China Environmental Law

Color me skeptical. The Environmental News Network carries a Reuters article that reports

This summer’s Beijing Olympics will be “basically” carbon neutral thanks to a series of energy saving measures such as the use of solar power and an afforestation program, a senior official said on Thursday.

Technology Minister Wan Gang said that the event was expected to generate 1.18 million tonnes of carbon, in part because so many athletes and spectators were traveling long distances.

“The ‘Green Olympics’ will take a series of measures, including technological ones, like planting of trees and controlling the use of vehicles, to reduce emissions by between 1 million and 1.29 million tonnes,” Wan told a news conference.

“We can basically ensure that emissions will be balanced.”

The whole concept of the modern peripatetic Olympics with the construction of gigantic new venues which have only limited post-Olympic applications and the movement of masses of people long distances would seem to make the games a poster child for non-sustainability and certainly a huge carbon generator. This isn’t a China issue, it just intuitively seems that any Olympics’ carbon footprint is going to be enormous(as Beijing has admitted), and I can’t fathom how that carbon can be truly and verifiably offset.

Solar panels for Olympic facilities and hybrid electric vehicles to shuttle participants around may reduce the total amount of carbon generated from Olympic operations (which are, by definition, extraordinary and incremental emitters of carbon) than would otherwise be the case, but they do not “offset” or reduce carbon emissions from, say, the airline flights of athletes, journalists, and spectators; the same could arguably be said about “traffic restrictions” during the Olympics and afforestation projects that would have been undertaken anyway as part of China’s anti-desertification efforts.

I know that some people may argue that the solar installations or afforestation, for instance, can be used after the Olympics and their entire life cycle carbon reductions should be considered in the Olympics’ carbon equation. I don’t buy that; the carbon generated by the Olympics has already been emitted into the atmosphere (during the construction phase) or will be emitted in a big slug immediately before, during, and after the Olympics.  This isn’t like a traditional Clean Development Mechanism project where reductions over time match emissions over time, and thus, in terms of atmospheric loadings, cancel each other out on a roughly temporally equivalent basis. Am I missing something here?  

Does anyone know where the conclusion that “the event plans to generate 1.18 million tons of carbon” comes from, and how it was calculated? Same goes for “1 million to 1.29 million tons” of carbon reductions? For all I know China has done a fantastic job of controlling and offsetting the carbon footprint of the 2008 games. I wouldn’t have even raised this issue had it not been raised by Minister Gang first. But since it has been raised, I just can’t feel warm and fuzzy about it, until I know where the numbers came from and how they were calculated. I’ll try to do a little additional digging myself.

More information on the proposed changes to China’s tax revenue allocation scheme, and the impact of those changes on environmental protection.  Here is the current national/local spilt according to a new article  in the  Economic Observer:

• Income taxes (corporate and individual): 60% national/40% local
• Value-added taxes (VAT): 75% national/25% local

Here are the two proposals for change, both of which aim to “redirect a significant portion of taxes that were being collected at the local level to China’s central government”:

1. Ministry of Finance (MOF): corporate and local income taxes: 100% national government; VAT: 65% national/35% local.
2. National Development and Reform Commission (NDRC): corporate and local income taxes: 60% national/40% local; VAT: 100% national.

I suspect the NDRC plan actually increase national revenues the most. The NDRC’s rationale for directing 100% of VAT taxes to the national government was based on the fact that

To guarantee value-added tax revenues, . . . local governments often push the development of manufacturing companies, wasting natural resources.

Thus, there was an explicit environmental policy basis for the proposed change. It clearly supports the Ministry of Environmental Protection’s priority of toppling the “development is king” mentality among local officials. The NDRC suggests that “[l]ocal governments should stress public services more and let the central government handle their economic development [which will no doubt enhance the NDRC’s authority, but all for a good cause].”

To some local officials, the tax reform seemed headed in the opposite direction they had expected. Recent years have seen many complaints over local financial plights and calls for more local share in taxes, which the central government had promised to react to.

At a seminar on tax reform organized by the NDRC last year, whether to tighten or loosen the central control of tax collection became a heated debate. Shortly thereafter the 17th National Congress of the Chinese Communist Party responded–in Chairman Hu Jingtao’s report to the Congress, he proposed building up a tax system where “financial power matched administrative power”.

All administrative power resides at the national level, although some of that power has been delegated to sub-national entities; therefore, I read this quote from Chairman Hu as saying financial power should be centralized at the national level, and delegated, i.e., tax revenues (not taxing power) doled out, where needed. In the environmental enforcement context this will be a vast and significant improvement. I’m sure there may be many other reasons why these proposals are not good ideas, but this is the China Environmental Law blog and we just focus on our little patch of grass. That patch will be much greener if MEP has more money.

The weekly Economic Observer (EO), which is quickly becoming my favorite China-based media read, has a great English page. I’ve picked a couple of articles with particular relevance for environmental issues to review for today’s post.

The first (in Chinese here) doesn’t mention the environment at all, but could have great impact on environmental enforcement in China.  It involves proposals for the split in income tax revenues between the national and local governments.

The Chinese Ministry of Finance has proposed for income taxes - both corporate and individual - to be submitted entirely to the Central government for wealth redistribution nationwide; while the National Development and Reform Commission (NDRC) thinks that the ratio of income taxes between Central and local governments should be 6:4. The former has suggested value-added taxes to be shared between the central and local governments on a ratio of 65% to 35%; but the differing formulas are part of the Chinese taxation reform currently under study. Both the formulas have to some extent highlighted the need to increase the central government’s control of tax collections, contrary to expectations at the local level.

This element of governmental reforms - tax revenue allocations - is described as “最难啃的硬骨头” (the hardest nut to crack, or literally the hardest bone to gnaw). Fortunately, both the MOF and NDRC  proposals advocate an increase in revenues to the central government. This is absolutely crucial if China wants to make significant progress increasing the level of enforcement of its environmental laws. Fundamental change will occur only when local EPB personnel are paid by, and report directly and exclusively to, the Ministry of Environmental Protection (MEP). For this to happen, the national government needs to increase its share of tax revenues. I’m sure there are plenty of other demands for funds at the national level, and the EO article seems to focus on an increase in subsidies to China’s underdeveloped western areas, but let’s hope the MEP can get in line for some of this money. There is no other way to do it folks.

The second EO article (Chinese here) encourages the “tearing down of barriers on freedom of information.” The article contrasts the actions of officials in Fuyang, Anhui Province where the EV71 outbreak occurred with the hopes and aspirations of China’s “sunshine bill” (as the article characterizes it)-the new Disclosure of Governmental Information regulations passed by the State Council which became effective May 1 (which we discussed here).

The EO article reports that certain Fuyang officials “thought it was their responsibility to remain silent and control public opinion.” As with most attempts to control public opinion, this one ultimately crumbled

[initially,] Fuyang officials informed the public there was no need to worry about the “few” child deaths or fear that other children would be infected. Instead, at kindergartens where students had already died, they “prohibited making careless remarks”. Thereafter, even more children were infected after being sent back to school by parents.

But the truth came too late. By April 30, official data showed there were nearly 1,900 children infected and 20 deaths. There were 300 to 400 new cases of infected children every day from April 26 to 30.

Granted, officers did not cover up the situation - they informed higher-level departments in accordance with protocol. But they did leave the public behind. Within one month, panicked Fuyang was rife with rumors about the unknown “strange disease”. As children continue to be infected and the death toll mounts, it seems to remain beyond the comprehension of local officials there.

How can anyone expect that “careless remarks” will not be made when the public isn’t told the truth. Did they actually think the increasing number of infected children and deaths would go unnoticed in the community? The EO article suggests this mindset is “a practical demonstration of the Confucian notion that ‘ordinary people could be made to do what you want them to do, but not know why they should do so.’” Perhaps; but this notion has had a few more recent advocates as well.

Rumors abound in China because it is so hard to get a straight answer from officials. But public stability requires straight answers. Remember yesterday’s post where the protester in Chengdu is quoted as saying

“What Chengdu people demand is very simple,” [an Internet poster] said. “This is a policy [the location of an ethylene plant and oil refinery] closely related to people’s interests, so why was it not open to the public?”

Public participation in decisions which can impact the local environment increases governmental legitimately and stops the spread rumors. When handled correctly “public participation = public stability.” Here are the EO article’s conclusions

[The SARS experience demonstrated that the] people’s rights, including the most fundamental rights to live and stay healthy, are illusory comforts without the right to information. Only when information is open can citizens be more independent and strong, and society more stable. The Regulations on Access to Government Information, which finally took effect this May 1 after ten years of research and drafting, prescribes that government should voluntarily publicize issues of direct interest to citizens which demand public knowledge or participation.

The freedom to information is a basis of democracy. And yet sometimes this issue surpasses democracy itself, and whether to publicize or cover up, can truly be a matter of life or death.

When describing the outlook of Chinese enjoying democracy, Premier Wen Jiabao once quoted a poem, “if you ask about the hope of China, go ask the thawed land and rivers”. Likewise, we expect a green flourishing land and defrosted rivers. But before this scene becomes a reality, we are still challenged by whether or not we can break the ice covering information.

The publication of this article itself is encouraging. If China can provide more resources to MEP and strengthen the public’s access to environmental information and participation in decisions which can potentially impact their health and welfare, it will be well on the way to the creation of a strong and functioning environmental legal system.

More citizen protests against the construction of potentially polluting facilities, this time in Chengdu. The New York Times is reporting that 400 to 500 Chengdu residents participated in a “stroll” through downtown streets on Sunday to express their concerns about a $5.5 billion combined ethylene plant and oil refinery under construction by a joint venture of the Sichuan provincial government and PetroChina, in Pengzhou, 18 miles northwest of the Chengdu city center. The “散步” was reported domestically in The Beijing News, although it places the number of strollers at 200.

The protests were apparently organized in the same way as last year’s Xiamen PX protests.

The recent protest, which was peaceful, was organized through Web sites, blogs and cellphone text messages, illustrating how some Chinese are using digital technology to start civic movements, which are usually banned by the police. Organizers also used text messages to publicize their cause nationally.

In what has to be of some concern to the government, the story reports that

Protest organizers in each city [where other citizen-lead protests have occurred] appear to have no formal links, but they have formed a tight-knit blogging network that they use to trade ideas in an online world that the police, particularly at the local level, have trouble trying to control.

One outspoken critic of the Chengdu project posts regularly on one site that is frequented by Lian Yue, a blogger who was instrumental in organizing the Xiamen protests.

There is a simple of reducing these protests, however: follow the law. The Chengdu protestors’ demands seem quite reasonable and are no more than is required by existing laws and regulations:

Critics of the Pengzhou plan said in interviews on Monday that the government had not done proper environmental reviews of the project, which could pollute the air and water and lead to health hazards.

“We’re not dissidents,” said Wen Di, an independent blogger and former journalist living in Chengdu. “We’re just people who care about our homeland. What we’re saying is that if you want to have this project, you need to follow certain procedures: for example, a public hearing and independent environmental assessment. We want a fair and open process.”

Hardly a radical position! A full Environmental Impact Assessment (EIA) would have been required for this facility. As one protester noted:

“Chengdu is in a basin,” she said. “If there’s a chemical plant there, it’ll bring pollutants. Also, Pengzhou is upstream from Chengdu, and the river provides the city’s drinking water.”

These factors should have been considered and addressed in the EIA. In addition, some form of public participation is also required, which given the scope of this project should have obviously been a public hearing.

 The local authorities were apparently caught flat-footed by the protests.

A brief front-page article arguing the merits of the project appeared Monday in a state-controlled newspaper, Chengdu Business News. The article said the project had been approved by the National Development and Reform Commission as part of a long-term plan to expand the country’s refining industry.

“The Sichuan refinery project will install advanced equipment and improve environmental protection facilities with strict pollution prevention,” the article said.

The last sentence may be true for all I know, but if it is, what can the authorities possibly have to fear by making the facts known to the public?

“What Chengdu people demand is very simple,” [an Internet poster] said. “This is a policy closely related to people’s interests, so why was it not open to the public?”

Good question. I hope the people of Chengdu get an answer, and I hope that the MEP steps in (as it did in the Xiamen situation) to ensure that the EIA laws and regulations are followed in this case.

I was all set to write something edifying today when what do I discover but this China Daily article which picks up and runs with that preposterous Greenpeace smear job about multinational companies in China and their disregard for “standard operating procedures.” The article manages to get just about everything wrong, but who cares when you get to bash the big bad foreign companies who are solely responsible, through their wanton disregard for China’s environmental laws, for Beijing’s air pollution, the blue-green algae in Taihu, and illegal dumping of silicon tetrachloride in Henan Province.

With the Measures for the Disclosure of Environmental Information coming into force on May 1, all enterprises in China are expected to timely and accurately make public their ecological footprints. [no they aren’t, they are “encouraged” to disclose such information; I wouldn’t “expect” much of anything from most ”enterprises in China” if I were you]

This will bring to an end the embarrassing practice that multinational companies are virtually left free to shirk the standard operating procedures of their countries of origin by not publicizing pollution information. [I suppose now that “ecological footprint” disclosure is a “standard operating procedure” in China, Chinese companies operating in say Africa or Southeast Asia will be expected to reveal their “footprints” in those countries; we wouldn’t want to embarrass anyone would we? Keep an eye on that will you Greenpeace]

A recent survey by Greenpeace found that 13 of 28 multinational companies operating in China adopted a double standard on environment protection due to the lack of impetus to unveil information on pollution. [assuming this statistic is true, more than half of the sampled multinationals voluntarily disclosed their “ecological footprint,” which is a considerably higher percentage than Chinese companies]

The implementation of the new measures will surely goad them to show equal respect for the public’s right to know the environmental truth in China as well as in their home countries. [the Chinese public will be infinitely better served if more than half of all Chinese companies choose to follow the regulatory “encouragement” and voluntarily disclose their “ecological footprints”]

OK, I’m going to stop now and count to 10.  Edification tomorrow I promise.

For your Sunday reading, I direct you to this article regarding a family of crested ibises in Shanxi Province.  Here’s the happy mother (or father) and her (his) brood:

The Asian Crested Ibis (Nipponia Nippon, I doubt the Chinese frequently cite to this name) is Endangered.

In May 1981, Chinese scientists found the last seven wild crested ibises in the world in Shanxi Province. Since then, the Chinese government and international organizations have worked together to protect the species. The species’ population has increased from seven to over 1,000. 512 of those are in captivity, while the rest can be found on the southern slope of the Qinling mountain range in Shanxi Province.

The featured family

hatched recently in Ningshan County in northwest China’s Shanxi Province. The hatchlings mark a successful pilot attempt by Chinese researchers to return one of the world’s most endangered species to the wild, the Xinhua News Agency reported. Its parents were bred in captivity and returned to nature last May [see here].

[Li Xia and Liu Xiaojun, employees at a rewilding base for crested ibis in Ningshan County] said the parents of the birds built their nest on a large, pine tree in Zhujiazui Village in Ningshan County. When one bird flies out to find food, the other stays in to protect the nest. They alternate their jobs every hour. The hatchlings are healthy, and they will be able to fly in 20 to 30 days, Li Xia told Xinhua.

Of the 26 birds released last May

six returned to the rewilding base by themselves, while five died and three went missing. The other 12 adapted themselves to the wild, even surviving a severe snow storm last winter.

I hope I am lucky enough one day to see this bird in the wild.

I’ve expressed my lack of enthusiasm for some of the more well-known environmental groups operating in China recently, so let me now issue a “pat on the back” to a group whose work I admire in China: the Natural Resources Defense Council  (unfortunately its acronym NRDC is easily confused with the acronym for the National Development and Reform Commission (NDRC) which always has me saying one when I mean the other). This group does not go for the quick headline, but has chosen to focus on areas where it can be most effective in solving some of China’s most pressing environmental problems and capacity deficits. As its website notes: “with estimates that global warming pollution from China is about equal to that of the United States and that 36 percent of total mercury in the United States comes from China, our common environmental fate has never been clearer.”

Current NRDC project areas include:

Improving the Energy Efficiency of Chinese- Made Products

With Chinese manufacturers dominating many world markets, improvements in the energy efficiency of products made in China can deliver benefits in the United States and across the globe. For example, more than 75 percent of external power supplies — those black boxes used to convert incoming AC power to the DC power needed by electronics — are manufactured in China. Unfortunately, most of these power supplies are relatively inefficient; NRDC estimates that the United States could reduce its electricity consumption by 1 percent to 2 percent simply by moving to more efficient power supplies.

Working on the first-ever joint project between the United States and China to coordinate the testing methods and performance measures for a product, we helped establish a single worldwide specification for external power supplies that has been adopted on a voluntary basis in China, Australia, and the United States. In the next few years, this specification will become mandatory for all external power supplies sold in China.

Spurring a Shift to Greener Buildings

NRDC was the first international environmental organization to establish a clean energy program in China, and over the last decade, our team of experts has helped China develop clean, efficient, and affordable environmental strategies. This year, NRDC’s eight year partnership with the Lawrence Berkeley National Laboratory led to the development of China’s first national commercial building energy-efficiency standard, which will require all new commercial buildings to cut energy use by 50 percent. We’re also making sure that residential buildings meet aggressive environmental benchmarks by setting energy standards for two of China’s three major climate zones: the Transition Zone, which covers the entire Yangtze River Basin, and the southern Cooling Zone, which includes Guangdong Province [Canton], China’s fastest-growing economic region. And because we know that setting standards is only half the battle, NRDC is working with Shanghai- and U.S.-based partners to ensure that these groundbreaking standards are properly implemented.

Promoting Energy- Saving Technologies

The cheapest, easiest, and fastest way to reduce the staggering pollution from China’s power plants is to increase energy efficiency. That’s why NRDC and the China-U.S. Energy Efficiency Alliance are working to develop incentive programs, known as demand side management (DSM), that will help China improve its efficiency. We helped organize the first DSM forum in China, bringing together representatives from national and provincial government agencies and utilities to discuss energy saving opportunities. Research shows that DSM programs — which allow utilities to use a portion of their revenues for rebates and other incentives to encourage customers to take advantage of energy efficiency — could meet up to half of China’s forecast load growth over the next decade. Moreover, these efficiency “negawatts” can be deployed rapidly and typically cost one-quarter to one-half as much as investments in traditional power supplies.

Pushing for Cleaner Cars

Private car sales have been surging in China, leading to increased global warming pollution from emissions and greater oil dependency for the nation. NRDC has been making sure that more cars on the road doesn’t come at a steep environmental cost. In Shanghai, we have successfully encouraged the formation of a public-private partnership for clean vehicle commercialization, a relatively new concept for China. The founding members of the partnership include Chinese subsidiaries of major multinational automakers, as well as Chinese companies and academic institutions. Formally launched in October, this nonprofit partnership is already hard at work organizing forums and seminars, supporting college students conducting an energy policy research project, and building China’s first hydrogen fueling demonstration station in Shanghai.

Strengthening the Law and Increasing Public Participation

In 2007, the Chinese government began developing an overarching energy law that will provide the foundation for more specific energy laws and regulations. Recognizing this unique opportunity for promoting sustainable energy policies in China, NRDC teamed up with the China Sustainable Energy Program of the Energy Foundation and the Law School of China’s Tsinghua University to provide recommendations for this groundbreaking law. Encouragingly, the draft version of the China Energy Law released in December 2007 has given energy conservation and efficiency the highest priority and included general provisions on low-carbon fuels, renewable energy, and public participation in energy decision making.

To encourage and empower the public to claim its place in the movement, our staff in Beijing — including Jingjing Zhang, dubbed the “Erin Brockovich of China” by the Atlanta Journal- Constitution — is working with local partners to conduct legal training for NGOs, community groups, and journalists. This year, we also helped develop and launch China’s first online resource devoted to environmental public participation (www.greenlaw. org.cn). The website arms citizens with how-to guides to getting involved, along with localized information about their region’s environmental initiatives.

They have achieved tremedous success with limited staff and funding. In addition, as the picture here attests, they seem to be a very happy lot. I like that! They hardly need my approval, of course, but I provide it in any event just to show that I am not a complete curmudgeon.

As part of our continuing look at the newly amended Energy Conservation Law, we’ll review today those provisions which address the transportation and public (or governmental) sectors. 

Transportation

With respect to the transportation sector, the law basically punted. It encourages the development of regulations and provides that the State Council (and its relevant departments) shall

guide and promote coordinated development and efficient connection of various transportation methods, optimize the transportation structure and build up a comprehensive energy-saving transportation system (Article 42),

strengthen organization and administration of communications and transportation, guide road, waterway and air transport enterprises in improving the organization and intensification level of transportation in order to improve energy utilization efficiency. (Article 44),

and

formulate the standards for limits on fuel consumption by commercial transport vehicles or ships (article 46).

The “development, production and use of energy-saving environmentally-friendly cars, motorcycles, railway locomotives, ships and other transportation vehicles” is encouraged (Article 45) by the State, as is the “development and popularization of the use of clean fuel and oil substitute fuel for transportation tools.”  We will address fuel efficiency and clean fuel standards in a subsequent post.

Local governments are required (Article 43) to “give priority to” the development, expansion and “perfection” of public transport service systems and to “encourage the use of non-motorized vehicles.”

Public Sector

The public sector (or “public organizations”), pursuant to the Energy Conservation Law, is defined (Article 47) to include “State organs, public-service institutions and group organizations that totally or partially use public financial capital.” Unfortunately, “public financial capital” is not defined; does a loan from a state-owned bank count as “public financial capital?”

Public organizations “shall practice strict frugality, curb waste, . . . lead in the use of energy-saving products and equipment, and improve energy utilization efficiency.” The government agency affairs departments at each level of government “at or above the county level” shall, for all public organizations within their jurisdiction

develop plans for energy conservation, including energy conservation  plans for existing buildings (Article 48), and

formulate quotas on public organization energy consumption, and the public financial departments shall formulate standards for energy consumption expenditures according to those quotas. (Article 49).

Public organizations should:

• strengthen administration of the measurement and monitoring of energy consumption and submit (to the government agency affairs department) the report on energy consumption status for the previous year (Article 49),
• development annual targets for energy conservation and plans to achieve the targets (Article 49),
• arrange energy audits pursuant to relevant rules and take measures for improving energy use efficiency according to the audit results (Article 50), and
• when purchasing energy-using products and equipment, give priority to purchasing products and equipment included in the list of energy-saving products and equipment for government procurement (Article 51)

The list of energy-saving products and equipment for government procurement referred to in the last bullet point “shall be formulated and promulgated by the department of the people’s government at or above the provincial level in charge of supervision and administration of government procurement” (Article 51). We will bring you up to date on the status of this energy-saving products and equipment catalogue in a later post.

As you can see, there’s not much meat here; most of the action will happen at the regulatory level, and we will try to keep you abreast of those developments.

The Labor Day holiday begins today in China and runs through Saturday; Sunday is an official workday (to make up for the holiday on Friday). Unfortunately, I must continue to labor during this festive period on matters unrelated to this blog, but it will be a slow news period anyway.

There is one interesting article released today from Xinhua entitled “Exporters Confront Rising Environmental Costs.”  It reports that

Chinese manufacturers have seen their costs for environmental protection rise, in many ways, since the government raised the standards over the past year. . . .

China has conducted special campaigns against polluting companies since last year. And violators have lost more than just export opportunities: blacklisted firms find it difficult to get loans. The State Environmental Protection Administration, now the Ministry of Environmental Protection, along with the central bank and the Banking Regulatory Commission, jointly issued a “green loan” policy in July that banned loans to blacklisted companies.

In addition, the government stated that the worst violators would face shutdowns of up to three years.

A senior official with the National Development and Reform Commission, the country’s top economic planner, said that “all these measures made it clear that companies must establish pollution-treatment facilities. Only paying fines for degrading the environment is definitely not enough.”

As supervision strengthened, some companies had to shut down.

Fuan Textile Mill, a Hong Kong-listed company, shut down last March as it was found to be discharging wastewater directly into underground pipes. The company was fined 11.55 million yuan (1.65 million U.S. dollars).

A couple of comments: the government hasn’t significantly “raised the standards” over the past years; I assume what the writer means is that enforcement efforts have increased over the past year. This reading jibes with the second quoted paragraph which mentions “blacklisted firms.”  These are firms which end up on the list we mentioned yesterday of those “enterprises with severe pollution and whose emission of pollutants is greater than the national or local emission standard or whose total emission of pollutants is greater than the quota of total controlled emission determined by local people’s government.” It is encouraging to see it acknowledged that “paying fines” is no longer deemed sufficient (at least to a “senior official” with the NDRC), but that the installation of “pollution-treatment facilities” will be required.

The Fuan Textile Mill mentioned in the quotes is the same company profiled in this August 2007 Wall Street Journal article. Although the Xinhua article implies that the company’s closing of, what I presume to be, its Dongguan (Guangdong Province) facility was the result of the environmental infractions, this article from China Labor Watch suggests the closure was the result of the new Labor Contract Law:

According to workers, the layoff was primarily due to the labor law established just this year. In order to cut down expenses, Fuan has prepared to relocate its production in other parts of China and cut down the number of its workers in Dongguan.

In addition, and perhaps most significantly, the Xinhua article reports that

During the spring session of this year’s Canton Fair, which concluded on Wednesday, Minister of Commerce Chen Deming said China would maintain strict controls on polluting and energy-wasting companies, despite a tougher export situation.

Some national leaders are apparently willing to bite the bullet for environmental improvement.

In support of this effort, blacklisted firms “were barred from the Canton Fair, or the China Import and Export Fair.”

The Canton Fair is the most important channel for Chinese exporters to expand overseas, so a ban means big losses. . . .

This creative penalty is an encouraging bit of news. So is the fact that some Chinese companies are discovering that “green” sells:

Appliance giant Haier introduced a “green strategy” at the fair. It showed off more than 100 new products, such as washing machines that don’t require laundry powder. The company won orders worth 850 million U.S. dollars.

Sales manager Yang Hong said that a Spanish customer had decided to buy more than 10 million U.S. dollars worth of environmentally-friendly products in less than 15 minutes. “It was a surprise to us,” said Yang.

Other products at the fair, such as furniture, decorations and toys, also emphasized an environmentally-friendly trend. Products using recycled materials were especially popular.

Liu Zhenyi, president of Shandong Luyi Wooden Product Co., Ltd., said their wood and woven-grass products all used recycled materials.

“Our products were made to European standards, although the cost was much higher,” he said. “They do not contain any lead or toxic chemical materials. We are confident about our products.”

Xu said Chinese companies were following stricter rules in designing, manufacturing, recycling and selling their products. “To promote energy-efficient products is to save resources for the world,” he said.

Ah, all my labors have not been in vain! I have renewed strength to labor on.

China’s Measures for the Disclosure of Environmental Information, adopted by MEP, become effective tomorrow (May 1) (now under “Laws & Regulations” in right sidebar). We have alluded to them previously, and will spend a little more time with them today. These MEP regulations operate in conjunction with (although they were promulgated before) the general Disclosure of Governmental Information, adopted by the State Council (which can be found here), which also become effective May 1.

The purpose of the State Council regulations (Article 1) is to ensure that

citizens, legal persons and other organizations obtain government information in accordance with the law, enhance transparency of the work of government, promote administration in accordance with the law. . . .

The State Council regulations provide general requirements as to the type of information that should be disclosed (Articles 9 through 12) and the procedures for disclosing it (Articles 15 through 28). Basically, the regulations envision a set of information that is routinely and automatically disclosed by agencies and also set forth a procedure for citizen requests for the disclosure of specific information. They provide plenty of reasons for justifying non-disclosure (see, e.g. Articles 5 through 8, Article 14), but they are a huge step forward in terms of transparency at the administrative level. 

The MEP environmental-specific regulations are designed (Article 1) to

propel and regulate the disclosure of environmental information by administrative departments in charge of environmental protection (”environmental protection department(s)”) and by enterprises, maintain the rights and interests of citizens, legal persons and other organizations to obtain environmental information and promote the public’s involvement in environmental protection. . . .

The regulations define (Article 2) both “government environmental information”

information made or obtained by environmental protection departments in the course of exercising their environmental protection responsibilities and recorded and stored in a given form

and “enterprise environmental information”

information recorded and stored by enterprises in a given form and relating to environmental impact arising from enterprise operational activities and enterprise environmental behavior.

Obviously, “government environmental information” can include information provided by private entities or enterprises which has been submitted by them to the relevant agency.

“Environmental protection departments” are required (Article 11) to disclose “on their own initiative” the following “government environmental information” to the public:

(1) Laws, regulations, rules, standards and other regulatory documents with respect to environmental protection;

(2) Environmental protection plans;

(3) Environmental quality status;

(4) Environmental statistics and environmental investigation information;

(5) Emergency plans for and forecast, occurrence and handling of sudden environmental events;

(6) Information on allocation of total emission quotas of major pollutants and its implementation, information on issuance of pollutant emission permit and results of quantitative examination of comprehensive improvement of urban environment;

(7) Information on type, volume and disposal of solid waste produced in medium to large cities;

(8) Information on the acceptance of environmental impact assessment documents of construction projects, results of examination and approval of environmental impact assessment documents accepted and results of environmental protection inspection and approval upon completion of construction projects, items, basis, conditions, procedures and results of other environmental protection administrative licenses;

(9) Items, basis, standards and procedures with respect to the collection of pollutant emission fees, amount of pollutant emission fees payable by and amount actually imposed on polluters and information on exemption, reduction and postponement of payment of pollutant emission fees;

(10) Items, basis, standards and procedures of environmental protection administrative charges;

(11) Letters, calls and complaints from the public about environmental issues or environment pollution caused by enterprises investigated to be true and their handling results;

(12) Information on environmental administrative penalties, administrative reconsideration, administrative lawsuits and enforcement of administrative compulsory measures;

(13) List of enterprises with severe pollution and whose emission of pollutants is greater than the national or local emission standard or whose total emission of pollutants is greater than the quota of total controlled emission determined by local people’s government;

(14) List of enterprises that have incurred serious or extraordinarily serious environmental pollution accidents or events, list of enterprises that refuse to enforce effective environmental administrative penalty decisions;

(15) Results of examination and approval of environmental protection creation;

(16) Information on the structure, responsibilities and method of contact of environmental protection department; and

(17) Other environmental information that shall be disclosed according to laws, regulations and rules.

“Citizens, legal persons or other organizations” can also  shall request environmental protection departments to release information identified by the requester in accordance with Articles 5 and 16. As with the general State Council rules, there are a several of reasons an agency can cite to justify non-disclosure (e.g., Article 12).

Of course some information maintained by an agency may have been provided or obtained from a private, regulated entity. Occasionally this information may be considered proprietary or confidential information by the private entity. How protected is this information from public disclosure?  Article 14 of the State Council regulations provides that

Administrative agencies may not disclose government information that involves state secrets, commercial secrets or individual privacy. However, government information involving commercial secrets or individual privacy may be disclosed by administrative agencies with the consent of the rightholder(s) or if administrative agencies believe that non-disclosure might give rise to a major impact on the public interest.

Article 12 of the MEP regulations parrots this language. There are no provisions for challenging a determination that confidential information should be disclosed. Given this language (and a variety of other reasons), as a practical matter, you should operate on the assumption that any information you provide to a Chinese governmental entity (even if marked confidential) will become public.

Under the MEP regulations “enterprises” are “encouraged” (Article 19) by the State to “voluntarily disclose” the following enterprise environmental information:

(1) Their environmental protection guidelines, annual environmental protection objectives and achievements;

(2) Their total annual resource consumption;

(3) Information on their environmental protection investment and environmental technology development;

(4) Type, volume and content of pollutants discharged by them and where the pollutants are discharged into;

(5) Information on the construction and operation of their environmental protection facilities;

(6) Information on the handling and disposal of waste generated from their production, information on recycling and comprehensive use of waste products;

(7) Voluntary agreement entered into with environmental protection departments for environment improvement behavior;

(8) Information on their performance of social responsibilities; and

(9) Other environmental information voluntarily disclosed by them.

Pursuant to Article 20, if an enterprise is included on the list of enterprises with severe pollution and whose emission of pollutants is greater than the national or local emission standard or whose total emission of pollutants is greater than the quota of total controlled emission determined by local people’s government (the “name & shame” list)(as referenced in item 13 of Article 11 above), it “shall” disclose to the public the following information:

(1) Its name, address and legal representative;

(2) Name of major pollutants, method, content and total volume of emission, information on emission that has surpassed the standards or total emission that has surpassed the prescribed limits;

(3) Information on the construction and operation of its environmental protection facilities; and

(4) Emergency plans for sudden environmental pollution accidents. Enterprises shall not refuse to disclose environmental information referred to in the above paragraph under the excuse of confidentiality of trade secrets.

Two cheers for China’s Freedom of Information Act! As with most Chinese regulations, the proof will be in the actual implementation.