The Asia Miner

OCT-DEC 2015

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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Page 7 of 71

6 | ASIA Miner | October-December 2015 The new EPL takes a carrot and stick approach to encourage off- cials to enforce the law. Local governments are now encouraged to include proper enforcement of the law as a factor in performance appraisals of environmental protection department offcials. Howev- er, in the event an offcial fails to properly enforce the new EPL, not only will this be refected in their appraisal, the offcial will also be subject to increased penalties. An offcial may be subject to demer- its, demotions, dismissal and criminal prosecution if they unlawfully grant an approval, cover up a violation, fail to make a decision on suspension or closure of an operation, or fail to make publicly avail- able environmental information. Initiating public interest litigation Under the original EPL it was often considered that only the govern- ment authorities had standing to commence litigation against pollut- ers for a breach of environmental obligations. However, a signifcant development in the new EPL is to set-out a procedure and require- ments for certain social organizations (NGOs) to have standing to initiate 'public interest litigation'. This builds on the amended PRC Civil Procedures Law (effective on January 1, 2013), which estab- lished the public interest litigation system but which failed to detail the rules on who had standing to initiate such litigation. In order for an NGO to have standing to initiate public interest litigation against a polluting enterprise, the NGO must: • Be registered with the civil affairs department of a government of a municipality divided into districts, or above; • Have at least fve years' experience in environmental protection activities for the public interest and not have committed any vio- lations in that time; and • Not seek economic gains through the litigation. An NGO may only bring actions against an enterprise for failing to comply with its environmental obligations and may not initiate litigation against a government offcial for failing to properly enforce the law. Since implementation of the new EPL, the frst public interest en- vironmental lawsuit has been initiated by an NGO. All-China Envi- ronment Federation fled a lawsuit against a glass manufacturer with the Intermediate Court of Dezhou City, Shandong Province for air pollution in March 2015. The claimed damages is approximately RMB30 million. This is a signifcant development in the evolution of China's en- vironmental protection. We understand that there are more than 700 NGOs that potentially have standing to litigate enterprises in breach of their environmental obligations. This, in conjunction with the increased transparency and availability of information of polluting activities of enterprises, will make it harder for enterprises to hide non-compliance or avoid consequences of non-compliance. Encouraging whistleblowers Any citizen, legal person or other organization is now able to report the following non-compliance: • Environmental pollution and ecological destruction by any organi- zation or individual - to environmental protection departments; and • Non-performance of duties by environmental protection depart- ments - to government authorities at a higher level. Authorities receiving these reports are obliged to keep information of informants confdential. This is yet another layer to encourage public involvement in environmental protection and make it increas- ingly diffcult for enterprises and government offcials to avoid their obligations. Central Government legislation To strengthen enforceability of penalties stipulated under the new EPL, the Ministry of Environmental Protection has promulgated sev- eral rules on implementing the penalties: • Measures on Implementing Fines Accumulated on a Daily Basis by Environmental Protection Departments (Fines Measures); • Measures on Implementing Restrictions to Manufacturing and Suspension of Production for Rectifcation Environmental Pro- tection Departments; and • Measures on Implementing Seal-up and Seizure of Assets by Environmental Protection Departments (Seal-up Measures). These measures came into force on January 1, 2015, together with the new EPL. The measures detail the criteria for applying the rele- vant penalties under the new EPL and expand the application of such penalties to some extent. The Fines Measures and Seal-up Measures both stipulate the typical misconduct subject to fnes or which would result in seal-up/seizure of assets. In addition, the measures provide a catch-all clause to cover other unlisted actions; effectively allowing the environmental protection departments to expand the range of actions of an enterprise that may be subject to punishment. Local legislation The new EPL grants local congresses powers to legislate on an expanded scope of environmental non-compliance that is subject to cumulative fnes. For example, The People's Congress of Guang- dong Province passed new regulations on environmental protection on January 13, 2015. Under the regulations, cumulative fnes are expanded to the following actions: • Dismantling or leaving idle installation for pollution control without prior approval; • Violating compulsory disclosure requirements by key polluting enterprises; and • Starting construction before submitting EIA documents. Future amendment to EIA Law The EIA Law was implemented in 2003. With the new EPL in place, certain discrepancies have been identifed between the two laws, including the following: • Disclosure of EIA report: The new EPL imposes a new obliga- tion on each environmental protection department to disclose the EIA reports they receive to the public, except for informa- tion involving State and commercial secrets. As the primary law that sets forth the EIA procedures, it is necessary to amend the EIA Law to include the corresponding information disclosure requirements required under the new EPL. • New penalties under the new EPL: The new EPL imposes new penalties to enterprises failing to comply with environmental pro-

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