MEP announced the “Implementation Measures of Daily Penalty by Competent Environmental Protection Departments” (hereinafter referred to as the Measures), for the purposes of enforcing the new environment law, punishing the pollution behaviors against laws, and setting standards for the implementation of the daily penalty measure. A reporter with CENEWS interviewed a leading official with MEP Department of Environmental Supervision and Inspection on the promulgation of the Measures.
Q: Would you please introduce the background for the promulgation of the Measures?
A: First and foremost, to implement daily penalty is the pressing need for strengthening environmental protection effort. Before the amendment, the amount of penalty imposed on environmental offences by the environmental protection law and administrative regulations in China were far below the industry’s pollution control cost and law-breaking yields, and the “high cost for compliance and low cost for incompliance” phenomenon was ubiquitous. As a result, the industry, drawn by the objective of maximizing profits, rather break law and bear relatively tender legal liabilities than fulfill the legal obligations for pollution control. This was one of the reasons why environmental offences happened a lot and law-breaking businesses repeated their offences in spite of the punishments. When the environmental protection departments’ punishments could not awe environmental offences, the industry would neither pay attention to environmental protection effort nor correct their offences in time. To solve this problem, the new law stipulates the daily penalty system based on national and international experience, which is to add up the penalties for each day on which the industry refuses to correct their illegal pollution behaviors, so the longer the offence lasts, the higher is the amount of penalties, so as to match the offences with punishments, effectively address the problem of “high cost for compliance and low cost for incompliance”, and urge for the timely correction of environmental offences.
Second, to develop the Measures is the pressing need for enforcement of the new environment law. The daily penalty system has canceled the upper limit to the penalties imposed on environmental offences, rendering the penalties to be limitless. It is undoubtedly a sharp sword hung high above the illegal polluters. However, as daily penalty is a whole new system, local environmental protection departments at all levels generally have no experience in practice, so it is of pressing need to develop concrete measures to specify the scope of application, procedures, and penalty-counting approaches, so that the daily penalty system can truly become one of the powerful weapons to be wielded by environmental protection departments to crack down on environmental offences, and one of the potent tools to urge the polluters to take main responsibilities for protecting and improving the environment.
Third, to develop the Measures is the inevitable requirement for administration by law. To implement the daily penalty system on the one hand shall apply the administrative punishment procedures as stipulated by law, and on the other hand shall follow special procedures and requirements different from those of general administrative punishments. In particular, daily penalty is a hefty punishment for environmental offences, which concerns the immediate interests of polluters, all the more reason to ensure the validity and standardization of its implementation and safeguard the legitimate rights and interests of the counterparties. Before the new law specifies this system, some of the local regulations have already made useful explorations. However, relevant articles of local regulations differ a lot from each other. For example, the “Regulations of Chongqing Municipality on Environmental Protection” stipulates that the environmental protection departments may impose daily penalty on any business which refuses to make corrections on their illegal pollution activities, while “Regulations of Shenzhen Special Economic Zone” stipulates the varieties of environmental offences applicable to daily penalty, which include not only pollution behaviors such as pollution release without getting “temporary” pollution permits, and pollution release not as specified by “temporary” pollution permits, but also illegal behaviors other than pollution release, such as starting a project without getting environmental approval and putting a project into commercial operation without getting the approval of environmental protection departments. Chongqing regulations do not specify the exact amount of daily penalty, while Shenzhen regulations set the daily penalty at 10,000 yuan. Hence, in order to apply the same law and maintain the justice of law, it is necessary to set unified regulations on the daily penalty to be imposed by local environmental protection departments.
Q: Would you please introduce the main contents of the Measures?
A: The Measures has 22 articles in four chapters, which specify the basis, principles, scope, procedures, and penalty-counting approach of the daily penalty system, as well as its compatibility with other environmental protection systems.
First, the Measures specifies the varieties of environmental offences applicable to daily penalty. Paragraph 1 of Article 59 of the environment law stipulates that the daily penalty shall apply to the illegal pollution release behaviors of industries, public institutions, and other business operators.
How to identify illegal pollutant release behaviors and what specific circumstances do they include has become the paramount problem to be addressed by environmental protection departments in an effort to implement the daily penalty system. There are many obligatory provisions, both mandatory and prohibitive ones, in Chinese environmental laws and regulations on the pollutant release behaviors of industries, public institutions, and other business operators. “Illegal pollutant release” refers to the release of pollutants to the environment against laws and regulations. The definition has two factors, i.e., “illegal” and “pollutant release”, which are not simple superposition but highlight the illegal nature of the pollutant release and the impact of such release to the environment. Accordingly, the Measures lists four typical circumstances of “illegal pollutant release”: a. release of pollutants against national or local pollution standards, or the total pollutant load control indicators for key pollutants; release of pollutants through regulation-evading ways such as hidden pipes, seepage wells, seepage pits, irrigation, or tempering with or falsifying monitoring data, or not running pollution control facilities regularly; release of pollutants prohibited by laws and regulations; dumping of hazardous wastes illegally. In the meantime, as there are many complicated circumstances of “illegal pollutant release”, the Measures specifies the miscellaneous provision on “illegal pollutant release in other circumstances”. For other common environmental offences, for example, the polluter not declaring pollutant release or alterations to such release, or blocking the environmental protection departments to conduct field investigations, as they are not directly related to “release of pollutants to the environment”, do not have direct environmental impact, so they are not included as circumstances of “illegal pollutant release”.
Moreover, local regulations may add the varieties of illegal behaviors subject to daily penalty, based on the practical needs for environmental protection, in accordance with Paragraph 3, Article 59 of the environment law. It means that the varieties of illegal behaviors subject to daily penalty are not restricted to the circumstances of “illegal pollutant release”, and local regulations may specify other environmental offences which are applicable to daily penalty, based on the characteristics of local environmental pollution and the need for environmental management.
Second, the Measures specifies the procedures for implementing the daily penalty system. The following four conditions shall be met in order to impose the daily penalty: illegal release of pollutants by industries, public institutions, and other business operators; being fined; being ordered to make corrections; refusing to make such corrections. There is certain logic among the four conditions: the industries, public institutions, and other business operators have to release pollutants illegally before they get fined; and they have to be ordered to make corrections before they refuse to do so.
The implementation procedures shall be conducive to cracking down on and correcting environmental offences and fully safeguard the legitimate rights and interests of the counterparty concerned. A separate chapter of the Measures which has 10 articles specifies the procedures to implement the daily penalty system, including imposing initial punishment, ordering the offender to make corrections, re-inspection, and making the daily penalty decisions.
For the timeframe and approach to make the corrections as ordered, in order to timely right the wrongs of environmental offences, the Measures stipulates that the environmental protection departments shall order the polluters to stop the illegal release of pollutants during field investigations if they can identify such offences right on the spot. As environmental protection departments shall identify excessive pollutant release through environmental monitoring, the Measures provides that environmental protection departments shall have the environmental monitoring report delivered to the offender concerned within three working days and order it stop the illegal release of pollutants immediately.
For the time limit of re-inspection, considering the time requirements for the re-inspection and the feasibility of enforcement practice, the Measures stipulates that the environmental protection departments shall organize re-inspection on the illegal pollutant release of offender concerned by covert operations within 30 days as of the delivery of the decision on ordering the corrections of such offences.
Two decisions of administrative punishments shall be made during one cycle of daily penalty, a. the punishment imposed after the first inspection identifies the illegal release of pollutants, i.e., the original punishment decision; b. the decision of daily penalty made after re-inspection finds the offender concerned refuses to correct their offences. As for the sequencing of the two decisions, the Measures provide that the decision of daily penalty shall be made after the original punishment decision is made.
Third, the Measures stipulates the contents and form of the corrections ordered to make. “To order to make corrections” is the prerequisite for imposing the daily penalty and a key link connecting the preceding and following step of the procedures. Two aspects need to be specified, i.e., to order to make what corrections, and how to give the order, which is, the contents and form of the corrections ordered to make.
The purposes of the daily penalty are to timely correct environmental offences and avoid greater impact on the environment. Therefore, the content of such order made by the environmental protection departments in accordance with the Measures is to immediately stop the illegal release of pollutants.
Meanwhile, in order to safeguard the legitimate rights and interests of the counterparties, the Measures stipulates that the environmental protection departments, while giving the order of making corrections, shall give a written decision about such order, and specify in the decision the concrete contents of the order, the possible legal consequence of daily penalty if the offender concerned refuses to make such corrections, and the route and time limit for appealing to administrative review or filing administrative lawsuits.
Fourth, the Measures sets the standards for measuring the behavior of refusing to correct the illegal release of pollutants. Corresponding to the content of the order to make corrections, “to refuse to make corrections” of illegal release of pollutants means not immediately stopping the illegal release of pollutants as required. For the identification of the refusal, the Measures stipulates that the refusal shall be identified when the environmental protection departments find the continuous illegal release of pollutants during the re-inspection. As polluters may in practice refuse or block the environmental protection departments from re-inspection in order to evade daily penalty, the Measures also define such circumstances as refusal. For those who stop the illegal pollutant release as required, the Measures stipulates that the environmental protection departments shall not activate the daily penalty procedure if they find in the re-inspection that the polluters have already corrected their illegal pollutant release or already suspent operations, gone out of business, or shut down.
Fifth, the Measures specifies the counting approach of daily penalty, which is, the dynamic penalty-counting approach. The amount of total penalty is adding up with the continuity of the environmental offence day by day. The number of penalty days and the amount of daily penalty are two key factors of the daily penalty system. In accordance with Article 59 of the environment law on “setting the amount of daily penalty the same as that of the original penalty”, the Measures stipulates that the amount of daily penalty shall equal to the amount of penalty decided by the original written decision on punishment; and that the total amount of daily penalty shall be computed by multiplying the amount of original penalty by the number of penalty days. With regard to deciding the number of penalty days, as “being ordered to make corrections” is the prerequisite for “refusing to do so”, the Measures provides that the number of penalty days is calculated from the second day since the delivery of the written decision about the order, to the day on which the environmental protection departments find the illegal pollutant release in re-inspection; the penalty days shall add up if the offender concerned still refuses to make corrections during a second re-inspection.
To give full play to the role of daily penalty in urging polluters to timely correct their environmental offences, the Measures, in the principle of “matching liability with punishment”, provides that the implementation of the daily penalty system can be repeated as much as needed. When a polluter refuses to correct the environmental offence as ordered to, the environmental protection departments shall, while imposing the daily penalty in accordance with law, give another order of correction in accordance with the time limit and method specified by the Measures, and start another cycle of daily penalty. If the polluter still refuses to make corrections despite multiple orders, the environmental protection departments shall repeat the implementation of the daily penalty system until the environmental offence concerned is stopped.
Sixth, the Measures specifies the compatibility of the daily penalty system with other relevant environmental protection systems. In accordance with the environment law, among the environmental offences applicable to daily penalty, some may apply several measures including ordering the polluters to restrict operations, suspending operations to make corrections, or taking seal-up and seizure measures, for example, release of pollutants by evading regulation. In response, the Measures states the compatibility of the daily penalty with other environmental protection systems, and provides that the competent environmental protection departments may apply one of the following measures to the same offence, including restricting operations, suspending operations to make corrections, or taking seal-up and seizure measures, while imposing the daily penalty on illegal release of pollutants in the meantime; and if the measure taken has put a stop to the said offence, the daily penalty shall no longer be applied. The aforementioned measures shall be implemented strictly in accordance with “Implementation Measures of Competent Environmental Protection Departments on Restricting Operations and Suspending Operations to Make Corrections”, and “Implementation Measures of Competent Environmental Protection Departments on Seal-up and Seizure”.
Q: Would you please tell us what should we be noted while implementing the Measures?
A: First, concerning how to identify the behavior of regulation-evading pollutant release. Subparagraph 2 of Article 5 of the Measures is about the release of pollutants by regulation-evading approaches, which include discharging wastewater through hidden pipes, seepage wells, seepage pits, and irrigation, tempering with or falsifying monitoring data, or not running the pollution control facilities regularly, as well as other release of untreated pollutants into the outer environment while evading the regulation of environmental authorities, for example, discharging untreated wastewater into the outer environment through visible pipes, and dumping industrial solid wastes outside of the premises without permission. There are many circumstances that constitute irregular operation of pollution control facilities, for example, release of untreated pollutants into the environment, and release of semi-processed pollutants into the environment, see Huanfa〔2003〕177 document of the former SEPA. For the identification of the behavior of discharging water pollutants through regulation-evading approaches, we may refer to MEP Huanhan〔2008〕308 on interpretations of the Paragraph 2 of Article 22 of water pollution control law on “it is prohibited to lay down hidden pipes or take other regulation-evading approaches to release pollutants”.
Second, concerning the fact that the timing of making daily penalty decision is restricted by that of the decision made on original punishment. The competent environmental protection departments shall make investigations and secure evidence once they find the polluters release pollutant illegally, and make an independent decision on administrative punishment for the offence identified on the day of inspection. If the polluters refuse to correct their illegal behavior, and the environmental protection departments have imposed daily penalty in accordance with law, the written decision of daily penalty shall be issued after the written decision on original punishment is issued, however, the timing of issuing the notice on daily penalty shall not be restricted by the timing of the decision made on original punishment, which means the former may precede the latter. If the recipient of the original punishment appeals to administrative review or files an administrative lawsuit about the original punishment, the daily penalty shall not be discontinued, which means the written decision on daily penalty may be made before the conclusion of the administrative review or lawsuit.
Third, concerning the response to administrative review or lawsuit about the decision to order the polluters to make corrections. Article 9 of the Measures stipulates that the polluters may appeal to administrative review or file administrative lawsuit about the written decision to order them to make corrections. If they do, the environmental protection departments shall still conduct re-inspection on their progress in making such corrections. However, if the environmental protection departments find the polluters have not stopped the illegal release of pollutants, they shall make a separate decision about whether to give the daily penalty upon the conclusion of the review or lawsuit.
Fourth, concerning the accumulation of penalty days under the circumstances of refusing to make corrections despite multiple re-inspections. Article 17 of the Measures stipulates that if the polluters still refuse to make required corrections despite multiple re-inspections, the penalty days shall be accumulated. The accumulation means summing up the days from the second day after the delivery of the written decision on ordering to make corrections through the day on which the polluters are found to refuse such decision during the final re-inspection and taking them as the penalty days. If the environmental protection departments find during re-inspection the polluters have already corrected their behaviors, they shall not activate daily penalty. If the polluters are to be found with the circumstances specified by Article 5 of the Measures during the inspection campaigns afterwards, the environmental protection departments shall make a new decision about the punishment, and reset the penalty cycle of the daily penalty.