商法论坛 | Mediation and civil suit collateral in environmental crim

Article 101 of the Criminal Procedure Law (revised in 2018) stipulates that, “where a victim has suffered any material loss as a result of the defendant’s criminal act, the victim shall have the right to institute an incidental civil action during the criminal proceedings. If the victim is deceased, or has lost the capacity of conduct, his or her legal representative or close relative shall have the right to institute an incidental civil action. Where state property or collective property has suffered any loss, a people’s procuratorate may institute an incidental civil action along with a public prosecution”.

Civil suit collateral to criminal proceedings has the dual nature of criminal and civil action. Mediation, as a way of dispute resolution, allows the parties to weigh their own rights and interests in a more relaxed atmosphere, which can avoid further aggravation of contradiction caused by litigation between the parties, so as to thoroughly resolve the dispute. Modern mediation takes freedom and efficiency as its value orientation. The authority of mediation in the civil suit collateral to environmental criminal proceedings comes from the recognition of both parties to this kind of dispute resolution.

The so-called third party’s participation in mediation in the civil suit collateral to environmental criminal proceedings means that a third party (usually the party’s shareholder) in the civil suit collateral to criminal proceedings takes the initiative to participate in the existing litigation mediation procedure, and voluntarily accepts the binding of mediation documents.

The civil public interest suit collateral to criminal proceedings of Gulou District People’s Procuratorate of Nanjing City, Jiangsu Province v Nanjing Sembcorp Water Supply, Zheng Qiaogeng and other 11 persons for environmental pollution was an environmental pollution case supervised by the Supreme People’s Court and the Ministry of Public Security, causing a great influence.

From October 2014 to April 2017, Sembcorp built underground pipes, tampered with monitoring data and received chemical dye hazardous waste from other units many times, although it had no authorisation for hazardous waste treatment. As a result, it illegally discharged a total of 284,583 cubic metres of high concentration wastewater, about 4,362 tons of sludge and 54 tons of hazardous waste into the Yangtze River.

According to the result of identification, the total amount of ecological and environmental damage caused by the above-mentioned illegal acts of Sembcorp was about RMB470 million (US$72.7 million). The Gulou District People’s Procuratorate of Nanjing City, in Jiangsu province, instituted a public prosecution in January 2018, accusing the defendant unit Sembcorp, the defendants Zheng Qiaogeng, and other 11 persons of environmental pollution crime.

As a plaintiff of public interest suit, it instituted a civil public interest suit collateral to criminal proceedings in September 2018, requesting to order the defendant, Sembcorp, to bear the cost of ecological environment restoration. In this case of incidental civil public interest suit, after mediation by the Xuanwu District People’s Court of Nanjing City, Jiangsu province, the Gulou District People’s Procuratorate and Sembcorp, and the third party, Sembcorp (China) Investment (Sembcorp Investment Company, the controlling shareholder of Sembcorp), signed a mediation agreement, confirming that Sembcorp shall pay RMB237 million in cash for ecological environment restoration.

Sembcorp Investment Company shall be jointly and severally liable for the above-mentioned payment, and the capital investment for completion of the alternative restoration project shall not be less than RMB233 million. It was finally confirmed that Sembcorp shall pay RMB237 million in cash for ecological environment restoration, and Sembcorp Investment Company shall be jointly and severally liable for the above-mentioned payment and make a capital investment of not less than RMB233 million in the alternative restoration project for new construction, upgrading and reconstruction of ecological environment protection projects of environmental improvement, energy conservation and emission reduction.

In this case, in consideration of shareholder’s social responsibility, Sembcorp Investment Company, the third party, took the initiative to participate in the mediation of the incidental civil public interest suit and bore the cost of environmental restoration, which provided a strong guarantee for the implementation of the mediation plan.

Article 5 of the Environmental Protection Law (revised in 2014) stipulates, for environmental protection, “the principles of protection first, stress on prevention, comprehensive treatment, public participation and accountability for damages”. A third party’s participation in mediation helps to further improve the efficiency and strengthen the implementation basis of mediation in the civil suit collateral to criminal proceedings, and further expands the social influence and educational effect of environmental law procedures.

In the process of hearing an incidental civil action, a people’s court should co-ordinate social forces, improve the mediation mechanism, and promote the formation of an overall joint force to prevent and resolve social contradictions. It should also actively explore the common point of the personal interests of the parties, and the fundamental interests of ecological environment protection, on the basis of finding out the facts and distinguishing right from wrong, and pay attention to environmental improvement and restoration while protecting the legitimate rights and interests of individuals in accordance with the law and promoting reconciliation, to jointly strengthen the protection of the ecological environment.

The purpose of the establishment of environmental pollution crime is to protect people’s constantly damaged environmental interests, and to draw a bottom line for protecting these interests. The core of environmental interests lies in the requirement that environmental quality meets the needs of normal life. When environmental quality meets the needs of normal life, people’s environmental interests are realised.

When environmental quality cannot meet such needs, or even threaten the survival needs of normal life, people’s environmental interests are infringed. In the civil suit collateral to environmental criminal proceedings, the infringer and its representatives’ voluntary dialogue, and negotiation with the representative organ of ecological public interest to solve the ecological restoration problem caused by criminal acts, not only concentratedly reflects and forms the principle of mass participation and social participation in environmental protection law litigation, but also plays a key link for companies to fulfil their social responsibility.

Environmental protection is a systematic project. Social organisations and their shareholders, actual controllers and affiliates should actively participate in relevant procedures to ensure that cases are heard fairly, reasonably and efficiently. All parties should be fully co-ordinated to achieve the organic unity of legal effect and social effect for the purpose of environmental restoration, and provide practical samples for improving the diversified settlement mechanisms for disputes over ecological environment resources.

Yang Rongkuan is a senior partner at Kangda Law Firm. He can be contacted on +86 136 0135 6259 or by email at yrklaw@126.com

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