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Collection of Pollution Discharge Fee Guaranteed by Legislation – An Interview with Lu Xinyuan, Director General of Environmental Supervision Bureau, State Environmental Protection Administration

State Environmental Protection Administration (SEPA) issued Measures on Checking Collection of Pollution Discharge Fees (hereinafter referred to as Measures), which will be put into effect as of Dec. 1, 2007. Based on the Regulation on Collection, Use and Management of Pollution Discharge Fees, the Measures serve to regulate the collection of pollution discharge fees and provide legal basis for finding out and correcting any violations in fee collection and ensure law-based, all-round and full-sum collection. To help readers understand the necessity and major measures, our journalist made an interview with Lu Xinyuan, Director General of Environmental Supervision Bureau, SEPA. 

J: In recent years, collection of pollution discharge fee has drawn much attention. In 2003, the government unveiled Regulation on Collection, Use and Management of Pollution Discharge Fees, followed by a series of rules and documents, which ensured regulated implementation of the policy. What are the necessities for formulating the Measures?

Lu: Since the implementation of Regulation on Collection, Use and Management of Pollution Discharge Fees (hereinafter referred to as the Regulation), the collected sum of pollution discharge fee has been rising year on year due to collection by total discharge, multiple factors and increased charging standard. In 2003, the collected fees totaled 7.4 billion yuan. The sum grew to 9.4 billion yuan, 12.3 billion yuan and 14.4 billion yuan in 2004, 2005 and 2006 respectively, almost jumping by over 30% year on year. By regulating pollution discharge fees, collection and expenditure of the fees have been settled and the reform of pollution discharge fee has achieved primary result. However, some problems still exist in collection and use of the fees which should be further regulated.

First, the Measures were formulated to ensure the fees are collected in full and in a legal and all-round manner. It will also serve as an effective solution to local administrative interventions. Currently, some EPBs are not able to verify the pollution discharge amount due to limited funds, personnel and monitoring conditions. A few departments do not perform their duties conscientiously and even set the collection amount on a negotiation basis or as a favor. Some local governments interfere by developing their own policies such as designating free areas, company peace day or even reduce or exempt levies on their own to attract investment. The main cause of inadequate collection of pollution discharge fee is the same as that affecting law enforcement, which is local administrative intervention. 

Second, the Measures are one of the supporting rules of the Regulation. To regulate collection of fees, we have considered checkup of fee collection when drafting the Regulation and set up relevant articles. After three years practice, the Measures formulated at present are more targeted than the Regulation.

Third, to regulate the checkup of fee collection, we also need to formulate the Measures. Currently, many EPBs started checkup of fee collection. Their exploration is worth learning but the action has not gained much legal force. Therefore, we need to have the Measures at national level to regulate checkup work at local level.

J: How do the Measures define the main body and recipient of the checkup?

Lu: The first paragraph of article 2 of the Measures made it clear as to who will be the main body of the checkup. The national and provincial EPBs have limited capacity for checkup due to lack of hands and numerous tasks. At municipal level, EPBs are relatively well-funded and have more knowledge on collection. Moreover, most problems occurred at county level and districts. So municipal EPBs should play a larger role in the checkup of county and district activities. As a result, the Measures give the authority of checkup of fee collection to national, provincial and municipal EPBs.

As for the target of checkup, the Measures provide that checkups focus on collection of pollution discharge fees by EPBs at lower level. That means it will be internal checkup. The reason is because collection and payment of pollution discharge fees are the two sides of one issue. Checkup of fee collection will be linked to examination of fee payment. Therefore, provision on internal checkup will be more specific and will be more effective to protect and regulate fee collection by environmental departments. In the meantime, the Measures also allow investigation of polluters through filing during checkup, which guarantees effective operation of the checkup.

The checkup provided in the Measures does not mean to interfere with routine collection of pollution discharge fees. Instead, it targets illegally collected fees and noncompliance of polluters in the payment, which is ex post checkup. This draws a distinction between normal fee collection and checkup by environmental departments at higher level.

J: What are the applicable scenarios to the checkup identified by the Measures?

First it enumerates seven scenarios subject to checkup including fees taxable yet uncollected, fees not collected by verified discharge amount and collection against procedures. In addition, the Measures sum up other possible scenarios by describing other violations in the process of fee collection. Article 9 of the Measures separately lists the cases where fees are collected by agencies other than EPBs and includes them into the scenarios under checkup so that the scope of checkup is more complete.

The Measures define that cases where pollution discharge fees are not paid adequately will not be subject to the time limit of retroaction. So long as environmental inspection agencies find out inadequate payment or collection and evidence to support it, they are authorized to recover what was left.

J: What solutions do the Measures offer to deal with problems found during checkup?

Lu: The Measures provide solutions to 8 types of cases ranging from fees taxable yet uncollected, collection against legal procedures, collection by unauthorized agencies, refunding fees overcharged, non-payment by polluters, disobeying the decision of checkup, violation by government officials and cases to be handled by other agencies. The solutions are as follows:

First, to pay overdue pollution discharge fees. For fees taxable yet not collected or collected inadequately by EPBs, EPB at higher level may order polluters to make up directly. The Measures clarifies where the polluter should pay, i.e. the commercial bank designated by EPBs for checkup. It can be the commercial bank where the EPB in charge of collection is located or the bank where the EPB in charge of checkup is located. Whichever bank the fees are paid to, the bank shall turn the set proportion of fees to national and local treasury.

Second, to withdraw the power of fee collection. This is the most deterrent among all. According to the Measures, pollution discharge fees taxable yet not collected or collected inadequately, or collected by other agencies such as collection bureau, if things are serious or problems not corrected beyond time limit, EPB of the higher level will verify and collect all the pollution discharge fees of the jurisdiction directly. But the action will not last more than a year. Verification and collection of pollution discharge fees by the higher level of EPB will definitely break through local administrative intervention. This provision was made based on article 7 of the Regulation.

Third, to deal with cases against legal procedures. Article 19 of the Measures gives detailed prescription on cases that EPB in charge of collection fails to press polluters to pay or ask the court for mandatory execution when polluters refuse payment or did not pay enough. Other cases against legal procedures such as EPBs fail to make decisions on reconfirmation on time, fail to deliver notice on payment of pollution discharge fees, fail to use unified receipt for administrative charges or make announcement on collection, will be ruled by EPB at higher level for rectification within a set time limit pursuant to article 20.

Fourth, on cases where rulings are refused to be accepted. Such cases are divided into two types by the Measures. One is caused by polluters for inadequate payment. In this sense, the rest payables should be recovered and overdue fine should be demanded by 2‰ on a daily basis. The overdue fine and the recovered sum should be turned over to the national treasury. The other type of less payment of pollution discharge fees is caused by the collection agency. In this case, only unpaid fees are recovered. No overdue fine is demanded. To be specific, the overdue fine is calculated from the day that pollution discharge fee is overdue rather than the time when a checkup decision is made. If polluters still refuse to pay pollution discharge beyond the time limit, they will face mandatory execution by local people's court where the EPB in charge of checkup is located according to article 89 of the interpretation on issues related to the Administrative Procedure Law of the People’s Republic of China.

Fifth, to deal with polluters against law. The Regulation has made clear punishment provision on cases where polluters refuse to pay or delay pollution discharge fees, or obtain the privilege of reduced, exempted or delayed payment through cheating. Therefore, the Measures do not make any other provisions. 

Sixth, to deal with responsible government officials. Article 24 of the Measure lists three types of infringement by government officials in the process of fee collection and turning fees over to the treasury. Punishment is defined in Article 25 of the Regulation and Article 5 of Provisional Regulation of Punishment on Official Infringement in Environmental Protection Departments (Ministry of Supervision and SEPA Decree No. 10).

(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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