Asia Society Policy Institute

For Overseas Projects:

Financiers should:

• Establish emergency warning mechanisms and contingency plans during the pre-project planning phase.²
• Prevent reputational risks and respond to incidents by minimizing public losses and adverse impacts during the project implementation and operations phases.³
• Work with Developers and Contractors to rectify problems and violations revealed through inspections.⁴
• Suspend or withdraw funding if there are major risks or dangers.⁵

Financiers, Developers, and Contractors should:

• Set up conflict resolution mechanisms to resolve disputes with communities, suppliers, and stakeholders.⁶

Developers (and Contractors) should:

• Establish emergency plan and response mechanisms.⁷
• Establish systems to report environmental incidents to the Host Country Government, the Chinese Ministry of Ecology and Environment (MEE), Affected People, and their own headquarters in China.⁸
  • Report environmental emergencies to Financiers, Chinese Embassies, Chinese Consulates, and Environmental Management Departments in the Host Country Government in a timely manner.⁹
• Establish Compliance Departments with dedicated officers and staff.¹⁰
  • Encourage subsidiaries and affiliate companies to establish their own Compliance Departments and designate the necessary staff.
  • Establish and implement a system to improve compliance with international standards.
  • Report information about compliance with local laws and regulations.
• Submit reports on the main problems facing projects, as well as compliance with local laws and regulations.¹¹
• Report incidents, hazardous situations, risks, and problems related to projects in a timely manner.¹² 
  • Report the following incidents to the Chinese Ministry of Commerce (MOFCOM):¹³
    • Major problems with project quality.
    • Violent terrorist attacks.
    • Public security crimes.
    • International media reports on anti-corruption investigations conducted by overseas institutions.
    • Environmental emergencies, local environmental protection penalties, and serious ecological damage.
    • Major health events.
    • Natural disasters.
    • War.
• Provide information on hazards associated with projects and appropriate mitigation measures to Affected People.¹⁴
• Use environmental and social hazard assessments to formulate emergency response plans or improvement plans, which could be ESAPs.¹⁵
  • Address environmental accidents or emergencies in a timely manner.¹⁶
  • Address health and safety (H&S) hazards.¹⁷
  • Minimize damage to companies and local communities.¹⁸
• Respond to emergencies in accordance with the direction of Chinese Embassies and Consulates, as well as the Host Country Government.¹⁹
  • Provide financial, material, and personnel support in cases of natural disasters and emergencies.²⁰
  • Coordinate and solve major issues in engineering construction safety, occupational health, and environmental management.²¹
  • Restore the environment if damage occurs during construction.²²
• Use multiple means of conflict management, including mediation, for settling environment-related disputes.²³
• Adopt corrective measures for future improvement.²⁴
  • Carry out proactive measures for improvement in H&S.²⁵
• Implement measures to prevent emergencies, as well as social and environmental damage.²⁶
  • Pay attention to project quality and safety management to prevent related accidents.²⁷

Insurers should:²⁸

• Expedite damage assessments, settle claims, and quickly compensate pollution victims.

The Chinese Government should:

• Establish and improve the system for overseas compliance risk review, control, and decision-making.²⁹
  • Establish an overseas investment blacklist.
  • Jointly prevent and penalize noncompliance.
• Propose response plans and preventive measures to address major political, economic, and social risks in host countries and safeguard the legal rights and interests of Chinese companies overseas.³⁰
• Reinforce cooperation on environmental emergencies and early warnings and sharpen environment risk prevention capabilities for BRI projects.³¹

MOFCOM and Local Commerce Departments in China should:

• Establish a safety risk assessment mechanism for projects.³²
  • Publish results.
  • Guide Developers and Contractors toward preventing safety risks.
• Establish and improve their own mechanisms for early warnings, risk prevention, and emergency response.³³

Chinese Environmental Protection Departments should:

• Disclose information about major environmental emergencies.³⁴
• Proactively disclose emergency response plans and forecasts and a list of Developers and Contractors that have discharged pollutants exceeding environmental standards or have been responsible for major, large-scale environmental pollution accidents.³⁵
• Record and notify the public about Developers’ and Contractors’ illegal acts, as well as penalties, in the “National Enterprise Credit Information Publicity System” if these companies do not follow regulations for recording and reporting project information.³⁶

The Chinese Government, as well as Chinese Embassies and Consulates in host countries should:³⁷

• Maintain records of the following events:
  • Accidents occur because of noncompliance with technical and health standards.
  • Developers and Contractors damage the local environment or threaten local public safety.
  • Developers and Contractors do not take effective measures against local security risks.
  • Conflicts with local people arise from projects’, Developers’, or Contractors’ disrespect for local practices, customs, religions, and lifestyles.
  • Labor disputes arise from noncompliance with local labor laws.
  • Developers and Contractors violate local laws and regulations.

The China International Contractors Association (CHINCA) should:³⁸

• Reprimand Developers and Contractors for the following events:
  • Conflicts with local people arising from projects and Developers’ or Contractors’ disrespect for local customs, religious beliefs, and living habits.
  • Threats to local public safety.
  • Violations of labor contracts or labor laws.
• Use industry regulations to determine other violations of laws and regulations, signs of a lack of integrity, and bad business behaviors by Developers or Contractors.³⁸

For Domestic Projects in China Only:

The Chinese Government should:

• Disclose information about emergency plans for, early warning information concerning, and countermeasures against sudden public events.³⁹
• Enforce accountability for environmental damage.⁴⁰

Subnational Governments in China should:⁴¹

• Organize environmental impact assessments (EIAs) immediately after emergencies and publicly disclose results in a timely manner.

Developers and Contractors should:⁴²

• Submit an updated EIA document for approval if major changes occur to each project's scale, environmental impacts, or mitigation measures once project implementation begins.
• Reduce environmental pollution and ecological disruption and assume liabilities for any damage.⁴³

During the pre-project planning phase, Financiers should:

• Establish internal procedures for monitoring — and, in rare cases, taking — corrective and preventive actions to address accidents, incidents, unanticipated adverse impacts, or proposed changes to projects during the project implementation and operations phases.
• Include the following requirements for Developers (and Contractors) in the environmental and social management plan (ESMP) and project agreements:
  • Undertake an environmental and social impact assessment (ESIA) after accidents, incidents, or other unanticipated adverse impacts occur or after major changes to projects are proposed by Developers (and Contractors).
  • Inform and consult Affected People and other key stakeholders through regular engagement.
  • Propose corrective and preventive actions, time frames for their implementation, and reporting requirements in the ESAP.
  • Submit the ESAP for Financiers’ review and approval.
  • Implement corrective and preventive actions in accordance with the ESAP.

During the project implementation and operations phases, Developers (and Contractors) should:

• Respond to accidents, incidents, and other changes to the nature, scope, design, implementation, or operation of projects in accordance with emergency response plans.
  • Inform the Financiers, Host Country Government, Affected People, CSOs/NGOs, and other key stakeholders of each accident, incident, unanticipated adverse impact, or major project change, as well as the timeline for preparing and implementing an ESAP.
  • Hire independent Researchers/Experts to carry out an ESIA.
  • Hire Resettlement Professionals to help address issues surrounding land acquisition, resettlement, and livelihood restoration.
• Not proceed with project implementation until the ESAP is formulated, disclosed, and approved.

With support from Developers (and Contractors), Researchers/Experts should:

• Prepare and undertake a comprehensive assessment to examine new — or increased — environmental and social risks and impacts for each accident, incident, unanticipated adverse impact, or major change to a project.
  • Identify the necessary corrective and preventive actions.
    • Avoid or minimize the potential for community exposure to waterborne, water-based, water-related, and vector-borne diseases; communicable and noncommunicable diseases; and hazardous materials and substances from project activities.
    • Propose measures to mitigate adverse impacts of emergencies that could arise from natural or humanmade hazards, such as explosions, fires, leaks, or spills.
  • Inform Affected People, CSOs/NGOs, and other key stakeholders of their findings.
  • Consult these stakeholders on the environmental and social risks and impacts, as well as appropriate corrective and preventive actions.
    • Arrange appropriate initiatives/activities/measures to mitigate or compensate for the needs and expectations of Affected People.
    • Where applicable, reallocate the community development fund to cover issues of greatest concern to local communities.
• Prepare ESAPs with the following information:
  • Baseline data from project monitoring.
  • Results from new ESIAs.
  • Knowledge, practices, and experiences learned through stakeholder consultation.
  • Proposed corrective and preventive actions, including measures to strengthen existing procedures and Developers’ and Contractors’ capacity for environmental and social management.
  • Desired outcomes and actions for corrective and preventive actions.
  • Monitoring and reporting measures, including performance indicators, to track the effectiveness of corrective and preventive actions.
  • Time frames for implementing, monitoring, and reporting on corrective and preventive actions.
  • Estimated costs, personnel, and other resources needed to implement, monitor, and report on corrective and preventive actions factored into the project budget.
  • Institutional or organizational arrangements and responsibilities for Developers’, Contractors’, and Subcontractors’ Staff, relevant agencies and ministries within the Host Country Government, Affected People, CSOs/NGOs, Researchers/Experts, and independent third-party stakeholders in implementing, monitoring, and reporting on corrective and preventive actions.
  • A commitment to undertaking corrective and preventive actions in accordance with environmental and social requirements.
• Update each ESIA report and ESMP to reflect changes to each project.
• Share each finalized ESAP with Developers (and Contractors).

Developers (and Contractors) should:

• Submit finalized versions of each ESAP in Chinese, English, and the local dialect(s) and language(s), including minority and Indigenous languages, to Financiers and the Host Country Government for review and public disclosure.
• Share finalized versions of each ESAP in Chinese, English, and the local dialect(s) and language(s) directly with Contractors (and Subcontractors), as well as Affected People, CSOs/NGOs, and other key stakeholders.
• Disclose finalized versions of each ESAP on their websites and social media accounts, as well as at the village/town/city/district/provincial hall in a timely manner.

Financiers should:

• Carry out environmental and social due diligence of accidents, incidents, unanticipated adverse impacts, and/or project changes proposed by Developers and Contractors.
  • Conduct additional assessments to review the environmental and social categorization of each project.
• Consult with Developers (and Contractors) on corrective and preventive actions needed to address noncompliance with environmental and social requirements in project agreements within appropriate time frames.
• Approve of, request changes to, or reject ESAPs.
  • If ESAPs have gaps or uncertainties in information, require Developers (and Contractors) to conduct additional assessments, expand stakeholder engagement, and/or devise more robust corrective and preventive actions.
  • Determine whether additional monitoring or reporting requirements based on projects’ risks and impacts, as well as the scope of corrective and preventive actions, are needed.
• Use internal procedures to determine their own measures to monitor and evaluate the implementation of each ESAP.

Financiers, Developers, Contractors, the Host Country Government, and the ESIA Authority should:

• Publicize the finalization of each ESAP in local media outlets.
• Post updates on each ESAP on their websites and social media accounts in Chinese, English, and the local dialect(s) and language(s).
• Add each ESAP to a publicly available database of projects’ ESIA, ESMP, and other related documents on their websites. Maintain records of these materials at the village/town/city/district/provincial hall and the ESIA Authority’s office.
  • Disclose the following materials in the local language(s) and dialect(s) for free on their websites, at the village/town/city/district/provincial hall and at the ESIA Authority’s office as soon as possible:
    • Updated maps, drawings, charts, diagrams, brochures, and/or technical documents.
    • Updated versions of the ESIA and ESMP, if applicable.
  • Retain digital copies of these materials on their websites, as well as physical copies at the village/town/city/district/provincial hall and the ESIA Authority’s office, throughout the project implementation and operations phases.

Developers (and Contractors) should:

• Implement corrective and preventive actions in accordance with arrangements and time frames set out in each ESAP.
  • Support Affected People, relevant agencies of the Host Country Government, and other stakeholders in responding effectively to emergencies.
• Work with relevant agencies and ministries within the Host Country Government, as well as with Affected People, CSOs/NGOs, Researchers/Experts, and independent third-party stakeholders to:
  • Periodically document the actions taken. Use key performance indicators (KPIs) to track the effectiveness of these actions through Project Monitoring and Reporting.
  • Disclose information about the actions and results on their websites in a timely manner.

Financiers should:

• Apply contractual remedies under project agreements to reestablish project compliance, if Developers (and Contractors) either are unable to manage accidents, incidents, unanticipated adverse impacts, and other significant changes in accordance with project agreements or fail to implement corrective and preventive actions in the predetermined in accordance with each ESAP.
  • Consult and collaborate with Developers (and Contractors) on ensuring project compliance with environmental and social requirements.
  • Engage and consult Affected People, CSOs/NGOs, and other key stakeholders on how the situation should be rectified.
  • Exercise legal means, including suspension, cancelation, or acceleration of maturity for project financing.⁴⁴

• During the pre-project planning phase, browse the websites of Financiers, Developers, and Contractors for information about their policies, procedures, and/or mechanisms for early warnings, environmental and social risk prevention, and emergency response.
• As soon as an accident, an incident, or an unanticipated adverse impact occurs or a major project change is proposed, browse Financiers’, Developers’, and Contractors’ websites for information about a new assessment, additional stakeholder consultation, preparation of the ESAP, potential corrective and preventive actions, time frames for implementation, and future monitoring.
• If any of the previously mentioned project-related information and Financier-, Developer-, or Contractor-specific information cannot be found online, ask the appropriate actor to publicly disclose specific details in your native language. See Stakeholders to identify some of the available mode(s) of contact.
  • If you are unable to directly contact the Developers and Contractors, reach out to Financiers for assistance.
  • If you are unable to directly contact the Financiers, reach out to a Community Leader or CSO/NGO for assistance.
• During the project implementation and operations phases, review Financiers’, Developers’, Contractors’, and Subcontractors’ compliance with governmental, industry-specific, and internal policies, procedures, and guidelines for responding to accidents, incidents, and unanticipated adverse impacts, as well as proposing major changes to projects.
  • Review Financiers’ compliance with the China Banking and Insurance Regulatory Commission’s (CBIRC) “Key Performance Indicators (KPIs) of Green Credit Implementation” and “Opinions on Green Credit Implementation.” Submit concerns or complaints about Financiers’ noncompliance with KPIs to CBIRC.
  • Review CHINCA’s “Administrative Measures for the Credit File of Member Enterprises of the China International Contractors Association,” “Penalty Measures for Violations by Foreign Contracted Engineering Enterprises (Trial),” “Guidelines of Sustainable Infrastructure for Chinese International Contractors,” and “Community Engagement Handbook for Chinese International Contractors.” Submit concerns or complaints to CHINCA about Developers and Contractors that fail to properly handle conflicts with local people, threats to public safety, and violations of labor contracts or labor laws, among other types of accidents, incidents, and unanticipated adverse impacts, and prevent recurrences.
• For Developers and Contractors that are Central State-Owned Enterprises (CSOEs), review their compliance with the State-owned Assets Supervision and Administration Commission of the State Council’s (SASAC) mandate for them to provide financial, material, and personnel support in case of natural disasters and emergencies.⁴⁵
• Report major relevant situations or events, such as the failure to effectively manage environmental emergencies and/or damage, to the Chinese MOFCOM and the Ministry of Ecology and Environment (MEE) in a timely manner.
• Check whether the Developers and Contractors are part of the Chinese MEE’s — or related Environment Protection Departments’ — public list of companies that have discharged pollutants exceeding environmental standards or have been responsible for major, large-scale environmental pollution accidents.
• Check whether the Developers and Contractors have illegal acts and/or penalties recorded in the “Chinese National Enterprise Credit Information Publicity System.”
• Submit queries/concerns/complaints about noncompliance with other policies, procedures, or guidelines to the appropriate actor.

Hiring Experts and/or engaging Relevant Host Country Government Agencies to devise corrective and preventive actions, produce ESAPs, and conduct consultations with key stakeholders throughout the project life cycle would:

• Advance high-quality development along the BRI.
• Align Financiers’, Developers’, and Contractors’ practices for BRI projects with Chinese policies and guidelines for responding to — and ultimately preventing — emergencies and other issues, as well as international best practices.
• Address critical gaps in compliance with host country laws, regulations, and procedures on how to respond to accidents, incidents, unanticipated adverse impacts, or proposed changes to projects.
• Fully inform key stakeholders of such circumstances.
• Maintain regular contact between Developers, Contractors, Experts, and the Host Country Government on the one hand and local communities, CSOs/NGOs, and other third-party stakeholders on the other. Build strong relationships based on inclusive dialogue and constructive feedback.
• Increase transparency and accountability of project-related operations, especially surrounding responses to significant adverse impacts and risks during the project implementation and operations phases.
• Improve the overall quality of each ESAP and project. Ensure local and Indigenous knowledge, expertise, and practices inform project decision-making, implementation, and operations.
• Build trust, understanding, and capacity among local communities, host country stakeholders, and other third-party stakeholders.
• Ensure promises, commitments, and requirements on environmental and social management set in the pre-project planning phase are fulfilled.
• Drive people-oriented progress and further green development.
• Bolster Developers’ and Contractors’ annual company rankings or credit ratings for effectively addressing environmental, social, and governance (ESG) issues, while abiding by host country legislation and fulfilling other social responsibilities.
• Reduce the risk of protests, damage, or other forms of conflict during the project implementation and operations phases.
• Curb significant commercial costs from delays caused by social upheaval, especially during the project implementation and operations phases.

• Black Sea Trade and Development Bank (BSTDB), “Environmental and Social Action Plan,” View the PDF.
• United States Agency for International Development (USAID), “Corrective Action Plan (CAP),” Version 2, March 2018, View the Website.

¹ This checklist uses the term ESAP to recommend the implementation of appropriate corrective and preventive actions during the project implementation and project operations phases. These documents may also be called corrective action plans. However, Financiers, Developers, Contractors, and/or the Host Country Government may require or prefer that any accident, incident, unanticipated adverse impact, or other change be addressed in updated versions of the environmental and social impact assessment (ESIA), environmental and social management plan (ESMP), or other related documentation approved during the pre-project planning phase.

² Ministry of Commerce (MOFCOM), “Administrative Measures on Outbound Investment,” September 2014.

³ China Banking Regulatory Commission (CBRC) and China Insurance Regulatory Commission (CIRC) (now China Banking and Insurance Regulatory Commission (CBIRC)), “Notification of the China Banking Regulatory Commission in the Issuance of the Guidance on Commercial Banks’ Management of Reputational Risk,” August 2009.

⁴ CBRC and CIRC, “General Office of the China Banking Regulatory Commission Opinions on Green Credit Implementation,” 2013.

⁵ Export-Import Bank of China (China Exim Bank), “White Paper on Green Finance and Social Responsibility,” 2019.

⁶ Green Finance Initiative & Green Finance Committee (GFC), “Green Investment Principles (GIP) for the Belt and Road,” 2018.

⁷ China Chamber of Commerce Metals, Minerals and Chemicals Importers & Exporters (CCCMC), “Guidelines for Social Responsibility in Outbound Mining Investments,” 2017.

⁸ MOFCOM and Ministry of Environmental Protection (MEP) (now Ministry of Ecology and Environment (MEE)), “Guidelines for Environmental Protection in Foreign Investment and Cooperation,” February 2013.

⁹ MOFCOM and MEE, “Guidelines for Ecological Environmental Protection in Foreign Investment Cooperation and Construction Projects,” January 2022.

¹⁰ Power Construction Corporation of China (PowerChina), “Announcement on Further Strengthening Compliance Operation,” September 2017.

¹¹ MOFCOM et al., “Interim Measures for the Reporting of Outbound Investments Subject to Record-filing or Approval,” January 2018.

¹² China International Water and Electric Corporation (CWE), “Integrity Compliance Declaration,” 2019; Sinohydro, “Statement of Ethical Principles,” 2014.

¹³ MOFCOM, “Notice on Strengthening the Reporting of Foreign Contracted Projects,” June 2021.

¹⁴ CCCMC, “Outbound Mining Investments.”

¹⁵ The following policy covers improvement plans that correspond to environmental and social impact assessments (ESIAs) during project implementation and operations: China International Contractors Association (CHINCA), “Guide on Social Responsibility for Chinese International Contractors,” September 2012. The following policy refers to the use of environmental and social impact assessments (ESIAs) for emergencies: SynTao and CHINCA, “Community Engagement Handbook for Chinese International Contractors-北京商道纵横信息科技有限责任公司,” 2021. The following policy focuses on environmental emergencies: MOFCOM and MEE, “Foreign Investment Cooperation.” The following policy covers emergencies in general: State Council, “Regulations on the Administration of Foreign Contracted Projects,” July 2017.

¹⁶ China Datang Corporation (CDT), “Regulation on Environmental Protection,” 2017.

¹⁷ Sinohydro, “Occupational Health, Safety and Environmental Policy Statement,” 2013.

¹⁸ SynTao and CHINCA, “Community Engagement Handbook.”

¹⁹ MOFCOM, “Administrative Measures on Outbound Investment.”

²⁰ State-owned Assets Supervision and Administration Commission of the State Council (SASAC), “Guidelines to the State-owned Enterprises Directly Under the Central Government on Fulfilling Corporate Social Responsibilities,” December 2007.

²¹ CDT, “Regulation on Project Safety, Health and Environment,” 2009.

²² Ibid.

²³ GFC et al., “Environmental Risk Management Initiative for China’s Overseas Investment,” September 2017.

²⁴ CCCMC, “Outbound Mining Investments.”

²⁵ Sinohydro, “Occupational Health.”

²⁶ The following policy focuses on preventing emergencies: CHINCA and Dagong Global Credit Rating, “Guidelines of Sustainable Infrastructure for Chinese International Contractors (SIG),” June 2017. The following policies focus on preventing damage: Sinohydro, “Statement of Ethical Principles;” CHINCA, “Penalty Measures for Violations by Foreign Contracted Engineering Enterprises (Trial),” April 2018.

²⁷ CHINCA, “Penalty Measures for Violations.”

²⁸ People's Bank of China (PBOC) et al., “Guidelines for Establishing the Green Financial System,” August 2016.

²⁹ General Office of the State Council et al., “Guidelines on Further Guiding and Regulating Overseas Investments,” August 2017.

³⁰ Ibid.

³¹ MEP et al., “Guidance on Promoting Green Belt and Road,” April 2017.

³² State Council, “Foreign Contracted Projects.”

³³ Ibid.

³⁴ MEP, “Notice on Further Strengthening the Disclosure of Environmental Protection Information,” October 2012.

³⁵ State Environmental Protection Administration of China (SEPA) (now MEE), “Measures on Open Environmental Information,” February 2007.

³⁶ MOFCOM et al., “Interim Measures.”

³⁷ MOFCOM et al., “Provisional Measures for Recording Bad Credit in the Fields of Outbound Investment and Cooperation and Foreign Trade,” July 2013.

³⁸ CHINCA, “Administrative Measures for the Credit File of Member Enterprises of the China International Contractors Association,” 2018.

³⁹ State Council, “Regulations on Open Government Information of the People's Republic of China,” January 2007.

⁴⁰ Standing Committee of the National People’s Congress, “Revision of Environmental Protection Law of the People's Republic of China,” April 2014.

⁴¹ Ibid.

⁴² Standing Committee of the National People's Congress, “Environmental Impact Assessment Law of the People's Republic of China,” October 2002; MEE, “Regulations on the Approval Procedures for Environmental Impact Assessment Reports (forms) of Construction Projects,” November 2020.

⁴³ Standing Committee, “Revision of Environmental Protection Law.”

⁴⁴ International Best Practice is based on Asian Development Bank (ADB), "Safeguard Policy Statement," 2009; Asian Infrastructure Investment Bank (AIIB), "Environmental and Social Framework," 2021; World Bank, "Environmental and Social Framework," 2018; Mekong Partnership for the Environment, "Guidelines on Public Participation in Environmental Impact Assessment in the Mekong Region," First Edition, 2017.

⁴⁵ SASAC, “Fulfilling Corporate Social Responsibilities.”