China to Enforce Environmental Indemnity in 2018; Government Will No Longer Foot Cost of Pollution Caused by Businesses
Tang Shihua
DATE:  Dec 18 2017
/ SOURCE:  Yicai
China to Enforce Environmental Indemnity in 2018; Government Will No Longer Foot Cost of Pollution Caused by Businesses China to Enforce Environmental Indemnity in 2018; Government Will No Longer Foot Cost of Pollution Caused by Businesses

(Yicai Global) Dec. 18 -- China will expand an environmental liability pilot reform across the country starting from Jan. 1, 2018. The environmental liability requirement coincides with the environmental protection tax, which will be unveiled on the same day. The new decision aims to end a situation under which "pollution caused by businesses are tackled at the expense of the government," said a spokesman of the ministry of environmental protection.

The General Office of the Central Committee of the Communist Party of China and the State Council, China's cabinet, yesterday issued the specific plan on ecological environment liability reform, state-run Xinhua news agency reported. Under the new measures, the government will not foot the cost of pollutions caused by enterprises.

Organizations and individuals that cause damages to the environment will be held accountable, and they -- instead of the government, will be responsible to restore the environment to the original state, Xinhua quoted a ministry official as saying.

The reform will fill a gap in the existing system, the absence of provisions regarding liability for indemnifying damages caused to mineral deposits, rivers, urban land, forests, mountains, grasslands, wastelands, beaches and other state-owned natural resources, the official stressed.

As it is still too early to bring forward legislation on environmental indemnity, the environmental pollution compensation system will be piloted on a nationwide scale, and it will lay the groundwork for legislation in future, he added.

Indemnity Related Rights and Obligations Remain Unclear

The plan provides that all organizations and individuals who have caused damages to the ecological environment against the law should compensate such damages, without exception. 

Provincial and municipal governments may designate departments or agencies to handle specific environmental indemnity cases, according to a recent document released by the State Council.

In reality, most environmental indemnity cases take place at the municipal and prefecture level, the official explained, so it is necessary to increase the range of departments and agencies authorized to claim for compensations on environmental damages. 

Where an environmental indemnity case affects multiple provinces, relevant provincial governments should carry out indemnification in consultation with each other, per the plan.

Effective Implementation of the Environmental Indemnity System

The plan establishes consultation and mediation as a precondition for initiating legal proceedings for environmental indemnity disputes.

Claimants and obligors are required to reach an agreement on compensation through consultation. They may apply for judicial validation of the agreement by a court, and request enforcement if the obligors fail to fulfill all of their obligations.

If an agreement cannot be reached between the parties, claimants should file a lawsuit against the polluter in a timely manner.

The ministry will collaborate with the supreme court and people's procuratorate and other national departments to tackle issues and difficulties encountered by local governments while implementing the pilot reform, the official said.

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Keywords:   Government Regulation,Indemnity,Environment Damage