CHINA: An Introduction to Environment (PRC Firms)

Economic Development and Environmental Law 

China's status as the world's second-largest economy has had a profound impact on the environmental law industry, leading to several changes: Firstly, there has been an increasing demand for legal services. With China's rapid economic development, the conflict between the environment and development has become more prominent. The demand for legal services in the environmental field from the government, enterprises, and individuals has also increased. This includes legal consultation and dispute resolution in government environmental decision- making, administrative practice, major ecological and environmental engineering projects, environmental management by enterprises, cleaner production, and environmental protection industries. Secondly, the competition in the legal service market has intensified. With more large law firms entering the environmental legal service market, competition has become fiercer. At the same time, emerging legal technology companies bring challenges to the traditional legal service model. Thirdly, there are reforms and innovations in the legal field. To adapt to the needs of social development, the Chinese government is actively promoting legalisation in the field of environment. This will provide more opportunities and challenges for law firms.

Stages of Development 

The development of environmental law in China has gone through three stages. The first stage, from 1949 to 1979, was a difficult initial period for Chinese environmental law. The second stage, from 1979 to 2013, was a period of vigorous development of Chinese environmental law. The third stage, from 2013 to the present, is a period approaching prosperity in Chinese environmental law. Since the 1980s, China's environmental law field has rapidly developed and has become an indispensable part of the national governance system.

Currently, there are 31 relevant laws in the ecological and environmental field, as well as over 100 administrative regulations and over 1,000 local regulations. The " 1+ N+ 4" legal system in ecological environmental protection has basically formed. " 1" represents the one environmental protection law that plays a fundamental and comprehensive role. " N" represents the multiple specialist environmental protection laws. It includes pollution prevention and control laws in traditional environmental areas such as air, water, solid waste, soil, and noise, as well as protection and governance laws regarding ecological environmental areas such as oceans, wetlands, grasslands, forests, and deserts. " 4" represents legislation related to ecological environmental protection in special geographical areas, specific regions or river basins, such as the Yangtze River Protection Law, the Black Soil Protection Law, the Yellow River Protection Law, and the Q inghai- Tibet Plateau Ecological Protection Law that is in the process of formulation.

Plans for the Future 

It is likely that China will continue to strengthen its environmental protection efforts. China will promote ecological and environmental legal education to enhance awareness of  the rule of law across the whole society, especially the government and leaders in relevant departments and major enterprises. Therefore, China will further improve the implementation and effectiveness of environmental laws and regulations, advance environmental regulatory mechanisms, enhanced environmental law enforcement, and promote various works based on the rule of law. The environmental judicial institution has continuously improved, forming a complete judicial system including environmental civil, administrative, and criminal fields. Institutions including the environmental public interest litigation and the ecological environment damage compensation are executed thoroughly in this system.

China will continue to promote the process of environmental legalization, and strengthen the legal and policy guarantee for green development. The country is accelerating the formulation, revision, and clearing of laws, administrative and local regulations, judicial interpretations, and national standards in ecological environmental protection. These works continuously enhance the systematization, integrity, and coordination of the legal system and constitute strong institutional guarantees for ecological and environmental protection. The work report of the Standing Committee of the National People's Congress shows that the legislative plan of the 14th Standing Committee of the National People's Congress has begun to study and coordinate the legislative work for the next five years. It will accelerate the legislation in the fields of science and technology, people's livelihood, society, culture, and environmental protection. According to the 2022 Legislative Work Plan of the State Council, the Energy Law, Mineral Resources Law, Marine Environmental Protection Law, Cultivated Land Protection Law, and Entry and Exit Animal and Plant Q uarantine Law will be formulated and revised successively. The Regulations on Ecological Protection Compensation, the Measures for the Administration of Carbon Emissions Trading (for Trial Implementation), the Measures for the Administration of Safety Licensing for Radioisotopes and Radiation Devices, and the Regulation of the People's Republic of China on Protection of New Varieties of Plants are also included.

Challenges 

In the field of environmental law, Chinese enterprises are facing the following potential difficulties or challenges:

Strict law enforcement and supervision

The Chinese government is  strengthening the enforcement and supervision of environmental protection standards. Enterprises need to abide by increased and stricter environmental protection laws and standards. Environmental legal risk management is becoming more complex. The administrative penalty measures are more severe, including continuous punishment on a daily basis, suspension of production for rectification, closure of business, and detention. Enterprises that cause environmental pollution or ecological damage may also face criminal penalties. At the same time, the environmental civil compensation system has been improved. The civil liability of polluters is investigated through environmental tort litigation, ecological and environmental damage compensation litigation, and environmental public interest litigation. Since 2013, courts across the country have concluded 244,000 criminal cases and 1.378 million civil cases on environmental resource.

High sensitivity of public opinion  

The public's awareness of environmental protection and the attention paid to environmental pollution caused by enterprises has increased. Issues such as  environmental image and social responsibility are receiving more and more attention and evaluation from the public.

High cost of governance 

Environmental governance is costly and technically difficult. Many companies need to invest a lot of money and human resources to solve environmental pollution problems. Due to the gradual tightening of environmental standards, enterprises need to take increased measures to control pollution, resulting in increased costs. 

Increased market pressure 

More and more countries and regions have greater and greater requirements for environmental protection standards, which poses huge pressure on the export market of Chinese enterprises. At the same time, an increase in environmental protection costs has made commodity prices rise, affecting the competitiveness of enterprises.

It is recommended that companies should take the following measures:

Compliance management 

Enterprises should formulate rules, operating procedures, and safety measures that comply with national environmental protection regulations and standards. They should also establish an environmental protection responsibility system, clarify management responsibilities, and ensure environmental protection compliance.

Popularisation of laws 

Enterprises should strengthen the popularisation of laws and employees' awareness of environmental protection. They should promote employees' attention to and participation in environmental protection, to deepen employees’ understanding of environmental protection regulations and enterprises’ environmental protection policies

Energy conservation and emission reduction

Enterprises should implement energy conservation and emission reduction measures to reduce environmental pollution. The measures include improving energy utilisation efficiency and reducing emissions of waste gas, waste water, and waste solids.

Technological innovation 

Enterprises should actively carry out the research and development of environmental protection technology, and promote advanced environmental protection technology. They should cooperate with domestic and foreign environmental protection research institutions and enterprises, and provide new technologies, new products and new applications for environmental protection.

Regular inspection 

Enterprises should conduct regular environmental inspections. They should rectify problems in a timely manner to avoid responsibilities and fines caused by violations of environmental protection regulations.