Mar 27 2008
environmental protection: will the rule of law grow through this?
Charlie McElwee posted the other day about the Ministry of Environmental Protection ( MEP), and what the new head of the MEP has been saying. I thought it interesting but wanted to think about it for a day or two before I made any comments. His post:
The new Minister of the Ministry of Environmental Protection, who was the old Minister of SEPA, Zhou Shengxian, announced yesterday that setting up a law enforcement system of “iron and steel” is at the top of his agenda. A China Daily article reports as follows:
“The new ministry will have greater authority to crack down on environmental crime, and we will expand our enforcement and surveillance teams,” he said.
Regular meetings, and joint enforcement, surveillance and information sharing systems will be set up not only among environmental protection departments of all levels, but also with law enforcement and judicial bodies, Zhou said.
I’m not sure where the new authority Minister Zhou refers to is coming from, but the words are encouraging.
I would agree that this could be very encouraging news: the new MEP is ready to crack down on environmental crimes. And note in the article that Zhou Shengxian did say he wanted to work with judicial bodies. This means that China is about to get serious about environmental regulation and law.
I think China’s new candor about its environmental needs and policy is a breath of fresh air. For example, the government officials in charge of the Three Gorges Dam finally admitted that this dam has the potential for environmental disaster. (see article here, h/t to CDT) I think this sort of candor will help fuel the rise of environmental regulation in China. The laws have been on the books, but now it seems like there are governmental directives to clean up China’s environment.
So is the rule of law about to grow through this new-found initiative? Maybe. If China cracks down on violators equally, then I think the rule of law will grow through this. Improved enforcement and applied at all levels, especially against Chinese companies, will help people learn to respect the law and submit to it. And hopefully in the long run, appreciate it too.
Why am I skeptical? Because China’s enforcement, aside from some enforcement against Chinese companies like SEPA’s interference with companies trying to go public and have their IPO’s, has largely targeted foreign companies for environmental violations and crimes. Yes, it is unfair. But unfortunately, that’s the track record so far. If China continues to do this, then I am not sure rule of law will get very far though the MEP stance is encouraging and sounds good. China must crack down on both foreign and domestic companies if its wants to get anywhere: both in the rule of law context, and also trying to curb environmental problems down the line. It is the only way.
Will China do it? Maybe not. But for your clients, the foreign MNC’s who have Chinese operations, make sure that you are complying with all environmental regulations. I have a feeling that if you do not, this new motivated MEP will be knocking on your door.
UPDATE: Charlie added some more about MEP enforcement here. This actually may be worth another post on my part over the weekend…
Tom: I agree that these encouraging words (which I believe were sincerely expressed) must be followed up by actions. I wish China published an environmental enforcement scorecard similar to that put out by US EPA which presents the figures on civil and criminal cases initiated, penalties imposed, etc.
I certainly have the impression that foreign companies are enforced against more frequently, but that may just be that I am more likely to become aware of those actions than a case against a Chinese metallurgical coke plant in Shanxi Province, for instance. Some environmental enforcement against Chinese nationals is being reported in the press: http://english.cri.cn/2946/2008/03/21/1321@336476.htm. Notice, however, that it was the lowest level “criminals” who took the fall in this case, and not the Chinese corporate entity. Despite relatively light sentences, one can’t help but reflect that Messers. Su, Jiang, and Guo must be the three least connected men in China.
Clearly foreign companies are more likely to be singled out for bad press if they violate China’s environmental laws than are Chinese companies, and the notion is certainly prevalent here that foreign companies take environmental shortcuts in China they do not take in their home countries. This notion is absolutely not true (at least with respect to US, Australian, and European companies) in my experience.
Charlie:
I would agree that most MNC’s tend to be quite good about following the law. I haven’t had many clients who wanted to be in violation of the law–gray areas perhaps at times, but in general, desires to comply with the law or at least a respect for it.
That article was really interesting about the 3 people in Shanxi. I also agree that the company didn’t get it. It is good to know that at least the Chinese are willing to enforce it against some of their own. While perhaps not really all that effective, it is very typical Chinese message-sending. (which is not necessarily a bad thing)
In addition to something like a scorecard, I also see the lack of an established plaintiff’s bar, which is encouraged to be private watch dogs. I know that my former chemical clients were far more careful because of the lawsuits. (major chemical companies back when I was doing environmental and toxic tort law) Yes, they did respect the law. But it was that fear of losing even more money to plaintiffs (and their lawyers) that made them very careful to be compliant. China seems to be far from having such a plaintiff’s bar, but if it ever learned to embrace and encourage such activity, I could see that having as much effect as strong regulatory enforcement, if not even greater effect.
Either way though, I hope MEP does add some teeth to its stated intentions.