Introduction

On January 10 2018 the Ministry of Environmental Protection (MEP) issued the Administrative Measures for Pollutants Discharge Permits (for Trial Implementation) (MEP Order 48), which took effect on the same date.

The measures develop and refine the Interim Provisions on the Management of Pollution Permits (Huan Shui Ti [2016] 186), which the MEP issued in December 2016.

Compared with the provisions, the measures put greater emphasis on the legal liability of environmental protection authorities and pollutants discharging entities. They also impose several specific rules on pollutants discharging entities, including with regard to:

  • self-monitoring;
  • producing executive reports; and
  • disclosing information.

The issuance of the measures reflects a new trend in environmental regulation reform, at the forefront of which is the pollutants discharge permit system.

Legislative intent and background

On July 12 1989 the State Environmental Protection Administration (which has since been replaced by the MEP) promulgated the Implementing Rules on the Prevention and Control of Water Pollution (repealed). The rules stipulated that in order to obtain a pollutants discharge permit, entities had to make a declaration to the competent environmental protection authorities before discharging pollutants into water bodies. In addition, the rules stated that the environmental protection authorities would decide whether to issue pollutants discharge permits or interim pollutants discharge permits based on the proposed volume of pollutants to be discharged.

Following the issuance of the rules, pilot programmes were successively rolled out throughout the country. In addition, the Standing Committee of the National People's Congress amended the Law on the Prevention and Control of Atmospheric Pollution, the Law on the Prevention and Control of Water Pollution and the Law on the Environmental Protection in order to incorporate the pollutants discharge permit system.

However, there was still a lack of unified and specific legislation regulating the conditions and procedures for issuing pollutants discharge permits. Such absence of law led to several problems – for instance, some local authorities did not issue pollutants discharge permits to local enterprises or inspect whether enterprises had obtained pollutants discharge permits.

On November 10 2016 the State Council issued the Implementing Plan for the Permit System for Controlling the Discharge of Pollutants to officially initiate the reform of the pollutants discharge permit system. The Interim Provisions on the Management of Pollution Permits were formulated under this plan in order to provide regulations regarding the application for and issuance of a pollutants discharge permit.

On July 28 2017 the MEP announced the Catalogue of Classified Management of Pollutants Discharge Permit for Stationary Pollution Sources (2017 edition), specifying the sectors that would be regulated under the pollutants discharge permit system and the time limit for enterprises engaging in those sectors to obtain a pollutants discharge permit.

In order to consolidate the previous efforts made under the successful pilot programmes, the MEP finally issued the new measures on January 10 2018.

Key elements

The measures comprise seven chapters and 68 articles. The key elements of the measures are as follows.

Application scope According to the measures, a pollutants discharging entity must lawfully obtain a pollutants discharge permit and discharge pollutants in accordance with the provisions set out in the permit.

Enterprises, public institutions and other producers and operators included in the catalogue (pollutants discharging entities) must apply for and obtain a pollutants discharge permit within the prescribed time limit. At present, pollutants discharging entities that are not included in the catalogue need not apply for a permit.

Pollutants discharging entities with high pollutants outputs, emissions or environmental hazard levels will be regulated under a key management system. All other pollutants discharging entities will be regulated under a simplified management system in accordance with the catalogue.

Issuance of a pollutants discharge permit According to the measures, a competent provincial environmental protection authority will be responsible for:

  • determining the local issuing authorities and the permit application procedure within its own administrative area; and
  • announcing these to the public.

Pollutants discharging entities must then apply for a pollutants discharge permit from the municipal issuing authority at the place where the entity's production and operation premise is located. If a pollutants discharging entity has multiple production and operation premises that are located in different administration areas, the entity must apply for a pollutants discharge permit for each premise under its own name.

Pollutants discharging entities must submit an application form via the National Pollutants Discharge Permit Management Information Platform and simultaneously submit a printed application form and other required materials to the local issuing authority. The application materials mainly include:

  • a printed application form containing basic information about the pollutants discharging entity, including:
    • its major production facilities;
    • the type, concentration and gross amount of the major pollutants to be discharged; and
    • the method, place and whereabouts of the discharge;
  • a self-monitoring plan;
  • a letter of commitment signed by the legal representative or major principal of the pollutants discharging entity;
  • the file number of the approved environmental impact assessment for the entity's construction projects;
  • an information disclosure statement; and
  • other documents required by the local authority.

Once an application has been accepted, the issuing authority must decide whether to issue a permit within 20 working days from the date of acceptance. Where the authority decides to issue a permit, it must do so within 10 working days from the date on which this decision is made.

Pursuant to the measures, an issuing authority will reject an application for a pollutants discharge permit if:

  • the pollutants discharging entity is located within a construction-prohibited area under any law or regulation;
  • the production equipment of the pollutants discharging entity constitutes the out-of-date production equipment that is explicitly required to be eliminated under the industrial policy catalogues promulgated by the State Council; and
  • other circumstances stipulated by law apply.

If an issuing authority issues a pollutants discharge permit, it must upload its review results to the National Pollutants Discharge Permit Management Information Platform, which will generate a national unified code for the permit.

A pollutants discharging entity cannot lease, lend, sale or transfer its pollutant discharge permit to a third party.

Duration of a pollutants discharge permit A pollutants discharge permit will come into effect as of the date of issuance. Permits are valid for three years initially and can be renewed for a further five years.

Where a pollutants discharging entity needs to extend its pollutants discharge permit, it must submit an application to the original issuing authority 30 working days before the permit's expiration.

Legal liability for discharge without a permit According to the measures, if a pollutants discharging entity discharges pollutants without obtaining a permit, the local competent environmental authority will – in accordance with the Law on the Prevention and Control of Water Pollution and the Law on the Prevention and Control of Atmospheric Pollution:

  • order the entity to rectify, restrict or stop its production and apply for a pollutants discharge permit; and
  • impose a fine ranging from Rmb100,000 to Rmb1 million.

If a local competent authority considers a serious violation to have occurred, it may suspend the entity's business or close it down after obtaining approval from the local government.

Platform According to the MEP, the National Pollutants Discharge Permit Management Information Platform commenced operation on January 1 2017, following the promulgation of the Interim Provisions on the Management of Pollution Permits. The new measures once again highlight the importance of the platform and stipulate that the application, acceptance, review, issuance, alteration, extension, cancellation, revocation and loss reporting of a pollutants discharge permit must all be conducted via the platform.

The MEP is responsible for maintaining and managing the platform.

Grandfathering As mentioned above, before the promulgation of the provisions and the measures, there was an absence of national unified legislation regulating pollutants discharge permits, which led to confusion. Thus, the measures clearly stipulate that where a pollutants discharge permit was issued before the implementation of the measures in accordance with local rules and regulations and is still valid, the original issuing authority must provide the relevant data via the platform and provide a unified code for the permit. If the formerly issued permit has expired, the pollutants discharging entity must apply for a new pollutants discharge permit pursuant to the measures.

Comment

The Administrative Measures for Pollutants Discharge Permits (for Trial Implementation) have played a significant role in establishing China's legal framework for pollutants discharge permits. In addition to providing the issuance procedure for such permits, the measures stipulate penalties for various violations, including:

  • discharging pollutants without a permit;
  • discharging excessive amounts of pollutants;
  • providing falsified materials or information; and
  • failing to conduct self-monitoring.

In this regard, the measures have been formulated to safeguard the implementation of the pollutants discharge permit system.

In recent years, the government has continuously shown concern over various environmental issues. As such, the promulgation of the measures will likely be viewed as a signal of more stringent legislative control over enterprises' environmentally sensitive activities.

For further information on this topic please contact Wenhong Xu or Hui Yang at Broad & Bright by telephone (+86 10 8513 1818) or email (wenhong_xu@broadbright.com or hui_yang@broadbright.com). The Broad & Bright website can be accessed at www.broadbright.com.

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