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Preface

“ Lucid waters and lush mountains are invaluable assets. ” In recent years, to implement the concept of green development, the country has continuously intensified its efforts to protect the ecological environment—particularly 2020 Year 9 Month 1 Since the newly revised "Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste" came into effect, businesses have been increasingly facing environmental violations, leading to growing pressure to comply with environmental regulations. If companies fail to prioritize environmental concerns, they not only risk administrative penalties but could even be charged with the crime of polluting the environment, potentially resulting in criminal prosecution. According to reports, 2020 This year, the country issued a total of environmental administrative penalty decisions. 12.61 Ten thousand copies, with the total amount of fines and confiscated funds 82.36 Hundreds of millions of yuan. Public security authorities have also consistently maintained a strong crackdown on environmental crimes and violations. 2018 Since the beginning of this year, public security organs across the country have jointly cracked down on environmental pollution cases. 1.2 Tens of thousands, with nearly suspects apprehended 3.3 Tens of thousands, dismantling criminal gangs 3048 Notably, once a company is suspected of environmental violations or even criminal offenses, it not only faces significant financial, reputational, and business opportunity losses but may also risk its very survival due to the hefty fines imposed under the dual-penalty system. Therefore, to ensure green, healthy, and sustainable corporate growth, businesses must proactively embrace environmental responsibility during production and operations, strictly adhere to environmental laws and regulations, diligently maintain environmental compliance, and proactively mitigate the risks of environmental non-compliance. This article explores these issues in three key areas: corporate environmental compliance legal frameworks, environmental compliance risks, and effective strategies for managing and preventing such risks.

I. Environmental Compliance Legal Standards

(1) Administrative Legal Norms

Currently, China has initially established a legal framework for environmental protection, and its legal governance system is steadily becoming more comprehensive, primarily including:

1.  Constitutional provisions on environmental protection

As stipulated in Article 26 of the Constitution: The state protects and improves both the living environment and the ecological environment, while preventing and controlling pollution and other forms of public hazards. The state also organizes and encourages activities such as tree planting and afforestation, ensuring the protection of forests and trees.

2.  Environmental Protection Laws

( 1 ) Comprehensive Basic Law on Environmental Protection

Environmental Protection Law

( 2 ) Single Environmental Protection Law

① Pollution Prevention and Control Laws: The Air Pollution Prevention and Control Law, the Water Pollution Prevention and Control Law, the Soil Pollution Prevention and Control Law, the Law on the Prevention and Control of Solid Waste Pollution, the Environmental Impact Assessment Law, and more;

② Environmental Resource Laws: The Forest Law, the Mineral Resources Law, and others.

( 3 ) Legal provisions on environmental protection found in other sectoral laws

As stipulated in Article 9 of the Civil Code: Civil subjects engaging in civil activities shall act in a manner that promotes resource conservation and protects the ecological environment.

3.  Environmental protection laws and regulations

Such as the "Administrative Measures for Operating Permits of Hazardous Wastes," the "Regulations on the Management of Medical Wastes," the "Catalogue of Classified Management of Discharge Permits for Fixed Pollution Sources," and the "Administrative Measures for the Joint Manifest System for Hazardous Waste Transfers," among others.

4.  Environmental standards

It primarily includes national environmental standards and local environmental standards, such as the Integrated Wastewater Discharge Standards. GB 8978-1996 )、Standards for Pollution Control in Municipal Solid Waste Incineration GB 18485-2014 ) etc.

5.  International treaties related to environmental protection

As in our country 1989 The Vienna Convention for the Protection of the Ozone Layer, joined this year.

(II) Criminal Legal Regulations

Since 1997 Since the Criminal Law added the crime of major environmental pollution incidents in [year], this offense has undergone two major reforms and adjustments (see Table 1 for details). 2011 The 2011 Amendment (VIII) to the Criminal Law reclassified the crime of causing major environmental pollution accidents as simply "environmental pollution," removing the original wording. “ Causing a major environmental pollution incident that results in significant losses of public and private property or severe casualties. ” The outcome requirements lower the threshold for criminal liability, thereby providing more proactive protection of environmental legal interests. 2020 Building on this, the 2021 Criminal Law Amendment (XI) further added four scenarios that trigger enhanced statutory penalties (imprisonment of seven years or more, along with a fine). This clearly demonstrates that the state is steadily intensifying its crackdown on environmental crimes, underscoring the critical need for businesses to take these issues extremely seriously.

Table 1: Key Changes in the Crime of Environmental Pollution

(III) Judicial Interpretation

2016 Year, “ Two Supreme Courts ” "The Interpretation on Several Issues Concerning the Application of Laws in Handling Criminal Cases of Environmental Pollution" further clarifies the specific criteria for convicting and sentencing offenses related to environmental pollution, outlining: 18 The species should be recognized as “ Severely polluting the environment ” The circumstances, along with a detailed explanation and distinction of sentencing standards for cases involving heavy metal pollution of the environment, have been added. “ The consequences are particularly severe. ” The circumstances of identification, among other factors. This interpretation enhances the practicality of judicial proceedings and underscores the nation's determination to combat pollution through criminal accountability and firmly punish environmental crime offenses.

2019 Year, “ Two Supreme Courts and Three Ministries ” Environmental pollution crimes are typically carried out covertly, making them difficult to detect in a timely manner. Common environmental violations by businesses include illegally dumping hazardous waste, secretly installing hidden pipes or seepage pits, discharging untreated industrial wastewater, emissions, and waste residues—often at concentrations far exceeding regulatory limits—directly into the environment, as well as tampering with online environmental monitoring data. Moreover, the consequences of these pollution-related crimes tend to be long-lasting and irreversible; once contamination occurs, it becomes extremely challenging to remediate and restore the affected ecosystems.

II. What environmental compliance risks do companies face?

Environmental compliance risk refers to the risk that a company may face administrative penalties from regulatory authorities or criminal prosecution by judicial bodies due to environmental violations, infractions, or even criminal activities during its operations.

1.  Administrative Legal Risks

Companies across different industries, regions, and sectors may face varying environmental legal risks. Generally speaking, the most prominent environmental legal risks for businesses typically revolve around air, water, and solid waste pollution (see Table 2 for details). Should a company fail to comply with environmental laws and regulations, the primary administrative penalties it could encounter include fines and temporary suspension of operations. / Revocation of licenses, orders to suspend production and business operations, orders for closure, administrative detention, and more.

Table Two Common Environmental Legal Risks for Businesses

In recent years, with the introduction and revision of the country's environmental protection-related laws and regulations, the environmental situation has become increasingly challenging, placing greater environmental legal responsibilities on businesses. Take the newly revised "Law on the Prevention and Control of Environmental Pollution by Solid Waste" as an example—this law has expanded and refined its dedicated chapter on legal liabilities, significantly tightening penalties for non-compliance in solid waste management and raising the financial costs of violations for companies. In addition to introducing specific fines for new provisions, the law has also broadly increased the penalty amounts for existing infractions, with fines now potentially reaching up to 5 million yuan, along with the addition of enforcement measures such as daily continuous penalties, administrative detention, and seizure/impoundment. These stringent changes in legal responsibilities also warrant particular attention from businesses.

2. Criminal Legal Risks

Environmental pollution crimes are typically carried out covertly, making them difficult to detect in a timely manner. Common environmental violations by businesses include illegally dumping hazardous waste, secretly installing hidden pipes or seepage pits, discharging untreated industrial wastewater,废气, and废渣—often at concentrations far exceeding regulatory limits—directly into the environment, as well as tampering with online environmental monitoring data. Moreover, the consequences of these pollution-related crimes tend to be long-lasting and irreversible; once contamination occurs, it becomes extremely challenging to remediate and restore the affected ecosystems.

The subjects of the crime of environmental pollution include both individuals and organizations, with organizations accounting for a significantly higher rate of criminal activity. In fact, the vast majority of pollution incidents occur in conjunction with businesses' production and operational activities. Some enterprises, driven by the pursuit of illicit profits and aiming to cut down on production costs, illegally discharge wastewater or waste materials, or improperly dispose of hazardous waste—often using their organizational resources to cover up these criminal acts. Article 31 of the Criminal Law explicitly stipulates that both the organization and its responsible personnel involved in corporate crimes must be held accountable. “The dual-penalty system” mandates criminal prosecution for all entities and individuals bearing criminal responsibility. Moreover, many illegal enterprises—primarily small-scale workshops and makeshift operations—operate without business licenses, environmental impact assessments, or pollution-control facilities. These tiny workshops often have low hiring standards, and their employees typically lack both professional skills and environmental awareness. As a result, the number of criminal cases involving unauthorized discharge of pollutants from unlicensed and unregistered workshops has been rapidly increasing in recent years.

The author used "environmental pollution crime" as a keyword to search for cases from recent years, resulting in a total of As of 2011–2021, there were 16,668 court judgments related to environmental pollution offenses (see Figure 1 for details). Notably, over the past five years (2016–2020), more than 2,000 cases involving environmental pollution crimes were recorded annually, peaking in 2019 with 3,229 cases. Regionally, 11 provinces reported over 300 such cases, with the top five being Zhejiang, Hebei, Guangdong, Shandong, and Jiangsu—aligning closely with public perceptions of environmental crime. These regions tend to have higher economic development levels and greater industrialization, leading to a larger number of businesses and, consequently, more frequent environmental incidents. Additionally, as a relatively new type of crime, environmental pollution offenses are heavily influenced by regional enforcement standards. Eastern China generally maintains stricter environmental regulations and enforcement practices, having pioneered institutional reforms early on across various stages—including law enforcement, investigation, prosecution, and judicial proceedings. In terms of trial procedures, approximately three-quarters of the cases were handled in first-instance proceedings, while second-instance reviews accounted for about one-quarter. Very few cases reached the retrial stage. Regarding court jurisdiction, the vast majority of cases were heard by grassroots people’s courts, with these courts and intermediate-level courts jointly handling over 98% of all cases.

Figure 1: Case Retrieval on Environmental Pollution Crimes (Data sourced from Peking University LawInfo)