Newsletter
Recent Developments of Taiwan’s and China’s Environmental Protection Laws and Advice for Enterprises
In the past years, environmental protection issues have attracted attention from people around the world. Both Taiwan and China have spared no effort to ensure protection of the environment, and amended environmental protection laws to set stricter emissions standards and impose more legal liabilities on violators. Moreover, both sides’ government agencies overseeing environmental protection are enforcing the law more aggressively. Under such circumstances, enterprises must be more diligent in observing environmental protection laws to decrease their operational risks. In this article, we will discuss key developments of amendments to environmental protection laws and enforcement of such laws made by Taiwan and China in recent years. We will also share our experience in providing legal services regarding compliance with environment-, safety- and health-related laws in the past years and give suggestions for corporate compliance with environmental protection laws.
I. Developments in Taiwan
Polluters Are Held Responsible
Article 190-1 of the Criminal Code was amended on June 13, 2018. According to the amended article, a factory or business proprietor, supervisor, agent, employee or other personnel who intentionally or negligently throws, abandons, drains, releases or otherwise allows toxic substances or any other substances harmful to health to pollute the air, soil, or rivers or other bodies of water and thereby causes harm shall be sentenced to imprisonment for no more than seven years and may also be fined no more than NT$15 million.
Amended Article 190-1 and pre-amendment Article 190-1 define violator differently. Under the amended article, a person does not have to be likely to cause injuries to the public to be considered a violator. Regardless of whether emitted pollutants can cause injuries to the public, the polluters can be subject to criminal investigation or be held criminally responsible. Moreover, the amended provisions set forth punishments for negligent violators. Persons causing environmental pollution for failing to perform the duty of reasonable care can no longer be exempted from criminal responsibilities on the grounds that they have no subjective intent to unlawfully pollute the environment. The provisions for punishment of negligent offenders under amended Article 190-1 of the Criminal Code are expected to effectively deter factory operators and other people in Taiwan from polluting the environment.
Increased Penalties and Recovery of Illegal Proceeds from Violators
Most environmental pollution cases conclude with administrative fines on the violators. Only when a polluter has committed a severe violation or is a recidivist will the competent authority order business suspension or closure. And polluters may be criminally punished only when they have intentionally emitted toxic or other harmful substances and thereby caused death or material harm. In order to effectively deter violations, legislators in Taiwan increased the criminal punishments and administrative liabilities in environmental laws in the past years.
In the Air Pollution Control Act as amended on June 25, 2018, the maximum administrative fine was raised from NT$1 million to NT$20 million. Where the pollution has caused human deaths, the polluter may be punished with life imprisonment and be fined a maximum of NT$30 million. Where the polluter is a juridical person, the fine may be increased by 10 times. In the Waste Disposal Act as amended in 2017 and the Water Pollution Control Act as amended in 2015, some of the criminal punishments and administrative penalties were increased.
Both the amended Water Pollution Control Act and the amended Air Pollution Control Act contain provisions for recovering more illegal proceeds. In the past, enterprise operators would pay comparatively small fines rather than investing in lawful emission of pollutants. To deter such opportunism, the amended provisions authorize the competent authorities to recover illegal proceeds from polluters as well as fine them. The illegal proceeds legally recoverable include the polluters’ positive interest as well as their negative interest in not expending the money they should have expended or expending less than the amount they should have expended.
Stricter Enforcement of the Environmental Protection Laws
Environmental pollution incidents happen, and it is extremely difficult to report or investigate such incidents. Understaffed, the central and local competent authorities have difficulty discovering pollution sources right away. As a result, it is a challenge to preserve evidence of the pollution sites, which complicates the pursuit of liability and renders Taiwan’s environmental laws toothless.
To step up the enforcement power, the newly amended Water Pollution Control Act and Air Pollution Control Act provide protections to whistleblowers so that the competent authorities may step in as soon as possible. Moreover, in 2017, the Environmental Protection Administration began installing thousands of small air quality sensors around Taiwan. With the data transmitted by those sensors, investigators can quickly find out the times and the places of illegal emissions and examine the sites. Operating 24 hours a day, those sensors can lighten the workload of the long overworked environmental investigators.
According to the EPA’s statistics, since the amendments to several environmental laws in 2015, many more illegal emission cases have been uncovered; the fines imposed by the competent authorities have increased by approximately 1.5 times; and the recovered illegal proceeds have exceeded NT$100 million. The installed air quality sensors have helped uncover 65 illegal emission cases with the collected fines exceeding NT$60 million. The collected air pollution fees also increased by almost NT$20 million. The enforcement of the environmental laws appears to be effective.
II.Developments in China
Developments of China’s Environmental Protection Policies, Enactments, and Enforcement of the Laws
In recent years, China has recognized that in pursuit of GDP growth, it should also value the protection of ecological civilization. In other words, it should achieve an equilibrium between the ecological environment and economic development. This is why the paradigm in China has swung from pollution control to prevention and administration. This paradigm shift spurred a series of enactments, law amendments, and adjustments of enforcement means.
In terms of policies, China presented the Tenth Five-Year Plan for National Economic and Social Development in 2001, in which environmental protection was listed as one of the key national development objectives aimed at aggressively reducing the emission of various pollutants and controlling emission indexes. In the Eleventh Five-Year Plan and Twelfth Five-Year Plan respectively presented in 2006 and 2011, water pollution remediation and air pollution remediation were listed as main remediation objectives. The proposed Thirteenth Five-Year Plan on National Economic and Social Development, approved on October 29, 2015, stressed the development of green industries, held all the polluters responsible for environmental protection, expanded the comprehensive governance of the environment, and proposed to raise environmental quality, implement the most stringent environmental protection systems, and establish an environmental governance system jointly managed by the government, enterprises and the public.
In terms of enactments, after the revised Environmental Protection Law came into force in 2015, the Chinese government amended the Law on the Prevention and Control of Solid Waste Pollution, the Water Pollution Prevention and Control Law, and the Law on the Prevention and Control of Atmospheric Pollution, and proposed the Environmental Protection Tax Law, the Enforcement Rules of the Environmental Protection Tax Law, and the Soil Pollution Prevention and Control Law to improve the pollutant treatment measures for pollution control. Moreover, to enhance pollution control, China is also promoting a marketization mechanism for full information disclosure and comprehensive environmental governance and protection.
In terms of law enforcement, the CPC Central Committee and the State Council of China issued the Opinions on Accelerating the Ecological Civilization Construction in 2015to implement a lifelong accountability system governing officials under which government officials were held accountable for severe destruction of resources, the environment or the ecosystem occurred when they were in office, which was a pendulum swing away from lax enforcement. Take the notice of the decision to stop production issued by Kunshan at the end of 2017 as an example. Reacting to the central government’s call for rigorous management of environmental and ecological protection,Kunshan City’s taskforce for the Two Minus Six Treatment Three Promotion project issued an emergency notice on December 25, 2017, to order heavy industry enterprises situated at the three area watersheds along Wusong River in Zhaotun (Shipu) to stop production work entirely. Even though the enforcement of the notice was subsequently suspended, the issuance of the notice showed the local competent authorities’ and the law enforcement authorities’ attention to environmental protection issues. According to the data announced by the Jiangsu Department of Ecology and Environment in March 2019, between 2018 and March 2019, the department investigated a total of 18,900 cases concerning environmental violations and issued fines totaling RMB 2,116 million, which are year-on-year increases of 35% and 135%. The Department also cooperated with public security bureaus in investigating 537 environmental violation or pollution cases and catching 1,575 suspects, year-on-year increases of 6% and 68%.
Furthermore, in 2018 the Ministry of Ecology and Environment launched the Clairvoyance Project. Under the project, a total of 2+26 cities in Beijing, Tianjin and Hebei, and 41 cities in Yangtze River Delta Economic Zone would be divided into grid units measuring 3 by 3 kilometers for monitoring and controlling air pollution spots using satellite remote sensing technology. The use of the technology will boost the efficiency of regional environmental monitoring and control.
III. Advice for Enterprises
The amendments to the environmental protection laws of Taiwan and China and their enforcement indicate that the scope of environmental polluters’ responsibilities has been widened and their legal responsibilities increased, and any act of polluting the environment will have serious impacts on enterprises’ operations. Hence, how to comply with environmental protection laws and curb operational risks is an important concern to enterprises. Having provided legal services regarding compliance with environment-, safety- and health-related laws in the past years, we have the following suggestions.
1. Identify the environmental protection laws the enterprise should observe and produce an environmental protection law compliance checklist suitable for the enterprise’s operations.
2. Followthe environmental protection law compliance checklist to check whether the environmental protection certificates and licenses, record keeping, field operation and records, records of penalties, corporate legal compliance principles and organizational operations, and documents of environmental control (such as SOP, OCAP, ERP, supervisor’s checklist, and audit items) comply with the law so as to identify legal exposure.
3. Classify the different types of legal exposure revealed throughthe checkup, assess factors such as extent of the exposure, the difficulties in making corrections, and the local law enforcement, before drafting feasible improvement or risk control plans to improve the enterprise’s compliance with environmental protection laws.
4. Establish a management system to effectively maintain compliance with environmental protection laws. The system should include multi-departmental environmental security organizations, maintenance of the validity of environmental protection certificates and licenses, procedures for reviewing environmental protection documents, procedures for identifying amendment to laws and regulations, identification and control of disruptions, effective audit items, and lists of high-ranking officers’ areas of supervision.
5. Training for compliance with environmental protection laws
An enterprise’s compliance with environmental protection laws is one important part of the enterprise’s social responsibility, and can help reduce the enterprise’s operational risks, maintain the enterprise’s sustainable operations and evaluate the enterprise’s overall value. We offer the above suggestions for your reference. Together, we can protect our living environment.