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Article China: Water Pollution Prevention Law Amended

(Mar. 2, 2008) On February 28, 2008, the Standing Committee of China's National People's Congress approved amendments to the Law on Prevention of Water Pollution. Under the revised Law, which enters into force on June 1, senior company executives may have up to half of their annual salary docked if they are found responsible for major or exceptionally serious pollution accidents, and the upper limit on enterprises' payment of penalties has been raised to 30 percent of the direct economic loss caused by the accident (art. 83). The former Law stipulated that executives would only be subject to disciplinary action and the maximum fine for polluters was RMB1 million (about US$141,000). In addition, the amended Law provides that local officials' performance evaluations "will now take into account how well they handle pollution cases and whether they meet environmental targets – a move that environmentalists have been urging for years." (Tracy Quek, China Toughens Water Protection Law to Hit Polluters' Pockets, THE STRAITS TIMES [Singapore], Mar. 1, 2008, Open Source Center No. CPP20080301094002; Zhonghua Renmin Gongheguo shui wuran fangzhi fa [Law on Prevention of Water Pollution of the People's Republic of China (PRC)] (in Chinese), The Central People's Government of the PRC Web site, Feb. 28, 2008.)

Strengthening of the Law came in advance of the annual meeting of the National People's Congress, which opened on March 5, at which the State Environmental Protection Agency (SEPA) was raised to the level of a full Cabinet-level ministry, thereby increasing its clout. According to THE STRAITS TIMES, the SEPA has in recent months "been rolling out new pollution control measures with more economic bite than before" – for example, by making companies that seek to go public or raise new capital pass an environmental assessment before being allowed to do so (affecting such high polluters as power generation, steel, and cement production industries) and by having banks deny credit to businesses that guzzle energy or create high amounts of pollution. (Quek, supra.)

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