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published on December 18, 2018 | reading time approx. 2 minutes
In China, the Law on Prevention and Control of Soil Pollution (Soil Pollution Law) was recently adopted and will enter into force on 1 January 2019. Among others, the law contains liability regulations in connection with the prevention, reduction and remediation of soil contaminations. It also provides the establishment of national standards for determining risks, in particular with regard to health risks, pollution levels and environmental risks. The law will also allow local governments to adopt stricter regulations.
The new Soil Pollution Law firstly provides greater legal certainty, as the regulations previously scattered across different laws and regulations are now stipulated in a single provision. However, the adoption of implementing rules to specify the obligations and measures in more detail remains to be seen.
The law provides for the establishment of an information platform. This platform shall include aspects such as soil protection in the plans for the further economic development and environmental protection, as well as a system for ecological monitoring of the soil. The public shall be involved by a higher transparency and the possibility to access data in the platform.
The Soil Pollution Law contains new obligations for (especially producing) companies and holders of land use rights. They are now obliged to take effective measures to prevent or reduce soil pollution and are liable for any pollution they cause.
In the event of contamination, the level of the contamination shall first be determined. If the level of contamination exceeds the limit laid down in the relevant standard, a risk assessment shall be carried out and the corresponding report shall be submitted to the competent authority. They can then include the site in a list of land subject to risk management, control and restoration. In such a case, the polluter must take appropriate measures to control the risks of pollution. If soil restoration is required, the polluter must submit an action plan and, after examination of the plan, remove the contaminations. The clean-up measures as well as further risk management and control shall be evaluated by an independent entity.
In addition, the Soil Pollution Law provides for fines for companies as well as penalties (including detention) for managers responsible for violations. The law also stipulates the possibility of tax reductions for companies engaged in soil control and restoration. However, the implementing measures remain to be seen.
On the other hand, the Soil Pollution Law also offers opportunities for companies specialized in soil restoration since an increase in orders for corresponding restoration works can be expected in the future.
Companies should review and, where appropriate, adapt their soil pollution prevention measures. In addition, internal rules on soil pollution should be adapted. In particular, this could be a respective emergency plan.
It should also be noted that the law holds the polluter responsible for the removal of pollution and soil restoration. However, there may be situations where the polluter cannot be identified anymore or where the origin of the pollution is in dispute. In such cases, the holder of the land use right is responsible (but a provision to identify the polluter in such cases will be drafted).
The possibility of soil contamination should therefore also be taken into account in the conclusion of planned contracts such as the transfer of land use rights, share or asset deals as well as rental or lease agreements.
Sebastian Wiendieck
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Peter Stark
