Overview on the Newly Amended Law of the Peoples Republic of China on Prevention and Control of Environmental Pollution Caused by Solid Waste

The newly amended Law of the People’s Republic of China on the Prevention and Control of Environmental Pollution Caused by Solid Waste (“Solid Waste Law”) came into force on September 1, 2020. This is the second major amendment after its enactment after 1995. The goals set by the Solid Waste Law are to protect and improve the ecological environment, to prevent and control environmental pollution caused by solid waste, to safeguard public health, to maintain ecological security, to promote ecological civilization development and to promote sustainable economic and social development. Please find below a brief on some of the key amendments to the Solid Waste Law.

1. What is Solid Waste

According to Article 124 of the new Solid Waste Law, "solid waste" refers to

(1) objects and substances in solid, semi-solid state or in gaseous state in containers that are generated in production, living and other activities and have lost its original use value or are discarded or abandoned although having not yet lost use value; and

(2) objects and substances that are included into the management of solid waste as specified by laws and administrative regulations, except for solid waste that has gone through treatment which has reduced the volume and hazardousness of waste and meets the national compulsory product quality standards and will not endanger public health and ecological safety or that are determined as not solid wastes according to the identification standards and procedures for solid wastes.

Solid wastes are further classified into industrial solid waste, domestic waste, construction waste, agricultural solid waste and hazardous waste, etc. The Solid Waste Law provides different waste management rules and methods for different kinds of wastes.

2. Supervision and Administration

(1) Facility for prevention and control of environmental pollution caused by solid waste

Same as the previous version, the new Solid Waste Law requires that necessary facilities for the prevention and control of environmental pollution caused by solid wastes as specified in the environmental impact assessment document of a construction project shall be designed, constructed and put into use simultaneously with the main part of a project. Article 18 of the new Solid Waste Law further provides that the preliminary design of a construction project shall, pursuant to the requirements of design specifications for environmental protection, include the contents of prevention and treatment of environmental pollution by solid wastes in the environmental impact assessment document, implementing measures for prevention and control of environmental pollution and ecological damage by solid wastes and the estimated investment budget for facilities for prevention and control of environmental pollution by solid wastes. The measures for prevention and control of environmental pollution and ecological damage by solid wastes and the estimated investment budget are, for the first time, required to be included in an environmental impact assessment document.

In addition, Article 18 of the new Solid Waste Law changed the responsible party for the completion acceptance inspection. It provides that the construction entity, instead of the environmental protection authorities as stipulated in the previous version, shall be responsible for conducting acceptance inspection for the facilities built for prevention and control of environmental pollution caused by solid wastes and formulate an acceptance inspection report pursuant to the provisions of the relevant laws and regulations, and publish the report to the public. This amendment was made in response to the revision of the Administrative Regulations on Environmental Protection for Construction Projects and the revision of the Interim Measures on Construction Project Completion Acceptance Inspection regarding Environmental Protection back in 2017 which also state that the construction entity shall be the responsible party for completion acceptance inspection regarding environmental protection facilities, instead of the environmental protection authorities.

(2) Transportation of solid waste across provinces

Article 23 of the previous Solid Waste Law stipulated that moving solid waste out of a province, an autonomous region or centrally-administered municipality for storage and disposal shall be subject to prior application to the environmental protection administrative department department (now, the competent ecology and environment department) of the People's Government of the province, autonomous region or centrally-administered municipality where the solid waste is moving out of from. Such authority had to consult with the environmental protection administrative department of the People's Government where the solid waste is moving into, before approving transfer of solid waste. No relocation was allowed to be made without prior approval. The aforesaid prior approvals on transportation of solid waste—for the purposes of storage and disposal—are still required under Article 22 of the new version. In the past, there was no unified national monitoring system for transporting solid wastes across provinces for utilization.

However, Article 22 of the new Solid Waste Law adds a filing obligation where solid waste is transported across provinces—for the purpose of utilization. I.e., moving solid waste out of a province, an autonomous region or centrally-administered municipality for utilization shall be filed with the competent ecology and environment department of the People's Government of the province, autonomous region or centrally-administered municipality where the solid waste is moving out of from. Such filed information shall also be notified to the ecology and environment administrative department of the People's Government of the province, autonomous region or centrally-administered municipality where the solid waste is moving into by its counterpart where the solid waste is moving out of from. In other words, transportation of solid waste across provinces for utilization is no longer exempted from the monitoring and management system. All transportations across provinces must be either approved by or filed with both the governmental departments, where solid waste is moving out of from and moving into, in accordance with the transportation purposes.

3. Provisions on Industrial Solid Waste

(1) Comprehensive management of industrial solid waste

Article 30 of the previous Solid Waste Law generally stipulates that entities generating industrial solid wastes shall establish and improve their environmental pollution prevention and treatment accountability system, and adopt measures to prevent and treat environmental pollution by industrial solid waste. The previous provision was relatively general and did not specify what shall be included in such system and measures.

Article 36 of the new version specifies that entities generating industrial solid wastes shall establish and improve their responsibility system for the prevention and control of environmental pollution during the whole process of the generation, collection, storage, transport, utilization and disposal of industrial solid wastes and establish ledgers for the administration of industrial solid wastes so as to faithfully record such information as the types, quantity, transfer, storage, utilization and disposal of the industrial solid wastes generated, realize the traceability and accessibility to such record of industrial solid wastes, and take measures for the prevention and control of environmental pollution caused by industrial solid wastes. Moreover, industrial solid wastes are prohibited from being discarded into facilities for collecting domestic wastes.

The new provision provides more detailed requirements of handling solid waste from its generation to its disposal. Basically, every step of handling industrial solid waste shall be recorded in ledgers for tracing. This amendment borrows the management method of hazardous waste. Since the Opinions on Further Strengthening the Monitoring and Management of Hazardous Wastes and Medical Wastes was issued in 2011, hazardous waste generators have been required to create ledgers for hazardous wastes management regarding its generation, storage, utilization, disposal, etc.

(2) Joint and several liability of wrongful entrustment

Article 37 of the new Solid Waste Law stipulates that where an entity generating industrial solid wastes entrusts others to transport, utilize or dispose of industrial solid wastes, it shall verify the qualifications and technical capacities of the entrusted party, lawfully conclude a written contract, and stipulate the requirements for pollution prevention and control in the contract. When transporting, utilizing or disposing of industrial solid wastes, the entrusted party shall, according to relevant laws, regulations and the contract, fulfill the requirements for pollution prevention and control, and inform the entrusting entity of the information on the transportation, utilization and disposal. Where an entity generating industrial solid wastes violates the aforesaid provision, in addition to being punished in accordance with the relevant laws and regulations, it shall also bear joint and several liability with the entrusted party causing environmental pollution and ecological damage.

This is a newly added clause which imposes obligations on industrial solid waste generators to verify the qualification and capacity of its entrusted party who handles the concerned industrial solid waste. For example, an entrusting party needs to check whether the entrusted service is included in the entrusted party’s business scope and its operating permit, if required, and whether the technical capacity of the entrusted party is up to the standard for handling such industrial solid waste. Failure to check the entrusted party’s qualification and capacity will subject the industrial solid waste generator to joint and several liability with the entrusted party, e.g., tortious liability and even criminal liability. Besides, according to Article 102 Item (9) of the new Solid Waste Law, solid waste generators who fail to check the qualification and capacity of the entrusted party will be subject to administrative punishments for their own wrongful entrustment, i.e., order to make corrections, a fine from RMB 100,000 to RMB 1,000,000, confiscation of illegal gains, order to suspend business or being closed down where the violation is serious.

(3) Including industrial solid waste in Pollutant Discharge Permit

Before the new revision, only air and water pollutants are under the Pollutant Discharge Permit management system in China. Article 39 of the new Solid Waste Law stipulates that entities generating industrial solid wastes shall obtain a pollutant discharge permit. Specific measures and implementation procedures for pollutant discharge permit shall be stipulated by the State Council. Entities generating industrial solid wastes shall provide local authorities in charge of ecology and environment with the information about the types, quantity, transfer, storage, utilization and disposal of industrial solid wastes, as well as specific measures for reducing the generation of industrial solid wastes and promoting the comprehensive utilization thereof, and implement relevant provisions of the management system for pollutant discharge permit.

In practice, whether an industrial solid waste generator has to apply for a new or updating an existing Pollutant Discharge Permit depends on its generating volume, the discharge volume and the environmental impact it causes. According to the Classification Management Catalogue of Pollutant Discharge Permits for Stationary Sources of Pollution (2019 Edition), entities that generate and discharge relatively large volumes of solid waste and cause relatively strong impact on the environment are subject to major pollutant discharge management. Entities that generate and discharge relatively small volumes of solid waste and cause relatively minor impact on the environment are subject to simplified pollutant discharge management. Entities that generate and discharge very small volumes of solid waste and cause very minor impact on the environment do not need to apply for a Pollutant Discharge Permit. Only filling in the Pollutant Discharge Registration Form via the National Information Planform for Pollutant Discharge Permit Management will suffice. Each industrial solid waste generator may check the catalogue to see whether a Pollutant Discharge Permit is required.

This revision follows the reformation of the environmental impact assessment management which revoked the one-fit-all approach that all construction and industrial projects must do an environmental impact assessment report and obtain the corresponding approval. Instead, after these reformations, only those projects having relatively major and not only very minor impact on environment are required to do a full-length report and a report form respectively, obtain the approval on the report or the report form, and obtain a Pollutant Discharge Permit according to laws and regulations. Projects that have very minor impact on environment are exempted from the aforesaid administrative monitoring and management to some extent.

4. Hazardous Waste

(1) Comprehensive management and including hazardous waste in Pollutant Discharge Permit

As a subcategory of solid waste, ledgers are required to be kept for the management of hazardous waste under the new Solid Waste Law as well as the requirement for including hazardous waste into Pollutant Discharge Permit. Article 78 states that entities generating hazardous wastes shall, pursuant to relevant provisions of the State, work out a plan for managing hazardous wastes; establish ledgers for managing hazardous wastes, faithfully record relevant information, and report the types, quantity, transfer, storage, disposal and other relevant materials of hazardous wastes to the local competent authority of ecology and environment through the national information management system for hazardous wastes. The above mentioned plan for managing hazardous wastes shall contain measures for reducing the generated amount of hazardous wastes and their harmfulness, and measures for storing, utilizing and treating hazardous wastes. The hazardous waste management plan shall be filed with the competent authority of ecology and environment at the place where the entity generating hazardous wastes is located. Where an entity generating hazardous wastes has obtained a pollutant discharge permit, the provisions of the pollutant discharge permit management system shall apply.

(2) Compulsory insurance on hazardous waste handling entities

Article 99 of the new Solid Waste Law stipulates that entities engaging in collection, storage, transportation, utilization and disposal of hazardous wastes shall purchase environmental pollution liability insurance pursuant to the relevant provisions of the State.

In the Guiding Opinions on Escalating the Environment Monitoring and Management Capability, the Utilization and Disposal Capability and the Environmental Risk Prevention Capability of Hazardous Waste issued by the Ministry of Ecology and Environment in 2019, a goal was set out that hazardous waste generators and operating entities shall be included in the compulsory insurance scope for environmental pollution liability. Hazardous waste handling entities are exposed to considerably high risk of environmental pollution incidents. In order to ensure the actual polluters have enough funds to assume liabilities, such compulsory insurance is necessary. Article 99 of the new Solid Waste Law, for the first time, implements such provision in statutory law.

5. Construction Waste, Agricultural Solid Waste, etc.

(1) Construction waste

Aside from keeping the previous provision on prompt clearance and removal of construction solid wastes, Article 63 of the new Solid Waste Law adds that construction entities shall formulate a plan for the disposal of construction wastes, take measures for preventing and controlling pollution and report it to the competent department of environmental health under the local people's government at or above the county level for archival purposes. In addition, dumping, scattering and piling up of any construction wastes without approval are prohibited.

(2) Agricultural solid waste

Entities that generate agricultural solid waste such as straws, agricultural waste films and pesticide package wastes and other producers or business operators shall take recycling and other measures to prevent environmental pollution. The State encourages the research and development, production, sale and use of agricultural films that are degradable and harmless to the environment.

(3) Extended producer liability

Article 66 of the new Solid Waste Law stipulates that the State establishes an extended producer responsibility system for electrical and electronic products, lead-acid batteries, automotive power batteries and other products. The producers of electrical and electronic products, lead-acid batteries, automobile power batteries and other products shall, in accordance with the relevant provisions, establish a system for recycling of waste products that matches the sales volume of the products by means of self-establishment, entrustment or otherwise, and disclose the same to the public so as to achieve effective recycling and utilization.

6. Stricter Legal Liability

(1) Administrative fines

Compared to the previous version, the ranges of administrative fines in the new Solid Waste Law are generally increased. Further, consecutive daily fines can be imposed where an entity, a producer or business operator, who has been fined and ordered to make corrections for discharging solid wastes due to violation of the law, was later found still continuing its illegal activities. Such consecutive daily fine was first stipulated in the Environmental Protection Law revised in 2014. The newly amended Solid Waste Law follows this mechanism.

(2) Personal liability

The previous version of the Solid Waste Law did not have a clause on detaining persons assuming personal liability regarding environmental pollution caused by solid waste. Only Article 63 of the Environmental Protection Law stipulates that the environmental protection authorities or other relevant authorities of the People's Government of county level and above shall forward the case to the public security authority, the person directly in charge and any other liable persons shall be detained for a period of more than 10 days but less than 15 days; or, where the violation is relatively minor, detained for a period of more than 5 days but less than 10 days in the following situations. I.e., (1) failure to carry out an environmental impact assessment for a development project pursuant to the law, and refuse to suspend construction when being ordered to do so; (2) violation of the provisions of the law in discharging pollutants without obtaining a pollutant discharge permit, and refuse to stop discharging pollutants when being ordered to do so; (3) illegal discharge of pollutants through underground pipes, seepage walls, pits, perfusion, alteration or forgery of monitoring data, circumvention of regulation such as abnormal operation of pollution prevention facilities etc.; and (4) manufacturing and use of pesticides for which manufacturing and use are prohibited by the State expressly, and refuse to do make correction when being ordered to do so.

In addition to the directly responsible person(s)-in-charge and other directly responsible personnel stipulated in the Environmental Protection Law, the new Solid Waste Law adds legal representatives and the persons chiefly in charge in the personal liability scope. Article 120 of the new Solid Waste Law provides that where an entity, in violation of the provisions of this Law, commits any of the following acts, which is not serious enough to constitute a crime, the public security authority shall detain the legal representative, the person chiefly in charge, the person directly in charge and any other liable persons for a period of no less than 10 days but no more than 15 days; and if the circumstances are relatively minor, a detention for no less than 5 days but no more than 10 days shall be imposed. The punishable acts are (1) dumping, piling up, discarding or disposing solid wastes without authorization and thus causing serious consequences; (2) constructing facilities or sites for centralized storage, utilization or treatment of industrial solid wastes or hazardous wastes or landfills for domestic wastes in red line areas for ecological conservation, areas where permanent basic farmlands are concentrated, or other areas which need special protection; (3) supplying or entrusting hazardous wastes to an entity that does not have a license or any other producer or business operator for piling up, utilization or disposal; (4) engaging in the collection, storage, utilization and treatment of hazardous wastes without a permit or in violation of the provisions of the permit; (5) transferring the hazardous wastes without approval; and (6) failing to take precaution measures and causing the scattering, loss, leakage or other serious consequences of hazardous wastes.

Strengthening legislation and law enforcement on eco system and environmental protection have become a top priority in China in the past years. Upon effectiveness of the new Solid Waste Law, it is foreseeable that solid waste related industries will face stricter statutory requirements and monitoring inspections in their daily business. Therefore, the concerned entities are well advised to adopt an updated comprehensive environmental compliance system for legal risk control.