Environmental Auditing: Promote the Implementation of the Environmental Policies

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The Chinese government lays high emphasis on the environmental protection. In the 1980s, China fixed environmental protection as one of the basic national policies; in the 1990s, China fixed sustainable development as a national strategy; since stepping into the 21st century, the Chinese government raised the human-oriented, comprehensive and coordinated scientific outlook on development. In the 18th CPC National Congress held in 2012, ecological civilization construction was included into the general arrangement of “five in one” with the Chinese characteristics, ecological civilization construction and environmental protection was placed in the more important strategic position: the 3rd Plenary Session of the 18th Central Committee of the Communist Party of China raised the task of deepening ecological civilization system reform by focusing on building beautiful China; the 4th Plenary Session of the 18th Central Committee of the Communist Party of China required to accelerate the building of the legal system for ecological civilization, for the protection of ecological environment with strict legal system; and the 5th Plenary Session of the 18th Central Committee of the Communist Party of China proposed the development philosophy of “innovation, coordination, green, development and sharing”.

I. Environmental protection policies in China under the general arrangement of “five in one”

Environment is a development issue. Beautiful environment is an important part of the benefits for the human beings. As said by Secretary Xi Jinping, environment is the people’s livelihood, green mountain is beauty, and blue sky is happiness. Environmental protection is necessary for development and is also the goal of development. Only the development with protection is sustainable development. With the deepening of the knowledge about the relations between protection and development, the Chinese government actively explores how to address the conflicts between protection and development. Environmental protection policy has been upgraded from basic national policy to sustainable development strategy, the control focus has been shifted from pollution control to pollution control and environmental protection, from the end control to full-process control, the control scope has extended from the point-source control to environmental control in the watersheds and regions, and the measures have been predominantly changed from the administrative orders to legal and economic approaches.

Since 2015, the Party Central Committee and the State Council have promulgated many important deployments regarding ecological civilization system and mechanism, in which Opinions on Accelerating the Ecological Civilization Construction, General Scheme of Ecological Civilization System Reform and Outline of the 13th Five-Year Plan for the National Economic and Social Development of the People's Republic of China have formulated the strategic deployment and system architecture of deepening the ecological civilization system reform.

—— Opinions on Accelerating the Ecological Civilization Construction is the programmatic document for pushing the ecological civilization construction in China. This document intends to address the increasing resource restriction, serious environmental pollution, degradation of ecological system, and the increasingly outstanding conflicts between development and human resources and environment, considering the overall situations that the ecological civilization construction in China still lags behind economic and social development. It has raised the goal of optimization of the development pattern of the land space, resource utilization with higher efficiency, overall improvement of ecological environment quality, and basic building of major ecological civilization systems, stated that till 2020, the ecological civilization construction level shall be adapted to the goal of building a moderately prosperous society in all respects, and proposed to improve the laws and regulations, standard system, and important systems in ten aspects, such as ecological compensation mechanism, under the guiding idea of source prevention, process control, damage compensation and accountability.

——General Scheme of Ecological Civilization System Reform has determined the key reform fields, including supervision of environmental protection, building of the monitoring network of ecological environment, the departure auditing on the leaders and cadres regarding natural resource assets, measures of accountability on the Party and government leaders and cadres regarding the destruction of ecological environment, compilation of the balance sheet for the natural resources, and compensation system reform for destruction of ecological environment.

——In March 2016, Outline of the 13th Five-Year Plan for the National Economic and Social Development of the People's Republic of China was discussed and approved by the Fourth Session of the 12th National People's Congress. Green development runs through the Outline with the goal of “overall improvement of ecological environment quality” being raised. The Outline takes ecological environment protection as the guide and important contents of the supply-side structural reform, stating “Push the supply-side structural reform, so that the supply capacity meets the increasing, constantly upgraded and personalized need of the people in material culture and ecological environment”. Ecological environment need has been laid in parallel with the material culture for the first time, and become the basic demand of the people with equal importance. The planning outline proposes the main objective of economic and social development in the next five years, and the core is “overall improvement of ecological environment quality”.In the main indexes of economic and social development during the “Thirteenth Five-Year” period, there are 10 resource environment indexes, which are all restrictive indexes, accounting for 77% of all restrictive indexes (13 indexes), and accounting for 40% of all indexes (25 indexes). So it indicates large components, heavy tasks, high requirements and strong restrictions.

II. Notice the resource environmental policies and push the implementation of environmental policies

——During the environmental audit focusing on water pollution prevention and control, land resources and mineral resources, attention is paid to the implementation of related resource environmental policies. On one hand, the implementation of the environmental policies is taken as one audit content, to disclose and reflect the problems during the implementation of the environmental policies, analyze the reasons that the policies are not implemented in place, and promote the landing of the policies. On the other hand, since the environmental policies for some resources in China shall be adjusted and improved according to the social and economic development, it is required to audit and assess the legality, reasonability and implementation effect of the environmental policies developed by the government, analyze the reasons influencing the policy implementation and raise the suggestions for the improvement of environmental policies.

Case: attention to the mineral resource management policies in the mineral resource auditing

Since 2009, National Audit Office of China has carried out four mineral resource audits, involving the auditing on the mineral resource development, utilization and protection, and the collection and management of the related funds.

Audit object: 19 provinces rich with mineral resources, such as Shanxi and Inner Mongolia, and the Ministry of Land and Resources.

The part involving the mineral resource policies in the audit contents: the local government implements the mineral resource planning and management, and development integration, mainly involving whether there are the following problems:

——Illegal overlap or cross setting of the mining right, setting of the mining right in the prohibited zone as determined in the mineral resource planning, and the setting of the mining right for specific enterprises in specific zones by turning against the planning.

——False integration in the name of development integration. The mine enterprise that shall be closed continues opening the mine to seek after illegitimate interests;

——The mineral resource management departments are not strict in law enforcement, illegal behaviors are not investigated, and law is replaced by punishment.

Audit results (audit suggestions and the improvement policies of the related departments): Some problems have been found in the management of mineral resources during the audit. For example, the management on the approval of the mining right approval is not strict, the collection and management of the related funds are not standardized, there is the hidden trouble with the production safety in the mine and some defects in the geological environment control of the mine. National Audit Office of China has raised the auditing suggestions for these problems, submitted the audit report to the State Council, and made public announcement, thus having promoted the improvement of the policies and systems related to the management of mineral resources.

——For the “improve the systems related to the approval and management of mineral resources” raised by the audit party, the Ministry of Land and Resources has actively explored and improved the administrative measures on the tendering-based auction and listed transfer of the mining rights, expanded the scope of competitive transfer of the mining rights, promulgated Notice on Strict Control and Regulating of the Transfer Management of the Mining Right Agreement; improved the approval and registration management system of mineral resource prospecting and exploration.

——For the suggestions raised by the audit office for “strengthen the management of the fund related to the mineral resources and the ecological environment governance”, the Ministry of Land and Resources worked with the Ministry of Finance to actively push the reform for the pricing of the mining right and the mineral resource compensation fee, study and build the mining right transfer income system; improve the geological and ecological environment protection mechanism of the mine, improve the security fund system for the mine geological environment recovery and control, and supervise the mining-related enterprises to fully perform the obligations in the mine geological environment recovery and control.

——During the organization of the follow-up audit project on the implementation of the significant policies and measures, attention is paid to the implementation of the policies related to the resource environment.

National Audit Office of China has recently printed and distributed “Opinions on the implementation of the tracking audit on significant national policies and measures and the macroscopic regulating deployment”, in which there are the contents related to resource environment policies and measures.

Objective of tracking audit: analyze the reasons for the problems by disclosing the problems in significant national policies and measures and the macroscopic regulating deployment, push significant national decision making and deployment and the implementation of policies and measures, and promote the landing and constant improvement of the policies. In addition, pay attention to the new situations and problems during economic and social development, raise the corresponding countermeasures and suggestions, and guarantee healthy and stable economic and social operation.

Objects of the tracking audit: including the related departments of the central government and the local governments in the levels, and if necessary, extended to the auditing on the related enterprises and institutions, social organizations and project builders etc.

Contents of the tracking audit include the overall situations of the implementation of the policies and measures; Main problems and new situations during the implementation of the policies and measures by the regions and departments, and the measures to be taken by the regions and the related departments.

Regarding the resource environment policies, National Audit Office of China requires continuous attention to the implementation of natural resource asset management and ecological environment protection responsibilities, particularly the implementation of new policies regarding the ecological environment protection. For example, for the requirements for pushing the supply-side structural reform, the audit pays attention to the elimination of the lagging capacity and the supply of the quality ecological environment products and services by focusing on the implementation of five tasks of “de-capacity, destocking, deleverage and shoring up the weak spots” in the ecological environment protection field.

In 2015, outstanding achievements have been made regarding the tracking audit on the policy implementation, and the audit authorities in the levels nationwide had 72.8 thousand projects related to the implementation of tracking audit and national significant policies and measures, and 105.8 thousand units received the spot check, in which the audit teams appointed by National Audit Office of China audited 5,510 projects and found out 3,260 problems.

In “Results of Follow-up Audit on the Implementation of National Significant Policies and Measures in the Second Quarter of 2016” issued by National Audit Office of China in August, two cement enterprises used the lagging equipment that shall be eliminated to produce the cement of 571.5 thousand tons without license, several indemnificatory housing projects are not built with the supporting domestic sewage treatment facilities, resulting in the contamination of water in the rivers by the domestic sewage, and the capacity expansion projects for several sewage treatment plants were in slow progress, resulting in the direct discharge of a large amount of sewage into the rivers.

III. Lead the reform measures of “the departure auditing on the leaders and cadres regarding natural resource assets”, and promote the improvement of ecological civilization performance appraisal and accountability system. In 2013, the Decision of the 3rd Plenary Session of the 18th Central Committee of the Communist Party of China proposed the departure auditing on the leaders and cadres regarding natural resource assets. According to the deployment and division of work by the central government, this task will be led by National Audit Office of China for the implementation in cooperation with other departments. The local governments in China have signed the letters of responsibility for natural resource management and ecological environment protection, such as the letter of responsibility for the control of main pollutants, with the governments in the superior level, to undertake important responsibilities in the environmental protection and sustainable development. The departure auditing on the leaders and cadres regarding natural resource assets has strengthened the auditing on the performance of the duties of the leaders and cadres in the management of natural resource assets and the ecological environment protection. National Audit Office of China actively carries out the departure auditing on the leaders and cadres regarding natural resource assets according to the work architecture and requirements of “compile the natural resources balance sheet, carry out the departure auditing on the leaders and cadres regarding natural resource assets, and build the full-life accountability for destruction of ecological environment”.

Since 2015, National Audit Office of China has organized 41 pilot audit projects, in which active exploration has been made by centering on “what to be audited, how to carry out the audit, and how to define the responsibility”, thus having accumulated the audit practice and experience in land resources, mineral resources, forest resources, water resources and atmospheric pollution prevention and control.

“Thirteenth Five-Year National Audit Development Planning” of National Audit Office of China requires that special attention shall be paid to the implementation of the policies related to the saving, intensive and circular use of resources and ecological environment protection by focusing on the important deployment for the acceleration of ecological civilization construction. We will make full use of the resource and environment audit consulting experts to continue strengthening the auditing on the policy implementation, promote the landing of the policies and guarantee the effects of the policy implementation.