CHINA WATCH For anyone who thinks China lags far behind the rest of the world when it comes to environmental issues, think again. A new law is being passed that effectively aims to deny finance to those firms who’re not willing to clean up their act.
Under the law, China will bar bank loans to companies that violate environmental rules. It’s part of a new effort to clean up worsening pollution, according to a story in Chinadaily. “Companies who fail to pass environmental assessment or fail to implement China’s environmental protection regulations are disqualified from getting loans from any bank or financial institution,” said the deputy director of China’s environmental agency, Pan Yue.
Of course, there’s less certainty about how such a law would be enforced, but it shows the direction of movement in the country anyway. One wonders how Western firms would react?
Regulators already have difficulty enforcing environmental rules because local leaders are reluctant to take steps that might hurt industry or reduce jobs or tax revenues.
The latest policy announcement appeared to be aimed at companies that find it cheaper to pay fines or bribe local authorities for protection than to install pollution-control gear.