CHINA Law and Practice Contributed by: Rongliang Wu, Mei Wan, Qirong Huang and Xueqi Huang, Jin Mao Law Firm
interest, and authorities must respond within 20 to 40 working days; refusals can be challenged in court. “Public authorities and bodies” includes any admin- istrative organs at all levels, as well as state agencies and public institutions that hold environmental infor- mation while performing regulatory or service func- tions. 16.3 Corporate Disclosure Requirement Some enterprises are mandatorily required to dis- close environmental information in accordance with the Administrative Measures for the Legal Disclosure of Environmental Information of Enterprises. 16.4 Green Finance China has initially established a multi-level green financial product matrix covering green loans, green bonds, green insurance, green funds and investments, green leasing and financial leasing, green trusts and carbon financial products. The key entities responsible for overseeing and promoting green finance include: • the People’s Bank of China, which sets policies and guidelines relating to green finance and works on promoting environmentally responsible financial practices; • the National Financial Regulatory Administration, which is responsible for regulating and supervising the banking and insurance sectors; and • the China Securities Regulatory Commission, which is in charge of regulating and supervising the securities market in China. 17. Transactions 17.1 Environmental Due Diligence Excessive Emissions Investigation for Land Use Changes/Right Transfers Per Article 67 of the Law of Prevention and Control of Environmental Pollution Caused by Solid Waste, land use right-holders must conduct soil pollution inves- tigations before changing land use for production or transferring/withdrawing land use rights.
The MEE has issued guidelines (HJ.1-2019 to HJ 25.6-2019 technical standards) to guide such due diligence. Environmental Risk Assessment in Credit Financing Banking institutions must conduct environmental due diligence before approving credit, though national environmental laws do not mandate this. Financial institutions may hire professional bodies to assess green investments and must evaluate invest- ment projects’ environmental risk management capa- bilities. Scope of Environmental Due Diligence To avoid potential environmental legal risks, some enterprises voluntarily conduct special environmental due diligence before listing or M&A. The scope and depth of such diligence are determined by clients’ needs. This diligence forms the basis for subsequent environmental risk control. More enterprises now pri- oritise pre-investigation and hire professionals (law- yers, technical experts) to identify and manage risks. 17.2 Disclosure of Environmental Information In the process of product sales, procurement vendors have a legal obligation to disclose some environment- related information, such as a seller’s request to the buyer to provide a material safety data sheet. The Administrative Measures on Restricted Use of Harmful Substances in Electrical and Electronic Prod- ucts stipulate that sellers of electrical and electronic products must not sell any products that violate the national or industrial standards for limiting the use of harmful substances in those products. In the process of M&A or real estate transactions, it is not a mandatory legal requirement for the seller to disclose all environmental information. However, the principle of good faith stipulated in Article 7 of the Civil Code is a basic principle that civil subjects should follow when engaging in civil activities. In practice, sellers are usually required to disclose known environ- mental hazards that may affect the value or usability of the property.
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