Month: Abril 2014
New Environmental Protection Law will lead China into a Cleaner Future
On April 24, 2014, the Standing Committee of China's National People's Congress (“NPC”) approved to adopt the amendment to the Environmental Protection Law (the new “EPL”), the first amendment since the original EPL was enacted 25 years ago. It will take into effect on January 1, 2015.
With 70 articles compared with 47 in the original EPL, the new EPL begins with the establishment of the environmental protection as the country's basic policy, in order to provide a stronger legal foundation to fight against the environment pollution and improve the environment condition dramatically in China.
The new EPL has established the principles that national economic and social development should be coordinated with environmental protection, and environment and health monitoring, survey and risk assessment mechanism shall be successively improved.
Among others, the new EPL achieves the “reform” of environment protection through the revolutionary changes and improvement in the following main respects:
1. Supervision and Management
1.1. Monitoring and Early Warning System (Article 17 – 18)
The state will establish the monitoring system including the relevant network and stations for the monitoring information sharing and management.
Meanwhile, the state and provincial governments will also authorize their departments or professional institutions to survey and assess the environment condition, and establish the early warning system for resource and environmental carrying capacity.
1.2. Environmental Impact Assessment (Article 19)
Besides the existing environmental impact assessment (the “EIA”) towards projects which may cause impacts on the environment, the new EPL introduces the EIA towards framework/plans for the development and use. Any plans without EIA shall not be implemented and any projects without EIA shall not be constructed.
1.3. On-site Inspection (Article 24 – 25)
The environmental protection departments and environmental monitoring agencies of different levels are empowered to conduct on-site inspections to polluting enterprises. If enterprises discharging pollutants violate the laws and regulations, which have polluted the environment or may cause the pollution, the environmental protection departments will be authorized to distain or seizure heavily polluting facilities and equipments.
2. Prevention of Pollution
2.1. Clean Energy (Article 40)
The State promotes and encourages the clean production and resource recycling. Clean energy shall be the priority to be made use of by enterprises.
Moreover, the technology and equipments to reduce the pollutants and prevent the pollution shall be highly recommended to use.
2.2. Quota on Discharging Major Pollutants (Article 44)
The new EPL establishes the rule of quota on major pollutants. The specific quota on total amount of pollutants discharged is set out by State Council and executed by different levels of governments.
For enterprises discharging pollutants, on one hand, they shall comply with national and local pollutant discharging standards, and on the other hand, they shall also control the total amount of discharged pollutant within the quota allocated to them separately.
If the total amount of discharged pollutants from all enterprises in one area is over the permitted quota or those enterprises don’t achieve the goal of national environmental quality, the environmental protection departments in that area shall suspend the approval of EIA for the application of construction projects with major pollutants discharging facilities.
2.3. Pollutant Discharging License (Article 45)
The new EPL stipulates the system of pollutant discharging license. Without the pollutant discharging license, any enterprises are not allowed to discharge pollutants. Even if one company obtains the pollutant discharging license, the pollutant discharging shall be subject to the requirement of pollutant discharging license.
3. Information Disclosure and Public Participation
Individuals, legal entities and other groups are entitled to obtain the environment information and participate in the supervision of environmental protection based on the new EPL.
3.1. Information Disclosure (Article 53 – 56)
The new EPL specifies the following information which the public may access to:
a. Environment related information published by environmental protection departments of governments of different levels and other environmental monitoring agencies;
b. Information of environmental quality and monitoring to major polluting sources as well as other serious environmental information published by State Council;
c. Environmental condition reports periodically published by environmental protection departments of provincial governments;
d. Information of environmental quality, environmental monitoring, environmental emergencies, information of environmental related administrative permission, administrative penalty, collection of discharging pollutants, as well as information of violation of environmental protection laws and regulations by enterprises or other business groups, disclosed by environmental protection departments of country and municipal levels and other environmental monitoring agencies;
e. Names of major pollutants, discharging methods, concentration and total amount of discharged pollutants, construction and operation of pollution protection facilities published by major pollutant discharging enterprises;
f. EIA report (except contents relating to national secrets or trade secrets) published by approval departments of EIA.
3.2. Whistleblowing System (Article 57)
Individuals, legal entities or other groups are entitled to report the environment pollution and ecological damage activities to environmental protection departments and other environmental monitoring agencies.
Personal information of whistleblowers shall be confidential and benefits of whistleblowers shall be protected.
3.3. Public Interest Litigation (Article 58)
The new EPL expands the participants who may bring the environmental cases into litigation in China.
This new rule will apply to social groups who meet the following requirements:
a. Duly registered with the Civil Affairs Agencies of Municipal People's Governments (with jurisdiction of districts) or above levels;
b. Keeping conducting environmental protection activities for public interests for more than successive 5 years without any illegal record.
However, such groups shall not make profit through the environment pollution litigation.
4. Punishment (Article 59)
The new EPL establishes the a new penalty system, which authorizes environmental protection departments to issue corrective orders and penalties based on the original penalty amount to polluting enterprises on a daily basis, from the day after the corrective order is issued, as long as enterprises fail to bring their operations in line with environmental regulations.
This new penalty system replaces the previous one-time penalty on polluting enterprises, which will definitely increase the cost of enterprises who are conducting the environment pollution activities. As there is no maximum limit for the penalty, environmental protection departments will start to pose an existential threat to non-compliant enterprises.
Comments
The new EPL establishes many strong amendments to improve environmental protection rules and reinforce the power of relevant authorities and public to fight against the pollution in China. It will certainly have a big potential to influence the dynamics of environmental protection in China in a long term.
Despite the positive changes in the new EPL, it still has space to be perfect and will face many challenges as follows:
a. Most of the amendments in the new EPL are related to the pollution prevention and environmental protection, however, as one of the important parts of environmental protection, ecological protection is not concerned enough in the new EPL, which causes the imbalance between these two key issues in the new EPL. Therefore, ecological protection shall be also strengthened in future.
b. Even though the environmental protection departments of governments of different levels are authorized more powers to execute the monitoring and inspection activities, such departments are still tightly controlled by corresponding governments in terms of personnel and finance, which may potentially create difficult conditions for implementation of activities and influence their independence, especially in small places of country level. It is still uncertain to what extent local environmental protection departments will be able to make use of the powerful weapons available to levy real punishments. Moreover, the new EPL doesn’t specify how to define and calculate penalties to the polluting enterprises. Whether a maximum amount of penalty will be considered is still unclear.
c. Even though the participants in the environmental litigation are expanded and social groups are involved in such litigation based on the new EPL, however, possibilities for environmental litigation still remain limited. Since only social groups registered above municipal level will be able to initiate relevant lawsuits, many other active parties engaging in environmental protection activities will be excluded for the litigation, such as many NGOs registered below municipal level and individuals. Therefore, more eligible participants shall be considered in future in order to encourage the legal defense for the purpose of environmental protection.
Pilot Programme for Mutual Connection of Transactions in Shanghai and Hong Kong Stock Markets Approved
The China Securities Regulatory Commission (“CSRC”) and the Securities and Futures Commission (“SFC”) have approved, in principle, the development of a pilot programme for establishing mutual stock market access between Mainland China and Hong Kong in order to promote the common development of the capital market. It will take around six months to formally start the Shanghai-Hong Kong Stock Connection (the “Connection”) from the date of announcement on April 10, 2014 to complete the preparation for formal launch.
The pilot programme will operate between Shanghai Stock Exchange (“SSE”), the Stock Exchange of Hong Kong Limited (“SEHK”), China Securities Depository and Settlement Corporation Limited (“China Settlement”), Hong Kong Securities Settlement Company Limited (“HKSSC”).
The main contents of this announcement are described as follows:
1. SSE and SEHK will enable investors to trade eligible shares listed on the other’s stock market through local securities firms or brokers.
2. The Connection will be established based on the existing stock exchange rules and regulations and operational models in each market. There are five principal elements of the Connection as follows:
a. Applicable Transaction, Settlement and Listing Rules
Transaction, settlement arrangements and listed companies will be subject to the regulations and rules of the market where transaction and settlement take place or companies are listed.
b. Settlement
China Settlement and HKSSC will establish a direct link for the cross--boundary settlement. Each of them will participate in the other’s settlement to provide settlement services.
c. Eligible Shares
Shares eligible to be traded under Northbound Link (trading shares in SSE through SEHK) will include all the constituents of the SSE 180 Index and SSE 380 Index, and shares of all SSE-listed companies which have issued both A shares and H shares. Shares eligible to be traded under Southbound Link (trading shares in SEHK through SSE) include all the constituents of the Hang Seng Composite LargeCap Index and Hang Seng Composite MidCap Index, and shares of all companies listed on both SSE and SEHK. The scope of the Connection may be further adjusted after the launch of the pilot programme.
d. Quotas
In the beginning the pilot programme, a maximum cross-boundary investment quota and a daily quota for the transaction are fixed and will be monitored on a “real time” basis. The Northbound Link will be limited to an aggregate quota of RMB 300 billion and a daily quota of RMB 13 billion, and the Southbound Link will be limited to an aggregate quota of RMB 250 billion and a daily quota of RMB10.5 billion. Quotas may be adjusted in future.
e. Eligible Investors
In the beginning of the pilot programme, the SFC requires Mainland investors participating in the Southbound Link to be limited to institutional and individual investors who hold an aggregate balance of not less than RMB 500,000 in their securities and cash accounts.
3. Both the CSRC and the SFC will actively enhance cross-boundary regulatory and enforcement cooperation and will also establish a dedicated liaison mechanism for the Connection to deal with issues during the pilot programme period.
4. Benefits
The Connection is an important step in the opening of China capital market and it will enhance capital market connectivity between Mainland China and Hong Kong, bringing various benefits, including:
a. Enhancing the overall strength of China’s capital markets through a new and significant collaborative mechanism.
b. Further consolidating the position of Shanghai and Hong Kong as financial centers, and enhancing the attractiveness of both markets to international investors.
c. Promoting the internationalization of RMB and development of Hong Kong as an offshore RMB business center.
Good News for Employees in Shanghai: Adjustment to the Standards of Certain Livelihood-related Security and Treatment
Shanghai has raised a series of livelihood-related security and treatment standards since April 1st, 2014, including the standards of minimum salary, unemployment insurance benefits, employment subsidies and employment injury insurance as well as disbursement ceiling of the overall fund of basic medical insurance for urban employees
1. Standards of Minimum Salary
The minimum monthly salary has increase from 1,620 Yuan to 1,820 Yuan and minimum hourly salary has increased from 14 Yuan to 17 Yuan since April 1st, 2014
The minimum monthly salary standard is applicable to a full-time employee who provides regular labor services during statutory working hours. Please note that the minimum monthly salary standard does not include social insurance charges and housing fund paid by the employee himself. Besides, overtime pay, allowance for working on the swing shift or night shift, allowance for working under high temperature or low temperature environment and allowance for working in poisonous and harmful conditions are excluded from the minimum monthly salary standard.
The minimum hourly salary standard is applicable to a part-time employee. Part-time employment refers to the employment in which the wage is paid on an hourly basis, and the average working hours of an employee with the same employer are less than four hours each day, and the total working hours of such employee are less than twenty-four hours each week. The minimum hourly salary standard does not include social insurance charges and housing fund paid by the employee himself.
2. Standards of Unemployment Insurance Benefits
Standards of unemployment insurance benefits are determined by the continuous payment period and the age of the unemployed which are currently divided into three levels. After the adjustment, three levels of unemployment insurance benefits standards for the first 12 months are increased to 1,065 Yuan per month, 1,120 Yuan per month and 1,170 Yuan per month respectively; unemployment insurance benefits standards for the second 12 months are 80% of those for the first 12 months and the minimum standard shall be about 10 Yuan higher than the subsistence allowances for urban residents in Shanghai.
3. Standards of Employment Subsidies
According to the adjustment, living allowance for youth on employment training has been increased from 1,296 Yuan per month to 1,456 Yuan per month; employment allowance for laid-off workers with agreement on reservation of social insurance and self-employment allowance for the older unemployed have been increased from 810 Yuan per month to 910 Yuan per month.
Meanwhile, the subsidy standard for employers hiring identified local unemployed who have difficulties in finding jobs has been increased from 13,000 Yuan to 16,000 Yuan and the subsidy standard for employers hiring identified laid-off workers with agreement on reservation of social insurance who have difficulties in finding jobs has been increased from 6,500 Yuan to 8,000 Yuan
4. Standards of Employment Injury Insurance
Three standards regarding employment injury insurance has been raised.
a. improvement in the disability allowance enjoyed by employees who have first-degree to fourth-degree of disability caused by employment injury:
first-degree disability: an increase of 310 Yuan per month;
second-degree disability: an increase of 290 Yuan per month;
third-degree disability: an increase of 280 Yuan per month;
fourth-degree disability: an increase of 260 Yuan per month.
b. improvement in nursing fees for injured employees who are unable to look after themselves:
completely unable to look after themselves: an increase of 170 Yuan per month;
mostly unable to look after themselves: an increase of 130 Yuan per month;
partly unable to look after themselves: an increase of 100 Yuan per month.
c. improvement in pensions for dependents whom the employees died in course of duty have: an increase of 70 Yuan per person per month.
5. Disbursement Ceiling of the Overall Fund of Basic Medical Insurance for Urban Employees
Disbursement ceiling of the overall fund of basic medical insurance for urban employees for the medical care year of 2014 (from April 1, 2014 to March 31, 2015) has been increased from 340,000 Yuan to 360,000 Yuan. 80% of the medical costs surpassing the disbursement ceiling is still paid by local additional medical insurance fund. Corresponding adjustments have also been made to disbursement ceiling of the overall fund of medical insurance for urban floating employees and town employees.
The standards of livelihood-related securities and treatment are tied to the vital interests of the people. Therefore, the above-mentioned improvements are really good news for employees, especially for those with low incomes.