PRC Supreme People’s Court Issued a Judicial Interpretation on the Application of the Ecological and Environmental Code
On August 5, 2026, the PRC Supreme People’s Court issued the Several Provisions on the Application of the Ecological and Environmental Code of the PRC (the "Provisions”). The Provisions took effect on August 15, 2026.
I. Background
The PRC Ecological and Environmental Code (the "EEC") is China’s second major code after the PRC Civil Code. It took effect on August 15, 2026, introducing significant changes to environmental liability, administrative penalty rules and compliance requirements (for details, please see our previous newsletter in April 2026 "China Introduces its Landmark Ecological and Environmental Code").
The Provisions address the legal issues on how the EEC should apply to disputes which occurred prior to/upon/after the effective date of the EEC.
II. Application Principles Established by the Provisions
1. General Principles
The Provisions set forth the following general principles for the application of the EEC:
a) For legal facts arising after August 15, 2026, the EEC shall apply;
b) For legal facts arising before August 15, 2026, the law then in effect shall apply;
c) For civil contracts which were formed before the entry into force of the EEC but were performed in whole or in part after August 15, 2026, the applicable law shall be determined as follows based on when the disputed performance occurred:
(1) if the disputed performance occurred prior to the entry into force of the EEC, the law then in effect shall apply;
(2) if the disputed performance occurred after the entry into force of the EEC, the EEC shall apply.
In addition to the above, Article 2 of the Provisions further provides that where the law then in effect only contains general principles but the EEC includes specific provisions, courts may refer to the EEC’s specific provisions in their judgements and reasoning, even where the legal facts arose prior to the entry into force of the EEC.
2. Special Principles
The Provisions also provide for the following special circumstances under which the EEC shall apply:
III. Practical Impacts of Certain New EEC Rules in Light of the Provisions
Please find below an overview on how the Provisions’ application principles may interact in practice with certain new EEC rules. Some key points are set out below:
IV. Conclusions
The Provisions, together with the EEC, impose stricter requirements for environmental compliance.
Under the Provisions, the EEC can apply to certain conducts occurred prior to the entry into force of EEC in specified circumstances, including continuing actions of tort and damages incurred after taking effect of the EEC, continuing or continuous violations, etc. Companies operating in China should strengthen their environmental compliance management, reassess potential exposure from historical non-compliance, and update internal controls and compliance frameworks. Companies may also wish to reassess litigation risks, claim-tracking protocols and regulatory-response procedures in light of the EEC’s stricter liability and enforcement rules and the Provisions.
