China Trip and Consultations with NPC, MEP and Supreme People's Court (by Bob Percival)

On Sunday night March 23 I returned from China where I had been leading an 11-day environmental law field trip of Maryland law students and alums during our spring break.   After spending the first four days in Beijing (as discussed in last week’s blog post), the group left for Qingdao on Tuesday March 18.  I stayed behind in Beijing to testify on as one of three invited foreign experts before representatives of China’s National People’s Congress (NPC) and Ministry of Environmental Protection (MEP) on March 19.  The other foreign experts joining me in the consultation were David Pettit, a senior attorney with the Los Angeles office of the Natural Resources Defense Council (NRDC), and James A. Holtkamp, a senior lawyer at Holland & Hart in Salt Lake City who represents many clients in the mining industry.  

Called the “Green Dialogue,” the event was an extraordinary effort to obtain expert input on proposed amendments to China’s basic Environmental Protection Law to improve its enforcement.  The amendments have been under development for two years and are about to undergo their fourth reading by the Standing Committee of the NPC

Presiding over the proceedings were Yuan Jie, Director of the Administrative Law Department of the Legislative Affairs Commission of the Standing Committee of China’s National People Congress (left), and Bie Tao (center), Deputy Director General of Policies and Regulations of China’s Ministry of Environmental Protection.  Ten other representatives of the Standing Committee attended the meeting along with two other representatives of MEP.  Representatives of the Beijing office of the Natural Resources Defense Council (NRDC) and the Environmental Defense Fund (EDF) also observed the proceedings.  

Bie Tao cited estimates that half of all regulated facilities in China violate the law and that pollution in China would be 70% less than it currently is if polluters there was full compliance.  Much of the focus of the discussions was on a proposal to provide that maximum fines for environmental violations in China be calculated based on the number of days the violation has occurred.  I argued that this has become a fundamental principle of U.S. pollution control law and that it provides a powerful incentive for violators promptly to stop and correct violations.  I noted that it is written into the enforcement provisions of the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Resource Conservation and Recovery Act, the Oil Pollution Act and the Comprehensive Environmental Response, Compensation and Liability Act.  I also made a pitch for China to adopt EPA’s policy that environmental settlements always should recoup at least the economic benefit of the violation to ensure that companies do not profit from their violations.  This is not something that is currently in the draft amendments, but there seemed to be considerable interest in moving in this direction in the future.   

At the end of the day, Ms. Yuan characterized our discussions as “very productive,” noting that China is now at a “critical moment” in the development of its environmental laws.  She joked that Bie Tao had tortured her by keeping her up night and day with his advocacy in support of the amendments.  We were told that the amendments were likely to be adopted by the NPC Standing Committees in April.                                                                                   

On the afternoon of March 18 I visited the first Tesla showroom on the Chinese mainland in the new Parkview Green mall near Ritan Park.  The showroom, which opened in November, was packed with Chinese curious about electric cars.  Sales of Chinese electric cars have been disappointing in part because of the paucity of EV chargers.  While the Chinese government provides a generous subsidy for purchases of electric vehicles, the subsidy apparently is not available for Tesla purchasers.  Tesla nevertheless should be able to sell lots of its vehicles in China because it is charging the same list price (adjusted for tariffs and the higher cost of transporting the vehicles from Tesla’s California factory) as in the U.S., unlike most other luxury car brands that double the list prices in China.

On Thursday morning March 20 David Pettit, Jim Holtkamp and I met with Yu Xiaohan, a judge on China’s Supreme People’s Court, at NRDC’s Beijing offices.  Judge Yu is responsible for drafting the Supreme Court’s interpretation of the new public interest litigation provisions of China’s Code of Civil Procedure.  Judge Yu indicated that China’s national environmental legislation is largely “sound and completed,” but that its enforceability is the core issue. We had a wide-ranging discussion of enforcement mechanisms used in the U.S. and in particular the recovery of natural resource damages against polluters.

I flew to Shanghai from Beijing on the afternoon of March 20 while the Maryland student group flew from Qingdao to Shanghai.  While the group was sightseeing on Friday March 21, I visited the DeTao Academy on the outskirts of Shanghai.  DeTao has appointed me to be one of their “Masters,” the first in the field of law.  I toured their facilities and met Israeli eco-architect Haim Dotan, another DeTao Master who is designing green buildings and other structures for Chinese cities.  In the afternoon of March 21 I gave a lecture to an international environmental law class at Shanghai Jiaotong University.  I then rejoined our Maryland student group for a reception at the Maryland China Center in the Marriott Tomorrow Square complex in downtown Shanghai.  Zhenxi Zhong (“ZZ”) from Roots and Shoots spoke to the group at the reception, which also featured members of the Shanghai bar.  

On Saturday March 22 the students and I participated in the 19th Doctoral Student Forum at Shanghai Jiaotong University.  The theme of the conference was “Deepending Reformation of the Rule of Law and Social Governance.” The dean of Shanghai Jiaotong Law School opened the conference with a terrific presentation about the difficulty of developing an independent judiciary and respect for the rule of law in China.  I then spoke about the importance of the U.S. and China forming a bilateral partnership to respond to climate change.  In the afternoon Maryland Clinic Fellow Andrew Keir spoke about the role of environmental law clinics in legal education.  Maryland 3L Ilana Kerner made a presentation on provisions for environmental rights in various national constitutions. Maryland 1L Haley Peterson discussed how various countries regulate drilling in and near protected areas.  Maryland 2L Renee Connor presented on approaches to regulating nuclear power in various countries and Maryland 3L Allie Santacreu discussed efforts to use planning law to adapt to climate change.  Students from Shanghai Jiaotong made several interesting presentations, including one advocating that certain overextended Chinese municipalities be allowed to declare bankruptcy based on Detroit’s experience.  We all flew back to the U.S. on Sunday March 23.

March 17 Post: David Sive, China Field Trip, Sumatran Smoke Pollution, WSJ Letter (by Bob Percival)

[This is a post I wrote in China on March 17, but because Blogspot if blocked by the Great Chinese Firewall I was only able to post it upon arriving back in the U.S. today]: 

Just two days after the death of Joe Sax, the environmental law field lost another one of its founding fathers when David Sive passed away on March 11.  I first met David shortly after I began work with the Environmental Defense Fund (EDF) in the early 1980s.  I was at an environmental conference at a resort in the Adirondack Mountains.  As a new lawyer with EDF I probably knew fewer people at the conference than anyone else.  David took me under his wing, introduced me to people, and gave me excellent tips of where to go hiking in the Adirondacks with my wife when she joined me after the conference ended.  David exuded passion for the environment and for the use of law to preserve it for future generations.  His passion and his kindness to me is something I will never forget.

I arrived in Beijing on Friday with a group of 39 Maryland law students, alums and colleagues on our biennial environmental law field trip to China.   On Saturday we visited Tiananmen Square, the Forbidden City, and the Summer Palace.  On Sunday we hiked the Great Wall and then had dinner with a host family in a hutong.  This morning we visited the Beijing offices of the Environmental Defense Fund (EDF) where we heard about EDF’s work promoting carbon trading.  China is launching seven pilot carbon trading programs in cities and provinces and it is hoped these will lead to the adoption of a nationwide trading system by 2015.  Professor Cao Mingde of the China University of Political Science and Law (CUPL) hosted us for a terrific luncheon banquet.  Then I gave a lecture at CUPL on “Forging a U.S./China Partnership to Save the Planet.” I focused on the prospects for bilateral action between the two countries that have the largest impact on the world’s environment, emphasizing the agreement between President Obama and Chinese President Xi Jinping to support a phaseout of HFCs.

After my lecture we visited Wang Canfa, the director of the Center for Legal Assistance to Pollution Victims, which for 15 years has operated a hotline to field complaints about environmental conditions in China.  Professor Wang updated us on his work, including a recent project in which he used media publicity to get a company to clean up shoddy hazardous waste disposal practices without having to file a lawsuit.  We then visited the law firm that Wang Canfa has established.  An attorney there compared notes with Maryland Environmental Clinic Fellow Andrew Kier on attempted political interference in environmental lawsuits. Professor Wang noted that the Chinese Supreme Court is considering establishing a specialized environmental division that he thinks would enhance the willingness of lower Chinese courts to hear environmental cases.  

The group left this morning for Qingdao, but I stayed behind in Beijing at the request of China’s Ministry of Environment and the Beijing office of the Natural Resources Defense Council to participate in an important meeting tomorrow on amendments to China’s basic environmental law to strengthen penalties for violations.  I will fly to Shanghai on Thursday to rejoin the group. Student blog posts reacting to the trip and an album of photos will be posted on this website in the near future.

Japanese electronic company Panasonic announced last week that due to the extreme levels of pollution in China it would pay a premium to its staff who are located there.  This is not an uncommon practice.  For some time the U.S. State Department has considered China postings to be hardship posts due to pollution problems.  Panasonic appears to be the first major company to acknowledge such a policy publicly. Jennifer Thompson, Panasonic to Offer Staff Extra Pay for Working in Polluted China, Financial Times, March 13, 2014, at 13.  

Slash and burn farming practices on the Indonesian island of Sumatra have caused thick air pollution that has sickened tens of thousands of people.  A spokesperson for the National Disaster Management Agency of Indonesia estimated that there were 330 hotspots of such burning, which has caused respiratory problems for more than 30,000 people. Thirty people have been arrested for starting the fires, which are being battled by airborne firefighters. 

Due to high winds, levels of air pollution during our visit to Beijing have been remarkably low.  CNN noted that air pollution was worse in Paris this week than in Beijing due to an atmospheric inversion that has prompted authorities to restrict the use of automobiles in the French capital.  

On Friday March 14 the Wall Street Journal published a letter that I wrote responding to the paper’s editorial declaring the decades-old lawsuit against Chevron for oil pollution in Ecuador to be the “Legal Fraud of the Century.”  Robert Percival, “What About Those Who Were Hurt?” Wall St. J., March 14, 2014.  I made the point that the litigation could hardly have been a fraudulent conspiracy from the start since it initially was filed by the plaintiffs in New York and only ended up in Ecuador at the insistence of the oil company.

Joe Sax Dies, Chevron (as expected) Wins RICO Suit, Chinese Premier Declares "War on Pollution," Tiffany Opposes Pebble Mine, Nepal to Require Climbers to Remove Garbage (by Bob Percival)

Earlier today Joe Sax, one of the founding fathers of modern environmental law, passed away.  Professor Sax probably had more influence in shaping the development of the field than any other environmental law professor.  His 1971 book Defending the Environment: A Strategy for Citizen Action had a huge influence on me.  Sax taught at the law schools of the University of Colorado, the University of Michigan, and UC-Berkeley.  My most memorable encounter with him was in 2005 when he gave the annual distinguished lectures at the IUCN Academy of Environmental Law Colloquium at Macquarie University in Australia.  At that Colloquium he gave a spectacular set of lectures describing his vision for how traditional conceptions of property law needed to change in response to environmental concerns.  I had a rare chance to spend time with him discussing a wide range of environmental issues at various colloquium events including a field trip to a national park near Sydney.  He will be sorely missed.

On March 3 federal district judge Lewis Kaplan, as expected, ruled in favor of Chevron in its RICO lawsuit against the plaintiffs and their lawyers who have been trying for more than two decades to hold the company accountable for oil pollution in Ecuador.  Kaplan issued a 485-page opinion siding with Chevron on virtually every issue in the case.  I insisted on actually reading his opinion before speaking to reporters who called me about the case.  While conceding that the plaintitfs may have been exposed to significant oil pollution, Judge Kaplan finds that plaintiffs’ attorney Steven Donziger bribed the judge in Ecuador who held Chevron liable for $9 billion in damages.  Although there appears to be strong evidence that a supposedly independent, court-appointed expert’s report submitted to the Ecuadoran court was largely written by the plaintiffs, the Ecuadoran judge who decided the case expressly refused to rely on it.  Judge Kaplan makes a huge leap of faith in finding bribery based entirely on the testimony of an admittedly corrupt judge to whom Chevron paid huge sums of money.  

It is hard to believe that the lawsuit was a corrupt conspiracy from the start, particularly since the plaintiffs initially filed it in 1993 in federal district court in New York.  The case ended up in Ecuador only because Texaco, who Chevron later acquired, argued that the Ecuadoran courts were the best venue for deciding the case.  Judge Kaplan brushes this aside with the argument that Texaco was a different entity than Chevron without coming to grips with how this initial choice of venue undercuts his efforts to characterize the decades-long litigation as a vast, corrupt conspiracy.  Donziger and the Ecuadoran plaintiffs have strong legal grounds for appeal, particularly since Chevron dropped its damages claim prior to trial because it feared that it would lose if the case were tried before a jury.  As Judge Kaplan is forced to acknowledge, there is a circuit split on whether a private RICO action can be brought seeking only equitable relief.  While Kaplan enjoined Donziger from seeking to enforce the Ecuadoran judgment in U.S. courts and required him to turn over to Chevron any proceeds he receives from enforcement anywhere, probably the most important aspect of the judgment is his factual finding that the plaintiffs tried to bribe the Ecuadoran judge.  Chevron’s Amazon Post website quotes me as saying this, which I guess means they consider me a reliable source of commentary on the case. 

Last week China’s National People’s Congress (NPC) opened its annual session, which is held in the Great Hall of the People adjacent to Tiananmen Square. Addressing the nearly 3,000 delegates, Chinese Premier Li Keqiang stated, “We will declare war on pollution and fight it with the same determination we battled poverty.”  Li conceded that “smog is affecting large parts of China and environmental pollution has become a major problem, which is nation’s red-light warning against the model of ineffiecient and blind development.”  The NPC is considering adopting a national pollution tax that it deferred action on last year.  Also under consideration are measures to shut down 50,000 small, coal-fired furnaces, to reduce emissions from coal-fired power plants, and to remove older, pollouting vehicles from the roads. Lucy Hornby, China Premier Declares “War on Pollution,” Financial Times, March 6, 2014, at 4.

On Thursday March 13 I will be leading a group of 39 students and alumni on an environmental field trip to China.  We will be visiting Beijing, QIngdao, and Shanghai.  Due to China’s great firewall, it is possible that I will not be able successfully to post to either this blog or my parallel blog at www.globalenvironmentallaw.com.  If so, try the other blog.  The University of Maryland Carey School of Law also will be posting daily blog reports about our trip on its website at: http://www.law.umaryland.edu.

In an extraordinary full-page ad that appeared in the Washington Post on March 6, Tiffany & Company offered strong support for EPA’s opposition to granting a permit for the Pebble Mine in Alaska due to the threat that it will pollute Bristol Bay. “Tiffany and Co.’s 177 years of experience in sourcing exquisite gemstones and precious metals has taught us there are certain places where mining cannot take place without damaging landscapes, wildlife, businesses, and communities.  Alaska’s Bristol Bay is one such place.”  Citing EPA’s study of the potentially damaging environmental impact of the mine, Tiffany & Company “applaud the Environmental Protection Agency’s responsible and prudent use of its clear authority under the Clean Water Act to protect -- for the benefit of all Americans for generations to come -- this extraordinary natural resource and the thousands of commercial and sports fishing jobs it supports.” The ad concludes that Tiffany and Company “know there will be other gold and copper mines to develop.  But we will never find a more majestic and productive place than Bristol Bay.”

Last week the government of Nepal took steps to combat the problem of garbage left on its stunning mountains by climbing expeditions.  Nepal's tourism authority announced on March 3 that it will require climbers on Mt. Everest to return from their expeditions with at least 18 pounds of garbage removed from the peak in addition to their own garbage.  Climbers who fail to comply with this rule may be fined and banned from future climbing on the country's mountains. Gardiner Harris, N.Y. Times, March 3, 2014.

On Friday I participated in a conference on the problem of concussions in professional and amateur sports at Maryland Carey Law School.  The conference was organized by the student editors of Maryland’s Journal of Business and Technology Law.  It featured a terrific, multi-disciplinary group of medical, legal, and media experts, including Colin Cloherty, a student in my Constitutional Law class who played for four years as a tight end in the NFL.  I gave the closing remarks in which I reminisced about the incredible privilege I had to work at a law clerk for Justice Byron White, once the highest paid pro football player in the nation and the best athlete who will ever sit on the U.S. Supreme Court.

Supreme Court GHG Argument, EU Auto Standards, China Air Pollution Suit, Bakken Crude More Combustible, Japan Backs Off Nuclear Phaseout (by Bob Percival)

On Monday February 24 the U.S. Supreme Court heard oral argument in cases challenging EPA’s regulation of greenhouse gas (GHG) emissions from stationary sources.  In an unusual twist, the focus of the challenges by industry groups and some states appears to be the claim that EPA has acted too reasonably by regulating only the largest sources of GHG emissions.  The oral argument attracted the largest crowd of Supreme Court bar members that I had ever seen.  I arrived at the Court at 7:15AM and I felt lucky to get a seat in the courtroom.  Comments by the Justices during the argument made it appear likely that the Court will split 5-4 with Justice Kennedy holding the decisive vote.  At the argument Kennedy appeared genuinely undecided.  Ironically, the fact that the Court had narrowed the issues in the case so as not to threaten EPA’s overall ability to regulate GHG emissions under the Clean Air Act may increase the chances that Kennedy will vote against EPA.  Counsel for those challenging EPA’s regulations repeatedly argued that a decision striking them down would only affect a small subset of the sources EPA can regulate.

On February 25 the European Parliament approved the world’s most stringent limits on CO2 emissions from new automobiles.  The new standards lower the existing emissions limit from 130 grams per kilometer to 95 g/km.  In response to lobbying from Germany and automakers BMW and Daimler, full implementation of the new standards was delayed from 2020 to 2021.  Members of the Green Party in the European Parliament voted against the new standards because of the year delay in full implementation, but environmental groups expressed general satisfaction that the standards were lowered.

Li Guixin, a Chinese citizen in Hebei province has sued the Municipal Environmental Protection Bureau of Shijiazhuang for failure to “perform its duty to control air pollution according to the law.”  Li is seeking damages for having to purchase faces masks, an air purifier, and a treadmill to exercise indoors.  He maintains that the economic losses caused by pollution “should be borne by the government and the environmental departments because the government is the recipient of corporate taxes” from the polluters.  Most observers do not expect the District Court to accept Li’s lawsuit.  Northern and central China have been plagued by severe air pollution in recent weeks. Sui-Lee Wee, Chinese Man Becomes First to Sue Government Over Severe Smog, Reuters, Feb. 25, 2014.

Last week the Wall Street Journal released a study finding that crude oil from North Dakota contains combustible gases at much higher levels than oil from most other sources. The combustibility of oil transported by rail has become a significant issue in the wake of two fiery train crashes in Canada and North Dakota.  The Canadian accident caused the deaths of several dozen people. The Journal study tested the vapor pressure of oil originating in 86 locations around the world.  It found that light sweet crude from North Dakota’s Bakken Shale field had an average Reid Vapor Pressure (RPV) of 8.56 pounds per square inch, far more than oil from any other source except for oil from the Eagle Ford Shale field in Texas.  RPV measures how quickly a fuel evaporates and emits gases.  No law, regulation, or even industry guideline requires that it be tested before oil is shipped.  The day after release of the Journal study the Federal Railroad Administration issued an emergency order requiring railroads shipping oil to evaluate factors contributing to the risks of combustion and to develop transportation security plans.

On February 25 the government of Japan released a new draft of its Basic Energy Plan that largely repudiates a pledge by a previous administration to phase out nuclear power. The plan includes efforts to restart the 50 nuclear reactors shut down in the wake of the Fukushima Daiichi nuclear accident.  It also includes the possibility of building additional nuclear power plants in the future.  Chico Harlan, Japan Backs Off Nuclear Phaseout, Wash. Post, February 26, 2014.  

Last week the Sustainability Accounting Standards Board (SASB) issued sustainability accounting standards for the financial industry.  The SASB is a private, nonprofit organization focused on developing standards that will enable publicly-listed corporations to account for “environmental, social and governance factors that have the potential to affect long-term value creation and/or are in the public’s interest.” The standards, which are the second set issued by the SASB, govern how companies should aggount for the environmental consequences of their operations. The standards may be downloaded from the SASB’s website at sasb.org.

Russian forces have seized control of Crimea in the south of Ukraine and many believe that Russian President Vladimir Putin is hoping to reestablish some of the former Soviet empire.  If Putin must seize part of Ukraine, why not take the part of the country where the Soviet Union left its most indelible mark?  For nearly 28 years a wide swath of land a couple of hours north of Kiev has been a human exclusion zone due to the accident at the Chernobyl nuclear power plant.  Ukraine’s then-Soviet masters delayed for several days before informing the world about the worst nuclear accident in the history of the planet.  Damaging fallout from the disaster spread north across Belarus and a wide portion of Europe, but no one was every compensated by the Soviet Union for the transboundary harm.  During a brief visit I made four years ago to Chernobyl and the crumbling ruins of the nearby town of Pripyat (see March 22, 2009 blog post), one can still see faded posters extolling the virtues of the Soviet empire.  Shoppers are often told, if you break it you must buy it and the Soviets surely broke Chernobyl and areas of Ukraine and Belarus surrounding it.