Intercedent Insight – September, Noose Tightens on Heavily Polluting Metals

In a sign that China is continuing to tighten regulation of environmental pollution, the major manufacturing province of Jiangsu is now strictly enforcing April 2011 legislation which requires that environmental clearance for industrial processes involving chromium, lead, arsenic, cadmium and mercury must be conducted in Nanjing, the provincial capital, and cannot be decided at city, industrial zone, county and lower levels. Provincial-level decision making on the environmental impact of industrial processes involving the designated chemicals is expected to be more rigorous and take longer.

Additionally, unlike in other jurisdictions where minimum levels of these compounds in treated water can be disposed of freely back into the environment, the Nanjing authorities appear to be adopting a zero tolerance approach at this stage.  That is to say, if chromium, lead, arsenic, cadmium or mercury is likely to be able to be detected in waste water emanating from a plant, then environmental clearance at the lower administrative level will not be permitted and applicants with new manufacturing projects will find it difficult to gain environmental clearance, full stop.

The requirement to obtain environmental approval in the provincial capital, Nanjing, is expected to result in much more difficult passage through the investment approval and business licence phases of set up for heavy industrial and metals processing projects in this province. New applications for establishing manufacturing facilities will likely be rejected and existing businesses which use processes involving the chemicals will be required over time to adopt new non-polluting technologies or move their operations to less developed provinces.

Clearly, while it is admirable that the authorities are taking a stricter posture on heavy polluting chemicals in this water-abundant province, there will be cost and timeline considerations in play for companies setting up manufacturing in Jiangsu. 

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