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Business / Green China

Credit system expected to improve companies' fight against pollution

By Zheng Jinran (China Daily) Updated: 2014-07-17 07:05

The planned government system for measuring companies' environmental protection efforts will spur companies to upgrade their pollution-reduction equipment, the country's top pollution watchdog said.

"The new credit system will encourage companies to make a greater effort in pollution control and help them realize the serious consequences of pollutant emissions," said Zou Shoumin, head of the environmental supervision bureau under the Ministry of Environmental Protection.

Since August, the ministry has been releasing monthly pollution-related supervision reports on its website, with details of the pollution and polluters.

"And we also publicize the companies' representatives," Zou said, adding that the ministry and other authorities can use the extra disclosure of information to hand down certain punishments to polluters, including travel bans and loans denials.

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The polluters will realize the ensuing cost and restrictions they will face , he said.

The ministry is drafting the credit system, based on pollution-control performance, with other ministries and departments. Detailed information on the system has not yet been released.

The ministry plans to label companies in four levels. The rating will be an important criterion when applying for loans, administrative licensing and other major certificates, forcing the companies to reduce pollution.

Though the national credit system based on the pollution-control performance has not been released, some provinces have already implemented regional ones.

Jiangsu province stands out in its anti-pollution efforts. Since 2013, it has released a regulation using such a credit system, covering more than 20,000 companies.

Due to a credit downgrade, the loan to a thermal power plant in Nantong was cut off, forcing the company to install environmental protection equipment, saving it from bankruptcy. Still the jump from a regional plan to a national one is a big one, experts said.

"The credit system can work well in controlling pollution, but it faces many problems in becoming a national system," said Ma Zhong, head of the School of Environment and Natural Resources at Renmin University of China.

The credit system should use a large amount of information on companies' production and pollution. But this is a major obstacle for a national system, he said, adding that the authority has failed to collect much of the needed information.

Using drones for pollution supervision is a good way to collect information, Ma and Zou said.

It's more important to improve the supervision system, making it efficient to control the companies, Ma said.

Wang Dayong, head of Hebei Metallurgical Industry Association, agreed with Ma that improved company supervision is necessary, saying that instead of focusing on drafting a new credit system, the governments and departments need to improve current laws and regulations to ensure that companies and their officials pay a huge price for creating pollution.

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