China Environmental Law

The Kuwait Petroleum Corporation and Sinopec proposed in 2005 to build a petrochemical refinery in Guangzhou.¹  The facility will process “15 million tones of oil a year and produce 800,000 tonnes of ethylene.” ²  The Nansha District, an island at the mouth of the Pearl River, was selected as the location for the facility.  The island is at the heart of the heavily-populated Pearl River Delta region and is only 37 kilometers from Hong Kong.  With a projected investment of US$5 billion, the project was the “mainland’s largest joint venture.”

Given the magnitude of the investment, the Environmental Impact Assessment (EIA) for the project must be approved by the national office of the Ministry of Environmental Protection (MEP).  If the MEP fails to approve the EIA, the project may not be constructed, pursuant to Article 25 of China’s Environmental Impact Assessment Law (EIA Law).  If the project is initiated without EIA approval, the MEP can order the construction halted and impose fines (Article 31 of the EIA Law). 

Some of the recent articles about the project reported that MEP representatives had stated last year that MEP “lacked power to block the construction.”  MEP may lack the political power, but it does not lack the legal authority to stop the project.  It appears, however, that the reports may have been based on a misreading of a comment by MEP vice minister Pan Yue.  He was quoted by cleartheair  as saying that

“Environmental factors should be thoroughly considered in the overall planning of any regions and industries,” he said. “However, the existing law does not make it mandatory to have an environmental assessment for the whole region before a specific project can be allowed to go ahead.”

What he is referring to here is regional or “special program” EIAs, which for our purposes can be defined as regional land use/zoning determinations.  He is correct that such EIAs do not need to be completed before specific project EIAs can be approved.  Pan goes on to say that

the Nansha refinery was just one of many large environmentally sensitive projects, most notably hydropower and petrochemical plants, that SEPA had failed to check due to the lack of legal support.

This statement is somewhat ambiguous.  As noted above MEP has the legal authority to stop the project (how did Pan block those projects in 2005 during an “Environmental Storm” that lacked approved EIAs?), but he may have meant “political” rather than “legal” support.

In any event, the status of the EIA for the proposed project is unclear.  However, China Digital Times recently reported that

in the last few days, an internal notice from Internet supervision departments was sent to all major Chinese news websites, translated by CDT’s Japhet Weeks.

“Environmental impact report for the Guangdong Nansha integrated oil refinery and petrochemical project”: All internet sites are prohibited from reproducing, commenting on, or discussing anything relating to the content of this report. Nor should it be discussed on blogs. Furthermore, blogs should set up keyword filtering to make sure the topic isn’t discussed. All websites are requested to strictly implement these rules.

Such actions may limit discussion of the issue in the PRC, although I doubt it: fourteen members of the Guangdong People’s Congress have already submitted a motion to Beijing to ask the central government to halt the project. The press brownout will have little or no impact on Hong Kong’s growing concern about the location of the facility.

Now comes word, however, that the facility may be relocated.  The South China Morning Post reported on Saturday that  

the authorities were considering relocating the plant, partly because of strong opposition from Hong Kong over the environmental impact, and because provincial Communist Party chief Wang Yang had a different line of thinking concerning development.

The provincial party chief’s opposition should pretty much clinch the deal that the facility will not be built in Nansha.

The project . . . is at odds with the State Council’s guidelines for the Pearl River Delta’s development up to 2020, of which Mr Wang was one of the main architects.

The guidelines, issued early this year, support building more petrochemical facilities in the region to sustain its economy but says they should be built on its less developed eastern and western sides.

The guidelines give Nansha, an island at the mouth of the Pearl River, a key role to play in bolstering cross-border economic ties with Hong Kong and Macau in the areas of services and hi-tech industries.

Thus, it looks like the regional land use/zoning considerations, even if not yet enshrined in a regional EIA, will lead to the projects relocation, probably to Zhanjiang, a port city in the far west of Guangdong Province (which will certainly require, at least, an amended project EIA.  EIA Law, Article 24).  If this is the case, one wonders what got the local net nanny so upset.  It just shows that even (especially?) in China the right hand often doesn’t know what the left hand is up to.

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