By Wu Qing King & Wood Mallesons’ Commercial & Regulatory group

Reporting and auditing

1. Do regulators keep public registers of environmental information? What is the procedure for a third party to search those registers?

(1)Public registers

Environmental administration departments must disclose environmental information in accordance with the law. The information disclosed by the MEP, Provincial Environmental Protection Offices and Municipal Environmental Protection Bureaus are different.

The environmental administration departments must disclose to the public the list of enterprises atnational-level, provincial-level and municipal-level under intensified supervision. The municipal environmental protection bureaus must disclose the list of enterprises that discharge certain key pollutants.

The environmental administration departments must disclose information on whether an enterprise has obtained the pollution discharge licence and dangerous wastes operation licence, or received environmental administrative penalties.

The environmental administration department in charge of environmental impact assessment of construction projects must disclose information on the assessment and approval of a construction project’s impact on the environment.

(2)Third party procedures

A third party can directly obtain information that should be actively disclosed by the environmental administration department through open channels such as official websites.

A third party can request information that the environmental administration department is only obliged to disclose where applications are received in written form, such as letters, faxes and e-mails.

2. Do companies have to carry out environmental auditing? Do companies have to report information to the regulators about environmental performance?

(1)Environmental auditing

In relation to new construction projects, and expansion or reconstruction projects which may affect the environment, enterprises must both:

  • Carry out environmental auditing in the form of an environmental impact assessment.
  • Obtain environmental impact assessment approval and environmental protection acceptance.
  • See Question 11(Are there any requirements to carry out environmental impact assessments (EIAs) for certain types of projects?) for details.

(2)Reporting requirements

Information disclosed by enterprises, public institutions and other business operators is subject to either mandatory disclosure or voluntary disclosure. Pollutant discharging entities under intensified supervision must publicly disclose environmental information (see below), whereas entities that are not under intensified supervision can voluntarily disclose such information.

The following information is subject to mandatory disclosure:

Basic information, including the name, organisation code, legal representative, address, and contact information of the enterprise, and the main content, production and scale of the enterprise’s production, operation and management.

Pollutant discharging information, including major pollutants discharged and their names, discharge means, quantity of discharge outlets, concentration level, total volume, beyond-standard situation pollutants discharging standard and the total volumes authorised.

The construction and operation of environmental protection facilities.

Environmental impact assessment of the construction project and other environmental protection approval.

The enterprise’s emergency programme for environmental pollution incidents.

Any other information required to be publicly disclosed.

On 12 June 2017, MEP and Securities Regulatory Commission signed the Cooperation Agreement on Jointly Carrying out Environmental Information Disclosure of Listed Companies. It specifically puts forward to gradually establishing and improving the mandatory environmental information disclosure system of listed companies and bond companies.

3. Do companies have to report information to the regulators and the public about environmental incidents (such as water pollution and soil contamination)?

Entities that cause or can cause environmental incidents must both:

  • Make any incident known to any third party that may suffer due to the incident.
  • Report the incident to regulators and accept their investigation and decision.

4. What powers do environmental regulators have to access a company?

The following can carry out onsite investigations at the relevant enterprises and other business operators that discharge pollutants:

  • Environmental protection authorities at county level or above.
  • Assigned environmental supervision agencies.
  • Other departments in charge of environmental supervision and management.

Investigators can:

  • Enter relevant facilities for the purposes of inspection, sampling, monitoring, recording sound, shooting video or taking notes.
  • Consult and reproduce relevant materials including the manufacture of products and sewage discharge records.
  • Appoint and question relevant persons in the enterprise, and demand that they explain relevant matters and provide relevant materials.
  • Order the suspension of production or demand remediation.
  • Apply the summary procedure and make an administrative penalty decision onsite.

5. What obligations are there on companies to report on environmental issues in their annual corporate reports?

Enterprises must prepare environmental impact reports in accordance with the Guidelines for the preparation of corporate environmental reports (HJ 617-2011). These reports must be made public.

See also Question 2.

Environmental insurance

6. What types of insurance cover are available for environmental damage or liability and what risks are usually covered? How easy is it to obtain environmental insurance and is it common in practice?

(1)Types of insurance and risk

The only type of insurance available addresses environmental pollution liabilities. Environmental pollution liability insurance policies can cover:

  • Liability for a third party’s personal injury or property damage caused by pollutants.
  • The insured enterprise’s necessary and reasonable costs of rescuing the life of a third party, and avoiding or reducing the property loss of the third party.
  • The insured enterprise’s necessary and reasonable costs of controlling the pollutants’ diffusion or cleaning up the polluted site as required by environmental protection law.
  • Any compensation liability agreed by the insured enterprise and insurance company.

(2)Obtaining insurance

Obtaining environmental pollution liability insurance is a pilot project rather than a compulsory regulation. Therefore, it is not a common practice to obtain environmental insurance.