China may slap higher penalties on polluters

08 March 2007 09:37  [Source: ICIS news]

SINGAPORE (ICIS news)--China could change its environment legislations and slap higher penalties on polluters to safeguard the country from rampant pollution as a result of rapid economic growth.

China’s top legislature the National People's Congress (NPC) expects to review a draft of the changes in August, according to local media reports on Thursday.

Beijing wants to remove a penalty cap and ensure polluters are fined daily until they rectify the problem, the reports said. Companies now face a maximum yuan (CNY) 1m ($129,199) fine for environmental offences.

The changes will also encourage companies to use energy resources more efficiently, while minimising waste. Tax incentives would be offered to companies that take an active role in recycling and reducing waste.

The new laws are expected to be passed before the end of the year.

Small- and medium-sized factories and plants are often the culprits of China’s poor environmental record, which has contributed to severe droughts in the north and worsening flooding in the south.

Despite recognising the damage releasing, for example, chemical waste into rivers, managers would rather pay small fines than introduce more expensive technologies to control or recycle pollutants, environmental consultancy China Eco-efficiency Research Centre (CERC) said.

"Complying with environmental rules is all about economics," said Alex Chen, director of Beijing-based CERC. "Penalties didn’t work in the past because they were too low."

The incidents have also raised questions on how dedicated the local authorities are in implementing rules.

They are often accused of boosting local economies at all costs by ignoring pollution problems.

"The energy-efficiency and environmental goals which are part of China's vision of the future require all stakeholders to yield," said James Brock, an independent energy analyst based in Beijing.

"And they tend to fight such reforms tooth-and-nail, so I don't have much hope for such things being readily accomplished in China either."

The seriousness of China’s environment problems was highlighted by a case in Luliang, a mining city in coal-rich Shanxi province, which was forced to shut 162 polluting factories and plants, according to a report in the Hong Kong-based South China Morning Post on Thursday.

The State Environmental Protection Administration (SEPA), China’s environment watchdog, ordered the closure of the plants from the coking, chemicals and smelting industries because they flouted laws and caused pollution levels to surge.


By: Matt Kovac
+65 6780 4359

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