China Policy Journal Volume 1, Number 1, Fall 2018 | Page 165

China Policy Journal
where civil society has developed to a
higher degree than in the rest of the
country, it has been shown that there
remain several obstacles preventing social
pressure becoming effective in reversing
the polluting firms’ behaviors.
The number of institutions and agencies
involved in public monitoring and
reporting are increasing, and they are
mostly handled by the relevant EPBs.
However, this rarely results in serious
penalties. Environmental litigation led
by NGOs has also just emerged and, if
successfully carried out, can lead to significant
penalties and consequences for
the polluting firms. Nevertheless, the
experiences of NGO-led public interest
litigation against environmental violators
in a Guangzhou lawsuit against
illegal industrial pollution suggest that
only a handful of experienced and
well-funded NGOs are capable of environment
litigation. Complex political
relations can also impede the normal
functioning of the legal process in an
environmental pollution case.
Another important political factor
for an increasing number of relocations
of penalized polluting firms is the
grand industrial restructuring being
promoted by the local government. This
project is aiming to attract high-end service
industries and push out the polluting
industries and it reflects a long-term
policy being pursued by the Guangzhou
municipal government. This project has
been backed by sustained and strong
political will from the municipal government
and it serves as an important
driving force behind many environmental
law enforcement campaigns that
have led to permanent shutdowns and
relocations of polluting factories.
Other than policy design,
firm-specific, and other political reasons,
there are other factors which are
not directly related to environmental
law enforcement but indirectly sustain
the chronic noncompliance decisions
at the firm level, such as market
fluctuation and competition as well
as the changing costs of compliance.
For polluting firms, the resources for
compliance consist nearly entirely of
economic costs without generating revenues
and profits. In the economic
hardship that emerged after the financial
crisis, those firms that are fighting
for survival may especially give pollution
mitigation a lower priority. Fierce
market competition could also dilute
their profit margin. Firms that can successfully
evade compliance could get
favorable standings which are largely
dependent on pricing. In addition,
compliance costs are also evolving, but
generally in a decreasing trend due to
learning and innovation.
As the Chinese central government
is increasingly keen and vocal
about reducing industrial pollution,
and Chinese society is more aware of
the health impacts of pollution, policy
and institutional design for effective
environmental law enforcement
are the common pursuit and goal for
all stakeholders. However, establishing
such effective enforcement institutions
and procedures will take time due to
the diverse nature of firms, the uneven
development of local EPB capacity, and
the still-nascent stage of environmental
NGOs and public participation in environmental
governance in China.
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