SAN FRANCISCO, September 27, 2011 — On the heels of the widely reported JinkoSolar scandal in China — in which Chinese authorities ordered a solar-panel manufacturing plant in China’s eastern Zhejiang Province to close after hundreds of villagers protested for four days that the plant was polluting their air and water — Asia Society Northern California's panel discussion “Environmental Law in China” convened a group of legal, NGO, business, and financial experts to report on the dynamics of doing business in China while complying with environmental regulations.
Charlie McElwee, author of Environmental Law in China: Managing Risk and Ensuring Compliance (March 2011) and Climate Policy Program Officer at ClimateWorks Foundation, kicked off the discussion by providing an overview of what he learned — and lived— during his time practicing environmental law and teaching it to Chinese university students in Shanghai. McElwee emphasized that, contrary to popular belief, China does have a full suite of environmental laws (i.e., covering air, water, forests, solid waste, etc.) along with pre-project reporting requirements akin to the EIS in the U.S.
He also pointed out that the way a foreign or multinational company doing business in China will approach its environmental laws in China will differ depending on whether that company is involved directly in a particular industry’s supply chain (such as JinkoSolar, a solar panel manufacturer) or is a customer/investor of supply-chain operations (such as toymaker Mattel, or personal electronics maker Apple).
Picking up on McElwee's observation that enforcement of pollution regulations — or “punishment” for violations thereof — usually takes the form of reputational and public relations disasters, Alex Wong, Visiting Assistant Professor at UC Berkeley’s Boalt School of Law, and former director of NRDC’s China Environmental Law Project, discussed the role of the public and of non-governmental organizations (NGOs) in environmental issues and disputes.
Wong cited the JinkoSolar incident, as well as other recent scandals, to illustrate the growing role the public and NGOs play in the environmental activism and enforcement sphere: Johnson Controls’ shutdown due to lead poisoning scares, the closure of a chemical plant near Dalian in the northest due to citizen protests, the backlash against Houston-based ConocoPhillips after the Bohai Bay oil spill, and continuing exposés of environmental and health problems resulting from the operations of Apple’s supply chain. (A video, below, focuses on the last of these items.)
Addressing the topic at a more micro level, Kristen Durham, Global Gateway Director of Silicon Valley Bank’s Financial Group, and Ryan Schuchard, Climate and Energy Manager at Business for Social Responsibility (BSR), emphasized that while Chinese companies may not be thinking about the environment or global warming in their operations, their foreign partners and investors definitely should encourage, if not require, playing by Western environmental standards, both to maintain a positive image in the long term and to avoid financial and reputational liabilities.
The panelists' presentations (which were moderated by Ginny Fang of ChinaSF) as well as the Q&A discussion that followed are best summarized by four trends Wong cited regarding environmental law in China:
- Growing public and NGO mobilization;
- Increased prioritization of the environment by the Chinese government;
- Expanding transparency about supply chain operations;
- More sophisticated use of technology (e.g., weibo.com, microblogs, the Internet).
For a more in-depth look at a local Anhui Province campaign, see Asia Society Northern California's interview with Zhou Xiang, founder of Green Anhui.