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Interpretations on the Decision of the State Council on the Amendments to the Regulations on the Environmental Management of Construction Projects

On Jul. 16, 2017, the State Council released the Decision of the State Council on the Amendments to the Regulations on the Environmental Management of Construction Projects (hereinafter referred to as the Regulations), which shall enter into force as of Oct. 1, 2017. The Director General with the Department of Policies, Laws and Regulations interpreted the Regulations.

Q: Can you tell us the background for the amendments to the Regulations?

A: The State Council promulgated the Regulations on the Environmental Management of Construction Projects on Nov. 29, 1998, which entered into force as of the date of promulgation. Over the nearly two decades, the Regulations has played an important role in implementing the environmental impact assessment system and the “three simultaneities” system (the simultaneous design, construction, and operation of the environmental protection facility and the main project) on construction projects, preventing and controlling environmental pollution, and reducing ecological damages.

In the latest reforms on the administrative approvals, the State Council requires streamlining administration and delegating powers, strengthening interim and post regulation, and conducting accountability in the environmental management of construction projects. The ongoing Regulations is outdated and needs to be amended. The main problems are a. the provisions on the acceptance check, trial operation, and environmental impact assessment as one of the prerequisite conditions for project proposal collide with the updated superior laws such as the environmental protection law, air pollution control law, and environmental impact assessment law; b. the provisions on the environmental review are not consistent with the State Council’s reforms to delegate powers, streamline administration, and optimize services, and fall short of the requirements for the transition of environmental management.

Q: What are the amendments based on?

A: The Regulations are amended based on two considerations: a. the superior laws. The revised environmental impact assessment law adopted by the Standing Committee of the NPC in July 2016 decouples the environment review from the project approval, cancels the pre-review by the environmental protection departments, requires the environmental impact registration forms to be filed with instead of reviewed by the environmental protection departments, and metes out heftier punishments over project construction without approval. The environment protection law amended in 2014 and the air pollution control law revised in 2015 removed the provisions on the acceptance check upon the completion of the environmental protection facilities of the construction projects.

b. Documents on the reforms to delegate power, streamline administration, and optimize services, which have been introduced by the central authorities since 2013, requiring functional transitions of the governments, streamlining administration and delegating powers, and strengthening the interim and post regulation.

Q: Can you tell us the process of the amendments?

A: The amendments officially started in 2013 and lasted for five years. MEP as the drafting organization has worked closely with the Legislative Affairs Office of the State Council, and completed the drafting, revision, investigation, and argumentation processes. The relevant State departments, local people’s governments, relevant organizations, enterprises and public institutions, and the general public have been consulted on important matters. The regulations was adopted by the executive meeting of the State Council on Jun. 21, 2017, and promulgated on Jul. 16, 2017.

Q: What do the amendments entail?

A: a. Deletion of the administrative review items: the Regulations withdraws the management over the qualifications of the environmental impact assessment organizations; and requires the environmental impact registration forms to be filed with instead of reviewed by the environmental protection departments, and the acceptance check of the environmental facilities of construction projects to be done by project owners instead of environmental protection departments.

b. Streamlining of the environmental impact assessment procedures: the document deletes the provisions on the trial operation of the construction projects before official operation, removes the prerequisite conditions such as that the water conservation departments shall review the water and soil conservation plans before the environmental review and the pre-review by the environmental protection departments, and deletes the provisions on the environmental approvals as the prerequisites for approval of investment projects and business licenses.

c. More specific requirements for environmental review: the Regulations specifies the five circumstances under which the environmental protection departments shall not grant approvals; specifies the key elements to be reviewed by the environmental protection departments, including the environmental feasibility of the construction projects, the reliability of the analysis, estimation, and assessment of environmental impact, the effectiveness of the environmental measures, and the scientific nature of the EIA conclusions. In the meantime, to ensure the fairness and scientific nature of the review, the environmental protection departments shall organize technical organizations to offer technical assessment services for the environmental impact statements without charging any fee from the project owners or environmental impact assessment organizations.

d. Greater interim and post regulation. The environmental responsibilities of the project owners at the design and construction stages are clarified. The project owners shall implement the environmental measures and secure the green investments at the design stage, and guarantee the funds for and build the environmental facilities on schedule at the construction stage. The Regulations adds provisions on the acceptance check procedures and specifications for the environmental facility upon the completion of the construction project. The project owners shall check and accept such facility in due procedures specified by MEP, make public the information, avoid data fraud, and make sure the facility is qualified before putting the construction project concerned into operation.

e. Heftier punishments. The project owners shall be punished for not going through environmental review before starting the construction of a project, in accordance with the environmental impact assessment law. The Regulations adds the provisions on a penalty ranging between 200,000 and one mil. yuan for not implementing the environmental countermeasures, the estimation of environmental investments, or the post assessment of environmental impact. The Regulations shall severely crack down on such environmental incompliances as putting a construction project into operation without completing the construction of, checking and accepting the environmental facility, or in case the facility fails the acceptance check, with a penalty between 200,000 and one mil. yuan. The penalty shall be raised to range between one mil. and 2 mil. yuan in case the project owner refuses to rectify within a prescribed period of time. And the punishment shall be imposed on not only the project owners like before, but also the individuals liable for the incompliance. The Regulations also stipulates legal liabilities such as making rectifications within a prescribed period of time, and ordering the project to halt operation or be shut down. It adds provisions on the punishment of technical assessment organizations for charging any fee for assessment services, demanding the return of the illegal earnings and a penalty equal to 1~3 times of the amount of the illegal earnings. Furthermore, the environmental protection departments shall include the information on the environmental incompliances of construction projects in the project owners’ social credit records.

f. Enhanced information sharing and public participation. As for the environmental protection departments, the MEP shall organize argumentation and consult relevant stakeholders while compiling the catalogue for the category-specific environmental management of construction projects, and make all the information public. The environmental protection departments shall have the environmental impact assessment statements reviewed and filed online, and disclose the names of the incompliant project owners. As for the project owners, they shall provide public access to the acceptance check reports, otherwise, they shall be ordered by the environmental protection departments to be do, in addition to a penalty between 50,000 yuan and 200,000 yuan. The punishment will also be made public.

Q: How shall the environmental protection facility of the construction project be checked and accepted after being completed?

A: The project owners shall check and accept the environmental facilities of their own construction projects, instead of the environmental protection departments before the amendments. Article 17 of the Regulations authorizes the competent environmental protection department of the State Council to provide for the acceptance check standards and procedures. Accordingly, MEP is working on drafting a guidance document for such acceptance check, in order to urge the project owners to assume the main responsibilities for implementing the “three simultaneities” system, and set standards for the procedures, contents, standards, and information sharing requirements for the acceptance check.

(This English version is for your reference only.In case any discrepancy exists between the Chinese and English context, the Chinese version shall prevail.)

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