A resident in Guangfeng county, Jiangxi Province, walks through smog, reportedly caused by a local charcoal factory, in December 2014. The factory received good marks on its environmental impact assessment. Photo: IC

Since his appointment in late February, China's new Environmental Protection Minister Chen Jining has stressed the need to curb corruption in the environmental impact assessment (EIA) industry.

In a latest announcement released on March 25, the Ministry of Environmental Protection (MEP) required all government-backed EIA institutes either to disassociate themselves from local environmental protection authorities or to pull out of the EIA market by the end of 2016. Employees at institutes to be shut down will have to quit if they wish to continue working as EIA engineers.

Chen vowed to disassociate all eight EIA institutes affiliated with the MEP before the end of 2015.

The announcement came in response to serious violations and corruption in the EIA process revealed by the China's top discipline watchdog during an inspection in late 2014.

The inspection team identified widespread professional negligence, and pointed out that government-backed institutes dominate the EIA market, making it easy for them to trade favors between the government departments associated with the EIA process.

The State Council has stated that except for major energy or construction projects, the EIA will not be a pre-condition of approval, which some experts worried might worsen the environment protection in the country, thepaper.cn reported in December.

Cheng Lifeng, director of the MEP's EIA department, said that only by eliminating administrative obstacles could China develop a healthy, truly market-based EIA industry.

But some environmentalists have expressed doubts as to whether simply forcing government-backed EIA agencies to disassociate from government organs could lead to a healthy market, as rampant violations still exist at every point in the chain.

Widespread violations

Information on disciplinary violations and corruption involving government-backed EIA institutes began emerging many years ago, said Peng Yingdeng, a senior EIA engineer with the Beijing Municipal Research Institute of Environmental Protection under the Beijing Municipal Environmental Protection Bureau.

Peng, who has over  30 years' experience in the EIA field, said that most violations occur when EIA institutes help illegal projects gain government approval by fabricating the report or bribing local environmental protection officials in charge of approval.

In one major corruption case that came to light in 2007, the Hangzhou Research Institute of Environmental Protection under the Hangzhou Environmental Protection Bureau offered a 30 percent kickback to officials responsible for the approval of EIA reports in 13 district-level environmental protection departments. The institute allegedly paid 7.4 million yuan in "commissions" in 2005 alone, the Outlook Weekly reported.

There are a total of 11,368 EIA engineers in China as of March 22. Among the 507 EIA engineers in Henan Province, 178 of them reportedly have ties with government-backed institutions, according to China Central Television.

"The EIA is the source and starting point for environmental protection. Approval of the EIA report is the key step in the EIA process and also where corruption is most likely to occur," said Chang Jiwen, vice director of the Research Institute of Resources and Environment Policies under the Development Research Center of the State Council.

However, experts said that non-governmental EIA agencies are not immune to corruption and violation.

"Corruption is worse in non-governmental EIA agencies, as the costs for breaking the rules are low," Peng said, adding those agencies have more flexibility in faking their financial records.

Some non-governmental EIA agencies also brag about their "good relations" with environmental protection authorities in their online advertisements. One such EIA agency employee surnamed Mo told the Global Times reporter posing as a potential client that his nine years of working in the industry in Beijing have helped him build good connections with government officials.

"I could get the EIA report approved for around 100,000 to 150,000 yuan even if your project has some problems," Mo said.

The MEP punished 63 EIA agencies and 22 assessment engineers for violations in early March. The agencies either had their licenses revoked or were ordered to fix the problems that led to the violations.

A total of 159 agencies and 169 engineers in China have been disciplined over the past two years for violations that threatened environmental safety, the Xinhua News Agency reported.

Far from enough

"Barring government-backed agencies from conducting EIAs could provide fairness and justice for the EIA industry, but it's not enough to establish a healthy market," Peng said.

At least a third of about 1,200 China's EIA agencies are affiliated with the government, Peng said.

"Very few of their employees would like to keep doing assessments after the quit, based on the circumstances at my institute, which means that the EIA industry will lose lots of experienced engineers."

A fundamental reason for the corruption in the industry is because the EIA mechanism is not transparent, and public supervision is largely absent, Peng said.

Although guidelines for the publication of EIA report issued by the MEP in 2013 asked all companies and related environmental protection authorities to publish the full text of the EIA report and the approval decision, in practice, many published reports are stripped down, said Xie  Xinyuan, a research fellow from Beijing-based NGO Green Beagle.

In one case Xie is working on, a company building an incinerator told residents they could only see a shortened version of the EIA report at a designated place, with no photocopying or picture taking allowed.

But after negotiations with the company, Xie said, the full report was finally published on the its website. "No matter whether the agencies are government-backed or not, the current EIA [process] has shifted to helping companies get their EIA report approved by the government."

The public cannot be left in the dark about the EIA process and oversight, experts said. "The EIA should be conducted by a third party that consists of EIA engineers, residents' representatives as well as NGOs, to ensure the authenticity of the report, and the relevant departments should organize public hearings once the report has been approved," Xie said.