Environmental Crackdown Targets China's Most Powerful Polluters

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A recent measure by the State Environmental Protection Administration (SEPA) to blacklist cities and industries that violate state environmental regulations represents the strictest administrative penalty yet to stem Chinese environmental degradation. On January 10, Pan Yue, vice minister of SEPA, announced the new Regional Permit Restriction, a ruling that suspends or restricts all construction projects owned by the laggard industries until they come into compliance with the law.

According to Pan, the restriction cracks down on two of the most powerful and profitable groups in China—local governments and large energy providers—which he says are conspiring together to invest in illegal electrical power facilities without passing the required environmental impact assessments (EIAs). China is currently witnessing unprecedented investment in the electricity industry, and in a push to get ahead power companies often expand their activities rapidly while ignoring environmental regulations. According to one expert, because these companies have strong political backing from local officials, they typically do not pay attention to SEPA rulings.

Under the new SEPA restriction, however, once one project in a specific area violates the environmental rules, the agency will withhold permits for all other new projects in the area. More importantly, the measure focuses not just on a single project, but rather targets the local government where the project is located, putting pressure on decision-making that has tended to incline toward investments in highly polluting and energy-consumptive projects.  

“SEPA has picked the ‘best fit’ measure for itself,” the expert (who prefers to be left unnamed) comments. In general, the agency has had few powerful laws at its disposal to use in the fight against the existing power structure. But the new Regional Permit Restriction, which stems from SEPA’s formal ability to approve or deny construction permits, enables the agency to halt or rein in new projects as a way to force local governments and power companies to improve their environmental standards.

Unlike during two previous environmental “storms,” the blacklisted power giants have responded immediately to SEPA’s recent actions. On the same day the agency suspended the construction activities of China Huadian Corp., the energy company called on its laggard project developers to firmly follow SEPA’s ruling and to take immediate action toward environmental improvement. A day later, a second targeted company, China Datang Corp., announced on its website that it too intends to “firmly obey and positively follow the rule by SEPA.”

Lie Yang is a journalist at 21st Century Economic Report.

Outside contributions to China Watch reflect the views of the author, and are not necessarily the views of the Worldwatch Institute.