China released a draft of its Environmental Code on 27 April, which includes a new provision to tackle data fraud committed by third-party environmental agencies. Environmental authorities will be able to directly issue penalties to agencies found to have falsified data, closing a gap that had made it difficult to hold them accountable.
Currently, Chinese law only allows for environmental departments to forward cases of fraud on to market regulation authorities or the police. For these departments, this leads to “a situation where violations are ‘visible but not punishable’”, Yang Wuchen, a senior engineer at the Ministry of Ecology and Environment’s Environmental Engineering Assessment Centre, told China Environmental News.
Under the draft code, third-party agencies that have provided services or produced environmental reports found to contain serious irregularities or falsified data will face fines of three to five times the fees they charged for the service. In egregious cases, they could be banned from providing environmental services, with their accreditations revoked by market regulation authorities.
In recent years, data fraud by such agencies has been drawing increasing public and regulatory attention. In June 2024, China’s Supreme People’s Procuratorate published three criminal cases it said typified such misconduct, highlighting their severity and prevalence. The cases involved employees of several environmental agencies forging signatures of certifying personnel, and falsifying sampling results in order to validate environmental impact assessments, pollution tests, and vehicle emissions checks.
In addition to addressing data fraud, the draft code also consolidates a range of existing environmental laws into a single legal framework, with the aim of improving consistency and coordination across different areas of regulation. It introduces new provisions for emerging forms of pollution, such as chemicals, electromagnetic radiation, and light pollution. The draft also seeks to enhance local environmental law enforcement by allowing county-level agencies to carry out inspections and issue penalties independently, according to China Environmental News.
The draft code will be open for public consultation until 13 June.
Read Dialogue Earth’s previous analysis of verification failures in the voluntary carbon market.