China Policy Journal Volume 1, Number 1, Fall 2018 | Page 163

China Policy Journal
mentally discourage or reverse some
firms’ repeated decisions to illegally
pollute the environment. For large polluting
firms (mostly SOEs, as well as
some privately owned ones), although
they are more visible and thus receive
more monitoring and inspections by the
formal law enforcement agencies, insignificant
penalties, relative to their compliance
costs or economic scale, makes
it more attractive for them to evade
the regulations. As for small polluting
firms, although the penalties for them
are significantly heavy relative to their
sizes, the probability of being caught in
their noncompliance remains low, given
the inadequate bureaucratic capacity
of the frontline environmental authorities
for effective enforcement. Thus,
many small firms would simply take
risks in conducting polluting activities
because, even when they are caught, it
is not difficult or financially devastating
to simply abandon and close down the
business to evade punishment. New administrative
and economic instruments
have been introduced such as the repeated
fine system and criminal prosecution
against firm managers, but the
impacts of these measures are yet to be
clearly seen and be visible to all.
However, the general weakness
of compliance and enforcement regimes
in China’s pollution control does not
disguise the complexity of compliant
behavior of firms (or lack of it) and the
practices of environmental regulation
in China. The experience of Guangzhou
shows that barriers to the effective performance
of compliance and enforcement
regimes are complicated and that
they vary across different types of firms
and violations.
For large polluters, like the SOEs
and some high-profile privately-owned
companies, the main barriers for environmental
compliance include not only
weak sanctions due to the problematic
environmental legislation and policies,
but also factors such as the political
connections of the polluting firms or
their owners and the local government’s
fear of increasing unemployment and
the loss of revenue caused by the shutdown
or relocation of big companies.
For small polluters, a persistent
barrier to ensuring long-term compliance
has been the passiveness of
the frontline enforcement agencies. In
practice, the catching and sanctioning
of small polluters are not cost-efficient
for the frontline law enforcers because
of their continuing shortage of staff and
lack of financial resources and the absence
of reliable monitoring information
about these small polluting sources.
However, recent development and combination
of both citizen and official enforcement
mechanisms have improved
the probability and efficiency of catching
and punishing the small polluters.
Statistics from both official and NGOs’
sources have shown a growing number
of detections and shutdowns of small
factories which have repeatedly not
complied with the environmental laws.
The effectiveness of compliance
and enforcement regimes also
varies with the types of contaminants
discharged by the polluting firms. As
shown by the experience of Guangzhou,
illegal water pollution and the discharge
of untreated industrial solid waste were
160