Case Brief
The defendant, * Glass Qinhuangdao Co., Ltd., was mainly engaged in the production and processing of glass bottles for packaging, using four glass furnaces. The Environmental Protection Bureau (EPB) of Haigang District, Qinhuangdao, repeatedly imposed administrative penalties on the defendant for the excessive discharge of pollutants during its operations.
On 12 February 2015, the defendant signed a contract with Wuxi * Environmental Protection Co., Ltd., worth CNY 36.17 million, for denitration, desulfurization and dust removal in the defendant’s four glass furnaces.
In 2016, the China Biodiversity Conservation and Green Development Foundation (plaintiff) brought an environmental public interest lawsuit against the defendant. After this suit was filed, the defendant accelerated its transformation towards denitrification, desulfurization and dust removal.
On 15 June 2016, the defendant passed an environmental protection test organized by the EPB. On 22 July 2016, the plaintiff organized experts to inspect operations of the defendant’s equipment for denitrification, desulfurization and dust removal, and made suggestions. On 17 June 2016 and 17 June 2017, the EPB granted the defendant Pollutant Discharge Permits in Hebei Province. On 2 December 2016, the defendant invested a further CNY 19.65 million to add auxiliary equipment for denitration, desulfurization and dust removal in its four furnaces.
The defendant paid an administrative fine of CNY 80,000 on 18 March 2015. After the plaintiff filed suit in 2016, the defendant paid further administrative fines of CNY 12.81 million in 24 installments, from 13 April to 23 November 2016.
On 25 July 2017, the plaintiff submitted “Notes on Claims and Evidence” to the court, contending that the period of environmental harm caused by the defendant’s illegal discharge of air pollutants should run from the date it was noted by an administrative agency to the date when the defendant passed the EPB’s environmental protection acceptance test.
The court commissioned the Center for Environmental Damage and Risk Assessment (CEDRA), under the Chinese Academy of Environmental Planning, to appraise the environmental damage caused by the defendant’s emission of air pollutants and to assess the cost of ecological restoration measures for the polluted atmosphere, from 28 October 2015 (when harm was noted by the administrative agency) to 15 June 2016 (when the defendant passed the EPB test).
In November 2017, CEDRA reported its findings. Based on the virtual cost approach, the total amount of particulates discharged into the air by the defendant during the appraisal period was about 2.06 tons; sulfur dioxide exceeded the standard limit by about 33.45 tons; and nitrogen oxides exceeded the standard limit by about 75.33 tons. As the air zone in the defendant’s area was classified as “Class II,” regulations deemed the monetary amount of ecological damage to be 3-5 times the virtual governance costs. Calculated by three times the amount in CEDRA’s report, the damage caused by discharging these identified pollutants into the atmosphere in monetary terms was about CNY 7,400, CNY 271,000, and CNY 1,271,200, respectively—totaling CNY 1,549,600.
Reports were also noted on the websites of Hebei Broadcasting Network and Hebei News in March 2015 which revealed that the defendant was fined more than CNY 2 million for discharging air pollutants exceeding the standard limits over several days, and for failing to install dust removal, denitrification, and desulfurization facilities. Accepting the accuracy of those online news reports, the defendant acknowledged it had discharged pollutants exceeding the standard limits before 28 October 2015.
Judgment
On 10 April 2018, the Qinhuangdao Intermediate People’s Court, Hebei Province, delivered the [2016, Hebei, 03, Civil First Trial, No. 40] Civil Judgment:
1. The defendant was ordered to pay CNY 1,549,600 in damages for the loss caused by the excessive discharge of air pollutants, into the special fund account of Qinhuangdao Municipality, for environmental restoration in Qinhuangdao. This was to be paid in three installments of CNY 516,500: the first within 7 days of the judgment’s execution and the second and third installments before 31 December of the second and third year respectively after the judgment’s execution.
2. Within 30 days of the judgment’s execution, the defendant was required to make an apology in national media for polluting the atmosphere—this statement was to be reviewed by the court of first instance, before publication. The order noted that if the defendant failed to fulfill these obligations, the Qinhuangdao Intermediate People’s Court would release the content of this judgment in national media, with the relevant expenses to be borne by the defendant.
3. The defendant was ordered to pay the plaintiff CNY 30,000 for reasonable expenses incurred in this case, within 15 days after this judgment’s execution.
4. The plaintiff’s other claims were rejected. The defendant was ordered to pay the court fee of CNY 80, plus the plaintiff’s appraisal and assessment costs of CNY 150,000.
The plaintiff appealed. On 5 November 2018, the Hebei High People’s Court issued the (2018) [Hebei Civil Final] No. 758 Civil Judgment, dismissing the appeal and affirming the trial court’s judgment.
Reasoning
The court held that, according to Article 23 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Environmental Civil Public Interest Litigation Cases: "If it is difficult to determine the cost of ecological restoration, the people's court may reasonably determine the restoration cost by considering the scope and degree of environmental pollution and ecological damage and factors such as the cost of operating pollution prevention facilities, the benefits obtained by the polluter from the tort, and the degree of fault."
In February 2015, to upgrade environmental protection facilities in its four glass furnaces, the defendant signed a CNY 36.17 million contract with Wuxi * Environmental Protection Co., Ltd. for denitration, desulfurization, and dust removal. This reflected the defendant’s law-abiding awareness of pollution prevention and rectification issues. However, the defendant discharged excessive pollutants during the upgrading and transformation of its environmental protection facilities. Although its conduct was unlawful, the defendant paid fines of more than CNY 12.8 million in administrative penalties for its excessive discharge of pollutants. After this public interest lawsuit was filed, the defendant accelerated its upgrading of environmental protection facilities by investing a further CNY 19.65 million in auxiliary equipment regulating pollutant discharge, to pass the environmental protection acceptance test—becoming the first enterprise in Qinhuangdao to keep two sets of environmental protection equipment in operation, with one set redundant, as part of its air pollution control efforts.
In Articles 1 and 4 of the Environmental Protection Law of the People’s Republic of China, it is clearly stated that the legislative intent is to protect the environment, prevent pollution, and promote sustainable economic development, reflecting the principle of putting equal emphasis on environmental protection and economic growth. While emphasizing the importance of environmental damage relief, environmental public interest litigation should also attach importance to preemptive measures.
During this litigation, the defendant accelerated the rectification of its environmental protection capacity, discharged administrative liabilities, and invested nearly CNY 20 million in facilities after installed equipment passed the acceptance test, to ensure stable production operations—significantly reducing the risk of causing further environmental pollution.
The defendant voluntarily invested a substantial sum in pollution prevention and control, serving the public interest and surpassing the claim of “compensating environmental damage and environmental restoration” made by the plaintiff at trial. Such action also satisfied Article 5 of the Environmental Protection Law of the People’s Republic of China, which requires “protection and prevention first,” as well as the risk prevention purposes and guiding principles of environmental civil public interest litigation.
The court took all factors into consideration, including the illegality of the defendant’s excessive discharge of pollutants in the production process, the degree of fault, and the operating cost of pollution control facilities—as well as the measures taken by the defendant for pollution prevention and control, mitigating the damage caused. Accordingly, the appeal court upheld the trial court’s judgment based on the appraisal report, without modifying the damages awarded for environmental damage and restoration costs.
In environmental civil public interest litigation, the court may consider a polluter taking the initiative to improve environmental protection facilities and effectively reducing environmental risks in mitigation of the polluter’s liability, in addition to considerations about the degree of fault in discharging any unlawful pollutant and the costs of controlling such pollution.