To implement the new Environmental Protection Law, strictly punish illegal pollution discharges and regulate the implementation of daily penalty, MEP issued Measures on Daily Penalty by Competent Environmental Department (hereinafter referred to as Measures). The reporter conducted an interview with official from MEP Bureau of Environmental Supervision on the Measures.
CEN: Please give us some background to the formulation of the Measures?
A: First, daily penalty is an urgent need of strengthening environmental protection. Before the revision of the Environmental Protection Law, China’s law on environmental protection and administrative regulations provided minimal penalty which is far below the pollution control cost and gains obtained from illegal production. High cost of compliance and low cost of non-compliance is ubiquitous. This leads the companies to would rather choose law-breaching than fulfil the legitimate obligations of pollution control in the pursuit of maximum profit. This is an important cause of frequent occurrence of environmental infringement and repeated violation of pollution discharge companies despite being imposed of fines from time to time. If the penalty by environmental department fails to deter environmental violations, companies won’t pay attention to environmental protection and the illegal behaviors will not be corrected in time. To solve this problem and by drawing upon current domestic and international experiences, the new Environmental Protection Law provides the daily penalty system. This is to say, the number of daily fine is calculated by the number of days when the polluters refuses to correct its behavior. The longer the period of violation lasts, the heavier the fines are. This will ensure the penalty is proportional to the crime, hence solving the problem of high cost of compliance and low cost of non-compliance. It also serves the purpose of urging the violators to correct the wrongdoing promptly.
Second, formulating the Measures is the urgent need of implementing the new Environmental Protection Law. Daily penalty system broke down the limit of fines. No upper limit of fines is undoubtedly the Sword of Damocles for polluting companies. However, as a brand new system, EPBs at all levels have no practical experience in it and it is necessary to formulate detailed measures to set out scope of application, procedures of implementation and means of enforcement. Only in this way can this system become a strong tool for environmental departments to combat environmental infringements and urge polluters to assume their responsibilities as the main party for environmental protection and environmental improvement.
Third, formulating the Measures is an inevitable demand for administration by law. As for enforcing the daily penalty, on the one hand, the procedures of administrative penalty provided by law should be followed. And on the other hand, it has special procedures and requirements that are different from ordinary administrative penalty. Particularly, daily penalty is a heavy penalty for environmental infringement and concerns the immediate interest of polluters. Therefore, we must ensure the legitimacy and standardization of the practice and fully protect the lawful rights and interests of the person subject to administration. Before the emergence of daily penalty set in this new law, some local regulations have made helpful explorations, which are different from one another. For instance, the Environmental Protection Regulations of Chongqing Municipality provides that environmental department can impose accumulated daily penalty on illegal polluters refusing to correct their behaviors. Environmental Protection Regulations of Shenzhen Special Economic Zone provides specific situations where daily penalty is applied such as discharging pollutants without pollution discharge license (temporary), discharging pollutants in violation of the pollution discharge license (temporary), starting construction projects prior to approval and putting into operation of construction projects without the authorization of environmental departments. Environmental Protection Regulations of Chongqing Municipality does not provide the amount of fine of daily penalty while Environmental Protection Regulations of Shenzhen Special Economic Zone makes it clear that daily penalty is 10,000 yuan/d. To ensure universal application and justice of the law, it is necessary to make unified regulation on the implementation of daily penalty.
CEN: Please tell us the main content of the Measures?
A: There are 22 articles in four chapters in the Measures, specifying the basis, principles, scope of application, procedures and means of implementation of the daily penalty and its relationship with other environmental regulations for concurrent use.
First, it provides the types of illegal activities that daily penalty can be applied to. The first item of article 59 of Environmental Protection Law stipulates that daily penalty applies to illegal pollution discharges by companies, institutions and other production and trading companies.
How to define illegal pollution discharges and what scenarios are included become the first problem that needs to be solved for environmental department to impose daily penalty. China’s environmental regulations have many obligatory provisions on companies, institutions and other production and trading companies discharging pollutants to the environment. These include mandatory provision as well as prohibitory rules. Illegal pollution discharges means to discharge pollutants to the environment in breach of the law. It has two implications. One is to defy the law and the other is to discharge pollutants, but it is not a simple combination of the two. Rather, it stresses the illegal nature of pollution discharge activities and their impact on the environment. Therefore, the Measures list four scenarios of illegal pollution discharges. First, pollutants are discharged exceeding national or local standards or exceeding the index of total discharges for key pollutants. Second, pollutants are discharged through secret pipes, seeping wells and pits, injection or falsifying or fabricating monitoring data, or operating pollution control facilities in an unusual manner to avoid supervision. Third, the discharged pollutants are prohibited by laws and regulations. Fourth, hazards waste is dumped illegally. Meanwhile, the scenarios of illegal discharge of pollutants are many and complicated, so the Measures use other cases of illegal pollution discharge to cover different types. For some common environmental violations, such as polluting companies that fail to declare pollution discharges as required or change their declarations, refuse on-site inspection by environmental departments are not included in the scenarios as illegal pollution discharge because these cases do not directly involve discharging pollution to the environment and do not have a direct impact on the environment.
In addition, item three of article 59 of Environmental Protection Law specifies that local environmental regulations may add the types of violations applying daily penalty. That is to say, the types of violations applying daily penalty are not limited to the scenarios of illegal pollution discharges. Local regulations may provide other violations applied to daily penalty according to local situation of environmental pollution and the needs of environmental management.
Second, the Measures provide procedures for imposing daily penalty. According to the Environmental Protection Law, four conditions must be met to impose daily penalty: companies, institutions or other production and trading companies discharge pollutants against law; the polluters are fined; they are ordered to correct their behaviors; and the polluters refuse to correct their mistakes. There is certain logic among the four conditions: only the companies, institutions or other production and trading companies discharge pollutants against law will they be subject to fine and only when they are ordered to correct their behaviors will there be the situation that they refuse to correct the mistakes.
The procedures of daily penalty aim to combat and correct environmental violations on the one hand, and fully guarantee the legitimate rights and interest of the counterpart of law enforcement on the other hand. The Measures have a chapter with ten articles to make detailed provisions on the procedures of imposing daily penalty. These procedures include first penalty, order of correction, review and decisions on daily penalty.
For the time limit and manner of giving order to correct the problems and in order to achieve the objective of correcting environmental violations in time, the Measures provide that environmental department may order the polluter to stop illegal discharges on site if the illegal discharge of pollutants can be established onsite. For discharging pollutants exceeding standards, environmental department needs environmental monitoring results to draw a conclusion. The Measures state that environmental department shall send the environmental monitoring report to the polluter within three working days upon obtaining the report and order that illegal discharge be stopped at once.
Of the time limit of review and given the promptness of review and feasibility of law enforcement, the Measures state that environmental department shall carry out review on the correction of illegal discharges in the manner of secrete investigation within 30 days upon when the decision letter of rectification is delivered.
During the penalty period of imposing daily penalty, two decisions on administrative penalty should be made. One is the original decision on penalty which is made upon finding out illegal pollution discharge for the first time. And the other is the decision on daily penalty which is made when the polluters are found to refuse correcting their mistakes in the review. The decision on daily penalty shall be made following the original decision on penalty.
Third, the Measures specify the content and means of order for rectification. Order for rectification is a prerequisite for daily penalty and moreover, an important part linking the whole procedure. It is important to clarify two things. One is about how to rectify the problems in the order and the other is about how to give the order, which concerns the content and means of rectification order.
The aim of daily penalty is to timely correct environmental violation and to avoid further impact of the violations on the environment. Therefore, the Measures state that the content of rectification order is mainly to stop illegal pollution discharge at once.
Meanwhile, to protect the legitimate rights and interest of law enforcement counterpart, the Measures require environmental department to produce decision letters on rectification order when giving the order, specifying the concrete items of rectification, possible legal consequences of facing daily penalty if polluters refuse to correct their problems and the way and time limit of applying for administrative reconsideration or lodging an administrative appeal.
Fourth, the Measures set judge criteria for rejecting illegal pollution discharge. Corresponding to the content of rectification order, rejection of rectification is behavior that fails to stop illegal discharge as required. The Measures state that if environmental department find out in their review that polluters continue to discharge pollutants illegally, then the behavior is considered rejection of rectification. As in practice, there may be situation that polluters refuse or obstruct environmental department to recheck to avoid daily penalty, the Measures state that those refuse or obstruct recheck are also considered rejection of rectification. If polluters stop illegal discharge as required, the Measures state that if environmental department find out that polluters in the review that polluters have corrected illegal discharge or have suspended production, business or shut down, then daily penalty will not be imposed.
Fifth, the Measures provide the means of calculation of daily penalty. Daily penalty is a dynamic penalty that fines accumulate continuously as the days of violation continue. The number of days calculated and the fines per day are two key factors of daily penalty. According to article 59 of Environmental Protection Law which indicates daily penalty is imposed by the number of original fines, the Measures provide that the amount of fines per day for daily penalty is the same as the fines set in the original decision letter of penalty and total amount of fines of daily penalty equals fines set in the original decision letter of penalty multiply the number of days subject to daily penalty. As for the determination of the number of days, it should be noted that the order of rectification is the precondition of rejection of rectification. The Measures specify that the calculated number of days for daily penalty begins from the second day when the decision letter for rectification is delivered to polluters till the day when environmental department find out illegal discharge in their review. If polluters are found rejection of rectification in the second review, the days of daily penalty will accumulate.
To fully play the role of daily penalty as a prodding for polluters to correct their environmental violations promptly and in accordance with the principle that penalty agrees with offences, the Measures provide that there is no limit on the times of daily penalty. If polluters are ordered to rectify their problems and they refuse to correct the behavior, environmental departments shall make a second order for rectification according to the time limit and manner set in the Measures while imposing daily penalty, hence brining in the next period of daily penalty. If the polluters have been given many rectification orders yet still refuse to correct, environmental departments shall impose daily penalty without the restriction on the times of punishment until the illegal discharge come to an end.
Sixth, the Measures clarify the relationship of daily penalty with other related environmental regulations for concurrent use. In the cases that daily penalty is applicable to certain environmental violations, sometimes other punishment measures can also be applied according to Environmental Protection Law such as order for limited production, suspension of production for rectification or seizure and detainment. Discharge of pollutants by evading supervision is a case in point. Therefore, the Measures give an explanation for the concurrent use of daily penalty and other environmental regulations. It states that environmental department may concurrently apply limited production, suspension of production for rectification or seizure and detainment to illegal pollution discharge that is subject to daily penalty. If above measures have successfully forced polluters to stop illegal discharge, then environmental department will not impose daily penalty. Order for limited production, suspension of production for rectification or seizure and detainment shall be executed strictly according to Measures on Enforcing Limited Production and Suspension of Production for Rectification and Measures on Enforcing Seizure and Detainment.
CEN: What are the things that should be noted while enforcing the Measures?
A: The first is on the identification of pollution discharge by way of evading supervision. The second item of article five in the Measures involves in such cases. The ways of evasion include discharging pollution through secret pipes, seeping wells and pits and injection, etc., falsifying or fabricating monitoring data and operating pollution control facilities in an unusual way. They also include discharging pollutants into external environment without effective treatment of pollutants and through evading supervision. For instance, wastewater is discharged to the external environment through pipes without effective treatment or industrial solid waste is dumped to the environment outside of the factory. In specific, there are different situations on unusual operation of pollution control facilities such as discharging pollutants without treatment and direct discharge by draining pollutants from the middle of the work procedures of treatment facilities. Please refer to MEP document (file No. (2003)177) for other situations. Identification of discharging water pollutants through evading supervision may refer to explanations in MEP document (file No. (2008)308) for item 2 of article 22 in Law on Prevention and Control of Water Pollution, “Discharge of pollutants by way of secretly setting up pipes or other evasions is prohibited.”
The second is about the timing of decision on daily penalty in relation to original decision on penalty. The environmental department shall make an investigation and collect proof when they find out illegal pollution discharge and produce an independent decision on administrative penalty on the violation of that day. If the polluters refuse to correct their behavior and environmental impose daily penalty by law, then the environmental department shall send the decision letter on daily penalty after the original decision letter on penalty is sent. However, the timing for sending notification letter on daily penalty is not restricted by the original decision letter. That is to say, the notification letter of daily penalty can be sent prior to original decision letter of penalty. When the organization being penalized applies for reconsideration or lodges litigation, the execution of daily penalty is not stopped. That means, the decision on daily penalty can be made before the end of reconsideration or litigation.
The third is on the handling of reconsideration or litigation on the order of rectification brought forth by polluters. Article nine of the Measures provides that polluters may bring forth reconsideration or litigation against the decision letter on rectification. The reconsideration or litigation by polluters will not have any impact on the review of environmental department on their implementation of rectification. But if the environmental department finds out in the review that polluters fail to stop illegal discharges, they shall decide on whether to impose daily penalty after the reconsideration or litigation.
The fourth is on the execution of accumulating the number of days for daily penalty in the case of refusing rectification after several rechecks. Article 17 of the Measures provides that the days of daily penalty will accumulate if polluters refuse to correct their problems in the second check. Accumulated days refer to the period starting from the second day upon the decision letter of rectification is delivered to the polluter till the last check where the polluters are found not to correct illegal discharges. If the environmental departments find out that illegal discharge has been correct during review, then they will not execute daily penalty; if they find out illegal discharge as provided in article five of the Measures in later review, they shall make a penalty decision again and the period of daily penalty will be recalculated.