How to survive the environmental regime

Last April, the Standing Committee of the National People's Congress in Beijing passed the first amendments to the PRC Environmental Protection Law (EPL) (中华人民共和国环境保护法) since the law was introduced in 1989. Significant revisions include heavier penalties for violations of environmental regulations, increased transparency and public reporting of pollution levels and proposed developments as well as standing for non-governmental organisations (NGOs) to bring civil lawsuits against polluting companies. Although the new EPL represents a significant milestone in the development of Chinese environmental policy, it is crucial to understand that the EPL is, like the Clean Air Act, primarily an enabling regulation that authorises central and provincial government agencies to enforce the rules rather than a detailed and specific regulatory scheme. As such, the key questions after the passage of the EPL amendments last year are only now being answered – how stringent will the standards promulgated by local governments be and how rigorously will they be enforced?

Application and enforcement of the EPL is an ongoing process, but it appears that China intends to vigorously fight the "war on pollution" declared by Premier Li Keqiang in a speech last March. As discussed below, penalties for violations have significantly increased under the amendments. One-off, capped fines have been replaced by fines that accumulate daily while the violation remains uncorrected, with no upper limit. Moreover, company executives can now be held personally responsible. Criminal prosecutions have been previously brought in China following major pollution incidents, but the amendments mark the first time that detention has been made a part of the civil environmental regulatory regime. The message for multinational firms operating in China is clear: environmental protection has become a real priority for the central government.

What the new environment law brings

Increased penalties for polluters