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The “most stringent plastic restriction order” has now been issued. How can companies navigate this order?

2021.05.16 ZHU, He (George)NI, Tianling (Carey Nee)、WANG, Yu

Introduction


Along with the implementation of the Law of the People’s Republic of China on the Prevention and Control of Environmental Pollution Caused by Solid Wastes, a series of documents such as the Opinions of the National Development and Reform Commission and the Ministry of Ecology and Environment on Further Strengthening the Treatment of Plastic Pollution (“Plastic Restriction Order”) was issued in January 2020 to prohibit and restrict the production and use of disposable plastic products. It is now regarded as “the most stringent plastic order” to be issued. The Plastic Restriction Order has now been in place for several months. This article will briefly introduce the latest practices related to the Plastic Restriction Order, and aims to provide compliance advice for companies which produce or use plastic products (such as enterprises in the consumer goods industry).


I. What legal consequences will be incurred if a company violates the Plastic Restriction Order?


The Law of the People’s Republic of China on the Prevention and Control of Environmental Pollution Caused by Solid Wastes stipulates that the state now bans and restricts the production, sale and use of non-degradable plastic bags as well as other similar disposable plastic products and sets up a basic principle that the state should encourage and issue guidelines about the use of recyclable products and degradable alternative products. In addition, the Law imposes a duty of reporting in relation to the use and recycling of disposable plastic products on specific industries such as sponsors of retail outlets (such as large shopping malls), e-commerce platform companies, and logistics companies. In case of any violation of the above regulations, the Law further stipulates a provision regarding the administrative penalties which authorize the commercial and postal authorities of local people’s government at or above the county level to make corrections and issue a fine of no less than RMB 10,000 and no more than RMB 100,000. It is also noted that the State Administration for Market Regulation in Shanghai, Hainan and some other regions have already imposed administrative penalties on food and catering outlets for illegally providing disposable non-degradable plastic products in accordance with the above-mentioned Law or local regulations.


We have also observed that in practice, local regulatory authorities may take other restrictive measures against companies that illegally produce disposable non-degradable plastic products, including the trial implementation of differential electricity price policies, public exposure, interviews, inclusion in credit information service platforms, etc.; Under certain circumstances, a producers’ illegal income shall  be confiscated while their business licenses may also be revoked.


What challenges and problems will companies face in complying with the Plastic Restriction Order?


II. The Importance of Environmental Compliance Review and Information Disclosure Compliance for Pre-IPO Companies  


According to the Opinions of the National Development and Reform Commission and the Ministry of Ecology and Environment on Further Strengthening the Treatment of Plastic Pollution and other documents, the state has proposed different schedules for different industries in terms of the restriction, prohibition, production, sale, and use of relevant plastic products. For instance, by the end of 2020, the use of non-degradable plastic bags will be banned in built-up urban areas of municipalities directly under the central government, provincial capitals and cities specifically designated in the state plan, including shopping malls, supermarkets, pharmacies, bookstores as well as food take-away services and various exhibition activities. In addition, all market places shall regulate and restrict the use of non-degradable plastic bags.


However, since the Plastic Restriction Order has just recently been put in place, the relevant complementary regulations and documents are incomplete, which gives rise to obstacles for companies to obey such rules. For example, although the national Plastic Restriction Order stipulates the restriction and prohibition of the use of non-degradable plastic bags, the current order is just a principle and specific standards are yet to be implemented. There is no unified definition of “disposable plastic bags”, “non-degradable” or “biodegradable” in the relevant laws, regulations or mandatory national standards. The definitions differ from each other at local level and the requirements and timings of the implementation in different industries vary in different places, which makes it difficult for companies to accurately determine which rules to follow. If you have any questions in this regard, please confirm with your environmental law lawyer in a timely manner.


It is said that the Ministry of Ecology and Environment and other relevant departments are taking the lead in formulating national standards for “non-degradable plastics” and related plastic products. The Ministry of Commerce and the State Administration for Market Regulation are also improving and implementing relevant policies and enforcement measures. It is foreseeable that the state will further introduce specific policies and regulations to make the Plastic Restriction Order more feasible.


III.Conclusion and suggestions


In conclusion, our country’s laws and policies regarding Plastic Restriction Orders will  gradually improve. Therefore, companies producing and using plastic products need to pay special attention to the national and local legislative processes as well as the regulatory requirements in this regard. In view of this, we believe it is necessary to carry out internal audits and product/business risk assessments in a timely manner to make prompt adjustments (if necessary) as well strengthening compliance management to avoid compliance risk. 


If you have any specific questions in relation to services involving plastic restriction compliance consultation and product risk assessment, or have questions regarding staff training around plastic restriction related laws or compliance, please contact us via: ecoenvpro@junhe.com  


The JunHe EHS Team: JunHe, with over 950 professionals, is one of China’s largest comprehensive law firms with an international reputation for providing high-quality legal services. As one of the pioneers in the legal area of environment and health and safety production (“EHS”) in China, JunHe’s EHS team provides multinational enterprises with a full range of EHS legal services that cover project development and the incorporation of joint ventures, M&A transactions, daily operations, EHS compliance, government investigations, administrative punishments, reconsiderations and litigations. 

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