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Environmental Protection (No. 9) – New Compliance Challenges after Amendment of Solid Waste Law

2020.05.14 ZHU, He (George)NI, Tianling (Carey Nee)、WANG, Yu、 TANG, TAO

Introduction: The 17th session of the Standing Committee of the 13th National People's Congress, which concluded on 29 April, deliberated and adopted a revised Law on the Prevention and Control of Environmental Pollution by Solid Waste (hereinafter referred to as the "Solid Waste Law") which will come into force on September 1, 2020. This represents the fifth amendment of the Solid Waste Law, with its last amendment being in 2016. To date, China's legislation on the prevention and control of environmental pollution by solid waste has been relatively perfect. This article will sort out the key changes of the new "Solid Waste Law", and based on that, remind enterprises (especially industrial enterprises) of some of the key compliance requirements of solid waste management.

I. What are the key changes in the newly-amended Solid Waste Law?

We have briefly summarized some of the substantial or significant changes made in the newly-amended Solid Waste Law. In particular, the new Solid Waste Law:

1.Made clear the subject that could be held responsible for environmental pollution. The new-amended Solid Waste Law identifies the participants engaged in the generation, collection, storage, transportation, utilization and disposal of solid waste as subjects that could be held accountable for environmental pollution. This definition effectively expands the scope of responsibility for environmental pollution as the current Solid Waste Law identifies the subject as ‘producers, sellers, importers and users’.

2.Made clear the role of independent inspections for environmental protection facilities used for solid waste pollution prevention. Before starting a construction project, the construction unit can carry out an independent inspection for the supporting solid waste pollution prevention and control facilities used in the project (the current Solid Waste Law requires inspection to be conducted and approved by the environmental protection administrative department).

3.Put forward the requirement for entities to establish an industrial solid waste management ledger and to implement information tracing of solid waste (the current Solid Waste Law only requires the establishment of an industrial solid waste management account for hazardous solid waste).

4.Made clear that when solid waste generators entrust others to transport, utilize and dispose of solid waste, the solid waste generator should verify the qualifications and skills of the entrusted party and stipulate the pollution prevention and control requirements in the contract. If not, the solid waste generator will bear joint and several liability with the entrusted party.

5.Made clear that the party engaged in the collection, storage, transportation, utilization and disposal of hazardous wastes should take out environmental pollution liability insurance.

6.Made clear that the solid waste generating entity should obtain a pollution discharge permit and implement a pollution discharge permit management system. This realizes the convergence of the Solid Waste Law with the pollution discharge permit management system as required by the Regulations on the Administration of Pollution Discharge Permits.

7.Substantially increased the punishment for violations of the Solid Waste Law by enterprises. On the one hand, new penalties are provided for newly-added illegal acts under the amended Solid Waste Law. For example, enterprises that fail to establish and record ledgers for its solid waste as explained previously in point 3 will be subject to “a fine of RMB 50,000 to RMB 200,000 Yuan, confiscation of the illegal income, and possible suspension or even termination of business if the circumstances are serious”. On the other hand, existing penalties of the Solid Waste Law have been adjusted to become substantially heavier. For example, the penalties for enterprises that fail to adopt corresponding preventive measures which result in the scattering, outflow and leakage of hazardous waste or other environmental pollution have previously been subject to “a fine of RMB 10,000 to RMB 100,000 Yuan". However, in the newly-amended Solid Waste Law, the penalty is now significantly higher as entities could face “a fine of more than one time but less than three times the required disposal cost, and if the required disposal cost is less than RMB 100,000 Yuan, it shall be calculated as RMB 100,000 Yuan".

8.Added penalties for legal representatives, main responsible persons, directly responsible managers and other responsible persons including financial fines and administrative detention. For example, these people may face “a fine of RMB 50,000 to RMB 500,000, and possible detention for 10-15 days (or detention for 5-10 days if the circumstances are relatively minor) if they are involved in an enterprise that engages in the collection, storage, usage or disposal of hazardous solid waste without obtaining an operating license or without abiding by its operating license.

II. Under the newly-amended Solid Waste Law, what are the key compliance matters that enterprises should pay attention to?

1.Enterprises should strictly abide by and implement the requirements for pollution discharge permits. The new Solid Waste Law provides that solid waste should also be subject to the pollution discharge permit management system as that pollution discharge permits are an important basis for law enforcement by environmental protection departments. Enterprises that generate solid waste should obtain pollution discharge permits in accordance with the law and discharge solid waste strictly according to the authorized pollutant emission types, concentrations, total amount, emission destination and other requirements stipulated in the pollution discharge permit.

2.Enterprises should improve their internal compliance systems. The newly-amended Solid Waste Law proposes multiple systems or requirements covering the whole waste discharge process (from generation to disposal). These include the pollution prevention responsibility system, the solid waste tracing system, and the solid waste management ledger system. Enterprises should formulate or improve their management systems, strengthen training and management of these systems, and implement these systems as required by law. They should also realize and enhance their compliance management systems through regular review and improvement.

3.Enterprises should strengthen their supplier management. Enterprises should carefully perform their legal obligations during the transportation, utilization and disposal of solid waste. The newly-amended Solid Waste Law has strengthened legal responsibility of solid waste generating enterprises. It should be especially noted that when entrusting others to transport, utilize and dispose of solid waste, waste generating enterprises should verify the qualifications and skills of the entrusted party as well as specify the relevant pollution prevention requirements in the contract.

III. Conclusion and Suggestions

There have been substantial adjustments and amendments to the structure and contents of the newly-amended Solid Waste Law. It has set forth clearer provisions on the types of illegal acts that can be committed by enterprises. Thus, enterprises should work on establishing or improving their internal compliance systems according to the newly-amended Solid Waste Law, as well as improve their solid waste management to prevent risks of environmental violations. If you have any specific questions or need any assistance, you may contact us via email at ecoenvpro@junhe.com.

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