Taking Stock of Integrated River Basin Management in China

Wang Yi, Li Lifeng Wang Xuejun, Yu Xiubo, Wang Yahua

SCIENCE PRESS Beijing, China 2007

ISBN 978-7-03-020439-4

Acknowledgements

Implementing integrated river basin management (IRBM) requires complex and systematic efforts over the long term. Although experts, scientists and officials, with backgrounds in different disciplines and working at various national or local levels, are in broad agreement concerning IRBM, many constraints on its implementation remain, particularly in China - a country with thousands of years of water management history, now developing at great pace and faced with a severe water crisis. Successful implementation demands good coordination among various stakeholders and their active and innovative participation. The problems confronted in the general advance of IRBM also pose great challenges to this particular project.

Certainly, the successes during implementation of the project subsequent to its launch on 11 April 2007, and the finalization of a series of research reports on The Taking Stockof IRBM in China would not have been possible without the combined efforts and fruitful collaboration of all involved. We wish to express our heartfelt gratitude to each and every one of them.

We should first thank Professor and President Chen Yiyu of the National Natural Science Foundation of China, who gave his valuable time and shared valuable knowledge when chairing the work meeting which set out guidelines for research objectives, and also during discussions of the main conclusions of the report. It is with his leadership and kind support that this project came to a successful conclusion.

We are grateful to Professor Fu Bojie, Dr. Feng Renguo, and Dr. Huang Tieqing of Bureau of Science and Technology for Resources and Environment, Chinese Academy of Science (CAS), whose strong support for the project aided its implementation and contributed to the success of the High-Level Roundtable on IRBM in China organized in June 2007 in Beijing.

We particularly wish to thank Professor Sun Honglie from CAS, Professor Wang Hao of the Chinese Academy of Engineering, Dr. Edwin D. Ongley and Mr. Murray Chapman for their detailed comments and constructive suggestions concerning revisions to the Synthesis Report. We benefited greatly from their new perspectives and illuminating insights.

Our sincere thanks also go to the peer reviewers from various governmental departments, universities, research institutes, and NGOs: Bao Daming, He Xiwu, Lü Xianguo, Ni Jinren, Shen Dajun, Shi Qiuchi, Song Guojun, Wang Shuyi, Wang Zhansheng, Wei Qiwei, Xia Qing, Xu Zikai, and Yang Guowei, for their significant contributions when reviewing the thematic reports. They corrected errors in and improved the structure, content and wording of the reports

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We are extremely grateful to all the participants present at the High-level Roundtable on IRBM in China for their valuable comments and policy recommendations concerning the implementation of IRBM. They brought perspectives from a variety of sectors, industries and disciplines. The Roundtable was a fine example of active involvement from stakeholders, identifying the gaps between and collaboration opportunities among us, while simultaneously reinforcing our confidence to move ahead in the promotion of IRBM in China.

We also owe special thanks to Mr. Peter Jensen, Ms. Beth Delaney, and Mr. Matt Plaistowe from AusAID, and especially Ms. Gao Ying for her great help in project management and constructive comments during preparation of and revisions to the research reports.

Our special thanks also should be given to Professors Wang Yi and Wang Xuejun, Dr. Yu Xiubo, Dr. Wang Yahua, and Dr. Li Lifeng of the WWF IRBM Experts Panel, who were such sterling contributors to the drafting and finalization of the Synthesis Report, working often in their own private time; We thank Dr. Li Lin, Mr. Peter Ramshaw, and Dr. Mark Otter of WWF for their support for this project. Dr. Li Lifeng deserves special mention; as project supervisor, he developed the proposal, formed and coordinated the WWF IRBM Expert Panel, jointly drafted and finalized the Synthesis Report with other colleagues, and delivered the project in a narrow timeframe.

We are grateful to the secretariats of the Expert Panel and the Roundtable, in particular Dr. Yu Xiubo, Mr. Ma Chaode, Mr. Pan Mingqi, Dr. Chen Shaofeng, and Miss Li Li, for their coordination and organization work on both the project and the Roundtable; also Mr. Li Yong, Mr. Lai Pengfei, Mr. Zhu Zengxin, Ms. Lin Yingting, and Mr. Jim Weldon for their help in translating and editing the Synthesis Report.

Finally, we wish to acknowledge the outstanding contribution of the members of the Expert Panel and specialists in thematic research, who worked so hard to achieve such an excellent outcome in such a limited time.

Nevertheless, we remain aware that China still has a long road ahead to achieve full implementation of IRBM, and many issues remained for the various stakeholders to explore and resolve together. Hopefully, the achievements to date will serve as a basis for future cooperation and experiment in how best to contribute to the sustainable development of river basins in China.

Dermot O’Gorman Country Representative of WWF China Programme September 2007

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Acronyms

ADB Asian Development Bank AusAID Australian Agency for International Development CIDA Canadian International Development Agency CAS Chinese Academy of Sciences CAE Chinese Academy of Engineering CCICED China Council for International Cooperation on Environment and Development COD Chemical Oxygen Demand DFID Department for International Development (UK) EU European Union GDP Gross Domestic Product GEF Global Environment Facility GONGO Government-Operated Non-Governmental Organization GWP Global Water Partnership IRBM Integrated River Basin Management IUCN The World Conservation Union IWRM Integrated Water Resources Management M&E Monitoring and Evaluation MLR Ministry of Land and Resources MOA Ministry of Agriculture MOC Ministry of Construction MOE Ministry of Education MOFCOM Ministry of Commerce MOST Ministry of Science and Technology MWR Ministry of Water Resources NDRC National Development and Reform Commission NGO Non-Governmental Organization NPC National People’s Congress NSFC National Natural Science Foundation of China PPP Public-Private Partnership R&D Research and Development SEPA State Environmental Protection Administration SFA State Forestry Administration TNC The Nature Conservancy UNEP United Nations Environment Programme UNDP United Nations Development Programme WWF World Wide Fund for Nature

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Executive Summary

In both antiquity and modern times China has seen substantial achievements in river basin management. In developing a system for water control and management, practitioners have accumulated rich experience in flood control, irrigation, water conservancy and river basin management policy over millennia. Many of these historical facilities and management practices are still in use. The modern era has seen laws and policies developed concerning to water, which in combination with greater economic and technical resources may form part of a solid foundation for the sustainable development of China’s river basins. The three most pressing basin-wide water issues in recent years here have been water pollution, water shortages and degradation of the aquatic ecology. These issues manifest most typically as mixed water pollution and its transfer within a river basin, general water shortages and unsafe drinking water, and ecological damage and economic losses caused by water infrastructure and hydropower development. Global warming has made these challenges still more severe and introduced further uncertainties and risks for the future and they, in particular water pollution, are becoming a major obstacle to China's sustainable growth. Integrated river basin management (IRBM) is a process of coordinating the management and development of water, land, biological and other resources within a river basin, so as to maximize economic and social benefits in an equitable way while at the same time conserving freshwater ecosystems, species and services for human being. This report introduces the status of river basin management, analyses the constraints, and provides recommendations and action plans for implementing IRBM, mitigating basin-level problems and ultimately achieving the water-related objectives listed in the National Eleventh-Five-Year Plan (2006-2010).

Integrated management should be adopted to safeguard the health of rivers and promote sustainable development of river basins Stability and integrity of river ecosystems are preconditions for rivers to fulfil their ecological functions. A river retains its unique characteristics and provides diverse ecosystem services through a series of hydrological, physical, chemical and biological processes. A stable and intact river ecosystem structure is thus a fundamental guarantee that the river will function well for human welfare. A systematic solution to water issues must be constructed on the basis that a river basin is considered as a geographical unit, with full consideration given to water issues on the river's upper and lower reaches, left and right banks, main stream and tributaries, surface water and underground water, and that ecological functions are an integral part of a living river system. The diverse functions that a river serves call for diversity in targets set for river basin management. A source of water and fish for people, a river basin may also support navigation, hydropower generation, tourism and recreation. As a result, river basin management targets should be diversified yet interlinked. However, due to differences in socioeconomic

IV development levels and knowledge about the river systems, targets are often set and adjusted to balance management requirements in the river basin. River basin management comes down to the interests of various parties. River basin management needs to involve a large number of stakeholders, such as central government ministries and departments, river basin authorities, local governmental agencies representing provincial and municipal governments, businesses, farmers, fishermen, and others. Various conflicts exist due to different interests and imbalance of power among these stakeholders. These conflicts may increase with improved social and economic conditions. As such, the interests of all stakeholders, especially those of disadvantaged groups, must be kept in mind if better and fair river basin management is to be achieved and the public goods generated by the basin maximized.

Integrated river basin management (IRBM) offers the best solution, as conventional management approaches cannot address current river basin challenges effectively. Lack of favourable legislation and regulations for integrated river basin management. There are at present four national water-related laws in force in China: the Water Law, Water Pollution Prevention and Control Law, Soil and Water Conservation Law and Flood Control Law. The State Council and various ministries have also issued a number of administrative rules and regulations concerning water. These legal instruments have played a positive role in the promotion of better water resource utilization and protection, yet they are inadequate to the task and need to be improved. There is no major law on river basin management. Moreover, inconsistency and contradictions among these legal instruments has raised law enforcement costs and weakened punitive measures. For example, inconsistent or conflicting wording in the Water Law and Water Pollution Prevention and Control Law is a cause of conflicts among different government agencies, and detrimental to effective and efficient river basin management. Unclear definition of responsibilities of interested government agencies. A variety of government agencies representing both central government ministries and local governments are working on river basin management. At the central government level, aspects of water management have been parcelled out among a number of agencies, and there is crossover or overlap of roles both at central government and at local government levels in terms of managed areas, management responsibilities, and information sharing. For instance, the water resource and environmental protection sectors have overlapping responsibilities which has led to conflicts as to how to manage water quality; construction departments and water resources departments have clashed over urban and rural water affairs for similar reasons. Confrontations often arise between agencies overseeing forestry, agriculture and environmental protection concerning conservation of aquatic wildlife and resources. Meanwhile, regional or basin-wide representatives of various central government ministries have quite separate and independent powers over river basin management, and there is limited coordination and collaboration among them. Lack of mechanisms and platforms for cross-sectoral and transjurisdictional

V coordination. There is certain logic to the current division of jurisdiction, yet it lacks an authoritative and neutral agency to be an effective and efficient coordinator. This absence of coordination among core agencies is the key cause of government failure in water management. For instance, the current management arrangement for water pollution is that the Ministry of Water Resources (MWR) oversees quantitative water management, the State Environmental Protection Administration (SEPA) covers water quality control, and the Ministry of Construction (MOC) is in charge of urban sewage treatment. There is no routine coordinating among them unless severe pollution incident happens, although all three have a critical role in reducing water pollutants. Even though reducing discharge of major water pollutants was listed in the Eleventh Five-year Plan as a target that must be accomplished, this target has been broken down and distributed to administrative regions rather than river basins. This lack of coordination among key actors and within river basins will make achieving this target much harder. Lack of policy mechanisms for river basin management. The lack of coherent overall consideration of river basin management policy issues makes it impossible to implement existing policies on water resources management, water pollution prevention and control, and aquatic ecological protection in actual work. At present, the vast majority of administrative policies in China are created under the direction of sectors. In most cases, these administrative policies do not address all issues relevant to manage a river basin and so are usually neither effective nor efficient in handling transjurisdictional and cross-sectoral river basin problems. These obstacles also prevent the proper implementation of economic incentive policies such as ecological compensation which might potentially contribute to resolving complex river basin problems. Sound solutions to basin-wide issues must consider the unique features of each river basin, and also the interests of and relationships among all stakeholders. To this end, what is most needed is an internally consistent and supportive policy system rather than individual policies. Lack of statutory IRBM plan. Even though China began river basin planning as early as the 1980s, and efforts are being made to modify and amend plans for major river basins, these are not genuinely comprehensive river basin management plans. This is because they are usually developed by a single leading sector - MWR with limited participation from other key sectors and almost no participation from many stakeholders. A number of factors contributed to this situation, the core is the lack of detailed legal requirements to formulate, develop and implement an integrated river basin plan. Until these issues are properly resolved and relationships between plans well defined, these so-called IRBM plans remain largely a waste of administrative resources and causes of controversy when implemented. Obviously, plans drafted in this way fail to achieve their designed purpose. Lack of participation from stakeholders and wider public. Over the years environmental management in China has not solicited active stakeholder participation, let alone that of the wider public. For instance, some local governments and local businesses, in pursuit of economic growth, establish and develop high-water-consumption, high-emission and high- pollution projects. The general public are almost entirely excluded from the decision making process. They are marginalised and stripped of any decision-making rights, with often even their right to know unfulfilled. Direct public participation in the river basin management is an even

VI more remote prospect. Good IRBM requires the participation of all stakeholders within the river basin to achieve solutions to basin-wide issues; indeed, effective broad participation is an essential precondition when implementing IRBM. Most urgent in the near term is for government officials at all levels and experts to be actively involved in river basin management, but the public should play an important role in the long run. River basin issues in China are more complicated than those faced in other countries at similar stages of national development. As river basin management requires cross-sectoral and transjurisdictional engagement, no single government sector, river basin agency, or technique can alone resolve such issues. The existing river basin management system is not meeting the requirements of the present situation, meaning a fresh IRBM philosophy and the associated methods and supporting legislation must be introduced to support implementation of comprehensive measures and promote collective action by all stakeholders throughout a river basin.

Existing engineering projects and research programs will not generate sufficient capacity for IRBM implementation. A large number of domestic basin-wide engineering projects have not been well prepared, implemented, nor effectively monitored and evaluated. Objectives and programs have not been adequately discussed and deliberated over, in part because of the limited time period allowed for development and approval of project proposals. This has meant the complexity and durability of some problems has been ignored or underestimated and no supporting policies or measures have been developed to address them. Many of these projects have been funded jointly by central government and local government. Yet in some cases, there was insufficient local finance and private sector funding for river basin management. To save costs, project supervision and evaluation, which should have been provided by a third party, are conducted by the project implementation agency. As both designer and supervisor, the project implementation agency lacks the motivation or credibility to conduct proper project adaptive management. Consequently, many problems created by the project will remain for a long time into the future. A majority of river basin engineering projects have been implemented by one single sector, resulting in a lack of cross-sectoral coordination and collaboration. A large-scale river basin engineering project should be carried out with the integrated involvement of central and local government and river basin organizations through greater cross-sectoral and transjurisdictional coordination and collaboration. Yet a majority of such projects have been the work of a single sector with little cross-sectoral and transjurisdictional cooperation. A project implemented in this way will be unlikely to achieve effective solutions to basin-wide problems. In terms of scientific and technical support to river basin management, replication of low-level investment has been seen in some research fields and programs simply because of a lack of cross-sectoral and transjurisdictional coordination between fund sponsors. A similar lack of effective coordination among donors is also seen in many international assistance projects.

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Capacity building has not been well incorporated into projects; thus necessary capacity has not been fostered to promote IRBM after projects completion. During the process of project implementation, adequate attention has been paid to hardware and facilities, but not to capacity building and institutional development or personnel training and long-term monitoring and evaluation of the new facilities and processes. This not only harms project implementation, it also makes maintaining the results and sustainability of the project accomplishments difficult after completion. A lack of capable staff and effective new mechanisms means that there is limited support available for IRBM. Scientific and technical support should be improved to integrate research proposals into river basin management practice and to standardize data collection for river basin ecological and environmental monitoring. At present, there is a clear lack of research projects on basin-wide and cross-sectoral issues. Aquatic ecosystem, and regulations and policies on river basin management have not been made as research priorities, as central government public finance gives more support to research on basic theory, key technologies and pilot projects, while the water sector and environmental protection sector prefer engineering and technological approaches rather than looking at laws, regulations, planning and policy. While various sectors have conducted ecological monitoring programs along the major river basins, the basin-wide data collected cannot easily be cross-compared as there are differences in monitoring indicators, evaluation criterion and methodology. Once again, this means a lack of effective coordination among the various parties involved. For instance, there is significant variance between river basin sewage discharge data collected by the water sector and that by the environmental protection sector, presenting problems when it comes to decision-making. International project investment should be properly adjusted targeted to areas of work and regions. Basin-wide water pollution control and aquatic ecosystem conservation are new challenges in river basin management in China compared to conventional water resource and disaster management issues. These new issues require greater attention. Logically, those river basins suffering water pollution and aquatic ecological degradation, such as the Yellow, Liao, Hai and other inland rivers, should see more investment once an agreed comprehensive integrated IRBM plan is completed and associated regulations are in place.

Principles and vision for IRBM Implementation in China The current situation and future needs for promoting IRBM in China suggest the following basic principles should be observed as preconditions: z Regulation by law. Relevant laws and regulations should be fully established with explicit definitions of division of labour, roles and responsibilities, and rights and obligations of all stakeholders. z Combination of centralization and decentralization. Unified management and planning should be reinforced with the establishment of comprehensive mandatory consultative mechanisms. River basin management should move toward separation of powers in decision-making, execution and supervision and monitoring and evaluation.

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z Combining economic and administrative means. Systems should be strengthened to improve administrative efficiency. This combined with expanded use of fiscal and tax instruments would help create market conditions favourable to the development of public utilities for cities and river basins. z Coordination between resource exploitation and environmental protection. Economic functions and ecological functions of river basin resources should be cared for equally balancing economic and social development and environmental protection. z Broad public participation and equity. Institutional participation mechanisms should be established that enhance participation channels to ensure the effective participation of all stakeholders and the full expression of the interests of all groups. z Information disclosure and transparent decision-making. A mandatory mechanism for information sharing and release should be established to affect a gradual shift to open and transparent decision making in river basin management. This would include a publicly available record of water quality and use.

To achieve the target of IRBM implementation in China with the above mentioned principles in place, proper systematic action is required in legislation, institutional reform, organizational restructuring, science and technology support, information sharing and public participation. These would allow a gradual shift from conventional river basin management to IRBM. Below is the vision for IRBM in China. z A legal system should be established to govern IRBM. National legislation would be developed and the concept of IRBM be incorporated into rules, regulations and laws governing river basin issues in China. z A national-level IRBM coordination mechanism should be created. At the river basin level, an appropriate IRBM organization with Chinese characteristics should be set up to allow the broader participation of all stakeholders. z A comprehensive mechanism to promote IRBM should be established, including administrative and economic policy frameworks and incentive and restriction mechanisms. z Work to establish a system of supervision, scientific research and technological innovation to facilitate implementation of IRBM. z Establish an information sharing and release platform to help river basin management decision-makers, stakeholders and the public get convenient and timely information concerning the state of a river basin and any problems it faces. This would also allow lessons learnt in one basin to be readily accessed by stakeholders in other river systems. z A public-private partnership should be developed in line with relevant legislation to create a broad, efficient and diverse cooperation mechanism and provide enhanced participation channels.

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Major Tasks and Priority Actions for IRBM Implementation in China Implementation of IRBM is a long-term endeavour. It should be undertaken under the principles of ‘comprehensive planning, full consideration of uniqueness of each river basin, putting pilot IRBM project first, and stepped implementation of IRBM across the country.’ The following Priority Actions are proposed as steps toward achieving the IRBM vision: Improving the legal framework and amending related laws Priority Action 1: feasibility studies for river basin legislation and study on types of legislation (I) Priority Action 2: study on amendments to Water Pollution Prevention and Control Law and Water Law so as to support IRBM (I) Priority Action 3: support local legislative capacity building (II) Reforming river basin management organizations Priority Action 4: research and formulate a roadmap for IRBM institutional reforms (I) Priority Action 5: undertake pilot IRBM institutional reforms in the Chishui River Basin or the Tai Lake River Basin (I) Priority Action 6: study and demonstrate systems of water allocation to improve water quality and provide appropriate environmental flows in the Yellow River Basin (I) Priority Action 7: IRBM capacity building and trainings for river managers and experience/knowledge exchange forums (II) Advancing policy innovation and pilot projects Priority Action 8: study supporting policy on reduced pollutant discharge in the Tai Lake and the Songhua River Basins (I) Priority Action 9: set up a public-private partnership (PPP) as a pilot in reform of urban public utilities, such as water supply and waste water treatment (I) Priority Action 10: study and pilot project in basin-wide ecological compensation (II) Priority Action 11: study relevant policies on speeding up reforms of water pricing and water rights (II) Developing river basin plans within an IRBM framework Priority Action 12: formulate revision guidelines and technical specifications for Comprehensive River Basin Planning (I) Priority Action 13: demonstration of participatory approach in Comprehensive River Basin Planning (II) Priority Action 14: organize relevant trainings and knowledge-sharing events on comprehensive river basin planning (I) Priority action 15: Strengthen the NDRC’s overall coordination of water-related projects (I)

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Step-by-step promoting public participation Priority Action 16: promote establishment of public notice and hearing system for approval of river-wide decisions (I) Priority Action 17: build capacity of stakeholders to participate in river basin management (II) Priority Action 18: set up river basin information disclosure mechanism and platforms (II) Enhancing science & technology support Priority Action 19: select a typical river basin for a pilot water environment monitoring project (I) Priority Action 20: study overall discharge load and target breakdown to reduce pollutants in a typical river basin (I) Priority Action 21: study early warning and emergency response systems for national drinking water safety (I) Priority Action 22: study and demonstrate ecological dispatch through water infrastructures (II) Priority Action 23: study the countermeasures for water resources and river basin management in the context of climate change (II) Priority action 24: promote international knowledge exchange and cooperation in science and technology (II)

Note: I – to be undertaken during 2007-2010 II – to be undertaken during 2007-2015

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Table of Contents

Preface and Acknowledgement ...... i Acronyms ...... iii Executive Summary...... iv

1 Introduction...... 1 1.1 Background...... 1 1.2 Goal and Scope of the Report ...... 2 1.3 Methodology...... 5 2 Current Status of River Basin Management in China...... 8 2.1 Overview of water-related problems in China ...... 8 2.2 Current status of river basin management in China...... 12 3 Issues and Causal Analysis of Current Basin-wide Problems in China ...... 31 3.1 Legislation and its Implementation...... 31 3.2 Institutions...... 33 3.3 Policy ...... 35 3.4 Planning ...... 38 3.5 Public Participation...... 40 4 Progress of River Basin Management and Engineering Projects...... 44 4.1 Progress of Domestic Engineering Projects...... 44 4.2 Domestic Research Programs related to IRBM...... 49 4.3 International Assistance Projects ...... 54 5 Conceptual Plan and Recommendations to Promote IRBM in China ...... 61 5.1 Goals ...... 61 5.2 Principles...... 62 5.3 A Vision and Framework...... 63 5.4 Priority Areas and Actions ...... 64 Reference ...... 83

Attached Map and Tables Attached Map: Map of China's River Basins Attached Table I: Overview of Projects on IRBM and Water-related Issues in Recent Years in China Attached Table II: Overview of Research Program on IRBM and Water-related Issues in China Attached Table III: Overview of International Donor-oriented Projects on IRBM in China Attached Table IV: Overview of Major River Basin Plans Since 1998

Summaries of Thematic and Case Study Reports No. 1 Water Resources Sectors, by FAN Ruiping. No. 2 Environmental Protection Sectors, by LIU Xiangmei.

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No. 3 National Development and Reform Commission, by SUN Zhen. No. 4 Construction Sectors, by HAO Tianwen and ZHOU Changqing. No. 5 Agricultural Sectors, by WANG Yamin. No. 6 Forestry Sectors, by CUI Lijuan and ZHANG Manyin. No. 7 Public Health Sectors, by LI Fuxing. No. 8 Yangtze River Basin, by HUANG Wei and LIU Qiang. No. 9 Yellow River, by SUN Yangbo. No. 10 Huai River Basin, by TAN Bingqing. No. 11 Songliao River Basin, by LI Heyue. No. 12 Dongting Lake River Basin, by WANG Kelin. No. 13 International Rivers, by HE Daming and FENG Yan. No. 14 Legislation on Integrated River Basin Management, by WANG Fengchun. No. 15 River Basin Planning, by LI Yuanyuan. No. 16 Economic Measures for IRBM in China, by MA Zhong. No. 17 Scientific and Technical Support for River Basin Management, by HUANG Tieqing. No. 18 Water Resources Management, by XIA Jun. No. 19 Water Environmental Management, by LI Yunsheng. No. 20 Standards of Drinking Water, by LI Fuxing. No. 21 Environmental Flows of Rivers in Northern China, by LIU Xiaoyan. No. 22 Stakeholders of Hydroelectric Development, by CHEN Jin. No. 23 Protection of Hydrobios Diversity in Yangtze River Basin, by WANG Ding. No. 24 Transjurisdictional Coordination in River Basin Management within Yangtze River Basin, by YANG Guishan.

Annex Annex I: The Expert Panel on Integrated River Basin Management Annex II: List of Sector-based Experts Annex III: List of Drafting Team of Synthesis Report: Annex IV: List of Invited Independent Reviewers and Internal Reviewers Annex V: List of Participants of High-level Roundtable on IRBM in China

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1. Introduction

1.1 Background Water, as the source of life, is essential to the socio-economic development of human kind. In common with much of the rest of the world, China is suffering from an increasingly severe water crisis, with some of its worst manifestations water scarcity, water pollution, ecological degradation of water and frequent water-related hazards. China’s vast national territory spans a variety of climatic zones from north to south each with different moisture features, and includes diverse topography from mountains, grasslands, and deserts to river basins and flood plains. With different combinations of climatic types including monsoon temperate, continental and maritime climates, rainfall varies greatly over time and across regions, while water and soil are disproportionately distributed. These natural factors play a part in many of the county’s water problems. People have been managing and developing water resources for millennia across what is today China. The country currently uses a sectoral water management model. This lacks coordination between the various sectors at national level responsible for water-related management, such as water quality, water quantity, aquatic biological resources, water transportation, hydro-power and irrigation. This has been the case for more than five decades. Despite rapid economic development, poor public awareness about resources and environmental protection; and enormous population pressure combined with weakness in legislation, policy and governance has resulted in unsustainable development of water resources and deterioration in the aquatic environment. These are the major human factors behind the present water crisis in China. As industrialization and urbanization continue apace, the Chinese economy will continue to grow rapidly and general living standards will rise. This will increase demand for water resources and place greater pressure on them, the water environment, and aquatic ecosystems. It also brings a number of new water problems, especially mixed water pollution and basin-wide water resource and hydropower exploitation. In addition, in the context of global climate change, a significant change is projected in the pattern of water resources and water-related hazards in China, not only changes in frequency and intensity, but also increased uncertainty and risk. Overall, the water crisis is intensifying and has become more complex, being now apparent at the river-basin scale and over the long-term. We also see the frequent occurrence of emergent events. Over the last few years, China’s government has put water issues at the top of its agenda. In the government Work Report he delivered at the National People’s Congress (NPC) on March 5 2006, Premier WEN Jiabao pledged to ‘enable the people to have access to clean drinking water,’ a clear commitment to resolving China’s water problems. Priorities for building water- saving society, reducing emissions of water pollutants and ensuring drinking water security have also been included in the national Eleventh Five-year Plan (2006-2010). However, while no consensus has yet been reached yet at the national level to solve water issues through an

1 integrated approach, it will be impossible for a single sector or a single basin-level organization to handle the complex water problems in China. Since the 1990s, a gradual realization has spread concerning the weaknesses of traditional water management, and Chinese actors have begun to shift their focus to new water management strategies, with IRBM arousing the greatest interest. In October 2004 a policy recommendation report entitled Promoting Integrated River Basin Management and Restoring China’s Living Rivers was submitted by the China Council for International Cooperation on Environment and Development’s (CCICED) Task Force on IRBM. This put forward objectives, principles, a framework and recommendations for implementing IRBM in China. This policy recommendation report played a positive role in improving understanding of IRBM in relevant sectors. Since the report came out, the IRBM concept has disseminated rapidly across China. The Yangtze Forum, established as per the Task Force recommendation, is another positive development. To date, the Yangtze Forums have been held twice, including a sub-forum on IRBM during the 2nd Yangtze Forum. In the recently published report China Sustainable Development Strategy Report 2007 - Water: Governance and Innovation, it was proposed that IRBM be adopted a new basic strategy to address China’s water issues. This was based on a review of the evolution of water governance in China which concluded that the root cause of the water crisis was a ‘governance crisis’ rather than water resources themselves. A number of projects favouring IRBM have also been initiated. These include the revision of the Master Plans (the so-called comprehensive river basin plans) of seven river basins; the China-Europe River Basin Program funded by European Union; the Taking Stock of IRBM in China funded by AusAID; and the Participatory River Basin Management funded by CIDA. To help understand these challenges and assist stakeholders make the shift from traditional water management to IRBM, WWF, with financial support from AusAID, brought together a group of specialists in a project to produce a Taking Stock on IRBM in China. This Synthesis Report, together with other 24 thematic reports, has since been produced using systematic surveys, workshops and desk research.

1.2 Goal and Scope of the Report Since the 1990s the experience of water governance in various countries led to a broad international consensus that the best solution for water issues lies in drafting overall plans to manage water-related affairs at river basin level with appropriate allocation of water resources. This process, known as Integrated Water Resources Management (IWRM), came to prominence after the 2000 Earth Summit in Johannesburg, South Africa. Based on the insights of IWRM and integrated ecosystem management, in October 2004 CCICED’s IRBM Task Force set out concept of IRBM in a report and proposed a framework for its implementation in China. (IRBM Task Force of CCICED, 2004). This report defines IRBM as a “process of coordinating the management and development of the water, land, biological and related resources within a river basin so as to maximize the economic and social benefits in an equitable way while at the same time conserving freshwater

2 ecosystems, species and services. IRBM is also a participatory mechanism for solving conflicts and allocating water among competing users, while recognizing that natural ecosystems are in part the suppliers of that resource and the fundamental ‘natural infrastructure’ that delivers it to human users.” This definition is the further development of IWRM at the basin level, integrating water resources with water-related affairs management. The main reasons are: z A prerequisite for utilizing the ecological functions of rivers is a stable and complete river ecosystem. A series of hydrological, physical, chemical and biological processes give a river its distinctive systematic features that make it both useful to human society and give it an important ecological role. A systemic way to solve water issues has to be based on the basin as a unit and consider water issues as a whole basin-wide, upstream and downstream, on both banks, in the mainstream and tributaries, and of ground and surface water. z River basins provide many functions and services, which will need to be maintained through a diverse range of management goals. The basin system provides humans with water and fishery resources, and serves shipping, electricity generation, tourism and leisure needs. Basin administrative goals should be diverse but interlinked. Limitations due to social and economic conditions and knowledge levels mean basin management should seek to balance the above goals by making overall plans. z River basin management involves multi-interest groups each with various demands. These stakeholders include agencies under different line ministries, provincial governments, and local businesses, farmers, fishermen and others. The different status and demands of these groups can often lead to conflicts of interest. Economic development and social change has intensified demands and changed how and how strongly they are made. This means river basin management needs to consideration the interests of all parties in a holistic fashion, with particular attention given to marginalised groups and regions, so as to ensure fairness. It should to be noted that IRBM is not a simple amalgamation of existing management of water, soil, biological and other aspects. It represents a move away from the former practice of separated regional and sectoral administration. It instead emphasizes the following aspects: z Understand the cycles of evolution, development and change to ecosystems in the river basin and adapt management to fit with natural order by using ecosystem approaches to manage water, soil and other natural resources basin-wide; z IRBM administrative targets start with water and water resources and focus on these, aiming for systematic management of water resources (including groundwater, surface water, hydropower, fishery, sediment, shipping, coastline and other resources), the water environment, land resources and aquatic ecosystems. There are two main reasons for placing water at the centre: first, water is the most crucial tie between different geographic units and ecosystems in a river basin, and is the carrier of the flowing soil, nutrients, pollutants and species within the basin; second, water issues are the most severe problems with the widest impact in most of China’s basin systems. z In terms of harnessing measures, IRBM emphasizes the combination of structural and non-structural measures, with especial care taken if adopting irreversible river basin

3 harnessing measures. z IRBM advocates management means that cut across sectoral and jurisdictional boundaries and the use of legislative, administrative, economic, planning, and S&T instruments in a comprehensive fashion. z IRBM emphasizes management processes that include the active participation of stakeholders. z In terms of management objectives, IRBM tries to balance economic development, social progress, ecological and environmental protection, to maximize the economic, social, and environmental benefits throughout a river basin. IRBM has not been easy to implement in either developed or developing countries. This has been the case for China with its fast growing economy. The first step towards implementing IRBM should be to define the rights, responsibilities and obligations of the relevant stakeholders, discuss how to enhance information sharing, communication and coordination between and among them in order to reach consensus on IRBM and jointly seek the best solutions to these basin-level issues. With this situation in mind, this project aims to provide high-quality information about the stakeholders that are involved in water management and their responsibilities, capacities, and plans; to illustrate water governance, including legislative, administrative and financial structures and mechanisms; to summarize best practices and identify gaps and any need for international cooperation. The project also seeks to propose a conceptual framework and priorities for implementing IRBM to provide directions on how best to proceed with this work in China. Major research areas of the project included: z Key stakeholders, their current roles, responsibilities and knowledge in relation to practical IRBM implementation in China; z Water governance in China, including the legislative, administrative and financial structures and mechanisms; z Key research and reviews, both completed and in preparation; z Activities/projects using an IRBM framework, both implemented and in preparation; z A detailed conceptual plan providing directions for proceeding to implement IRBM in China. Time constraints have meant the Report focuses on the issues at national and river basin levels, and does not include a systematic analysis of stakeholders from the corporate world and general public. The report deals with basin-wide water issues but does not include a in-depth analysis of land, navigation, groundwater, agriculture (especially irrigation) and rural development issues. The situation in Hong Kong, Macao, and Taiwan is not discussed in this Report. These are things to be addressed in future research.

4 1.3 Methodology Recognizing that stakeholder participation is the basis of any approach and a necessary tool to implement IRBM, the project reviewed the current state of IRBM in China from four perspectives within a framework of stakeholder analysis: water and river basin management issues; representative river basins; water-related sectors; and national strategy. z Water and river basin management issues: research on 12 themes has been conducted by addressing major existing problems related to water and river basin management in China. These themes are: construction of hydrological projects and their impact; S & T support for IRBM; river basin planning; legislation related to river basin management; protecting aquatic wild life and resources; water pollution control; environmental flow; water management; water-related conflicts in river basin management; standards for drinking water quality; economic instruments in river basin management; and trans-boundary river management. Recommendations on how to address these issues were made using the IRBM concept and comprehensive analysis. z Representative river basins: five river basins, including the Yangtze, Yellow, Huai, Songliao river basins and Dongting Lake are systematically reviewed from the perspectives of legislation and regulation, basin-level organization and their responsibilities, major water-related or IRBM projects implemented or under implementation, and key plans during the Eleventh Five-year Plan (2006-2010) related to water and IRBM in each river basin. The researchers made recommendations on how best to promote IRBM in these river basins. z Water-related sectors: seven major water-related sectors at the national level, including departments of water resources, environmental protection, construction, forestry, agriculture, development and reform, and public health, are systematically reviewed from the perspectives of legislation and regulation, major responsibilities, institutional arrangements within each sector, major water-related projects implemented or under implementation, and key plans during the Eleventh Five-year Plan related to water and IRBM in each sector. Recommendations for each of these sectors on their roles in implementing IRBM in China are made. z National Strategy: integrating the findings from the above research, a synthesis was made considering status and issues in terms of legislation, institution, policy, planning, S&T, and public participation. A conceptual framework and recommendations to implement IRBM in China are put forward. To ensure the authoritativeness and impartiality of the research reports, the project has incorporated the comments and recommendations of various stakeholders by involving a range of experts and officials in the project through participatory approaches, in the form of thematic research, peer review, interviews with key sectors, and workshops. z An Expert Panel (EP) on IRBM was established, consisting of 14 experts from organizations and institutions such as the Chinese Academy of Sciences, relevant sectors, river basin organizations, research institutions and universities (for a full list of EP Members, see Annex I). Headed by Prof. Chen Yiyu, the EP is responsible for major

5 interviews with key sectors, and preparation of the Synthesis Report. z To better understand responsibilities, planning and policies in different sectors and river basin organizations in the implementation of IRBM in China, the project invited 23 specialists from relevant institutions to conduct desktop research on key themes. They prepared 23 thematic reports (for a list of the Thematic Research Specialists, see Annex II). z After an internal review, 17 Chinese and international specialists and officials were invited to review the Synthesis Report and thematic reports, and provide recommendations on them. z An Inception Workshop and Roundtable on IRBM in China were organized to incorporate the comments and recommendations of stakeholders. More than 90 participants from 40 institutions attended the meetings and provided constructive suggestions. AusAID and three invited peer reviewers commented on the Synthesis Report, and the Expert Panel revised the Synthesis Report in the light of this.

Project Implementation Process Project participants

Developing the project framework and workplan implementation - WWF China Freshwater Programme

Drafting the Synthesis Report Drafting the thematic reports - 14 EP members - 14 specialists on thematic research Internal Peer review review - 17 peer reviewers Revising the Synthesis Report Revising the thematic reports

Internal Peer review review - 90 workshop participants Workshop and Roundtable

Finalizing the Synthesis Report Finalizing thematic reports

Submitting the general and thematic reports to the relevant sectors/organizations

Figure 1.1 Technical Roadmap of the Project During this process, one synthesis report and another 23 thematic reports were completed. The EP members, specialists on thematic research, peer reviewers, delegates at the workshops, and members of WWF China Freshwater Programme are noted scholars, policy-makers and

6 practitioners in water and river basin management. Coming from different disciplines, they represented various stakeholders in river basin management, in an example of a participatory and cross-disciplinary process. During the research process, the project has held extensive discussion and debate on issues surrounding IRBM in China. This debate helped shape the consensus among stakeholders concerning IRBM and ensured that ideas from water-related sectors, river basin organizations and specialists were fully integrated in the general and thematic reports.

7 2. Current Status of River Basin Management in China

2.1 Overview of water-related problems in China In Chinese history, ruling the country and water governance have long been linked, thus Chinese traditional society is also called a “hydraulic society.” Water governance had great influence in shaping Chinese traditional social and political structures. This included flood prevention, management of river navigation, farming and irrigation. An administrative system emerged in which central government took the lead in flood prevention and water conservancy with local administrations and agencies fulfilling assigned roles. Environmental challenges, including water-related environment problems, have accompanied China’s recent rapid economic growth. Since 1978 and especially in more recent years, annual growth rates have averaged around 10 percent. Overall living standards have improved greatly, and some 400 million people, especially those living in the rural areas, have been freed from absolute poverty, an achievement praised by multilateral development agencies. At the same time, rapid industrialization and urbanization have sharply increased both total and per-capita consumption of natural resources, putting pressure of them and the energy supply and bringing widespread ecological damage and severe environmental pollution all across the country. Some 37 percent of China’s territory suffers from water and soil loss, and 10 percent from desertification; about one third from acid rain, and two thirds of grasslands are degraded, according to some figures. This has meant a loss of biodiversity and

China now is the second largest emitter of CO2 after the US, and is on course to exceed America in this regard in the coming years. Scarce natural resources, environmental and ecological degradation have caused problems for long-term sustainable development in China. Water-related problems have posed one of the major challenges. These problems include a variety of challenges such as water scarcity, water pollution, aquatic ecosystem degradation and water-related hazards. At the river basin level, many local and regional water-related problems have extended to become basin-wide. These problems are made more complex and complicated by the interactions of various water-related problems as follows:

Basin-wide water pollution Pollution is now severe in many river basins. According statistics given in the Report on the State of the Environment in China, in 2006, of 408 surface water cross-section monitoring samples of China’s seven big river systems, 28 percent were found to be V Class, and 26 percent worse than V Class, meaning water quality was so poor as to lose utility function. Fully 90 percent of reaches flowing through cities are polluted, and more than 80 percent of lakes in the eastern and southwest regions have eutrophication problems to different degrees (SEPA, 2007). A survey on ground water pollution in key cities and regions nationwide found that 90 percent of urban ground water is polluted by organic and inorganic toxins. Frequent

8 significant water-related pollution incident, an average two to three per day have occurred over the past two years. Looking at the issue in river basins, China’s water pollution shows a tendency of extending from urban to rural areas, from east to west, from downstream to upstream, from surface water to ground water, and from mainstream to tributaries. The water environment is getting generally worse. Pollution control cannot keep pace with deterioration, and the pollution load has exceeded the capacity of the water environment. According to the 2005 Report on the State of the Environment in China, the water quality of seven major river systems decreases from the Pearl River, Yangtze River, Yellow River, Songhua River, Liao River, Huai River to Hai River. The Yellow River, Songhua River, Liao River and Hai River have seen water quality deteriorate in recent years. Due to the overuse of fertilizers and agricultural chemicals, non-point source pollution rather than point pollution has become the major water pollutant in many basins and regions, aggravating of eutrophication of rivers, lakes and also coastal waters. In some basins and regions like the Yangtze River and Pearl River Deltas and Bohai Area, a combination of air, water body and soil pollution has created a threat to human health and food safety.

Basin-wide water scarcity Water scarcity poses an enormous challenge in China, particularly in the north of the country. Water resources per capita in China are currently about 2,200 cubic metres, less than one quarter of the global average. In northern China, for example in the basins of the Hai, Huai and Yellow rivers, the per-capita resource endowment falls as low as 350-750 cubic metres. This situation exacerbated by the pollution which affects most river systems and aquifers in urban areas. This is also the case in south China, the part of the country richest in water resources. Of the 840 billion cubic metres of available water resources in China, about 67 percent have already been exploited and the demand for water will continue to grow. It is projected that socio-economic and ecological water demand in China will reach 700 billion cubic metres by 2030, meaning more severe water scarcity (Xia Jun, 2007). This means a water shortage will be a fundamental and long-term constraint to China’s socio-economic development including the food security, especially in the north.

Basin-wide aquatic ecosystem degradation With the over-exploitation of water resources, exacerbated by water pollution and poor management of water infrastructure, aquatic ecosystem degradation is now apparent at the basin level. Although in some locations the status of the aquatic ecosystem has been improved locally, the overall situation is still rapidly degrading. For instance, in Hai, Huai, Yellow and other rivers in northwest China, the total amount of water resource exploitation has exceeded 100 percent of usable capacity, while water consumption in the Hai River now takes more than 100 percent of its usable capacity. Some 70 to 80 percent of usable capacity has been consumed in the Huai River and most rivers in northwest China. The over-exploitation of rivers has taken capacity away from ecological water uses in China’s basins, leading to the drying-up of rivers, over-exploitation of ground water and reduction of downstream water

9 entering the sea. There have been other associated ecological problems such as the withering of vegetation and land degradation. (Xia Jun, 2007). Furthermore, the great expansion of dams and reservoirs has fragmented river systems and resulted in a reduction of the services they provide, such as flood regulation, purification of pollutants and supporting aquatic life. One result of this has been a sharp decline in several rare aquatic species in the Yangtze River basin, and a significant reduction of annual natural fish catches from 427,000 tons in 1954 to 100,000 tons in recent years (Wei Qiwei et al, 2007). Many new reservoirs and dams are being constructed, especially in southwest China, adding to the trade-off between hydraulic development and ecological conservation. As the three major basin-wide problems mentioned above occur across all regions and sectors, it is impossible to deal with these problems by applying conventional management models that address only a single area or a single sector. The problems must be tackled simultaneously in all the river basins, and can only be addressed using the concept and tool that is IRBM. There are further basin-wide water challenges on top of intensifying water scarcity, water environmental pollution and aquatic ecosystem degradation. At the workshop convened by the WWF Expert Panel on IRBM in April 2007, more than 20 experts and officials from different sectors and disciplines in attendance identified 11 major national issues related to river basins in China (see Box 2.1). We will cover some of these additional issues below. Box 2.1 Major water issues related to river basins in China 1. Basin-wide water pollution 2. Basin-wide water scarcity and diversion, including low-efficiency water use 3. Basin-wide aquatic ecosystem degradation, including environmental flow, and ecological problems due to water infrastructure 4. Drinking water insecurity 5. Basin-wide flood disasters 6. Water-related problems in the context of climate change 7. Over-exploitation of fishery resources 8. Water and soil loss 9. Over-exploitation and pollution of ground water 10. Agricultural-use water insecurity and low efficiency 11. Water transportation related issues Source: WWF Expert Panel on IRBM, April 2007, Beijing

Drinking water insecurity Basin-wide water shortage and pollution have endangered human health, production and daily life. Some 300 million rural residents across China currently have no access to safe drinking water. Rural areas often lack the infrastructure for a centralized water supply and sewage treatment. Only 45 percent have access to piped water supplies. Drinking water safety issues in urban areas are largely the result of water source pollution. Around one quarter of surface water sources around 1073 towns in the country were of worse quality than national standards. Severe problem also exist in ground water sources, with 35 percent of 115 sources found to be substandard in one survey (CAS Sustainable Development Strategy Study Group, 2007).

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Urban drinking water sources and rural water supply have serious safety issues that are not always readily apparent; moreover, toxics and organic pollution have been discovered in some water sources. The exponential increase in household and other daily living waste produced in both urban and rural areas, most of which cannot be treated properly. Leakage of polluted water causes persistent pollution of ground water. Notable recent examples include the pollution of the Songhua River in November 2005 and the drinking water emergency of Lake Tai in May 2007. These incidents made national and international headlines and indicate just how calamitous unsafe drinking water can be.

Basin-wide water-related hazards Floods, one of the major water-related hazards, occur frequently in China. Although flood control infrastructure has been established along major rivers, bringing a measure of control preventing the most common floods, most of these systems are not able to guard against catastrophic flooding. Risks of drought and flooding thus remain a long term threat in China. Drought has posed the greater threat, particularly because of its effect on agricultural production. Of the farmland areas affected by drought and flooding in China, more than 70 percent are threatened by drought. Droughts affecting farmland have become more common over the past three decades. The economic losses due to drought and flooding are also on the rise as population and the economy has grown within river basins.

Increase in water challenges in the context of climate change The potential impact of global warming on water problems in China cannot be ignored. It is generally recognized that climate warming is a factor in all water problems, in most cases making the situation much worse. A recent report from the IPCC stated that Himalayan glaciers have declined due to global warming, affecting some 250 million Chinese citizens, particularly local communities dependent on fresh water provided by the glaciers (IPCC, 2007). According to the National Assessment Report on Climate Change in China, over the past 50 years the average number of hot days has changed from a downward trend to an upward one. An apparent rise can be traced over the past 20 years. Climate change has affected China’s natural ecosystem and economy in various ways, such as the enlargement of drought areas in the north, aggravation of floods and waterlogging in the south, and a 21 percent reduction in glaciers in the northwest. Future climate change will have a big impact on China’s agriculture, pasturage, ecosystem, water resources, and economy in coastal regions. The shortage of water resources in the north will worsen, flood risks in the eastern cities will be greater, and the rise in sea level will have visible impact on the southeast region. (Editing Committee of the National Assessment Report on China’s Climate Changes, 2007) Due to space constraints, this report will not present in detail the problems related to river basins. Further reading on this subject can be found in CCICED’s IRBM Task Force Report (CCICED IRBM Task Force, 2004) and China Water Vision (GWP, 2007). However, all of these problems are becoming increasingly serious due to a combination of a worsening natural environment and poor human management. Rapid population and economic growth

11 have placed increasing pressure on ecosystems in most river basins. Of the many problems, intensified water scarcity, water pollution and aquatic ecosystem degradation in administrative regions across China will pose the greatest challenge to sustainable socio- economic development in these areas. Moreover, this rapid socio-economic growth and an increase in per-capita incomes has seen interest groups involved in river basins become more diversified. Different stakeholders have different needs and interests when addressing issues related to river basin management, demanding the process of water governance find a balance between the complex interactions between natural conditions and socio-economic context. Despite the diverse features of different river basins, the overall problems in natural resources, environment and ecosystems have become more acute at the basin level, while various stakeholders are involved in the river basin management, which complicates the conflicts between man and nature, and between and among different interest groups. Against such a context, only the concepts and tools of IRBM are suitable for resolving water problems in China.

2.2 Current status of river basin management in China 2.2.1 Legislation related to river basins Legislation is crucial in the promotion of IRBM, yet there are no Chinese laws addressing water use, water pollution control and ecological conservation in an integrated fashion at the river basin level. Some key legal systems related to IRBM have been established under existing laws and regulations, despite these legal systems having been developed under a sectoral framework or by different administrative authorities and acting as a hindrance to the development of an IRBM system.

Box 2.2 The legal framework in China The existing legal framework in China related to river basin management includes national laws, administrative laws, local regulations, sectoral regulations and local rules. National law is formulated by the National People’s Congress (NPC) and its Standing Committee; the State Council makes administrative laws and regulations guided by the constitution and national legislation; People’s Congresses at provincial level may draft local regulations to meet the needs of their specific administrative region so long as these do not violate constitutional provisions and administrative laws. In addition, the ministries, commissions under the State Council, the People’s Bank of China, the National Audit Office, and also institutions with administrative authority directly under the jurisdiction of the State Council, make regulations concerning articles under the jurisdiction of their particular sector, also within the limits of the constitution, administrative laws, decisions and orders issued by the State Council. Articles included in the sectoral regulations are those that implement constitutional provisions or administrative laws, decisions and orders issued by the State Council. Provincial-level government and some big cities can make their own local rules.

Legislation related to IRBM in China includes the relevant stipulations in the constitution; those of the basic laws, such as the Water Law, the Law of the People's Republic of China on Prevention and Control of Water Pollution and its implementation guidelines, Law on Water

12 and Soil Conservation, Flood Control Law and Fishery Law; those in the administrative regulations, such as the Regulation of River Channels of PRC, and the Regulation of Flood Prevention of PRC; in addition to some local regulations and rules.

Box 2.3 Major legislation relevant to IRBM in China 1. Relevant laws Water Law 2002 Law on Prevention and Control of Water Pollution 1996 Fishery Law 2000 Forest Law 1998 Flood Control Law 1997 Law on Water and Soil Conservation 1991 Wildlife Protection Law 1988 2. Major administrative regulations, sectoral rules and legal documents Regulation on Hydrology 2007 Opinion on Limiting the Total Emissions of Waste Discharge into the Key Rivers and Lakes 2007 Ordinance on Yellow River Water Quantity Regulation 2006 Regulation on Water Diversion License and Collection of Water Resources Charges 2006 Guidelines on the Distribution of Total Quantity for Major Water Pollutants 2006 Regulation on Flood Prevention 2005 Circular on Enhancing Wetland Protection and Management 2004 Regulation on Water Supply Pricing of the Water Infrastructure 2003 Regulation on Water Function Zoning 2003 Regulation on the Collection and Use of Waste Discharge Fees Regulation on Returning Farmlands to Forests 2002 Regulation on Sand Extraction along the Channels in Yangtze River 2001 Guidelines of Implementing the Law on Water Pollution Control 2000 Regulation on Water Supply Pricing in the Urban Areas 1998 Regulation on Water-Saving in the Urban Areas 1998 Tentative Regulation on the Fund-raising and Use of Water Infrastructure Construction Fund 1997 Tentative Regulation on Water Pollution Control in Huai River Basin 1995 Regulation on Water Supply in the Urban Areas 1994 Regulation on Nature Reserve 1994 Regulation on Implementing the Law on Water and Soil Conservation 1993 Regulation on Implementing the Law on Wildlife Protection 1993 Regulation on the Security of Reservoirs and Dams 1991 Regulation on River Channels 1988

Beyond national legislation, significant progress has also been made at the local level in recent years. A number of provincial, municipal and autonomous region governments have developed local regulatory frameworks and rules related to water governance, such as the Regulation onWater Pollution Control in Shandong Province, the Regulation on Water Resources in Jiangxi Province, the Regulation onWater Infrastructure in Jiangsu Province, the Regulation on Water Pollution Control in Tai Lake in Jiangsu Province, and the Regulation on Water Supply in Urban Areas of Zhejiang Province. These local regulations and rules have played a critical role in regional water-related management.

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Although no law has been made by the NPC and its Standing Committee concerning river basins, the State Council and its sectors have promulgated some administrative regulations and sectoral rules, such as the Ordinance on Yellow River Water Quantity Regulation 2006, and the Interim Regulation on Water Pollution Control in Huai River Basin. These have had positive effects. Overall, some modest achievements have been made in legislation with respect to river basin management. One of the best practices is the adoption of the new Water Law 1988 by the NPC Standing Committee in 2002, which represented a significant improvement to guiding principles, administrative systems, methods and legislative approaches. In defining IRBM and the duties and obligations of relevant stakeholders, it improved the administrative structure for water resources and also officially recognized the legal status of river basin organizations. The administrative structure for water resources was revised to become ‘a system, adopted by the state, of integrating river basin management with management of water resources in administrative regions’. In addition, the functions of river basin organizations are highlighted. The text of law states explicitly that ‘river basin organizations established by the competent authority in charge of water in key rivers and lakes at the national level, shall perform their functions of water management and supervision in the areas under their jurisdiction as per the stipulations of the laws and administrative regulations, as well as those delegated by the agency under the State Council charged with water affairs.’ It goes on to state that other water-related sectors under the State Council can only ‘be accountable for the exploitation, utilization, saving and protection of water resources, according to their respective functions’. This revised administrative structure for water resources not only contributes to the integrated allocation and utilization of water resources, especially water quantity; it also recognizes the legal status of river basin organizations and delegates supervisory powers, which is consistent with the practice of water management according to the physical geographic unit of a river basin.

2.2.2 Sectors Relevant to Water and Basin Management Agencies The basin management in China involves various governmental agencies at both national, river basin level, provincial, and local levels. At the national level, the main departments charged with handling water issues are listed in Table 2.1 and Figure 2.1. As a large number of factors and sectors are involved in IRBM, planning and management activities are often conducted with one single sector taking the leading role and other relevant agencies participating to a greater or lesser extent.

Table 2.1 Water Relevant Sectors in China and Main Responsibilities Sectors Responsibilities MWR Water resource management and protection; water use reduction; river channel maintenance; flood control; water and soil conservation; water infrastructure management; hydrology management; water policy supervision; organizing for and implementation of water-drawing permit system and water resource fee system; water function zoning; checking and determining pollutant carrying capacity of a specific water area; provision of

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proposed effluent ceiling volumes; formulation of water resource conservation programs, monitoring of water quantity and quality in rivers and lakes and delivering national reports on water resources. SEPA Water pollution control; joint formulation in conjunction with relevant sectors of programs, policy, law and regulations, rules and standards in relation to water pollution control; monitoring of environmental quality, water pollution source monitoring and delivery of relevant monitoring information; levying of effluent charges, working out policy for charges made by pollution treatment plants; participation in policy-making for water resource conservation; participation in program formulation for water resource protection; checking reports on environmental impact assessment in relation to water infrastructure. MOC Planning, construction, and management of engineering in relation to urban and industrial water saving; urban water supply; drainage and pollution treatment. MOA Non-point source pollution control; protection of fisheries environment and aquatic wildlife habitats. SFA Ecosystem restoration; protection and management of water retention forest; wetland management; wildlife conservation. NDRC Participation in program of water resource utilization and ecological environment rehabilitation; maintaining balance between agriculture, forestry, and water conservancy in development planning and policy. Ministry of Inland river shipping, control of effluent from ships and boats. Communication Ministry of Health Supervision and management of drinking water standards. State-owned Issues related to water-related state-owned enterprises at national level. Assets Supervision and Administration Commission State Electricity Oversight of electricity generation including hydropower. Regulatory Commission MLR Land resources management, monitoring and supervision; prevention of over extraction of underground water. Ministry of Coordination of international river management and negotiation. Foreign Affairs

MWR and SEPA, as the administrative departments charged with overseeing water quantity and water quality management respectively, play key roles in water management in China. A rational division of administration work and cooperation between these two is thus of critical importance to the implementation of IRBM. Conversely, a failure to coordinate would create great obstacles for IRBM. Currently, the system for administering the water environment is different from that for water resources. The present system for water pollution control combines unified management, management according to different administrative levels and sectoral management; for water resource management the system is a mix of “basin management and regional management by jurisdiction.” The influence and control of the water resource sector is more apparent than that of the environment sector in IRBM, as the former performs two administrative functions - supervision of water infrastructure and protection of water resources.

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At the basin level, the administration system in China has changed in line with the development of various sectors and reform of state organizations. The main river basin organizations include water resources conservancy commissions (including the water resource protection bureau) affiliated to the MWR, fishery resources management commissions affiliated to the Ministry of Agriculture, bureaus overseeing navigation affairs for a specific basin affiliated to the Ministry of Communication, regional supervision centres affiliated to SEPA, headquarters of flood control and drought-prevention, and a cross-sector and transjurisdictional agencies i.e. the Water and Soil Conservation Commission for the Upper Reaches of Yangtze River. The seven river basin organizations are affiliated to the MWR. Their main powers are limited to water resource (like water quantity) management. They are not in a position to conduct integrated management that recognises basin integrity, nor to coordinate related sectors. For instance, a conflict between water conservancy commission and the EPA constrains the role played by basin water resource protection bureaus in water environment management. There are also various institutional obstacles to water resource management that combines “river basin management and regional management by jurisdiction.” In an effort to strengthen the unified supervision and management of pollution control exercised by EPB, in 1983 supervision of basin water resource protection bureaus was transferred from sole supervision by MWR to dual supervision by SEPA and MWR. Basin water resource protection bureaus are however still administered by the water sectors, maintaining the original administrative set-up. SEPA only exercises oversight of the technical work of these bureaus related to water environment and water pollution control. Learning from this system, various sectors came up with new management mechanisms suited to the conditions of their particular basin and work there, including steering groups for basin water resources, joint meetings on basin water pollution control, and steering groups for pollution control. SEPA initiated establishment of a law enforcement and supervision agency in the early 2000s. This saw five regional environment supervision centres established for eastern, southern, north-eastern, south-western and north-western China. These centres went into operation in 2006. This symbolized the beginning of a coordinated supervision system for water pollution control on a river basin or regional basis. These centres, being affiliated to SEPA share their parent agency’s responsibility for monitoring the performance of local governments implementing state environmental policy, law and regulations and standards by within their jurisdictions. They also coordinate cross-boundary conflict resolution work in cases of pollution and deal with important cases involving environmental pollution and ecological damage. However, further practice and examination are need to determine the powers of these centres in actual operation. Along the Huai River, for example, basin agencies include the Huai River Commission (HRC), Steering Group and Office for Water Resources Protection in Huai River Basin (SGWRPHR), Headquarters of Huai River Flood Control, and General Team of Water Administration Supervision of Huai River Basin. Of these, the HRC plays the most important

16 role in water resource management, whilst the SGWRPHR is responsible for coordination and management in issues related to protection of water resources and the water environment. Locally, provincial departments of water sectors, urban construction, environment protection, in-land river shipping and navigation sectors have responsibilities limited to a specific administrative realm defined by jurisdiction. These organizations cooperate and link to the local water authority, and so can be seen as playing a role in IRBM. The relationship of supervision and coordination among national, basin and local level is quite complex and demarcation of powers is a major problem. In the EPB system, for example, although the local agency reports to higher EPB levels, financing and personnel will mostly come from local government.

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Figure 2.1 Organization Chart of Water-related Sectors in China State China People’s Political NPC State Consultative Conference Council (CPPCC)

MWR SEPA MOA Communication MOC Health Assets State-owned MLR State Electricity Other Sectors N SFA Ministry DRC and affiliated agency

Bureaus Bureaus Administration 2 Shipping commissions resource 3 basinfishery supervision centers supervision environment 5 regional commissions 7 riverbasin resource 7 basinwater

Basin/ regional agency Supervision and Ad State-owned Assets institutions subsidiary Othersectors and direc Water conservancy EPB Commission Reform And Development. Communicatio Land and and Land Agriculture Forestry Construction Health Provincial department resource n

t

18 Notes: 1. Basin-wide flood control and drought fighting organizations are not shown in this diagram. 2. River basin commissions and water resource protection bureaus are set up in seven river basins, including the Yangtze, Yellow, Huai, Hai, Pearl, Songliao River Basins and Tai Lake. 3. The five regional supervision centres of environment protection are set up for eastern, southern, north-eastern, south-western and north-western areas of China; 4. The three basin fishery management commissions are in the Yangtze River, Yellow River and Pearl River; 5. The two Shipping Administration Bureaus are in the Yangtze River and Pearl River.

2.2.3 Policy in Relation to Basin Management

(1) Policy in Relation to Water Resources Water resource management 1 in China is in a transitional period, with a shift from administrative measures dating back to the era of the planned economy to economic instruments for the emerging market economy. The main policy features and changes are presented below. Water quantity management policy. The Water Law of the People’s Republic of China which came into effect in 2002 stipulates that all water resources belong to the state and that the state will implement a system combining control of total water quantity and management by quota. The State Council assumes ownership, exercises allocation, utilizes and claims benefits from water resources on behalf of the state. In other words, local government has no right to allocate or otherwise dispose water resources in a river basin since that right belongs to the State Council. The allocation of basin water resources is of critical importance because of shortages. The allocation of water resources of the Yellow River, for example, is now governed by an Ordinance on Yellow River Water Quantity Regulation, passed and officially implemented in 2006 after a lengthy process to put it in place. This has systemized the allocation and regulatory plan for water quantity in the Yellow River. Since the state began exercising unified allocation of water quantity for the Yellow River in 1999, there have been no further instances of it drying up. This has brought economic, social and ecological benefits. The Water Law requires that industrial sectors at provincial level shall set quotas for industrial water use within their respective administrative jurisdictions. They must also formulate annual plans for water use on the basis of the available water in line with the quotas for water use, economic and technical conditions and plans for allocation of water. These plans control the total amount of the water used annually within their respective administrative areas. Priority is given to water saving and efficient water use. A water quota was set for some ten provinces or equivalent-level jurisdictions. Also, with a view to improving water saving by industry, state standards have been set for thermal power, steel, petroleum, textile, paper-making, brewing and distilleries, formulated by the NDRC and approved by State Standards Commission. These measures should

1. Generally management of water resources shall cover unified management of both water quantity and water quality. However, the water resource management practiced by the water administrative sector mainly targets water quantity.

19 contribute to improved water saving for both urban domestic and industrial use and to water quota management. The Eleventh Five-Year Plan included stipulations that by the year 2010 the water use per CNY10,000 of industrial value-added should drop by 30 percent against 2005 level. Water quota management will make meeting this target easier. The state will now implement a system of water use permits and payment for water resources in line with the new law. Entities and individuals extracting water directly from rivers, lakes, or underground aquifers are now required under provisions of a water diversion license system and payment system to apply for a license to do so from water administration departments or river basin organizations. Extractors will pay water resource fees for the right to use water. Collection of a small amount of water for household use, raising livestock in pens and similar is exempt from this.

Water pricing policy. The policy of collecting fees has important benefits for improving water use efficiency and regulating use of water resources. This is one area of water policy in China where great improvement has been made. In the era of the planned economy, water resources were very cheap or even free. Any payment was well below the commercial value of the water, and lower even than the engineering cost. Water was used intensively with a great deal of waste. In the post-reform economy, water pricing has gradually changed in line with the transition in economic system. The new Water Law established principles for water price reform: compensation for cost, appropriate charges, high price for high quality and fair sharing of payments. However, a process under which these principles can be implemented is yet to be established. Alongside this promulgation of laws, regulations and policies aimed at reforming water pricing, progress is also being made in associated areas. A water pricing system is taking shape, there has been a gradual increase in general water prices; the introduction of flexible water pricing aimed at improving water saving; implementation of graded water pricing conducive to sensible quantity demands from users; diversification of water price management models, and standardized procedures for setting prices. The reform of water pricing in China has successfully transitioned from free or cheap provision in the collective era to commodity pricing. The introduction of a sensible water pricing mechanism will help meet demand from a diverse user base. It will also help optimize the allocation of water resources, enhance water use efficiency, promote water saving, improve the ecosystem and control water pollution.

(2) Policy for Water Pollution Control Transition in water pollution control. Since the late 1990’s, a transition has occurred in China’s water pollution control policies. In particular, during the Eleventh Five-Year Plan, the State Environment Protection Administration worked to effect four transitions: from point pollution control to regional and basin-wide comprehensive prevention and control; from terminal management to control of pollution sources and the whole process; from control of pollution concentration to integrated control of discharge gross and concentration; and from single pollution control to combining pollution and

20 ecological protection. Stronger cross-sectoral cooperation will be vital to realizing the above and making pollution control in China more effective.

Total effluent control policy. The control policy of basin-wide gross pollutant is an important part of water pollution prevention and control. According to the Law of the People's Republic of China on Prevention and Control of Water Pollution and its enforcement regulations, “where a water body cannot meet the national standard for water environment quality in terms of water pollutant discharge, control regulations of key pollutant discharge gross should be implemented.” The State Key River Basins Control Plans are drafted by the environmental protection and other departments under the State Council working with local governments in the provinces. Transboundary water body gross control plans are negotiated in this drafting process which includes input from affected local governments. These gross control plans should include the regions involved, species of key pollutants, gross discharge, pollutant discharge reductions and time limits for them to happen in. Where key pollutant discharge controls need to be legally enforced for a water body, local governments above the county level should take charge of making a regional enforcement scheme based on the allocated control indicators. Regulations in the Water Law also led to water conservancy departments issuing a document entitled Suggestions for Limiting Pollution Discharge in Key Rivers and Lakes. Despite the legal regulations on basin-wide pollutant gross control, the regulations are not in fact implemented over a whole polluted water body, nor are specified enforcement rules or detailed action plans made by SEPA. The Law of the People's Republic of China on Prevention and Control of Water Pollution and the detailed rules for its implementation require enterprises and institutions that discharge pollutants into a water body to obtain discharge licenses and pay a pollutant discharge fee as set by national regulations; if their discharge exceeds the limits set by national or local standards, an extra fee is levied on this excess. Quota Policy for Cutting Effluents. During the period of the Eleventh Five-Year Plan, a compulsory target to cut ten percent of total effluent emissions of main pollutants was set by the state. In addition SEPA issued Instructions for Allocation of Effluent Total of Main Pollutants. The State Council also approved the National Plan for Effluent Total Control of Main Pollutants during the Period of the Eleventh Five-Year Plan, which determined the COD cut quota for each provincial-level jurisdiction. Effluent total control will play an important role in realizing targets for cutting discharges of major pollutants.2 In order to improve the treatment ratio for urban sewage, and achieve the target for pollution cuts, NDRC and SEPA introduced a policy of raising effluent treatment fees. The rate of urban sewage treatment was as low as 35 percent in the seven major river basins in China, which led to generally low treatment fees. This calls for energetic promotion of water price reforms. The policy of collecting sewage treatment fees needs to be actively implemented.

2 In fact, only a ten percent reduction in main pollutants discharge was realized during 1996-2000.

21 Specifically localities are charged by the newly released Comprehensive Program for Energy Saving and Reducing Pollutant Discharges with raising effluent discharge standards for COD appropriate to their particular local circumstances. At the same time, management of collecting the effluent discharge fee needs improvement. Collecting negotiated fees or fixed fees will be prohibited. Discharge fees shall be collected for all urban sewage and fee rates raised. They are not to be less than CNY0.8 per ton. National preferential policies on land and tax are applicable for construction of sewage treatment facilities. Finally, reform of urban sewage treatment agencies will be accelerated, rights franchised and improvements made to supervision and monitoring.

(3) Policy of Aquatic Ecosystem Conservation Since 1988, a number of major ecological restoration projects have been implemented, such as Green for Grain, Natural Forest Protection Programme, and Returning Cropland to Lakes. This had benefits for soil and water conservation and helped improve basin ecology. In addition the policy and measures adopted for integrated management of small basins aimed at soil and water conservation have been effective. Bans on fishing and sand extraction and environment flows have been introduced in many basins. These have helped to rehabilitate freshwater ecosystems and restore damaged ecosystem functions. For instance, a seasonal ban on fishing has been in force in the Yangtze River Basin since 2003, covering 10 provincial-level divisions along 8,100 km of the river’s reaches including the main river course and major tributaries starting from Deqin County in Yunnan Province down to the river estuary and including Poyang and Dongting lakes. The ban period covers February to April each year in the area above Gezhouba Dam and from April to June in the area between Gezhouba Dam and Yangtze estuary. The ban has mitigated the drastic decline of fishery resources in the Yangtze. Rapid development of local economies alongside an increase in environmental awareness recent years has seen more and greater conflicts over resources, ecosystems and environmental issues between different regions and the river’s upper and lower reaches. Different sectors have also began to consider charges for ecological services. Currently payment for ecological services in China is very limited and comes mainly from implementation of laws in relation to ecosystems, environment and policy complementarity for a particular ecological project. For instance, Compensation for Forest Ecological Impacts (or payment for forest eco-service) was clearly specified in the Implementation Rule of Forest Law, promulgated and implemented in 2002. Moreover, under the Green for Grain project (converting cultivated land to forests), households affected received economic compensation for setting aside farmland. Pilot ecological compensation projects within a basin have been tried in some provinces. Ecological compensation policy in China is still in a trial phase and improvement is needed in both theory and practice.

(4) Finance Mechanism and Environment Finance Policy

22 Public finance plays an important role in the promotion of IRBM, especially as regards urban wastewater treatment. In China’s public finance system (see Box 2.4), basin development and protection involves both central and local funding. Although there is no specific basin item in the central finance budget, funds from national level are appropriated through sectors, river basin organizations, relevant budget items, and items of budget for local finance. This has boosted the development of basins. In addition, private and international funds are also invested in basin development. Due to the lack of an overall basin funding mechanism, these various funding sources are not well coordinated at the basin level. In consideration of the public goods well managed basins provide, particularly national ecological security and environmental protection, funding should largely come from national budget allocations. IRBM is one aspect of public management, providing protection of basin resources and the wider environment. The finances of environmental programmes are one aspect of public finance and include revenue and expenditures resulting from protection of the environment and natural resources, the provision of ecosystem services to the society and public, and safeguarding national environmental security. Environmental financing is an embodiment of the government’s management authority and one of the most important measures whereby government fulfils its political duty, exercising rights and responsibilities in relation to the environment (including basin resources and environmental protection). It has three main components: revenue (tax); expenditure; and price setting by public sectors. Some kinds of taxes closely related to environment and natural resource are incorporated into China’s tax system levies taxes on resources, consumption, urban construction maintenance, vehicle and ship use, urban land use and appropriations of farmland. This tax revenue combined with effluent discharge and water resource fees accounted for eight percent of the total national tax take in 2002. However at that time taxation was not designed to achieve environmental protection ends and annual expenditure on environment protection far exceeded such revenue. These taxes were considered as having the potential to contribute to future environmental protection, rather than being “environmental tax” in any strict sense.

Box 2.4 China’s Finance System A tax sharing-system is in place in China. Under this system, expenditure at various government levels is set according to a division of intergovernmental power and responsibilities under the public finance framework. Central government is responsible for funding national security, foreign affairs and covering operating costs of central government organizations. It also allocates budgets for national economic restructuring, coordinating balanced regional development and macro-control and development of institutions directly managed by the central government. Local finance covers the operating costs of local government, costs arising from supporting development of the local economy and social expenditures within its jurisdiction.

Investment in the environment in China comes mainly from three funding sources: projects and enterprises, that is, investment for infrastructure and renovation, which accounts for the great bulk of investment; from central and local finance, including earmarked funds for environmental protection and funds for urban construction; and also from bank loans. Although investment in the environment is increasingly diversified in China, environmental funding

23 amounted to less than one percent of GDP over the past 15 years (CCICED Task Force on Price Forming Research, 2005). Obviously on the one hand public finance did not play a key role in environmental investment; on the other, despite rapid growth of national revenue, funding for environmental or basin management has not increased accordingly. During the period of Eighth Five Year Plan financial expenditure by government at various levels for environmental and resource protection amounted to CNY65 billion, or 2.67 percent of total central expenditure for the period, including CNY12.3 billion from effluent discharge fees in local budgets. Some CNY5.4 billion of this total came from central finance and CNY59.4 billion from local finance, or 0.74 percent and 3.49 percent of central and local expenditure totals (Wang Jinnan, 2003). This is quite apart from the CNY800 billion of long-term Construction Treasury Bonds issued beginning in 1998, money channelled to protection of the environment and resources. During the period between 1998 and 2000, moneys used for agriculture, forestry, water conservancy and environment accounted for 38 percent of the bond fund total for the corresponding period (including natural forest conservation and the Grain for Green Project). Expenditure for environmental protection was CNY61.3 billion, 9.3 percent of the bond fund total (CNY660 billion) over the corresponding period.3 A compensation fund for forest ecological impacts was established in 2001 out of central finance. Subsequently pilot projects providing compensation for forest ecological impacts have been implemented, providing both policy and funding guarantees for forest ecosystem improvement. Recently the Chinese government has stepped up price reforms aimed at resource saving and environment protection. Public price setting is closely linked with environmental protection in China, with water and energy prices the most significant. Water resource fees, urban sewage treatment fees linked to water prices and the pricing of energy from desulphurized coal-fired electricity generation have a direct relationship with the environment. Water course use and sewage treatment fees are levied in most cities in China. The Ministry of Construction issued the Management Rules of Charted Rights for Public Utilities in 2004. These rules were designed to further reform of investment and finance for environment protection, and boosting investment in protection, encouraging involvement of the private sector and promoting sound development of utilities in a planned way. The aim is to boost the market for urban utilities through charted rights. Although the rules set out clear policy, problems remain in its implementation. Further measures are due to be drafted by individual cities to address this. Beginning in 2007, environmental protection has been included as a budget item in national public finance, including administration costs and the monitoring and supervision of environmental protection, pollution control, and nature conservation. This marks significant progress in public finance for the environment. Future basin management will be expected to attract more private capital under the new policy framework to go along with increased public finance and rationalisation measures.4

3Mainly used for infrastructure construction in relation to urban environment protection, water pollution control in “three rivers and three lakes” and Blue Bohai Sea, water pollution control in the Three Gorges Reservoir, a secondary pipe network for urban water supply and drainage, comprehensive environment management in Beijing Municipality and domestic-made environmental protection equipment. 4Ministry of Finance, A Circular of Government Budget Account Reform, No. Cai-Yu [2006]13，Feb., 10, 2006

24

2.2.4 River Basin Planning

Planning is an important prerequisite for carrying out IRBM. Plans for river basin management are drafted at national, basin and local levels, and may be comprehensive or specialized. The participation of relevant sectors is integral to both formulation and implementation of the plans. Almost all laws on water conservancy, environmental protection, agriculture, forestry, construction and nature conservation specify the drafting of plans, with specific stipulations requiring plans to control basin water pollution, a master plan of basin water resources, and specialized basin plans. For instance, the creation a national strategic plan for water resources is a requirement set out in the new Water Law. In addition water resource plans are classified as either basin or regional plans, including both master and special plans. Legal definitions are given for each kind of plan. Procedures are set out for drafting various plans, as is the relationship between different plans. Regional plan within a given river basin are subsidiary to river basin master plans, as are special plans. The river basin master plan, comprehensive region plans and special plans related to land use are required to be consistent with national economic and social development goals, land use master plans, city master plans and environmental protection plans. Consideration shall be made of demand from different regions and industries. Such stipulations accord with the features of water resource management as seen in international legislation on water resources. Unified planning is a clear requirement in the amended Law of the People's Republic of China on Prevention and Control of Water Pollution, for both basins and regions. The law also sets out formulation procedures, legal features and implementation measures for such plans. What a plan should cover is clearly indicated in the Detailed Implementation Rules of Law of the People's Republic of China on Prevention and Control of Water Pollution. It requires that water pollution control plans, both basin and regional be created by the State Council and governments at provincial level. Other laws also touch on the formulation of plans. The whole second chapter of the Law on Flood Control sets out standards for flood control planning and further specifies how this should be linked with other plans. Specifications for basin plans and plans based on administrative regions are provided. In addition, the Law of the People's Republic of China on Water and Soil Conservation states that local government departments of water administration at or above county level must draw up water and soil conservation plans. However, no mention is made of plans for basin-wide water and soil conservation. Interactive linkage among different plans is one aspect highlighted in the various laws on water related issues. In accordance with the specification of the laws in relation to water, an array of plans has been worked out by government at different levels. For instance, the Comprehensive Plan for National Water Resources was drafted in 2002 by the then State Planning Commission and MWR. This plan will play an important role in the overall regulation and management of water

25 resources. In addition to the plans at national level, headway was made in planning for IRBM at basin and local level. Formulation of river basin master plans is a key tool for IRBM in China. Since the founding of the People’s Republic in 1949, there have been two occasions when large scale master plans for important rivers were drawn up. Although river basin master plans were first made in the early 1980s, the plans were based mainly on administrative divisions. Worse, the plans were for just single issues in the basin. Comprehensive integrated plans were rare. Nearly 20 years have passed since the last river basin master plan was drafted, a period that has seen enormous change in China, not least in the situation as regards basin water resources and engineering infrastructure. River basin management and development must now address new conditions and challenges. Shortages and pollution of the water environment along with other conflicts and problems are becoming ever more apparent. Innovation is needed in basin management and development. In 2007, the State Council organized a new round of drafting and amendment of river basin master plans. Compared to the earlier round of planning two decades ago, the new master plans will emphasise on improving flood control and disaster reduction, better allocation of basin water resources, enhanced conservation of basin ecosystems and environment, comprehensive administration of water resource use, and capacity building for river basin water resource management. The new plans will be more comprehensive and pragmatic. The master plans for the seven basins are scheduled to be completed by 2009, subject to approval by the State Council. Master plans for other basins are expected to be created within five years. In order to consolidate sectoral coordination and ensure the quality of the new master plans, three mechanisms are expected to be instituted by the MWR. The first is a joint meeting of various ministries and agencies. The MWR will take the leading role; other agencies involved will be the NDRC, Ministry of Land and Resources, Ministry of Construction, Ministry of Communication, MOA, SEPA, SFA, China Meteorological Administration and State Oceanic Administration, etc. A joint meeting system for these ministries and administrations is to be set up for planning and amendment work. The system is designed to consolidate organization, leadership and coordination in planning and promote discussion and problem solving in the planning process. The second mechanism will be basin-wide coordination. A steering group and coordination group will be set up to formulate master plans. River basin organizations will be giving a leading role and work in conjunction with provincial water sectors within the basin and other relevant provincial sectors. The aim is to encourage discussion of major inter-provincial problems with a view to finding appropriate solutions. The last mechanism is expert consultation. A technical consultation expert group has been set up to provide technical guidance during planning, to provide consultation on major technical issues and offer technical supervision for finalization of plans. The expert group includes academicians from the Chinese Academy of Science and China Academy of Engineering, experts recommended by sector of water conservancy, member agencies of joint meetings, and experts from universities, research institutes and relevant industries.

26 Although not supported by legislation or an administrative framework, the amendment of river basin master plans goes some way to facilitating a more thorough implementation of IRBM. It also improves financial support and public participation for IRBM. Corresponding plans for particular basins have been drafted out in some localities, for instance, the management plan for the Tarim River and that for the Hei River, a water pollution control plan for the Three Gorges Reservoir and upstream and a national wetland conservation plan. At the local level, in addition to basin-wide plans, many special plans and comprehensive plans have been created in various administrative regions, including plans for water pollution control, water resource protection, hydropower, navigation and ecological conservation. These plans are generally limited by administrative boundaries and impact has not met expectations due to a lack of coordination with other administrative regions within the basin. The above mentioned plans set out specific goals and major tasks. However, detailed implementation procedures and accountability systems are still lacking, core problems prevailing in various currently ongoing plans.

2.2.5 Public Participation

China’s political system is centralized and governance is top-down. However, government does not have the ability to solve the basin-wide problems alone at present, because diverse stakeholders are involved in the river management; various industrial sectors representing the interests of the state, local government local interests, as well as enterprises, farmers and fishermen. The interests of all parties need to be considered, particularly social vulnerable groups, if there is to be equitable access to the public goods generated by better river management. Hence broad public participation in basin management is needed. The state of public participation in basin management in China was surveyed using an analytical framework in which the extent of participation was classified into six levels: i) being ignored; ii) information gathering and release; iii) consultation; iv) partnership building; v) participation in decision making; and vi) autonomous management. A further distinction was made between four contexts: state, basin, local, and community. Table 2.2 presents an overview of the current situation. Over the past decades, headway has been made in public participation and in the release of governmental information. This has helped create a legal basis for public participation in river basin management. As early as the 1990s requirements for public participation were included in a series of environmental laws; such legislation has been stepped up in recent years.

27 Table 2.2 Current situation of the Public Participation in Basin Management Information gathering Consultation Partnership building Participation in decision- Autonomous and release making management National Government information Consultation with National Political National People’s Congress; National role of level published, disclosure of provincial governments Consultative scholars and media play a key environmental various environment and sectors; opinions of Conference; expert and role in shaping public NGOs information domestic and media comment on opinion, making international experts public and social issues recommendations, and sought influencing decision making River basin Basin-wide status Workshops, seminars; Concern for river Some GONGOs participating level reports release expert consultation conservation from in IRBM-related issues certain agencies and NGOs Local level Government affairs and Public hearings Political Consultative People’s Congresses at local Grassroots NGO procedure open to Conferences at local level activity publics; pilot projects in level environment performance assessment of enterprises Community Township/village Villagers/owners Complaints, letter- Villager /owners vote More water user’s level /community information meeting writing and petitioning associations released

28 The Environment Impact Assessment Law was implemented in 2003. It contained specific articles concerning public participation in government planning and construction projects. In addition the Administrative Permit Law was passed in June 2004. This prescribed mechanisms for public hearings where ordinary citizens could offer their views. In February 2006, SEPA issued a Trial Rules for Public Participation in Environment Impact Assessment. This defines organizational arrangements for public participation. Subsequently in January 2007, the Regulations on Public Disclosure of Government Information was promulgated by the State Council. These include detailed measures for safeguarding public access to government information. SEPA has since brought forward Methods of Public Disclosure of Environmental Information due to come into force on 1 May 2008. This will greatly broaden the means for and form taken by public participation in environmental protection. The State Council and SEPA encourage businesses to release environmental information to the public. Moreover, pilot environment performance assessments of enterprises have been carried out. Basin status reports for the larger river basins are now to be delivered annually, providing information on water conditions and management. In the past, the public in China rarely participated directly in river basin management, but the situation has improved recently. The public is currently able to influence basin management and conservation practice through grassroots organizations, NGOs, and the media. At the community level, in addition to the conventional mechanisms such as input from the National People’s Congress (NPC) and China People’s Political Consultative Conference, new approaches are being introduced, such as village-level elections, public disclosure of government information and public hearings. Water user associations of local farmers in reservoir regions have been established, with a view to promoting self-management of water use in irrigation areas. Many community-based organizations (CBOs) have been set up in the urban areas, providing new channels for public participation in environmental protection. NGOs have developed rapidly in China, with some 2,000 environmental NGOs now established. Some have carried out campaign activities to boost public awareness of river conservation and water-saving practices. Grassroots NGOs, like those in the Huai River Basin, Sichuan Province and Yunnan Province, have conducted a range of environmental protection activities to help advance river conservation. However, the extent of NGO participation in basin management in China is generally very low. In comparison, some GONGOs (Government-organized NGOs), such as science associations, water conservancy associations and various industry associations, currently play a much more important role. This is because these GONGOs enjoy closer links with government ministries and departments, as well as river basin organizations. They exert influence on water resource and river basin management through research, information exchange and organizing activities. The media have played an active role in boosting public participation in environmental protection, including river conservation. Academics, NGOs and the public are now better able to express opinions on river management through the media. Such opinion and comment may elicit high-level government response and contribute to problem resolution. For instance, two

29 years ago, there was a controversy over plans to build a 13 cascade hydropower stations on the Nujiang River in Yunnan. Public and NGO opinion reached the government, encouraging a more cautious attitude towards development on the Nujiang. Although some progress has been made in the public participation in river basin management, it is still limited in scope and extent. Some progress has been made as more available information for public participation in river basin management has enabled more effective consultation. Progress elsewhere is so far quite limited. Of course, at the current stage, stakeholder participation in river basin management, particularly that from various levels of government and experts is more active than wider public participation. In the longer term the latter will be able to play a greatly enhanced role.

2.2.6 Summary of Challenges to Implement IRBM

In conclusion, in both pre-modern and modern times, China has seen great achievements in river basin management, taking full advantage of centralized governance and administrative tools. A thousand years of water governance have established a reasonably effective administrative system. This legacy, if properly studied and understood, will be of great value in future efforts to achieve sustainable development. Yet it is apparent that rapid development has brought new issues for river basins and the implementation of IRBM in China faces many challenges. Problems includes an unfavourable legislative environment for river basin management, no clear assignment of responsibilities for various government ministries and agencies, a lack of effective mechanisms for cross-sectoral and trans-jurisdictional coordination, no clear basin-wide policy structures and systems, no clear legal authority for river basin master plans and only a low level of stakeholder and public participation in river basin management. Conventional water governance will find it hard to adapt to solve the increasing basin-wide challenges as China’s economy continues its breakneck development. Basin-wide problems in China are more complex than those in any other part of the world at a similar level of development. Of the many IRBM issues, cross-sectoral and trans- jurisdictional coordination is the most crucial. It will be impossible to solve complicated water issues by a sole sector or through a single river basin organization, one technology or policy. The existing river basin management system is not suitable for the new situation. The IRBM concept and approaches need to be introduced, bring a more integrated approach and increased stakeholder and public participation in river basin management. Yet implementing IRBM, even in developed countries, is no easy task, and still developing China is no exception. To move from conventional water governance to IRBM will mean overcoming many far-reaching and complex such as those noted above.

30 3. Issues and Causal Analysis of Current Basin-wide Problems in China

3.1 Legislation and its Implementation

3.1.1 Legislation and Enforcement at National Level

China still has no integrated river basin law. IRBM principles can only be found as part of other laws and regulations. This means the necessary institutional arrangements for IRBM are absent, and also poses great difficulties for basin-wide management and coordination. The legislation and enforcement of river basin management involves a number of stakeholders, but their levels of participation vary greatly. In the 1980s and 1990s, government departments at all levels had great powers of legislation, with the situation at that time known as “sector-based legislation.” This led to conflicts and ineffective coordination between various laws and regulations, which also affected IRBM. In recent years, the NPC and local People's Congresses have gained stronger legislative powers, which have improved the situation. But in general, government departments still have a major influence on legislation. Other stakeholders including civil society do not play full roles in this process. Although opinions are solicited from a broad range of stakeholders when legislation is being prepared, there are few instances where significant influence of stakeholders is apparent as regards key issues that involve water management. Currently, the main legislative problems of river basin management are as follows:

(1) Lack of coordination between legislation of relevant laws

In China, there is not enough cooperation when creating legislation for river basin management and that for other linked initiatives, such as water resource protection, pollution control, water and soil conservation, farming and forestry, nature conservation and so on. Some legislative articles duplicate or even conflict with each other. There is a noted absence of clear regulations on stakeholders’ rights and obligations and a sound coordinating system. These problems can be largely attributed to the over-involvement of government departments coupled with ineffective institutional arrangements for resolving sector-based interest conflicts in legislation. (Figure 3.1) Many examples reflect discord between the different kinds of legislation. For instance, in M&E (monitoring and evaluation), Article 18 of Law of the People's Republic of China on Prevention and Control of Water Pollution stipulates that M&E of surface water environment quality is to be carried out by environmental protection departments, whereas water resources protection organizations of key river basins are charged with conducting water quality M&E within their jurisdictional boundaries. They respectively report to national water resources and environmental protection departments, and their supervising institutions. Yet according to Article 32 of the new Water Law, “the water quality of the water function zones should be supervised and assessed by the water administrative departments of the local people’s governments above the county level and river basin organizations.”

31 Supporting local regulations, Water resource Supporting departmental administrative administrative Water Law administrative regulations & system regulations local governmental regulations

Water Water pollution Supporting Supporting local regulations, Pollution prevention and administrative departmental administrative Prevention & control system regulations regulations & local governmental Control Law regulations Figure 3.1 Independent legislative frameworks for water resource management and water pollution prevention and control Source: WANG Fengchun, 2007

So many different laws state that the surface water quality can be supervised and assessed by environmental protection departments, water sectors and also river basin organizations. A tripartite supervision that not only leads to conflicts between environmental protection departments and river basin organizations, but also results in a waste of human resources, materials, equipment and funding. Another example is the total discharge in a river basin. According to Article 17 of the Water Pollution Prevention and Control Law, environmental protection departments are responsible for ensuring the control of total pollutant emission loads and water environmental function zoning. But Article 32 of the Water Law states that water resources departments or river basin organizations have charge of assessing the pollutant-carrying capacity of the water body, giving opinions on the pollutant emission limits and water function zoning. This could easily cause disconnect and discord among water environmental function zoning and water function zoning, pollutant-carrying capacity of water body and total pollutant emission load, as well as total pollutant emission limits and real emission volume.

(2) Lack of cross-sectoral or trans-jurisdictional integrated management regulation

Although many rules and regulations are in force requiring an overall plan and integrated utilization for water resources, there is still a lack of specific regulations on master plans for trans-boundary rivers and lakes management. Different regions within a same river basin usually have their own favourable local policies. Different trade organizations also utilize water resources depending according their own demands, lacking overall coordination. Many measures which sometimes seem to be advantageous in part, may however be harmful overall due to cumulative impacts.

(3) Lack of procedural legislation and ineffective enforcement

National and local legislation related to basin-wide management are mostly substantive laws, with little procedural legislation. With no supporting procedural regulations for the substantive laws, it is hard to enforce substantive law and resolve stakeholder conflicts. The enforcement issue has many aspects. Besides the lack of procedural legislation, regional protectionism is another major factor. The funding and personnel for regional

32 environmental protection sectors comes mostly from local governments. Although there are lots of regulations on environment protection, industrial pollutant emissions and strict requirements for enforcement, the difficulty of actual enforcement still exists. For instance, in terms of government responsibility, the Environmental Protection Law stipulates that the local governments at all levels should be responsible for the environment quality within their jurisdictional areas, and take concrete action to improve it. Where companies cause severe pollution, governments should ask them to abate within a set time limit, or disclose when exceeding the due period. Obviously, if governments at all levels and the administrative departments fulfil their full legal responsibilities for environmental M&E, and pollutant emitting companies consciously comply with their legal obligations, there would be many fewer pollution disputes. The reality is far different.

(4) Lack of water resource and water environmental systems for stakeholders

Current national and local legislation has established management frameworks for water resources and water environment but since these lack some important features, they fall short of properly addressing water issues in China. Missing features include: payments for ecosystem services between upstream and downstream, water right and trade, pollution emission permit, water-related information release (including information on pollution), risk and emergency management, pollution damage assessment and insurance and so on.

3.1.2 Legislation Problems at the Local Level

Not only national legislation, also local lawmaking has some problems, including: ƒ Unbalanced legislative progress among different regions. Some provinces (districts) have fairly comprehensive IRBM rules and regulations suited to their local needs, whilst many more regions do not. ƒ Duplication of national regulations without local features. ƒ No availability for operation among most of the local legislation. ƒ No harmonisation between different laws and even some mutual conflicts. Legislation for water resource protection, water pollution prevention and control as well as soil and water conservation are not in line with the requirements of IRBM. Some articles are duplicated and some absent in legislation. ƒ Lack of regulations for public participation mechanisms.

3.2 Institutions Many problems exist in the prevailing river basin management organizations in China, for instance: ƒ There are a number of river basin organizations with differing degrees of administrative responsibility, such as various river basin water resources commissions of MWR (Ministry of Water Resources), basin-wide water resources protection bureaus, River Basin Fishery Management Commission of MOA (Ministry of Agriculture), bureau of

33 navigational affairs of MOC (Ministry of Communications), regional monitoring center of SEPA (State Environmental Protection Administration) and so on. The river basin water resources commissions of MWR have comparatively most power and play an active role in river basin management, whereas the other departments have less influence. ƒ In all but a few river basins, river basin organizations rarely involve stakeholders. The so- called “river basin commission” does not have any commissioners representing basin stakeholders. ƒ The river basin organizations of MWR are responsible only for monitoring river water quality and do not have authority to manage basin-wide or trans-jurisdictional water pollution issues. SEPA doesn’t have basin organizations and so lacks a competent monitoring system to acquire accurate water quantity and quality data despite SEPA being responsible for monitoring water environment quality. Consequently, water quantity management by MWR and water quality management by SEPA are conducted separately for the most part. ƒ Lack of coordination between MWR, SEPA and other departments. Conflicts of administrative authority often arise. Conflicts of administrative authority, obligations and poor information sharing among governmental departments and relevant basin organizations are key factors in low management efficiency. Although these have a number of causes, the most fundamental is conflict between rules and regulations, in particular, no clear division of responsibilities and work between government departments and lack of relevant standards. At the national level, MWR and SEPA have the main responsibility for water resources and environmental management. However, at the same time, other departments have some powers in this regard. For example, the Ministry of Construction is responsible for urban water supply and water saving, the Ministry of Communications takes charge of maintaining shipping functions of big rivers, the NDRC (National Development and Reform Commission) is responsible for examining and approving key hydroelectricity projects and drafting water- saving strategy, and the SFA (State Forestry Administration) is in charge of wetland planning and protection. The administrative authority of these departments is interrelated or even overlaps and so conflicts arise. For example, when the SFA makes wetlands conservation plans this will definitely involve regional water resources allocation. Objectives may go against water resources allocation targets made by water sectors. Segmentation problems cause difficulties in the resolution of basin-wide water-related issues. At the level of river basins, Chinese basin organizations are still official agencies tasked with river basin planning and research, such as the Yellow River Conservancy Commission, Yangtze River Water Resources Commission. Their key routine work is prevention and control of floods, droughts and sedimentation. Due to a lack of management synergy and substantive functions, these organizations are not equipped to solve the problems or difficulties emerging in IRBM. The “three designates program” (function, organizations and personnel) issued by the State Council merely defines river basin organizations as “the representative institutions of MWR in river basins” with the nature as “official agencies” Although they have some administrative authority, they are not real administrative agencies, possessing only monitoring and supervision rights and the right to implement IRBM.

34 It is very important for the environmental protection bureaus to maintain good relations with local governments, especially in water pollution management. The local governments supply staff for environmental protection departments in their jurisdictions. Thus local governments have considerable influence on the activities of the environmental protection bureaus, which sometimes may be negative. The effect of regional representative institutions model implemented by SEPA needs to be verified by practice. Apart from the problems between water sectors and environmental protection departments, there are other issues to be considered at the level of river basins. For instance, there are conflicts among harbours, shipping and flood protection, electricity production, sand exploration and aquatic ecology, whose resolution involves a number of departments and different administrative authorities. It will be very hard to resolve these without IRBM and coordination.

3.3 Policy Looking at the actual effect of SEPA’s previous basin-wide pollution control initiatives “Zero Action” and “Environmental Protection Storm,” commands and controlling tools alone cannot solve fundamental environmental protection problems. The key issue in dealing withh water pollution at present is not technical fixes but regulatory frameworks and management. These require a comprehensive supporting reform of legislation, enforcement, agencies and policies. The existing problems of present water policies in China have various dimensions. The most fundamental cause of the problems is that water resource protection and water pollution controls are lagging far behind or even giving way to rapid economic development. There are two main problems at present in resource policies at the basin level. Policy-making currently does not fully consider the basin features, in other words, the enactment of basin-wide policies and mutual coordination are not adequate for resolving basin issues. Also, common problems are emerging in the transition period, including policy gaps and mismatches in supporting regulations for policy-making, implementation and monitoring. Policy distortions may aggravate river basin degradation.

3.3.1 Basin-wide Policy Coordination and Integration

Policy making at present is still sector-based, and not linked to basin-wide features. For instance, setting targets for reductions in COD emissions and guiding investment for pollution control are mainly based on administrative jurisdictions, not basin-wide situations or pollution trends. In the Eleventh Five-Year Plan, the principle underlying allocation of national COD discharge control indicators is that (with the precondition they meet national objectives) there should be specific treatments for the eastern, middle and western regions by taking an overall consideration of their own environmental quality, carrying capacity, discharge baseline, economic development, reduction capacity and specific requirements of pollution prevention and control. That is to say, the allocation guidance follows an administrative hierarchy: first among different provinces, then cities at the local level, with regions (river basins) last at the county level - instead of basin features.

35 However, water pollution has now become a basin-wide issue in China. Many catchments (particularly of key rivers) cover several administrative regions, and different reaches vary in water environmental functions and capacities. If the water pollutant emissions are parcelled out to different reaches and pollutant sources without considering basin-wide features, it will be very hard to improve overall basin water quality. The present basis of research (including basic data, monitoring system, water pollution load and share rate of pollutant sources) is not sound enough to allow basin-based target setting. Inevitably, the prevailing allocation policy according to administrative regions is not very scientific. Considering basin-wide pollutant transfer tendencies and prevention, it is not hard to discover the following policy distortions: pollution extends from upstream to downstream, from east to west, from urban to rural areas, and from main streams to tributaries. However, the master plans of many river basins emphasize water transfer instead of pollution control. Funding for control also largely flows to the developed downstream areas, urban and eastern regions, whereas the upstream areas suffering from severe pollution are ignored. This leads to a mismatch between actual problems and implemented solutions. Given the social and economic conditions of the upstream and western regions, an operational policy to deal with pollutant transfer, in particular an economic compensation policy, is needed. Greater public financial support and relevant institutional arrangements are also needed to attract more private investment into reducing the increasingly severe water pollution of river basins. The Water Pollution Prevention and Control Plan for the Songhua River Basin (2006~2010) was adopted after the recent serious pollution incidents in the Songhua River. Yet emergency management in many areas still focuses on temporary and obvious measures rather implementing macro-control covering a wider area and addressing root causes. According to the State Council’s 2006 Decision on Implementing the Scientific Concept of Development and Stepping up Environmental Protection, upstream provinces should compensate the downstream ones for any pollution incidents. It is both difficult to set compensation standards and also downstream regions enjoy good quality water from upstream at no cost. So who should pay for the economic losses caused by emission of polluted water into the sea? At present, during construction of large or medium scale water infrastructure and hydropower projects, there are only clearly defined regulations on compensation for land requisition and migration and resettlement policies but no specific ecosystem compensation. As development continues in the river basins, water storage increases. But most of the catchments do not have relevant water division caps. Great efforts have to be made to achieve ecological restoration, though environmental flows have been considered in some basin-wide water resources allocation. For example, to ensure four billion cubic meter of water could reach to the sea annually, a new water allocation policy called the Ordinance on Yellow River Water Quantity Regulation has been in force since 2000. These policy gaps together with ineffective enforcement mean there is still a long way to go to improve basin-wide ecosystems. As a result, river basin level support and integration of all kinds of policies are urgently required. Integration of industrial development policies and water-related incentive policies are of the first importance, so as to guide industrial structural adjustment and transition of growth pattern towards a sustainable model and to restrict the development of resource-

36 extensive and pollution-extensive industries. Second, investment mechanisms and policies for public finance need reform aimed at optimizing investment in basin harnessing and management projects under an IRBM framework. The goal should be to solve basin-wide water pollution problem and improve cost-effectiveness of investment.

3.3.2 Policy-making and Implementation in the Transition Period

Incomplete policies during the transition from a planned to a market economy have a direct impact on how targets for river basin management are met. Water resource allocation in China for a long time relied on administrative instruments. The state monopolized water rights, and government at all levels had full charge of water resource development and utilization. As market reforms deepen, water resource management has gradually been replaced by economic incentives. The major issues during this transition period are: z Administrative instruments still play an important role, but are not very effective. z Since the market economy is not fully developed and due to the prevailing political situation, many newly-established policies cannot function fully as intended. For instance, some economic incentives fail to work because of the low risk of lawbreaking and high cost of implementation caused by weak punishment. z In the transition period, the shift of government functions and division of work are not clearly defined, some policies need to be adjusted or new ones made as they are out of line and policy gaps and duplication have arisen. For example, control targets for basin-wide pollutant emission proposed by water sectors and those by environmental protection departments conflict with each other. z There is no mutual coordination or support for implementing department-based management policies. The following section is presents a detailed analysis: The efficiency of administrative policies needs to be enhanced. In China water-related administrative and compulsory policies still play a central role in dealing with domestic water issues. These will bring into incentive policies in the long term. For instance, quota administrative instruments, where those who meet quotas are praised and those who exceed them punished, are inadequate to meet the demands of a market economy. They need to evolve with the times. In order to improve policy efficiency a number of tasks lie ahead. The pace of reform of property rights must accelerate and the initial allocation of property rights be made. Compulsory policies have to be integrated with incentives. Capacity and quota indicators must be adjusted, combining capacity indicators with efficiency ones. The monitoring and collection of basic data must be improved and a unified assessment standard established. This will allow the energy saving and environmental protection objectives set out in the Eleventh Five-Year Plan to be realized. In economic policy-making, generally low water prices seriously limit any incentive to save water, enhance usage efficiency or reducing discharge. Water resource fees do not reflect their scarcity value. The average fee for ground water is CNY0.3 per ton, for surface water still less. These low fees, combined with weak enforcement and ineffective monitoring, result

37 in much unregulated and illegal exploitation of water sources. In the water conservancy project supply pricing, current water prices only cover half of supply costs. Because water costs less to use than supply, combined with low expropriation rates, project maintenance costs cannot be guaranteed, which leads to depreciation of infrastructure. In the urban water supply pricing, prices in many cities do not encourage the public to save water. In sewage treatment, the prevailing charge barely covers the cost of day-to-day operation of sewage treatment plants. Legislation is lagging behind the reform of water pricing, as is apparent in the gaps in national rules and regulations for sewage treatment and discharge fees, as well as a lack of specific measures for cost monitoring of water supply and sewage treatment. It is vital that sewage treatment efficiency be improved so as to meet the emission reduction targets set out in the Eleventh Five-Year Plan and improve basin-wide water quality. However, present policies are unlikely to guarantee targets are met (CAS Sustainable Development Strategy Study Group, 2007). There are a number of reasons why not. A system or charges for sewage charge and recycle infrastructures is still being created. In the Eleventh Five-Year Plan, new added investment for construction amounts to CNY332 billion. Although an enormous sum, it has to pay for solutions to problems like sharing fees, sewage charges, compensation of investment, price monitoring and so on. Up to June 2005, 475 cities around China had adopted the sewage treatment charging system, which revealed problems of low fee standards and levy rate; 186 cities have not yet begun charging. Figures show that in a quarter of China’s cities urban sewage fees are charged at less than CNY0.3 per cubic metre. At year end 2005, 278 cities in China had no sewage treatment plants. Only one third of existing plants operating regularly at full capacity. Construction of sewage networks in most cities was apparently insufficient or stagnant. Reform of urban public services is laggings behind. Low levels of entrepreneurship and marketisation rates in sewage treatment are unfavourable for public capital pooling and industrialization. Urbanization is generally progressing only slowly. To date, the majority of water and sewage plants have been public entities under direct government control. Though some discharge companies or corporations claim to be enterprises, they are in fact publically- run. There is no depreciation, profit-generation or strict cost management, similar to directly controlled government operations. In some projects, the percentage of domestically manufactured equipment is fairly low and use of key technologies cannot be fully implemented, which results in higher prices, and greater investment and operating costs. The sticking points are undefined property rights and a mixture of government and private enterprise, combined with unfavourable mechanisms among China’s water plants and sewage treatment plants. Technical application does not take full consideration of the country’s situation and the most practical technologies. Meanwhile, due to weaknesses in governmental monitoring and supervision, the implementation of Administrative Measures on the Franchise of Municipal Public Utilities has also encountered obstacles from sectoral interests.

3.4 Planning As stated above, legislation and governments at all levels in China regards planning as an important administrative tool. However, it often involves many stakeholders and departments. Therefore, good planning largely requires coordination among these different stakeholders.

38 There are still procedural problems in IRBM planning and implementation. The broad sectoral involvement not only makes it hard to coordinate stakeholder interests, but also difficult to implement these plans smoothly. The major problems include: (1) Contradictions on regulations of planning in existing key laws. Relationships between types of planning are not clarified. The hierarchy of plans is not clearly defined, nor is the relationship between master plan and special plan. Timeframes for plan priorities, and the nature of consultation and rights and obligations of the parties in the consultative process are also unclear. Moreover, there are too many plans without clear boundaries between master plans and special plans. In fact, some special plans are either unnecessary or should be combined into the master plan. Duplication not only wastes money but make implementation confusing. For instance, in basin-wide water quantity and quality planning, there is disagreement between regulations in the Water Law and Water Pollution Prevention and Control Law. According to Water Law, water sectors would cooperate with other sectors to make a master plan for water resource management. This should likely include provisions for water pollution control. However, SEPA holds that “water resources” only means water quantity. SEPA is responsible for drafting water pollution prevention and control plans. The pollutant emission indicators for each province are assigned based on the Eleventh Five-Year Plan and implemented by the provincial environmental protection bureaus. The plans for water pollution prevention and control and water resources do not coincide with each other, and water quality of flow dynamics is not considered as a technical factor in implementing water pollution prevention and control plan. These latter two are not in line with the international practice. There are no articles to clarify coordination and linkage between the water pollution control plan in Water Pollution Prevention and Control Law and water resource management plan in Water Law. If the two plans are not correlated with each other well, it may lead to: duplication of work; waste of limited administrative resources; unnecessarily repeating activities; and conflicts in implementation which may result in no implementation at all. Effectiveness will be severely reduced. Besides, making plans following these requirements is one thing; whether those plans are rational and practical or not is another. The authority, legal effectiveness and implementation of the plans are also in doubt. Some plans become divorced from real-world actualities and set overly high demands. Some lack authority and legal support. This contributes to severe violation of the plans, resistance to their implementation and also ineffective monitoring and supporting mechanisms. (2) Lack of real River Basin Master Plans (or Comprehensive River Basin Plans). Although the development of Master Plans was firstly started in China in ears and in early 2007 revision of the past Master Plans was kicked off, none of those plans is real comprehensive river basin plan. Prevailing planning is mainly dominated by water sectors. Though environmental departments and the other sectors participate, the degree and nature of this varies case by case. Only a few stakeholders are involved in the planning process, so previous basin-wide management plans are not real IRBM plans. At the local level, besides river basin plans, local government also develop comprehensive regional plans and special thematic plans for their administrative regions; the

39 special thematic plans include plans on water pollution prevention and control, water resources protection, hydropower development, shipping, ecological conservation and so on. Most plans are limited by jurisdictional boundaries. Without coordination with other regions in the same river basin or consideration of mutual relations, implementation performance is bound to be reduced. (3) Lack of public participation in the planning process. Without opinions from institutions and the public in the river basin, planning loses its popular basis. Existing problems in information sharing and transparency also make participatory planning more difficult. (4) Lack of detailed procedures and a system of accountability for poor performance and violations. This leads to general difficulties in implementation. For instance, IRBM is in theory the basis for water resources development and utilization as well as disaster prevention. It is also the guideline for river basin management and regional management. But it is not stated clearly in current Chinese laws who should be in charge of monitoring, evaluation and carrying out IRBM activities. Because no supervisory organizations are defined, in water administration of a river basin, departments and local authorities have only vague concepts of IRBM and in practice often violate the plans. The lack of public participation in IRBM also contributes to poor supervision and monitoring. (5) Lack of timely revision of the plans. Some plans are out-dated and have not had timely amendment. For instance, the Outline Report of Comprehensive Utilization in the Yangtze River Basin was approved by the State Council in 1990, and was due to end in 2000. However, it was not amended in 2000, which resulted in a long time gap with no master plan in place.

3.5 Public Participation IRBM as currently practised in China is mainly driven by administration. There is insufficient stakeholder participation and its coverage and degree is also limited. The stakeholder engagement system in IRBM is not fully operational. Many water-related departments, local governments, households and non-governmental organizations are excluded from IRBM development and decision-making processes. Inadequate public participation not only makes it hard to ensure public interest, but also reduces their motivation to implement IRBM activities. The Table 3.1 shows the major problems in public participation.

40 Table 3.1Problems of public participation in IRBM in China Information release Consultation Partnership building Decision-making Autonomous management National Insufficient information Generally no public Preferring sector-based Lack of public Restrictions on level released; what is, not in consultation system in administration, rarely working participation mechanisms organization registration timely fashion legislation & with the public for legislation and plans & management implementation River basin Lack of transparency in Usually no public Tendency for compulsory Lack of effective system A few NGO acting on level policy-making, consultation in river basin administration rather than for water-related IRBM, fewer on related insufficient data management and policy- strengthening cooperation organizations and public issues; no establishment of collection & information making among local governments and participation; many water users associations release concerned organizations, lack of stakeholders alienated platform for mutual discussion from decision-making Local level Insufficient information, No public outlet or Heavy dependence of Mere dependence of Limited space for regional not timely; consultation by administration; more administrative departments NGOs; sensitive responses lack of transparency in governmental institutions cooperation with strong interest in water decision-making, for NGO’s monitoring water policy-making; in water-related policy- groups (enterprises) rather than no or even unwillingness of actions of governments & poor safeguards to allow making civil society; exclusion of public participation enterprises disadvantaged groups to disadvantaged groups exercise informed rights Community Inadequate Failing to hold regular Low ratio of initiators; informal Attentions to small affairs A need to enhance the level activities; no respect for attitude for the majority & surrounding areas; quality & quantity of public opinions limited in depth community organizations participation in bigger and water household affairs associations

41 Despite rapid progress, government information released on IRBM is still not enough. For instance, the public has little access to river basin plans or environmental status reports. This information, like the administrative approval system of water acquisition permission and key project progress, is not disclosed to the public in a timely manner. A public consultation system has not yet been set up. Unlike systems in western countries where public input is required by law with specific rights and responsibilities assigned both to government and to the public, the prevailing hearing system in China, including public participation system in environmental impact assessment (EIA) is usually quite cursory. No hearing system concerning river basins has been established, and the public doesn’t have a channel to express the views. Government at different levels seem to want to continue to rely on administrative tools, without conscious public engagement and partnership building. Local government mostly work closely with strong interest groups (enterprises) rather than civil society. Voices of disadvantaged groups are largely ignored. For instance, some regions and enterprises launch projects which will consume large amounts of water, and /or cause severe pollution and discharge with economic benefits in mind. The interests of the public, who are the disadvantaged group in drinking water issues, are often not being looked after. The so-called river basin commissions don’t have commission members. There is no effective mechanism for water-related organizations, the public or provincial participation in IRBM. Many important stakeholders are excluded from decision-making, which makes it hard to balance the interests of different regions and pay attention to citizens’ rights living in the river basin. A lack of transparency and public participation in legislation, planning and policy- making is commonplace. Self-management water user are mainly confined to township and village level activities. It is rare to see such organizations on a river basin scale. China’s NGOs have made some progress; however, channels and platforms for participation are still limited. Also registration of NGOs is restricted, which needs sponsorship from governmental administrative institutions and there should not be other NGOs devoted to a similar mission within one city or province. There are also external restrictions on NGO activities. Many local governments are touchy about NGOs overseeing governmental and business practice, which limits the space NGOs can operate in. There are few NGOs in river basin activities, and fewer still participating professional IRBM affairs. Generally speaking, the role of NGO in IRBM is fairly weak. There are many reasons for insufficient public participation and weak IRBM. First, governmental factors. Influenced by traditional views of their status, some local governments are unwilling to listen to public opinion, let alone respond to it. Decision-makers usually believe that their views represent the public interest. Many of them think that public participation is a waste of time and reduces efficiency. Some decision-making processes are easily influenced by strong interest groups (like the hydroelectricity and pollution enterprises), which leads to rejection of public participation. Such local practice has been part of the culture of governance of China for thousands of years. When it comes to promotion of public participation within river basins, it is not likely to be put on the agenda and elicit government

42 interest. Second, incomplete legal framework. A preliminary public participation system has been established in China. Relevant statements have been included in several individual environmental laws. However, there is a regulatory vacuum concerning citizens’ environmental rights and interests (such as the Protection of Environmental Rights and Interests Law and Compensation Law for Environmental Damage). There are still no laws ensuring public participation in IRBM. Also, the system of monitoring and administration, fund donation, public interest litigation for NGOs is under construction, resulting in a wait- and-see attitude among the majority. Only a few people influence river treatment and protection through civil society activity or petitions to higher authorities. Third, citizens’ own limitations. The prevailing awareness among Chinese people is at a low level. Apart from big cities, in most areas people’s main focus is their livelihood. The traditional thinking of “none of my business” also limits public enthusiasm. The public usually can not get the government information in a timely fashion. A lack of public policy- making mechanisms and platforms also reduces interest. These factors and similar make it hard for the general public to get involved in higher-level public affairs such as IRBM. Fourth, poorly developed civil society. Civil society is still in its infancy. Many NGOs have shortcomings in human resources, capital and organizing ability, and remain as loose voluntary groups un-networked. The real players in IRBM at present are the “NGOs” organized by governments (GONGOs), which are closely linked to government and do not fully represent the public interest. Primary-level organizations (like the community organizations and water users associations) are somewhat developed, but confine their main activities to the lower levels of river basin management. The poor development of civil society means little prospect for good cooperation between NGOs, government and business. This leads to inequitable division of public goods within the river basins.

43 4. Progress of River Basin Management and Engineering Projects

4.1 Progress of Domestic Engineering Projects Since 1998, there has been a marked increase in investment in projects for floods prevention, soil and water conservation, water pollution treatment and water ecological restoration. Roughly 50 national projects targeting river basin management and engineering have been funded, with an average annual investment of CNY40 billion. These projects include those targeting specific basin-wide problems, sub-basin problems, and parts of basins, but do not include the Yangtze Three Gorges Project (TGP) or the South-to-North Water Transfer Project, or associated infrastructure construction such as roads and bridges in river basins. An overview of some river basin projects can be found in Attached Table 1.

4.1.1 Background to the Projects

These kinds of projects can be classified under the following three categories: (1) Projects targeting crucial basin-wide issues. For instance, the Yangtze River basin suffered from severe floods in 1998. This led to the implementation of projects for natural forest protection (“logging ban”) and conversion of farmland to forest (“grain for green”) in upstream areas, projects for returning farmland to wetland, removing lakeside embankments for releasing floods and resettlement for immigrants in the river’s middle reaches, and projects to reinforce river banks along its main streams. To deal with the major pollution incident on the Songhua River in 2005, the national government proposed a 10-year plan for “protection & restoration.” Similar projects included sewage treatment for the “Three Rivers and Three Lakes” (the Huai, Liao, and Hai rivers, and Tai, Chaohu and Dianchi lakes), and also the Pearl River Emergency Water Transfer Project for Repelling Saltwater Intrusion and Supplementing Freshwater among others. (2) Programs as support for major national hydraulic projects. Examples include sewage treatment in the South-to-North Water Transfer Project (Eastern route), a similar one on its middle route - the upstream source region of the Danjiangkou reservoir, and water pollution prevention in the Three Gorges area of the Yangtze. (3) Projects to meet new national demands. For example, with a view to ensuring drinking water safety, as part of the work for the Eleventh Five-Year Plan a rural drinking water safety project has been instituted, also one for Ensuring Safety of Urban Drinking Water Source Areas, as well as others . Plans or schemes for river basin treatment projects are normally brought forward by departments and local governments, and approved by the State Council through the NDRC (National Development and Reform Commission) and finally implemented by relevant departments. Generally speaking, projects of this kind are financed out of the central budget with some local government supporting funding. The proportion paid out of the central budget

44 varies from project to project, usually higher in Western China and lower in the east. At present, certain elements of water-related projects proposed under the water resources system have to be approved by the basin-wide organizations. Some departments in sectors like environmental protection, agriculture, transportation and construction do not have basin organizations, or only ones confined to the key basins. This makes it difficult to coordinate and integrate projects and funds at the basin level.

4.1.2 Main Areas

At present, these projects concentrate on four key fields: (1) Treatment of water loss and soil erosion, such as the project in the upstream of the Yangtze River, the Silt Retention Dam Project on the Loess Plateau, the Project for Comprehensive Prevention and Control of Soil and Water Loss in the Chernozem Region of Northeast China, and the Grain for Green project. The major implementing agencies in these projects are the Ministry of Water Resources and the State Forestry Administration. Their focus is the upstream of the Yangtze River, middle and upper reaches of the Yellow River and the chernozem region in the Northeast. (2) Flood prevention and IRBM projects, for instance, the Yangtze River main embankment reinforcement project, the Poyang Lake Regional Flood Control Project, Comprehensive Management for Dongting Lake, key treatment projects for the Lake Tai and Huai River, Standardized Levee Construction Project for the Yellow River (II stage), and projects for Returning Farmland to Wetland. The main implementers of these projects are the MWR (Ministry of Water Resources) and the river basin organizations with a focus on catchments of the Yangtze River, Yellow River and Huai River. There have also been some large irrigation and water-saving projects. (3) Basin-wide sewage treatment and drinking water safety projects. The emphasis of such projects is prevention and control of pollutants in key catchments, such as the Huai, Liao and Hai rivers and Tai, Chaohu and Dianchi lakes, the Three Gorges reservoir area and its upper reaches, the Songhua River and the eastern route of the South-to-North Water Transfer Project. These are under the overall control of the State Environmental Protection Administration. The Ministry of Construction is responsible for urban sewage treatment projects, the rebuilding of water supply networks in rural and urban areas and projects for ensuring the safety of urban drinking water sources. The key areas are cities and towns with a wide coverage within major river basins. The MWR is in charge of projects for safeguarding rural drinking water security and ensuring water sources for areas subject to serious water shortage, especially in central and western China. (4) Basin-wide water ecological protection and restoration projects. Examples of such projects include those for the Tarim River, Heihe River and the capital’s water resources, the Pearl River Emergency Water Transfer Project for repelling saltwater intrusion and supplementing freshwater, the pilot programme to transfer water and sand in the Yellow River Basin, and water transfer from the Yangtze River to Tai Lake. The above projects are organized by the MWR, targeting inland river basins, the Yangtze River, Yellow River and Pearl River. Projects for the protection and restoration of wetlands, substantial development

45 pilot projects, and those in community co-management and improvement of protection ability are implemented by the SFA. These cover a wide range of key river basins. The Qinghai provincial government is implementing the Project on Ecological Monitoring in the Source Area of Yellow, Yangtze and Lancang Rivers. The MOA is running projects to protect unique fish species in the upstream of Yangtze River. Grain for Green projects are also mostly happening along the upper reaches of the Yangtze River and middle and upper reaches of the Yellow River, helping the ecological restoration of river basins. Most of the projects above will continue to progress during the Eleventh Five-Year Plan, and state budget investment in such initiatives will see a major increase. Compared with the Tenth Five-Year Plan, there has been a shift in the emphasis of flood control, with the prevailing plan stressing the construction of flood retention areas in major rivers (the Yangtze, Yellow, Huai and Hai rivers), rehabilitation projects for deteriorating state-administered reservoirs and key water projects. The Eleventh Five-Year Plan includes provision for sewage treatment of the key catchments including for the Yellow River, Xiaolangdi reservoir on the Yellow River and its upstream, the water source area of the South-to-North Water Transfer (middle route and its surroundings, the middle and downstream of Yangtze River, the Pearl River and key boundary rivers. Key projects for integrated treatment and water ecological restoration will be extended to the Huai River, Weihe River, Shiyanghe River, Lake Tai, Hai River as well as rivers and lakes in Wuhan City and Guilin City. Considered overall, no clear tendency to increase the number of projects or funding for water loss and soil erosion (esp. Grain for Green projects), flood control, irrigation and similar is apparent. But there is a marked growth in water pollution control, safeguards for drinking water, water ecological restoration and protection. For instance, SEPA has proposed a ten-year moratorium on development of the Songhua River, which should mean no net increase of pollutant discharge to river thanks to controls on new industrial development. The Water Pollution Prevention and Control Plan for Songhua River Basin (2006~2010) contains plans for 222 pollution control projects with total funding of some CNY13.366 billion.

4.1.3 Major Progress

In general, progress has been good. Most projects have achieved their objectives and are helping reduce the degradation of China’s basin-wide issues. However, progress varies from project to project, and major gaps have emerged in investment efficiency and sustainability. (1) Specific treatment projects have had a clear impact on water loss and soil erosion. Sedimentation and flooding to the main streams of the Yangtze River and Yellow River has greatly decreased, but there has been a tendency for water conservancy departments to implement fewer soil and water conservation projects. Though investment efficiency is high, the enthusiasm for such projects from local government and farmers has fallen because central government subsides have been reduced. The Grain for Green project in the years from 1999 to 2005 became the biggest ever ecological programme in China. Central government allocated CNY103.4 during this period to pay for the set aside of 135 million mu (1 mu=1/15 ha.), benefiting 120 million farmers. One goal of the project has been to reduce water loss and soil erosion (Research Team on Sustainability of Policy of the Grain for Green

46 Projects, Chinese Academy of Sciences, 2007). Nevertheless, the overall impact of this project has been reduced to a great extent by existing problems such as finding alternative livelihoods for farmers, unfavourable investment benefits, poor sustainability and so on. (2) Flood control standards in Yangtze River and Huai River basins have been raised by the flood control projects and IRBM, generally reaching the expected objectives. However, due to erosion of the river bed below the Three Gorges Reservoir, changes are taking place in the river regime of the middle and lower reaches of the Yangtze River as well as the hydrological situation in Dongting and Poyang lakes. There are still risks from floods in the Yangtze River. Major multi-featured projects and water-saving reformation projects in irrigation areas, have however helped promote water-saving in agriculture. (3) The target set for sewage treatment projects in river basins in the Tenth Five- Year Plan was not met, and worsening water pollution has not been controlled. There are 2,130 key water pollution prevention projects, of which 488 are in the Huai River basin, 496 along the Hai River, 221 along the Liao River, 225 in Lake Tai, 46 in Chaohu, 26 in Dianchi, 38 for the Three Gorges Reservoir and its upper reaches, and 260 along the east route of the South-to-North Water Transfer Project. Total investment was some CNY71.4 billion. (LIU Xiangmei, 2007) Overall, only 60 percent of planned objectives were achieved. Main pollutant discharges remained larger than environmental capacity. No breakthroughs had been made in some fundamental environmental issues (LI Yunsheng, 2007). Pollution in key river basins is still severe, and water quality continues to decline. Most of the drinking water security projects were launched after 2006. How best to ensure these projects have a beneficial impact to 160 million farmers during the Eleventh Five-Year Plan is still a question. (4) Positive impacts have been made in slowing down water ecosystem degradation in key river basins thanks to water ecological protection and restoration projects. But there are only a few such projects and still lack of addressing hydrobiology protection, which makes it difficult affect the trend of water ecosystem degradation. Progress in the National Wetlands Protection Projects and Ecological Restoration Project in the Source Region of Yellow River, Yangtze River and Lancang River in Qinghai has been unsatisfactory, due to difficulties in cross-sector coordination and less funding from central government than planned and also inadequate technical and scientific support. Whether the projects can achieve their original goals and the investment make benefit and sustainability remains to be seen.

4.1.4 Existing Problems and Causes

Five aspects have been identified in the causes of the existing problems of IRBM: (1) Insufficient preparation, impractical objectives, irrational planning and mismatched policy and technology. The most obvious examples of this are Emergency Projects in river basins, such as the returning farmland to wetland projects along the middle reaches of the Yangtze River, also the Songhua River pollution control project, water pollution prevention and control projects for the Huai River and Lake Tai as well as the Three Gorges Reservoir and its upstream. It takes only a short cycle to develop a project proposal and get approval. The objectives are divorced from the real situation, and the complexity and time are under-estimated. Supporting policies and measures are usually missing. Many

47 projects that include “river basin” in their title, like the Grain for Green projects along the Yangtze and Yellow rivers are not in fact conceived or designed from the perspective of the river basin. This makes it difficult to achieve an integrated impact. The planning process also lacks consultation or just goes through the motions of arguing the case, without wide participation from other stakeholders and departments. This means it fails to achieve the goal of making an overall plan suited to the diverse needs of different departments and regions. Moreover supporting measures and implementation are inadequate. Also, a design concept that emphasizes treatment while neglecting maintenance increases the cost of ecological system protection and restoration and reduces investment cost-effectiveness. It should be noted that basin-wide issues are almost always long term and complex problems. Addressing them requires sustained investment. Projects lasting for only three to five years will be unlikely to achieve the desired outcomes. The goal of river basin management should be integrated into basin master plans. Also, there should be ongoing implementation of basin management projects that combine engineering and non-engineering measures. (2) Unilateral implementation without co-operation among departments. At present, most river basin projects are carried out by individual departments alone with no cross- sectoral or trans-jurisdictional coordination. This partial approach makes it difficult to resolve basin-wide issues. In projects for returning farmland to wetlands, lakes are not included in post-project administration of natural wetlands, which affects the overall IRBM program. In recent years, the NDRC (National Development and Reform Commission) integrated supporting funding for agriculture with some success. Implementation of water-related programs is also essential. Research and development are needed in the near future, as is assessment of investment benefits derived from these river basin projects, in particular, analysis of the need and proper platform for investment integration. (SUN Zhen, 2007) During their implementation, integration of river basin projects has to be made at central government level, and among relevant institutions and local authorities, so as to promote cross-sectoral or trans-jurisdictional coordination. (3) Mismatched supporting policies and measures. For instance, there are many sewage treatment plants in the Three Gorges Reservoir and its upper reaches. These plants fail to operate effectively as fees collected for sewage treatment are not enough to cover operating costs. A mechanism for sharing funding between the central and local governments is the framework usually adopted for river basin projects. But cash-strapped local governments often find it hard to achieve objectives, such as the project of Huai River Pollution Treatment. Moreover, the poor performance of some projects may become an excuse for local authorities to ask for money from the central government. Regional water-related departments fail to act as sector-insider advocates for IRBM, and the “polluter pays” principle is not fully applied for a variety of reasons. Given the difficulty of conservation and restoration, these river basin projects require long-term monetary support, in particular, an increase in public as well private sector funding. (4) Lack of effective monitoring and evaluation (M&E) and adaptive management. M & E needs to be carried out objectively and openly by independent third parties. But in fact, many departments act both as “player” and “referee,” being involved with all stages of the project process from proposal to implementation, monitoring and evaluation. Naturally, their

48 findings tend to be positive and it is hard to uncover problems and deviations over time. There is no motivation or urgency for timely adjustment of project plans or adaptive management. (5) No great importance attached to capacity building, training and new substantial mechanisms once a project finished. Many projects stress infrastructure and hardware construction, while ignoring the institutional capacity building and creation of mechanisms as well as personnel training. This not only harms project implementation, but also makes it difficult to maintain the impact and sustainability of the project. New mechanisms and personnel are rarely brought in once a project cycle is complete and thus such initiatives fail to play a full role in promoting river basin management.

4.2 Domestic Research Programs related to IRBM Currently, basin-wide issues tend to be administrative rather than technical ones. However, technical support is also insufficient, which makes problems worse and affects the efficiency and effectiveness of IRBM.

4.2.1 An Overview of Scientific Research Institutions and Plans

At the national level, there are more than nine departments in China supporting or with responsibility for research of water/ basin-wide issues. The eight agencies organized or directly under the State Council listed below sponsor and carry out scientific research of these issues in a variety of ways:, MOE (Ministry of Education), MOST (Ministry of Science and Technology), MWR (Ministry of Water Resources), CAS (Chinese Academy of Sciences), NSFC (National Natural Science Foundation of China), SEPA (State Environmental Protection Administration), CAE (Chinese Academy of Engineering) and CASS (Chinese

49 Ministries Departments Key Programs /Institutions (Bureaus)

Ministry targeting at the nation MOST Department of Social Development, National Basic Research Program of China (973 Program), National High Department of Basic Research Technology Research & Development Program of China (863 Program), National Key Project of Scientific & Technical Supporting Programs, Key Scientific Research Projects NSFC Department of Life Science, General programs, key scientific research projects Department of Earth Science, NPOPSS Office of Planning, Applied Economy Plan Approval Group General programs, key projects, youth programs

Institutions targeting at internal systems CAS Bureau of Science and Technology for Resources & Environment Pioneering programs, key projects and innovative key projects CASS Bureau of Scientific Research Foundation programs of social science CAE Division of Civil, Hydraulic and Architecture Engineering Consultation and research of CAE Division of Environment, Light and Textile Industries Engineering MOE Bureau of Science and Technology Scientific research program; seed funding, and Cheung Kong Scholars MWR Department of International Corporation, Science and Technology Non-profit programs of scientific & technical study SEPA Science and Technology Standard Department Non-profit programs of scientific & technical study Table 4.1 Sponsoring Institutions of RIBM & Key Programs

50 Academy of Social Sciences), as well as NPOPSS (National Planning Office of Philosophy and Social Sciences). Of the above, CAS and MOE organize R & D by research institutions and universities. The CAE mainly has responsibility for study and consultancy services for water-related and basin-wide issues provided by academicians and experts out of the academy. Central funding supports the study of relevant issues from different perspectives and scales in a variety of ways, as shown in Table 4.1: National Basic Research Program of China” (973 Program), the National High Technology Research and Development Program of China (863 Program), National Key Project of Scientific and Technical Supporting Programs, Key Scientific Research Projects, Science Foundation, Project of Knowledge Innovation Program, Non-profit Programs of Scientific and Technical Study and so on. There are four kinds of water-related research: (1) primary research, mainly supported by MOST (973 Program), CAS and NSFC; (2) key technical research and pilot programs, mainly supported by MOST (863 Program and scientific supporting program) and CAS; (3) applied studies, mainly supported by MOST, CAS, NSFC; 4) study of social economy and policy, mainly supported by CASS and CAS. Among the institutions currently producing research for IRBM, the key players are CAS, CAE, GIWP (Water Resources and Hydropower Planning and Design General Institute), Chinese Research Academy of Environmental Sciences, and relevant universities (smaller impact on policy-making), and affiliated research institutes within river basin organisations. The institutions affiliated to government departments play a bigger role, and can directly participate in policy-making and give professional opinions through various channels.

4.2.2 Progress of Key Scientific Research Programs in Recent Years

Since 2000, MOST has sponsored primary research on water-related/basin-wide issues and key technology pilot projects through the 973 Program, National Key Project of Scientific & Technical Supporting Programs and Key Scientific Research Projects, with a total national funding about CNY1.3 billion. Through innovation programs and key projects, CAS also gives strong support to the above scientific study and spends about CNY180 million for such research. The NSFC provides funding of about CNY150 million. CAE supports the consultancy program of water resources management with an expenditure of about CNY50 million. An overview of domestic water-related/ river basin management programs can be found in Attached Table II. Scientific research on water-related/ river basin management issues includes the following: Research of Water Resources and Water Cycle. The main subjects researched are technical systems for water-saving agriculture, hydrological processes, the water cycle, and sustainable development of water resources, and water rights and markets. Priority is given to the Yellow River and inland rivers in the northwest of China, especially the North China Plain, loess plateau and drought areas of northwest regions. The main supporting institutions are MOST, CAS, NSFC and National Fund Program of Social Sciences. Modern technical systems for water-saving in agriculture and launching of key projects and new product research proposed by MOST have a major impact, running from 2002 to 2005, with a total

51 expenditure of CNY420 million. The research was divided into three themes: pioneering and key technology, key product research and industrialization and technology integration and pilot projects. Water Pollution Prevention and Water Environment Research. The key fields are urban water supply and sewage treatment in urban and rural areas, water pollution prevention and restoration technology of water body, safety of drinking water, treatment of lake eutrophication, transfer of Persistent Organic Pollutants, and themes relevant to the Yangtze River basin, especially Dianchi lake and middle and downstream estuarine areas. Water pollution prevention and control projects funded by MOST have a bigger influence, running from 2002 to 2006 with a total funding of CNY950 million. The project list includes lake pollution control, water body restoration techniques, pilot projects, quality improvement of urban water environment, integrated pilots, measuring drinking water safety, new physical, chemical and biological technology for water pollution prevention and cure, complete programme for urban sewage treatment. Water ecological protection and treatment research. These studies look at ecological impacts brought by water loss and soil erosion, ecosystem degradation and related restoration work, ecological water supply, ecosystem of lake wetlands, hydroelectricity development and utilization. There is no clear targeting of key river basins and regions. The main supporters are NSFC and CAS. MOST has little input in this field. Water Disaster Prevention Research. Research looks at technology for flood warning systems, storm monitoring and prediction systems and risk management. The key river basin is Yangtze River. Funding comes from MOST and CAS. To sum up, the key sponsors of water-related and river basin management research are MOST, NSFC, and CAS. In terms of project numbers and funding, studies concerning water resources and cycle are best represented, followed by water pollution prevention and water environmental projects. The amount of research into water ecosystems and damage is less. Water-related and river basin management projects stress basic research, key technologies and applied pilots. Research on laws, regulations and policies for IRBM is however quite weak. Policy research concerning IRBM in recent years. Examples are as follows: (1) In 2004, CCICED (China Council for International Corporation on Environment and Development) proposed a consultative report entitled Promoting Integrated River Basin Management and Restoring China’s Living Rivers, designed to develop a framework for IRBM in China, including river basin legislation, institutions, policy, planning, public participation and technical support, and providing detailed proposals for IRBM in the Yangtze River basin. (2) CAE has organized four research consultancies since 1999 for water issues in key regions, including the Strategic Study on China’s Sustainable Development of Water Resources in 21st Century, water resources allocation in the northwest and northeast regions of China, a strategic study on sustainable development and ecosystem construction, and also a consultancy study on water pollution control in the Three Gorges Reservoir and upstream. In the Strategic Study on China’s Sustainable Development of Water Resources in 21st Century, proposals were made for reform of the water resources management system, including establishment of a water resources management commission under the State Council headed

52 by the Vice Premier and composed of senior figures from relevant departments and commissions, and other measures such as accelerating reform of the system for investment in water resources and water pricing policy. (3) From 2005 to 2006, MWR, CAS and CAE jointly sponsored a national integrated scientific survey on water and soil erosion, providing a systematic analysis of legislation, policy and planning in key river basins and treatment of water and soil erosion.

4.2.3 Key Scientific Plans in the Eleventh Five-Year Plan

As part of efforts to achieve national objectives including pollutant reduction, water-saving and drinking water security, an Outline of National Plan for Medium to Long-term Scientific and Technological Development was drafted. This placed priority on optimizing water resources allocation, integrated management of water-saving and pollution prevention, waste recycle and reuse, ecosystem restoration in ecological vulnerable areas, and identified water pollution prevention and control as key projects. No great changes were made to existing scientific programs for water-related issues and IRBM in the Eleventh Five-Year Plan. This research focuses on technology for water pollution prevention, water resource allocation, and water-saving agriculture. There will be no major changes to targeted regions and river basins, but the total amount of project funding by MOST and NSFC will be increased significantly. In the Eleventh Five-Year Plan, MOST and SEPA will initiate key projects for water pollution prevention, with a budget of CNY2 billion to 3 billion. Research will look at five aspects: i) integrated water pollution prevention in the river basins; ii) monitoring and control technology for river pollution; iii) prevention of lake eutrophication and pilots projects and drinking water safety; iv) NSFC is creating a key research proposal for IRBM designed to solve basin-wide problems; and v) the CAS action-plan for Western Development (stage II) will accelerate study of inland river basin management in northwest regions. CAE and SEPA have launched a consultancy program for the China Environmental Study, stressing corporation among different sectors and disciplines. Overall, the number of multi-disciplinary integrated research programs targeting at larger scale and complete river basins is quite small, as is funding for them. There also remains a shortage of funding for research on legislation, institution, policy and planning related to IRBM.

4.2.4 Existing Problems and Gaps

Central funding supports a lot of water-related and river basin research, and there has been progress in theory innovation and meeting national needs. But this increased public funding has not achieved all expected outcomes and does not support IRBM effectively. This lack of scientific support means no scientific basis for developing IRBM objectives. The lack of technology and policy instruments for river conservation and management makes it hard achieve the best outcomes. The existing problems and gaps can be categorized as follows: (1)Disconnect between research program proposals and real-world demands of

53 IRBM. There is a distinct lack of integrated study at the level of river basins. Little attention is paid to cross-sectoral issues, and priority is given to releasing SCI papers on aspects of the performance assessment index. This situation is not helpful for solving severe river basin- wide issues. Also, the national 973 Program, 863 Program and other similar programs give priority to breakthroughs in single elements or technology, while neglecting the integration of multiple elements and technologies. (2)Studies on policy and regulations for river basin ecosystems and management have not been funding priorities. There are a lot of water-related scientific programs, and several of them target basin-wide issues. However, the nationally-funded program stresses basic theories, key technologies and pilots, water conservancy. Environmental protection departments focus on applied engineering and technical measures. This leads to neglect of policy and regulations. Studies of wetland ecosystem conservation, environmental flows and the impact of dam control on aquatic life are comparatively weak. Few studies have been made on regulations, standards, policy and planning for IRBM, still less cross-discipline studies bringing natural and social sciences together. (3)Still no cross-sectoral coordination mechanism. Due to institutional obstacles, there is a lack of cooperation between different departments and funding channels. Duplicated investments and low-level redundant developments are found in some research fields and regions. Driven by the departmental interests (self-protection), information and data are not shared among departments, and there is in general inadequate cross-sectoral cooperation. Integrated water / river basin studies involving multiple disciplines and targets need to be strengthened. (4)The basic support system for river basin research not solid. Though departments have carried out a lot of ecosystem monitoring work in the key river basins, gaps in systematic research and ineffective coordination of the M & E index, standards and methods have created incompatibility of monitoring data. For instance, there is a big gap between pollutant discharge data of river basins supervised by environmental protection departments and those monitored by water conservancy ones. Moreover, a lack of systematic M & E and development of eco-hydrological watershed models makes it hard to supply the basic data needed to support research and decision-making for IRBM. (5)Disconnection between IRBM scientific research and actual practice. Some scientific research programs do not attach importance to solving practical problems emerging in IRBM. They also play a limited role in knowledge-sharing, technology popularization, and pilot models. Supervision by relevant departments is not in place during the project cycle, leading to waste of money and resources. Research needs to include end users to ensure it has practical results. This can happen by setting up a project Steering Committee that has the power to change, if necessary, the project direction to ensure its delivery of useful results.

4.3 International Assistance Projects For more than two decades, a number of international organizations have worked with various levels of government in China to implement a large number of water-related projects. Water- related issues are one of the significant areas in international cooperation assistance in China.

54 Below is an outline of water-related projects known to this project implemented in China by international agencies. In spite of various international activities in this respect, supported projects related closely with IRBM are still very new. The demand in China in this respect is so great that the international community has many opportunities to develop activities.

4.3.1 Overview of International Cooperation Projects

Although there are many water-related international cooperation projects, relatively few provide direct services to IRBM as their core task. Of the water-related international cooperation projects completed in recent years, the following are directly related to IRBM: the ADB-funded Yellow River Law, the Environmental Management Project for Administrative Divisions in the Yellow River basin, Songhua River Basin Water Quality & Pollution Control Project, and the IRBM Task Force research project of CCICED. There are 104 water-related international cooperation projects we were able to collect details of currently being implemented. Table 4.2 shows the status of these projects. A further eight international cooperation projects are planned. Categorised by their relevance to IRBM, 33 of the projects are highly concerned with IRBM (See Attached Table 3 for detailed information). Because of the limited information collected, the status of these projects is not yet fully summarized. However, this project list reflects the general picture of activities engaged in by international organizations in China. The main conclusions are as follows: Of the water-related international cooperation projects, being implemented 51 are multi- lateral assistance projects, 40 are bilateral projects and 13 are supported by international NGOs. In terms of IRBM relevance, 81 are intermediately so and 33 highly relevant to IRBM, of which 14 are funded multi-laterally, 10 bilaterally and six by individual NGOs.

Table 4.2 Overview of International Assistance IRBM Projects Being Implemented in China (Incomplete statistics) Categories Supporting No. of Projects being Funding （ Unit: one Parties Implemented million U.S. dollars） All water- Highly relevant Projects being related projects implemented projects (intermediately and highly relevant ones) Multi-lateral assistance World Bank 15 6 1022.2 ADB 23 4 326.6 GEF 13 4 21.83 Bilateral assistance EU 8 2 28.73 Japan 4 1 4.8 Australia 9 2 1.5 U.K. 6 2 11 Germany 4 0 U.S. 1 1 Holland 2 2 Canada 1 1 Switzerland 2 2 Norway 2 1 Sweden 1 0

55 Categories Supporting No. of Projects being Funding （ Unit: one Parties Implemented million U.S. dollars） International NGOs WWF 5 3 8.1 Conservatio 22 n TNC 2 2 GWP 2 0 others 1 1 In total 104 33 1432.76 Note: All the figures in this table are rough figures only; blanks represent no data available. z The number of projects implemented shows that multilateral is the most common type of assistance accounting for half of all the practiced projects, with the World Bank and ADB prominent funders. GEF serves as the other important international supporter; its projects are implemented by the World Bank, ADB, UNDP and UNEP. There are several bilateral supporters with the EU, Japan, the U.K. and Australia carrying out most of the projects. As to international NGOs, WWF, Conservation International, TNC and GWP are most active. Some other international NGOs such as the Ford Foundation, Rockefeller Foundation, Wetlands International and IUCN also carry out projects related to river basins but information on these was not gathered for this report. z Incomplete statistics for funds for projects being implemented say about USD3.4 billion is being spent on intermediately and highly relevant projects. USD1.4 billion has been allocated to projects highly related to IRBM and about USD1 billion is earmarked for upcoming projects. Although our information is incomplete materials, most funding is known to come from multilateral assistance, the World Bank and ADB in particular. Of course, funds from World Bank and ADB are mostly loans. This is different from bilateral assistance or the free aid given of international NGOs. z Water-related projects have always been focal points for international assistance to China. However, most past projects centred on cities and rural areas in the West and very few were designed from the perspective of IRBM. IRBM projects in this respect are only in their preliminary phase in China and for this ADB and CCICED (China Council for International Corporation on Environment and Development) have made a great contribution. For some years now international support has increasingly gone to IRBM projects with comprehensive programs for river basins. It is a burgeoning field for international assistance. z Current IRBM projects are mostly concerned with aquatic ecosystem conservation and water pollution control in river basins, which corresponds the practical demands from IRBM in China. Of the 41 IRBM related projects being or due to be implemented, 13 focus on aquatic ecosystem conservation, 10 on water pollution control, and 11 on water disasters and water resource management. There are also some projects for IRBM capacity building. z In terms of areas where these projects are implemented, they cover almost all the major river basins of China, with most projects in the Yangtze River Basin (including sub-river

56 basins such as Tai Lake, Hanjiang River and Dongting Lake), about one half of the total international projects. Other river basins or sub-basins also have some international projects related to IRBM, but not as many.

4.3.2 Main Supporting Parties

The World Bank is the foremost supporter in the environmental field in terms of both projects and total funding, and has begun to prioritise funding treatment of river basins over recent years. Almost all of China’s main river basins have World Bank’s IRBM projects underway, they emphasize integration and place special concern on the water environment and aquatic ecosystem of river basins. The management system and capacity building are stressed in the design of many projects. In 2004, the Bank started carrying out projects in the Hai River basin with an aim to accelerating integrated management of river basin water resources and water environment. In the Tarim River Basin Project, the Bank actively worked with Xinjiang AR government to set up China’s first River Basin Management Committee adopting a full participatory approach. In 2006, the Bank commenced a project for the Yangtze and Pearl River basins to restore the headwaters. In a project for stagnant water drainage in swales of key plains in the river basin of Huai River started formally in 2007, the Bank requires that farmers’ drainage associations be set up to boost public’s participation. The Bank also provides financial aid to projects promoting pollution treatment in water areas of Tai Lake and Pearl River Delta. The Asian Development Bank (ADB) acts as another important international supporting party. The environmental projects aided by ADB in China cover a lot of areas with water management being the preferential area. As of 2003, ADB had subsidized the “Environmental Management Project over Administrative Divisions” in the basin of the Yellow River, which gives priority to studies of legal, financial, management and social issues in the Yellow River’s protection. The major river basin management projects implemented by ADB in China are Songhua River Flood Control Project, Wetlands Conservation Project on the Sanjiang River Plain, Water Pollution Control Projects in River Basins of Huai River and Tai Lake as well as Integrated Ecosystem Management and Environmental Protection Project in the River Basin of Baiyangdian Lake. The Global Environment Facility (GEF) is also a key international supporter. Together with the Ministry of Water Resources and State Environmental Protection Administration, GEF is implementing an Integrated Management Project of Water Resources and Water Environment. With ADB as its partner, GEF is developing an Integrated Ecosystem Management and Environmental Protection Project in the River Basin of Baiyangdian Lake. It also plans to carry out Natural Conservation and Flood Control Project in Yangtze River Basin. In the designs of these projects, coordination between the basins’ economy, society and ecological environment as well as capacity building of related institutions are emphasised. WWF (World Wide Fund for Nature) serves as an active facilitator of China’s integrated river basin management. After the major flood disaster in 1998, WWF China started a project in Hunan called “Partnership for a Living Yangtze River,” which aims to work over 25 years to restore a vigorous and living Yangtze River. There are many WWF IRBM projects in the

57 Yangtze River basin, including restoring wetlands and lakes, enhancing flood control capacity, promoting the corporation between regions and local governments, advancing community education and NGO capacity building as well as expanding public participation in the management of water resources. The European Union (EU) is China’s biggest bilateral supporting party. From 2002 to 2006, the budget for the cooperating projects of EU and China was 250 million euros, 30 percent of which was allocated to environmental protection and sustainable development. One of the biggest environmental projects is the Sustainable River Basin Treatment Project on the Liao River. At present there are at least eight EU projects in China related to IRBM, including an IRBM promotion project for the upper reaches of Yangtze River and middle reaches of Yellow River as well as an integrated management project for the Brahmaputra river basin. The UK Department for International Development (DFID) focuses on poverty alleviation in its cooperation with the developing countries. As far as the challenges faced by China’s water resources are concerned, DFID tries to raise people’s living and health standards by improving the management of water resources and providing sustainable clean drinking water. It also cooperates with other international organizations to support the Chinese government to reform departments of water resources after the revision of the Water Law in 2002 involving the enlarged participation of users, methods of integrated water resources management, new water and soil conservation methods and wider provision of drinking water and health systems. There is at least USD25 million in assistance to China from DFID in current water management improvement projects. The other important aid donor to China is Japan, which concentrates its official developmental assistance here on environmental projects. In 2004 the Japanese government announced that water resources management would be viewed as a primary concern through afforestation, prevention and treatment of desertification and management of catchments. Now the Japanese government has consulted with the Chinese government, considering its termination of loans denominated in Yen to China as of 2008. After that Japan’s official aid to China will focus on systematic reforms and human resource development instead of infrastructure construction. For the moment Japan is carrying out the Sino-Japan Cooperated Large-scale Demonstration Project of Water Conservation and Reconstruction in Irrigational Areas aimed at introducing and drawing upon Japan’s advanced technologies and successful experience in modernization construction of irrigational areas. Another important project is the Sino-Japan Cooperated Project of Hanjiang River Flood Forecast and Yellow River’s Water & Soil Preservation, which focuses upon supporting the purchase of flood advance warning and forecasting equipment and networks to increase Hanjiang River’s flood control capacity. Australia, through AusAID, is also one of the major donors to China. Australia’s development program in China has had a strong focus on environmental development, and Australia wishes to build upon these experiences in its future development program. AusAID’s 2002-2005 environment program in China included a range of environmental activities: some are related to the rehabilitation of degraded areas with linkages to poverty reduction and income generation; others involve dry land agricultural management and irrigation. Water management and water quality has been a significant feature of the program.

58 There have also been jointly funded activities with multilateral agencies in biodiversity conservation, basin environmental management, water supply and the promotion of renewable energy. The projects that have been implemented include: Water and Agricultural Management, and Yangtze River Flood Control and Management. In addition, AusAID is also engaged in the Environmental Management Research of Tarim River Project (2nd Phase) financed by the World Bank. The Australia China Environment Development Program (2007-2012) has just been launched by AusAID. Aimed at improving environmental protection and natural resource management to balance the needs of the environment and human development in China, has water resources management as its key area. These projects focus on institutional development for water rights, and research on the current state of and strategy for IRBM. IRBM will be listed as a major area to be funded by AusAID in its plan for environmental collaboration over the next five years. Current activities include Water Entitlement and Trading Activity (Phase 1 during March-October 2006 and Phase 2 March-December 2007).

4.3.3 Needs and Gaps Analysis and some Suggestions

Although the international community has lots of water-related aid projects in China, due to the complexity and difficulty of resolving China’s water issue, this field still demands effective international aid projects, especially projects mainly concerned with IRBM. As China’s water issue is increasingly centred on river basins, project demands in these areas are rapidly becoming ever larger, providing many opportunities for the international community to take action in this field. First, more funds and projects are needed in areas relating to river basin management. Past international environmental aid projects to China were mostly centred on certain regions and cities. River basins, as the most ideal units for the improvement of water environment were not paid sufficient attention. In our list of 104 water-related international aid projects being implemented now, only twenty percents are designed from the perspective of river basins. More projects are however working from this perspective, yet they are still too few in number. Against China’s ever-worsening basin-wide issues, there is still a big gap between supply and demand. Second, investment in the fields of water environment and aquatic ecosystem need to be improved. The issues of water environment and aquatic ecosystem are new challenges for China’s river basin management. Compared with traditional problems of water resources and water disasters, these two issues in river basins require greater attention. In 41 international cooperation projects related to IRBM being implemented or due to be implemented soon, 23 emphasize water environment and ecosystems. More than half of these, however, are carried out in the basin of the Yangtze River (including Tai Lake). More concern should be given to the Hai River, Huai River, Songhua River, Liao River, and Yellow River which have more serious water pollution and water ecological degradation. To strengthen the water environment, aquatic ecosystem and IRBM will be the developing trend of future international cooperation projects. Third, many key river basins need more international project support. In 33

59 international cooperation projects highly concerned with IRBM that are being implemented or due to be implemented soon, about one third is in the Yangtze River basin. In the other main river basins like Yellow River, Huang River, Songhua River, Hai River, Pearl River, although there are some international cooperation projects, compared with the Yangtze River basin, the amount of projects is much smaller.

60 5. Conceptual Plan and Recommendations to Promote IRBM in China

With rapid economic growth and socioeconomic transition, China is facing increasingly serious basin-wide problems. Due to the diversity, complexity, severity, and ongoing nature of water issues in China, this Report concludes that, based on the lessons learnt from domestic and international practices, IRBM is the practical way forward to improve the river basin conditions in China. There is a need to acknowledge that promoting IRBM in China will mean facing many challenges ahead on laws and regulations, management mechanism, policies and governance. In addition, it will take a long time to shift from traditional management models reliant on administrative measures and fragmented governance to IRBM. Such a transition will not succeed if we only rely on past experience. There are at the same time unprecedented opportunities in China for introducing IRBM. The country is going through a great era of change, in which economic and social structures and government agencies are undergoing a new round of adjustment. Moreover, official policy calls for a scientific outlook on development and the building of a “harmonious society.” IRBM will also bring mandatory targets for energy saving and discharge reduction as well as a comprehensive action plan for the targets. In this context, opportunities must be seized. We must learn from best practices at home and abroad and adopt comprehensive policies and priorities appropriate to unresolved basin- wide resource, environment and management problems as they currently exist. This makes it necessary to expedite changes in river basin management mechanisms and systems, improve basin-wide governance and begin to move towards IRBM, in order to realise sustainable development in China’s river basins.

5.1 Goals The goals for implementing IRBM in China are as follows: (1) To provide people and industries with an adequate water supply of sufficient quality and diversified ecological services through integrated management of water resources, water pollution, water ecology and water-related hazards; (2) To prevent and mediate cross-sectoral and trans-jurisdictional conflicts of interest by instituting integrated and coordinated development of all water-related industries such as urban water supplies, agriculture, hydropower development, fisheries, shipping, tourism, recreation and water treatment; (3) To ensure the intensity of human activity is compatible with the carrying capacity of rivers and to maintain the natural hydrological and biogeochemical processes of rivers and related groundwater systems; (4) To safeguard the big river basins from devastating floods, reduce losses due to flood

61 and drought, and build capacity to adapt to climate change and deal with emergencies; (5) To guide and coordinate environmental protection and ecological restoration in river basins and maintain the health of rivers, so as to achieve the harmonious coexistence of humanity and nature as well as the sustainable development of river basins.

5.2 Principles Domestic and international experience indicates that the following principles need to be followed when promoting IRBM: (1) Rule by law. Supporting legislation and regulations are fundamental to effective river basin management. The establishment of supporting laws and legislation systems is a clear requirement for implementing IRBM. The rights and obligations of stakeholders, the responsibilities/accountabilities and authorities of river basin agencies, as well as the management system, incentives and penalty mechanisms also need to be clearly defined. Due to differences among river basins, special regulations for each major river basin should also be considered and developed. (2) Combination of centralization and decentralization. The decision-making process should be democratic and consultative so as to mobilize various administrative bodies to participate in river basin management. At the same time, the power of river basin planning, developing standards, monitoring, and water resource allocation should be centralized, so that the river basin management agencies have the authority and capacity to coordinate the process of implementing IRBM. Through this combination of centralization and decentralization, the powers of decision-making, execution and supervision can be divided, so that the provincial governments can be more empowered in managing the tributaries of large rivers and the rivers within their jurisdiction within a framework of IRBM. This would include an independent, transparent reporting system against which their performance could be judged. (3) Combination of economic and administrative means. River basin authorities should shift from building and operating water infrastructure to offering public goods and services in the market economy. Governments need focus investment on comprehensive water pollution prevention and control, restoration and rehabilitation of ecosystems, and water resource conservation, and thereby enhance their roles in environmental protection. Market-friendly management mechanisms are needed, including improves ‘user to pay’ rules for natural resources and a market-oriented reform of the water pricing mechanism in order to break the monopoly in the water market and foster diversity. Meanwhile, administrative means should play a better role in IRBM and be combined with economic means so as to enhance synergies and efficiencies. (4) Coordination between resource exploitation and environmental protection. These two factors are linked and may also come into conflict. In past exploitation of water resources, economic functions have been overemphasized compared with ecological ones, resulting in unreasonable exploitation and degradation of rivers. Under an IRBM framework, these two functions of rivers would be given equal attention, so as to achieve balanced economic, social

62 development and environmental protection in the river basin. For example, adoption of the polluter-to-pay principle will mean the cost of any waste water treatment is charged at a price to return the water to its original quality or fit for the next purpose if not being discharged to the river. (5) Broad participation and fairness. Policy development and plan implementation processes for river basin management need to include institutionalized participation mechanisms to ensure that all the stakeholders can participate and the views of various interest groups can be expressed. To ensure fairness in the design mechanisms, compensation measures should be made to guarantee the rights of poverty-stricken areas and disadvantaged groups. (6) Ensure information disclosure and decision-making transparency. Compulsory information sharing and publicity rules should be established to secure common access to information across sectors and regions, with the release of full and accurate information in a timely manner to the public. Information disclosure and transparency in decision-making within river basin management should be gradually introduced.

It takes a long time to implement IRBM. Alongside the above fundamental principles, practical principles of ‘comprehensive planning, full consideration of uniqueness of each river basin, putting pilot IRBM project first, and stepped implementation of IRBM across the country’ should also be followed to systematically and incrementally implement IRBM in China.

5.3 Vision and Framework To achieve IRBM targets with the above mentioned principles in place, proper systematic actions in legislation, institutional reform, organizational restructuring, S & T support, information sharing and public participation are required. These would see a shift in China away from conventional river basin management to IRBM. Below is the vision for IRBM in China. (1) A policy and legal system should be established to govern IRBM. National legislation would be developed or current laws amended, and the concept of IRBM would be incorporated into relevant rules, regulations and laws of China. (2) A national-level IRBM coordination mechanism should be created. An IRBM organization suited to the Chinese context should be set up at the river basin level to facilitate broader participation of all stakeholders. (3) A comprehensive mechanism to promote IRBM should be established, including an administrative and economic policy system, and incentive and restriction mechanisms. Efforts should be made to establish a system for supervision, scientific research and technological innovation to facilitate implementation of IRBM. (4) An information sharing and release platform should be set up, which will help river basin management decision makers, stakeholders and the public get convenient and timely access to information about problems within a river basin that they can give feedback on, as well as lessons learnt in one basin to readily accessible to other basin stakeholders. (5) A government-business-public partnership should be developed in line with laws and regulations to create a broad-based, efficient and diverse cooperation mechanism and

63 participation channels.

5.4 Priority Areas and Actions In the following section, for each priority area under the IRBM framework such as legislation, institution, policy, planning, public participation, and S & T support, the report will propose principles, recommendations and priority actions for research, reform and development.

5.4.1 Improve legislative framework and revise laws (1) Basic principles z The basic goal is to ensure an efficient and appropriate IRBM institutional and organizational setup, and to clarify the responsibilities and obligations of stakeholders. z Since extensive reforms will be ongoing in China, the amendment of legislation and institutional reform should be conducted gradually, and take into consideration the experience of other countries and China’s national situation. Changes to the legal framework should keep pace with reform of administrative system. Neither can be neglected. In the short term, the emphasis should be on the integration and amendment of the existing laws and regulations in order to meet the needs of IRBM. In the long run, priority should be given to establishing an IRBM legal system suited to Chinese needs. z Reduce the power of sectors in legislation while enhancing public participation and try to reduce the conflicts between various laws. z Terminologies and explanations used in various laws should be consistent. Ambiguous or incomplete articles should be clarified and included. Measures for implementation and supervision should be more clearly defined to make clear the responsibilities and power of each sector. z An independent system of checks and balances should be established to strengthen the accountability of government officials, avoid arbitrary decisions caused by vague articles in laws and regulations, and punish officials who violate or do not execute laws. z Delegate some authorities to NGOs or independent bodies through administrative permits.

(2) Recommendations Recommendations for national legislation as follows: z Revise existing laws and regulations integrally Given the conflicts between laws on river basin management in China, lack of IRBM concept, vague definitions of participation, vague definition of responsibilities and obligations

64 of stakeholders, a careful review of related laws as a whole is urgently needed. They must be, systematically revised to incorporate IRBM. In practical terms, there are a few options, such as: a) revising the laws by adding explicit articles; b) developing detailed rules for implementation after laws come into force to ensure the laws can be implemented; c) developing special river basin law, d) developing laws for important river basins, such as the Yangtze Law and the Yellow River Law. In the short-term, revising the current laws to incorporate IBRM is the most effective way to support the implementation of IRBM; in the long-term, a new legislative framework in favour of IRBM should be considered. Further study on this should be made. Neither comprehensive river basin legislation nor special legislation for important river basins should not be driven by any single sector or department, to ensure the laws will become fundamental base for integrated management across sectors.

z Add articles about stakeholder participation into related laws. Stipulations on IRBM and stakeholders participation need to be developed, e.g., procedures for public participation, in the determination of pollution incidents, and of settlements, which are absent from current laws. Some laws should be revised to include these articles. z Formulate nonfeasance or malfeasance in execution and penalties for violations. Nonfeasance of government agencies is a common problem, partly due to unclear laws and regulations, lack of penalty articles, lack of accountability and public participation. Therefore, penalties for nonfeasance and public participation should be included in national laws and regulations so as to empower the public to supervise nonfeasance and protectionism by local governments. In cases where violations are not punished, or agencies with execution authority default, the public will be able to urge defaulters to fulfil their obligations through judicial procedures. z Clearly define the responsibilities and accountabilities of authorities for water environment management. Currently the responsibilities of various actors, for example, environmental protection agencies, local water conservancy agencies, river basin organizations and other related authorities, are not clearly set out. This has brought about serious management problems. Therefore relevant laws should be modified in order to define clearly the responsibilities of different authorities. z Stipulate mutual compensation between the upstream and downstream. Water pollution across jurisdictions is to some extent about the rights to develop regions from upper to lower reaches. It is not fair for upstream regions to only be required to reduce discharge of pollutants so as to meet the requirements on water quality for downstream, particularly where the upstream region is less economically developed. Therefore, measures should be taken to secure development opportunities for them, for example, appropriate compensation mechanisms or transfer payments. Compensation could be fiscal assistance by the

65 national government, low-interest loans, basin-wide funds, rights in discharge transactions and agreements on joint water use and flood control. If the upstream pollutes downstream, water quality standards, the polluters require that they reimburse the victims. This is also applicable as river pollution happens across provincial boundaries. z Develop information sharing and disclosure rules. Information on water quantity and quality is vital for water users. At present, there are no means to collect, process, disclose, inquire, and use such information. Thus disclosure of water environment information should mandated by revising current laws. This will enable various organizations to share information when necessary, which will better serve decision making; and also the public will be able to obtain related information, influence the behaviour of governments and enterprises, and thus safeguard their lawful rights.

Recommendations for coordination between Law of PRC on Water Pollution Prevention and Control and Water Law as follows: z Standardize the terminology Some terms and definitions in the Water Law and Law on Water Pollution Prevention and Control are not accurate, or not defined, or hard to be understood. This leads to difficulties in interpreting provisions and solving problems. For example, there is no clear definition in law of “water pollution,” “water environment,” “water affairs,” “water resources,” “water quality,” “water quantity,” “water pollution tolerance,” “environment carrying capacity,” or “discharge load.” Nor are water pollution incidents / accidents clearly defined. Clear definitions should be developed to eliminate misinterpretation before revising other concerned provisions. Attention should be given to the linkages between water function zones and water environment function zones while amending the above laws. z Clarify the status and responsibility of river basin organizations At present, the status and responsibilities of river basin organizations are not clear, which makes it difficult for them to perform their functions. Since basin-level organizations have been in place for a long time, and have been provided with rich resources in equipment, technology, personnel and information, they can play an important role in river basin water environment and water resource management. With these factors in mind they should be given a fuller role when adjusting the Law on Water Pollution Prevention and Control and Water Law. For example, in establishing new river basin water environment management systems, full consideration should be taken of the actual conditions within existing basin-level water resource protection organizations and fuller roles granted them in the new system. z Clarify monitoring sectors and their responsibilities Responsibilities should be clearly defined for the different sectors involved in monitoring to eliminate any overlap. The Laws on Water Pollution Prevention and Control should stipulate explicitly that if river basin organizations fail to report results to the environmental protection

66 and water resources management sectors under the State Council, and to basin-level water resource protection agencies as the law demands, the persons and organizations responsible shall be given administrative punishment. z Improve pollution incident and dispute settlement system When the environment quality of a river at a provincial boundary is below standard, river basin organizations or local government on the lower reaches should report this to higher levels in government. Government at higher level will hold local government on the upper reaches responsible. If government or sectors in charge do not take responsibility as above, the public will have the right to bring an administrative lawsuit to court and the people’s court may order polluters to take responsibility. As for dispute settlement mechanisms, the Water Law and Law on Water Pollution Prevention and Control should have a clear definition for different types of disputes and the processes for how they will be settled.

Other Recommendations on Legislation as follows: Given that local legislation is an integral part of IRBM legislative system, it is recommended that there should be a systematic framework for local legislation. Major recommendations in this regard include: z As the legislative capacity in different regions varies, extensive training and expert consulting services need to be organized or experts can be invited to draft local legislative models for reference in the regions where there are insufficient professionals. z Local legislation should be closely linked with the river basin legislation and national legislation to integrate them as a whole. z Local legislation should emphasize and enable participation of all stakeholders and coordinate the responsibilities of all sectors. z Local legislation should emphasize operability and promote the establishment of procedural regulations and responsibility investigation systems.

(3) Priority actions The priorities in recommendations for legislation include: Priority action 1: Study of feasibility and legislative model for IRBM legislation Legislation on river basin management is crucial to promote IRBM. Therefore, it is necessary to conduct research on feasibility and legislative models. Issues include: whether to make a single river basin management law at national level or specific laws for each major river basin; and how to formulate the basic framework and legal system. Priority action 2: Study amendment to Law on Water Pollution Prevention and Control and Water Law under IRBM framework When revising these two laws, sector-based legislative procedures used in China in the past

67 will not be appropriate. Detailed research must be conducted first on how to revise the laws from the perspective of IRBM, to ensure the two laws have their own clear roles and responsibilities in IRBM, to clarify the sectoral responsibilities and intensify the coordinating mechanism, so as to facilitate the enforcement of these two laws within the framework of IRBM. This study should be accomplished during the Eleventh Five-Year Plan. Priority action 3: Support local legislative capacity building As legislative capacity is weak in many regions, especially in central and western regions, legislative capacity should be built by providing training and expertise to make local legislation models.

5.4.2 River basin management organization reform Despite existing problems, there are some favourable conditions for the operation of IRBM in China. For instance, the political strength of the central authority can help facilitate the resolution of emergency problems effectively. Thus China’s flood and drought prevention and control system has achieved significant progress. In future administrative system reform, emphasis should be placed on creating a scientific, democratic and systematic decision-making process gradually, as well as the strengthening of stakeholder participation. (1) Basic Principles A sound IRBM institutional structure must be science-based and flexible to ensure stakeholder participation. The following basic principles should be followed to create a sound IRBM institutional structure: z Institutional reform should take the following two models into account when implementing IRBM in China: the top-down model which means to start restructuring from the State Council and other major administrative system at the national levels; and the bottom-up model that is to develop appropriate basin organizational arrangements with features suited to different basins. z Administrative reform should create a transparent and participatory process, which can reduce the possibilities of improper administration, and ensure smoother adoption and enforcement of the decisions. z Local and sectoral interests must be subject to the overall interest of the river basin. River basin management and regional management must be combined well and be interlinked. Administrative functions (like issuing water extraction permits) and commercial service functions (such as water supply and discharge) should be separated in the new management system.

z A responsibility system for government officials should be developed and implemented. Law enforcers should be accountable to the public through many mechanisms such as planning supervision systems, third party evaluation and reporting systems, public consultation mechanisms, and environmental information disclosure systems, a system for the public right to know and an independent

68 reporting system that evaluates the efficiency and effectiveness of government agencies. z In the administrative system of the country, various measures should be adopted suited to different administration levels and local conditions. For instance, the administration of local water affairs may vary from that of the central government. Different regions can also set up specialized management models that are adapted to local circumstances. z A responsibility system and performance evaluation indicator system for the governmental departments should be established. If the government agency fails to implement as the law requires, the public should have the right to seek legal redress in the courts. z Explicit dispute resolving mechanisms should be established, including consultation mechanisms, arbitration mechanisms, and litigation mechanisms. The public and private sectors and individuals should enjoy equal treatment before the law.

(2) Major recommendations Institutional reform is one of the cores of IRBM reform. IRBM cannot be implemented without an appropriate basin management organization. Yet since the reform involves many organizations, it must be carried out cautiously with full consideration of the particular features of each river basin, without any generalization or hastiness. We suggest that the river basin institutional reform should proceed step by step, with short-, medium- and long-term phases. In detail, the short-term refers to the period of the Eleventh Five-Year; the medium-term refers to the period of the Twelfth Five-Year; and the long-term refers to the period after 2015. In the short-term, the key tasks are to strengthen coordination among central government departments, and to best fulfil the mandates and responsibilities of the current water related institutions and river basin organizations. At national level, a River Basin Management, Coordinating and Leading Group of the State Council should be established. It is a high level coordination organization. It should be leaded by the relevant leader of the State Council and with participation from concerned ministries. It is responsible mainly for coordinating the key issues in legislation, planning, standard formulation, policy making among different departments in river basin management, and be responsible for dealing with conflicts among departments and jurisdictions. Meanwhile, it is responsible for the coordination of implementation of laws and policies and reducing the overlaps of duties of different departments. At river basin level, water resource and water environment management systems adapted to individual basin circumstances should be explored and developed in each river basin. Setting up cross-sectoral and trans-jurisdictional coordination mechanisms should be explored, such as establishing Water Resources and Water Environmental Protection Committees for each river basin with the participation of organizations from the ministries at the central level, as well as governments from major provinces at the river basin, or create a joint meeting mechanism for

69 river basin water pollution prevention and control, in order to strengthening the coordination between water resource conservation and water pollution prevention and control. Meanwhile, reform should be carried out for existing river basin organization and regional environmental supervision centre, so as to make them perform their duties well. Figure 5.1 illustrates the institutional arrangement in the short-term. It emphasizes the coordination among departments at both central and river basin levels. In the medium-term, the core tasks are to strengthen the decision at river basin level, and play the role of local governments at river basin management gradually. At the national level, to enlarge the scope of duties of the River Basin Management, Coordination and Leading Group of the State Council. Based on this Leading Group, a River Basin Comprehensive Management and Coordination Committee (or Resource and Environmental Protection Committee of the State Council) should be established. This organization is still a high level coordination and decision making organ. The relevant leader of the State Council takes the position of Chairman, with the participation of other departments. The duties of this organ is coordinating and decision making for trans-departments and trans- jurisdictional issues. At the river basin level, based on exiting River Basin Water Resource and Water Environmental Protection Committee or River Basin Water Pollution Prevention and Control Joint Meeting, extending them to a River Basin Coordination Committee, with participants from central government and provincial representatives at each province of the river basin. It will be a coordinating and decision making organ for IRBM, and plays its IRBM right with the authorization by the State Council. At the initiative stage of this Committee, more members may come from the central government. They play major role. Gradually, the number of local representatives may be added. Their roles may get stronger. The river basin organization of each department as well as the relevant organizations at each province will play the executive roles, and enforce the IRBM decision. The organization arrangements for this term are shown in Figure 5.2. This is also a transitional arrangement. The key issues are the coordination between river basin management and regional management, and strengthen the decision management at river basin level. In the long-term, the decision right and enforcement right should be separated. A democratic participating and high efficiency coordination river basin management system should be established. With the increase of local participation in river basin affairs and the change of China’s macro political and economic situation, the local autonomy ability at the basin level should be strengthened. A new IRBM system with Chinese characteristics should be established gradually. At the national level, the River Basin Comprehensive Management and Coordination Committee (or Resource and Environmental Protection Committee of the State Council) created at the medium-term will be upgraded to a real IRBM committee. This Committee should be leaded by the relevant leader of the State Council. Ministers of each ministry at the central level will be members of the Committee. Its duties are to coordinate the key river basin management issues among ministries. When issues concerning a specific river basin are raised, the

70 representatives from relevant provinces will be invited to participate. At the river basin level, a modern basin organization centering on stakeholders would be authorized to be established by new legislation. Members of this organization would be representatives of major stakeholders in the basin. Its main responsibilities would be planning, reporting and coordinating. It would also have important financial allocation powers in relation to IRBM. It would be the most important basin-wide decision-making agency. The river basin organization would be independent from all government agencies, but would carry out its work in accordance with relevant regulations, plans and assignments from the State Council. Within the river basin, there are executive organizations for basin management, including the basin-wide management authorities of related central government departments, related provincial organizations, and independent assigned organizations. They are supervised by the river basin organizations and undertake the activities delegated to them. Figure 5.3 illustrated the institutional arrangement of IRBM for the long-term. The characteristics of this model are to emphasize the power of river basin management organization authorized by law, the wide participation of stakeholders, and high level local autonomy.

Central level: z Leaded by State Council head, Basin Management with participants from ministries Coordination and Leading z High level coordination organ, coordinate key trans-sector issue Group and conflicts

Coordinating level: z Composed by departments at River basin water resource and water central level and provincial environment protection committee or basin governments at the basin z Strengthen the coordination on water pollution control joint meeting system water resource and pollution control

Decision and enforcement level: z Related departments, basin Relevant departments Basin organization at organization and local government z Making decision and enforcing in provinces each department IRBM related issues

Figure 5.1 IRBM System in the Short-term

71

Central level: z Leaded by State Council head, Basin comprehensive with participants from ministries management and z High level coordination organ, coordination committee coordinates key trans-sector issues and conflicts

Decision and coordination level: z Composed by departments at Basin coordination and central level and provincial management committee governments at the basin z In charge of basin planning, management, coordination and supervision work

Enforcement level: z basin organization and local government Related provincial Basin organizations z Enforcing IRBM related issues departments of departments

Figure 5.2 IRBM System in the Medium-term

Central level: z Leaded by State Council

Basin head, with participants comprehensive from ministries management z High level coordination committee organ, supervises basin organization

Decision level: z Composed by basin stakeholders, mainly New basin management from local organization z In charge of basin planning, , coordination and supervision work

Enforcing level: z All departments, local or other Basin organizations of Related provincial Entrusted organizations departments departments organizations z Enforcing entrusted activities by basin organization

Figure 5.3 IRBM System in the Long-term

72 (3) Priority actions Priority action 4: Study and formulate a roadmap for IRBM institutional reforms The best model for IRBM would be developed through detailed research. Comparative studies on different models should be carried out. Based on the model designing, a road map for management reform would also need to be made to implement all the IRBM system reform effectively. Priority action 5: Pilot and demonstrate IRBM institutional reforms in Taihu Lake Basin or Chishui River Basin Reform of river basin management structure involves various sectors, so results do not come overnight. Some representative basins should be chosen to pilot reform on the basis of legal framework and systematic studies. Taihu Lake Basin and Chishui River Basin are recommended for such pilots. The former is China’s third largest freshwater lake located in the most developed area of China, facing severe pollution issue with frequent algae blooms such as in 2007, although central government spent billions of funding through The Three-lake and Three-river Pollution Control Project. The basin covers terrestrial areas of Jiangsu, Shanghai, and Zhejiang, and Taihu Lake, and Taihu Lake Basin Management Commission of MWR is the major coordination body at basin level. The later is one primary tributary of the Yangtze, with enormous richness of aquatic biodiversity. The river basin covers partial territory of Yunnan, Guizhou, and Sichuan, but there is not formal catchment coordination and management body. These pilots and demonstrations could help gain experiences which can be adopted in other areas. Priority action 6: Study and demonstrate systems of water allocation to improve water quality and provide appropriate environmental flows in the Yellow River. Environmental protection agencies and water sectors are in charge of water quality and quantity respectively, which results in a lack of coordination in many basins. Studies should thus be conducted to set up an effective and coordinated dispatch system of water quality and quantity. Priority action 7: Capacity building, trainings and knowledge exchange forum for IRBM Carrying out relevant capacity building. Providing Trainings for managers, and creating multi- levels internet and exchange forum for managers, experts and donors.

5.4.3 Develop holistic policy portfolio （1） Basic principles z Apply an integrated approach to integrate various policies. z Combine administrative adjustment and control with economic incentives and apply more market-based tools z Apply policy tools to address basin-wide problems to realize targets for river basin management

73 z Understand fully the applicability and cost-effectiveness of various policy options and select the most appropriate policy tools that apply to the river basins z Highlight policies for water resources and water environment protection z Apply tools for public fiscal policy in environmental protection

（2） Recommendations z Develop policies on total pollutant control and emission reduction target distribution The existing pollutants emission reduction system cannot meet the demands of environmental protection. In order to improve the water governance at the basin level, water standards should be integrated with water pollution load and reduced total emissions. The reduction target should include reduction targets for different pollutants, and affiliate policies so as to achieve the targets and reverse the worsening trend within the water environment. z Give clear roles to environmental finance, to support water saving, improve the water use efficiency and reduce pollutants Whether the Eleventh Five-Year Plan targets for reduction of major pollutants can be achieved depends on the availability of government investment in environmental protection. The government should invest more in environmental protection, especially in trans-jurisdictional issues within a basin. All public services should be accessed fairly, with the drinking water security as the top priority for a harmonious society. z Continue to reform water tariffs and develop sound pricing mechanisms. Water tariff reform should ensure appropriate allocation and promote sustainable use of water resources, cost-effectiveness of water supply and drainage services and also a clean and safe drinking water supply. Reform should be shifted from the existing engineering water price systems to cost-recovery pricing systems, which include water resource pricing (water resource cost), engineering water price and environmental water price (water treatment cost). It should comply with the principle of compensation for costs, reasonable profits, higher price for higher quality and equitable bearing of cost. An appropriate mechanism for setting water tariffs and hearings should be made available, as well as public decision making and price supervision mechanism for price management. z Experiment with setting up a user to pay system for environment carrying capacity Through pilot programs, gradually establish a holistic quantity control system based on the maximum water discharge capacity, properly distribute initial discharge rights, implement paid discharge rights and set up a discharge right trading system and extend this nationwide. z Speed up the reform of urban utilities and open up the water resource market through franchise operations. Use of market processes should be accelerated for urban utilities, breaking government monopolies, introducing competition mechanisms, speeding up the reform of urban water management departments, using diversified franchise operations and encouraging private sector

74 funding and international investment in environmental infrastructure. Meanwhile, all financial instruments should be developed alongside in particular, the reform of laws and regulations. The feasibility of issuing municipal bonds that could be first used for environmental infrastructure should be studied. z Establish and improve payments for ecosystem services within a basin. Further study on payments for ecosystem service within a basin should be planned for the future; especially increasing compensation for ecosystem services in vulnerable areas. In addition, trans-boundary compensation between upstream and downstream should be established. In addition the issue of compensation between resource development and ecosystem conservation needs to be resolved. Efficient resolution mechanisms should be explored that give clear policies for central payment transfer, establishing river basin funds and formulating compensation mechanism between upstream and downstream.

(3) Priority actions Priority action 8: Develop supportive policies on reduced discharge pollutants in the Songhua River Basin After the pollution spill in November 2005, the pollution control and water-environment protection in the Songhua River has become a national priority and included in the 11th Five- year Plan. The discharge cap (maximum discharge) and discharge reduction quota should be defined according to water discharge status, water environment functions and pollution load. To achieve the target and to shorten the time schedule, should design supportive policies and a roadmap should be designed, including implementing compulsory discharge limits, economic incentives and pollution rights trading systems. Priority action 9: Set up Public-Private Partnership (PPP) for trial reform of urban utility business, such as water supply and treatment. In future, efficiently improving the treatment rate of urban sewage is vital for realizing COD reduction target of the Eleventh Five-Year Plan. This research is based on river basin planning. The input of government public finance will be increased in river basin pollution treatment and urban wastewater treatment plant construction. At the same time, reforms should be carried out of urban utilities and waste water treatment, opening up the water management market, encouraging the private sector investment in this field, increasing the efficiency of environmental protection investment and improving water quality in urban areas and river basins. Priority action 10: Study and pilot ecological compensation in river basin It is difficult to make a compensation policy for river basin ecosystems. The research priority should be given to find the most efficient basin-wide ecosystem compensation mechanism and implementation approach by comparing standards, costs and effectiveness of different compensation policies. Second priority is the combination and feasibility of a policy portfolio consisting of resource development (land use) franchise operations, environmental impact assessment, compensation for ecosystem services and ecosystem protection agreements.

75 Priority action 11: Study relevant policies for faster reform of water pricing and water entitlement Water rights reform in the Yellow River and Liao River is more advanced than that in other rivers, so lessons learned should be summarized and extended to other river basins when appropriated.

5.4.4 Develop River Basin Master Plans under the IRBM framework (1) Basic principles z The Master Plans and special thematic plans should be consistent with each others.

z Differentiate short, medium, and long term objectives, so as to put forward concrete and proper implementation approaches. z Balance protection and development in future plans. z Emphasize the applicability of the plan and formulate a detailed guideline for implementation. z Emphasize the evaluation of implementation performance and accountability. z Emphasize the plan efficiency and make timely revisions.

(2) Recommendations Cross-sectoral coordination in China has been greatly improved in integrated river basin planning. For example, many sectors including SEPA participated the revision of the River Basin Master Plans led by MRW and lunched in early 2007. That will pave the way for a more appropriate master plan. But overall many problems remain. To tackle these, recommendations are proposed as follows: z Ensuring that River Basin Master Plan guides the creation of other special thematic plans such as flood control plan and hydropower development plan. Many plans are now too geared towards sectoral interests. Clear definition is needed of application ranges and executive agencies within each plan. Any specific sectoral plans or other special thematic plans should be made in line with and revised within the framework and guidance of the River Basin Master Plan. Sensible resolutions procedures need to be developed to cope with possible conflicts during planning process. z Defining a procedure and other related agendas for the River Basin Master Plan through legislation Given the importance of River Basin Master Plans, legislation should set detailed guidelines for its formulation and implementation. This would include the participation and coordination of all sectors, planning related issues, main measures, and implementation procedures. Systematic objectives of integrated management and relevant indicators should also be developed. Efficiency should be defined and overdue plans should be revised in time. Roles

76 for stakeholders and the public in the planning and its implementation processes should be clearly defined so that they could actively participate these processed through workshops, seminars, public hearings and so on. For failures in implementation and non-compliance with the River Basin Master Plan should be punished following related regulations. z Promoting the integration of IRBM concept and approach into the Master Plans The current revising process of River Basin Master Plans provides the best opportunity for China to learn from the best practices of river basin management in the world. As the holistic approach to balance protection and development in river basins, IRBM should be used as the framework for new River Basin Plans, related approaches in favour of IRBM should be integrated into the Master Plans as well. z Integrating environmental protection objectives into the River Basin Master Plans It’s often difficult to balance protection and development in the context of rapid economic growth. Protection didn’t attract enough attention and investment by the planning in the past. In future River Basin Mater Plans and special thematic plans, priority should be given to the protection of water resources, water environment and aquatic ecosystems.

(3) Priority actions Priority action 12: Formulate amendment guidelines and technical specifications for revision of the River Basin Master Plans River Basin Master Plan plays a vital role for implementing IRBM, and is the most practical approach for promoting IRBM within current institutional structures. But none of the current River Basin Master Plans is a real comprehensive mater plan. There are no clear and standardized documents that could guide the ongoing revising process to promote IRBM and encourage stakeholders to participate. Studies should be conducted on how to develop the Master Plan under the new management systems, analysing the guiding principles of Master Plan revision and technical specifications, so as to incorporate the new concepts and approaches e.g. IRBM into the Mater Plans. Priority action 13: Demonstrate participatory approach to develop the River Basin Master Plan Stakeholder participation is of great importance for this planning, however degree of participation varies greatly among the stakeholders in the current planning processes. Recognizing the complexity of planning and its implementation, it is necessarily needed to develop sound participatory planning procedure to ensure the active participation of all stakeholders. Participatory planning should be piloted when revising of the Master Plans, and lessons should be learnt for further magnification. Priority action 14: Organize training and experience –exchange on comprehensive river basin planning. The latest IRBM concept must be embedded in the River Basin Master Plans. However the personnel responsible for the revision are lack of the capacity and experience. Trainings and experience exchanges will help them to improve their knowledge on IRBM, and ensure IRBM

77 incorporated into the Master Plans. Priority action 15: Strengthen the overall coordination of water-related projects by the NDRC In recent years, the NDRC has successfully integrated national projects related to agricultural sector. The integration of water-related projects will also be necessary. Surveys and research should be carried out in the near future, such as assessing implementing efficiency of basin- wide engineering investment, analysing the necessity of investment integration, proper integration platforms and mechanisms and so on (SUN Zhen, 2007), so as to accelerate the integration of basin harnessing and management project, and to improve cost-effectiveness of water-related funds.

5.4.5 Promote public participation (1) Basic principles z Involve the public in all the levels and stages of management and develop various participatory activities. z Improve laws and regulations, guarantee the right of citizens to participate and encourage legally-sanctioned participation. z Engage public in planning and implementation. z Support the development of Water User Associations and environmental NGOs as major stakeholders to participate in IRBM z Promote information disclosure at all stages and levels of basin management to fully guarantee the public right to know. z Enhance dissemination by all means to improve the public awareness on participation and to improve government agencies’ understanding on public participation.

(2) Recommendations Promoting public participation in China should take all aspects into consideration and be introduced in a step-by-step manner. At the national level, it is critical to improve relevant laws and regulations. In legislation, the rights and interests of associations, NGOs and the wider public to participate in river basin management should be enhanced. Detailed procedural regulations for public participation should also be developed. At river basin level, river basin organizations should be reformed, and new river basin organizations should be participated by stakeholders; river basin forums attended by all interested parties should be organized. For governments at all levels, information disclosure and public consultation should be enhanced, and the development of NGOs should be widely supported. Recommendations are made as follows: z Encouraging public environmental litigation. In river basin management, any citizen or association can sue management agencies or individuals who failed to fulfill their obligations.

78 z Adding procedural regulations for public participation to existing laws, clarifying the procedures of government notification, opinion surveys and public hearings. In public hearings especially, specific terms for information disclosure, opinion expression and government reply should be made clear. z Involving the public in decision-making processes to improve openness and transparency in policy-making. An advisory mechanism involving public participation, expert analysis and government decision should be established, which will enhance the scientific and democratic nature of the decision-making process. z Speeding up township- and community-based watershed management. The improvement of river basins depends on that of township- and community-based watersheds, and so needs the joint effort of the whole community. Experience in small watershed management should be systematically summarized to stimulate the involvement of local communities and improve their capacity in river basin management. z Encouraging the establishment of Water User Associations at all levels, which will act as bridges linking river basin management and the public. z Supporting NGO development in every way possible. For example, revise relevant laws and regulations to make it easier for NGOs to register; advance tax-free donation and relevant laws to encourage Chinese enterprises and individuals to donate to local NGO and strengthen the capacity building. z Expanding the public right to know. Government should be more open and widely notify environmental protection policies and regulations, project approvals, case transaction and so on. Government websites should be updated timely to disclose environment quality and management information, so that the public and NGOs can have easier access to information on water quality and quantity, water use, decisions and management, plans and their implementation, and other information. Enterprise environment performance should be disclosed as legally required. For instance, lists of toxic substances used and released into the environment (water, soil, air) by enterprises should be disclosed. z Making full use of all kinds of mass media (radio, TV, newspaper and Internet) for publicity and making full use public oversight of river basin management. The importance of the public participation should be emphasized to increase public enthusiasm and sense of ownership.

(3) Priority actions Priority action 16: Promote establishment of public notification and hearing system for basin- wide issues In all administrative approval procedures related to water sectors concerning water use, discharge and project approval, notification and public participation should be included so that cross-sectoral and transjurisdictional stakeholders, such as fishermen, downstream water users

79 and wetland nature reserves can have equal opportunities to be engaged. Moreover, the rights and interests of marginal groups and potential victims must be protected. The administrative approval that currently charge river basin organizations should be improved, with an aim of applying notification and public participation mechanism in water administrative approval processes in the river basin. Priority action 17: Build stakeholders’ capacity on river basin management A platform for the exchange of views should be constructed. For example, forums, clubs and so on could be established to facilitate stakeholder participation. Also cooperation with relevant education and training institutions would be needed to set up river basin management courses to increase stakeholders’ participation awareness and ability. Priority action 18: Set up river basin information disclosing mechanism and platform Measures on how to comprehensively implement government notification policy at river basin level are need to be studied and developed, and the construction of river basin information release platforms should be promoted. For example, a website / online portal in pilot river basins could be developed for information disclosure to promote timely information release. The website / portal could also become a virtual platform for public to exchange information and provide feedback on river basin management.

5.4.6 Strengthen science and technology support (1) Basic principles The objective of strengthening science and technology support is to provide IRBM with good scientific information, basin-wide monitoring, and innovative technology. z The correlation of assignment and coordination among research institutes in research on basin-wide issues should be made clear so as to improve coordination and collaboration on cross-sectoral research plans, encourage the integration of natural science and social science to reduce duplication. z The identification, design and planning, approval and evaluation processes of research projects should be more transparent. (2) Recommendations z An overall plan on IRBM S&T should be made; research projects on priority basin- wide issues should be well-justified and implemented timely. Barriers between basic research and high-tech R&D and obstacles between natural science and social science research should be removed in order to integrate the strength of multiple sectors and disciplines and enhance comprehensive research on basin-wide issues. z Given the complexity of IRBM and water issues and needs for continuous long-term research, a comprehensive river basin research framework and plan should be developed. z Domestic and international academic exchange and cooperation on IRBM and water-

80 related research should be enhanced. (3) Priority actions Priority action 19: Select a typical river basin for piloting independent water environment monitoring An independent basin-wide monitoring agency should be established through bidding or delegation in a typical river basin such as the Songhua River, which would be in charge of collecting, processing and disclosing information on run-off, water quality, aquatic ecosystem, sediment and water diversion. The agency should also be empowered to integrate relevant monitoring resources, unify monitoring standards and procedures, and take fully responsibility and accountability to acquire reliable basin-wide information and timely share with stakeholders and the public. Priority action 20: Study overall discharge load and target breakdown to reduce pollutants in a typical river basin According to environmental functions and environmental standards, the maximum pollutant discharge load per day in contaminated rivers and the methods to break down the discharge load to all pollution sources should be examined; Starting from data collection and monitoring, studies on how to allocate national reduction target of water pollution discharge to major river basins and pollution sources should be established; Trans-provincial and cross-section water quality standard and protection plan should be developed; A simple yet efficient model is to be worked out to measure, calculate and predict pollution load and water quality; Water pollution discharge reduction plans and control measures in the pilot river basin should be formulated. It’s recommended to conduct pilots in Huai River, Tai Lake, Songhua River to accumulate experience then magnify where appropriate. Priority action 21: Study early warning and emergency response systems for national drinking water safety The lessons from recent drinking water crises should be learnt and summarised, such incidents on the Huai River in recent years, the Songhua River in 2005, and Tai Lake in 2007. These should be used to draft emergency response measures, procedures and supporting countermeasures on drinking water safety. The national monitoring system on water environment and human health is the core of such a system, which will provide comprehensive and accurate data and information (LI Fuxing, 2007). Priority action 22: Study and demonstrate environment flow through water infrastructures For sluice and dams nearing the end of their service lifetime, comprehensive assessments should be conducted on their safety, economic returns and environment impact. Those without economic returns should be removed. Research on the impact on aquatic species by large water projects including the Three Gorges Dam should be carried out. Operation plans of water infrastructures should be updated and fully to secure environment flows and restore health of rivers. Priority action 23: Study the adaptation measures on water resources and river basin management in the context of climate change

81 The impact of global warming on water resources, water cycling, drought and flood in selected river basins such as the Yangtze River and the Yellow River, vulnerability and adaptation of watershed ecosystems to climate change should be conducted, and measures and policies on water resource management should be developed. Priority action 24: Promote international knowledge exchange and cooperation on IRBM S&T Tailored IRBM knowledge exchange and cooperation with related countries and river basin organizations should be promoted to meet China’s urgent needs for implementing IRBM. Joint IRBM research teams, graduate education, workshops, short-term training and field trips, and comparative studies of selected river basins will be the appropriated approaches to promote international knowledge exchange and cooperation on IRBM.

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Reference

Working Group III Report of the IPCC Fourth Assessment Report, Climate Change 2007: Mitigation of Climate Change, May 2007 Jennifer TURNER and Kenji OTSUKA, eds., Reaching across the water: International Cooperation Promoting Sustainable River Basin Governance in China. Woodrow Wilson International Center for Scholars May 2006. RMIT, Final Report on Cross-Administrative Region Water Pollution Control (in Chinese), Project Report of ADB, 2003 National Assessment Report of Climate Change Committee, National Assessment Report of Climate Change (in Chinese), Science Press, 2007 Lu Zhongmei, Research on. Legislation to Protect the Water Resource of Yangtze River (in Chinese) WANG Canfa, On Problems and Countermeasures concerning Legislation on Transjurisdictional Water Resources Management in China (in Chinese) Wang Jinnan, Environmental financing strategy (in Chinese). Beijing: China Environmental Science Press, 2003. YANG Guishan, WENG Lida, LI Lifeng, Report on the Protection and Development of Yangtze River in 2007 (in Chinese), Changjiang Press, 2007 Environmental and Natural Resource Pricing and Taxation Task Force/CCICED, Establish Environmental Finance, Correct Market Inefficiency and Strengthen Environmental Protection (in Chinese), 2005.11 Follow-up Policy of Converting Farmland to Forest and Grassland Research Task Force/CASS (in Chinese), Jan. 15th 2007 Institute of Geographic Sciences and Natural Resources Research, etc., Compiling of China Integrated River Basin Management Stakeholders Information, 2007 CAS Sustainable Development Strategy Study Group, China Sustainable Development Strategy Report 2007 ---- Water: Governance and Innovation (in Chinese), Beijing: Science Press, 2007 ZOU Shoumin, Lack Quantity and Supervision, Too Many Problems in Sewage Treatment Plant, http://env.people.com.cn/GB/1073/4314342.html FAN Ruiping. Thematic Study 1: Water Resources Sectors. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. LIU Xiangmei. Thematic Study 2: Environmental Protection Sectors. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. SUN Zhen. Thematic Study 3: National Development and Reform Commission. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. HAO Tianwen. Thematic Study 4: Construction Sectors. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. WANG Yamin. Thematic Study 5: Agricultural Sectors. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. CUI Lijuan. Thematic Study 6: Forestry Administration Departments. Series reports of Taking

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Stock of Integrated River Basin Management in China, 2007. LI Fuxing, et al. Thematic Study 7: Health Sectors. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. HUANG Wei, LIU Qiang. Thematic Study 8: Yangtze River Basin. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. SUN Yangbo. Thematic Study 9: Yellow River. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. TAN Bingqing. Thematic Study 10: Huai River Basin. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. LI Heyue. Thematic Study 11: Songliao River Basin. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. WANG Kelin. Thematic Study 12: Dongting Lake River Basin. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. HE Daming. Thematic Study 13: International Rivers. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. WANG Fengchun. Thematic Study 14: Legislation on Integrated River Basin Management. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. LI Yuanyuan. Thematic Study 15: River Basin Planning. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. MA Zhong, Thematic Study 16: Economic Instruments for IRBM in China. Series reports of Taking Stock of Integrated River Basin Management in China, 2007 HUANG Tieqing. Thematic Study 16: S&T Supporting on River Basin Management. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. XIA Jun. Thematic Study 17: Water Resources Management. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. LI Yunsheng. Thematic Study 18: Water Environmental Management. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. LI Fuxing, et al. Thematic Study 19: Standards of Drinking Water. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. LIU Xiaoyan. Thematic Study 20: Environmental Flows of Rivers in Northern China. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. CHEN Jin. Thematic Study 21: Stakeholders of Hydroelectric Development. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. WANG Ding. Thematic Study 22: Protection of Hydrobios Diversity in Yangtze River Basin. Series reports of Taking Stock of Integrated River Basin Management in China, 2007. YANG Guisha, et al. Transjurisdictional Ccoordination in River Basin Management Within Yangtze River Basin. Series reports of Taking Stock of Integrated River Basin Management in China, 2007.

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Attached Map: Map of China's River Basins

Source: Wang Shucheng, 2005.

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Attached Table I: Overview of Projects on IRBM and Water-related Issues in Recent Years in China（Incomplete Statistics）

Title of Projects Location Budget（×108 RBM） Projects implemented by Ministry of Water Resources and its River Basin Organizations Soil and Water Conservation and Ecological Construction Project Central and Western China 18.75（2006） Pilot Project on the Ecological Restoration of the Water and Soil Conservation Central and Western China 7.5 Pilot Project on Comprehensive Management of Water and Soil Losses in the the black soil area in northeast China 2 Black Soil Area of Northeast China * Comprehensive Management of Water and Soil Losses in the Black Soil Area Songhua River Basin and Liao River Basin 10 of Northeast China( First Phase) Silt Retention Dam Project on the Loess Plateau * Qinghai, Gansu, Inner Mongolia, Ningxia, 8.7 Shaxi and Shanxi Province Key Prevention and Harnessing Project on Water and Soil Losses in the the Upper Reach of Yangtze River 17.21 （ the 10th Five-Year Upper Reach of Yangtze River Plan Period） Project of Soil and Water Conservation in Integrated Agricultural Yangtze River Basin and Yellow River 1（annual budget） Development Basin Project of Rural Drinking Water Safety during the Eleventh Five-Year Plan Central and Western China 60（2006） Period The Irrigation and Water Saving Reconstruction Project in Large-scale In more than 270 Large-scale Irrigation 9（2006） Irrigation District Districts Special Project on Water Resource Restoration in Tarim River, Hei River and Tarim River, Hei River and Beijing 11.25（2006） Beijing Dyke and Embankment Enhancement Project along the Main Stream of Main Stem of Yangtze River 270 Yangtze River * Flood Control Project in Poyang Lake Region (Phase II) * Poyang Lake in Jiangxi Province 12.30 Comprehensive Treatment Project of Dongting Lake (Phase II)* Dongting Lake Basin 0.7 Comprehensive Treatment Project of Tai Lake * Tai Lake Basin 98

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Title of Projects Location Budget（×108 RBM） Dyke and Embankment Standardization Construction Project in Yellow River Shandong and Henan Province 40 （Phase II） Comprehensive Treatment Project of Huai River (19 Key Projects ) Huai River Basin 262（in total） Projects cooperatively implemented by Ministry of Water Resources, Ministry of Construction, National Development and Reform Commission, etc. Project of returning cropland to Lake and Resettlement * The middle and low reach of Yangtze River, 103 including Dongting and Poyang Projects implemented by State Environmental Protection Administration Sewage Treatment Plant Construction Project in “Three Rivers and Three Covering 14 provinces 317 （ within the 10th Five- Lakes”(Three rivers, namely, Huai River, Hai River and Liao River; Three Year Plan Period） lakes, namely, Tai Lake, Cao Lake and Dian Lake) Water Pollution Control Project in the Three Gorges Reservoir and upper Three Gorges Reservoir and upper stream 146 （ within the 10th Five- stream Year Plan Period） The Water Pollution Control Project in Eastern Route of South-to-North Jiangsu Province, Shandong Province, etc. 88 （ within the 10th Five- Water Transfers Project Year Plan Period） Initiatives for Clean Water and Blue Sky in Beijing Beijing 117 （ within the 10th Five- Year Plan Period） Construction Project on National Nature Reserves and National Ecological Nation-wide 30 （ within the 10th Five- Function Zones Year Plan Period） Water Pollution Prevention Project in Songhua River Basin Songhua River Basin 134 （ within the 10th Five- Year Plan Period） Water Pollution Prevention Project in Key River Basins 574 cities in China 39.3（2006） Projects implemented by State Forestry Administration National Wetlands Conservation Project 222 wetlands nature reserves 90 Natural Forest Resources Protection Project Forest zone in southwest and northeast 8（2006） China “Grain for Green” Project Central and Western China 11.5（2006） Projects implemented by State Forestry Administration and Qinghai Provincial Government “Three Rivers' Resource”(Yangtze River, Yellow River and Lancang River) Three Rivers' Resource 75

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Title of Projects Location Budget（×108 RBM） Wetland Nature Reserve Construction Project Projects implemented by Ministry of Construction The Reconstruction of Water Supply Pipeline Network at county and city 409 counties and 200 cities 13.4（2006） level Projects implemented by Ministry of Agriculture Nature Conserve Construction Project for the Endemic and Rare Fishes of the The main stem of upper Yangtze River and 1 upper Yangtze River Chishui River Note: The projects which marked with star (*) have been finished.

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Attached Table II: Overview of Research Program on IRBM and Water-related Issues in China（Incomplete Statistics）

Category Title of Project Budget (10000 RBM) Program funded by Ministry of Science and Technology Technological Innovation on Water Security 36800 Key Scientific & Technological The Study and Demonstration on Ecological Security and Key Technology of Rehabilitating Project 1200 Eco-Economic System in the Three Gorges Dam Area The Modern Water Saving Technological System and its Research and Development of New 20000 Key Science & Technology Products Special Projects Engineering System of Water Pollution Control and Treatment 35000 Water Pollution Control and Treatment 100000 Study on Lake Eutrophication Process and Mechanism of the Cyanobacteria Bloom-forming 2800 （since 2002） Runoff-sediment Yield and Transport and its Mechanism of Coupling with Environment 2900 Change in the Yangtze River Basin（since 2003） The Theory and Methodology on Monitoring and Forecast Flood Causal Rainstorm in 3000 Southern China（since 2004） The Land-Ocean Interactions between Typical Estuary and Coastal Ocean and Its 2900 973 Program Environmental Effects in China（since 2002） Hydro-ecological Processes, Water-Environmental Effects and Integrated Control of 2900 Ecological Security for Wetlands in Huang-Huai-Hai Region of China（since 2006） Mechanism of Water Circle Evolution and Efficient Water Use in Hai River Basin（since 3000 2006） Research on Soil Erosion Process and its Regulation in the Main Water Erosion Area of 3000 China（since 2007） 863 Program The Modern Water Saving Agricultural Technology and Products 8500 The Efficient Use Technology of Precipitation 600 Safety-ensuring Technologies of the Drinking Water Quality 630 Technology on Sewage Treatment, Reuse and Sludge Disposal 540 Research on Safe Irrigation Technology of Reclaimed Water 300

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Category Title of Project Budget (10000 RBM) Enhanced Physicochemical and Biological Integrated Technology of Removing the 280 Poisonous and Harmful Substance in Sewage Wastewater Biological and Ecological Engineering Treatment Technology and its Complete 300 Device Research and Demonstration of the Water Quality Security Ensuring Technology for Middle 450 and Small City in the undeveloped region of western China Technology for Pollution Control and Restoration of Water Environment 450 Technology for Pollution Control and Restoration of Ground Water 350 Technology Research on Optimization of Water Resources Allocation and Ensuring of Water 1500 Security in northeast China Research on the Key Restoration Technology for Healthy Yellow River 2000 Key Engineering Technology for Comprehensive Harnessing of Water and Soil Losses on 2800 Loess Plateau Technology Research on Flood Control and Sediment After the Three Gorges Dam Put into 2500 Operation The Research and Application on Several Key Technology of South-to-North Water Transfers 10000 Project Technology Supporting Key Technology Research on Reservoir and Dam Safety 2000 Program Key Technology for Flood Warning and Forecasting and Risk Management at Watershed 800 （since 2006） Utilization Technology of Rain and Flood and its Application 2000 Key Technology Research on Water Saving Reconstruction Project in Large-scale 3200 Agricultural Irrigation District Integrated Safe Water Supply Technology and its Demonstration in Rural Region 4300 The Development and Demonstration of Urban Integrated Water Saving Technology 1800 Energy Saving and Cost Reducing Technology for Urban Sewage Treatment Plants 3500 Drinking Water Security Technology in Small Township 4750 Development and Demonstration of Water Saving Technology for Intensive Water 2000 Consumption Industry Program funded by Chinese Academy of Sciences Mechanisms and Control of Eutrophication of Lakes in the Middle and Lower Reaches of the Key Program 1700 Yangtze River

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Category Title of Project Budget (10000 RBM) Regulation Mechanism and Technology System of Water and Land Resource in Agricultural 1650 Region of Northeast China Environment Evolution and Sustainable Use of Water and Land Resource in Western China 3000 Demonstration of Water Conservation and Environment Construction on Loess Plateau 1000 Experiment and Demonstration of Comprehensive Management of Water-Ecological- 1000 Economic System in Hei River Basin Western Plan(First Phase) Pilot Program for Restoration and Rebuilding of the Typical Degraded ecosystems in the 1000 Upper Reaches of Minjiang River Experimental Demonstration in Desertification Control & Management of Oasis-Based 1000 Ecosystems in the Lower Reaches of Tarim River Program funded by Chinese Academy of Engineering The 21st Water Resource Strategy for Sustainable Development of China 800 Study on Water Resource Allocation, Eco-environment Protection and Strategy of 1000 Sustainable Development in Northwest China Study on Key Strategic Issues about Water Resource Allocation, Eco-environment Protection 1000 Key Consultative Program and Strategy of Sustainable Development in Northeast China Study on Water Pollution Prevention and Treatment in the Three Gorges Reservoir and 1000 upstream Study on Regional Agricultural Resource Rational Allocation, and Comprehensive 1200 Environment Management and Agriculture Development Strategy in China Program funded by National Natural Science Foundation of China Key Program The Loss of Nutrient Elements and Evolution of Eutrophication in Jiao Zhou Bay 160 The Sustainable Use of Water Resource in the Arid Region of Inland River Basin in 130 Northwest China under the Condition of Environment Change Study on Water Resource Reuse in the Arid Region of Western China 130 The Effects of a Cluster of Small Hydropower Stations on Riverine Ecosystem and its 135 Restoration Mechanism – Taking Xiangxi River as a Case The Characters and Counter Measures of Eutrophication in the Estuary of Yangtze River 150 The Basic Research on Agriculture and Ecological Water Saving in the Arid Region of 140 Northwest China The Regularity and Spatial -Temporal Allocation for Ecological Water Needs in a Watershed 120

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Category Title of Project Budget (10000 RBM) Impact of Water Transfer Engineering on the Environment of Estuary in Yangtze River Basin 140 and its Counter Measures Program funded by Ministry of Education Program of “Yangtze Scholar Large Dam and the Engineering in Mountain Rivers 300 and Innovation Team” Agricultural Water Saving and Efficient Use of Water Resource 300 Program funded by Planning Leading Team of National Philosophy and Social Science Theory and Practice of Chinese Legal System of Water Right 7.0 Transboundary Negotiation Mechanism of Water Resource Management 4.8 Program Funded by National Water Resource Property Right and Water Market – a Case Study in the Arid and Semi-arid 6.0 Natural Science Foundation of Region of Northern China China The Development Mode of Ecological Economy and Compensation Mechanism of Water 5.6 Use in Water Conservation Region of Beijing and Tianjin

Source: HUANG Tieqing, 2007

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Attached Table III: Overview of International Donor-oriented Projects on IRBM in China (Incomplete Statistics)

Donor Project Name/Theme Project Regions Multilateral Donor-oriented Projects World Bank Changjiang/Pearl River Watershed Rehabilitation Project Changjiang/Pearl River Watershed World Bank China: Fifth Inland Waterways Han River region World Bank Tai Basin Urban Environment Project Taihu Basin Pearl River Delta and the South China World Bank Guangdong Pearl River Delta Urban Environment Project Sea World Bank Hai Basin Integrated Water and Environment Management Project Hai Basin World Bank China – Tarim Basin Project (Phase II) Tarim Basin World Bank* Guangdong Pearl River Delta Urban Environment Project (Phase II) Guangdong Pearl River Delta World Bank* China Bengbu Integrated Environment Improvement Project Bengbu, Anhui Province World Bank* Han River Urban Environment Improvement Project Han River Basin World Bank* Huai River Basin Flood Management and Drainage Improvement Huai River Basin World Bank* Western Provinces Rural Water Supply, Sanitation and Hygiene Promotion Project Western Provinces ADB Songhua River Basin Flood Management Songhua River Basin ADB Sanjiang Plain Wetlands Protection Sanjiang Plain Evaluation of Environment Policy and Investment for Water Pollution Control in the ADB Huai River Basin and the Tai Lake Basin Huai River Basin and the Tai Lake Basin

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Donor Project Name/Theme Project Regions Integrated Ecosystem Management and Environmental Protection of the Baiyangdian ADB Hai River Basin Lake Catchment http://www.gefchina.org.cn/ Hai River Basin Integrated Water Resources Management Hai River Basin GEF http://www.gefchina.org.cn/ Lake Dianchi Freshwater Biodiversity Restoration. Lake Dianchi GEF http://www.gefchina.org.cn/ Integrated Ecosystem Management and Environmental Protection of the Baiyangdian Hai River Basin GEF Lake Catchment http://www.gefchina.org.cn/ Prevention and Management of Marine Pollution in the East Asian Seas East Asian Seas GEF* http://www.gefchina.org.cn/ Nature Conservation and Flood Control in the Yangtze River Basin Yangtze River Basin GEF* Bilateral Donor-oriented Projects Mid reaches of the Yellow River/Upper EU River Basin Management Programme reaches of the Yangtze River Upper Brahmaputra River Basin (UBRB) EU BRAHMATWINN Integrated Water Resources Management System in South Asia AusAID Water Entitlement and Trade Programme AusAID Yangtze River Flood Control and Management Project Yangtze River (Wuhan, Hubei province) AusAID Australian Youth Ambassadors for Development Program (AYAD) Asia Pacific region AusAID * Australia –China Environment Development Program (ACEDP)

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Donor Project Name/Theme Project Regions DFID Poverty Alleviation and Water Reform Project DFID China Watershed Management Project Norway Biodiversity Management in Dongting Lake Dongting Lake Water Pollution Control Management Research for Minjiang and Tuojiang River Switzerland Sichuan Province Basins Ecosystem Conservation and Construction Research for Upper Reaches of the Yangtze Switzerland Upper reaches of the Yangtze River River Japan Flood Prediction in Han Rive and Water and Soil Conservation in Yellow River Han River, Yellow River International NGO-oriented Projects WWF Central Yangtze: Partnership for a Living river Central and Lower Yangtze WWF WWF-HSBC 'Investing in Nature' – Web of life Central and Lower Yangtze WWF River Basin Conservation in Heilongjiang/Amur River Basin Heilongjiang/Amur River Development of Southwest China Carbon and Water Resources Environment Services Conservation International Lijiang, Yunnan Province etc. Compensation System Conservation International Research and Communication for Legislation of Ecosystem Services Compensation Jane Goodall Institute Demonstration of Eco-county Project by Roots & Shoots Sichuan Province The Nature Conservancy Biodiversity Conservation Research and Monitoring Upper reaches of the Yangtze River Financial Mechanism Perfecting Research on Weihe River(Yellow River’s tributary)’s The Nature Conservancy Yellow River Environmental Protection Note: The projects with* are international cooperation projects under preparation.

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Attached Table IV: Overview of Major River Basin Plans Since 1998

Title of Planning Compiled by Main Contents Explanatory Notes National Flood Control Planning MWR National flood control strategy, layout, countermeasures Waiting for approval and flood management policies Flood Control Planning for Seven Major River MWR and Related River Overall flood control arrangement and scheme Waiting for approval Basins( Namely Yangtze, Yellow, Tai Lake, Basin Organizations Songliao, Pearl, Huai, and Hai River Basins) Flood Control Planning for Other Major Rivers Provincial Department Independent river flood control arrangement and scheme National Construction and Management Planning The construction and management of flood storage and Submitted to State for Flood Retention Area MWR detention area Council of China National Flash Flood Control Planning MWR and other 4 Overall Strategy, arrangement and countermeasures on Approved by State ministries flash flood control Council of China Urban and Regional Flood Control Planning Local Governments Scheme and countermeasures on urban and regional Approved by Related flood control Local Government National Comprehensive Water Resources MWR and NDRC Water resource investigation, utilization, allocation, and On going Planning protection Comprehensive Water Resources Planning for Ten Related River Basin Scheme and countermeasures on water resource On going Water Resource Regions Organizations utilization, allocation, and protection Provincial Comprehensive Water Resources Related Provincial Scheme and countermeasures on water resource Planning Departments of Water utilization, allocation, and protection for related province Reservation Comprehensive Urban Water Resources Planning Authorities of Water Scheme and countermeasures on water resource Conservation in utilization, allocation, and protection for related city Corresponding City National Surface Water Function Zoning MWR National surface water function zoning and its protection Waiting for approval goals National Planning of Water Resources Protection MWR Making the protection countermeasures for major river in On going China

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Title of Planning Compiled by Main Contents Explanatory Notes National Urban and Rural Drinking Water Security NDRC and MWR Countermeasures on urban and rural drinking water Approved by State Planning security Council of China National Rural Drinking Water Safety Planning MWR Rural drinking water safety planning Approved by State Council of China National Groundwater Utilization and MWR National groundwater utilization and conservation plan On going Conservation Planning Integrated Watershed Planning for Seven Major MWR, NDRC, etc. Water resource utilization and conservation plan, flood Upcoming Rivers and drought disaster management plan Integrated Watershed Planning fro Other Rivers Related Local Water resource utilization and conservation plan, flood Government Department and drought disaster management plan National Major Rivers Coastline Use Planning MWR Function regionalization and management of river Upcoming coastline Yellow River Short-term Management Planning MWR Yellow river management planning in a short term Approved by State Council of China Tarim River Short-term Management Planning MWR Tarim River short-term management and protection plan Approved by State Council of China Hei River Short-term Management Planning MWR Hei River short-term management and protection plan Approved by State Council of China Shiyang River Short-term Management Planning MWR and Gansu Shiyang River short-term management and protection Province plan Capital Water Resource Planning in the Beginning MWR and related Water resource management and protection plan in Approved by State of the 21st Century provinces Beijing Council of China River Basin Planning for the Major Tributaries of MWR Major tributaries management planning, including Jinsha Yangtze River, Yellow River, etc. River, Jialing River, Han River, Wei River, etc. South-to-North Water Transfers Project Overall MWR and NDRC The detail arrangement and management plan for South- Approved by State Planning to-North Water Transfers Project Council of China The Eleventh Five-Year Plan on National Water MWR and NDRC The main task and schedule in the Eleventh Five-Year Resources Development Plan period National Large Reservoir Construction Planning MWR and NDRC The schedule and task of reservoir construction Approved by State Council of China National Risky Reservoir Reinforcement Planning MWR Risky reservoir reinforcement schedule

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Title of Planning Compiled by Main Contents Explanatory Notes The 10th Five-Year Plan on National Water MWR and NDRC The main task and schedule in the 10th Five-Year Plan Resources Development period Water Resource Development Planning of Western MWR The overall strategy and countermeasures of water China resource development in western China Water Resource Development Revitalization MWR The overall strategy and countermeasures of water Planning of the Northeast Old Industrial Bases resource development in the northeast old industrial bases

Source: LI Yuanyuan, 2007

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Summaries of Thematic and Case Study Reports

No. 1 Water Resources Sectors

As China’s economy has developed and society changed, the universal trend in water resource management has been for unified management based on individual river basins. It is now the mainstream method of modern water resource management, and has become particularly prevalent in the new century. New central goals for water control have been set, with innovation actively sought in the systems, mechanisms and institutions for comprehensive management of basin water resources. Sustainable development theory and a goal of harmony between people and nature have become the guiding principles of water practice. China is now in line with the international community in placing emphasis on establishing integrated basin management as standard practice. Trial implementation in a number of locations has explored application of theory and much valuable experience accumulated. China has also looked to successful international experience. These efforts made great contributions to moving forward the implementation of integrated basin management in China. Integrated management of basin water resources is now becoming mainstream global practice. In the European Union, basin management applies three main models: basin-level water system management; cooperation and organization at basin level; and administrative management. In the UK is representative of an integrated management water system mode; in France, basin management committees are usual practice; regional cooperative management is seen in Germany and Portugal; in the Netherlands administrative management is prevalent. Yet basin management is often implemented for geographical areas that are too large, impacting effectiveness. In the cooperative management system coordinated results are used as evaluation standards so management outcomes are not especially good. Administrative management can often lead to conflicts between up- and down-stream, and left and right bank areas in a basin. China has to date established seven major basin institutions that use a combination of basin water management and cooperative organization. Because their legal status is not clear and due to other inherent shortcomings, management outcomes are not ideal and their recise role is not clear. It is imperative that China create basin management models suited to local conditions. Practice shows that to the need for multi-functional use of water resources intensifies as the economy and society develop and people’s living standards continue to rise. Single goals for water resource management are not suited to the needs of a developing modern society and economy and changes in the ways people live. Above all, if development is to be sustainable, the water needs of different production sectors and stakeholders must be coordinated. To achieve this, it will be necessary to improve integrated management and coordination of water resource use. The main functions of the Ministry of Water Resources are described in “Status and Strategy of Integrated River Basin Management in China.” A diagram shows basic structural divisions of departments, basin detached offices and directly affiliated public institutions under the ministry and each agency’s main functions, structural establishment and business connections. The theme also presents a summary of prevailing laws and an analysis of individual clauses and administrative codes, code documents issued by State Department and department rules and normative documents from the Ministry of Water Resources. The third part in the theme describes current cooperation between China’s water conservancy agencies

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and international partners. Part four focus on the national Eleventh Five-Year Plan, including its guiding ideology, general approach, overall objectives and priorities for water conservancy development, innovation and management; also the key projects under the Plan for water conservancy. Finally, the report ends with an analysis of the main issues in water conservation in China and their principal causes, as well the policies proposed to deal with them.

(Author: FAN Ruiping, Department Foreign Capital, MWR)

No. 2 Environmental Protection Sectors

The Environment Protection Law stipulates that environment protection sectors manage water pollution in order to protect water resources and promote the sustainable use of water resources. China’s State Council has instructed the environment protection sectors on the work of managing water resources, requiring that they follow national plans; take full responsibility and conduct important pollution prevention and clean-ups, strengthen monitoring and publicize environmental information. Environment protection sector institutions include administrative management agencies and technical support agencies. The administrative management departments at the national environment protection bureau include control pollution department, natural zoology department, and an environmental supervision department. Further, as part of fulfilling their role, the national environment protection bureau has restructured, adding a national pollution investigative office and an environment protection bureau leading group. At present, environment protection sectors consider energy efficiency and emissions reduction as their key work. They also attach importance to “ensuring the safety of drinking water”, strict control of pollution emissions and managing the river basin environment in order to promote water pollution protection. Environment protection sectors take guidance from the environment protection law, water pollution protection law, and ocean environment protection law as the systemic basis of their water protection work. At present, the environment protection sector enforce existing environmental laws but also consider promoting historical change as important to improve those laws and to create a system that promotes a resource-saving and environment-friendly society and works towards sustainable development. In 2010 new legislation and revisions to the present law are expected, to create an environmental law system which covers the whole range of environmental protection. This will provide a full legal framework to protect China’s environment. Environment protection sectors had some success during the tenth Five-Year Plan with a pollution protection project which covered three rivers (the Huai, Mei and Liao), three lakes (Tai, Chao and Dianchi) one city (Beijing City) and one sea (Bohai). However, not all goals were met; only some 65 percent of initial target were achieved National environment protection goals in the Eleventh Five-Year Plan will add the Songhua River, and a new river basin basis for work will cover the Songhua, the Yellow River reservoir and Yangtze and Pearl rivers. This will involve twenty-two provincial-level regions. The Eleventh Five-Year Plan also adds key goals of ensuring safe drinking water resources, waste water management projects and industrial waste water father treatment. Current water pollution protection programming approved by the State Council includes the “Songhua River Basin water pollution protection programme (2006-2010)” and “Water Pollution Protection and Natural Environment Maintenance Programme in Danjiangkou Area and Upriver”.

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Public participation in environment protection management has seen some success, but is still limited in scope. An integrated analysis suggests that the environment protection sector needs to restructure to resolve problems in the water environment. Changes in institutions, functions, laws, important river basin projects and working concepts are all needed. This thematic report offers six suggestions for river basin management in China: changes in concept, plan-based programme, improvements to the legal framework, capacity building for project implementation, establish valid mechanisms, strengthen international cooperation.

(Author: LIU Xiangmei, Bureau of Environmental Supervision, State Environment Protection Administration)

No. 3 National Development and Reform Commission

The National Development and Reform Commission (NDRC) is a macroeconomic management agency under the State Council, which studies and formulates policies for economic and social development, maintains a balance of economic aggregates and guides overall economic restructuring. The water-related work of the NDRC covers flood prevention, irrigation, hydropower, shipping, water supply, sewage disposal, water and soil conservation, ecosystem protection and meteorology; and is involved at all stages from decision-making to enforcement, including making strategy, policy, system reform, planning, programs, investment, pricing, and information safeguards. In terms of laws and regulations, it has been noted that: 1) Responsibilities of NDRC departments have been formulated by thematic laws through bringing them under a plan; 2) Legislation on NDRC functions (like planning and programming) is lags behind real needs; 3) Multiple functions of NDRC “departments” (Department of Development Planning, Department of National Economy, Department of Fixed Asset s Investment, Department of Price and Bureau of Energy) require a closer internal coordination. In planning and programming, it is noted that: 1) The scope and scale of various water- related investment programs have expanded, which is appropriate for the present reality and future development trend in China; 2) Most programs are carried out within individual industries, some are based on river basins as a unit; 3) Though being implemented independently, ecosystem restoration, water-saving, drinking water safety and environmental pollution management are closely related. Integrated analysis leads to the following suggestions: (1)Deepen understanding. The viewpoint of “Creating a water resource management system combined with river basin with regional management”, which was advocated in Outline of the Eleventh Five-Year Plan for National Economy and Social Development, is now on the government agenda. Its relation with Integrated River Basin Management (IBRM) proposed in this study should be clarified. It is also necessary for department executives at all levels to attach importance to IRBM reform within a framework of strengthening government administration and implementing scientific development. This program can also be implemented by trainings, workshops, field work and so on. (2)Improve master planning. Experience has shown that all kinds of water-related affairs

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can be efficiently coordinated through master planning, which is also an arena where the NDRC can play a major role. Efforts can be made on the following three aspects: 1) adjusting basin-wide specialized plans to coincide with amendments to national key river basin plans; 2) emphasizing coordination of river basin and regional economic development plans, including those for large-scale reservoirs like the Three Gorge and Danjiangkou reservoirs, so as to facilitate harmonious development between people and nature; 3) making basin-wide plans in tune with the national major function oriented zoning. (3)Intensify integration of water-related funding. Ensuring investment efficiency is an important goal of the NDRC. In recent years, progress has been made in integrating agriculture-aid funding, which is also imperative for water-related programs. Taking account of the complexity of the task, research is needed in the near-term to clarify some fundamental issues, such as previous water-related investment efficiency assessment, necessity of investment integration and appropriate mechanisms.

(Author: SUN Zhen, Department of Regional Economy, National Development and Reform Commission)

No. 4 Construction Sectors

The Ministry of Construction is an important -stakeholder in the comprehensive administration of drainage areas. The reasons why are listed below. The first concerns water-related management functions. The Ministry of Construction has the following responsibilities in city planning: water supply and drainage, water economizing, policy making for water prices, reclaiming water usage, protection of water source areas and construction for the emergent system of water supply, security of drinking water, setting standards for drinking water, planning and design of water supply and drainage, construction management, collection and processing of city wastewater, water tourism planning and construction, management and protection of city wetlands, industrializing of city wastewater and garbage processing, city river and lake management and protection. These functions are directly or indirectly related to the comprehensive administration of drainage areas. The second reason is to do with institutional arrangements and corresponding functions. The ministry has eight departments related to city water administration. They are Department of Comprehensive Financial Affairs, Department of Policies and Laws, Department of Science and Technologies, Department of Standard Rations, Division of Urban Water Affairs of the Department of Urban Construction, and three research centers. The major functions of these institutions are to make city water-affair plans and department rules, organize technical reforms, establish industrial norms and standards, administrate city water affairs and carry out research. These functions are all associated with the comprehensive administration of drainage areas to some degree. The third is concerned with statutory functions. Currently, certain national water-affairs statutes endow the Ministry with certain functions. These include the City Planning Law, Water Law, Environmental Protection Law, Water Pollution Prevention Law, and Flood Prevention Law. These laws define functions to be performed by the Ministry and require that the Ministry should deal with inter-departmental relationships for water management in drainage areas. Fourth, the Ministry promulgates independently or in combination with other ministries

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many of regulations and normative instructions for water affairs. These include Water Quality Regulation of City Water Supply, City Water Economizing Administration Regulation, Administration Methods for City Water Drainage Permit, Administration Methods for City Wetland parks, Management Methods for City Blue Lines, and the Regulation for Preventing Watercraft Garbage and Solid Garbage at Riversides from Polluting the Yangtze River. These departmental regulations directly or indirectly affect drainage areas, as does their enforcement. Fifth, in the past five years, the Ministry has organized and deployed more than 20 national and international water-related research programs and plans. These include the City Wastewater Processing Engineering Plan in the Songhua River Basin (2006-2020), Technical Research of Water Security, Sustainable Exploiting of Water Resources in Chinese Cities, and the Economical Technologies about Environmental Infrastructure in Chinese Western Small Towns. These plans and programs are not limited to a single city. They are carried out on a larger scale and more levels. The research results guide and support the administration of water affairs in cities. The Eleventh Five-Year Plan made by the Ministry also contains much concerning water affairs. The Ministry has also implemented some international cooperation programs such as “Research on Wastewater Charging Policy in Chinese Cities” and the “Sino-Netherlands Cooperation FTEI Program” (Economical Technologies about Environmental Infrastructure in Chinese Western Small Towns). The Ministry has organized several major conferences and activities about water affairs such as the Fifth World Water Conference and the Experience Intercommunication Conference about Processing Wastewater and Garbage in Domestic Cities. These activities have promoted communication and cooperation between the Ministry of Construction and other departments. Among the numerous water-related regulations made by the Ministry of Construction, some overlap or conflict with regulations made by other departments in terms of their goals, division of responsibilities, and water-quality standards. The problem is especially evident against regulations made by the State Environmental Protection Administration and the Ministry of Water Resources. To exploit the overall benefits of drainage areas to the largest extent, the Ministry of Construction should further coordinate relationships between city water supply, water saving, water drainage, wastewater processing, and protection, development and utilization of water resources in drainage areas and administration over whole drainage areas city water sources and water usage and drainage to guarantee water security in cities. The Ministry should clearly define functional divisions for water affairs and improve relevant regulations, norms and standards. Also, it should further communicate and cooperate with other departments like the Ministry of Water Resources, the State Environmental Protection Administration, the Ministry of Health, and National Development and Reform Commission. Further, it should enhance the contact with international organizations such as World Wide Fund for Nature (WWF) and International Water Association to broaden cooperation channels and modes.

(Authors: HAO Tianwen and ZHOU Changqing, Institute of Infrastructural Planning & Design, China Academy of Urban Planning & Design)

No. 5 Agricultural Sectors

This study shows that, according to current laws, regulations and the division of departments under the State Council, China’s fishery, agricultural departments and industries are the main

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departments governing and utilizing aquatic life, endangered aquatic wild species and aquatic ecosystems. In terms of the structural establishment of water-related management, agricultural departments have established the management agencies governing aquatic life, endangered wild species and aquatic ecosystems from central level to the river basin. In inland areas of China, the main river basins of Heilongjiang, the Yellow River, the Yangtze River and Pearl River all established management committees under the Ministry of Agriculture governing river basin aquatic life, endangered wild species and aquatic ecosystem. In ocean areas, the Ministry of Agriculture also set up management authorities around the Yellow and Bohai seas, East China Sea and South China Sea governing regional aquatic life, endangered wild species and aquatic ecosystem. The Ministry also established fishery environmental monitoring networks and scientific institutions for these river basins and seas. This quite comprehensive integrated management system plays an irreplaceable role in water-related management. The study went through and analyzed water-related laws and regulations and found that there are a considerable number of water-related laws and regulations implemented by agricultural departments. The main laws are the Fisheries Law, Wildlife Conservation Law, Marine Environmental Protection Law and Law on the Prevention and Control of Water Pollution. The main administrative regulations are Rules for the Implementation of Fisheries Law, Implementation Regulations of Aquatic Wildlife Protection and Regulations on Protection of Aquatic Resources Reproduction. Administrative regulations include Regulations on Procedures of Investigating and Handling Fishery Waters Pollution Accidents, Regulations on Calculation Method of Fishery Losses from Waters Pollution Accidents, Measures on Administration of Fishery Pollution Accidents Investigation and Identification Qualification, Measures on Administration of Aquatic Plant and Animal Natural Reserves, Measures on License of Aquatic Wildlife Use, Pilot Program on Improving Waters Tidal Flat Breeding Permit System and Outline on Chinese Aquatic Biological Resources Conservation Action. The study found that a shortage of specialized water-related projects and planning under the agricultural departments and very few international cooperation projects in this area. This thematic report believes that almost all the water-related utilization behaviors will do harm to the interests of fishery and agricultural departments, however, current laws and regulations on water resources management do not expressly grant powers to fishery and agricultural departments to participate in the supervision and management of water resources. This means it is impossible for them to protect the interests of fishermen, fishery and aquatic biological resources, to effectively participate in the management of water resources and to effectively supervise damage to aquatic life caused by departments in charge of water resources in the course of water resources management. After going through a large number of laws and regulations involving agricultural and fishery management, the study selected those closely related to water management. After collation and analysis, we came up with the following proposals on water-related management: (1) Perfect laws and regulations on water-related management, promote the timely implementation of integrated river basin management and develop specialized integrated water management covering marine and inland waters. (2) Implement integrated management, establish an integrated management committee and develop joint decision-making and a democratic decision-making mechanism. (3) Strengthen the participation of agricultural and fishery departments in water-related management and develop the coordination of interests and dialogue mechanisms participated in by all stakeholders. Establish a system of water use hearings. (4) Make clear the duties, rights and interests of every department in integrated management, in particular the agricultural and fishery department. (5) In the use of water resources, establish a compensation and reimbursement mechanism for fisheries, agriculture and aquatic ecosystems. (6) With respect to river basin and their ecology, conduct water use management and allocation. Water use scheduling must consider the interests and needs of fisheries and other

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departments, jointly decide on the allocation of water resources and establish early consultation, communication and a notification system in decision-making. (7) Research the various interests in river basin management and economic driving mechanism and develop mutually syncretic integrated river basin management mechanism. (8) Establish investment and financing mechanisms for integrated river basin management. (9) Strengthen comprehensive study and investigation on various river basin resources and environment, laying a foundation for integrated management. All departments should work together to carry out research and investigation.

(Author: WANG Yamin, Shandong University at Weihai)

No. 6 Forestry Sectors

China joined the Ramsar Convention on Wetland in 1992. In order to improve capacity to implement requirements of the Convention and undertake related international obligations and responsibilities and also to accelerate and reinforce national wetland protection and management tasks, the State Council mandated founding a special organization to implement these tasks on wetland protection and management. This thematic report analyzes wetland protection powers in Forestry Administration Departments as well as their current functions at both national and provincial levels. It also summarizes the wetland protection and management tasks in Forestry Administration Departments. Analysis finds: (1) wetland protection and management tasks in China are carried out by the State Forestry Administration together with local Forest Administrations Departments in every province; (2) the organizations for wetland protection and management in Forestry Administration Departments have existed for a long time and have complete management teams. The analysis of current statuary rules and regulations related to wetlands found the existing problems in wetland protection to be: (1) lack of clear statuary regulations to restrict exploitation of wetlands, making it difficult for the State Forestry Administration to organize and coordinate practical management work. In a survey, all local wetland protection and management departments reported that independent management systems made it hard for Forest Administration Departments to organize and coordinate relevant activities. That is the key reason for current problematic situation in wetland protection. (2) Current statuary systems are independent of each other. Wetland protection is governed by one overall system, only in various individual aspects. Although those aspects include wetland protection and reasonable utilization, there is still lack of comprehensive consideration. (3) Current statuary system pays more attention to developing wetland functions that cannot coexist with ecological requirements in wetland protection. Indeed, in some respects these are accelerating the decline of ecological functions in wetlands. The report gives a summary of the National Wetland Protection Project Plan (2004- 2030), Implementation Plan of the National Wetland Protection Project (2005-2010), its strategic targets, focus and means of national wetland protection implementation. We briefly introduce significant projects supported by the State Forest Administration and National Natural Science Foundation of China related to wetland protection in the Eleventh Five-Year

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Plan period also wetland protection related projects. There are descriptions of projects and the construction status for wetland ecological field research centers by Forest Administration Departments that are collaborations between the State Forestry Administration and international organizations. The analysis lists the following outcomes (1) Wetland Monitoring Center of Academy of Forest Inventory and Planning, State Forestry Administration is responsible for the national wetland resource survey and monitoring works, (2) Wetland Research Center, Chinese Academy of Forestry will support State Forestry Administration with important scientific and technical inputs for wetland protection and management engagement as well as the implementation of the Ramsar Convention. The Center has carried out R&D tasks for The Ministry of Science and Technology, National Natural Science Foundation of China, The Ministry of Water Resources and State Forestry Administration, including much basic research. The Center also keeps in close contact with International Wetland Organizations and R&D Centers in a wide range of collaborations, and cooperates in much international research. (3) Wetland research in local forestry administrations is carried out by local academies of forestry and of forest inventory and planning. However, these local academies for forestry research institutes by and large did not have special wetland research teams, and they often also undertook many other forestry research tasks at the same time. Conclusions and suggestions: (1) speed up the completion of wetland protection organizations; design, establish and implement a three-level wetland protection system at national, provincial and conservation zone level. Reinforce the coordination and communication with each wetland protection and management department in both horizontal and vertical directions. (2) Include wetland protection in policy making and action plans of the state administration, provinces (municipalities) as well as each local government. (3) At the level of State Administration, the Wetland Protection Statutes (Draft) should be completed as soon as possible, as well as the local Wetland Protection Statutes or regulations. For key wetlands, special protection statutes should be set up. (4) Complete wetland protection measures and a financing system, and complete a public consultation system for wetland protection. (5) Improve technical support capacity for wetland protection, especially wetland protection and management capacity within the Forestry Administration System. Reinforce R&D ability in each science research department.

(Authors: CUI Lijuan and ZHANG Manyin, Center for Wetland Research, Chinese Academy of Forestry)

No. 7 Public Health Sectors

The report, with a major theme of water-related management in the health sector and its functions, is divided into seven chapters. Chapter I outlines the basic framework of water- related functions and structures in the health sector, in particular two systems- that for health surveillance and that for disease prevention and control. Chapter II presents the water-related legislation developed by the Ministry of Health (MOH), including the laws and regulations with respect to drinking water safety; administrative licensing of the health sector of drinking water products; regulations on sanitation standards; regulations on the monitoring of drinking water hygiene; official documents on drinking water safety in the rural areas; and the regulations for the prevention and control of schistosomiasis. Since legal management of the hygiene of water-related products is one of its major components of water-related management for the health sector, in Chapter III, the authors assessed the its current status and also the national hygienic administrative licensing system and its implementation for water-

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related products, noting that the hygienic quality of water-related products can only be improved by means of a professional and standardized licensing and legal system in this area. The next chapter, Chapter IV focuses on the current status and assessment of drinking water safety in the rural areas, highlighting the importance of this issue, analyzing the major causes behind drinking water pollution and providing some recommendations. The major functions of drinking water hygienic management and water-related management for the health sector are listed in Chapters V and VI respectively. The last, also the most important chapter, Chapter VII, addresses the key challenges in water-related issues, particularly drinking water management for the health sector. Some recommendations were made, including: (1) strengthening the role of water in disease prevention; improving the management and functions of the health sector in ensuring drinking water hygienic safety in the rural areas; promoting collaboration with international organizations; increasing public participation in water-related issues, particularly the drinking water management; enhancing the role of water-related associations/organizations within the health sector; stricter law enforcement in the health sector to avoid the re-occurrence of the incidents such as drinking water pollution that occurred in Baiwang Jiayuan residential area in Beijing 2006; and the MOH’s taking a leading role in developing a national law on Drinking Water Safety, that references laws on drinking water safety in the developed countries and takes into account the actual situation in China. In sum, drinking water safety has become a critical issue that exerts a major impact on social and economic development and public health which needs to be resolved urgently in China.

(Author: LI Fuxing, Beijing IDM Institution of Bio-technology)

No. 8 Yangtze River Basin

This special subject introduces CWRC water resource management institutions and their function, analyses comprehensive management for river basin stakeholders, discusses laws and regulations for water management and looks at existing problem. It gives a summary of the achievements and experience of CWRC river basin comprehensive management during the Tenth Five-year Plan period. In line with water conservancy demands for development in the new era, we have offered a detailed discussion of the key fields and the guiding ideology of CWRC during the Tenth Five-year Plan period. Lastly we look at recent problems and further propose advice for improving capacity in water resources management and promoting water resource comprehensive management and river basin comprehensive management building on the basis of those past achievements. Main achievements can be gained as follows: (1) Existing laws and the authorization of Ministry of Water Resources place the CWRC in charge of water administrative enforcement, conservation and utilization of water resources, river basin planning, flood preventing and drought fighting, administration of channels, construction and management of water basin controlled water conservancy projects, management of sand extraction, soil and water conservation, hydrology, research and running and supervision of government funding. Stakeholder problems in river basin water resource management include: conflicts of interest between river basin water resources management and area water resources management; insufficient participation of the public and water users in decision-making. (2) The report has listed six divisional regulations and 16 normative documents. The

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main problem with laws and regulations at present are: gaps in different water resource laws are unclear; they are hard to coordinate between; there are marked differences between some regulations concerning the mechanism for administration. The balance between localities and regions lacks regulation; there is a lot of local legislation but little river-basin-wide legislation. (3)Yangtze River committee has obtained the great achievements in many aspects such as flood prevention disaster reduction, water resource utilization, water resource conservation and water environment treatment, water and soil ecological environment conservation and international cooperation. (4)The general goals and concepts in the Eleventh-Five-Year Plan for the Yangtze valley are as follows: The overall theme is maintaining the health of Yangtze River and promoting harmony between man and water. Four large systems are to be constructed: flood prevention, comprehensive utilization of water resources, water ecological environment protection and the water resource management. The four major goals are flood prevention security, appropriate development and use, maintaining a fine ecology, and maintaining a stable river potential and river bed. The Ministry of Water Resources guidelines in its Working Guideline for National Water Resources during the Eleventh Five-Year Plan finds that CNY210.6 billion is needed to fund goals for water conservancy construction in the Yangtze Basin. (5) Putting river basin comprehensive management into practice is a long-term process which requires the research on laws and regulation, systems and organization, science and technology and methods and means. (i) Reinforce the revision, drafting, implementation, enforcement, publicity and monitoring of laws and regulations concerning water resources management. (ii) Reinforce system building for river basin water resources management, guiding and assisting localities to work out water resources management laws and regulations. (iii)Perfect the river basin plans system. (iv)Build up and perfect a river basin management working mechanism which is unified coordinated and allows for public participation. (v) Reinforce international cooperation, actively participating in strategic conversation of river basins, build international water strategic partnership. (vi)Intensifying publicity and education, raising awareness of water saving, improving public ecology and environment education.

(Authors: HUANG Wei and LIU Qiang, Yangtze River Scientific Research Institute, Yangtze River Conservancy Commission, MWR)

No. 9 Yellow River Basin

In order to better resolve China’s water issues and help make the transition from traditional water resources management to Integrated Water Resources Management (IRWM) and IRBM for the stakeholders, sponsored by AusAID, WWF (World Wide Fund for Nature) has launched a program called “Status and Strategy of Integrated River Basin Management in China”. Through an analysis of the current state of responsibilities, capacity and planning of China’s water-related sectors in water resources management, the present situation of water- related and basin-wide management will be deeply explored, and useful experience will be gathered to recognize existing gaps and the needs for international cooperation. This can serve as a reference for the future cooperation in this field. This report describes the main administrative institutions in Yellow River basin management and their responsibilities. The new Water Law in 2002 calls for the administrative system to adopt a combination of river basin management and management by

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jurisdictional areas, with a rational division of responsibilities among water administrative sectors, basin-wide organizations and other relevant departments. Second, it clarifies the legal status and responsibility of the basin-wide organizations. The Yellow River water resources administrative system is established within the framework of the national political and economic system as well as the water resources administrative policies. At present, the organizations involved are the Yellow River Conservancy Commission, water administrative sectors at central government level and basin-wide local governments at all levels. This report explains the organizations and responsibilities of the stakeholders and provides an initial exploration of existing problems. The report also looks at the prevailing water legal system in the Yellow River, covering laws, administrative rules and regulations, legal and regulatory documents at the national level, regulations of the Yellow River Conservancy Commission, as well as rules and regulations, and regulatory documents at the local level. It investigates the contradictions between river basin administrative rules and regulations and sectoral policies, as well as the major conflicts and problem. The report also considers other issues including the establishment of the Yellow River basin administrative legal framework, ways to regulate the rights and obligations of the different parties participating in basin-wide treatment and how to balance their interest relations. This report also describes the major achievements made by the Chinese people over the past 50 years of work to resolve Yellow River issues, especially flood prevention and silt reduction, water resource management, developing hydroelectricity, soil and water conservation and water resources protection, under the guidelines of the Technical Economics Report on Yellow River Integrated Development Plan and the Recent Key Treatment and Development Plan of Yellow River Basin issued by the State Council in 1954 and revised in 2002. With social and economic development, river basin management faces more challenges. Discussions and experiment have been made in terms of strengthening international cooperation and public participation. In terms of focus for future work, referring to the Eleventh 5-Year Plan, the report looks at general guidelines, targets and tasks, key construction projects and reform measures for the Yellow River management. Finally, the report offers suggestions for the three major issues in basin-wide management, namely, legislation, IRBM and stakeholder participation. It also offers valuable discussion of international cooperation on IRBM, including priority issues, areas and actions in the Yellow River basin, and makes suggestions on this.

(Author: SUN Yangbo, Yellow River Conservancy Commission, MWR)

No. 10 Huai River Basin

Located in the east of China, the Huai River Basin is at the overlap of three transitional zones, namely southern and northern climates, high and low latitudes, marine and continental facieses. Its rainfall is unevenly distributed both temporally and spatially, the annual border changes in a year are extreme, the distribution of land and water resources is highly unbalanced, population density ranks highest among China’s seven major river basins, and competition for land between humans and the river are marked. In addition, the Yellow River has damaged Huai River for a long time, so the Huai River Basin shares many of its problems such as excessive water interspersed with water shortages, dirty water and water viscosity. As lots of river courses within the river basin span provincial boundaries, jurisdictional issues

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concerning water are complex, and it is hard to balance the competing interests of all parties, making administration of water difficult. The Huai River Basin is an area where China’s problems of water resources and river basin management are seen in concentration. If the problems of Huai River can be resolved, it will be of national significance. The major conclusions of the thematic report are as follows: (1) Flood and drought disasters and the water pollution are still the main water problems for the Huai River. In the last century and the early years of this the Huai River Basin experienced floods in 1950, 1954, 1991 and 2003, causing serious damage. Since the water pollution in the basin has been severe and water quality has worsened. Water bodies of most rivers and lakes are less than the standard Ⅲ. Ground water has also been polluted to varying degrees. The overall seriousness and the frequency of water pollution incidents have endangered human health and safety and affected economic development. Droughts have occurred frequently since the 1990s in this area and have shown a tendency to become more severe. The shortage of water resources and the water pollution have become a bottle neck in realizing the sustainable development of economy and society in Huai River Basin. (2) An imperfect administrative system, deficiency of democratic decision-making and harmonizing systems are the main problems in the administration of Huai River Basin. Comprehensive administration in the basin faces lots of problems, including those just noted above and also that legislation covering river basin administration has come late and local regulations are not well linked to department rules. (3) Progress of Comprehensive Administration of the Huai River Basin. Flood control, settlement of water affairs disputes among provinces, and the joint defense of Shaying River pollution have been ongoing components of comprehensive administration of the river basin, and the administration has seen improved outcomes. Flood control in particular has embodied the beneficial effect of a unitary body governing the river basin, both in terms logistical arrangements and in engineering construction and management. The Research Report on the division of water administrative rights between Huai River Basin and the Administrative Area written in 2006 has provided the basis for correctly dealing with the relationship between the river basin administration and the regional administration and improving the administrative level in the basin. Major suggestions in the thematic study reports are as follows: (1) Speed up the legislation and the improvement of existing statutes for the river basin; harmonize the relations between river basin and the region (2) Strengthen coordination and cooperation, work out a management committee system for the river basin (3) Set up a system for sharing information resources within the basin and for promoting public participation. (4) Develop international cooperation and research comprehensive management models for the river basin, making the safety of drinking water the basis of experimental work.

(Author: TAN Bingqing, Hydrology Bureau of Huai River Conservancy Commeision, MWR)

No. 11 Songliao River Basin

This subject introduces the setup and functions of the river basin administrative agencies, the

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Songliao Water Resources Commission of the Ministry of Water Resources. It gives a basic overview of the present situation regarding stakeholders in the Songliao river basin comprehensive management and makes a preliminary analysis of this. It summarizes in brief local laws, regulations and normative documents concerning the Songliao river basin management. It introduces in brief significant water related engineering in the Songliao basin in recent years, and also the aims, key projects and investment in the Songliao basin as part of the Eleventh Five-Year water conservancy planning. Suggestions for future directions are made up based on summing up past working experience and observed shortcomings in Songliao river basin water conservancy works and management. (1)Coordination among departments is a difficulty in basin management. At present, the seven major rivers organizations are subsidiaries of the Ministry of Water Resources. They are merely functional extensions of the Ministry of Water Resources in regard to basin management. The organizations are not able to coordinate affairs among the Ministries and Commissions of the central government. This limits the functionality of the organizations. Some other Ministries and Commissions are also planning to establish their own subordinate organs for basin management. If that happens it would mean every Ministry and Commission creating new basin level agencies, making unified and harmonized management of basin affairs meaningless. Basin comprehensive management has been selected as the overall water related affairs management policy by the Central Government. The State will grant authorization to the river basin administrative agencies directly by laws and from the State Council, and grant full powers for water related management to one river basin agency to establish an authoritative river basin comprehensive administrative agency. Water related affairs of all the Ministries and Commissions of the state shall be carried out via the same agency. (2)Coordination among provinces (including autonomous regions and municipalities directly under the Central Government) is a focus in river basin management. The main functions of the river basin administrative agencies are organizing, communicating, harmonizing and dealing with inter-provincial basin affairs and those between different industrial sectors so as to balance benefits among thee parties. River basin administrative agencies are the representatives of the central government. They must not represent the interests of one single industry but should work on behalf of the State (for example, implementing its policies to protect ecology and the environment). These agencies shall fully respect the local government and give full consideration to local interests. They should establish commissions and a coordination mechanism, and make sure the local governments and the related departments of the central government participate in these. The river basin administrative agencies mainly exercise organizing, communicating and harmonizing functions and seek consensus to maximize beneficial outcomes as far as possible. The river basin administrative agencies should operate in line with the principles of openness, fairness and impartiality. Provinces and different industries should follow the principles of “seeking truth from facts, unity and cooperation.” The river basin administrative agencies have the final decision-making power in those affairs where consensus can’t be reached. (3) Extensive public participation is the future direction of basin management With the development of a market economy and progress towards democracy, basin management will become better known to the public. At the same time harmonization of interests among all the administrative districts and industries should be sought, improving the transparency of government work, with broad public participation and the involvement of interested individuals and enterprises in basin management decision-making. Management should be more democratic. (4) Modern and effective information service systems provide vital support for basin management.

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It is a basic precondition for good basin management that modern and effective basin flood prevention warning systems, real-time water resources monitoring (including water quantity and quality monitoring, urban monitoring systems, and monitoring of irrigation districts, all in real time), soil and water conservation monitoring and other information service systems be put in place. This is also a requirement to achieve prompt, accurate and efficient basin management.

(Author: LI Heyue, Songliao Water Resources Commission, MWR)

No. 12 Dongting Lake River Basin

The Dongting Lake basin management is a complicated engineering system, involving water conservancy, agriculture, forestry, environmental protection and various governmental departments. However, the unitary function of the present water resources department is insufficient to assume responsibility for integrated river basin management (IRBM). Dongting Lake Water Resources Construction Management Bureau emphasizes individual project construction and program development, examination and appraisal, assessment and supervision. It rarely assigns manpower and material resources to overall management of Dongting Lake, which results a functional gap in legislation, water resources development plans and basin-wide management planning. Moreover, the relationships and responsibilities between water resources and administrative departments, as well as local governments and their supervising departments are not clearly demarked. They operate unilaterally and separately without a coordinating system, which creates a situation of multiple actors without a leader. Among all local regulations concerning Dongting Lake basin management, the most influential, the Water Conservancy Administrative Regulations of Dongting Lake, Hunan Province set out parameters for lake-wide water resources protection and administration, including the management responsibilities and procedures on embankment, rivers, lakes, culvert and sluice, drainage and irrigation, flood retention area, equipping a snail control project, flood control and emergency management. However, there are gaps as regards basin- wide soil and water conservation, wetlands protection and pollution treatment. The current problems of legal framework construction lie in a lack of rules and regulations similar to the comprehensive Dongting Lake IRBM Administrative Regulation. There are too many policies and rules promoting economic development while ecological compensation and a fair interest balancing mechanism are ignored. There is not enough coordination among regulations and sector-based tendencies in law-making and amendments are too strong. Some local legal articles and policies lag behind the changing times. The IRBM of Dongting Lake is centered around maintaining a healthy basin-wide ecosystem complex, and on water resource management. It covers relations between society, economy, environment and production, life and environmental flow, strengthens planning for water and soil resources, development and protection, and establishes basin-wide systems for flood prevention and drought control, resources management and ecological environmental protection. The aim is to promote harmony between people and water, maintain sustainable development for basin-wide society, economy and environment, and maximize public goods generated by the lake. The geographic boundaries for administration should center on the Dongting Lake and extend to cover the whole basin including its four tributaries and four estuaries of the Yangtze River.

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The IRBM of Dongting Lake must have an innovative vision and adopt comprehensive measures: (1) Strengthen the coordination among water-related sectors, improve IRBM, and establish an integrated communication mechanism between basin-wide decision-making coordinating organizations, integrated administrative institutions and all stakeholders; (2) Make a science-based master basin management outline plan, and amend the Dongting Lake integrated plan. Regard the lake as a whole ecosystem, focus on the relationship between mountains, rivers and lakes and consider that between economic and social development with water resources and environmental capacity. Take advantage of the opportunity presented by the Three Gorges Project construction and those brought by changes to rivers and lakes. Make fullest use of the role of rivers, lakes and reservoirs, so as to propose the Dongting Lake integrated management scheme; (3) Set up a sustainable protection and construction mechanism for Dongting Lake, including input and interest compensation mechanisms, in particular, tackling compensation issues in inter-provincial relations and middle and downstream relations for the lake; (4) Establish a monitoring system, enhance public participation and expand international cooperation for ecosystem protection and construction.

(Author: WANG Kelin, Institute of Subtropical Agriculture, CAS)

No. 13 International Rivers

This report offers an integrated analysis in three aspects, namely, international river administrative organizations and relevant functions, sector policies and local regulations, as well as international river water-related program progress and the Eleventh Five-Year Plan, of China’s present international river management, development and research status. Its main contents are: (1) Issues of multiple principal actors in international river management. For example, the issue of “Ministry of Foreign Affairs and nine other principals in water management”. The report offers a detailed analysis of severe functional overlap between MWR (Ministry of Water Resources) and SEPA (State Environmental Protection Administration) in water function zoning and water environmental function zoning, IRBM (Integrated River Basin Management) and basin-wide pollution prevention planning, trans-boundary water-related disputes intermediation and other issues in this regard. (2) Legislation and the implementation of local regulations and sector policies in international river management. In the late 1980s, as China reformed and opened up to the outside world including regional cooperation with the neighboring countries, the issue of trans-boundary resources and the environment of international rivers became a fresh focus of concern. In particular, China’s international river development, utilization and management drew attention from the Chinese government, neighboring countries and international organizations. Several national policies, rules and regulations were enacted in this field. The then administrative system combining sector leaders of water resources management and local administration saw the basin-wide management affairs of international rivers assigned by MWR to the following four basin organizations: Yangtze River Water Resources Commission, Yellow River Conservancy Commissions, Pearl River and Songliao Water Resources Commissions. Despite local governments’ limited administrative rights in this

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regard, confined to planning, development, allocation and policy-making for the big rivers, while development and administrative rights mainly center on their tributaries, local governments have key responsibilities in basin protection, policy enforcement and management from the level of the whole basin. Especially, as China’s market economy grows, the local-dominated development and utilization of the tributaries will pose a great challenge for the overall development and ecosystem safety maintenance at the national level for China’s international river management. (3) Connection between international river development and coordinating management and national development strategy. Since the turn of the new century, as globalization impacts China’s social economy, wise use and ecosystem protection of the trans-boundary resources of international rivers become a main component of national security and sustainable development. International river management has a direct relation with the harmonious development strategy. In the Eleventh Five-Year Plan, the NSFC (National Natural Science Foundation of China) and MOST (Ministry of Science and Technology) and others sponsor research on international river basins. MWR and SEPA are tostrengthen monitoring and evaluation, management and disaster prevention of international river resources. The NDRC (National Development and Reform Commission) and the local governments are also asked to intensify the development and protection planning of some key international rivers. Examples include water resources utilization and IRBM for the Tarim River, transboundary ecosystem safety control for the Lancang River basin and water resources protection planning of the Songhua River. In light of the factors above, this dissertation proposes the following suggestions for strengthening China’s international river management: (1) In line with the national strategy of political cooperation and harmonious development between trans-boundary regions, with the demands of the Western Development and neighboring areas’ social and economic progress in mind, the strategy for China’s international river integrated development and coordinating management should be segmented in different dimensions, such as national, regional (northeast, northwest and southwest regions) and international river basins, so as to complete master plans for some key international rivers, such as the Lancang River, Salween river, Brahmaputra River, Yili River, Heilongjiang River, Tumen River and others. (2) Plan and set up monitoring mechanisms at all levels according to law, including intra- sectoral, inter-sectoral, bottom-up and top-down mechanisms. (3) Further clarify departmental responsibilities and inter-sectoral cooperation obligations. Coordinate authority for basin management between basin organizations and local governments. Achieve basin-based integrated management, so as to improve the water management efficiency. (4) Institute a public participation mechanism, and strengthen capacity for public oversight of international river development and management. (5) Accelerate research and the building of an international legal framework related to trans-boundary resources environmental issues. Promote cooperation between scientific research and governmental administrative departments. Provide scientific and technical support for policy-making for international river management and development policy- making and institutional capacity building. (6) Prioritse capacity building for international river research and training-related institutions, human resources development and platform building. Strengthen scientific cooperation, academic exchange, education and information sharing between basin countries and related international organizations. Increase mutual trust, avoid misunderstandings and reduce conflicts. (7) Suggest Ministry of Foreign Affairs to set up an administration department at the bureau level to oversee international cooperation or neighboring affairs, so as to enhance

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capability to deal with these foreign affairs.

(Authors: HE Daming and FENG Yan, Asian International Rivers Research Center, Yunnan University)

No. 14 Legislation on Integrated River Basin Management

In existing legislation in China on the general management for drainage area, there is no integrated law, statute or regulation on the usage of water resources, prevention of water pollution and the ecological protection of the drainage area. Pertinent laws are spread out among different legislative fields, included usage of water resources, prevention to water pollution and ecological protection, disaster prevention and reduction. Important legislative systems for the general management of drainage area are absent and what laws, statutes and regulations were established under the framework of individual departments and local district management. This radically restricts the formation and development of the general management of drainage area. To boost the general management of drainage area, China needs to revise and enact pertinent legislation, clearly defining the legal rights and responsibilities of every actor or interested party ， including government at all levels, departments in charge of water, environmental protection agencies, departments in charge of general economy, resource departments and other institutions and individuals with an interest in water as regards drainage area management, especially in the process of reform and innovation to the management system of drainage area. Meanwhile, based on a clear definition and effective protection of “water rights”, it is also important to extend the participation of the beneficiaries in decision-making and management of water usage, and form a new type of legislative system of effective coordination of water resources usage, prevention of water pollution and the protection of water ecology.

(Author: WANG Fengchun, Environment and Resource Committee, NPC)

No. 15 River Basin Planning

River basin plans are guiding documents for the activities in river basins associated with water resources, such as the development, utilization, conservation, and protection of water resources, as well as flood prevention and other work. They are an important basis on which government performs its duties of social management and public service, and play very important role coordination between water and socio-economic development. Thus strengthening river basin management must start the planning. For a long time, due to the profusion of sub-sector and sub-grade management of resources and the environment in China, there have been many actors associated with river basin planning, and no well defined legal relationship among these different interest groups.

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Mutual relationships are very complicated. Problems in existing river basin planning and its management in China include the following: first, legal and regulatory systems for water planning and coordination mechanisms in river basin planning were substandard, and many plans suited certain industrial sectoral interests; second, there was a lack of effective implementation and monitoring mechanisms for river basin planning, also no adequate mandatory standards; third, the water planning system was imperfect with ambiguous relationships; fourth, the management system for river basin planning was poor with imperfect mechanisms; last, the content and orientation of much planning was not suited to the needs of systematic innovation for a market economy, changing river basin situations and broader changes over time. Therefore the following actions are recommended: (1)Study and formulate the regulation of water planning and management, and define legal relationships and procedures, led by the Legislative Affairs Office of State Council. (2)Establish and improve planning coordination mechanisms for stakeholders. (3)Pilot innovatory projects on river basin management, establish a River Basin Commission including central and provincial departments, form an efficient decision-making and implementation mechanism, and improve river basin management systems combining river basin and regional management. (4)Strengthen the building of water information infrastructure, improve information platforms in river basins, develop and utilize new technology in planning, research into major issues and difficult problems in the development of river basins, strengthen the training of technical and managing personnel to improve their planning skills.

(Author: LI Yuanyuan, Water Resources and Hydropower Planning and Design General Institute)

No. 16 Economic Measures for IRBM in China

Based on analysis of institutional functions, laws and regulations, program planning related to economic measures in IRBM (Integrated River Basin Management), the following estimates can be made: (1) China’s water-related administrative departments have had lots of powers relating to economic measures. Concentrated in macroeconomic agencies like the National Development and Reform Commission and Ministry of Finance, those powers are however too general to be applied to decision-making and practice for basin-wide economic measures. (2)Both the overall framework and specific contents of China’s water-related and basin management laws and regulations basically center on compulsory administration. What little discussion there is of economic measures fails to provide a legal basis for operation and enforcement. The most common economic measure the laws as they stand is fines, which are set out clearly in some key laws and regulations. More basic and important measures like funding and taxation are rarely mentioned in other laws and regulations apart from the Fisheries Law. (3)Compensation and charging are also economic measures commonly set out in laws and regulations. For the former, its major function seems not to be fulfilled. An over- emphasis on “direct loss” as a criterion increases the negative impact of a ceiling on leviable fines and at the same time reduces the role of economic measures in basin-wide management. As for charges, though advocated in the existing legal system, fee levels remain at the lower end due to enforcement, hampering actual operation.

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(4)Historically, planning in China has been at the whim of government and used as a basic means for government administration and policy enforcement. Similar to planning in other fields, though clear targets and requirements are mentioned, river basin plans and related programs do not make detailed provisions on funding sources, especially on the vital work of pollution control. This is much more ambiguous compared to the clear provisions for funding of water resource utilization, which is closely related to economic development. China has been one of the most active countries in terms of domestic financial, tax and price reforms in recent years. Ongoing economic development, marketization, rising fiscal revenues, a reformed public financial system, investment transition in the national debt program, adjustment of financial expenses structure and rising environmental awareness for government at all levels, all make for a golden opportunity to set up economic measures for basin management. (1)Moving on from previous models of first full centr allocation and then “economic growth fuelled funding”, China has entered a third phrase of public finance, bolstered by the solid support of a stable and rapidly growing national economy. (2)As the public financial system continues to be reformed, central and local government are making more frequent use of taxation to control key economic and social issues. This has included raising personal income tax thresholds, repealing and resuming textile export tax rebates, and the nation-wide elimination of agricultural tax. Tax reforms with environmental goals include raising tax rates on some resources, charging higher consumption tax for motor vehicles with high emissions, and advocating fuel oil tax be set aside for 10 years. It should be noted that though current tax reform is geared towards economic development, there are greater opportunities for environmental and resources tax measures than ever before. These should be grasped for river basin management to allow timely actions and maximize positive outcomes. (3)As the economy grows, flexible income from environment resources makes it possible to set public pricing based on real environmental cost. For instance, people will be more and more willing to pay for water environment and resource protection. The economic benefit brought by resource saving and environmental quality improvements after price rises will offset the cost increase. Supported by fiscal expenditure and taxation, water pricing should create more scope in decision-making. For example, the implementation of financial transfer payments and preferential tax policies could both reduce pricing levels as appropriate for less developed regions, and also draw more investment to these region to boost local economic growth. The study shows that the general objectives for economic measures in IRBM in China are: to adjust and complete the basin-wide economic policy system through institution innovation oriented towards IRBM; to increase government inputs, guide social funding investment, strengthen supervision management and policy implementation, and enhance economic policy effectiveness and efficiency, so as to ensure the successful implementation of IRBM. The concrete targets are: (1) Adjust policy framework for basin-wide management. China has drafted an initial general policy framework for basin management (laws, regulations, plans, rules and standards). In terms of the operation of decision making and economic policy, attention should be paid to an analysis of the rationality and efficiency of the prevailing framework to provide suggestions for its further improvement. (2) Reform economic policies for basin-wide management. Within the general policy framework, efforts should be made to adjust and renew economic policy, creating a full system that is in line with the overall objective. (3) Increase inputs into IRBM. With a view to resolving insufficies and imbalance in inputs into basin management, it is necessary to clarify government administrative powers and put forward policy suggestions for financial powers, strengthening the control of central

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government over basin management, formulating economic policies, and better attracting social funding. (4) Enhance funding efficiency. With basin management targets, the efficiency of all kinds of funding (financial, commercial, social and international) should be raised through economic policy-making and policy reform, as well as through monitoring and better implementation. Efforts are needed to strengthen the monitoring and executive capacity of government at all levels and public supervision of water environment protection. (5)Correct market failures and establish a market system. The dual functions of economic policies should be given full play to make up for failures of traditional markets in basin management and to help establish a new environmental-friendly market system.

(Author: MA Zhong, School of Environment and Natural Resources, Renmin University of China)

No. 17 Scientific and Technical Support for River Basin Management

China has established a systematic and generally effective scientific and technical (S&T) management system and funding system for research, with clearly defined divisions for various sectors and channels. Research programs on water and river basins are funded by various means. A large number of sectors or institutions are involved in this process, including ministerial-level sectors and institutions such as the Ministry of Science and Technology (MOST), the National Natural Science Foundation of China (NSFC), Chinese Academy of Sciences (CAS), Chinese Academy of Social Sciences (CASS), Chinese Academy of Engineering (CAE), Ministry of Education (MOE), Ministry of Water Resources (MWR), and State Environmental Protection Administration (SEPA). At vice-ministerial-level funding comes from sectors and institutions under the State Council and the National Planning Office of Philosophy and Social Science (NPOPSS). The major research programs include the National Basic Research Program (‘973 Program’), High-tech Research and Development Program of China (‘863 Program’), S&T Support /Key Technologies Research and Development Program, National Key S&T Special Program/National Key Special Program, to Science Fund, National Knowledge Innovation Program and S&T Special Program for Public-interest Sectors, which also provide financial support to the water and river basin research projects on different levels, topics and scales. Generally speaking, the MOST, NSFC and the NPOPSS are the main funders for national research programs, whereas CAS, MOE and other sectors/institutions mainly offer financial support to research programs of organizations under their own sectors/institutions. However, the CAE only funds its own academicians and other experts outside CAE for consultative research on water/river basin issues. Over recent years, the Chinese central government has invested huge sums of money in water/river basin research programs through various channels, and substantial outputs have been achieved in both theory and practical terms. Despite this, there is still much room for improvement, particularly in the areas of S&T administrative systems, planning and the implementation of the science programs. In particular, better communication and collaboration between/among various sectors/institutions and channels are called for, while in the long-term, integrated water/river basin research programs that involve many targets and multi-disciplines also need to be strengthened. To meet this challenge, it is imperative that we :1) establish a coordination and collaboration mechanism between/among various sectors for approving and implementing

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synthesis research on water and river basins; 2) develop a sound system for the integration and approval of national key S&T programs, and build a national S&T management information sharing platform to provide support to different research programs; 3) integrate different research projects, preferably by means of national key S&T special program, and consolidate the disciplines to provide synthesis research on water and river basins, mainly through such key research programs as funded by the NSFC; 4) provide more financial support for basic applied research and macro-level strategic studies, moving away from an over-emphasis on purely technical research and development, thus distinguishing new research from the older 863 Program; and 5) increase inputs into social science research projects. Since 2000, a total of CNY1.3 billion (about USD170 million) has been provided by the three major S&T programs and National Key S&T Special Program to support research projects on water and river basins. In addition, the CAS has invested about CNY230 million (USD30 million) in related research through its Knowledge-Innovation Program. The NSFC has also provided substantial support for basic research projects. As a result, a series of S&T outputs have been achieved in such areas as the hydrological cycle, water resources, water environment and aquatic ecology, river basin-scale ecology and environment, river basin-level economic development ,and water use and diversion policies. At the level of national planning, during the period of the Eleventh Five-Year Plan (2006-2010), increased funding will be provided by various S&T programs and funding sources for research programs/projects on water and river basins. This is clearly set otu in the Guideline of the National Medium and Long-Term Scientific and Technological Development Planning and similar five-year planning. Of the 11 key areas and 62 priority themes listed in the Guideline, at least two key areas and five priority themes are related to water and river basin research. The topic of water body pollution prevention and control is also included within the 16 key special programs. Water and river basin research in China has thus been provided with very favorable enabling conditions, providing a good opportunity to conduct international collaborative research on water/river basin issues. Nevertheless, multi-disciplinary, integrated and synthesis research on major river basins has not been given full attention in the major national S&T programs (either already implemented research projects or in upcoming ones). This needs to be improved in the project approval and implementation process. It is hoped that in the key special program whose implementation plan is being developed on water body pollution prevention and control, and also in the key research program to be proposed and funded by NSFC on river basin synthesis research, experts from various disciplines and sectors can be involved in integrative and synthesis research on river basins. As regards research program approval and international collaborative research on river basins, we recommend: (1) Involve experts from various sectors and disciplines in proposing key research programs on water and river basins At present, the water and river basin research is generally listed as one of the key areas in most of the major S&T programs at the national and sectoral level. Thus relevant organizations and experts should take advantage of this great opportunity to propose research projects, working closely with experts from other sectors and disciplines. The first and most important step in obtaining approval for a project proposal is to enable the proposal to be listed as a candidate project and be included in the annual project guideline. Such key programs as the 973 Program, 863 Program, and S&T Support Program are driven by national needs, and MOST gives top priority to the needs of various sectors, in particular sectors in applied areas. As a result, one of the critical steps for the sector in applied areas to get approval for a project proposal is to work with scientific research institutions in developing that proposal and submitting it to MOST. In addition, the main theme and project proposal should be selected and prepared to meet

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key national needs, and in the light of the Guideline of the National Medium and Long-Term Scientific and Technological Development Planning and the similar five-year planning on S&T. (2) Promote the approval and launching of research programs funded by NSFC on river basins. The Development Planning of NSFC in the Eleventh-Five-Year Planning Period (2006- 2010) lists 15 key research programs to be implemented during this period. To date, 14 programs of this kind have already been launched and implemented. Since a key research program on river basin is currently under proposal, great efforts should be made to promote the approval and eventual implementation of this program. (3) Work closely with international research institutions to apply for research programs and conduct collaborative research To date, research projects on water and river basins have already been listed as a focus for international collaborative research by MOST, NSFC and other sectors/institutions. Organizations and experts in China are, therefore, asked to work closely with overseas research institutions to apply for international collaborative research projects on this topic, either funded by the Chinese government or by international funders, in order to learn from global best practices.

(Author: HUANG Tieqing, Bureau of S&T for Resource and Environment, CAS)

No. 18 Water Resources Management

China is a water-poor country, with an insufficient natural water resource endowment that has only a low usable proportion. These particular conditions of natural geography mean that availability of water resources is distributed unevenly both spatially and temporally. Of the overall pattern of economic and social development does not line up with the distribution of water resources, and supply and demand for them is highly problematic.. As well as the impact of global climate change, population rises and economic growth, China will face an ever worsening water resource restraint on prospects for sustainable development. Challenges to that goal of harmony between man and nature will come largely from water issues: shortages, severe pollution and worsening of the water ecosystem and environment. Under such enormous pressure challenges to water resource initiatives such as river development, engineering construction and management are marked, and this is seen in the administration of China’s river basin resources. This report describes the current situation in water resource management, identifies the main issues and puts forward proposals for action. The problems faced are no longer just the traditional shortages in water for agricultural irrigation or of flood control. Now there is a general shortage of water, made worse by pollution, ecosystem deterioration and frequent severe water disasters. The ever-changing nature of the problem will make ensuring water security an enormous challenge. Local situations are often not included I national early-warning mechanisms and there is a crisis in overall management. Management by region and sector is no longer able to cope or to resolve emerging conflicts. It is imperative that a new integrated system be introduced. Capacity must be built for ongoing monitoring and to create the ability to respond to the challenge of future crises.

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(Author: XIA Jun, Institute of Geographic Sciences and Natural Resources Research, CAS)

No. 19 Water Environmental Management

Water environmental protection began in the 1970s in China. An environmental protection management system suited to China’s national situation has taken shape following the promulgation of the Water Pollution Control Law and Water Law and the establishment of environmental quality standards and standards for pollutant discharge. Great advances have been made in water environmental protection in China since 2000. These include the promotion of, water pollution control which has brought an improvement of industrial structure, resulting in the closure of 40,000 enterprises or production lines which cause severe pollution. Eight industries including the chemical industry, which severely pollutes the environment, were reformed and a reduction of 50 percent of total discharges of chemical oxygen demand per unit industrial output value nationwide was achieved. Key river basin pollution control has been supported, a cumulative CNY80 billion invested in pollution control in important water bodies: the Huai River, Haihe River, Liaohe River, Taihu Lake, Chaohu Lake and Dianchi Lake. Some 1800 projects have been completed or are under construction. Water pollution control capacity has been enhanced with 800 newly-built municipal sewage plants, bringing the rate of municipal sewage treatment nationwide up to 52 percent. Ongoing improvements have been made to water pollution control systems and leadership and coordination in water pollution control. Target management, supervision and inspection as well as an accountability system have been established. However, the grim situation of the water environment in China mean we must remain on high alert. In 2005, 411 surface water monitoring sections in seven largest water systems in China showed that 27 percent of water was worse than Grade V water quality, meaning it was unfit for use. More than 300 million rural citizens face problems with unsafe drinking water. Water resources in some river basins are overused. Utilization rate of water resources in Huai River and Liaohe River exceeds 60 percent; in the Haihe River it exceeds 90 percent, far exceeding the level of rational use. Many industries such as the petrochemical industry which are severely polluting have been developed along the rivers, with some located near drinking water sources and densely-populated areas; many earlier founded enterprises are poorly equipped and under poor management with deficient pollution control facilities, thus posing a threat to the safety of water body. Efforts must be intensified to reform and improve the water environmental management system in China. We suggest: (1)Establish coordinated and efficient management system. The government should step up efforts to adjust departmental functions and in the division of work, enhancing capacity for integrated coordination between departments such as the development and reform commission (SCDRC) and MOF. Acting as the watchdog of environmental protection and law enforcement department, the environmental protection department should make it crystal clear that laws will be strictly enforced. Water resources department must strengthen integrated management of water resources and establish a coordinated system for this. (2)Revise laws on water environmental management as soon as possible. The Water Pollution Control Law and Water Law should be revised to promote balanced development that is environmentally sustainable. Coordinated and uniform functional zoning of water area should be established to exercise unified management of fixed amounts in water supply and water consumption, drainage concentration and total quantity. Vigorous efforts should be

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made in legislation on non-point source pollution control, especially agricultural source pollution. A public interest litigation system for environmental protection should be established. Punishment for water pollution should be greatly strengthened to increase the cost of lawbreaking. (3)Use economic means to improve the efficiency of pollution control. Integrated coordination departments such as SCDRC and financial department should quicken the pace of formulating economic policies conducive to water pollution control, the levying of urban sewage treatment fees and higher pollution discharge fees as well as implementing tax policies which are beneficial to water pollution control. An appropriate environmental taxation system should be practiced as part of ongoing tax system reforms and the requirements of environmental protection targets in China. (4)Improve the funding system for water pollution control. A diverse funding system encompassing government, enterprise and society should be established and financing channels should be broadened to allocate funds to water pollution control projects under the guidance of national government and also market-oriented and with broad public participation. In the future five to ten years, the state should allocate more funds to environmental protection in the following aspects: public finance and expenditure for environmental protection brought in to the fiscal budget of government at various levels; direct investments or subsidies for key projects such as continuous issuance of treasury bond; more soft loans to enterprises to improve pollution control and cleaner production; use financial means such as transfer payments to help water environmental control in poorer western and central regions; reform the system for collecting pollution discharge fees and increase government investment in environmental protection. (5)Promote water environmental protection through making environmental affairs public. Public ecological awareness should be raised and the right of the public to know the truth about environment should be guaranteed. Government affairs should be made public and environmental information sharing and publicity systems should be established. Information sharing should be implemented for water sources, pollution sources, river basin hydrology and the health of populations. Enterprise performance on discharge should be made public in the key industries causing severe water pollution, to facilitate public oversight. Pressure from society and the public on the enterprises concerned will help achieve the goal of less pollution.

(Author: LI Yunsheng, Water Environment Institute, Chinese Academy of Environmental Planning)

No. 20 Standards of Drinking Water

This report focuses on the assessment of drinking water-related laws, regulations and standards in China. Taking the standardized management system as an entry point, it first lists and evaluates existing standards on the water environment, water-related legislation and the standards for drinking water sources. Next, both the principal and secondary standards on drinking water are presented. It addresses the history of national standards on drinking water hygiene, specifications on the revision of the new drinking water standards, as also the gaps between China’s national standards and international best practices. For secondary standards, an analysis is given of the characteristics of various national and sectoral standards, including the principal or participating agencies developing these standards. In addition, comparisons between Chinese and international standards on drinking water are made on the content of

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indicators and other factors. The report identifies an urgent need to include standardization as one of the national strategies in the Eleventh-Five-Year Plan (2006-2010) and highlights its critical role in promoting the development of a socialist market economy in China. Only in this way can China move forward in standardization in the drinking water sector. Further recommendations are made, including : 1) improve the practice of various sectors’ involvement in drinking water standards, and establish a coordination mechanism between/among various sectors; 2) shift from the old practice of drinking water standards reviewed and prepared by experts, to one of a project authorization mechanism integrating expert reviews, business participation and policy-making; 3) establish a sound system for revising drinking water standards with enterprises as the major actors; 4) increase national input in drinking water standardization. All in all, only when a sound drinking water standardization system is in place in China, can public health be safeguarded and the drinking water sector be developed in a sustainable way.

(Author: LI Fuxing, Beijing IDM Institution of Bio-technology)

No.21 Environmental Flows of Rivers in Northern China

Shortage of environmental flows is one of the biggest problems threatening the health of rivers in China. For most northern rivers, it is even the biggest problem. Because a shortage of environment flow can cause a series of environmental disasters such as aggravation of riverbed siltation, reduction of natural wetlands, deterioration of seawater quality, enlargement of groundwater funnels, and the reduction and even disappearance of the tail- stream oases. The major causes of environment flow shortages are poor public awareness of environmental protection, unclear authority in water resource administration, and insufficient communication and interaction among central authority departments. Stakeholders in environment flow include the Ministry of Water Resources, State Environmental Protection Administration of China, State Forestry Administration, State Fishery Administration, State Oceanic Administration, local government, the public and hydropower enterprises. The Ministry of Water Resources plays a decisive role in determination and implementation of environment flow while other stakeholders have little impact. This is obviously contrary to the concept of environment flow. In order to protect rivers’ environment flow and health, the government should develop capacity building with environment as its theme and enhance inter-departmental cooperation centered on water resources departments under the guidance of the concept of integrated management. Most of the rivers in northern China and the inland rivers in northwest China have been severely degraded due to over-extraction of runoffs and over-regulation of floods over the past decades. By end 20th century, the lack of environmental flow has resulted in the sharp decline of natural functions of the rivers, posing a major threat to the life of rivers and the human health, and hindering the sustainable socio-economic development in Yellow River basin and its related areas. It is predicted that in the next few decades, the rising population, industrial development and poverty reduction will place a greater pressure to the environment. Under such context, people are obliged to rethink their ways to deal with the rivers. Ensuring the environmental flows of the rivers is key to maintaining the health of the rivers. It is also a major challenge to the current river management. To help address this challenge, we propose the recommendations as follows: (1) Promoting the capacity building on environmental flow. International exchange and

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collaborative research will be conducted on selected rivers in China, such as Yellow River, Heihe River and Tarim River, with both international and national funding. It will bring together the national ecologists, environmental scientists and water resources experts to improve the understanding and capacity of environmental flow researchers, river water resources planners and managers, and to provide information support in terms of river environmental flow. (2) Facilitating cross-sectoral cooperation, with the water resources sector playing a leading role. In river water management, the water resources sector will take the leading position. However, it needs to engage other relevant sectors in water resources or river basin planning, and water management cost-effectiveness assessment. Only in this way can the water resources in the river basins be allocated more wisely for their sustainable use. At the same time, other relevant sectors should also identify a reasonable target for river ecological and water quality protection, determine the corresponding water needs and their temporal and spatial distribution, and communicate actively with the water resources sector. It is recommended to establish a river basin management commission at the national level that represents the major stakeholders, on the basis of 7 existing basin-level organizations. A decision-making coordination mechanism on major issues will be made available to define and change the environmental flow on a scientific basis. (3) Establishing an independent organization responsible for the river basin public information collection. An independent organization is recommended to be set up at the national level, which will take charge of collecting, processing and releasing the information related to runoff, water use, sediments, siltation, landforms, water quality, meteorology and ecology within the river basin. This organization should be fully funded by the central government to ensure the impartiality of the information and to ensure that the information can be shared among the stakeholders. After that, other sectors will not be responsible for this effort. 4) Launching some priority actions on environmental flow. On the basis of IRBM, some priority actions need to be taken to focus on the environmental flows in middle and lower reaches of Yellow River and Heihe River. These priority actions include: a) A symposium on environmental flow will be convened by bringing together the experts and professionals on river basin integrative planning, water diversion, and environmental flow. International leading scientists on environmental flow will be invited to give keynote speech and hold discussions on the concept and tools on environmental flow with the national experts; b) A forum on environmental flow will be organized by involving the stakeholders of Yellow River or Heihe River, in order to provide a good opportunity for the river water managers to hear the interests of the stakeholders, and for the stakeholders to understand the water resources status and the needs of various water users; c) Collaborative research projects on environmental flow will be initiated by engaging the experts from the relevant disciplines. Efforts will be made to link the research findings with the ongoing river basin integrative planning and water diversion practices.

(Author: LIU Xiaoyan, Yellow River Conservancy Commission)

No. 22 Stakeholders of Hydroelectric Development

This special report looks into china interest correlatives of hydroelectric development, principle departments and institutions involved in and related laws and regulations as well as

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the existing problems, forecasts “eleventh five years” planning and that in days to come of hydroelectric development, and in conclusion brings up suggestions of institutionalize construction about hydroelectric development and ecology dispatches which is suit for integrated management of water resources. The follows are some key achievements: (1) China watershed management and hydroelectric developing institutions have gone through many reforms. Today, the principle organ for China hydroelectric development and supervision is State Commission for Developing and Restructuring, which is responsible for examination and approval of large and medium type items(above 50,000kw); Committee of Supervision and Administration of State Property takes charge of investment, buliding and supervision of reservoir and hydroelectric power station through its subordinate large government enterprises; Ministry of Water Resources deals with affairs as water resources management, water amounts dispatch, development of mini hydroelectricity(below 50,000kw), and supervision of reservoir immigrant development. Environment protection sector, Forestry Department and Fishery Department of Ministry of Agriculture are the affected sides by evaluating environment influence, valuing the protection of propagation and fishery to influence hydroelectric development. The main benefit affected sides in hydroelectric development are the immigrants caused by reservoir flooding and the ecosystem of rivers. (2) Right now, there aren’t any laws and regulations for hydroelectric specially and the correlated laws are Water law, Regenerative Energy Law and Environmental Impact Assessment Law. The main problems existed in the laws and regulations are that these laws don’t define some special subjects such as watershed planning and hydroelectric, etc, the watershed integrated dispatch and management and single hydroelectric power station along with the relation and liabilities main bodies of hydroelectric development and ecological environment; The same goes for the situation which don’t set up coordination mechanism between every department and benefit counterparts , don’t set up participation mechanism of benefit counterparts for hydroelectric project planning ,scheme, construction and management, and don’t set up technologies and mechanism for the dispatch of single reservoir and the watershed ecology. (3) China economy is still in the instant development period for the moment and future 20 years. It will be in great need of energy and water as regenerative energy will be supported strongly by the state. Therefore, it will be the biggest phase for hydroelectric development in the future 15 years and the main area is in China western region, including upper reaches of Yangtze River and Yellow River as well as all rivers in southwest and so on. By the time Eleventh –five Years project ends, it is predicated that hydroelectric development level will vary from 25%, the present development level, to 35% and reach 60% in 2020. (4) Hydroelectric development is the biggest project of watershed resource development and has tremendous influence. In China, if we want to motivate the water resource integrated management on watershed, we must consider the influence to the nature environment of watershed and to the society. The ways and suggestions to solve the present problems are the following: to strengthen watershed integrated management and hydroelectric development’s institutionalized foundation, to establish the system and mechanism for every department, benefit counterparts and society public, to establish the coordination and compensation mechanism for benefit counterparts related to hydroelectric development, to perfect and improve the technology about watershed ecology dispatch, to strengthen the education and propaganda about water resource of streams and ecosystem , to strengthen watershed ecological supervision, scientific research and international cooperation and to learn the knowledge of developed countries.

(Author: CHEN Jin, Yangtze River Scientific Research Institute, Changjiang (Yangtze) Water Resources Commission)

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No. 23 Protection of Hydrobios Diversity in the Yangtze River Basin

This thematic report describes the current state of hydrobios diversity and resource protection in China’s Yangtze River basin and existing problems. also It also explains the causes of these problems, seeing stakeholders as key in their resolution. Present problems include long-term rapid development of water-related projects seriously destroying hydrobios habitats, water pollution exerting wide and serious impacts on hydrobios resources; over- and illegal fishing causing a steady drop of hydrobios resource volume and other human activities, such as shipping and sand excavation, having a serious impact on hydrobios resources. The causes of these problems include: a graded management system from the central to the local and with as yet little concept of scientific development, a separation between water resource management and environmental management delinking water resources’ ecological property and economic property, contradiction and conflict often found between laws and regulations and between protection and development, interest conflicts among departments and insufficient participation of the stakeholders making it hard to implement the protection; insufficient investment making it hard to advance the cause of hydrobios protection, insufficient public participation making for a lack of support, no laws to follow or no obedience to laws or no strict enforcement of laws, a difficulty in genuine implementation of environmental protection. The most fundamental and common cause is the fragmented mechanism of “multi- channeled water management” for the Yangtze River where there is overlap under the special management system of graded management yet also barriers existing between different departments and between different regions. The rights and interests of stakeholders are often different or even completely opposed. Under the drive of different claims for interests, a “single” river with an integral ecological function has been artificially divided into “several” rivers to satisfy the demands of different interests. In a situation where there is no national unified planning, different stakeholders are planning and using various kinds of resources of the Yangtze River based on only their own responsibilities and demands. Under the system of “each-one-doing-his-duty”, there is no way to require independently operated “planning and use” to give an integral consideration to and make rational use of the various resources of the Yangtze River. Because contradictions and conflicts naturally exist among different stakeholders, the “each-one-do-his-duty” mechanism not only makes resource use in the Yangtze River irrational and inefficient, but worse, endangers the survival and sustainable development of the river. Under the guiding principle of “giving top priority to development”, it can be said that the protection of the Yangtze River hydrobios diversity and resources is weak and of only secondary status. It is impossible to be optimistic about future prospects. In the light of above problems and their causes, the writer here analyzes the attitude and roles of the stakeholders in the protection of the hydrobios diversity and resources in the Yangtze River basin and puts forward recommendations for enhancing comprehensive management of the basin and addressing the interest conflicts between the stakeholders. These include: earnestly promoting a change in development concept and foster a core value of scientific development; enhancing legislation to lay down a solid legal foundation for environmental protection; strengthening river basin comprehensive management to promote national unified planning and inter-departmental cooperation; increasing funding to reinforce long term monitoring and scientific research; promoting public participation to build a social consensus for hydrobios protection; enhancing international cooperation to introduce advanced concepts in management; and given the present emergency, to carry out various kinds of protection measures as soon as possible. The writer also points out that in the long term hydrobios diversity and resource protection must be made an integral consideration in river basin comprehensive management. Protection should be implemented as an important

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task in comprehensive management of the river basin. Only then cab the problem be addressed at its roots.

(Author: WANG Ding, Institute of Hydrobiology, CAS)

No. 24

Transjurisdictional Coordination for Yangtze River Basin Management

The Yangtze River is of great strategic importance to national socio-economic development in China. The past 50 years have witnessed significant achievements in the exploitation and management of the Yangtze River basin, and have also seen rapid economic growth in the region. Areas along the main stream of the Yangtze have now become one of the most highly- developed regions of China. In addition, a system that combines integrated exploitation of water resources, flood control and ecological protection has begun to be established. Laws and regulations on river basin management have been developed and publicized. All these efforts have improved capacity for integrated river basin management. However, since early years of the new century, rapid economic development has placed greater pressure on natural resources and the environment of the river basin. Cumulative impacts have come from key engineering projects and there is a growing threat to water supply safety in the lower reaches due to pollution by heavy and chemical industries. The full openness and fast economic growth of the river basin have complicated its management and regional development, posing a major challenge to the traditional practices in river basin management. As a result, there is an urgent need to balance local resource exploitation and environmental protection to maintain the health of the Yangtze River from the broader perspective of the river basin as a whole. The region of main streams of the Yangtze River, stretching across nine provinces and two municipalities in China, is a key area for trans-boundary coordination for the basin. The diverse locations and different development levels of various administrative areas have brought about different interest needs in water resources exploitation, flood control and ecological protection. In general, the administrative areas in the lower reaches are more interested in pollutant discharge control in the upper and middle reaches, water quality protection of main streams, and the negative impacts of large-scale water engineering projects; while the administrative areas in the middle reaches focus more on the flood control, floodwater storage area construction and compensation, regulation of lakes and rivers, water and soil loss and pollutant discharge in the upper reaches, and the linkage of water transportation between middle and lower reaches. The upper reaches are mostly concerned with the economic compensation for ecological protection. There is as yet no sound supervision system for the integral river basin, nor an effective tradeoff and coordination mechanism between/among different regions available in China. With the tightening of water supply, and due to the nature of water resources (integrity, multi- function and exclusiveness) and externalities in exploiting water, conflicts and disputes occur frequently between upper and lower reaches arising from the water resource exploitation , which are often reflected in economic activities such as flood control, power generation, water use, water discharge, water transportation, and fishery. The conflicts are mainly due to: 1) unclear tenureship of trans-provincial water resources; 2) different interests of neighboring provinces in flood control; 3) disparate interests of the upper and lower reaches because of the construction of water engineering projects; 4) water disputes caused by water pollution; 5)

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different interests in watercourse management; and 6) various regional interests in large-scale development. To help address the conflicts of trans-boundary management in the Yangtze River basin, a coordination facility and mechanism must be established that represents the water-related national sectors and provincial governments within the river basin, through legislative, administrative and economic means. A sound legal system on IRBM needs to be developed by taking into account the actual needs of trans-boundary coordination within the Yangtze River basin, and by revising existing laws and regulations. It is also important to speed up the process of revising and implementing an integrative plan for the Yangtze River basin, with the objective of maintaining the health of the river and finding a balance between human and environmental needs. Efforts should also be made to explore a water–rights-defining and water market management mechanism suited to the existing political system in China. Enhanced collaboration is also needed between and among local governments within the river basin to release and share the relevant information, and to promote public participation in the process.

(Author: YANG Guishan, Nanjing Institute of Geography and Limnology, CAS)

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Annex I: The Expert Panel on Integrated River Basin Management

Chair： CHEN Yiyu Prof., Academician President, National Natural Science Foundation of China (NSFC) Member of the Standing Committee, National People’s Congress (NPC)

Members: CHEN Jin Vice Director, professor., Yangtze River Scientific Research Institute, Changjiang (Yangtze) Water Resources Commission (CWRC) LI Lifeng Dr., Director, WWF China Freshwater Programme LI Yuanyuan Vice President, professor, Water Resources and Hydropower Planning and Design General Institute (GIWP) LI Yunsheng Professor, Water Environment Institute, Chinese Academy of Environmental Planning LIU Xiaoyan Vice Chief Engineer, professor, Yellow River Conservancy Commission (YRCC) MA Zhong Dean, professor, School of Environment and Natural Resources, Renmin University of China WANG Ding Deputy Director, Professor, Institute of Hydrobiology, CAS WANG FengchunProfessor, Environment and Resource Committee, NPC WANG Xuejun Professor, School of Environment Science, Peking University WANG Yi Deputy Director, professor, Institute of Policy and Management, CAS XIA Jun Professor, Institute of Geographic Sciences and Natural Resources Research, CAS YANG Guishan Director, professor, Nanjing Institute of Geography and Limnology, CAS YU Xiubo Associate professor, Institute of Geographic Sciences and Natural Resources Research, CAS

Coordinator: LI Lifeng Dr., Director, WWF China Freshwater Programme

Secretariat： YU Xiubo Associate professor, Institute of Geographic Sciences and Natural Resources Research, CAS MA Chaode Officer, WWF China Freshwater Programme WANG Yahua Assistant professor, School of Public Policy & Management, Tsinghua University PAN Mingqi Ph.D candidate, Institute of Geographic Sciences and Natural Resources Research (IGSNRR), CAS CHEN Shaofeng Associate professor, Institute of Policy and Management Sciences, CAS

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Annex II: List of Sector-based Experts

CUI Lijuan Professor, Center for Wetland Research, Chinese Academy of Forestry FAN Ruiping Deputy Director, Department Foreign Capital, MWR HAO Tianwen Professor, Institute of Infrastructural Planning & Design, China Academy of Urban Planning & Design HE Daming Dean, Professor, Asian International Rivers Research Center, Yunnan University HUANG Tieqing Dr., Division chief, Bureau of S&T for Resource and Environment, Chinese Academy of Sciences HUANG Wei Professor, Yangtze River Scientific Research Institute, Yangtze River Conservancy Commission, MWR LI Fuxing Director, professor, Beijing IDM Institution of Bio-technology LI Heyue Vice Chief Engineer, professor, Songliao Water Resources Commission, MWR LIU Xiangmei Dr., Bureau of Environmental Supervision, State Environment Protection Administration SUN Zhen Division chief, Department of Regional Economy, National Development and Reform Commission SUN Yangbo Professor, Yellow River Conservancy Commission, MWR TAN Bingqing Chief Engineer, Professor, Hydrology Bureau of Huai River Conservancy Commeision, MWR WANG Yamin Professor., Shandong University at Weihai WANG Kelin Director, professor, Institute of Subtropical Agriculture, CAS

Annex III: List of Drafting Team of Synthesis Report WANG Yi Deputy Director, professor, Institute of Policy and Management, CAS WANG Xuejun Professor, School of Environment Science, Peking University YU Xiubo Associate professor, Institute of Geographic Sciences and Natural Resources Research, CAS WANG Yahua Assistant professor, School of Public Policy & Management, Tsinghua University LI Lifeng Dr., Director, WWF China Freshwater Programme

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Annex IV: List of Invited Independent Reviewers and Internal Reviewers

Synthesis Report Reviewers: SUN Honglie, Academician of CAS WANG Hao, Academician of Chinese Academy of Engineering Edwin D. ONGLEY, Environment Canada (retired) Murray CHAPMAN, Director, Rural Planning, Australia

Thematic Report Reviewers: BAO Daming Wetland Conservation and Management Center, SFA HE Xiwu Institute of Geographic Sciences and Natural Resources Research, CAS LV Xianguo Northeast Institute of Geography and Agro-ecology, CAS NI Jinren Department of Environmental Science and Engineering, College of Environmental Sciences, Peking University SHEN Dajun China Institute of Water Resource and Hydropower Research (IWHR) SHI Qiuchi Water Resource Protection Division, MWR SONG Guojun Department of Environmental Science, School of Environment and Natural Resources, Renmin University of China WANG Shuyi Research Institute of Environmental Law (RIEL) of Wuhan University WANG Environmental Science and Engineering Department, Tsinghua University Zhansheng WEI Qiwei Yangtze Fishery Research Institute, Chinese Academy of Fishery Sciences, MoA XIA Qing Chinese Research Academy of Environmental Sciences XU Zikai Policy and Technology Research Center, Office of South-North Water Transfer Project of the State Council YANG Guowei Member of GWP China; Yangtze Water Resources Commission

Internal reviewers: YU Xiubo, WANG Yi, WANG Xuejun, LI Lifeng, WANG Yahua, MA Chaode

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Annex V: List of Participants of High-level Roundtable on IRBM in China

Name Position Institution FENG Renguo Deputy Director Bureau of Science and Technology for Resources and Environment, CAS REN Songchang Deputy Director Yellow River Conservancy Commission MA Xiao Division chief the Yellow River Water Conservancy Committee LIU ZhenSheng Director General Bureau of Water Administration and Water Resources, Yangtze River Water Resources Commission LIAO Zhidan Senior Engineer Bureau of Water Administration and Water Resources, Yangtze River Water Resources Commission MIAO Jianzhong Division Chief Bureau of Water Administration and Water Resources , Huaihe River Water Resources Commission LIANG Fenggang Division chief Haihe River Water Resources Commission, Ministry of Water resources of People’s Republic of China JIN Yihua Director General Administration of Changjiang River Shipping, Ministry of Communications of the People’s Republic of China ZHUANG Zeping Deputy Director Ministry of Communications of the People’s Republic of China WU Qiong Senior Engineer Ministry of Communications of the People’s Republic of China WU Zhiping Deputy Chief Engineer Taihu Basin Authority LI Xue Deputy Division chief Department of Pollution Control,State Environmental Protection Administration of China WU Xiaochun Division chief Department of Fishery, the Ministry of Agricuture of the People’s Republic of China LI Pei Division chief State Environmental Protection Administration of China XIAO Hong Deputy Division chief Centre for Wetlands Conservation and Management, State forestry Administration, the People’s Republic of China QIN Boqiang Prof. Nanjing Institute of Geography and Limnology, CAS YUAN Jun Deputy Division chief Centre for Wetlands Conservation and Management, State forestry Administration, the People’s Republic of China CAO Yanjin Consultant, Senior Ministry of Construction of the people’s Republic of China Engineer HE Jianxiang Deputy Division chief The Ministry of Agricuture of the People’s Republic of China ZHANG Xiangwei Division chief Minstry of Water resources of People’s Republic of China GUO Yongsheng Division chief Minstry of Water resources of People’s Republic of China LI Xiangyun Professor Development Research Center; Ministry of Water Resources of China CHEN Hongfeng Doctor Renmin University of China WANG Yexue Expert State Environmental Protection Administration of China SU Liying Research Associate International Crane Foundation World Center for the Study and Preservation of Crane Lars Skov Andersen Senior Water Resources COWI Consulting Co., Ltd Specialist，COWI A/S Ministry of Energy and Water Development / Danida COWI Zambia Stefan Agne First Secretary Development & Cooperation European Union - Delegation of the European Commission Richard Hardiman Project officer Co-operation & Development Section, European Commission Delegation to China Magnus Gislev First Secretary European Commission Delegation to China YANG Baozhen Project Officer Canadian Embassy in Beijing ZHOU Yaozhou Senior Project Officer Asian Development Bank PRC Resident Mission Thomas L. Zearley Sector Coordinator Urban Development Unit, World Bank Beijing Office ZHANG Wenlai Transport Specialist Transport Sector of the World Bank Office Beijing GAO Ying Senior Program Officer AusAID, Beijing Matt Plaistowe Country Program AusAID, Canberra Manager PEI Zhiyong Senior Program Officer AusAID, Beijing DONG Zheren President Global Water Partnership China ZHANG Daidi Secretary Global Water Partnership China GUO Qiaoyu Yangtze River Project The Nature Conservancy Beijing Office Manager Dermot O’Gorman Country Representative WWF China LI Lin Conservation Director on WWF China Strategy

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