CHINA Law and Practice Contributed by: Rongliang Wu, Mei Wan, Qirong Huang and Xueqi Huang, Jin Mao Law Firm
17.3 Key Issues in Environmental Due Diligence Regulatory Compliance There may be compliance issues, such as enterprises lacking environmental permits or not holding them in accordance with regulations, enterprises violating environmental laws and regulations, and construc- tion projects not conducting EIAs in accordance with the law. Pollution and Contamination There may be pollution and pollution liability issues, including site pollution and the risk of pollution migra- tion. There may also be non-compliance in waste management, such as improper disposal of hazard- ous waste.
Known and Potential Liabilities Identification of any existing environmental liabilities – for example, ongoing or pending lawsuits related to environmental damage, or regulatory orders for remediation. Unclear potential future liabilities alloca- tion clauses can lead to disputes between buyers and sellers over responsibility when environmental issues occur. In representation and warranty clauses, if the seller’s statements about the environmental situation are false, the buyer may suffer losses.
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