During the twelfth National People’s Congress, a newly established committee was entrusted with the task of laying down a new environmental protection regulation.
It is expected that the official implementation of this regulation will begin in 2018 leading to an ever increasing attention by the Chinese authorities towards environmental protection.
The decree which came into force last July on the part of the Minister for Environmental Protection appears to be the first concrete answer from the Chinese administration.
Parcels of land used for specific production processes, such as the fusion of non-ferrous metals or the processing of chemicals, will be subject to the measure; together with the parcels of land that will be re-converted for specific uses such as residential areas, medical establishments, schools and for other purposes of public interest. However, it is expressly stated that individual industries may be subjected to inspections even when they do not necessarily fall into the predetermined categories. The competent authorities for analyzing the plots that are considered suspicious will be the various local government administrations that will also have to periodically update their status and in some cases make the gathered information available to the public.
If a plot were considered suspicious, appropriate case studies on soil and groundwater would have to be carried out. Also, estimates of possible contamination risks would have to be made and a special system capable of controlling the level of contamination would have to be organized. Finally, the results obtained will have to be checked by a qualified third party who will have to verify its correctness. If the plot of land is considered contaminated, the responsible party will have to plan a remediation project with an industry expert to be submitted to the local authority for approval.
The general implementation principle provides that the responsible party is the polluting party, having a liability with no time limit (Polluters Pays Principle). However, it will not always be easy to find the person directly responsible for the contamination, especially in cases where the polluting activity was carried out in the past or when the possible responsible parties are more than one. Parties such as the current holder of the right to use the plot or other qualified contractors will have to be identified each time as they could possibly be considered as responsible parties. If no party is identified, the government will be considered as responsible for performing the restoration of the plot.
The imminent environmental protection regulations should therefore not be underestimated by companies operating in China, especially in the case of acquiring or renting land for the purpose of establishing or transferring a business. Depending on the possible scenarios, certain preventive measures shall have to be taken, in order to safeguard one’s position and avoid annoying interruptions to any business.
Moreover, this new regulatory framework will be a great business opportunity for all those companies that deal with environmental protection and treatment of pollutants.
(Shanghai Office – Luigi Zunarelli, Matteo Pecorari – 0086 2151501952)
