China Environmental Law

Giving the customer what he or she wants is the motto here at CELB, so when a reader suggests a topic we are only too happy to comply.  Andrew Gardner, Legal Consultant at Freshfields Bruckhaus Deringer, has asked for our take on China’s new plastic bag policy which went into effect today.  Happy to oblige Andrew and thanks for your request!

The State Council issued a Circular on December 31, 2007 Restricting the Production, Sale and Use of Plastic Shopping Bags. The Circular notes that

While plastic shopping bags provide convenience for consumers, this has caused a serious waste of energy and resources and environmental pollution because of excessive usage, inadequate recycling and other reasons. Especially ultra-thin plastic shopping bags, which are easily damaged, are often discarded, becoming the main source of “white pollution”. . . . For the implementation of the scientific concept of development and building a resource-saving and environment-friendly society, from the source to take effective measures, and urge enterprises producing durable, easy recycling of plastic shopping bags, guide and encourage the rational use of plastic shopping bags to promote integrated resource use, and protect the ecological environment, to further promote energy saving reduction, the State Council agrees to strictly restrict the production, sale and use of plastic shopping bags.

The Circular imposes six specific mandates:

1. The production, sale and use of ultra-thin (less than 0.025mm in thickness) is prohibited as of June 1, 2008.

The National Development and Reform Commission (NDRC) is to revise the Guidance Catalogue for Industry Structure Adjustment to put ultra-thin bags on the Catalogue of Eliminated Products, and the General Administration of Quality Supervision, Inspection and Quarantine is required to develop national standards for plastic shopping bags an “visible distinguishing marks” qualified plastic bags.

2. Retailers most charge customers a separate fee for the use of qualified plastic bags.

All “retail stores,” defined to include “supermarkets, department stores and markets,” as of June 1, 2008 must “clearly mark the price of plastic shopping bags and charge a levy on plastic shopping bags, and must not provide free plastic shopping bags nor impliedly include the fee for plastic shopping bags into the total price of goods sold.”

3. Systems to ensure that prohibited plastic bags do not get produced or sold must be enhanced

Product quality inspections of plastic bag manufacturers are to be increased, as are inspections at the retail level, to ensure that ultra-thin plastic bags are not produced or sold.

4. The recycling level of waste plastic must be increased

Several different departments are required to join in this effort.  Environment and health departments must “accelerate promoting household waste collection and disposing of classified in order to reduce the amount of plastic waste mixed with burned or buried garbage.”  Departments in charge of recycling waste materials must “advance the recycling of plastic waste by making full use of price incentives and providing excellent services as measures; increase ability to sort and classify waste on a larger scale, and increase efficiency in recycling plastic waste.”  The environmental protection department “must increase its environmental supervision and management over the recycling process of plastic waste.”  The science and technology department must “increase its support to the research and development of technology to” dispose of, treat, recycle and use plastic waste.  And, the finance departments and tax bureaus must “formulate a tax policy restricting pollution by plastic waste and regulate the production, sale and use of plastic shopping bags by tax incentives.”

5. The harmful nature of “white pollution” shall be publicized and use of alternative packaging options encouraged.

The use of cloth bags and baskets and dual use of durable shopping bags are to be encouraged, and enterprises should “simplify product packaging and proactively use green and environment-friendly packaging.”

6. Local governments are responsible for restricting the production, sale and use of plastic shopping bags.

Commerce Ministry officials have said that “3% to 5% of the weight of landfills was made up of plastic waste from households, the majority of which was plastic bags.” There is disagreement as to how many plastic bags are used in China on a daily basis. Some sources say 3 billion, others say 1 billion, although they all reference the same source for the figures-the China Plastics Processing Industry Association.  Whatever the number, “experts” predict that that number will be reduced by two thirds once the Circular takes effect.

Several articles have reported that retailers can be fined “up to 10,000 yuan (US$1,400) for providing free plastic bags to shoppers” and “up to 20,000 yuan if they fail to buy bags from legally incorporated producers, wholesalers or importers, or if they fail to obtain related certificates and record relevant data.” These penalties are not in the Circular and I am not sure where they come from. They may be contained in China’s Product Quality Law which is referenced in the Circular.

It appears that most large retailers geared up to implement the new requirements on time.  The general consensus seemed to be that the small bags would sell in the range of 2 to 3 mao (2.8 to 4.2 cents), with higher prices for larger bags. 

Reportedly, “C-Store, a convenient store chain, has begun to offer discounts to those who bring non-plastic bags, the report said.” I don’t think this approach will actually be deemed in compliance since it “impliedly include[s] the fee for plastic shopping bags into the total price of goods sold,” a non-permissible option under the Circular.

Efforts to encourage alternative types of shopping bags have not proved particularly successful.

On January 5, Wal-Mart supermarkets in Kunming extended 400 environment friendly shopping bags free to nearby local residents. They also set up prizes to encourage shoppers to use cloth bags and paper bags. “Our promotion did not achieve satisfactory effects. Few people returned to shop with cloth bags in our supermarkets,” said Dong Yu of Yunnan Wal-Mart Stores, Inc.

The “coolness” factor of adopting alternative packaging arrangements is still being worked out.  Some university students interviewed said they would definitely bring their own environmentally-friendly packaging with them to shop to support the plastic bag reduction efforts, but

Different from the elders, young guys largely say they would go on using plastic shopping bags, even if they are charged. It is somewhat embarrassing for them to hold bamboo baskets to shop on streets, they confess.

I was encouraged to see that some local governments are, in fact gearing up to enforce the law.

To implement the policy, law enforcement organs of local governments have to overcome many problems in collecting evidence.

Qingdao Industry and Commerce Bureau in the eastern Shandong Province, invested 60,000 yuan to buy 120 instruments to measure the thickness of plastic film. These facilities have been sent to grassroots organs of the bureau. Staff workers have received training programs for field law enforcement.

With these tools, the bureau will launch a two-month supervision in June and July to check the use of plastic bags in all supermarkets and shops in the city. Regulation violators will be fined up to 10,000 yuan.

In May, Linyi Industry and Commerce Bureau, also in Shandong, started to strengthen supervision of plastic bags accessing the wholesale markets. Linyi City is a key distributing center of small commodities in the country and a major plastic bag wholesaler in Shandong.

As shown in the supervision results, the sales volumes of thin plastic bags have plunged in the wholesale markets in Linyi since mid May.

There has not been unanimous support for the new policy.

“A plastic bag is a tiny item but one that’s closely associated with people’s everyday lives,” said Yang Huidi, chief editor at China Plastic, a trade magazine. “This is a litmus test of the government’s problem-solving skills as it jumps on the bandwagon without thinking things through. They would have done better to do nothing.”

For one thing, banning outright all bags thinner than 25/1000th of a millimeter, rather than requiring manufacturers to meet strength tests, could prompt China to use more plastic.

“This policy is nonsense,” said Tang Saizhen, secretary-general of the China Light Industry Information Center. “If I buy one steamed bun and use a thicker bag, it’s an even bigger waste.”

Others question the government’s motives

Some say the real push behind the new policy and its predecessors may be China’s pre-Olympics image and the high price of oil, from which plastic is derived, rather than concern over the environment.

“This whole thing is a big publicity stunt,” said Zhang Hua, a Beijing fishmonger. “Plastic is so convenient, whether you’re in China or abroad, that you won’t change people’s habits. We’ll still be using plastic for another 200 years.”

The success of the policy will, of course, depend on how it is enforced and how it changes consumer behavior. Preliminary observations on this score will be the subject of tomorrow’s post (although I can tell you the ladies at the local Lawson’s were in high spirts today!). What’s your experience with the new policy? Please let us know by submitting a comment.