Environmental checks for listed companies tightened

Following the Documents to be Submitted When Production and Operating Companies in Heavily Polluting Industries Apply for IPO Notice, issued by the China Securities Regulatory Commission (CSRC) in January 2008, the Ministry of Environmental Protection issued the Further Regulating Strict Environmental Protection Checks of Listed Companies Notice on 14 February this year. The latest Notice imposes more stringent requirements in respect of environmental protection checks on listed companies.

Listing-related checks

The system of listing-related environmental protection checks by PRC environmental protection authorities applies to companies in heavily polluting enterprises that are applying to list on a stock exchange, and to listed companies in such industries that are applying for further financing. The objective of the checks is to compel listed companies to comply with environmental protection laws, regulations and policies, while also controlling how proceeds raised from the public are invested. An enterprise in a heavily polluting industry that has not undergone an environmental protection check may not apply to list or for further financing.

Targets of the checks

Any company that engages in, or is seeking to raise funds to engage in, any of the following heavily polluting industries, and which intends to apply to list or for further financing, is required to undergo an environmental protection check:

1. 1. metallurgy, chemicals, petroleum, coal, fossil fuel power generation,
      construction materials, paper making, brewing, pharmaceuticals, fermentation, textiles, leather making and mining; or
   2. thermal power generation, iron and steel, cement and electrolytic aluminium.

Wang Jihong is the managing partner of V&T Law Firm. She practises in the field of infrastructure development. Shi Jie is a lawyer at V&T Law Firm