Strict Environmental Protection Law puts polluting companies on notice

By Wang Jihong and Shi Jie, Grandway Law Offices
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The amended Environmental Protection Law, which will be implemented from 1 January 2015, sets some hard provisions to improve environmental protection systems, and the intensity of pursuit of liability for violations and of punishments will reach an unprecedented level. The new law is being dubbed the “strictest environmental protection law in history”.

王霁虹 Wang Jihong 国枫凯文律师事务所 执行合伙人 Executive Partner Grandway Law Offices
王霁虹
Wang Jihong
国枫凯文律师事务所
执行合伙人
Executive Partner
Grandway Law Offices

Environmental impact assessment

The environmental impact assessment system is an important manifestation of the principle of “taking prevention as principal, and combining prevention and treatment” in China’s environmental protection law sector and a core environmental protection system in China. The new law intensifies the punishment for violations, specifying that if an owner fails to submit an assessment document for its construction project, or if it commences construction without approval of the document, the environmental protection authority may, in addition to ordering it to halt construction and assessing a fine, order it to restore the site to its original state. This new provision signifies that an enterprise will be required to remove a project which has already commenced construction, imposing a heavy cost for violating the law.

Furthermore, addressing fraud in the environmental impact assessment sector, the new law specifies that if an assessment firm commits fraud in relevant environmental service activities, it will be liable for the environmental contamination and ecological damage caused, and in addition to being punished according to relevant regulations, it will bear joint and several liability with other parties responsible for causing the environmental contamination and ecological damage. This directly boosts the requirement that environmental impact assessment firms be rigorous in performing their duties, making fraud much more costly.

Per day fine system

The new law brings the per day fine system into the illegal pollutant discharge sector for the first time, specifying that “if an enterprise, entity or other producer or business operator illegally discharges pollutants, has been fined therefor and been ordered to rectify the situation, but refuses to do so, the administrative authority that rendered the penalty decision in accordance with the law may impose a per day continuous penalty at the original penalty amount commencing from the day immediately following the date on which it was ordered to rectify the situation”.

The third paragraph of the same article additionally specifies that “based on the actual requirements of environmental protection, additional types of illegal acts subject to the per day continuous penalties specified in the first paragraph may be added to local regulations”. This enables local governments to impose per day penalties for environmental law violations other than the illegal discharge of pollutants.

Seal, seizure and security detention

In the environmental protection law sector in China, provisions on placement under seal and seizure, as administrative enforcement measures, were found previously only in the Administrative Regulations for Substances that Deplete the Ozone Layer, whereas the new law brings them into the entire sector: “If an enterprise or institution or other producer or business operator discharges pollutants in violation of laws or regulations, causing or potentially causing serious contamination, the competent environmental protection authority of the people’s government at the county level or above, or another authority with environmental protection oversight duties, may place under seal or seize the facilities or equipment that caused the discharge of pollutants.” Compared to fines, placement under seal and seizure can directly cause an enterprise to cease production, a much more direct deterrent for, and of more direct impact on the economic benefits of, an enterprise; and as compared to such measures as ordering an enterprise to shut down or cease production, the requirements are lower, and their practicability greater, making their impact on enterprises potentially greater.

石杰 Shi Jie 国枫凯文律师事务所 合伙人 Partner Grandway Law Offices
石杰
Shi Jie
国枫凯文律师事务所
合伙人
Partner
Grandway Law Offices

To prevent its abuse by law enforcement personnel, the new law specifies that if an environmental protection authority places under seal or seizes the facilities or equipment of an enterprise or institution or other producer or business operator in violation of the law, its administrative liability may be pursued.

To strengthen the responsibility of relevant persons in charge of enterprises, the new law adds provisions for the detention of senior officers and responsible persons for certain relatively serious violations: (1) where an environmental impact assessment was not conducted in accordance with the law for a construction project, a halt to construction has been ordered and implementation thereof is refused; (2) where pollutants are discharged without a pollutant discharge permit in violation of the law, a halt to the discharge of the pollutants has been ordered and implementation thereof is refused; (3) where pollutants are discharged in violation of the law by means designed to evade oversight, such as by way of concealed pipes, seepage wells, seepage pits, perfusion or the alteration or fabrication of monitoring data or failing to normally operate facilities for the prevention and treatment of pollutants; or (4) where agricultural chemicals the production and use of which are expressly prohibited by the state are produced or used, an order to remedy the situation has been given and such rectification is refused.

Public interest lawsuits

The provision of the Civil Procedure Law (as amended in 2012) specifying that “with respect to acts that harm the public interest, such as contamination of the environment, infringement of the lawful rights and interests of the mass of consumers, etc., the authorities specified in law and relevant organisations may institute legal actions in people’s courts” has been dubbed in the industry the earliest ancestor of the public interest lawsuit system in China. However, with respect to the definition of “relevant organisation”, the new law defines it as a social organisation that satisfies both of the following conditions: (1) it is lawfully registered with the civil authority of the people’s government at the level of municipality divided into districts or above; and (2) has specifically been engaged in environmental protection related public interest activities for at least five years in succession, and does not have a record of violations of the law. In this way, the new law places the environmental public interest lawsuit system on a sound footing.

The amended Environmental Protection Law lands a series of heavy blows, comprehensively regulating the environmental protection actions of enterprises and strengthening enterprises’ responsibility for environmental protection, such that pollutant discharging enterprises are obliged to give it their full attention.

Wang Jihong is the executive partner and Shi Jie is a partner at Grandway Law Offices

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