DECEMBER 2012

Promulgated October 8, 2012

The Twelfth Five-Year Plan was jointly issued by the Environmental Protection Agency, the National Development and Reform Commission, the Ministry of Industry and Information Technology (MIIT) and the Ministry of Health.

Specific goals of the newly issued plan to be met by 2015

Targets for utilization and treatment:

• Completechromiumslagremediation

• Increasetheproportionofannualhazardouswaste(excludingchromium slag) annually used and treated by companies holding permits by 75% or more (compared to 2010 levels)

• Compelmunicipalandhigher-levelkeyhazardouswaste-producing companies to independently utilize and treat hazardous waste in order to render it harmless

• Implementmeasurestorendermedicalwasteharmlessatthemunicipal, county and local levels

Targets for facility construction and operation:

• Completetheconstructionofcentralizedmedicalandhazardous waste handling facilities under the Facilities Construction Plan

• Increasetheloadrateforincinerationofhazardouswaste(notincluding medical waste) to 75% or greater

Target for standardized management:

• Increasethepercentageofhazardouswasteproducerspassingspot-checkstandardizedmanagementinspectionsto90%orbetter, and the level of hazardous waste operators passing spot checkstandardizedmanagementinspectionsto95%orbetter

Inadditiontothesegoals,theplancallsoutthreekeyareasthat must be improved for the prevention of hazardous waste pollution: hazardous waste production and storage surveys; utili-zation and treatment measures; and supervision capacity and human resources training projects. The funding dedicated to these improvementsisexpectedtobeapproximatelyRMB26.1billion.

Through the plan, the total value of the hazardous waste utilization industrywillbeoverRMB200billion,whilethecostsofincin-eration, landfills and other collective handling are estimated to exceedRMB50billion.

NEWS FROM ENVIRON CHINA

Twelfth Five-Year Plan for Preventing Pollution from Hazardous Waste

Twelfth Five-Year Plan for Preventing Pollution from Hazardous Waste

Regulations for Prevention of Pollution in the Processing and Use of Waste Plastic

Administrative Rules for Environmental Registration of Hazardous Chemical Products (Pilot)

Guangdong Provincial Regulations on Solid Waste Pollution Prevention and Remediation

Hainan Provincial Environmental Protection Regulations

Hubei Provincial Rules for Handling ofWorkplaceAccidentReportsandInvestigations

Administrative Rules for Renewable Resource Recycling in Shanghai

China Update

Note: The regulatory information contained herein is current as of December 2012.

Regulations for Prevention of Pollution in the Processing and Use of Waste PlasticEffective October 1, 2012

These regulations aim to standardize plastics processing and recycling in China; they prohibit the following:

• Processingoruseofwasteplasticinresidential areas

• Useofwasteplasticmaterialstoproduce plastic shopping bags of less than0.025mmthick,oranyplasticbagsoflessthan0.015mmthick

• Useofwasteplastictoproduceplasticbags for food use

• Recyclingandreuseofwasteplasticmaterials(includingplasticpackagingthat has been contaminated by hazardous chemicals or pesticides, and disposable plastic products for medical use) by facilities that do not have an appropriate operations permit for such activities

Additionally, the regulations prohibit any sewage treatment facilities not in compliance with the environmental protection requirements from engaging in processing activities such as the pellet-ization of plastic woven bags, the rinsing of cylinders, the stripping or coating of waste plastic, or brine separation.

The regulations require staging sites for the processing and utilization of waste plastic to establish a mechanism for the recycling and disposition of trash and filters. Staging grounds for processing and utilization are encouraged in order to implement centralized zone management, and to centrally process wastewater, emissions and solid waste resulting from the processing and utilization of waste plastic. Qualified staging grounds are encouraged to apply to develop a national “municipal mineral” demonstrationbasefacility,aswellaskeyprojects for waste and recycling systems.

Residual trash and filters should not be treated and disposed of by any individuals or organization not in compliance with environmental protection requirements. In addition, open-air incineration of plastic waste, residual trash or filters during processing is prohibited.

The regulations stipulate that beginning January 1, 2013, companies that have not undergone an environmental audit may not import waste plastic in lot quantities.

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Administrative Rules for Environmental Registration of Hazardous Chemical Products (Pilot)Effective March 1, 2013

Theserulescomprisesixchapters:generalprinciples; environmental registration for production and use; environmental regis-trationforimportsandexports;supervisoryand management laws and regulations; responsibilities; and supplementary provisions.

Per the rules, hazardous chemical products aredefinedashighlytoxicchemicalsandother chemical products as listed in the Catalog of Hazardous Chemicals under the Administrative Rules for Hazardous Chemical Product Safety.

Companies producing or using hazardous chemicals must abide by the provi-sions of these rules in applying for environmental registration of hazardous chemical products. They must be issued a Certificate of Environmental Registration for Production and Use of Hazardous Chemicals (Production and Use Certificate). Projects involving the production or use of hazardous chemicals (whether new construction,renovationorexpansion)mustcomplete the procedures for a Production and Use Certificate prior to inspection and

acceptance of the project. Certificates for theproductionanduseofkeyenvironmen-tally hazardous chemicals will be issued by the provincial or higher-level environmental protection authority; other certificates for the production and use of hazardous chemicals will be issued by the municipal or higher-level environmental protection authority for the area.

Forimportsandexports,therulesstipulatethat hazardous chemicals listed in the catalog of hazardous chemicals for which exportfromorimporttoChinaisstrictlylimited, companies must first pursue environ-mental management registration with the supervisory environmental protection agency under the state council and present the related documentation at customs for clearance procedures.

In terms of supervision and management, the rules state that county and higher-level environmental protection agencies must maketimelyannouncementstothepublicof any penalties imposed on companies producing, using or importing hazardous chemicals. When these companies are in violation of the regulations, the agency may refuse to issue emissions certificates, refuse to issue environmental audits for publically listed companies and report violations to the relevant financial and securities and exchangeorganizations.

Hainan Province Environmental Protection RegulationsEffective October 1, 2012

The regulations stipulate that “environment protection implementation progress shall be part of the review and assessment of People’s Governments at all levels, as well as for their respon-sible persons,” and that “People’s Governments at the county and higher levels must include environmental protection funding in their budgets and increase the amount of funding yearly.”

There are five clauses dealing with administrative penalties to be imposed on relevant government agency failing to properly implement their environ-mental protection and supervisory duties. At the same time, the regulations require governments to draft related plans to organize and implement environmental impact assessments. New construction,expansionandrenovationprojects must also implement environ-mental impact assessments, as well as a sewage permitting system, per the regulations.

The regulations provide strict rules governing economic penalties. They provide for a limited time for remedi-

ation of violations and address the halting of production of construction and determinationofcriminalliability.Biggerfines are mandated for those who begin construction without approval, who violate the Three Simultaneities system and who illegally discharge or harm local ecology or impact human health, thereby increasing the cost and deterrent effects of violating criminal law.

There is a relationship between national environmental and economic policy andHainan’sexperienceinpilotprojects. The regulations clarify enviro-economic policies such as pollution liability insurance, ecological subsidies, emissions trading and the good-faith system of environmental protection.

People’s Governments and relevant agencies at all levels are required to organize environmental education in order to raise the level of environ-mental consciousness throughout the community. Environmental protection information must be published in newspapers and broadcast via radio, television, the Internet and other mass media as a public service. Schools and other educational organizations must consider current conditions in providing education concerning environmental protection.

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Guangdong Provincial Regulations on Solid Waste Pollution Prevention and RemediationEffective May 1, 2012

Theseregulationsstipulatethattoxicorhazardous waste not already listed in the state hazardous waste catalog, but that containstoxicorhazardousmaterials,orthatislikelytoproducetoxicorhazardousmaterials during use, shall be listed in a catalog. This catalog must set out types of materials and their handling methods, and should be created by the provincial environ-mental protection agency in cooperation with associated agencies that control use and disposition processes. Vice Director Deng Zhiming, of the Office of Pollution Control, Provincial Environmental Protection Agency, has stated that the provincial agency will soon draft and publicly issue the Guangdong Province Catalog of Strictly Controlled Waste Materials. Waste, including circuit boards, batteries, electrical cords and cables, tires and discarded electronics will be included in the catalog.

The regulations also stipulate that, within the province, it is prohibited to deal in, dispose of or use imported electronic waste. Additionally, bringing trash from outside of China, or even outside of the province, into Guangdong is prohibited.

Open-air incineration or use of facilities not approved by environmental authorities for the incineration of asphalt, asphalt felt, rubber, plastics, leather, electrical cords and cables, circuit boards, copper-clad laminate board, electronics and electrical devices, plastic machine filters, batteries, fluorescent tube-type bulbs, sludge from wastewater treatment, household garbage,

toxicorhazardousashornoxiousgasesis prohibited. Low-quality counterfeit goods seizedbylawenforcementandothertoxicor hazardous materials are to be processed in conformance with environmental require-ments. Open-air incineration of these is also prohibited. The use of sites not equipped to prevent leaching is prohibited for the landfilling, storage or disposal of solidwaste.Disposingofsolidwastenexttorivers,lakes,oceansorreservoirsisprohibited. The use of landfills as a means of disposition for semi-solid or liquid waste isprohibited.Mixinghazardousmaterialsorothertoxicorhazardouswasteintoresidential garbage for disposal in a landfill is prohibited.

Organizations generating industrial solid waste must set up solid waste management records and apply annually for regis-tration with the county or higher-level government environmental protection authority. Organizations or individuals producing solid waste that use centralized processing facilities must pay a processing fee. Organizations or individuals producing solid waste in the process of shipping shall collect it as per the relevant regulations and deliverittoanairport,busstation,dock,harbor or similar processing facility; no dripping,leaks,discardingordumping are permitted during shipping. Airports, busstations,docksandharborsmustconstruct comprehensive solid waste storage facilities.

Organizations that have not constructed comprehensive solid waste reception and storage facilities prior to the implementation of these regulations must do so within one year. Feedlots and slaughterhouses must abide by the relevant regulations for the collection, storage, use or disposition of the manure or waste they produce.

Hubei Province Rules for HandlingofWorkplaceAccidentReports and InvestigationsEffective November 1, 2012

These rules are based on both the People’s Republic of China Safe Production Law and the Rules for Production Accident Reporting and Investigation. They comprise a total of sixchaptersand54clauses.

Per the rules, accidents are categorized as major, significant, large and ordinary based on whether there was human injury or death, as well as on direct economic losses. Accident reporting must be timely, accurate and complete. No organization or individual may delay reporting, fail to report, report false information or cover up the report of an accident.

The rules establish a system for accident investigations that outlines the responsi-bility for the administrative head of the People’s Government related to reporting andinvestigatingaccidents.Workplacesafety management offices at the county and higher-level People’s Governments are thedepartmentstaskedwithintegratedmanagement and supervision of accident reporting and investigations. They are also responsible for organizing an investigation team and implementing the investigation. Ifconsiderednecessarybythenexthigher-level People’s Government, an investigation may be made into the lower-level People’s Government’s performance.

The rules clarify incentives and protections forpersonsmakingreports.Theworkplace

safety supervisory department—and related department with responsibility for supervision and management of safe production—must establish a system with 24-hourcoveragetoreceivereportsofincidents at any time. The cost of incen-tives to persons submitting reports shall be borne by the People’s Government at that level. Items reported, the status of the report submitted and all information concerning thepersonsubmittingthereportwillbekeptconfidential, in order to protect the legal rights of the submitter.

The rules stipulate that, once an organi-zation receives an accident report, the person responsible has one hour to submit that report to the county or higher- level People’sGovernmentWorkplaceSafetySupervision and Management Department, and to corresponding departments with responsibility for the supervision and managementofworkplacesafety.Within10 days of the conclusion of the handling of an accident, the organization in charge of the facility where the accident occurred (and any relevant departments) must produce a written status report on the accountability of those liable for the accident. The status report must be submitted to the safety supervision bureau that organized the investigation team, as well as their higher-level supervisory organization. The safety department of the People’s Government in charge of organizing the investigation must announce the handling of the accident to the public within 15 days of receipt of the accident report.

Administrative Rules for Renewable Resource Recycling in ShanghaiEffective December 1, 2012

These rules address the management of mobile trash collectors. They stipulate that resident councils must, under the guidance of village and town governments, obtain and review information on the identities and residences of persons engaged in resource recycling in the community.

Village and town governments should urge those engaged in community recyclable collection to abide by the public safety regulations and engage property service companies to establish necessary conditions for recycling activities in the community.

Commercial agencies in cities and counties must follow the principle of “unified planning, rational deployment” and consider the local economic devel-opment, population density, environment

CHINA UPDATE|DECEMBER2012 4

and resources in a particular adminis-trative area when organizing and drafting plansforarecyclingnetworklayout.Thelayout plan must then be approved and proven compliant with relevant regulations. Plansforrecyclingnetworklocationsandconstruction of related facilities may be linkedtotheplanningandconstructionofcollection, sanitation and environmental facilities for the city. Shared services are appropriate in some areas.

The rules also address the sale of scrap metal. When a production-type scrap metal recycling company signs a contract for sale with a purchaser, the seller’s material listmustbeexaminedandabillofsalewritten. This bill must give a true record of the organization’s name, the manager’s identity and the names, quantities, specifi-cations and ages of the products, and must be retained for a minimum of two years.

For more information, please contact: Mr. Xiao-Jian Zhou, Managing Director ENVIRON China Tel:+862164736885 xiaojian_zhou@environcorp.com

We prepare China Update to apprise clients of major EHS regulatory developments in China. It is not intended to constitute legal advice and should not be relied upon as such.

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