Environmental guidelines for Chinese companies overseas may be released soon

July 10, 2010

A book that Ministry of Environment officials say will serve as the basis of a new set of guidelines on Chinese investments overseas, commissioned in March this year from the new semi-official Global Environmental Institute, has been released (see e.g. Xiao Ming 肖明, 对外投资环境指导意见酝酿出台 [Environmental guidelines on foreign investment in preparation], 21世纪经济报道, 9 July 2010). The proposed policy foresees penalties for companies that violate the guidelines, including a blacklist.

Among the examples illustrating why such a policy is needed is the case of a company that signed an agreement with the Cambodian government to invest $30 million in a timber operation in 1995, only to have its licence revoked in 2001 after protests by environmental groups, sustaining a loss of $15 million. Such cases serve to bolster the argument that it is in Chinese companies’ long-term economic interest to apply higher standards to their overseas activities. This may also mean that foreign environmental NGOs may not in the future be seen as mere obstacles to development and stooges of anti-Chinese Western interests.