China Policy Journal Volume 1, Number 1, Fall 2018 | Page 164

Chronic Noncompliance and Ineffective Enforcement in Guangzhou
more easily caught and harsh penalties
thereafter imposed. The reporting of illegal
air pollution, on the other hand,
was relatively more difficult to penalize.
The main reason for such differences
might be explained by the low visibility
of air pollution and the difficulty of detecting
and verifying it.
Our findings have confirmed the
arguments in the regulatory literature
derived from the experiences of both
industrialized and industrializing countries,
namely, that the sole reliance on
either the formal government enforcement
or the civilian enforcement cannot
effectively ensure corporate compliance
with the environmental regulations.
Only with an effective combination
of formal and informal enforcement
mechanisms can any environmental
compliance regime ensure the compliant
behavior of firms. As shown by the
case of Guangzhou, the central government’s
increased emphasis on pollution
control and the continued strengthening
of environmental legislation have
led to enhanced law enforcement and
tougher penalties against illegal polluters
at the local level. From 2010, more
polluting firms were subjected to political
implementation of environmental
rules jointly conducted by the EPBs and
BODIs and forced to permanently shut
down. The past few years have also witnessed
the development of public participation
in environmental regulation
and this has led to the increased detection
of environmental violations and
more intrusive law enforcement activities
launched by the government.
However, the positive correlation
between enhanced law enforcement
and the decrease in chronic noncompliance
with environmental rules
was more likely to be observed among
small polluters. The sheer scale and
the elusive nature of the environmental
violations by these polluters used to
create major obstacles for effective law
enforcement. Illegal emissions committed
by small factories were extremely
difficult to catch and punish by government
enforcement agencies which
were seriously undermanned and more
preoccupied by the regulation of the
larger pollution sources. For large polluting
firms (mostly SOEs, as well as
some privately owned ones), although
they are more visible and thus subjected
to more frequent and intense monitoring
and inspections conducted by
the government law enforcement agencies,
insignificant penalties, relative to
their compliance costs or economic
scale, make it more attractive for them
to evade the various laws. As for small
polluting firms, although the penalties
for them are significant relative to their
size and scale, the probability of being
caught in noncompliance remains low
mainly due to the shortage of manpower
and resources of the grassroots regulatory
forces, and many would simply
choose to take the risk; and, even when
they are caught, it is also neither difficult
nor economically devastating to
simply abandon the business and evade
the punishment.
The opening-up and expansion
of political space for more involvement
by public monitoring and NGO-led litigation
is expected to make noncompliance
by polluting firms more costly.
Through the experience of Guangzhou,
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