Computational Water, Energy, and Environmental Engineering, 2013, 2, 56-60
doi:10.4236/cweee.2013.22B010 Published Online April 2013 (
Introspections and Suggestions on the Amount Fixing of
Administrative Penalty for Environmental Pollution
Xiaohong Zheng
Law school Southwest University,Chongqing ,China,400715
Received 2013
Environmental pollution has seriously damaged the health of mankind and the development of future generations. Be-
cause pollution damages are irreversible, taking effective measures to prevent contamination accidents is the primary
task for administrative penalty on environmental pollution. However, the specific amount of such penalty is a little bit
on the low side, and the standard for fixing the penalty is not rational somewhat. As a result, the original functions and
purpose of administrative penalty on environmental pollution cannot be fully achieved. By comparing and using for
reference related systems at home and abroad, this paper advances the drawbacks and suggestions for the amount fixing
of China’s administrative penalty on environmental pollution in the hope of supplying theoretical basis for the im-
provement of China’s administrative penalty mechanism on environmental pollution.
Keywords: Environment; Administrative Penalty; Amount Fixing
1. Introduction
Over the past twenty years, China has experienced the
period of high environmental risks. According to statis-
tics, the direct economic losses merely brought about by
environmental pollution each year amount to RMB 120
billion Yuan. Besides, environmental pollution will result
in potential and irreversible damages to human health. As
an important measure for environment-oriented law en-
forcement, the administrative penalty mechanism on en-
vironmental pollution made some achievements in the
past, but it is rather weak and seriously lags behind in its
performance with the increasingly serious environmental
pollutions. The most typical case was the ConocoPhil-
lips’s oil spillage accident in June 2011: the polluted sea
area covered 6,200 square kilometers, which led to a di-
rect economic loss of more than RMB 100 million Yuan,
which seriously damaged the public health. However, the
corresponding administrative penalty was only RMB
200,000 Yuan, which was only a minuscule amount for a
company with an asset of tens of billions of USD like
ConocoPhillips, and could not truly show its warning
effect to the violator. Another case is the American’s
Mexico Gulf oil leakage accident in 2010: the responsi-
ble party was imposed a fine of 1.256 billion USD, and
was required to establish a foundation of 20 billion USD
as well as make a subsequent payment of 3.269 billion
USD for solving the accident. The responsible party for
an oil spillage accident in November 2011 in Brazil was
promptly imposed a heavy fine of 50 million BRL
(equivalent to 28 million USD). The greatly different
results between China and foreign countries in handling
environmental pollution accidents push us to re-examine
the design of China’s administrative penalty system on
environmental pollution and to re-think of the fixing on
the amounts of such penalties so as to find out the crux of
the problem.
2. Related Legal Provisions on
Administrative Penalty for Environmental
Pollution in China
Presently, China has been implementing the Law of the
People’s Republic of China on Environmental Protection
that is adopted in 1989. Article 35 of the law entitles the
competent administrative department of environmental
protection to give warning or impose a fine to “such be-
haviors as refusing the spot inspection by the competent
administrative department of environmental protection or
other departments that exercise administration and su-
pervision on environment according to law, or resorting
to deception during the inspection”, that is, the compe-
tent administrative department of environmental protec-
tion was granted the power of imposing administrative
penalty directly. The Law of the People's Republic of
China on Administrative Penalty implemented on Oct. 1,
1996 applies the principle of “moderate punishment on
fault,” such as Article 4, which stipulates “the adminis-
trative penalty shall be fixed and implemented on the
basis of fact and shall be moderate to the act, nature and
Copyright © 2013 SciRes. CWEEE
X. H. ZHENG 57
circumstances of the offence as well as to the damage to
the society,” In Article 51, it is stipulated that the faulty
party shall, if failing to pay the penalty over due time, be
imposed a fine of 3% of the penalty for each overdue day;
in the Article 73 of the Law of the People’s Republic of
China on Marine Environment Protection implemented
on April 1, 2000, it is stipulated that the faulty party who
discharges the pollutant that is forbidden to discharge to
the sea area by this law shall be imposed a fine amount-
ing to no less than RMB 30,000 Yuan but no more than
RMB 200,000 Yuan,” which is a provision on maximum
punishment for the marine environmental pollution in
China; the Article 75 of the new Law of the People’s
Republic of China on Water Pollution Prevention and
Control (revision in 2008) stipulates that “the people’s
government at county level or above shall order the party
who sets up sewage outlet within the protective area of
the drinking water source to dismantle such outlet within
the limited time and impose a fine no less than RMB
100,000 Yuan but no more than RMB 500,000 Yuan,
provided the responsible party fails to dismantle such
outlet in the due time, the outlet will be dismantled
forcefully and the expenses arising from such forceful
dismantling shall be borne by the responsible party who
is also imposed a fine of no less than RMB 500,000
Yuan but no more than RMB 1 million Yuan or the re-
sponsible party is even ordered to stop production for
rectification,” which is a provision on maximum pun-
ishment for the environmental pollution in China and is
strictly limited to apply within protective area of the
“drinking water source,” as shown to us, the amount of
administrative penalty on environmental protection is on
increase in China. Prior to September 2000, China adopts
the principle of collecting charges for the sewage drain-
age exceeding permits and such drainage was deemed as
the legal act after the party pay the drainage fee,” but the
new Law of the People’s Republic of China on Preven-
tion and Control of Atmospheric Pollution (revision in
2000) adopts the principle that “the party exceeds the
sewage drainage permit is required to make harness
within limited time and is imposed a fine,” and that “the
sewage drainage exceeding the permit is deemed as an
illegal act;” In the aspect of laws on prevention and con-
trol of noise pollution, the measure of “collecting the
drainage fee for the sewage drainage exceeding the per-
mit” is still applied. The inconsistency between the laws
and norms brings inconvenience in implementing the
pollution penalty system in the practice; and the extents
to which the penalty is determined are also different in
particular situations as they are determined by different
persons or in different areas. It is stipulated in the Article
9 in the new Law of the People’s Republic of China on
Water Pollution Prevention and Control (revision in
2008) that “the water pollutants discharged shall not ex-
ceed the national or local standards on water pollutant
drainage and the limited index of the total amount of the
key water pollutants discharged.” China has moved a
great step forward in the aspect of environmental protec-
tion by controlling the total amount of the pollutants.
In accordance with the Constitution Law, the Law of
the People’s Republic of China on Environmental Pro-
tection and the relevant provisions of laws on protection,
prevention and control of natural resources, the objective
of the environmental protection law and the ultimate goal
of the administrative penalty on environmental pollution
is to “safeguard the health of mankind and promote the
sustainable development of economy and society.” The
18th CPC national congress that was concluded not long
before has blueprinted the future development of China,
which will put the ecological civilization construction in
priority in China’s modernization. The annual meeting of
China Council for International Cooperation on Envi-
ronment and Development (CCICED) that was opened
on December 12, 2012 has the theme of “regional bal-
ance and green development.” Therefore, as one of the
most common and most effective measures for environ-
mental protection, the administrative penalty on envi-
ronmental pollution is to safeguard the health of the
mankind, protect the environment and achieve the sus-
tainable economic and social development in the end.
3. Introduction & Analysis on
Internationally Advanced experience of
Administrative Penalty on Environment
3.1. US System of Administrative Penalty on
Environmental Pollution
When speaking of the legislation on administrative pen-
alty for the environmental pollution, the US is the first
country to be introduced as its administrative legislation
on environment is in the pioneering rank in the world. At
present, the commonly used system of penalty by day in
the world was first implemented in the US and it is the
most characteristic of the US administrative penalty;
what’s more, the amount of the US’s administrative pen-
alty is usually enormous figure, it is natural that the vio-
lator will evaluate the serious consequences arising from
the violation act through the cost-benefit analysis in such
pressurized condition, and thus greatly reducing the in-
tentions to violate the laws.
The US has worked out the National Environmental
Policy Act in 1969, which is one of the earliest basic en-
vironmental laws in the world. The country has passed
the Clean Air Act in 1970, the Clean Water Act in 1972,
etc. As the chemical pollution accident in the Love Canal
was revealed, the US Congress passed the Comprehen-
sive Environmental Response, Compensation, and Li-
ability Act (CERCLA) [1] in 1980 under the pressure of
Copyright © 2013 SciRes. CWEEE
the public. The federate administrative authority in charge
of environment is the United States Environmental Pro-
tection Agency (USEPA), and deterrent force of US’s
administrative penalty on environmental pollution mainly
arises from the penalty type and fine amount. The
USEPA has the power of enforcement on civil legisla-
tions in which the judicial organ participates, and its
penalty is at high degree. In the aspect of fine amount,
the US has stipulated the upper limit on the maximum
fine amount and adopts the “penalty by day” system in
practice, that is, the limit to the daily penalty is stipulated
in dynamic state, i.e., the amount of daily penalty on a
violation act is limited and varies with time, the longer
the time passed, the more the penalty amount was.
It is indicated in the Administrative Penalty Policy
formulated by EPA that “permitting the violators to earn
benefit from the violation act will put the legalists in the
unfavorable position, and thus making a penalty on them,
therefore, the main economic benefits arising from the
illegal act shall be collected via the administrative pen-
alty.” [2]The first step to determine the amount of the
administrative penalty is to determine the cardinal num-
ber of the fine mainly on the basis of the benefits ob-
tained from the illegal act. Unless otherwise stipulated,
the penalty amount shall not be less than the benefits
obtained from the illegal act [3]. For example, EPA re-
quires the enforcement official to give the reason in the
files provided the penalty amount is less than the illegal
benefits; the second step is to adjust the coefficient, to
ensure the violator reluctant to repeat the violation act,
and the potential violator to cancel the intention of viola-
tion due to the huge penalty, it is necessary to make ad-
justment on the basis of the cardinal number. As is
shown by the court in the case of complaint of SPIRG
against SPIRG vMonsanto Co. that “it is not sufficient
to prevent the violator or potential violator from stopping
its illegal act under the condition that the penalty amount
is equivalent to the economic returns of the violator, it is
necessary to add the extra fine to the penalty amount to
achieve the punishment effect.
3.2. Legal System of Brazil on Environment
The content and system of the Brazilian environmental
legislation have been relatively matured, and some
scholars think it is one of the most advanced legal sys-
tems on environment in the world. However, like most of
developing countries, the environmental law is in poor
enforcement in Brazil. The Brazilian government has
issued the National Environmental Policy Act on August
31, 1981, which is a milestone in the Brazilian legislation;
the country has issued another epoch-making law of En-
vironmental Offence Act in 1998, which features the de-
finitive provisions on fines, it is stipulated in the Article
75 that the maximum fine imposed on the violator may
reach 50 million BRL. The key that the Brazilian admin-
istrative authority can make a penalty in no time is that
the Brazilian judicial system has granted the strong
power to the supervision organs, which intervenes widely
in the environmental protection and forms the unique
background for the enforcement of supervision organs. In
addition, according to the environmental penalty system
of Brazil, the administrative penalty may be determined
prior to the penalties of other kind in the case of the se-
rious violation against the environment administration.
The Brazilian environmental legislation, with the detailed
provisions and complete system, forms the relatively
complete and reciprocally complementary legal system
on environmental protection with the Constitution Law at
the core, which is a system that may rival with the sys-
tem of the developed countries because Brazil selects a
law enforcement road different from that of the other
countries in Latin America, in particular, the Brazilian
legal system on environment has introduced and refer-
enced the German environment law and the US envi-
ronment law, which are the most advanced laws in the
The design of penalty system on environmental pollu-
tion in other countries may provide reference to China to
complete our administrative penalty system against en-
vironmental pollution. The above-mentioned introduction
tells us that the relatively large amount of administrative
penalty on environmental pollution has been an interna-
tional trend, which has the following in common: First,
intensify the penalty force and enforcement; second, the
penalty procedure is dominated by the administrative
authority and participated by the judicial organ; the pen-
alty amount is determined by the coefficient calculation
based on the cardinal number. Compared with the prac-
tical experience abroad, the introspection on the draw-
backs and the system design of penalty amount fixing has
called our concerns.
4. Introspections on the Amount Fixing of
Administrative Penalty on Environmental
4.1. Amount Fixing Mode of Administrative
“Numerical Interval” mode is mostly applied to the pen-
alty amount fixing in China, and its upper limit is still
low to achieve the ideal of justice that “making the ille-
gal cost considerably higher than compliance”, which
may result in a higher compliance cost and a lower ille-
gal cost. “Multiple Penalty” mode is adopted in Article
73 of Law of the People’s Republic of China on Preven-
tion and Control of Water Pollution, which stipulates that
the faulty party who mishandled the treatment facilities
Copyright © 2013 SciRes. CWEEE
X. H. ZHENG 59
for water pollutants shall be imposed a fine of more than
doubled and not more than three time payable pollutant
discharge fee. However, due to the severe low payment
base, the penalty, even triple pollutant discharge fee, is
still on the low side. Generally speaking, penalty amount
shall be sharply increased and make sure an easy and
accessible calculation mode anyway.
4.2. Limitation of the Principle of “Moderate
Punishment on Fault”
Such principle mainly applies to those incurred fault or
loss. However, many faults or losses needed to be han-
dled are not incurred during the environmental adminis-
trative enforcement, for instance, the river water has been
polluted but such pollution is not impaired anyone yet.
Due to the lack of specific data of such fault or loss, the
principle of “moderate punishment on fault” may not be
helpful for related administrative department to deter-
mine the amount of penalty imposed on violator. Apart
from the said principle of “moderate punishment on
fault”, the Law of the People's Republic of China on Ad-
ministrative Penalty has not given any detailed specifica-
tion on the amount of administrative penalty. The
abovementioned laws and regulations specify quite dif-
ferent penalty amounts for different (but similar) illegal
activities as well as fix a broader interval (more than
RMB 10,000 Yuan but not more than RMB 100,000
Yuan) on the penalty amount for single illegal activity.
As a result, penalty will be imposed at the discretion of
the law enforcement officials, which may lead to arbi-
trary law enforcement.
4.3. Afterwards Indemnity Functions
The Law of the People's Republic of China on Adminis-
trative Penalty places an over-emphasis on maintaining
legal sanctity by penalty and reflects the responsibility to
the State from administrative counterpart, but neglects
the indemnity for victims. In the United States, penalty
system has functions of pre-restraint and post-punish-
ment as well as indemnity functions, which is to com-
pensate for the loss of victims and social public interests.
Study on the penalty system design of other countries
may provide salutary reference and lesson for China to
perfect our administrative penalty system. We shall not
simply copy or imitate foreign administrative penalty
system but make a thorough investigation on how to bet-
ter improve it considering China’s national conditions
when we use it for reference. By this, it is expected that
such reference will improve and optimize the administra-
tive penalty system on the whole to produce the best pos-
sible value and effect. Therefore, through comparison
and analysis on the common practice of current interna-
tional administrative penalty system, the writer puts for-
ward following suggestions:
5. Suggestions on Improving the Amount
Fixing of Administrative Penalty on
Environmental Pollution
5.1. Establish New Concept on Environmental
Protection Based on Sociology and Ecology
——Prevention of Environmental Protection
Administrative penalty on environmental pollution shall
have functions of prevention and restraint beforehand as
well as post-punishment and deterrent. Such practice as
pollution prior to control and damage prior to rehabilita-
tion would inevitably duplicate the unsustainable devel-
opment mode on economy and society. [5] Administra-
tive penalty on environmental pollution has a theoretical
prerequisite that the government shall represent the soci-
ety and be commissioned to make an overall plan and to
rationally eliminate and diminish violations of laws and
regulations that impair the society. The ultimate solution
is to prevent the problem from happening. Similarly, the
most effective solution to eliminate pollution is to keep it
from occurring. [6] Use “Society Standard” instead of
“National Standard” to fully achieve the tenet of “Law
enforcement for the people” into specific administrative
penalty fixing on environmental pollution. Make an
analysis on legal issues by using economic theory and
method and adopt proper penalty amount fixing mode is
to solve the problem with the minimum legal resource,
i.e. to take economic efficiency as the goal and evalua-
tion criterion of the laws and to make legislation, en-
forcement and justice advantageous for the social wealth
5.2. Use “The Hand Formula” for Penalty
Amount Fixing
“The Hand Formula” was formally put forward in 1947
by Learned Hand, the United States federal judge at the
case of the United States’ litigation of Carol Towing
Company. [7] This Formula is of heuristic and connota-
tive view of society. In a sense, it integrates the plaintiff
and the defendant to make a “unified settlement”, and
then regards the society as a whole, which has a coinci-
dent goal with the administrative penalty on environ-
mental pollution. Therefore, such administrative penalty
fixed by this formula should be able to effectively impel
parties to take adequate and rational preventive action to
avoid related impairs.
5.3. Carry Out “Fined per Diem” Rule
Wang Canfa said that the stipulated maximum fine of
RMB 3 million Yuan is not necessary when amending
the Law of the People’s Republic of China on Prevention
Copyright © 2013 SciRes. CWEEE
Copyright © 2013 SciRes. CWEEE
and Control of Water Pollution and that the fine should
be imposed by the day no matter how much the fine is.
For example, Du Pont Company was imposed a fine of
25 thousand USD per day and ultimately 310 million
USD for Teflon that may impair people’s health from the
day it got to know such risk until it halted sales, and Du
Pont Company was deterred to break the law again.
Friends of Nature, a non-governmental environmental
organization has held a seminar in regard to amendment
of environmental protection law and the experts partici-
pating in the seminar believed that “Fined per diem” rule
should be regarded as core content in the published
amendment of environmental protection law. Liang
Xiaoyan, the executive director of Friends of Nature
suggested supplementing the Law with “Fined per diem”
rule that worked in the practice on environmental protec-
tion in many other countries around the world.
5.4. Implement Environmental Liability
Insurance System and Set up Damage
Compensation Fund
Environmental liability insurance system and damage
compensation fund can be regarded as two compensation
modes for post-punishment of administrative penalty on
environmental pollution. Such modes can be put into trial
implementation in accordance with the specific circum-
stance in China and both of them pertain to the category
of environmental tort remedy socialization. This insur-
ance and compensation system has been maturely used in
the US, Germany and Sweden. Theoretical foundation
for environmental tort remedy socialization mainly
originates from social responsibility theory, balance of
interests theory and economic externality theory. Speak-
ing of Superfund Law, it indeed works in the abovemen-
tioned Gulf of Mexico oil spill. China may use for refer-
ence to share risks in a socialized way and to keep pol-
luting enterprises from bankruptcy that may influence
economic development. This is of importance for such
developing countries as China.
[1] J. Wang, “Science of Environmental Law,” Peking Uni-
versity Press, Beijing, 2006.
[2] Policy on Civil Penalties, EPA General Enforcement
Policy#GM 21 recodified as PT1—1(Feb.16,
1984), P. 3.
[3] Atlantic States Legal Found. V. Tyson Foods, Ine., 897
F.2d 1 128, 1 141(1 1 Ih Cir.1990).
[4] C. Fan, “Analysis and Assessment on Brazilian Legal
System on Environmental Protection,” Northern Legal
Science, Vol. 5, No. 2, 2011.
[5] D. P. Han, “Courses on Environmental Protection Law”
Law Press China, 2003.
[6] J. R. Ye, “Environmental Policy and Law,” China Uni-
versity of Political Science and Law Press, Beijing, 2003.
[7] Z. Y. Wei, “Civil Law,” Peking University Press, Beijing,