Beveridge & Diamond
 

China Toughens Contaminated Site Regulations

Beveridge & Diamond, P.C., May 19, 2014

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Multinational corporations with operations in China may wish to take note of recent regulatory developments relating to soil contamination and the redevelopment of former industrial sites. On May 14, China’s Ministry of Environmental Protection (MEP) issued a notice prohibiting the redevelopment of former industrial sites without proper environmental assessment and cleanup. In addition, Shanghai also promulgated a new law on contaminated sites, MEP and the Ministry of Land and Resources released a survey on soil pollution, and MEP announced developments in the drafting of the Soil Pollution Prevention Action Plan.

MEP Notice on the Redevelopment of Former Industrial Sites

The May 14 MEP notice implements prior MEP and State Council directives[1] to prohibit the transfer of land formerly used by an industrial enterprise without an environmental assessment, a risk assessment, and designation of a primary responsible party for site remediation.[2] Additionally, the notice prohibits new development on contaminated sites until remediation is completed.[3] For contaminated sites not undergoing redevelopment, responsible parties are still required to prevent the spread of contamination.[4]

The notice also requires industrial enterprises that are planning to close down or relocate to take proper environmental protection measures. Enterprises are required to contract with a licensed hazardous waste disposal work unit to dispose of hazardous wastes, as well as to properly dispose of non-hazardous solid wastes.[5] Enterprises are also required to publicly disclose information about on-site pollution,[6] prepare contingency plans for dealing with environmental accidents, and take precautions in dismantling their facilities.[7]

Shanghai Contaminated Site Regulation

On May 6, Shanghai promulgated a new law for contaminated industrial and municipal sites.[8] Citing the “polluter pays” principle,[9] the new law holds responsible parties accountable for cleaning up contaminated sites.[10] If the responsible party is unknown or no longer in existence, the county level local people’s government  is responsible for cleanup.[11] (Note that the law – unlike the U.S. Superfund statute – does not differentiate between past and current owners and operators or explicitly address the question of generator liability.) Additionally, prior to a transfer of land, the responsible party must perform environmental and risk assessment of the site, and if necessary, site remediation and verification.[12] If a responsible party fails to do so, local environmental and other bureaus may enjoin redevelopment activity.[13] 

Survey on Soil Pollution

On April 17, MEP and the Ministry of Land and Resources jointly published a survey on soil pollution.[14] The survey revealed that 34.9% of abandoned industrial sites in China are contaminated, and that 16.1% of the nation’s soil overall is contaminated. The survey is notable not only for what it reveals about the extent of historical soil contamination, but also in that it reflects the government’s increased willingness to be more transparent about environmental matters, after claiming just last year that pollution data of this kind were a “state secret.”[15]

Soil Pollution Prevention Action Plan Developments

On March 18, MEP announced that it had approved in principle the Soil Pollution Prevention Action Plan.[16] The five-year action plan aims to effectively preserve soil and clean up some contaminated soils by 2020, in order to protect the safety of agricultural products. The plan will be submitted to the State Council for review before final approval likely, later in 2014.

Beveridge & Diamond advises Chinese companies on the environmental considerations of doing business in the U.S. and, through relationships with a network of Chinese national law firms on environmental issues faced by multinational companies doing business in China.  Firm Principals Karl Bourdeau and Scott Fulton recently traveled to China to participate with various stakeholders in a roundtable discussion – organized in part by Beveridge & Diamond – of China’s evolving environmental regulatory regime and to speak at a seminar organized by China’s Ministry of Environmental Protection on environmental pollution liability insurance. Click here for more information on our China Practice, or contact Karl Bourdeau at (202) 789-6019, kbourdeau@bdlaw.com, or Scott Fulton at (202) 789-6030, SFulton@bdlaw.com.


1. 关于推进城区老工业区搬迁改造的指导意见 (国办发[2014]9号) [Guidance on Promoting the Relocation and Reform of Old Urban Industrial Areas] (promulgated by the State Council, Mar. 11, 2014); 关于保障工业企业场地再开发利用环境安全的通知 (环发[2012]140号) [Notice on Ensuring the Environmental Safety of Redeveloped and Reutilized Industrial Sites] (promulgated by the MEP, the Ministry of Industry and Information Technology, the Ministry of Land and Resources, and the Ministry of Housing and Urban-Rural Development, Nov. 26, 2012).

2. 关于加强工业企业关停、搬迁及原址场地再开发利用过程中污染防治工作的通知 (环法[2014]66号) [Notice on Strengthening the Work of Pollution Prevention in the Course of Industrial Enterprises’ Closing, Relocating, or Site Redevelopment] § 4 (promulgated by the MEP, May 14, 2014).

3. Id. Any remediation must be conducted pursuant to MEP technical guidelines. Id. at § 5.

4. Id.

5. Id. at § 2(3).

6. Id. at § 6.

7. Id. at § 2(1), 2(2).

8.关于保障工业企业及市政场地再开发利用环境安全的管理办法 (沪环保防[2014]188号) [Administrative Measures For Ensuring Environmental Safety During the Redevelopment and Utilization of Industrial Enterprise and Municipal Sites]  (promulgated by the Shanghai Environmental Protection Bureau, the Shanghai Municipal Planning, Land and Resources Administration, the Shanghai Municipal Commission of Economy and Informatization, and the Shanghai Urban Construction and Communications Commission, May 6, 2014), available at http://www.sepb.gov.cn/fa/cms/xxgk/AC45/AC4502000/AC4502001/2014/05/86317.htm.

9. Id. at art. 5.

10. Id. at art. 5(1).

11. Id.

12. Id. at art. 5(2); see also id. at arts. 6-8 (setting forth the procedures for site assessment, remediation, and verification).

13. Id. at art. 15.

14.全国土壤污染状况调查公报 [Survey of the State of National Soil Pollution] (promulgated by the MEP and the Ministry of Land and Resources, Apr. 17, 2014).

15. Zhang Chun, Why should soil pollution data be kept a “state secret”?, China Dialogue (Mar. 4, 2013), https://www.chinadialogue.net/article/show/single/en/5758-Why-should-soil-pollution-data-be-kept-a-state-secret-.

16. Zhang Qiulei, 周生贤主持召开环境保护部常务会议 (Zhou Shengxian convenes MEP routine meeting), MEP (Mar. 19, 2014), http://www.mep.gov.cn/zhxx/hjyw/201403/t20140319_269358.htm

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