Chinese Ruling Threatens Environmental Public Interest Suits

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By Michael Standaert

A Chinese court ordered two nongovernmental organizations to pay 1.89 million yuan ($275,000) in legal fees for a failed environmental public interest lawsuit, raising concerns of a chilling effect on groups using the courts to fight pollution.

“We are highly concerned that this would set a precedent for courts to use similar charging standards for future environmental public interest lawsuits,” said Ma Yong, head of the legal department of the China Biodiversity Conservation & Green Development Foundation (CBCGDF), which along with Friends of Nature filed the suit.

China opened the door to such lawsuits in 2015 through amendments to its Environmental Protection Law, a move lauded as a way to increase pressure on the government and companies to clean up the country’s endemic environmental problems.

And there have been victories for environmental groups that would have been unthinkable before 2015. In fact, the first successful suit was filed on the day the amendments went into effect, when Friends of Nature and a local environmental group sued to force an illegal quarry to pay about $400,000 in fines for restoration of a site in Fujian province.

Charging Fee

But last month, the Changzhou Intermediate People’s Court in the eastern province of Jiangsu said for the first time that an NGO that lost one of these cases must pay all legal fees and a percentage of the amount they were asking the companies to pay for environmental cleanup—a “charging fee.” The ultimate costs are some $275,000.

The organizations have appealed the decision to the Jiangsu Supreme People’s Court.

Costs associated with filing environmental public interest lawsuits—from court acceptance fees, lawyer fees, funding for studies and evidence collection—were a hurdle for smaller environmental groups. The latest verdict, if upheld, could silence even larger groups, according to experts who spoke with Bloomberg BNA.

“These high costs are a threat to environmental groups from filing [additional] environmental public interest lawsuits,” Ma told Bloomberg BNA.

Sickened Students

The case in question involves a famous incident in China: the sickening of hundreds of students at the Changzhou Foreign Languages School, which opened in 2015 on land that had previously been part of an industrial park housing three chemicals companies.

In 2011, the companies sold the land to the local government, which hired two companies to clean up the land. The local government considered the land safe when the school was built, but provincial investigations found that construction on the school started before remediation was completed.

So last April, CBCGDF and Friends of Nature sued the three chemical companies—Jiangsu Changlong Chemicals Co. Ltd.; Jiangsu Changyu Chemical Co. Ltd.; and Jiangsu Huada Chemical Group Co. Ltd.—claiming they polluted 70,000 square meters (83,700 square yards) of land over a decade and failed to properly address leftover heavy metals and chemical compounds.

The Changzhou court rejected that suit, saying the soil and groundwater pollution on the site is “now under control,” and it is unnecessary for the companies to pay any more remediation costs.

‘Not Like Normal Cases’

“Public interest lawsuits are not like normal cases,” Lu Huang, a lawyer with Guoyin Law Firm, told Bloomberg BNA. “These are filed by NGOs, not by companies. The decision on the legal fees poses major obstacles for future public interest lawsuits.”

The two organizations initiated a crowdfunding campaign to raise funds to assist with their legal fees, CBGDF said.

To contact the reporter on this story: Michael Standaert in Shenzhen, China, at correspondents@bna.com

To contact the editor responsible for this story: Greg Henderson at ghenderson@bna.com

For More Information

Changzhou Intermediate People's Court ruling is available, in Chinese, at https://tinyurl.com/h9oh37a

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