CHINA ESQUIRE

Charlie McElwee followed up with a post at China Environmental Law Blog, which I want to quote in full:

In a story entitled “ Arming up in the battle for a greener future,” China Daily today provides some additional information about the new MEP’s authority and initial priorities.

Money quotes:

While the ministry’s new responsibilities have not yet been announced in detail, Zhou summed them up by saying that it was going “to deal with mounting environmental woes caused by previously rapid growth, and to try innovative means and tools to curb new problems”. The solution, Zhou said, lay in measures including law enforcement and market mechanisms. . . . Giving top priority to law enforcement, Zhou said the MEP will have greater authority to crack down on environmental crimes by including the expansion of enforcement and monitoring teams.

The new MEP has also said it will put the quality of drinking and waterway resources as one of its top priorities. A new requirement for pollutants discharged into the Taihu Lake basin in Jiangsu province aimed at reducing and eliminating blue-green algae outbreaks in the region will be published soon, an MEP source said.

The ministry is also working to rid itself of the friction from other ministries. The old administration, for example, reportedly faced such difficulties in water pollution control. While several agencies, including the water resources, construction and agriculture ministries, had been involved in water management, the MEP is now expected to take full responsibility dealing with water pollution, sources close to the government reshuffle have said. Similarly, the MEP’s extended duties now include biodiversity management such as the approval and assessment of national ecological protection zones, the sources said.

And as part of its broader strategy to ensure that the country attains a balance of economic growth and environmental protection, the MEP is setting out to have local leadership and the public discard the idea that “development is king” - widely viewed as the main contributor of environmental degradation and a shortage of resources following the 30 years of the country’s rapid development.

Take away points:

1. The Ministry has been granted some new responsibilities (all of which have not yet been revealed), including, having apparently wrested primary authority for water pollution from the water resources, construction and agriculture ministries. Good.
2. More carrot and stick: increased resources devoted to enforcement and more market mechanisms to encourage environmental compliance. Good.
3. A green public relations offensive is on the way to topple the “development is king” mentality among cadres and the masses. OK, but let’s hope it’s more successful than recent public relations efforts.

No disagreement from me on this part, just some skepticism. Why? Because enforcement is hard. We have been assuming that the the U.S. is a paragon of enforcement of its laws. While probably better than China, it is hardly virtuous in this area. Reading and thinking about this reminded me a lot of a case that I read while working at a class-action law firm, where Presiding Justice Sills of the California Court of Appeal noted that a particular tax statute actually had some teeth with a note of irony and sarcasm. (I can’t remember the case citation to save my life) I think that tells you a lot–that the U.S. is pretty decent at enforcement, but still has problems.

A number of areas are opened up for civil liability that might normally be within the scope of government enforcement: elder abuse, qui tam actions, securities fraud and insider trading suits, etc. Why? Because opening up enforcement to a mixture of government agencies (the EPA, SEC, etc.) and private civil actions brings in a separate beast: the plaintiff’s bar.

Before you sit back and think to yourself, “this guy is a left-wing liberal nutcase”, let me clarify and say that (1) I am not, and (2) the function of the plaintiff’s bar is essential to proper enforcement of the law in the U.S. As I stated in a comment to Charlie:

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.

And if you look at the track record of some the good plaintiff’s firms, you can see why companies in the U.S. both despise and fear the plaintiff’s bar. (albeit more despising than fearing)

My old firm lists on their website some examples: (1) “The California State Teachers’ Retirement System (CalSTRS) reached securities fraud settlements totaling $151.5 million with AOL Time Warner and Qwest Communications”, (2) “McCarthy also served as national co-lead counsel in a predatory lending suit against Household International, Inc. that resulted in a $150 million settlement”, (3) “CP&M prosecuted the class action suit against Household in U.S. District Court in Oakland, California. McCarthy and Joseph W. Cotchett served as national co-lead counsel in fourth predatory lending lawsuit against Citigroup and its affiliates that resulted in a $240 million settlement.”

If I were a business, I would hate to see these guys bringing a law suit. Now imagine that there are many lawfirms like this that specialize in plaintiff’s side work and I think you get the picture.

In the U.S., there are plaintiff’s attorneys that go after environmental polluters. In fact, one of them scored something to the tune of $75 million off of an old client (I already left the firm before trial came around) and $100 million off of our co-defendant. And some of the jury members actually admitted to attorneys later that though the law was actually in support of the defendants, the jury felt that someone needed to pay for the groundwater contamination in Modesto, CA.

Charlie argued in a comment:

we are unlikely to see the growth of a significant plaintiff’s bar in the near future. If the MEP can’t get its laws and regulations enforced at the local level, the private lawyer is going to have an even harder time getting and keeping his action in court. And, as Brad notes most Chinese do not yet consider lawsuits as viable remedial options for any number of reasons. Things will change, but slowly. Now if we could just figure out a way to encourage civil lawsuits in China without creating plaintiff’s lawyers. . . .

I agree that we are a long way off from plaintiff’s attorneys. And I know the Chinese mindset doesn’t mesh well with the concept of plaintiff’s lawyers and that litigious type of society. But I hope that as the rule of law progresses, so will a plaintiff’s bar. I am a little less biased because I’ve worked on both sides of the litigation bar. (It will take at least a generation or two before this will ever happen though!)

So if China is willing to enforce its laws on its own, great. But if China wants to see wider spread enforcement, then its time to empower plaintiff’s attorneys.

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