China Environmental Law

This news item was pointed out to me by my friend and fellow Shanghai-based environmental lawyer, Dayton Carpenter.

A judgment of RMB80,000 has been entered against the Korean WFOE, Cangzhou Chengyuan Cosmetics Co Limited (Chengyuan) for the cancer death of a neighbor to its facility in Hebei Province.

Here are the facts as we know them:  Chengyuan manufactures cosmetic brushes and uses toxic substances, including benzene in the manufacturing process.  The plaintiff, the wife of the cancer victim, contended in her suit that Chengyuna’s emissions of toxic substances had caused harm to nearby residents, and, in particular, had caused her husband’s lung cancer.  She claimed compensation for hospitalization and burial costs in the amount of RMB550,000 (US$80,000).  She was aided in her suit by the “legal aid department” of China University of Political Science and Law.  The People’s Court of Hebei Province (it is unclear whether the court which heard the case was the Highest People’s Court in Hebei Province or simply a People’s Court located in Hebei Province) awarded her RMB80,000 (US$11,600) in damages.

Here are the significant take aways from this case:

1. The court placed the burden on Chengyuan to prove that its emissions did not cause the victim’s cancer.  Since it presented no evidence to disclaim liability it was found liable to compensate Li’s wife.  Both China’s Solid Waste Pollution Law and newly amended Water Pollution Law contain provision which place the burden of proof in such cases on the defendant:

The defendant of a lawsuit for damage compensation due to environmental pollution caused by solid waste shall bear the burden of proof on identification as prescribed by law and no cause between the defendant’s acts and the consequence of damage. (Solid Waste Pollution Law, Article 86)

China’s Air Pollution Law does not have such a burden-shifting provision, but that apparently was not an issue in the case.

2. Chengyuan’s emissions of pollutants were at or below China’s discharge standards.  In other words, it was in compliance with China’s environmental laws.  While it was always assumed that compliance with discharge standards would not insulate a company from civil liability for personal injuries or property damage to third-parties, this case confirms it (remember, however, that case decisions in China do not have precedential effect).

3. Courts will continue to experiment in this area as they encounter similar cases.  Despite the fact the defendant failed to meet its burden of proving that its emissions did not cause the deceased’s cancer, the court awarded less than the claimed amount of damages because benzene was not the only potential cause of the cancer in this case.

4. Expect to see a sharp increase in the number of environmental tort cases in China.