Has China’s impact assessment law lost its teeth?

New revisions could make it even easier for companies to build recklessly, say campaigners

China’s Environmental Impact Assessment (EIA) Law, which requires companies to investigate the effect of projects on communities and the environment before starting construction, has been recently revised.

While calls for reform of the existing law are longstanding, environmental groups were still surprised when it unexpectedly appeared on the legislative agenda in April.

Having controversially bypassed public consultation, the revised law (which comes into force on September 1) is not so different from the old, but with one notable exception. Under the revisions, EIAs no longer need to be given the nod before other approvals are granted. In other words, EIA is no longer a prerequisite for other approvals. 

That said the old law was subject to abuse. Under it, developers could still build projects without submitting an environmental impact statement. Part of their penalty for failing to apply would be a retrospectively applied ‘make-up’ assessment, which allowed them to effectively circumvent the restrictions applied by EIA.”

Currently in China, impact assessments must be obtained before other construction permissions can be requested. Under the new law, however, different permissions can be applied for in parallel, which policymakers say will grease the wheels and reduce the amount of time applications spend stuck in process.

Campaigners worry that this will weaken the efficacy of EIAs as a tool for environmental protection. At a seminar organised by international environmental group Friends of Nature in Beijing different opinions were aired.

Hu Jing, an associate professor at the China University of Politics and Law, believes the revision does not diminish the clout of EIAs, generally speaking. He points out that EIA approval is still essential; the only change is to the order in which approvals might be obtained.

However, a recently published comment piece from media site Tencent raised concerns that once time-consuming financial and construction approvals have been granted, the sunk administrative costs will make it harder to exercise the EIA veto. A statement from the Institute for Public & Environmental Affairs said that an easier approvals process would mean companies take the EIA process less seriously.

Xia Jun, an environmental lawyer in Beijing, said that this represents a weakening of the system. In 2014, as part of efforts to simplify governance and devolve power without having to revise the EIA law, the State Council issued an order mandating that prerequisite approvals were only needed for site selection and land use, except for important or very large projects.

Under the new law, that exception has been removed, meaning that the approvals process for huge petrochemical or infrastructure projects can progress in parallel with EIA approval.

Mrs Liu and Mrs Sun, both engineers with many years of EIA experience speaking at the seminar, were blunt: the changes are bound to mean the failure of the EIA system; the Ministry of Environmental Protection is not a powerful body and even under the previous system it was common for construction to start before EIA approval was issued. As the EIA approval is no longer needed to set the wheels in motion, it will be weaker.

Yet at the same time, the revision bolsters penalties for breaches of environmental law, designed to act as a deterrent for reckless developers. Companies previously faced fines of 200,000 yuan (US$29,900) but the range of fines has been raised to 1% to 5% of total project costs. This means fines can now reach hundreds of millions of yuan if rules are breached on very large, billion-yuan projects. There are amounts companies cannot afford to ignore.

The old law was problematic in its own right, in part, because of corrupt practices taking place at a provincial level. In reality, the new law does not touch the substantive part of the EIA process; the old problems can still rear their head under the new regime. 

As public consultation on the new EIA law was skipped over, Xia Jun proposed involving ordinary citizens in the creation of administrative regulations (including the formation of rules around public participation in the EIA process).

Xia Jun told chinadialogue that the EIA process is just one part of environmental management, and cannot be expected to resolve all problems. “In terms of environmental impact, the initial EIA process and later management of pollution are equally important.”

Public opinions on a consultation draft of subsidiary legislation relating to the EIA consultation process were solicited in late April but since then no official statement has been made. The discussion around this critical issue in China remains very much alive.