligation under article 199 of the United Nations Convention on the Law of the Sea concerning ‘States should jointly develop and promote contingency plans to deal with pollution incidents in the marine environment’.

Update and trends

Key developments of the past year

Are there any emerging trends or hot topics in environment law in your jurisdiction?

Key developments of the past year33 Are there any emerging trends or hot topics in environment law in your jurisdiction?

The new Law on Soil Pollution Prevention and Control came into effect on 1 January 2019 and stipulates the prevention, risk control and remediation of soil pollution. The revised draft version of the Prevention and Control of Environment Pollution Caused by Solid Wastes Law, promulgated on 5 July 2019, stipulates that the state will gradually basically import zero solid waste.