China Law Blog

Hi Dan: Thanks for the notice. On the first point (is there increased enforcement of China’s environmental law?), I haven’t seen any official figures and I wouldn’t believe them anyway; I’d believe the Ministry of Environmental Protection (MEP), but it would have collected the numbers from the local EPBs and I wouldn’t trust some of them. Based on my experience and anecdotal information, I would share your observation that it is more difficult to get projects with heavy pollution loadings approved (especially if they have high SO2 emissions or COD discharges). With respect to chemical plants, there is a concerted effort among regulators to ensure that they are located in approved chemical industrial parks. Responsible MNC’s operating previously-approved chemical facilities outside of these parks have not been required to shut down, but they are not getting approvals to expand in their existing locations.

As to enforcement actions, I have not seen an up tick in enforcement actions among my clients, but then they constitute a set of companies who are very serious about maintaining their compliance status. Press reports and word on the street suggests a marginal increase in enforcement actions, and if the penalty amount in the Xinhua story is to be believed (US$ 1.65 million imposed on Fuan Textile Mill), penalties are definitely increasing.

I think this trend will intensify in part because of MEP’s new status and increased resources (some of which will be deployed among the regional offices, closer to the action), and remember that MEP has stated it will initiate another “strike hard” campaign beginning this month “to crack down on environmental damage.” Western MNCs have traditionally not been targeted in these campaigns, but for any number of reasons, it would not surprise me if we see a few familiar Western corporate names hit in this latest round.

As to the second point (does going green mean making more green?), the Xinhua article suggests that this is the case with respect to those selling into the export market. For those selling into the domestic market, I have to think the jury is still out, especially (as you point out) outside of the tier one cities. I have heard from real estate developers that green residential and commercial buildings (even in Shanghai and Beijing) do not command premiums, but may rent faster than “non-green” buildings. Pursuant to Article 36 of the new Energy Conservation law when “selling houses, real estate development enterprises shall demonstrate to buyers information on measures for energy conservation,” so we may see increased public awareness of these issues in the future.

As to consumer products, I think the public is understandably confused about environmental labeling in China and will not pay more for a “green” product, but may buy it as opposed to an equivalently priced “non-green” product. Then again, a few weeks ago I passed a bus whose side was plastered with an add for a “low NOx” water heater. Most Americans don’t know what NOx is, so I will give the Chinese consumer credit if this is a selling point for them.

http://www.economist.com/world/asia/displaystory.cfm?story_id=11293734

The same internet and mobile-telephone technology that is helping China's angry young nationalists organise protests and boycotts is also helping other aggrieved citizens to unite. The past year has seen the first large-scale, middle-class protests in China over environmental issues: in the southern coastal city of Xiamen in June over the construction of a chemical factory, and in January this year in Shanghai over plans to extend a magnetic levitation train line.

For all the central government's green talk, a complex web of local interests sometimes linked with powerful figures in Beijing often frustrates efforts to deal with the problems that lead to such unrest. Wu Lihong's campaigning around Tai Lake threatened factories, the governments that depend on them for revenues and the jobs the factories provide. The anger of laid-off workers has long been one of officialdom's biggest worries. A factory where Ms Xu worked was among those Mr Wu helped force to stop production.
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Well, at least the reform in the labor laws was real.

Having been to China (Beijing, Nanchang, Honk Kong) the hotels all claimed to be "green" which seemed to be putting very dim fluorescent bulbs in the hallways and putting timers on the light fixtures in the rooms which turned off after you left the room. The water in your bathroom, though, would come out at a very high rate and did not have any kind of water reduction facet installed. But, who cares if the water is not really treated. Seems, that "green" in China does not really mean anything.

....you ask how others see this....and what I am seeing as far as the environment is concerned is a race and fight to destroy the planet with no holds barred. Just to give an example, Australia is selling I don't know how many millions of tons of coal to China per year for China to burn it all in it's old and new coal-fired power plants, steel mills and etc. ...which are NOT green, but even if they were even partially....(they would have to sequester at least some of the CO2 and they don't)... would still be beyond comprehension bad. (and "believe me" the effects of few degrees more temperature increase is indeed "beyond comprehension")

And this is happening at the very same time that prime Australian agricultural land is becoming a desert due to climate change. (or due to pure chance of course, according to the Bush and Howard orthodoxy of just a couple of years ago)

And though I don't really know, I suppose the Mandarin speaking Australian prime minister will be subsidizing farmers and staple foods for Australians out of the tax revenues he receives from Australian private companies' sale of coal. Could anything be more stupid and insane? Yet the same thing is happening in other contexts too.

One other "silly analogy" for your readers' consideration. If a bunch of people were swimming together in a swimming pool and some of the people kept pissing in the water what do you think the other people or the life guards might do? (throw their ass out so fast their heads would spin) I would suspect). Yet countries or "nations" are allowed to dump THEIR carbon dioxide into OUR common atmosphere
just as much as they please. It's called "national sovereignty". So what I really think is that if there aren't some pretty dramatic changes to overall global governance and its fundamental rules, we had better all book one way tickets on the Soyuz.

regards,

Max Jones

I can't comment on the enforcement of laws, but what I see is that the marketing of "green" products - from yogurt to neighborhoods - has become so widespread that it has become essentially meaningless, just noise. I think that represents a genuine strong desire among consumers for healthy and environmentally friendly products, but a lack of knowledge and (deserved?) cynicism about truth in advertising means that the effect in marketing is weak. Not that different from the west, come to think of it. I think gradually standards will stiffen and education will take hold (as it has with low-VOC paint, for example, which is far more visible here than it is in the States) but how long will this take?