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China Reaffirms Record Pollution Penalty

People wear protective masks near the Bund in Shanghai, Jan. 19, 2016. Environmentalists have warned that dirty water is a greater problem than dirty air, and China's top court reaffirmed a record fine on six firms for polluting.

People wear protective masks near the Bund in Shanghai, Jan. 19, 2016. Environmentalists have warned that dirty water is a greater problem than dirty air, and China's top court reaffirmed a record fine on six firms for polluting.

China's top court last week upheld an earlier ruling to impose a record-high penalty of 160 million yuan (US$26 million) on six companies from the city of Taizhou in eastern Jiangsu province for discharging waste acids into two rivers.

Although the court’s decision set an unprecedented example for businesses in China to better manage industrial waste, it only marks the beginning of the country’s uphill battle against its massive water pollution crisis, analysts say.

“This is not gonna improve overnight. There’s been a lot of mechanism and rules that have been building over the past decade,” said Jennifer Turner, director of the China Environmental Forum at the Woodrow Wilson Center in Washington.

The water pollution action plan, announced by the State Council in April 2014, "gives the political green light" for enforcement by the Ministry of Environmental Protection, she added.

Verdict upheld

The Supreme Court upheld the case's initial verdict, arguing that all six defendants remained responsible after they sold more than 25,000 metric tons of waste acid in 2014 to a leather company, which didn’t have the authority to discharge the waste into the rivers.

The case drew the highest compensation fine ever imposed in China arising from a public interest case, and showcased the judicial system’s role in environmental protection, analysts said.

"This case has a powerful deterrence effect on polluting businesses…. That is, polluters have to now take their environmental cost into consideration," said Maple Ge, director of the law and policy department at Friends of Nature, a registered environmental nongovernmental organization.

Calculating costs

But given that compliance and law enforcement are expensive and evasion is still the cheapest route, it remains to be seen whether all businesses will get in line or will adopt a bust-me-if-you-can attitude, said Wang Jin, a law professor of Peking University.

Nevertheless, Wang said the ruling was significant because it reaffirmed the long-lasting impact of pollution on the environment even if no immediate damage is in sight.

The court determined the penalty by using a simulation model to calculate the cost of cleaning up the rivers, Wang said.

In spite of the record penalty, the lawsuit only exposes the tip of the iceberg when it comes to the water pollution crisis facing China. Many environmentalists have warned that dirty water is a bigger headache than China's notoriously dirty air.

Dirty water

Ma Jun, director of the Beijing-based NGO Institute of Public & Environmental Affairs, once said that China’s wastewater discharge has far exceeded the capacity the environment can handle and that water pollution poses a bigger health threat to about 300 million people living in rural areas.

The latest available official data also shows that 60 percent of groundwater and 36 percent of rivers were ranked as poor or very poor in 2014.

Estimates by the Wilson Center show the water quality crisis in China may be even worse than suggested by the official data.

"It’s hard to know exactly, ’cause data is often a little bit sketchy in China in terms of pollution. But we estimate something like 35 percent of China’s water is so polluted, it should not come in contact with humans," Turner said. She added that China is the only country threatened by water pollution-induced scarcity.

According to the center, agricultural runoff is the biggest source of lake pollution in China, as a result of overused pesticides and fertilizers. Up to 80 percent of the nation’s meat factories have failed to treat their animal wastewater.

Hopeful signs

Encouraging signs have emerged since mid-2015, after authorities stepped up efforts to tackle the water crisis. But the recent economic slowdown has some wondering if local governments will follow through with toughened measures to clean up messes left behind by decades of unregulated rapid growth.

"With a slowing economy, we are not sure how local governments or divisions in charge of economic affairs weigh the importance of environmental protection, and this has a direct impact on the strength of the law enforcement," said Wang.

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