SUSTAINABLE DEVELOPMENT ­ EAST ASIA AND PACIFIC 57953 D I S C U S S I O N P A P E R S OVERVIEW OF THE CURRENT SITUATION ON BROWNFIELD REMEDIATION AND REDEVELOPMENT IN CHINA September 2010 THE WORLD BANK SUSTAINABLE DEVELOPMENT EAST ASIA AND PACIFIC REGION D I S C U S S I O N P A P E R S OVERVIEW OF THE CURRENT SITUATION ON BROWNFIELD REMEDIATION AND REDEVELOPMENT IN CHINA September 2010 Jian Xie Fasheng Li THE WORLD BANK Washington, DC TABLE OF CONTENTS ACRONYMS AND ABBREVIATION ............................................................................................... IV FOREWORD ............................................................................................................................................. V ACKNOWLEDGEMENTS ................................................................................................................... VI EXECUTIVE SUMMARY ........................................................................................................................ 1 1. INTRODUCTION............................................................................................................................. 2 2. ENVIRONMENTAL AND DEVELOPMENT PRESSURES OF LAND CONTAMINATION IN CHINA ........................................................................................................... 3 2.1 MAGNITUDE AND HISTORICAL ROOTS OF LAND CONTAMINATION ................................ 3 2.2 TYPES OF BROWNFIELD SITES ............................................................................................... 3 2.3 URBAN DEVELOPMENT PRESSURE AND EMERGING BROWNFIELD CONCERN .................. 4 2.4 BEGINNING OF BROWNFIELD REMEDIATION AND CONTROL ............................................ 5 2.5 CHALLENGES AHEAD ........................................................................................................... 6 3. GOVERNMENT PLANS, TARGETS AND ACTIONS ............................................................ 8 4. REGULATORY FRAMEWORK FOR BROWNFIELD MANAGEMENT............................ 10 4.1 REGULATORY FRAMEWORK ............................................................................................... 10 4.2 TECHNICAL STANDARDS .................................................................................................... 11 5. ORGANIZATIONAL SETUP, MANAGEMENT PROCEDURES AND STAKEHOLDERS................................................................................................................................... 13 5.1 RELEVANT AGENCIES AT THE NATIONAL LEVEL ............................................................. 13 5.2 ORGANIZATIONAL ARRANGEMENT AT THE LOCAL LEVEL........................................... 14 5.3 STAKEHOLDERS AND THEIR RESPECTIVE ROLES .............................................................. 17 6. REMEDIATION TECHNOLOGIES AND MARKET IN CHINA......................................... 19 7. CASE STUDIES: BEIJING AND CHONGQING ..................................................................... 21 7.1 CITY CASE ONE - BEIJING ................................................................................................... 21 7.1.1 Industrial Relocation and Land Contamination ........................................................... 21 7.1.2 Local Regulation Development ....................................................................................... 21 7.1.3 Remediation Efforts .......................................................................................................... 23 7.1.4 Challenges Ahead ............................................................................................................. 24 7.2 CITY CASE TWO -- CHONGQING ....................................................................................... 24 7.2.1 Industrial Relocation and Land Contamination Problems ......................................... 24 7.2.2 Local Regulation Development ....................................................................................... 24 7.2.3 Local Government Strategy and Actions Plans ............................................................ 26 7.2.4 Challenges Ahead ............................................................................................................. 26 8. AREAS FOR IMPROVEMENT, RECOMMENDATIONS, AND CONCLUSIONS ......... 28 REFERENCES .......................................................................................................................................... 32 ii LIST OF TABLES Table 1. Examples of Industrial Enterprise Relocation in Major Chinese Cities .................... 4 Table 2. Pilot and Demonstration Remediation Projects in China ......................................... 19 LIST OF FIGURES Figure 1. Review and Approval Procedure of Industrial Relocation in Beijing ................... 16 Figure 2. Land Redevelopment Process ..................................................................................... 17 Figure 3. Stakeholders in brownfield remediation and reuse ................................................ 18 LIST OF BOXES Box 1 Examples of Pollution Incidents on Contaminated Sites in Chinese Cities ............. 6 Box 2 Local Policies and Regulations on Contaminated Site Management in Chongqing .................................................................................................................. 25 Box 3 Financial Resources for Brownfield Remediation ..................................................... 27 iii ACRONYMS AND ABBREVIATION AAI All Appropriate Inquiries BEPB Beijing Environmental Protection Bureau BHC Hexachlorocyclohexane BLCRC Beijing Land Consolidation and Reserve Center BMEIC Beijing Municipal Economic and Information Commission BMUPC Beijing Municipal Urban Planning Commission DDT Dichlorodiphenyltrichloroethane EIA Environmental Impact Assessment ERA Environmental Risk Assessment ESA Environmental Site Assessment GDP Gross Domestic Product HCB Hexachlorobenzene HCH Hexachlorocyclohexane DRC Development and Reform Commission MEP Ministry of Environmental Protection MEPB Municipal Environmental Protection Bureau MIIT Ministry of Industry and Information Technology MLR Ministry of Land and Resources MOHURD Ministry of Housing and Urban-Rural Development MWR Ministry of Water Resources NAPL Non-Aqueous Phase Liquids NDRC National Development and Reform Commission PAH Polycyclic Aromatic Hydrocarbons PCB Polychlorinated Biphenyl POP Persistent Organic Pollutant SEPA State Environmental Protection Administration (MEP at present) WLRC Wuhan Land Reserve Center iv FOREWORD Land contamination is a serious problem in China. In recent years, many old and polluting industries are being relocated away from urban centers due to rapid urban growth in China. As a result, a large number of contaminated land sites (often referred to as `brownfields') are emerging. These brownfields pose a dual problem: on the one hand, they pose an environmental and health hazard in China's most densely populated areas. On the other hand, as brownfields cannot be developed usefully, they pose an obstacle to urban and economic development. The most straightforward solution to the brownfield problem is site remediation. However, the policy, regulatory and technical frameworks for site remediation remain relatively underdeveloped in China and many challenges remain for adequate site remediation. This review of the current situation with regards to brownfield site remediation highlights the fragmentation of the legal framework for site contamination. At the same time, many different stakeholders are involved with brownfields, including former exploiting enterprise(s), governments at all levels, local communities and the public, as well as new developers. Responsibilities and interactions between these stakeholders are often not clearly defined, which leads to confusion and dodging of responsibility. A strengthened and comprehensive legal system covering all aspects of brownfield remediation and redevelopment is necessary. Additionally, national standards and guidelines are crucial for a consistent approach to site management across the country. We hope the challenges identified in this study and the recommendations and suggested solutions will be able to contribute to awareness of the importance of effectively addressing land contamination, and to accelerating the remediation and redevelopment of brownfield site in China. Ede Jorge Ijjasz-Vasquez Magda Lovei Sector Manager Sector Manager China & Mongolia Sustainable Development Social, Environment and Rural East Asia and the Pacific East Asia and the Pacific v ACKNOWLEDGEMENTS This report is one of the outputs of the Christophe Crepin provided written World Bank Program "China: Brownfield comments. Ke Yuan assisted in desktop Remediation and Redevelopment." It was editing. prepared by Jian Xie and Fasheng Li with the assistance of Yunzhe Cao, Ning Yang, Yuyang Gong, and Dimitri de Boer. Ke The World Bank program is managed by Yuan assisted in desktop editing. Jian Xie under the general guidance of John Roome, Klaus Rohland, Ede Jorge Ijjasz- The peer reviewers of the note were Vasquez, and Magda Lovei at the World Adriana Damianova, Christine Kessides, Bank. Generous financial support was also Catalina Marulanda and Anjali Acharya of provided from the Governments of Canada the World Bank and Lida Tan of U.S. EPA. and Italy. Carter Brandon, Victor Vergara, and vi EXECUTIVE SUMMARY Poor industrial planning and inadequate improvement. The key conclusions and pollution management in the past have recommendations of this report are made land contamination a serious issue in summarized below. China. Rapid urbanization in recent years has resulted in the need to redevelop The report first highlights the fragmentation industrial land once occupied -- and of the legal framework for site contaminated -- by old industries, which contamination. It concludes that a have helped bring the issue of the comprehensive legal and regulatory remediation and redevelopment of framework including a national law contaminated lands (often referred to as covering site contamination is needed to brownfields) to the forefront. Brownfields clearly define the responsibilities and pose two problems: an environmental and liabilities regarding land contamination and public health risk and an obstacle to urban remediation, and provide clear and concise and local economy development as they guidance for all stakeholders. remain unused. Both the Chinese national government and the local governments in Secondly, due to the many different actors some Chinese cities have begun to take involved in site contamination ­including action to control land contamination, various local and national governments, mainly emphasizing the remediation of previous exploiters, local residents and polluted lands for the purpose of urban potential investors­ confusion between development. The actions taken to date in actors and authorities is a major problem. some cities, such as Beijing and Chongqing, An example is that the relationship between demonstrate the viability of such programs. land use planning (deciding the type of land use) and brownfield management This report provides an overview of the (specifying remediation standards and current situation of brownfield requirements) is not clearly defined. The management in China in order to help raise government should therefore strengthen awareness of land contamination and help inter- and intra-coordination and develop remediation activities. It reviews cooperation between various government the institutional arrangements and agencies on issues including in site stakeholders of brownfield site investigation, assessment, land ownership management in the country, examines the transfer, design and implementation, weaknesses and challenges of the current remediation standards and completion systems, and offers some suggestions and acceptance and reuse. recommendations. Thirdly, China needs to speed up its work As a newcomer in the area of brownfield to officially approve, release and implement management, China has wide room for a system of national standards and technical 1 guidelines for the prevention and treatment to increase its R&D capacity, especially of land contamination. Local authorities advanced software and hardware should also be encouraged to issue tougher equipment in the fields of contaminated site standards based on local situations. monitoring, assessment and remediation. International exchange and training can Fourthly, economic and financial help increase the talent pool. instruments, such as environmental taxes, cleanup subsidies, loans, guarantees and Last but not the least, public awareness and market licenses, are necessary for participation are always one of the establishing an effective management important elements in effective governance system to address the incentive and funding and administration of brownfield site issues of brownfield management. Better management. As the first step, information and practical application of the "polluter should be made available to the public, in pays" principle and clearly defined rules order to raise awareness and facilitate and funding channels between known public participation in brownfield stakeholders (namely the governments, management. previous or current land owners, and developers) for the remediation and In summary, as brownfield remediation and redevelopment of brownfield sites should redevelopment is becoming a pressing be carefully analyzed in order to develop an environmental and development issue, effective system brownfield management. China needs to strengthen its legal, China can learn from the U.S. experience in organizational, and institutional framework the evolution of contaminated site for brownfield management, build its remediation from the Superfund Act to the implementation capacity, raise public Brownfield Act. awareness and participation, and be innovative in financial and technical Fifthly, China's urgent need for urban land solutions. In addition, China should draw requires that efficient soil remediation be from the land remediation and completed in a short period of time. redevelopment experiences accumulated by Selection of suitable and cost-effective developed countries for contaminated soil, remediation technologies is a high priority. and adopt those best practices and lessons Soil remediation objectives should be to improve its own system. A companion considered in the selection of technology study to this one reviews these lessons and and remediation plans, and be specifically experiences (see International Experience in designed for each site according to its Policy And Regulatory Frameworks For intended use and other specific Brownfield Site Management, World Bank, circumstances. The country urgently needs 2010). 2 1. INTRODUCTION Poor industrial planning and inadequate Bank staff and relevant government officials past pollution management have helped in order to help raise awareness of land make land contamination in China a serious contamination and help develop problem. However, rapid urbanization in remediation activities. After the recent years has resulted in the need to introductory section, Section 2 explores the redevelop industrial land once occupied -- environmental and development pressures and contaminated -- by old industries, of land. Section 3 reviews government plans, which has resulted in several high-profile targets and actions. Section 4 discusses the pollution-related incidents that have helped regulatory framework for brownfield bring the issue of the remediation and remediation and redevelopment in China. redevelopment of contaminated lands to the Section 5 analyzes organizational setup and forefront. Both the Chinese national management procedures, as well as the government and local governments in some stakeholders in brownfield management. Chinese cities have begun to take action to Section 6 offers a brief review of the status control land contamination, emphasizing of brownfield remediation technologies in the remediation of polluted lands for the China. Section 7 looks at the cases of Beijing purpose of urban development. and Chongqing. Section 8 evaluates Chinese practices, discusses areas for improvement, The purpose of this report is to provide an offers recommendations, and concludes overview of the current situation of the brief. brownfield management in China for World 2 2. ENVIRONMENTAL AND DEVELOPMENT PRESSURES OF LAND CONTAMINATION IN CHINA 2.1 MAGNITUDE AND HISTORICAL meters. Some underground organic ROOTS OF LAND pollutants have aggregated in the form of non-aqueous phase liquids (NAPL) which, CONTAMINATION if not dissolved in water, can become a new Land contamination has become a serious source of pollution. Contaminants also can problem in both rural and urban areas of migrate to groundwater, leading to China. In urban areas, China's widespread dispersal of pollutants. industrialization and modernization process, which started in the 1950s, has left 2.2 TYPES OF BROWNFIELD SITES a legacy of vast polluted industrial and Industrial brownfield sites in China's urban commercial areas (often called `brownfields' 1 areas can be divided into four groups by in Western literature) , however overall type of main pollutant: statistics are not yet available. 1. Heavy metal contaminated sites. Mainly Brownfields in China often date back some from steel, iron and smelting plants, ore 50 years to the era of highly polluting tailings and chemical solid waste piles; industries built during the Great Leap typical contaminants are arsenic, lead, Forward. Most of these industrial factories cadmium, mercury, and chrome. were initially located on the perimeter of 2. Persistent Organic Pollutant (POP) Chinese cities. Many were state-owned contaminated sites. China produces, and enterprises that were initially located on the widely uses, pesticides such as DDT, perimeter of cities, and they often have a HCB, Chlordane and Mirex. Although long history of using antiquated equipment certain pesticides haven't been used for and a legacy of poor management and many years, some remain in the soil. inadequate environmental services. Soil New pesticide-contaminated sites pollution is often serious at these sites. In continue to be discovered in China, in some cases, the concentration of pollutants addition to other types of POP- in the soil can be up to hundreds of times contaminated sites, such as PCB higher than regulations permit. In some capacitor dismantling and burial sites. places pollution has been documented to 3. Organic contaminated sites such as have penetrated the soil by as much as 10 petrochemical, coking etc. Substances include organic solvents, benzene and 1 The definition of brownfields is "a property, the expansion, redevelopment, or reuse of which may be hydrocarbons, often mixed with other complicated by the presence or potential presence of a contaminants such as heavy metals. hazardous substance, pollutant, or contaminant". See 4. Electronic waste sites. Incorrect disposal http://www.epa.gov/brownfields/about.htm. In this report, contaminated sites and brownfield sites are of electronic waste can affect human used inter-exchangeably. 3 health. The main contaminants are China -- such as Beijing and Tianjin in the heavy metals and POPs (bromination Hai River Basin, the old industrial belt in flame retardants and dioxin). northeastern China, the Yangtze River Delta, and the Pearl River Delta. It has recently 2.3 URBAN DEVELOPMENT PRESSURE been reported that there are more than 200 AND EMERGING BROWNFIELD polluting enterprises being relocated from CONCERN inside the Fourth Ring Road in Beijing, 56 being relocated in Shenyang, and 147 large Little public attention was paid to land industrial enterprises being shut down, contamination in the past due to the suspended and relocated in Guangzhou. difficulties in identifying and measuring The environmental issue of brownfields has land pollution, as well as soil pollution become a barrier in the process of land hysteresis (the effects of pollution redevelopment. Today, many old experienced with a lagged effect, or delay in industrial sites located inside cities cannot time). In recent years, however, the process be redeveloped due to contamination of relocating old and polluting industrial concerns. They become a roadblock to enterprises away from urban areas has been urban development owing to both accelerated due to rapid urban development. environmental contamination (groundwater, This relocation of industrial enterprises has intensified greatly in major urban areas in Table 1. Examples of Industrial Enterprise Relocation in Major Chinese Cities Beijing Over one hundred polluting enterprises inside the Fourth Ring Road have been relocated, leaving eight million square meters of industrial land to be redeveloped Chongqing Over one hundred polluting enterprises from the city center will be relocated by 2010 Guangzhou Over one hundred large industrial enterprises have been shut down, suspended, or relocated since 2007 Shanghai Several dozens of old industrial enterprises were relocated from downtown areas Shenyang Several dozens of polluting enterprises were relocated in 2008; all the heavily polluting enterprises in the city centre would be relocated from 2009 onward Cities in Jiangsu Over one hundred chemical enterprises have been relocated, and many Province small chemical companies were closed Cities in Zhejiang Several dozens of large industrial enterprises have been relocated or Province closed since 2005 4 soil, surface hazardous and non-hazardous When Shanghai began site preparations for waste, ongoing dumping) and liability the 2010 Expo in 2004, the city government concerns for both owners and developers. established a soil pollution remediation The abandoned or delayed redevelopment center in 2005 to carry out the remediation of brownfield sites in urban areas also has a effort. The remediation of several profound social impact on local contaminated sites has been successfully communities such as poor living conditions, completed in Beijing as well, including at lack of employment opportunities, and even the Beijing No. 3 Chemical Plant, Red Lion social instability. Paint Factory, Beijing Coking Plant (South area) and Beijing Dyestuffs Plant. These 2.4 BEGINNING OF BROWNFIELD cases have helped build technical and REMEDIATION AND CONTROL management experience on brownfield remediation and redevelopment in China. A series of land contamination incidents has During the remediation and redevelopment occurred in recent years during the process of old industrial sites, industrial landmarks of rapid urban sprawl and redevelopment. are protected, reused and gradually Some of these incidents (Box 1) have been recycled. For example, the main structure of reported in the media, and have caught the Shanghai Nanqu Power Plant was public's attention. For instance, the pollution successfully preserved and converted into poisoning incident of construction workers an exhibition hall for the Shanghai Expo. in the construction site of Songjiazhuang Based on the recommendations and Subway Station in Beijing marks the proposals of 50 representatives of the city's beginning of brownfield acknowledgement congress in 2007, Beijing decided to stop the and remediation. Immediately following this demolition of the Beijing Coking Plant and incident, the State Environmental Protection instead launched a global competition for Administration (now MEP) issued the ideas on reusing the plant's industrial "Notice on Effective Prevention and Control buildings. of Environmental Pollution for Industrial Enterprise Relocations" in 2004. The notice requires that all local environmental protection bureaus satisfactorily carry out pollution prevention and control during the relocation process. As soon as a case of soil pollution is found, it should immediately be reported to SEPA, and pollution control countermeasures must be implemented. 5 Box 1 Examples of Pollution Incidents on Contaminated Sites in Chinese Cities A. Songjiazhuang Poisoning Accident in Beijing On April 28th, 2004, a poisoning incident took place during the construction of Songjiazhuang Metro Station in Beijing. The Songjiazhuang site had previously housed a 1970s-era pesticide plant. Though the plant had been removed many years earlier, large quantities of residual poisonous gases remained trapped underground. Three workers collapsed when the drilling operation reached 5 meters. They were sent to the hospital, and the site was closed. Consequently, the Beijing Environmental Protection Bureau conducted site monitoring and took remediation measures. Contaminated soil at the site was later evacuated, transported, and incinerated. The incident marks the beginning of the remediation and redevelopment of industrial contaminated land in China. Source: Outlook Weekly, Xinhua News Agency, 2009 B. Sanjiang Housing Development Project (Hanyang Pesticide Factory) Site in Wuhan City In 2006, an 18.7 hectare (280mu) parcel of land in Wuhan, the largest industrial city in central China, was sold to Sanjiang Real Estate for residential development. The land is on the water front of the Han River, near the confluence of the Yangtze and Han Rivers, and was deemed very valuable for residential development. Four years later, however, the land remains vacant, devoid of any of the planned development, as shortly after construction began, the soil was found to contain large amounts of pesticide residuals due to the fact that the area used to be occupied by Hanyang Pesticide Factory. Several construction workers were poisoned and had to be hospitalized. The vendor, Wuhan Land Reserve Center, had to compensate 120 million RMB to Sanjiang Real Estate as it had failed to perform an adequate site assessment and information disclosure before the transaction. It is estimated that remediation of this site could cost at least 500 million RMB. Source: Times Weekly, 2010 2.5 CHALLENGES AHEAD However, the effective regulatory and Currently, brownfield remediation and institutional framework for brownfield redevelopment is a big challenge to management has yet to be established, and governments, business owners, developers, many of these issues must be resolved. and local societies. Consequently, Suitable, cost-effective remediation environmental supervision and technologies in China are still in the pilot management of contaminated sites has stages. Major land contamination problems gradually become an essential responsibility and management challenges have been of environmental authorities. 6 highlighted by MEP (2008) and are There are numerous reasons for cleaning up summarized below: brownfield sites: removing a public health hazard, improving the general environment, 1. There is serious land pollution in some and making new land available for areas of China. Abandoned land -- a development. However, unlike many Super result of the relocation of industrial Fund sites in the US where contaminated enterprises -- is one of the main lands, once remediated, are usually not manifestations of soil pollution; developed for other economic activities, 2. Various types of land contamination there is always pressure in China to find exist, including the coexistence of old new land suitable for development. and new pollutants, mixes of both Therefore, an important remaining issue is organic and inorganic compounds; the liability of the new developer after a "cleaned" site has been purchased and 3. Food quality and safety incidents developed. What is the extent of their future associated with contaminated land have liability (exposure) if the site is found to increased rapidly in recent years, remain contaminated, or if pollution becoming an important threat to standards become more stringent? This people's health and social stability; question of liability--both to past polluters 4. The causes of land contamination are and future developers of brownfield sites-- often complex and difficult to control; needs to be clarified and resolved. The 5. A supervision and management system answers to these questions will have an for land pollution is not fully formed, important impact on both the development for example there is a lack of awareness; and the pricing of "cleaned" brownfield 6. The question of risk and "exposure," is sites. Without clarification, developers will an important unresolved issue in need be reluctant to make major investments in of attention. previous brownfield sites. 7 3. GOVERNMENT PLANS, TARGETS AND ACTIONS Due to the pressure of industrial relocation proposed action plan includes completing and brownfield remediation and the national survey of soil contamination, redevelopment in many Chinese cities, establishing a basic framework for a Soil governments at the national and local levels Environmental Monitoring Network, have begun paying attention to brownfield developing national and local soil pollution issues and have started preparing plans for prevention plans, and forming a brownfield remediation and redevelopment. preliminary regulatory and policy framework for the prevention of soil To investigate the current situation of land pollution. contamination, the MEP and the Ministry of Land and Resources (MLR) have, since 2006, The 2008 MEP document set the following jointly carried out a national survey on the working targets for soil pollution control in environmental conditions of soil and on China by 2015: install a supervision and pollution prevention, primarily in management system for soil pollution farmlands. The project, budgeted at one prevention; develop a series of policies, billion yuan RMB, is planned to be laws and regulations on soil pollution completed in 2010. The soil pollution survey prevention and control; improve the aims to establish an inventory of standard system on soil pollution contaminated sites, identify the type, scope, prevention and control and the soil extent and spatial distribution of heavily environmental monitoring network; polluted areas, analyze the causes of establish an oil pollution emergency pollution, and propose environmental response system; enhance soil environment management measures. The scope of the protection efforts by significantly increasing national survey covers most provinces and public awareness of the issue; implement municipalities in China, focusing on the soil pollution prevention planning, develop Yangtze River Delta, the Pearl River Delta, new soil pollution prevention and control the Bohai Bay Economic Belt, and the old technologies, and demonstrate significant North East China industrial belt. The results results. The document also calls for local of this investigation are currently being authorities to urgently and fully understand analyzed and processed. the importance of, and contribute to, strengthening soil pollution prevention and In June 2008, MEP issued an official control. document entitled "Recommendations on Strengthening Soil Contamination On the local level, some provincial or Prevention and Remediation." It pointed municipal governments such as Shanghai, out the severe problem of soil pollution, Beijing, Chongqing, Wuhan, Shenyang and specified government requirements, laid Zhejiang have also begun to take action in out a plan, and called for action. The brownfield remediation. For example, 8 Shanghai issued soil cleanup standards for EPB is working on documents titled the Shanghai World Expo 2010 site, which "Management Framework on Land was the first of its kind in China. In 2007, Contamination Prevention and Beijing's Environmental Protection Bureau Remediation," and is carrying out a risk (EPB) issued "Guidelines on Site assessment system and demonstrations on Environment Assessment (SEA)", and remediation technology. The EPB, Planning "Notice on SEA of Industrial Wasteland Bureau, and Land and Resources Bureau of after Relocation" which will be discussed in Shenyang City have jointly issued the depth below. Chongqing EPB has carried "Administrative Methods for Cleanup and out an initial SEA for its industrial lands Remediation of Contaminated Lands in and is drafting a document titled Shenyang (for trial use)." Shenyang has "Methodology on Soil Contamination completed the clean-up of the area where Prevention and Remediation." Zhejiang the old Shenyang Smelter Plant was located. 9 4. REGULATORY FRAMEWORK FOR BROWNFIELD MANAGEMENT China's legal and regulatory system for soil activities should be compensated, and the pollution prevention and control is in its soil remediated. Article 35 of The Solid infancy. There is no national law Waste Pollution Prevention Law requires encompassing land contamination and that entities producing solid waste take brownfield remediation and redevelopment. preventive measures for storage and Legal requirements related to soil pollution treatment facilities and sites of solid waste, and liability are scattered in the provisions and the article also specifies their obligation of several existing national laws or and financial liabilities. regulations, such as the Constitution, Criminal Law, Environmental Protection These relevant legal provisions, however, Law, Land Management Law, Solid Waste are not systematic or consistent, and none of Pollution Prevention Law, Hazardous them are focused on land contamination. Chemical Waste Pollution Prevention and They also are too general, and lack Control Methods, Law of Water and Soil operational details and accountability Conservation, Land Reclamation Ordinance, deterrence provisions. Control and and the Urban Real Estate Development prevention requirements, and measures and Management Regulations. pertaining specifically to land pollution, are largely missing. It is therefore necessary to 4.1 REGULATORY FRAMEWORK develop a specific law for prevention and In principle the Constitution requires the control of land contamination. MEP is rational use of land and the prevention of lobbying for including the "Soil Pollution soil pollution; Criminal Law specifies the Prevention and Control Law" in the criminal nature of soil pollution; the Solid legislation plan of the national congress. Waste Pollution Prevention Law regulates solid waste, municipal waste and industrial Currently, brownfield management in solid waste, but does not specify China is guided by an ad-hoc set of brownfields; the Land Management Law documents, rules and guidance issued by states that "governments at all levels should the government over the past several years, take measures to maintain irrigation and such as "Notices on Effective Prevention drainage facilities, improve soil quality, and Control of Environmental Pollution for improve soil fertility, and prevent land Industrial Enterprise Relocations" and desertification, salination, soil erosion and "Recommendations on Strengthening Soil soil pollution"; and the Land Reclamation Contamination Prevention and Remediation Ordinance requires that damage caused (MEP [2008] No. 48)," issued by MEP during construction work--including (formerly SEPA), in 2004 and 2008 digging, excavating, pressing and other respectively. 10 The 2004 Notice is not a mandatory rule and Testing Standards: "Soil Environmental does not give many details, but it began to Monitoring Technical Specifications" promote pollution control and management (HJ/T166-2004); "Groundwater of contaminated sites in cases where Monitoring Technical Specifications" industrial enterprises where relocated. (HJ/T164-2004); and "Water MEP's "Recommendations on Environment Monitoring Specifications" Strengthening Soil Contamination (SL219-98) issued by the Ministry of Prevention and Remediation" in 2008 Water Resources; and further requires that all relevant Monitoring Standards: "Groundwater departments and units fully understand the Quality Standards" (GB/T14848-93); importance of strengthening soil pollution "Soil Environmental Quality Standards" prevention and control, of establishing (GB15618-1995); and "Soil guiding principles and goals, and of setting Environmental Quality of Industrial priority areas of remediation. The document Enterprises" (HJ/T25-1999), although places a heavy emphasis on the need to the latter is very rarely used. establish and improve relevant laws, regulations and the standard system of soil In addition, MEP has commissioned pollution control. However, given the research institutes to draft or revise a series magnitude brownfield problems in the of contaminated site management standards context of development, these documents and guidance, including the "Soil which lack legal status are no substitute for Environmental Quality Standard," "Interim a national law. Measures for Soil Environmental Management of Contaminated Sites,"(2009) 4.2 TECHNICAL STANDARDS "Guidelines for Contaminated Sites Technical standards for soil pollution Environmental Monitoring,"(2010) control are also in urgent need of "Guidelines for Contaminated Site Risk improvement. There are no Assessment,"(2009) and "Guidelines for comprehensive technical guidelines or Contaminated Site Soil Remediation," standards on soil pollution monitoring, (2009). They are currently under review and revision. environmental risk assessment and soil remediation techniques officially issued Establishing local regulations or standards at a national level. However, a series of is essential to accommodate the regional provisional site management standards and local differences in China in terms of and technical guidelines are being economic development, soil types, and prepared and trials used, such as: natural conditions. Some Chinese cities with "Soil Environmental Quality a fast development pace and stronger Assessment and Remediation Standards economic capacities have started their own for Exhibition Site (Provisional for research, and prepared local regulations Shanghai Expo)" (HJ350-2007) and technical standards, in response to the 11 need for soil remediation and In 2007, Shenyang EPB, Shenyang environmental management for land Municipal Planning Bureau, and redevelopment. The following are a few Shenyang Municipal Land Resources examples: Bureau jointly issued "Shenyang Municipal Environmental Management In March 2006, Zhejiang Province issued Measures on Contaminated Site "Zhejiang Province Solid Waste Treatment and Remediation (trial Pollution Prevention Regulation," implementation)," Shenyang which requires an environmental risk Environmental [2007] No. 87, which assessment to be carried out for stipulates the evaluation and contaminated soil. identification of contaminated sites. In January 2007, the Beijing In June 2008, Chongqing Municipal Environmental Protection Bureau (EPB) Government issued the "Notice on issued "Site Environmental Assessment Strengthening Industrial Contaminated Guidelines," which stipulate work Sites Treatment and Remediation," procedures and technical methods for which details requirements for site environmental assessments within meticulous conduct on contaminated Beijing. site risk assessments. In May 2007, Chongqing Municipality dispersed "Chongqing Environmental Protection Regulations," which stipulated that before industrial enterprises may relocate, they must first clean up remaining hazardous materials and wastes, as well as remediate any contaminated soil. 12 5. ORGANIZATIONAL SETUP, MANAGEMENT PROCEDURES AND STAKEHOLDERS 5.1 RELEVANT AGENCIES AT THE 2. National Development and Reform NATIONAL LEVEL Commission (NDRC): Contributes to the drafting of environmental protection In China, as land is owned by the state, the planning; coordinates major problems in government is the main body in charge of ecological development, saving energy land use. In particular, the Ministry of Land and resources, the comprehensive and Resources (MLR), on behalf of the State utilization of resources (promotion of Council, is responsible for the uniform resource efficiency); overall management of land according to national coordination of environmental laws and regulations. The State Land industries and the promotion of cleaner Administration, under the supervision of production. MLR, is directly in charge of land 3. Ministry of Housing and Urban-Rural management, including implementing land Development (MOHURD): Responsible management law or regulations; land for city planning, endorsing plans surveys, statistics, registering and issuing submitted by provincial, municipal or land titles and certificates; developing land township level administrative use master plans; managing land departments and the supervision of acquisitions and allocations; reviewing and their implementation; participating in submitting land use change applications land use planning framework review; that require State Council approval; developing housing and urban researching major land management issues; construction planning and economic supervising local land bureaus; development policies; developing and coordinating with other ministries to monitoring the implementation of resolve land disputes, and investigating regulatory policies in the real estate major land use violation cases. market jointly with relevant departments; guiding urban land Besides MLR, a number of ministries are transfer and commercial development, involved in different aspects of land and issuing real estate industry sector management. For example: development plans and policies. 1. Ministry of Environmental Protection MLR needs to communicate with other (MEP): Responsible for supervising ministries on strengthening land and managing environmental pollution management. For example, in March 2010, prevention; developing and MLR held a forum attended by implementing management rules for the representatives from 16 ministry-level prevention of water, air, soil and solid organizations, including NDRC, Ministry of waste pollution; 13 Industry and Information Technology qualifications of the companies involved. (MIIT), MOHURD, etc., to discuss priority This document is expected to significantly land management issues, and ensure that contribute to further clarifying the the work of inventorying and redeveloping management procedures on urban contaminated sites is listed as a priority task brownfield sites. in the agenda of the central government in 2010. 5.2 ORGANIZATIONAL ARRANGE- MENT AT THE LOCAL LEVEL The management of industrial At the local level (county, municipal and contaminated sites is divided over several provincial), the land bureau within local ministries (MLR, MEP, NDRC and governments is in charge of uniform MOHURD). Although there is a definition management of land resources and the of each ministry's responsibilities and urban planning bureau is in charge of urban duties there are problems with overlap and planning. Taking Beijing as an example, absence in management procedures industrial relocation needs to be approved especially on contaminated sites which have by four municipal agencies before a parcel not yet been streamlined due to the lack of of industrial land can be transferred to other applicable laws and regulations. Methods use. These agencies are the Beijing are usually considered on a case-by-case Municipal Economic and Information basis, and the redevelopment of the first Commission (BMEIC), Municipal few sites was a process of "learning Development and Reform Commission by doing." (BDRC), Municipal Urban Planning Commission (BUPC), and the Municipal As an authority for pollution management, City Administration and Sanitation MEP plans to issue the "Management Commission (BCASC). The roles of each Method of Contaminated Sites" (in June agency breakdown as follows: 2010 this document was in the comments collection stage). It stipulates methods of 1. The Beijing Municipal Economic and site investigation and environmental risk Information Commission (BMEIC) is assessment, including guidelines under responsible for researching and drafting which the investigation and assessment of the development plan and policies for conditions must be carried out, what the local industry, software and content should be included and what information sector, as well as the procedures should be followed. The method application and promotion of structural also stipulates a management system for the adjustment and upgrading of the remediation, inventory, and recording of industrial structure. contaminated sites, including the conditions under which remediation should be started, 2. The Municipal Development and specific requirements for the remediation Reform Commission (BDRC) is plan and its implementation, how to deal responsible for planning major with the results of remediation, and the construction projects and the geographic 14 layout of economic productivity; Figure 1 below shows the working promotion of a sustainable development procedures in Beijing for the relocation of strategy, helping to draft general land polluting enterprises which affect local use, ecological construction, and residents. environmental protection planning. 3. The Municipal Urban Planning Notice in Figure 1 that the Beijing Municipal Commission (hereinafter referred to as Environmental Protection Bureau (BEPB) BUPC) is responsible for the has not been listed as one of the authorities organization and compilation of overall in the approval process. urban plans, city districts and planning of new urban districts, urban design In 2007, the BMEPB issued the "Notice guidelines, and specific district planning; Regarding Implementation of Soil urban construction land use, planning Environmental Assessment after Enterprise and management of construction Relocation," which requires that soil projects; site selection of major environmental assessment be conducted urban/rural development projects; before a site is reused after enterprise research and review of land reserves relocation. This notice has had a positive and land supply planning; licensing of effect on contaminated site treatment and construction land and construction remediation. project planning; urban planning, construction project planning and its Figure 2 represents the administrative implementation, supervision and process for land redevelopment in Beijing. management. The process is split into two phases. The first phase covers land acquisition and 4. The Beijing Municipal City reservation, consisting of four steps: land Administration and Sanitation acquisition, consolidation, reservation and Commission is responsible for the transfer. The second phase covers land organization, management and auction and development. In this system, supervision of the environment and the government controls the primary land hygiene; coordination of municipal market, with the land being supplied to the waste disposal facilities, site closure and market through the reserve and auction dismantling of facilities; development system. and implementation regulations for solid waste disposal. 15 Figure 1. Review and Approval Procedure of Industrial Relocation in Beijing 1. BUPC approval for change of use for old factory site; 2. Opinion of BUPC on planning for new factory site; 3. Company application to BDRC for project establishment approval of enterprise relocation; 4. Enterprise plan for relocation and construction of new factory. Project Application (to DRC) 1. BDRC approval of the project application; 2. Land transfer agreement of old site signed by both parties, and notarized; 3. Company-submitted application to all four departments for land transfer; 4. BUPC issues key planning points for the old and new site; 5. Land value assessment report for old site (by a certified institute); 6. Developer's application to all four departments for use of old site; 7. Developer's board meeting agreement on old site land use (signed by all directors); 8. Developer's bank deposit (no less than 1/3 of total land transfer cost); 9. City Industrial Technology Center's assessment report on land use transfer. Approval on land use transfer (coordinated with four departments, led by BMEC) 1. BDRC's approval on project; 2. Four departments' approval of land use transfer; 3. Company application to BMEC for feedback on feasibility study of new project; 4. Feasibility study report for new project; 5. Authority's comments on the Three Synchronies (i.e., Design, Construction, and Operation). Approval of Feasibility Study (by BMEIC) Approval of preliminary design (by BUPC) Construction Completion Approval (by BMEIC) 16 Figure 2. Land Redevelopment Process Land Redevelopment Phase Content Land Purchase Property Transfer, Relocation of Residents Land Consolidation Dismantling of Housing, Site Leveling Land Reservation Work Out Land Use and Transfer Plan Land bidding to transfer Developers bid Redevelopment Developer wins bid and starts construction 5.3 STAKEHOLDERS AND THEIR with developed infrastructure. Although RESPECTIVE ROLES China did not make detailed regulations on brownfield redevelopment, the government The process of land redevelopment includes has actively encouraged the redevelopment direct and indirect stakeholders. Direct of wasteland in order to promote stakeholders include the local government, densification (more concentrated use of community residents, enterprises and land resources), and provided policies that developers. Indirect stakeholders include reduced risk to developers' investments. financial institutions, research institutions, Brownfield redevelopment can create new arbitration or litigation organizations, the employment opportunities, stimulate media, the public, future generations, community activity and reduce health biodiversity advocates, and local non- threats, all of which are conducive to governmental organizations. Figure 3 building a harmonious and stable society. shows crossover interests and relationships Therefore, the redevelopment of among direct stakeholders. Take, for brownfields, if pollution issues are example, the relationship between the local appropriately handled, is of great government and developers. Brownfields significance for regional and urban are often located in the city center, economic development, as well as for occupying an area of high commercial value residents' living conditions. 17 However, the redevelopment of brownfield redevelopment, but are worried brownfields can be costly and time about these risks. As the caretaker of public consuming as the results of remediation lands, the government should provide must meet the pollution control standards incentive policies to attract developers and of the environmental protection bureau. encourage effective use of land resources. Brownfield redevelopment also brings Setting these incentive policies and dividing potential risks from pollutants that remain the costs and responsibilities of remediation after cleanup and redevelopment. will be a critical task for both the Developers want to get good returns from government and the developers. Figure 3. Stakeholders in brownfield remediation and reuse Government Treatment Local development Responsibility Ownership Resolve problem Exploitation Involve in management Brown Developer Local residents Field Profit Health, Employment Opportunities Relocation Compensation Pollution Responsibility and Responsibility Ownership compensation Original enterprise Responsibility and compensation 18 6. REMEDIATION TECHNOLOGIES AND MARKET IN CHINA In recent years, government funding has research institutes, and their respective helped develop remediation technologies domestic counterparts. The completed soil and equipment for selected types of remediation and land reuse projects cover contaminated sites. Although various soil most types of contaminated sites, including and groundwater remediation technologies chemical engineering plants, mining and exist, only a few are both practical and metallurgy sites, petroleum-polluted sites, economical. In China, the most commonly pesticide-contaminated sites, and e-waste used remediation practice is excavation sites. Remediation technologies currently followed by ex-situ treatment, such as used in China are predominantly off-site depositing contaminated soil in an off-site (ex-situ) disposal technologies, such as landfill, and or neutralizing with kiln excavation and co-incineration in cement treatment. In-situ remediation technologies kilns. Other technologies, including bio- are still in the early stage of research and remediation and vapor extraction, are piloting. currently under development; most on-site (in-situ) remediation technologies remain in A few pilot and demonstration projects for the experimentation and demon-stration soil remediation and land reuse have been stages (refer to section 2.3). Pilot and implemented in China (see Table 2). Most demonstration site remediation projects draw on relevant foreign experience, and have been implemented in Beijing, were jointly executed with foreign Shanghai, Chongqing, Zhejiang, Jiangsu environmental protection companies and and Shenyang, and other cities. Table 2. Pilot and Demonstration Remediation Projects in China Year Soil type Major pollutants Major technologies Scale Reuse purpose 2005 Heavy metal Lead and other Induction of plant Pilot Exhibition space contaminated soil heavy metals extraction, chemical fixation, chemical leaching methods, electrokinetic remediation 2007 Polluted soil Tetrabutyl tin, Solidification by cement 65,000 m3 Residential land Chemical dioctyl phthalate, kiln incineration engineering plants DDT, lead, etc. technology, landfill 2007 Soil in pesticide DDT, BHC and Solidification by cement 140,000 m3 Residential land plants other organic kiln incineration pollutants 19 Year Soil type Major pollutants Major technologies Scale Reuse purpose 2008 Soil contaminated Heavy metals, Thermal desorption and 52,000 m3 Residential land by paint semi-volatile Solidification by cement organic chemicals kiln incineration 2008 Petroleum Benzene and Landfill 8,000 m3 Eliminate potential contaminated soil nitrobenzene environmental risks 2008 Coal Chemical Phenol, sulfide Landfill 2,000 m3 Commercial contaminated soil and polycyclic development aromatic hydrocarbons 2008 Petroleum Oil Sludge Plant - microbial Pilot Eliminate contaminated soil remediation pollutants 2009 Polluted soil Volatile, semi- Biological reactor and Pilot Residential land Chemical volatile organic ventilation repair engineering plants compounds techniques 2005 PCBs PCBs wastes, Cleanup of storage sites, demon- demonstration PCBs thermal desorption of stration project contaminated soil low-density PCBs and water waste, disposal, online transformer PCBs oil dechlorination storage facility long-distance transport of high concentration waste China's soil remediation market remains in and mature technologies. China should take the experimental and cultivation stages advantage of advanced technologies and with some domestic enterprises and joint equipment and cooperate with the ventures carrying out environmental international soil remediation industry on remediation engineering practices and technical activities in order to promote cultivating soil remediation markets. The technological advancement and learn from soil remediation industry in developed international experience, which will help countries has already been established for accelerate the maturation of its soil several decades. Therefore these countries remediation market. have developed much valuable experience 20 7. CASE STUDIES: BEIJING AND CHONGQING 7.1 CITY CASE ONE - BEIJING local economic engines of new development areas. 7.1.1 Industrial Relocation and Land Contamination Despite the achievements, the large-scale In order to improve environmental industry relocation left behind many conditions and restructure industrial areas, contaminated sites throughout Beijing's the Beijing government began shutting urban area, which sometimes contain down and relocating old and polluting multiple pollutants on site and serious soil industries from the center of Beijing in the and groundwater pollution. Currently, 1980s. As Beijing's rapid urban expansion Beijing is facing administrative, technical and requires a substantial amount of land for financial challenges to effectively tackle the public, residential and commercial purposes, issue. the remediation and redevelopment of 7.1.2 Local Regulation Development former industrial lands is necessary. During the period from 2001 to 2005, 142 plants The poisoning incident of Songjiazhuang were relocated, making 8.78 million m2 of Subway Station in 2004 was a turning point land available for reuse. According to regarding the public opinion and another statistics, some 300 factories have environmental management of industrial been moved out of Beijing's urban area, contaminated sites. Following the freeing up some 9 million square meters of Songjiazhuang incident, a series of local land for redevelopment. These relocations regulations and administrative rules were involved several mega-plants, including issued, and actions were taken by the Capital Steel, relocation of which began in municipal government (Box 2). 2005, and the Beijing Coking Chemical Plant in 2006. To date, Beijing Municipal Government has established an initial regulatory framework These efforts proved successful because: for environmental assessment and management planning for sites vacated by 1. industrial pollution sources in urban area relocated industries. Among these, two have been largely removed; brownfield management documents, 2. urban land use efficiency and industrial namely Site Environmental Assessment structure improved; and Guidelines (January 2007) and Notice on Implementing Soil Environmental Assessment 3. relocated industries recover capital from for Sites Left from Industry Relocation (July land transfers, which provides the 2007), are of particular importance. enterprises with funds that can be reinvested in the business, thus facilitating the companies to become 21 The Site Environmental Assessment Guidelines specify the level and geographic are intended to identify potential boundaries of the contamination, and contamination at a site, to conduct a risk when appropriate to conduct further assessment based on the current situation or quantitative risk assessment, including future land utilization requirements, to exposure and toxicity analysis. determine site remediation requirements Meanwhile, future land utilization such and recommend remediation methods, and as residential, farmland, industrial and to provide a basis for decisions on land commercial purposes needs to be taken utilization in the future. It also stipulates a into account in the risk assessment. As a stepwise procedure for site environmental result, remediation objectives, measures assessment. and cost estimates need to be developed. Step 1 Contamination Identification: The Notice on Implementing Soil Identify potential contaminated sites Environmental Assessment for Sites Left from using desk reviews, field visits and Industry Relocation essentially reiterates the interviews with land owners and principles set forth by SEPA on industrial operators, as well as environmental contaminated site management, such as the agencies. The assessment practitioner "polluter pays principle". It also helps will then use professional judgment to reinforce the Site Environmental Assessment conclude whether the examined site has Guidelines presented above. It stipulates that, been contaminated, and prepare a site prior to redevelopment: investigation list (annex 2 to the Guidelines). The environmental situation of such Step 2 Contamination Verification: sites must be assessed; Carry out preliminary soil and A soil remediation plan must be groundwater sampling and laboratorial prepared for the contaminated site; analysis. Based on the results of the Remediation costs of the contaminated analysis, the assessment practitioner sites should be paid by the factories will verify the location, type and level of which caused the pollution; and site contamination, and conduct an The site cannot be redeveloped until the initial risk assessment regarding human remediation reaches the environmental health and environmental quality. At targets agreed. this stage, an initial remediation plan should be developed and assessed. Step 3 Risk Assessment and The development of a regulatory Remediation Measures: Conduct a risk framework regarding contaminated site assessment and develop soil cleanup management in Beijing has focused on the and remediation measures. At this stage, identification of liability and stakeholder more intensive soil and ground water responsibilities. The "polluter pays sampling and analysis is needed, to principle" has been clarified, and the roles of respective government agencies have 22 been set. Another achievement is the Plant. Several hundred thousand cubic development of the Site Environmental meters of polluted soil have been treated. Assessment Guidelines to regulate methodology and procedure for soil Beijng Hongshi Paint Plant site housed a assessment, which effectively helps contain pesticide plant in the 1950s, which was risks of existing sites. However, given the transformed into a paint plant in the 1980s. particular complexity and risks associated Site assessment results indicated that the with the brownfield redevelopment main contaminants were Hexachloro- lifecycle -- from site identification to reuse cyclohexane (C6H6Cl6) and DDT. It is -- of brownfield management, the role estimated that the contaminated soil in the played by regulations and the site amounts to 140,000 m3. The bidding environmental agency needs to be further document of the land auction specified that expanded. the winning bidder should prepare and implement an action plan to avoid 7.1.3 Remediation Efforts secondary soil pollution in accordance with Environmental consideration and the contaminated soil disposal plan requirements have been incorporated into formulated by BEPB. As a result, the regulations regarding land ownership developer spent tens of millions (RMB) of transfer and the redevelopment of private capital on soil remediation, and has contaminated industrial sites. Since 2007, met the commitment to clean up the environmental assessments have been contaminated soil, which was disposed of conducted on nearly 50 contaminated sites using cement kiln incineration. The entire in Beijing, involving steel making, coking, remediation process was supervised by chemical, dye, textile, automotive, and BEPB. Upon completion of the disposal, pesticide industries. The assessment results land monitoring was conducted and the show that some of the sites are results recorded by BEPB. Further contaminated and cannot meet the development of the land proceeded with environmental criteria for planned usage the inspection approval issued by BEPB. without soil remediation. Among those sites, some are so severely contaminated that This case shows that, firstly, in involvement pollutants extend to 20 meters underground. of environmental authority into the entire So far, several sites have been cleaned up, brownfield redevelopment process ensures and the soil was disposed of using ex-situ proper site cleanup and risk control; remediation technologies. These secondly, Beijing is in an advantageous technologies, including separation and position as soil remediation costs can be landfill, as well as cement kiln incineration, recovered from high land transfer revenue. have been applied to different As long as this is the case, and appropriate contamination situations, including Beijing site and soil analysis are carried out, such as No.3 Chemical Plant, Beijing Hongshi Paint a site assessment prior to land auction, this Plant, Beijing Tire Plant and Beijing Dye approach will remain viable. 23 7.1.4 Challenges Ahead The city has recognized the importance and urgency of brownfield management. It has Brownfield remediation and reuse in Beijing introduced various policies and regulations, is urgent because of the shortage of urban clarified main institutional responsibilities, land for development. Beijing needs to conducted a baseline study on brownfield further develop its institutional and management, and piloted several regulatory framework, establish an effective demonstration projects. The city has also brownfield management system, and use developed strategic action plans, including market mechanisms raise adequate funding establishing a city-wide prevention and for financing brownfield remediation. response system by 2015, and a specialized 7.2 CITY CASE TWO -- CHONGQING fund for contaminated land cleanup and remediation. 7.2.1 Industrial Relocation and Land 7.2.2 Local Regulation Development Contamination Problems Chongqing municipal government has Chongqing is an industrial mega-city in clarified the principles regarding liability southwestern China. Its industrial sectors for brownfield management, based on cover bulk and fine chemicals, metallurgy, Chinese environmental protection law, civil machinery, and instrumentation among law and land law. Three key principles others. Since 2002, the city has been include: relocating old and polluting industries from central urban areas, for environmental the "Polluter Pays Principle"; management and urban development purposes. There were 137 factories on the the "Investor Benefits Principle"; and relocation plan list set forth by the the "Land Owner Takes Responsibility Chongqing Municipal Government, posing Principle". great challenges to the city in terms of management, technology and financing. Since 2004, various government bodies have Most of these former industrial lands would issued a series of brownfield management be reused for urban development. However, policies and regulations, as listed in Box 2. long-term accumulation of contaminants resulting from industrial production and operation has polluted large amounts of soil and groundwater. Based on past studies, it is estimated that contaminated soil amounts to several million cubic meters in Chongqing City. In addition, land contamination is often complex, comprised of heavy metals, volatile organic compounds (VOCs) and semi-VOCs. 24 Box 2 Local Policies and Regulations on Contaminated Site Management in Chongqing (1) City People's Congress: "Chongqing City Environmental Protection Regulations", 2007 Article 47: Before switching production or relocation, factories should conduct brownfield treatment; Article 104: have not conducted treatment of the contaminated soils must make a correction under supervision of environmental administrative authorities...and be fined up to RMB 100,000. (2) Municipal Government Documents: "Recommendations on Speeding up the Relocation of Key Polluting and Unsafe Factories in the Core Urban Areas", 2004 "Notification on Strengthening the Remediation of Contaminated Former Industrial Sites", 2008 (3) Municipal EPB Documents: "Forwarding SEPA Notification on Implementing Pollution Control during Factory Relocation", 2004 "Notification on Implementing Soil Contamination Control and Treatment after Factory Relocation", 2005 "Notification on Strengthening the Management of Solid Waste Left from Closed, Shut-down, Bankrupt and Relocated Factories",2006 "Request for Further Regulating and Strengthening the Supervision of Contaminated Sites Left from Closed, Stopped, Bankrupted and Relocated Factories", 2008 These regulations show that the municipal combined with prevention, that new government attaches great importance to contamination should be avoided, and that the issue of brownfields. It considers remediation of existing contaminated sites addressing brownfields as an integral part should be conducted gradually. of realizing the city's development objective: to build a livable and ecological Chongqing. At the institutional level, Chongqing Unlike Beijing, which has formulated Environmental Protection Bureau (CEPB) dedicated Site Environmental Assessment plays a leading role in supervising baseline Guidelines, Chongqing requires that site surveys of the contaminated sites of relocated environmental assessment should be factories. The city also provides policy incorporated into the existing general explanations and publications to factories on environmental assessment mechanism. It a regular basis, and gradually strengthens the also stipulates that priority should be given enforcement of its regulations. to prevention, that remediation should be 25 As a result of these regulations and 2011­2014: incorporate environ- guidelines, the remediation and mental simultaneous (design, redevelopment of contaminated sites in construction, and operation) into the Chongqing City has made substantial site control and prevention system progress. Meanwhile, the municipal of all newly built factories; government has provided a specialized 2015: the city's industrial factories subsidy fund for contaminated site conduct soil and groundwater environmental risk assessment, which has pollution EWPC system in a been significantly increasing during the past stepwise manner. years. In 2007, 200 million RMB was spent on 15 sites, while by 2009 the figures rose to 2. Build a diverse financing mechanism for 800 million yuan RMB spent on 45 sites. So site cleanup and remediation. According far, 5 demonstration projects have been to the "polluter pays principle", the launched, among which the demonstration "investor benefits principle", and the of excavation and cement kiln disposal "land owner takes responsibility methods on chemical plant contaminated principle", it is anticipated that future soils is almost completed. financial resources for contaminated site remediation will consist of a revolving 7.2.3 Local Government Strategy and fund to finance cleanup and Actions Plans redevelopment activities of enterprises, Based on the above work, the CEPB and an earmarked fund to provide proposed the following strategic action grants for the cleanup and remediation plans for future brownfield management of contaminated land with unclear in 2008. ownership or responsibility and other financial sources (Box 3). 1. Set forth a timetable for developing a city-wide Early Warning and Prevention 7.2.4 Challenges Ahead and Control (EWPC) system for soil and It is estimated that at least 2 billion USD is groundwater pollution: needed for site cleanup and remediation in Chongqing. The city, however, is facing a 2008: preparatory work; huge financing gap. The city is looking for 2009: pilot industrial soil and technically suitable and cost-effective groundwater EWPC system set up remediation technologies and appropriate in 5 factories; site remediation standard. 2010: scale up to 10 factories; 26 Box 3 Financial Resources for Brownfield Remediation 1. Revolving Fund for cleanup and redevelopment of enterprise contaminated sites utilize the loans of international financing institutions and other sources to establish a fund to finance the cleanup and relocation of polluting enterprises; provide loans to the enterprises to be relocated for site remediation; repay the loans with revenues received from remediated land use rights transfer for other commercial use 2. Earmarked Fund to Subsidize Brownfield Remediation establish Fund with part of the fees collected from the transfer of remediated land use rights (coordinate with the Bureaus of Finance, Land and Resources) prepare operational manual of the Fund in coordination with the Bureau of Land and Resources Provide subsidies earmarked for the cleanup and remediation of contaminated lands which's ownership or pollution responsibility is unclear, which is not intended for development in the short term, or which will be used for public purposes. Source: Chongqing Environmental Protection Bureau 27 8. AREAS FOR IMPROVEMENT, RECOMMENDATIONS, AND CONCLUSIONS As a newcomer in the area of brownfield National soil pollution standards and management, China has wide room for technical guidelines for brownfield improvement and is facing an opportunity cleanup and remediation. Despite some in brownfield prevention, control and local practices and provisional standards remediation of contaminated land. As and guidelines issued at the national level, outlined here, the nation is lacking in many government agencies and research institutes areas: a comprehensive regulatory have been using or referring to different framework (including both ex-ante and ex- methods and standards of contaminated pose liability and risks for brownfield sites); soil risk assessment used in other countries; uniform national standards on site the result has been inconsistent and assessment, clean-up and remediation; incomparable assessment results and proven technologies for investigating and conclusions. The lack of unified standards remediating contaminated sites; and also complicates efforts to develop a effective funding or financing mechanisms. regulatory framework. China needs to China also needs to improve its information speed up its work to officially approve, disclosure on brownfield sites and release and implement a system of national strengthen its national and local capacity standards and technical guidelines for the and the participation of stakeholders. prevention and treatment of land contamination. Local authorities should also Regulatory framework. Analysis shows be encouraged to issue tougher standards that China's legal systems for the based on local situations. prevention and remediation of contaminated lands and brownfield Financing instruments and mechanisms. redevelopment at both national and local Remediating and treating contaminated levels is weak. Existing legal provisions on sites for redevelopment is expensive, the prevention and control of land pollution therefore financial issues are often a major in Chinese laws and regulations are obstacle. An appropriate financing scattered, and too general to specify legal mechanism--one that includes economic responsibilities and obligations among incentives and funds--is important to the stakeholders. A comprehensive legal system remediation and redevelopment of is desperately needed to clearly define the contaminated sites. Economic and financial responsibility and liability of land instruments, such as environmental taxes, contamination and remediation, and cleanup subsidies, loans, guarantees and provide clear and concise guidance for all market licenses, are necessary for stakeholders. establishing an effective management system to address the incentive and funding 28 issues of brownfield management. In China, for each site according to its intended use no specific funds exist for contaminated site and other specific circumstances. Such remediation (like the Superfund or the detail requires experienced and highly Brownfield Remediation Fund in the US) at trained experts with relevant skills, but at either national or local levels. No clearly present China lacks such expertise. defined rules and funding channels exist between known stakeholders (namely the Government coordination. The planning, governments, previous or current land remediation and redevelopment of owners, and developers) for the contaminated sites requires inter- remediation and redevelopment of departmental, multi-partner, inter- brownfield sites. This is an urgent area for disciplinary, and cross-boundary improvement. Better and practical cooperation in order to be carried out application of the "polluter pays" principle successfully. In China, management should be carefully studied in order to responsibility for urban land at both the develop a reasonable and manageable local and national levels is allocated system of implementation for brownfield between two different administrative management. China can learn from the U.S. systems: urban planning and land experience in the evolution of contaminated management, both of which have site remediation from Superfund Act to independent functions. Currently, however, Brownfield Act. the functions of these two government departments are not clearly defined, Cleanup technologies. Moreover, China causing confusion and managerial needs efficient and practical technologies difficulties regarding contaminated land for remediating contaminated soil. remediation and development. The role of Brownfield remediation technical aspects, environmental authorities (as well as the such as practical procedures, standards, role of different divisions within technically suitable and cost-effective environmental authorities) in prevention remediation technologies are either yet to be and control of contaminated land both in established, or are still in a pilot stage. urban and rural areas is not well specified. China's urgent need for land in urban The relationship between land use planning construction requires that efficient soil (deciding the type of land use) and remediation be completed in a short period brownfield management (specifying of time. Therefore, requirements for remediation standards and requirements) is selecting remediation technologies are high. not clearly defined. The government However, the lack of advanced, efficient should therefore strengthen inter- and intra- and practical technologies is a significant coordination and cooperation between barrier in the redevelopment process of various government agencies on issues contaminated land. It is also necessary for including in site investigation, assessment, soil remediation objectives, as well as the land ownership transfer, design and selection of technology and remediation implementation, remediation standards and program plans, to be specifically designed in completion acceptance and reuse. 29 Corresponding policies and regulations Implications of city case studies. The should be developed. actions taken to date in the cities of Beijing and Chongqing demonstrate the viability of Public awareness and participation. such programs. Beijing has established an Redevelopment of contaminated land can initial regulatory framework for brownfield have an effect on public health and other management. In particular, it has developed vital interests, but public awareness of such specific Site Environmental Assessment risks remains low in China. Many cities Guidelines for contaminated site currently focus too much on local economic investigation, impact and risk assessment. development and profit from urban land Significant progress has been made relative sales. They tend to overlook pollution to other cities in China. The Hongshi Paint health, problems and environmental Plant site cleanup and redevelopment security associated with industrial and experience shows that appropriate prior urban development. Investors and local assessment, involvement of environmental residents of brownfield redevelopment authority into the entire redevelopment projects have low awareness of the risks of process and transparent processes are previous soil contamination, and lack crucial. In addition, the financing adequate means and resources to mechanism used in this project--recovering investigate and participate in such matters. cleanup costs from land transfer revenues-- Information should be made available to the proved to be viable. public, in order to raise awareness and facilitate public participation in brownfield Chongqing has also made an effort in management. formulating policies, a regulatory framework and strategic action plans for Capacity building. The capacity of brownfield management. Chongqing bases environmental monitoring and supervision brownfield remediation financing in contaminated sites is in urgent need of mechanisms on the "polluter pays", the improvement. Although China is making an "investor benefits", and the "land owner effort to develop its R&D sector and enforce takes responsibility" principles. These intellectual property rights, it still principles allow flexibility in balancing predominantly relies on the assimilation of between liability and implementation foreign experience and technologies. efficiency, and as such, are commendable. Therefore, the country urgently needs to In addition, Chongqing's proposal to build increase its R&D capacity, especially a diversified financing mechanism is a good advanced software and hardware start and worth further exploring. equipment in the fields of contaminated site monitoring, assessment and remediation. International experience in risk-based and International exchange and training can brownfield site prioritization. Based on the help increase the talent pool. review of international experience in brownfield management (see International Experience in Policy And Regulatory 30 Frameworks For Brownfield Site Management, the risk of land pollution, classifies World Bank, 2010, prepared by the same contaminated land risk levels, and World Bank program), prioritization and determines the priorities of remediation. On risk-based approaches can be highlighted the human health and environmental safety and applied in China. In setting premise, funds should first be allocated to remediation objectives, industrialized sites that pose the greatest threat to society countries have learned some lessons the and the environment, as identified through hard way. The U.S. Superfund is a case in contaminated sites surveys and assessments. point. Very large amounts of money and It is necessary to establish a similar risk effort were spent on a relatively small assessment system in China, taking into number of sites, leading to very high costs consideration and combined with the actual to society. In the Netherlands, previous situation of contaminated land in China. environmental laws required that all contaminated soil be remediated to meet In summation, brownfield remediation and certain environmental quality targets, but redevelopment is becoming a pressing the system proved difficult to operate, and environmental and development issue in was very costly. China. As plans exist to reuse most old industrial sites for residential and International experience has shown that it is commercial purposes after industrial more effective to establish a suitable relocation, land contamination and contaminated soil remediation standard environmental risks are a crucial issue. To system that takes future land use and site cope with the challenge, China needs to features into consideration. Such systems strengthen its legal, organizational, and are known as `risk-based,' because the level institutional framework for brownfield of remediation required depends on the management, build its implementation level of risk sites pose to society and the capacity, raise public awareness and environment. This system of remediation participation, and be innovative in financial usually requires less work overall than full and technical solutions. 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People's Daily, June 3, 2002 Contaminated Land in China," Background Wang, W.M., "The `incident of transferring report submitted to the World Bank poisoning land for redevelopment' hasn't Program "China Brownfield Remediation ended." China Real Estate Newspaper, August and Redevelopment." 21, 2007 Liu, D.T., 2009, "About 1/5 of land in our country Wu, X., 2006, "Deployed the investigation work is contaminated, foreign enterprises are of soil pollution nationwide." Ecology and optimistic in the soil remediation market," Rural Environment Studies, 22 (3): III-IV China Environmental News, April 14, 2009 Yao, H.Y., 2010, "280 acres of most valuable land Liu, Wei, 2009, "Beijing: After the fall of subway laid waste, the truth behind the returning of workers," Outlook Magazine (Liaowang the country's largest land contamination Zhoukan), Xinhua News Agency, Issue No.9, incident," Time weekly (Shidai Zhoubo), No.10 2009 32 This report is one of the study reports of the World Bank Knowledge Product "China: Brownfield Remediation and Redevelopment". It was prepared by the Sustainable Development Department of the East Asia and Pacific Region of the World Bank. Environmental and natural resources management issues are an integral part of the development challenge in the East Asia and Pacific (EAP) Region. The World Bank's Environment Strategy in the East Asia and Pacific Region has provided the conceptual framework for setting priorities, strengthening the policy and institutional frameworks for sustainable development, and addressing key environmental and social development challenges through projects, programs, policy dialogue, non-lending services, and partnerships. This study provides a forum for discussions on good practices and policy issues within the development community and with client countries. For more information and to view the reports of the SEA TA Program, please visit http://www.worldbank.org/eapenvironment/sea-asia. Sustainable Development Department East Asia and Pacific Region The World Bank Washington, D.C. September 2010 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. 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