A Comparative Study of U.S. and Chinese Environmental Law with a Focus on the Real Estate Industry

• Author: Jihong Wang - Paul Kossof
• Position: Jihong Wang (Zhong Lun Law Firm, Senior Partner) is an urban construction legal expert with extensive experience in Chinese environmental law. In addition to representing clients in real estate, infrastructure, energy and natural resource projects across the globe, Ms. Wang has advised the Chinese legislature on related draft legislation, holds...
• Pages: 367-389

A Comparative Study of U.S. and Chinese

Environmental Law with a Focus on the Real

Estate Industry

J

IHONG

W

ANG AND

P

AUL

K

OSSOF

*

In our cross-border practice, clients often encounter legal issues stemming

from differences between their jurisdictions and target countries.

Experience has shown that clients operating in multiple countries should

know the legal atmosphere of target countries at least as well as their own,

regardless of whether they are foreign companies in the PRC or Chinese

entities going abroad. This article stresses the importance of understanding

local law and practice by analyzing the implications of U.S. and PRC

environmental laws on their respective real estate industries.

Part I reviews the environmental administrative laws of the United States

and China; Part II focuses on related civil liabilities; Part III describes

corresponding criminal repercussions; and Part IV briefly discusses

environmental due diligence.

I. Environmental Administrative Law

Environmental, administrative, civil, and criminal implications are

intertwined by the legislative and regulatory documents that create them as

well as alleged actions or omissions that lead to their respective liabilities.

This article begins with administrative law as it is often the first area of law

encountered during a real estate project or transaction such as through

environmental impact assessments or related licenses and permits.

1

* Jihong Wang (Zhong Lun Law Firm, Senior Partner) is an urban construction legal expert

with extensive experience in Chinese environmental law. In addition to representing clients in

real estate, infrastructure, energy and natural resource projects across the globe, Ms. Wang has

advised the Chinese legislature on related draft legislation, holds several high positions in

industry organizations, and arbitrates for CIETAC. To learn more about Ms. Wang and her

practice, please visit http://www.zhonglun.com/en/lawyer_312.aspx.

Paul Kossof (Zhong Lun Law Firm, Legal Consultant) is an American attorney that

represents Chinese companies in large-scale outbound investment and construction projects; he

is fluent in English, Italian, Mandarin, and Spanish. Most of his research is free and available

for download at http://ssrn.com/author=2149200.

1. Environmental Law Alliance Worldwide, Guidebook for Evaluating Mining Project EIAs 19 (1st

ed. July 2010) (emphasizing the importance of EIAs and their early performance).

THE YEAR IN REVIEW

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PUBLISHED IN COOPERATION WITH

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368 THE INTERNATIONAL LAWYER [VOL. 50, NO. 2

A. U

NITED

S

TATES

In the United States, environmental administrative laws can be found at

the federal and state levels.

2

As detailed below, states typically implement

federal law through local procedural rules, with some states also imposing

additional administrative penalties.

3

1. Federal Statutes

The federal environmental protection regime may be categorized by two

prominent acts and the laws that amend them.

4

The first act is the Resource

Conservation and Recovery Act of 1976 (RCRA).

5

The second is the

Comprehensive Environmental Response, Compensation, and Liability Act

of 1980 (CERCLA), commonly referred to as the “Superfund” (referring to

the federal trust fund created by CERCLA for hazardous substance release

prevention and cleanup).

6

Both of these acts have been amended by separate

legislation.

RCRA was amended by the Hazardous and Solid Waste Amendments of

1984.

7

Since its enactment in 1980, CERCLA has been amended by three

subsequent laws: (1) the Superfund Amendments and Reauthorization Act of

1986, (2) the Asset Conservation, Lender Liability, and Deposit Insurance

Protection Act of 1996, and (3) the Small Business Liability Relief and

Brownfields Revitalization Act of 2002.

8

2. Erin Ryan, Federalism, Regulatory Architecture, and the Clean Water Rule: Seeking Consensus

on the Waters of the United States, 46 L

EWIS

& C

LARK

E

NVTL

. L. R

EV

. 101, 110 (2016)

(discussing how the Clean Water Act (federal legislation) “stepped into a field formerly

regulated by the states”).

3. See, e.g., New York v. United States, 505 U.S. 144, 167 (1992) (stating “where Congress

has the authority to regulate private activity under the Commerce Clause, we have recognized

Congress’ power to offer States the choice of regulating that activity according to federal

standards or having state law pre-empted by federal regulation.”).

4. Memorandum from Thomas P. Dunne, Acting Assistant Admin’r, U.S. Envtl. Prot.

Agency, to Regional Administrators, Regions I-X (Dec. 21, 2005) (on file with author).

5. Resource Conservation and Recovery Act (RCRA) Overview, U.S. E

NVTL

. P

ROT

. A

GENCY

,

https://www.epa.gov/rcra/resource-conservation-and-recovery-act-rcra-overview (last visited

Sept. 18, 2016).

6. Comprehensive Environmental Response, Compensation, and Liability Act, U.S. E

NVTL

. P

ROT

.

A

GENCY

, https://www.epa.gov/laws-regulations/summary-comprehensive-environmental-

response-compensation-and-liability-act (last visited Sept. 18, 2016).

7. See Summary of the Resource Conservation and Recovery Act, U.S. E

NVTL

. P

ROT

. A

GENCY

,

https://www.epa.gov/laws-regulations/summary-resource-conservation-and-recovery-act (last

visited Sept. 18, 2016) (explaining that “HSWA - the Federal Hazardous and Solid Waste

Amendments - are the 1984 amendments to RCRA that focused on waste minimization and

phasing out land disposal of hazardous waste as well as corrective action for releases.”).

8. See The Superfund Amendments and Reauthorization Act (SARA), U.S. E

NVTL

. P

ROT

.

A

GENCY

, https://www.epa.gov/superfund/superfund-amendments-and-reauthorization-act-sara

(last visited Sept. 18, 2016); see also CERCLA Lender Liability Exemption: Updated Questions and

Answers, U.S. E

NVTL

. P

ROT

. A

GENCY

, https://www.epa.gov/sites/production/files/documents/

lender-liab-07-fs.pdf (last visited Sept. 18, 2016); see also Summary of the Small Business Liability

Relief and Brownfields Revitalization Act, U.S. E

NVTL

. P

ROT

. A

GENCY

, https://www.epa.gov/

THE YEAR IN REVIEW

AN ANNUAL PUBLICATION OF THE ABA/SECTION OF INTERNATIONAL LAW

PUBLISHED IN COOPERATION WITH

SMU DEDMAN SCHOOL OF LAW