China's environmental crackdown on manufacturers to continue in 2019

By Synnove Vandal

A new soil pollution law targeting manufacturers will take effect at the beginning of next year in China.

The law focuses on “soil polluters”—namely manufacturers, business operators and land-use rights holders. The law is part of a larger effort by the Chinese government to reduce pollution overall.

Chinese premier Li Keqiang declared a war against pollution in 2014. This move was a stark change from the country’s typical policy of putting economic growth ahead of the environment.

Most of the cleanup efforts have focused on air pollution. And in the last four years, some cities have cut average concentrations of fine particulates in the air by 32 percent.

The rapid improvement is impressive. But it’s also brought many changes for businesses operating in China, including increased fines and even factory closures.

As the government passes additional regulations, importers sourcing from China who familiarize themselves with new policies can avoid manufacturing disruptions like seeing a supplier’s noncompliant factory shut down.

Air pollution inspections increase threefold

China has made strides in recent years to reduce air pollution. But pollution remains a concern throughout China.

According to a study by the Chinese University of Hong Kong, every year, air pollution:

• Leads to 1.1 million premature deaths on average
• Costs the Chinese economy 267 billion yuan (U.S. $38 billion)

China has received international criticism for lackluster regulation and excessive energy usage. And air pollution levels far surpass World Health Organization standards for “safe.”

In order to improve pollution, the government has:

• Pressed residents to give up coal stoves and furnaces
• Required higher quality gasoline for vehicles
• Closed coal-fired power plants

And in coming months, air pollution inspections will increase threefold. The central government plans to send out 200 teams comprised of 18,000 inspectors through April 2019.

Industrial manufacturers are target of new anti-pollution initiatives

China’s reliance on industrial manufacturing is another commonly criticized source of pollution.

The soil pollution law specifically applies to manufacturers, business operators and land-use rights holders.

Under the new law, these groups must take effective measures to monitor, prevent and reduce soil pollution. And they bear liability for the soil pollution they cause.

According to the Ministry of Ecology and Environment, businesses are also the focus of the increased air pollution inspections. You can expect to be “hit the hardest” if your business falls within the following sectors:

• Industrial
• Energy
• Transportation

China is stepping up inspections and punishments for noncompliant businesses. But officials are also increasing incentives for companies that reduce pollution.

Hebei province recently introduced a “pace setter” scheme giving leading enterprises preferential treatment and exclusion from output restrictions lists.

China receives a lot of flak for high pollution levels. But the government continues to expand the focus and scope of its anti-pollution efforts.

If you operate in China, stay alert for additional measures in the coming months.

Follow the link below to continue reading about environmental compliance for businesses in China.

China’s War Against Pollution: Five Environmental Compliances Businesses Should Expect This Winter – Dorcas Wong, China Briefing

Synnove Vandal is a Client Manager at InTouch Manufacturing Services, a QC firm that performs product inspections and factory audits in Asia for clients in the US, EU and Australia.