Per day fine system is needed, but with the correct limits

The environmental pollution situation in China calls for severe penalties for heavily polluting enterprises. The lead author had the fortune to participate in deliberations on revising the Environmental Protection Law, and from the current trend it seems that the amended law will bring in a “per day fine” system.

Per day fines

Per day fine means, in respect of a persisting violation of environmental law, a per day continuing penalty based on the duration of the violation of the law. It usually applies to a persisting pollution problem, changing the traditional one-time penalty to continuing penalisation, and so making environmental penalties heavier.

The per day fine system is set up to make penalties heavier the longer the violation of the law endures, and is very applicable to rectifying the severe imbalance between the penalties imposed for violating the law and the costs of pollution treatment to the large number of polluting enterprises, and even lends itself to a situation where the fine is paid on the one hand while operation and profit-making continue on the other.

The system is widely used in the US, and there is also relevant practice in China, in Chongqing. For example, the Clean Air Act, the Toxic Substances Control Act and the Environmental Liability Act in the US all specify that a fine of up to US$25,000 per day may be imposed for a violation of environmental law, and for repeat offenders a fine of up to US$75,000 for each day that the violation persists.

Wang Jihong is the executive partner and Shi Jie is a partner at Grandway Law Offices