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China Punishes Twelve Heavy Polluters Under New ‘Green Credit’ Policy

with 3 comments

Twelve Chinese companies reported for environmental violations have had crucial bank loans recalled, suspended or rejected. The first list of thirty offending companies was submitted to the People’s Bank of China and the China Banking Regulatory Commission by the State Environmental Protection Administration (SEPA) in July this year. China’s new ‘Green Credit’ policy is intended to starve notorious polluters of operating capital. Under Chinese law, polluters are subject to a maximum fine of 100,000 yuan (about 13,500 U.S. dollars).

“The deterioration of China’s environment tells that it is not effective to rely on just one department to monitor pollution emissions,” said Pan Yue, deputy minister of SEPA. “The environmental watchdog needs to work hand in hand with financial policymakers to find ways to punish polluting factories.”

Wang Jinnan, a senior expert at the Chinese Academy for Environmental Planning, said: “The listed plants are small and medium-sized plants, which face more challenges than large companies when applying for loans from financial institutions. The green credit system is a reasonable way to control pollution from the small and medium-sized plants. But if large companies were on the list this time, the policy would be more influential and effective.”

None of the names on the list have been made public. However, most of the factories were in the paper-making, coking, pharmaceuticals, iron and steel, and brewery industries. This week’s report outlined several cases, including:

  • a brewery in East China’s Anhui Province whose 10 million yuan ($1.35 million) loan application was rejected owing to continued violations in waste-water discharge.
  • a power company in Chengdu, capital of Sichuan Province, whose bank loans were recalled after it failed to pass an environmental assessment.

Wang Jinnan, a senior expert at the Chinese Academy for Environmental Planning, said: “The listed plants are small and medium-sized plants, which face more challenges than large companies when applying for loans from financial institutions. The green credit system is a reasonable way to control pollution from the small and medium-sized plants. But if large companies were on the list this time, the policy would be more influential and effective.”

We shall have to wait and see whether the green credit system will have a real impact on pollution in China. If SEPA continues to ignore the large companies, this policy may prove to be just window dressing.

Chinaview

Chinadaily

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Written by Pete Smith

November 16, 2007 at 9:02 am

3 Responses

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  1. It would also be a good idea if funds were made available for the needed environmental improvements.

    matt

    November 16, 2007 at 9:55 am

  2. It’s the old cleft stick, isn’t it? How can they clean up if they can’t get the cash? China’s not alone in this, UK firms like Thames Water have been fighting fines on the same grounds for years.

    Pete Smith

    November 16, 2007 at 10:00 am

  3. Yes, I have felt uneasy about the UK government (and their watchdogs) fining the likes of Thames Water. The company has taken the responsibility off the government for providing clean water to their designated areas after all. The govt then fines them so as to look like they’re doing something to monitor the company and the system of privatisation they set up in the first place, well them and the last Tory govt.

    Madness!

    matt

    November 16, 2007 at 10:15 am


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