REGULATIONS OF SHANGHAI MUNICIPALITY ON ENVIRONMENTAL PROTECTION

CHAPTER II ORGANIZATIONS AND THEIR DUTIES

CHAPTER IV ENVIRONMENTAL SUPERVISION

OTHER PUBLIC NUISANCE

CHAPTER VII SUPPLEMENTARY PROVISIONS

   Article 1 Environmental protection is a basic state policy of China. With a view to protecting and improving living conditions and ecological
environment, preventing pollution and other public nuisance, safeguarding human health, promoting the coordination
of environmental protection and economic construction as well as social development, these Regulations are formulated
in accordance with the Environmental Protection Law of the People’s Republic of China and relevant laws and regulations,
and in the light of the city’s actual conditions.

   Article 2 The environment referred to in these Regulations means the whole of natural and artificially transformed natural physical elements,
which influences the existence and development of human beings, including atmosphere, water, seas and oceans, land,
mines, forests, grassland, wildlife, natural and cultural relics, nature protection areas, scenic spots, cities and villages,
etc..

   Article 3 These Regulations shall apply to the administrative divisions of this Municipality.

   Article 4 The principles of the work of protecting the city’s environment are as follows:

1. Putting prevention first, combining precaution with treatment, and tackling the problems in a comprehensive way;

2. Combining utilization of resources with their conservation;

3. Holding the polluter responsible for control of pollution and compensation for damages;

4. Combining unified supervisory administration with individual responsibility for assigned work; and

5. Combining professional management with mass participation.

   Article 5 People’s government at all levels and their departments, and all units shall attach importance to publicity and education
about environmental protection, popularize scientific knowledge of environmental protection, enhance supervision
through public opinions over environmental protection, and heighten people’s environmental consciousness and sense of
legality.

   Article 6 A citizen has the right to enjoy good environment and the obligation to protect the environment. Every unit and individual
person have the right to inform against or complain about any act causing environmental pollution or destruction.

   Article 7 The municipal, district and county people’s governments shall commend or reward any unit or individual person that has made
marked achievements in environmental protection and improvement, and in enforcement of these Regulations.

CHAPTER II ORGANIZATIONS AND THEIR DUTIES

   Article 8 The municipal, district and county people’s governments shall be responsible for the environmental quality within their respective
jurisdiction. Each government shall set a target of environmental protection during its term of office, draw up an annual
working plan according to the environmental protection program, and practise the system of chief executive assuming the
responsibility for environmental protection.

The municipal, district and county people’s governments shall each make an annual work report on the environmental protection
and on the fulfillment of the environmental protection target during their respective term of office to the people’s
congress or the standing committee of the people’s congress at the same level.

The township and town people’s government shall be responsible for the environmental protection within their respective
jurisdiction as required by the related district or county people’s government, and shall report regularly to the people’s
congress at the same level.

The sub-district office shall be responsible for the environmental protection in the region as authorized by the related district
people’s government.

   Article 9 The Municipal Environmental Protection Bureau (hereinafter called “MEPB”) is the administrative department of the Municipal
People’s Government responsible for environmental protection, which exercises unified supervision and control over the city’s
environmental protection.

The district or county environmental protection bureau (hereinafter called “DCEPB”) is the administrative department
of the People’s government at the same level, responsible for environmental protection, which exercises unified supervision
and control over environmental protection within its jurisdiction under the leadership of MEPB in professional works.

   Article 10 The main duties of MEPB are as follows:

1. To take the responsibility of implementing and enforcing the environmental protection law and regulations in the
city, and to supervise and direct the environmental protection work in each district and county;

2. To draw up the municipal environmental protection program and plan, and to participate in the formulation of the national
economic and social development program, the national land program, the district (county) regional program and the overall
planning of the city;

3. To draw up the municipal environmental protection norms, standards, and the preventive countermeasures against pollution;

4. To participate in making policies on the city’s key construction projects, and to conduct direct supervision and administration
over large-scale construction projects, specific projects, specified areas and pollutants;

5. To determine areas where the total quantity of pollutants is to be controlled, and the related targets for the areas;

6. To organize the monitoring of the city’s environment, and to investigate and settle major pollution accidents and disputes;
and

7. To organize researches in environmental science and important environmental projects, to spread advanced experience
and technology relating to environmental protection, to develop environmental protection industry and to carry
out international cooperation and exchanges on environmental protection.

   Article 11 The main duties of DCEPB are as follows:

1. To take the responsibility of implementing and enforcing the environmental protection law and regulations in their
respective jurisdiction;

2. To draw up the environmental protection program and plan for their respective jurisdiction;

3. To fulfill the total pollutant discharge target and to exercise supervision and inspection in their respective jurisdiction;

4. To organize investigation on regional environmental quality, to monitor pollution sources, and to supervise and urge
environmental control;

5. To popularize scientific knowledge of environmental protection and spread advanced technology for environmental protection;
and

6. To investigate and settle pollutant accidents and disputes.

   Article 12 Administrations of public security, transportation, railway, civil aviation, ocean, harbor superintendency, fishery and
fishing harbor superintendency and the environmental protection departments of the army shall exercise supervision and
administration over the prevention and control of environmental protection in accordance with the stipulations of relevant
laws and regulations.

Every administrative department responsible for land, agriculture, gardening, environmental sanitation, water conservancy,
mines shall exercise supervision and administration over resources and ecological environmental conservation in accordance
with the stipulations of the relevant laws and regulations.

Every relevant administrative department of the municipality, district and county shall assist MEPB and DCEPB with the enforcement
of these Regulations according to their respective functions.

CHAPTER III PROTECTION AND IMPROVEMENT OF ENVIRONMENT

   Article 13 The Municipal People’s government shall bring its environmental protection program into line with the national economic
and social development program, the national land program and the overall planning of the city.

The environmental protection program drawn up by MEPB or DCEPB shall be submitted to the people’s government at the same level
for approval before its implementation, and be reported to the environmental protection bureau at a higher level for
the record.

   Article 14 MEPB shall, jointly with the relevant departments and according to the Shanghai City’s overall planning and the areas
where the state environmental quality standards are applicable, classify and designate environmental functional zones, and
this program shall be made public and put into effect after being approved by the Municipal People’s Government.

   Article 15 Varied ways shall be explored to hear public opinions on the formulation of the environmental protection program or on
the construction of any large or medium-scale project or specific project, which may cause pollution to the environment.

   Article 16 The Municipal People’s Government shall, according to the state quantitative check index for comprehensive environmental
protection, set the target and measures for the city’s comprehensive environmental control, and urge the district and
county people’s governments and the relevant department to fulfill the target and implement the measures.

   Article 17 The city’s industrial layout shall, in accordance with the requirements of the city’s (township’s or town’s) planning, industrial
structure and ecological conservation, meet the following conditions:

1. No industrial production project is to be built in commercial centre, and the existing ones must be relocated;

2. No construction or expansion of any pollutant industrial project is to be carried out in the city’s central area, and the existing
ones must be adequately regulated or relocated;

3. A new industrial project to be built shall be located in the industrial area fixed by the planning, and the pollutants
must be disposed concentratively; and

4. Paper-making, electroplating, leather-working, printing and dyeing, and other industrial projects with serious pollution must
be located in restricted areas.

   Article 18 The municipal, district and county people’s governments shall increase investment every year in water supply, drainage,
sewage treatment, concentrative disposal of solid waste, fuel gasification, centralized heat supply system, greening,
environmental sanitation, river pollution control and other environmental facilities in the city, and shall ensure the availability
of funds for daily maintenance and management.

   Article 19 The construction of a development zone shall meet the requirements of an ecological city, in which the functional zones
shall be strictly classified, the industrial structure rationally arranged, the building density controlled and the green
land area ensured.

In a city’s development zone, the centralized heat supply system, the pollutant treatment and disposal facilities, the pollutant
collection and conveyance system shall be established, and the environmental quality standard in the zone shall be more
rigid than in other areas.

   Article 20 Besides the designated conservation area for water source on the upper reaches of the Huangpu River, the Municipal People’s
Government shall delimit conservation areas on the Yangtze River and for the sources of drinking water fixed by the city’s planning.
The district and county people’s government shall designate conservation areas for the sources of drinking water for urban
and rural residents.

A conservation area for the sources of drinking water shall set the target of improving water quality, and prohibit or restrict
any act that may cause pollution to water sources.

The designation and administration of trans-district or trans-county conservation areas for water sources shall be settled
by MEPB with the relevant district or county people’s government through consultation.

   Article 21 The municipal, district and county people’s governments shall strengthen the protection of natural ecological areas,
natural distribution areas for rare and endangered wild animals and plants, conservation areas for water sources, cultural
relics, ancient trees and famous woods.

No pollutant project shall be built in the Chongming Dongtan Migratory Birds Protection Area, the Jinshan Sandao Marine Ecological
Protection Area, the Dianshan Lake Water Source Conservation Area, the Sheshan Scenic Spot, the Hengsha State-level Tourist
Area and other areas under special protection fixed by the city’s planning. The existing ones shall be required to reach the
pollutant discharge standard and the total control index, or must be relocated.

   Article 22 People’s governments at all levels shall attach importance to the protection of agricultural environment, and prevent the occurrence
and development of ecological imbalance, such as soil pollution, vegetation destruction, water loss, soil erosion and
land salinization.

People’s governments at all levels shall reinforce water source conservation and administration of waters, and
prohibit direct discharging of pollutants and dumping of waste into the waters.

The exploitation and utilization of natural resources such as land, water, minerals, fishery and wildlife, shall be
governed by the stipulations of relevant state laws and regulations. Anyone causing damage to natural resources shall
be required to make compensation for the damage.

   Article 23 Discharging pollutants and dumping refuse into ocean, or undertaking coastal project construction, off-shore oil exploration
and exploitation, marine transportation and ship dismantlement on mud flat shall be governed by the stipulations of relevant
laws and regulations.

CHAPTER IV ENVIRONMENTAL SUPERVISION

   Article 24 MEPB may, in the light of the actual conditions of the city, set regional standards for the items that are not covered in the
state environmental quality standards and in the state pollutant discharge standards, and set more rigid regional pollutant
discharge standards for items that are covered in the state pollutant discharge standards. The formulated regional standards
shall be made public and put into effect after being approved by the Municipal People’s Government.

   Article 25 The environmental supervision agencies set up by MEPB and DCEPB shall be responsible for daily supervision of pollutant sources,
for investigation and handling of unlawful practice, collection of fees for discharging pollutants and for discharging
pollutants above standards within their respective jurisdiction.

   Article 26 MEPB shall draw up regional environment monitoring norms and technical standards, and jointly with relevant departments, set
up an environment monitoring network.

Environment monitoring agencies under MEPB and DCEPB are responsible for the routine monitoring of environmental factors, the
supervision and monitoring of pollutant sources within their respective jurisdiction. Their data on supervision and monitoring
shall form the basis for environmental supervision.

The environment testing data of each department and unit may also be regarded as the basis for supervision on environmental
protection after being confirmed by an environment monitoring agency under MEPB or DCEPB.

If the party concerned disagrees with the monitoring data, it may apply for a recheck and affirmation to the environment monitoring
agency under an environmental protection bureau at the next higher level within the prescribed time.

   Article 27 Before the annual World Environment Day (June 5), MEPB shall issue a bulletin on the city’s environmental situation in the previous
year.

   Article 28 A system of environmental impact assessment shall be adopted in every construction project that is likely to affect the environment.

A construction unit shall entrust a qualified environmental impact assessment agency to prepare an environmental impact report
(table) for every construction project, which shall be submitted for approval to MEPB or DCEPB according to their respective
examination and approval competence before a project is to be registered.

The environmental impact assessment agency for construction project shall be responsible for its assessment conclusion.

   Article 29 The pollution prevention and treatment facilities for every construction project shall be designed, built and put into production
or use together with its principal construction works at the same time. The original pollution relating to the construction
project shall be controlled concurrently.

After the completion of a construction project, the pollution prevention and treatment facilities must be subjected to check and
acceptance by the environmental protection bureau that originally examined and approved the environmental impact
report, before being put into production or use. If a trial production or operation is required, approval must be
obtained from the environment protection bureau, and the pollution prevention and treatment facilities must operate at the
same time.

   Article 30 Any unit or self-employed worker discharging pollutants shall, according to relevant stipulations, declare accurately to
the environmental protection bureau in the locality and register with it the kind, quantity, concentration, mode of discharge
and direction of the discharged pollutants, the facilities and type of pollution treatment, and provide technical data
and information concerning prevention and treatment of pollutants.

If any change needs to be made in the kind, quantity, concentration, mode of discharge or direction of the discharge
pollutants, the alteration procedures for declaration and registration must be completed within 30 days before the change
is made.

   Article 31 The pollutant discharge by a unit discharging pollutants in the total pollutant discharge control area shall come up to the
set discharge standard and the total control index.

On the precondition that the improvement of environmental quality in a region is ensured, the unit concerned may transfer part
of its pollutant discharge quota for valuable consideration upon the approval of MEPB.

   Article 32 A system of pollutant discharge licence shall be adopted in the city. MEPB shall, jointly with relevant departments, determine
the areas, kinds and objects to be licensed.

MEPB or DCEPB shall examine and approve applicant unit for discharging of pollutants and issue the “Pollutant Discharge Licences”
according to the requirements of the regional total pollutant discharge control.

   Article 33 Any unit or self-employed worker discharging pollutants above the state or municipal standard must pay fees for discharging
excess pollutants according to relevant stipulations. Where the state and the city authorities stipulate payment of fees
for discharging pollutants, the stipulations must be implemented. Payment of the fees for discharging pollutants
above standard and the fees for discharging pollutants shall not relieve the party concerned of the responsibility for
pollution treatment and compensation and other responsibilities set by relevant laws.

Fees for discharging pollutants above standard and fees for discharging pollutants shall be managed and used according to the
stipulations of the relevant state laws and regulations.

   Article 34 In the case of the discharge of pollutants above standard or the total control index, causing severe environmental pollution,
a time limit must be set for its treatment.

The municipal, district and county people’s government shall make a decision on pollutant treatment within a specified
period of time according to their respective competence, and may also authorize MEPB and DCEPB to make such decision, which
shall be reported to the people’s government at the same level for the record.

   Article 35 MEPB or DCEPB and their environment monitoring agencies shall, according to law, exercise on-the-spot supervision
and investigation on every unit and self-employed worker under their administration. In the process of an inspection,
a uniform credential of supervision and inspection printed by MEPB shall be produced, and the technology and professional
work of the examinee shall be kept secret.

The examinee shall report the situation accurately, and provide necessary data and information. No concealment, refusal
or obstruction is allowed.

   Article 36 The prevention and control of trans-district or trans-county environmental pollution and destruction shall be settled
through consultation by MEPB with the relevant district or county people’s government. If no settlement can be reached
through consultation, the Municipal People’s Government shall make a decision.

   Article 37 The departments and units concerned shall work out plans for preventing and controlling pollution, adopt advanced techniques
and technology, and harness pollution sources as required by the environmental protection program and the comprehensive
environmental control.

Any unit or self-employed worker causing environmental pollution and other public nuisance shall adopt a system of responsibility
for pollution control, set up pollutant processing facilities and ensure their normal operation, and perfect the file of
operation.

If the pollutant processing facilities fail to operate regularly owing to breakdown or overhaul, the production must be stopped
or decreased, or other measures be taken, and a report must be submitted to the environmental protection bureau in the
locality within 24 hours.

If the pollutant processing facilities are to be dismantled or left idle, a written application must be submitted to MEPB
or DCEPB for approval within 30 days before any action is taken.

If MEPB or DCEPB fails to make a decision within 20 days from the date of receipt of the written application, an approval is
to be taken for granted.

   Article 38 Adoption of clean technology featuring energy saving, low consumption, no pollution or minimal pollution, and clean production
shall be encouraged.

For the introduction of technology, equipment and construction project from abroad, the requirements of no pollution or minimal
pollution must be met. If the introduced items may cause pollution while the necessary treatment technology or equipment
is not available in China, the required treatment technology or equipment must be imported concurrently.

Use of any technology or equipment causing severe environmental pollution, which are to be discarded as explicitly ordered
by the state and the city authorities, is prohibited.

   Article 39 The discharge of waste gas must be brought under strict control and the following conducts are banned;

1. The discharge of toxic and noxious gas and dust above the set discharge standard;

2. The construction, renovation or expansion of any thermal power plant with no desulphurisation equipment installed;

3. The burning of substances that give off toxic and noxious smoke or dust and foul odor in a non-designated area;

4. The producing of a large amount of dust and airborne dust in the process of construction, transportation, loading and
unloading and production;

5. The discharge of waste gas from powered vehicles and vessels above the set standard;

6. The exhaustion of unpurified smoke and oil fume in catering services and canteens; or

7. The installation of air conditioners and cooling facilities that affect the environment and the life of other people.

   Article 40 Sewage discharge must be brought under strict control and the following conducts are banned:

1. Unscrupulous discharge of oils, acid and alkali fluids, lethal waste water, radioactive waste water of high or medium intensity,
and non- sterilized pathogen bearing sewage;

2. Unscrupulous discharge of below-standard industrial waste water, domestic sewage, building slurry, livestock and poultry
sewage, aquatic cultivation farm sewage, slaughterhouse sewage and other sewage in production and operation activities;

3. The connection of below-standard sewage pipes to a sewage processing plant or the discharge of below-standard sewage
from the sewage processing plant;

4. Unscrupulous discharge of a ship’s sewage nonconforming to the discharge standard; or

5. Artificially pumping back of underground water of below-standard quality.

The sewage received into the regional sewage catch-pipe shall reach the set standard and the total control index. If such sewage
does not reach the standard or index, it must be pre-treated.

   Article 41 Noise pollution must be brought under strict control and the following conducts are banned:

1. The setting up of a production or an operation project that causes noise pollution in residential quarters, cultural
and educational quarters and other special areas;

2. The use of high-powered loudspeakers that cause noise pollution in public places such as streets, parks, markets and schools,
except in the case of special needs as approved by the environmental protection bureau in the locality;

3. Construction operation during the set time at night affecting the sleep of the residents, except in the case of emergencies,
rush repairs and necessary consecutive operation as approved by MEPB or DCEPB;

4. Undertaking of profit-making cultural entertainment activities affecting the life of the residents; or

5. The honking of motor vehicles and vessels in non-honking quarters.

   Article 42 Solid waste pollution must be brought under strict control and the following conducts are banned:

1. The mixing of dangerous waste with domestic refuse or other waste;

2. Unscrupulous dumping of domestic refuse, faeces, industrial residue or other solid wastes;

3. Unscrupulous dumping and burying of waste residue containing soluble lethal toxicants;

4. The spilling of domestic refuse, industrial residue or other solid wastes in process of loading and unloading and transportation;
or

5. The storing of residue containing soluble lethal toxicants, without taking precautions against water, leak and loss.

A site chosen to serve as store ground, treatment ground or disposal ground of solid wastes shall be approved by MEPB; the
construction and operation of the site shall be supervised by MEPB.

   Article 43 A unit or individual person that uses nuclear installations, radioactive isotopes or mineral resources with associated radioactivity
shall subject radioactive wastes to safety treatment. Radioactive solid wastes must be put under strict control and
be disposed of concentratively according to relevant regulations.

Radiation devices must be equipped with shields to meet the requirements of protection against radiation.

A unit that produces electromagnetic radiation must install protection facilities.

   Article 44 The production, sale and use of pesticides must be in conformity with the state provisions on pesticide management.

Control over transportation and storage of pesticides and over disposal of expired and ineffective pesticides must be tightened
to prevent environmental pollution.

   Article 45 Transfer of dangerous wastes, radioactive wastes and refuse on the control list of the state and the city from abroad or
other provinces and cities into this city are forbidden.

If there is a special need for the importation of wastes as raw materials, energy source or for recycle, an approval must
be obtained according to relevant state regulations before the wastes are admitted into the city.

Transfer of pollutants or production projects that may cause severe pollution to any unit or individual person incapable of
disposing of or treating pollutants in the city or in other provinces and cities, is forbidden.

   Article 46 If a pollution accident or other sudden pollution incident happens, the unit or self-employed worker involved must take emergency
measures, notify the units and residents that may fall victims to the pollution, report in no time to the local environmental
protection bureau and the relevant departments, and be ready to be investigated and dealt with.

If the environment is seriously polluted and the residents’ lives, property and safety are threatened, MEPB or DCEPB must
report to the people’s government at the same level and the next higher environmental protection bureau. The people’s government
concerned and the relevant departments shall take effective measures to remove or reduce the pollution dangers.

   Article 47 A standard for environmental protection technology shall be set up for industrial products likely to cause environmental pollution.
Production, sale, or use of industrial products non-conforming to the

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