China’s Top Court Clarifies Environmental Tort Liability Standards

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On June 1, 2015, China’s Supreme People’s Court (“SPC”) issued an interpretation, The SPC Interpretation on Several Questions Concerning Applicable Law in the Adjudication of Environmental Tort Liability Dispute Cases (“Interpretation”),[1] clarifying key principles in environmental tort cases.  The Interpretation became effective on June 3, 2015 and governs certain civil lawsuits with underlying claims stemming from environmental pollution and ecological damage.[2]  The Interpretation reflects the SPC’s most recent effort to unify standards for Chinese courts to adjudicate environmental tort claims from several widely applicable statutes.  The key elements of the Interpretation are set forth below.

Liability Standard, Defenses, and Allocation of Liability: The Interpretation clarifies the burden of proof and presumption of liability in environmental tort cases.  Foremost, the Interpretation sets forth the general principle that parties against whom tort claims have been brought can be found liable for harm caused by pollution regardless of fault.  Defendants are required to rebut this presumption with specific provisions from either the separate environmental protection laws or China’s Tort Liability Law (“TLL”), which specifies when tort liability may be waived or reduced.[3]  Notably, defenses based on the fact that the discharge or pollutant in question complies with national or local standards, or that the harm was caused by third parties, are not alone sufficient to rebut the presumption of liability.[4] On the question of causation, the Interpretation places the initial burden on the tort claimant to prove “relatedness” between the polluter and the pollution impact at issue; the burden then shifts to the defendant to prove the absence of a causal relationship.[5]  

Regarding allocation of liability under the TLL, the Interpretation provides additional clarity on when joint and several liability applies, as well as situations involving both divisible and indivisible harms.  The Interpretation also provides several criteria for the People’s Courts to consider when ascertaining the extent of an individual defendant’s liability.

Evidentiary Issues: The Interpretation also addresses two key evidentiary issues.  Concerning evidence proffered by experts, the Interpretation clarifies the evidentiary rules pertaining to reports and data from certain qualified institutions, expert opinions, and reports and data from  public authorities.  The second evidentiary issue concerns evidence preservation after environmental emergencies or accidents.  Specifically, the Interpretation addresses the relevant provisions in the Environmental Protection Law (“EPL”) and the Civil Procedure Law regarding requests to preserve evidence, as well as injunctive or pollution prevention and control measures associated with these requests.

Remedies: Regarding remedies, the Interpretation sets forth the available types of relief for aggrieved parties,[6] clarifies the rules pertaining to claims seeking environmental remediation, and provides for the award of consequential and incidental damages for losses caused by an environmental tort.  The Interpretation also removes the statute of limitation contained in the EPL for several types of injunctive relief.

This Interpretation reflects a  second major judicial guidance[7] from China’s top court addressing environmental lawsuits after the country’s strengthened EPL became effective on January 1, 2015 (see B&D alert on January 9, 2015).  The Interpretation broadly covers the adjudication of environmental tort disputes, with limited exceptions for claims stemming from other bodies of law, as discussed above.  The SPC’s issuance of the Interpretation reflects once again the increasing commitment by China’s authorities to improve the country’s governance of environmental litigation, though its impact on actual judicial practice remains to be seen as new cases emerge before the People’s Courts.

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 regularly travel to China and foster dialogue among various stakeholders regarding China’s evolving environmental regulatory regime. For more information, please contact the authors or any member of our China Practice.

The authors graciously acknowledge the assistance of Shengzhi Wang, a summer associate with the Firm, in the preparation of this Alert.

[1] Zuigao Renmin Fayuan Guanyu Shenli Huanjing Qinquan Zeren Jiufen Anjian Shiyong Falü Ruogan Wenti de Jieshi (最高人民法院关于审理环境侵权责任纠纷案件适用法律若干问题的解释) [The Supreme People’s Court Interpretation on Several Questions Concerning Applicable Law in the Adjudication of Environmental Tort Liability Dispute Cases] (promulgated by Sup. People’s Ct. June 1, 2015), available here (last visited June 4, 2015).

[2] The Interpretation applies to all general civil environmental tort lawsuits, except for the following: notably, claims caused by pollution occurring on adjacent properties, which are covered by property law; labor disputes where the alleged harm is caused by pollution in employment activities (which are governed by other laws); or environmental civil public interest cases, which are subject to a separate SPC interpretation (see B&D alert on January 28, 2015).

[3] These situations generally include where: (1) the tort victim is at fault; (2) the tort victim intentionally caused the harm; (3) third-party liability; (4) force majeure; (5) non-excessive self-defense; and (6) necessity. Tort Liability Law, art. 26-31.

[4] Available defenses include that: (1) it is impossible for the discharged pollutants to cause the harm in question; (2) the discharged pollutant that may cause the harm in question never arrived at the site of harm; (3) the harm in question occurred before the discharge; and (4) other scenarios where the court can ascertain the absence of a causal relationship between the act at issue and the harm.

[5] Interpretation at Articles 6-7.

[6] Available types of relief include: an injunction; removal of the cause of the pollutant; removal of the environmental danger posed by the pollutant; restoration of the resource to its original status; “apology”; and monetary compensation.

[7] An earlier SPC judicial interpretation addressed environmental civil public interest litigation.