Poor environmental record could scuttle listing applications

Companies that fail inspection by environmental authorities may also face objections in to their becoming listed on stock exchanges under an information-sharing mechanism.

The China Securities Regulatory Commission and Ministry of Environmental Protection are expected to exchange the results of their environmental protection inspections of companies applying for listings, according to a report by Economic Observer operated by Xinhua News Agency.

A "white list" and "blacklist" will be established between the ministry and regulatory commision, meaning companies that have passed the ministry’s environmental inspection will be exempted from environmental inspection for their listing application. Companies identified with severe pollution cases or deception will be rejected or suspended.

According to the Environmental Protection Ministry, as of May 21, only 12 of 51 companies that applied environmental inspection passed. The others were either suspended pending the arrival of more documents or are waiting for approval.

Zhang Fang, an analyst with China Future Co Ltd, said the new policies may raise environmental protection costs for industries such the nonferrous metal and lead, leading to a reshuffling of these industries through which "the stronger become even stronger".