China Glyphosate Environmental Regulations  

On 21 May 2013, MEP published a notice to conduct environmental verification on glyphosate TC (PMIDIA) manufacturers in the next three years and list the names of compliant manufacturers’ for public reference. The official release of the first batch of compliant manufacturers was on 8 Jul 2014. The MEP’s regulations have added a significant regulatory burden for Chinese producers with possible global impact on the supply of glyphosate. This AgroPedia page analyzes these regulatory obligations and recent environmental incidents from a domestic perspective providing key insight into the current legislative environment affecting pesticide business in China.

China Glyphosate Production History
1982started glyphosate production
2005 annual output of 180,000 tons, with 17 registration certificates
200879 registrants, annual output exceeded 0.6m tons
2010131 registrants, price declined to the bottom
2013 price fluctuated at more reasonable range

Contents

 

Pesticide Registration and Manufacturing Approval

As stipulated by the “Regulation on Pesticide Administration (Regulation on the Control of Agrochemicals)”, pesticide imported and produced in China should be registered with the MoA by obtaining a registration certificate. Applicants are required to gather the data for the product and the ICAMA (Institute for the Control of Agrochemicals under the Ministry of Agricultural) is responsible for the substantial task of governing the labs, establishing technical requirements and reviewing the dossier from the applicant. The Institute will examine the data and provide the technical opinion from quality, efficacy, safety and environmental perspectives and the MoA will issue the certificate to each product of the applicant based on the technical opinion.

To ensure the production process and the quality of pesticide from each producer, the Regulation also requires that pesticide produced, formulated and repacked in China is subject to a manufacturing management system. All producers in China should firstly be designated by the MIIT as approved manufacturers after which they should obtain a certificate or license for each of their product categories:

If China has not yet established a national or industrial quality standard for the product, the producer should apply to the MIIT for an approval certificate of pesticide manufacturing;

If China has already established a national or industrial quality standard for the product, the producer should apply to the AQSIQ for a production license of pesticide product;

Thus a domestic pesticide producer should be granted at last three different administrative approvals directly derived from the “Regulation on Pesticide Administration (Regulation on the Control of Agrochemicals”:                                                 

 

Pesticide Registration

Production Designation

Manufacturing Approval on single product

Authority

MoA

MIIT

MIIT

AQSIQ

Scope

pesticide produced and imported in China

pesticide production Business in China

without national/industry quality standard

with national/industry quality standard

Applicant

Domestic producer and overseas producer export pesticide to China( Chinese office or an entrusted agency)

Domestic Manufacturing Company

Domestic producer

Domestic Producer

Aim

Verify the efficacy, safety and appropriateness of the product

Inspect and ensure the competence of the production facility and staff

Inspect the production site and verify the capacity of the producer for the corresponding product

implication

The product is commercialized and marketable in China

Precondition of pesticide production business in China

The company is able to produce the corresponding quality product

Certification

one product, one producer ,one certificate

one company ,one approval

one product, one producer, one certificate

one company one certificate(listed with all  products allowed for production)

Hazardous Chemical Management

In 2011, China revised the “Regulations on the Control over Safety of Hazardous Chemicals” (now known as Decree 591) and the new version came into force on 1 Dec 2011. The regulations is designed to prevent and reduce accidents, protect life, property and the environment by strengthen the control over hazardous chemicals.

As hazardous chemicals (HCs) are highly involved in pesticide production, thus the most of the producers in China will be inevitably subject to spectrum of obligations under the Decree 591, including:

  • China GHS requirement on classification, labelling, SDS and hazardous statements, etc;
  • Registration of Hazardous Chemical under SAWS Order 53 and the MEP Order 22;
  • License and permit of the production, use, operation (including distribution, storage and transport) of hazardous chemicals;
  • Entry-exit legal inspection for the import & export of hazardous chemicals;
  • The subject activity, competent authority and management scope involved in hazardous chemical management are summarized in the table below:

Activity in Supply Chain

Competent Authorities

Management Scope

N/A

MIIT(Ministry of Industry and Information Technology)

Leading authority of GHS implementation

manufacture, us, storage, operation

SAWS(State Administration of Work Safety)

Enforcing authority of hazchem safety production, use, operation and hazchem facility construction, competent agency for hazchem registration

manufacture, use, import & export

MEP(Ministry of Environmental Protection)

Enforcing authority of hazchem environmental management registration(manufacture &use and import &export)

transport, packaging

MOT(Ministry of Transport)

Enforcing authority for hazchem inland & inner waterway transport and packaging

Import & export, declaration

GAC(General Administration of Customs)

Enforcing authority for hazchem entry-exit inspection and customs declaration

sale, entry-exit inspection

AQSIQ (General Administration of Quality Supervision, Inspection and Quarantine)

Enforcing authority of Hazchem sale and distribution

business registration, advertising

SAIC( State Administration of Industry and Commerce)

Enforcing authority for hazchem enterprises’ business registration

N/A

MOA(Ministry of Agriculture)

Former MOH(Ministry of Health)

Cooperating authority for hazchem listing consultation

The last consultation of China’s Draft Inventory of Hazardous Chemicals was made on 31 Oct 2013 and totally 2,963 entries of hazardous chemicals were listed into the draft, which contains approximately 140 pesticide active ingredients and various basic chemical materials for pesticide production. Though the Ministry of Agricultural is arguing against such inclusion due to the significant impacts on the pesticide industry, the consequence of the attempt is still unclear as there has not been any official release informing the timeline of the final version. As revealed by the SAWS, even chemicals excluded from the Inventory will be regarded as “chemicals with unidentified hazards” and thus subject to “Hazard Identification”. The burden on the hazardous chemical involved pesticide enterprises might not be easy.

Environmental Approvals

Apart from the hazardous chemicals involved in pesticide production, China adopts an environmental approval system on new construction, expansion and rebuilding of all pollutant releasing facilities, which covers nearly all pesticide production facilities in China. Producers are required to obtain an environmental impact assessment (EIA) approval before the construction of each production project and the environmental protection acceptance (EPA) approval after the completion of a construction project. MEP is responsible for reviewing and approving these applications. To guarantee the implementation of such an approval system, China promulgated a series of associated regulations:

Regulation

Scope

Summary/Obligation

Presidential Order 9-Environmental Protection Law

中华人民共和国环境保护法

Construction of all environmental polluting project

All construction(new construction, expansion and rebuilding) of environmental(air, aquatic, solid waste generating or treatment , coastal) pollution project should abide by associated environmental protection regulations on project constructing:

  • An environmental impact assessment report should evaluate the possible pollution (air, aquatic, solid waste) and determine the necessary facilities and device for pollution control. The EIA report should be reviewed and approved by the competent authority of environmental protection before the construction of the main project;
  • The pollution control facilities should be designed, constructed and put into use simultaneously with the corresponding phases of the main project. After the construction of the main project, the pollution control devices and facilities should be review and accepted by original authorities for EIA approval. The acceptance on the pollution control devices should be simultaneous with the environmental protection acceptance of the main project;
  • If pollution control devices were not reviewed and approved by the competent authorities of environmental protection, the main project shall not be put into pilot program. If the pollution control device were not acceptance-approved or identified as a disqualification, the main project shall not be put into operation;

It is stipulated in the “Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Wastes (Presidential Order 31)” that China implemented special control on hazardous wastes. China established the “National Catalogue of Hazardous Waste” and the subject hazardous wastes are not allowed to be dumped, stacked without authorization:

  • Hazardous waste generating companies should submit the information of the category, volume, flow, storage and disposal of the waste to the competent authority of environmental protection;
  • Companies engaged in collecting, storage, disposal and utilizing of hazardous waste should obtain the operation license from the competent authorities of environmental protection. Hazardous wastes are not allowed to be collected, stored, utilized or disposed of without a license. Hazardous waste generating companies are not allowed to transfer the waste to the collecting, storage, disposal and utilizing companies without the operation license of hazardous waste;
  • The transport of hazardous waste should also be approved by the competent authorities of environmental protection;

Presidential Order 87- Water Pollution Prevention and Control Law

中华人民共和国水污染防治法

Aquatic pollution project

Presidential Order 32-Air Pollution Prevention and Control Law

中华人民共和国大气污染防治法

Air polluting project

Presidential Order 31- Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Wastes

中华人民共和国固体废物污染环境防治法

Solid waste and hazardous waste generating project;

Hazardous waste storage and disposal project

Presidential Order 8-Marine Environment Protection Law

中华人民共和国海洋环境保护法

Costal pollution project

State Council Decree 253- Regulation on the Environmental Protection for Construction Project

建设项目环境保护管理条例

 

The regulation details the requirements and procedures of EIA and EPA approvals.

The EIA should be conducted by qualified agencies. Depending on the possible environmental impact  China classifies environmental protection management of construction project into the following categories:

  • If the construction of the project may cause significant impact on the environment, an EIA report should be compiled, which should contain a comprehensive and detail evaluation on the pollution and impacts;
  • If the construction of the project may cause slight impact on the environment, an EIA form should be compiled, which should contain general analysis or specialized assessment on the pollution and impacts;
  • If the construction of the project may cause minor impact on the environment and there is no need to conduct the assessment, an EIA registration form should also be filled;

The competent authorities of environmental protection under the State Council are responsible of compiling the “Catalogue of Categorized Management on Environmental Impact Assessment of Construction Project”. It is worth noting that construction of all pesticide production facilities are classified as “EIA report required”

SEPA Order 13- Measures for Environmental Protection Acceptance on the Completion of Construction Project

建设项目竣工环境保护验收管理办法

 

Pollution control and environmental devices should be put into use simultaneously with the main project. If the project was trial produced, the pollution control device should also be trialed with the main project.

Before the trial production of the project, an application for trial production should be submitted to the competent authorities of environmental production. The trial shall not be started without the approval;

After construction of the subject project, the owner of the project should file application for Environmental Protection Acceptance (EPA) on the Completion of Construction Project. The competent authority of environmental protection will verify whether the project has been equipped with enough environmental devices, which should be determined and prescribed in the EIA report before the construction of the project. If the authority is satisfied with the performance of the pollution control devices, the EPA will be approved and the project is allowed.

Environmental Verification and Pollution Cases in Zhejiang

China promulgated comprehensive regulations to assure environmental impact assessment and environmental protection acceptance approvals on construction and operation of all pesticide production facilities. When China experienced it’s most significant inflation in glyphosate prices during the 2008 boom, market driven industry development and production capacity vastly outpaced enforcement of infrastructure regulatory requirements for production facilities. This led to a situation where national regulatory and infrastructural capacity, particularly in the area of environmental regulation was grossly inadequate to deal with the rate of industrial development and output of serious pollutants. MEP has been the subject of considerable criticism in its handling of this situation. In response the MEP developed an environmental regulation which was promulgated on 21 May 2013. The MEP is to conduct environmental protection verification on glyphosate TC (PMIDA) producer by checking the environmental impact assessment and environmental protection acceptance approvals, as well as evaluating the performance of their environmental protection infrastructures, which were detailed in the “Guidance of Environmental Verification upon the Glyphosate (PMIDA) Manufacturing Enterprises”. The government verification process is on a “voluntary basis” and producers can chose to undertake MEP’s verification during a three year window following the promulgation of this regulation. MEP state that qualified producers will be included into the “Name list of Environmental Compliant Glyphosate TC(PMIDA) Manufacturing Enterprises”, which will be circulated to other departments and institutions such as NDRC, MIIT, MoA, MOFCOM, GAC, SAIC, AQSIQ, SAWS, People’s Band of China, SASAC(State-owned Assets Supervision and Administration Commission), China Banking Regulatory Commission, General Office of China Securities Regulatory Commission, the CCCMC (China Chamber of Commerce of Metals Minerals & Chemicals imported& exporters). The interaction with the above departments and institutions has sparked speculation among industry that a set of interdepartmentally coordinated measures will be taken by government, with the aim of squeezing out SMEs and other poor environmental players. Three years ago, MEP adopted similar measures targeting citric acid producers whereby non-compliant producers were forbidden from exporting and subject to other punitive measures by governmental authorities resulting in the consolidation of citric acid production to just six producers.

Shortly after MEP’s promulgation of this new environmental verification regulation, two major glyphosate manufacturers in Zhejiang were discovered to have illicitly discharged glyphosate wastewater into the Beijing-Hangzhou Grand Canal through a proxy warehousing and transporting company. Following the scandal glyphosate producers became depressed about outcome of MEP’s examination and became hesitated or indifferent to MEP’s verification, which has delayed the progress repeatedly.

This scandal and situations surrounding it were in direct violation of the “Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Wastes (Presidential Order 31)”. Glyphosate wastewater is included into the “National Catalogue of Hazardous Wastes” and the Law clearly provides the terms and condition on transport, storage and disposal activities of hazardous wastes. The attorney for the two glyphosate companies argued the wastewater they had disposed of was not included in the “National Catalogue of Hazardous Wastes”. The case was open to public hearing during July of 2014. Interestingly the two Zhejiang producers achieved favorable outcomes during MEP’s environmental verification campaign. Both Zhenjiang Jiangnan Chemical (subsidiary of Wynca) and Hubei Taisheng Chemical (ex-subsidiary of Jinfanda) were ultimately included into MEP’s “Name list of Environmental Compliant Glyphosate TC (PMIDA) Manufacturing Enterprises”. On 18 Jul 2014, the largest glyphosate producer Wynca revealed that a sentencing date for its pollution case had been decided and warned investors that the pollution case would have a influence on the company. Some insiders even believed that Wynca would lose its dominant position in glyphosate industry as the costs restitution had the potential to reach 80 million CNY.

Progress and Future Trend

China Glyphosate Trend

According to plan the government’s environmental rectification is consolidating glyphosate production into the hands of China’s largest producers. More companies are encouraged to apply for MEP’s next round of verification. 18 producers have applied for the next round of verification and the production, expansion/new construction of the major producers is progressing smoothly:

  • Fuhua Tongda (120,000 tons of glyphosate TC)
  • Hebang (150,000 tons of PMIDA and 90,000 tons of glyphosate TC)
  • Beier Group (20,000 tons of Glyphosate TC)
  • Nutrichem (50,000 tons of glyphosate TC).

Most of the industry development in construction and production capacity has happened in the central and western regions in China, which also reflects a definite industry trend where producers are migrating towards less developed areas.

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