Songhua River Basin Water Quality and Pollution Control Management – Institutional and Regulatory Mechanism

Home , Huangpu River, Huifa River, Mudan River, Nen River, Second Songhua River, Songhua River

Technical Assistance Consultant’s Report

Project Number: 33177 September 2005

People’s Republic of China: Songhua River Basin Water Quality and Pollution Control Management – Institutional and Regulatory Mechanism

Prepared by SOGREAH Consultants / WL Delft Hydraulics

For Songliao River Basin Water Resources Protection Bureau

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents.

PEOPLE REPUBLIC OF CHINA

ASIAN DEVELOPMENT BANK SONGLIAO RIVER BASIN WATER RESOURCES PROTECTION BUREAU

SONGHUA RIVER BASIN WATER QUALITY AND POLLUTION CONTROL MANAGEMENT

TA N° 4061-PRC

FINAL REPORT INSTITUTIONAL & REGULATORY MECHANISM

SEPTEMBER 2005 2 340107.R4.V3

PEOPLE’S REPUBLIC OF CHINA ASIAN DEVELOPMENT BANK SONGLIAO RIVER BASIN WATER RESOURCES PROTECTION BUREAU

SONGHUA RIVER BASIN WATER QUALITY & POLLUTION CONTROL MANAGEMENT TA 4061 PRC

FINAL REPORT: VOLUME 3: IDENTIFICATION N° : 2340107.R4.V3 DATE : SEPTEMBER 2005

This document has been produced by the Consortium SOGREAH Consultants/Delft Hydraulics as part of the ADB Project Preparation TA (Job Number: 2340107). This document has been prepared by the project team under the supervision of the Project Director following Quality Assurance Procedures of SOGREAH in compliance with ISO9001.

APPROVED BY Index DATE AUTHOR CHECKED BY PURPOSE OF MODIFICATION (PROJECT MANAGER)

A First Issue 29/09/05 PK, LSB, GCG GDM GDM

Index CONTACT ADDRESS DISTRIBUTION LIST

1 SLRBWRPB (Mr LI Zhiquan, Ms Bai Yan) [email protected] ; [email protected]; [email protected]

The Asian Development Bank (Robert 3 [email protected], [email protected] Wihtol, Sergei Popov) [email protected], 4 SOGREAH (Head Office)

5 DELFT (Head Office) [email protected]

PEOPLE’S REPUBLIC OF CHINA – THE ASIAN DEVELOPMENT BANK SONGHUA RIVER BASIN WATER QUALITY & POLLUTION CONTROL MANAGEMENT – TA 4061-PRC FINAL REPORT-VOLUME 3: INSTITUTIONAL & REGULATORY ANALYSIS

CONTENTS

CONTENTS...... I

LIST OF TABLES...... III

LIST OF FIGURES...... III

LIST OF APPENDICES...... III

ABBREVIATIONS & ACRONYMS...... IV

1. INTRODUCTION...... 1 1.1. THE SONGHUA RIVER BASIN...... 1 1.2. IMPLEMENTATION ARRANGEMENTS...... 3 1.3. PURPOSE & SCOPE OF THIS REPORT...... 4 1.4. LAYOUT OF THE REPORT...... 4

2. INSTITUTIONS RELATED TO WATER QUALITY & WATER POLLUTION CONTROL5 2.1. INSTITUTIONAL FRAMEWORK AT THE NATIONAL LEVEL ...... 5 2.2. INSTITUTIONAL FRAMEWORK AT THE LOCAL (PROVINCIAL/REGIONAL) LEVEL...... 9 2.2.1. OVERVIEW...... 9 2.2.2. ENVIRONMENTAL PROTECTION INSTITUTIONS...... 10 2.2.3. WATER RESOURCES DEPARTMENTS ...... 12 2.2.4. OTHER DEPARTMENTS...... 12 2.3. INSTITUTIONAL FRAMEWORK AT THE RIVER BASIN LEVEL...... 13 2.3.1. INTRODUCTION ...... 13 2.3.2. HISTORY...... 14 2.3.3. BACKGROUND OF BASIN INSTITUTIONS ...... 15 2.3.4. THE SONGLIAO WATER RESOURCES PROTECTION BUREAU ...... 18 2.3.5. ASSESSMENT OF CURRENT INSTITUTIONAL STATUS...... 20 2.3.6. COMPARISON OF DIFFERENT RIVER BASIN ORGANIZATIONS IN CHINA ...... 22

3. LEGAL & REGULATORY FRAMEWORK...... 25 3.1. PRC WATER QUALITY AND POLLUTION CONTROL LAWS FRAMEWORK ...... 25 3.1.1. LAWS AND REGULATIONS ...... 25 3.1.2. ENVIRONMENTAL CONTROL STANDARD ...... 30 3.1.3. INTERNATIONAL TREATIES (MULTILATERAL AGREEMENTS)...... 32 3.2. PERMIT SYSTEM...... 36 3.2.1. OVERVIEW...... 36 3.2.2. WATER PERMITS...... 37 3.2.3. SEWAGE PERMIT ...... 37 3.2.4. TREATED WASTEWATER DISCHARGE PERMIT ...... 38 3.2.5. ADMINISTRATIVE PERMISSION LAW AND ITS INFLUENCE ...... 38 3.2.6. PERMIT MANAGEMENT IMPROVEMENTS...... 39 3.3. FUNCTIONS AND ISSUES WITHIN LEGAL FRAMEWORK...... 39

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3.4. LOCAL LAWS AND REGULATIONS IN SONGLIAO BASIN ...... 40 3.4.1. LOCAL LAWS AND LEGISLATIONS IN SONGLIAO BASIN ...... 40 3.4.2. INTERNATIONAL TREATIES RELATED TO WATER RESOURCES MANAGEMENT OF SONGHUA RIVER BASIN...... 42 3.4.3. BASIC REGULATORY SYSTEMS STIPULATED IN THE SONGLIAO BASIN ...... 43

4. INSTITUTIONAL & REGULATORY ANALYSIS OF WASTEWATER SERVICE PROVISION...... 46 4.1. INSTITUTIONAL ORGANISATION OF THE WASTEWATER SECTOR IN THE SRB...... 46 4.1.1. TYPICAL ORGANISATION OF A CHINESE MUNICIPALITY ...... 46 4.1.2. THE “FOUR SEPARATIONS”...... 48 4.1.3. REGULATORY ISSUES ...... 50 4.2. CURRENT SERVICE LEVELS ...... 51 4.2.1. TARGETS FOR THE 10TH FIVE YEAR PLANNING PERIOD...... 51 4.2.2. ACHIEVEMENT OF TARGETS ...... 52 4.2.3. INOPERATIVE WWTP ...... 53 4.3. FINANCING OF URBAN WASTEWATER SERVICES...... 54 4.3.1. INVESTMENT IN WASTEWATER SERVICES...... 54 4.3.2. COST RECOVERY & TARIFF LEVELS ...... 54 4.3.3. CURRENT LEVELS OF PRIVATE SECTOR PARTICIPATION & DFI ...... 55 4.4. URBAN WASTEWATER SECTOR REFORM ...... 56

5. MAIN FINDINGS & RECOMMENDATIONS...... 58 5.1. MAIN FINDINGS...... 58 5.1.1. LAWS AND REGULATIONS ...... 58 5.1.2. ADMINISTRATIVE SYSTEM ...... 58 THE SONGLIAO WATER PROTECTION COMMISSION WAS INITIALLY SET UP AT RIVER BASIN LEVEL UNDER THE SUPERVISION OF THE MINISTRY OF WATER RESOURCES TOWARDS LAW AND REGULATION ENFORCEMENT....60 5.1.3. MONITORING & CONTROL...... 60 5.1.4. CAPACITY BUILDING...... 60 5.1.5. EXPENDITURES AND POLLUTION ABATEMENT INVESTMENTS...... 61 5.2. GENERAL FRAMEWORK FOR THE INSTITUTIONAL REFORM...... 61 5.2.1. WATER MANAGEMENT AND POLLUTION CONTROL NEED INTEGRATED RIVER BASIN MANAGEMENT ...... 61 5.2.2. FOCUSING KEY POINTS AND PHASED INSTITUTIONAL REFORM ...... 62 5.2.3. REFORMING APPROACH AND STAGE OBECTIVES ...... 63 5.2.4. WASTEWATER SERVICE PROVISION...... 64 5.3. DETAILED RECOMMENDATIONS ...... 66 5.3.1. STRENGTHENING AGREEMENTS AND INSTITUTIONS FOR THE SONGHUA RIVER BASIN...... 66 5.3.2. IMPROVING THE INSTITUTIONAL SYSTEM...... 68 5.3.3. PERFECTING OPERATIONAL MECHANISMS...... 68 5.3.4. STRENGTHENING CAPACITY BUILDING...... 71 5.3.5. INCREASING THE EXPENDITURE AND INVESTMENT ...... 72

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LIST OF TABLES Table 2-1: Number of Institutions of SRB Environmental System at the End of Year 2002 ...... 11 Table 2-2: Number of Persons of Songhua River Basin Environmental System at the End of Year 2002..... 11 Table 2-3: River Sub-Basin Organisations...... 17 Table 2-4: Comparison of River Basin Management Mode ...... 24 Table 4-1: Lines of Influence with Regard to Infrastructure Projects ...... 48 Table 4-2: Existing WWTP in SRB and Funding Source ...... 53 Table 4-3: WWTP under Construction in 2005 & Funding Source ...... 53 Table 4-4:Examples of Existing Water Tariffs Within Selected Communities in the SR B ...... 55 Table 5-1: Development stages for Songhua River Basin water quality management and pollution control . 64 Table 5-2: Distribution Of Water Quality & Pollution Control Activities Between Different Organisations In The River Basin...... 67 Table 5-3: Example Levels of Subsidy as part of a River Basin Fund ...... 73 Table 5-4: Policy Matrix ...... 75

LIST OF FIGURES Figure 1-1: The Songhua River Basin ...... 2 Figure 1-2: Implementation Arrangements for the Technical Assistance ...... 3 Figure 2-1: Overall institutional framework for the Water Sector in the People’s Republic of China (National, Provincial and Lower Level) ...... 8 Figure 2-2 SongLiao River System Protection Leading Group Organization ...... 16 Figure 4-1: Summary Organisation Chart, Harbin Municipal Government ...... 47 Figure 5-2: Development of River Basin Plans within a Typical River Basin Management Framework...... 69 Figure 5-3: Recommended Partners of the River Basin Board for the Songhua River System ...... 72

LIST OF APPENDICES Appendix A Bibliography Appendix B Detailed Conclusions and Recommendations Appendix C Financing Water Pollution Control in the SRB (working paper) Appendix D Comparison of River Basin Management Models in various countries

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ABBREVIATIONS & ACRONYMS

ADB Asian Development Bank BH Bureau of Hydrology EA Executing Agency EIA Environmental Impact Assessment EMP Environmental Management Plan EPB Environmental Protection Bureau EU Environmental Unit FB Forestry Bureau GEF Global Environment Facility GIS Geographic Information System GPS Global Positioning System IRBM Integrated River Basin Management IMAR Inner Mongolia Autonomous Region MLR Ministry of Land and Resources MOA Ministry of Agriculture MOC Ministry of Construction MOF Ministry of Finance MoU Memorandum of Understanding MWR Ministry of Water Resources, PRC NIDRI Northeast Investigation, Design and Research Institute NPC National People’s Congress NPCC National People’s Consultative Committee PLG Project Leading Group PMO Project Management Office PPTA Project Preparation Technical Assistance PRC People’s Republic of China RRP Report and Recommendation to the President SDRC State Development and Reform Commission SEPA State Environmental Protection Administration SFA State Forestry Administration SLRB SongLiao River Basin SRB Songhua River Basin SWRC Songliao Water Resources Commission SWRPB Songliao Water Resources Protection Bureau SRSPLG SongLiao River System Protection Leading Group TA Technical Assistance WRB Water Resource Bureau

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SUMMARY & CONCLUSIONS

INSTITUTIONAL FRAMEWORK

INSTITUTIONAL FRAMEWORK AT NATIONAL LEVEL

At the national level, the National People’s Congress and NPC Standing Committee are agencies responsible for legislation approval, inspection and supervision of law enforcement. The State Council has responsibility for implementation of laws, and proposing necessary national laws, regulations and policies. Regulatory departments of the central government are responsible for law enforcement, development of regulations and policies. Agencies at provincial or lower levels are responsible for implementing national laws, regulations and policies.

The two major stakeholders in water and pollution management at national levels are the Ministry of Water Resources (MWR) and the State Environmental Protection Administration (SEPA). Other ministries directly or indirectly involved in these topics are the Ministry of Construction (MOC), the State Forestry Administration, the Ministry of Agriculture, the Ministry of Land Resource, the State Marine Administration, the Ministry of Health, the Ministry of Communication, State Development and Reform Commission (SDRC), the Ministry of Finance, the Ministry of Science and Technology and the State Power Corporation.

Ö MWR is the chief agency for country-wide water resources management. They are responsible for developing water resources development and protection policies, flood control, coordinating multiple uses of water resources (domestic, industries, agriculture and ecological demand), water permits and charging water related fees.

MWR is responsible for developing integrated river basin plans, in association with relevant provincial, regional and municipal governments and submits them to the State Council for approval. MWR, jointly with environmental departments, prepare water functional zoning and submit to the State Council for approval. These functional zones conditions the classes of environmental Water Quality Objectives (WQO). The MWR also provides comments to the environmental department on total admissible pollutant load into water bodies.

Ö SEPA is the agency responsible for country-wide water pollution prevention and control. SEPA develops national environmental water quality standards, and should further develop national pollutant discharge/emission standards in accordance with these environmental quality standards; rather than being re-estimated for each water body, discharge limits are often generally fixed on two general classes of emission standards based on WQOs (1996 standards except the three classes defined for wastewater treatment plants in 2002 standards).

SEPA is also responsible for developing river basin water pollution prevention plans in association with planning agencies, water resource agencies and provincial, regional, municipal and county governments, and submits to the State Council for approval; SEPA also reviews and approves environmental impact assessment report. Further SEPA is also the implementation agency for the Convention on Biological Diversity in China.

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INSTITUTIONAL FRAMEWORK AT THE LOCAL (PROVINCIAL/REGIONAL) LEVEL

The three provinces and region sharing part of their territory with the Songhua River Basin are Heilongjiang Province, Jilin Province and Inner Mongolia Autonomous Region.

The organizational structure of the local authorities mirrors the structure of the central government with a provincial people’s congress, standing committee and local government. The people’s congresses and the standing committees of provinces may adopt local regulations provided these are in conformity with those at national level.

The provincial departments/agencies also called bureaus (from each ministry or central administration) have in principle the same responsibilities as the central government and follow their general policy guidelines. Nevertheless, their detailed responsibilities are set up by each of their provincial governments and provincial departments report administratively to the provincial governments. In addition, over the last ten years, decentralisation resulted in provincial governments playing a more important role than before.

Similar to national level, in Songhua River Basin, the two main departments at provincial level related to water quality and pollution control are the Water Resource Bureau (WRB) and Environmental Protection Bureau (EPB).

INSTITUTIONAL FRAMEWORK AT THE RIVER BASIN LEVEL

Ö The SongLiao Water Resources Commission (SWRC), located in ChangChun, Jilin Province, is one of the seven dispatched river basin institutions of MWR. It is actually in charge of managing the Songhua and Liao river basins (as well as the international transboundary rivers in Northeast China and rivers entering the sea). Major responsibilities of SWRC include water related regulatory enforcement, inspection and supervision, solving water disputes among provinces or sectors, formulating master plans and technical plans and most of the responsibilities of the central Ministry of Water Resources, applied at basin level. The number of staff specified by the national authority for SWRC is 795.

Ö The SongLiao River System Protection Leading Group (SRSPLG) has been created in the 1970s as an interprovincial leading agency for water resources protection of river systems and water pollution prevention and control.

The Leading Group are not government, but they provide a platform for discussion on important water quality and pollution control management events in the river basin. With regard to basin-wide water quality management and pollution control, the Leading Group negotiates and reaches consensus and issues relevant documents in the name of provincial/regional governments. The management framework consisting of the leading group and SWRPB can enhance the relationship among provinces/regions within the basin and improve the coordination among the provincial/regional water resources and environmental protection authorities. The river basin water protection agency can act as a link between the provincial/regional water resources and environmental protection authorities. This framework just coincides with the state management mechanism integrating basin management and administrative regional management. The relevant state authorities and many national specialists in river-basin management have recognized the importance of this organization and have named it the ‘Songliao Management Pattern’.

In China, water resource protection bureaus have also been established for seven major river basins one of which is the Songliao River Basin Water Resource Protection Bureau (SWRPB). SWRPB is led by the SWRC in administrative affairs and personnel management, and should technically report to both MWR and SEPA (but mainly reports to MWR in reality). Meanwhile, it also stands as the executing Office led by Songliao River System Protection Leading Group.

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Although water resource protection bureaus of the seven river basins were set as separate agencies managed by the MWR and SEPA, dual management does not actually exist as SEPA has not provided SWRPB the right of administrative regulatory enforcement, only MWR has provided it to SWRPB, which results in the SWRPB’s difficulties in dealing with issues related to water quality and pollution control management in the basin. It is urgent to implement the dual leadership to integrate the basin management together with regional management to fully bring the basin management into play

Links between central, provincial and basin institutions involved in water quality and pollution control have been displayed in the following figure.

Governments of Jilin, Heilongjiang, MWR SEPA Liaoning Provinces and IMAR

SWRC SRSPLG

SWRPB Office of SRSPLG

Water Resources and Environmental Sub-Basin Water Pollution Control Departments of Provinces/Region Leading Group

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LEGAL AND REGULATORY FRAMEWORK

LAWS AND REGULATIONS • Since 1980s, China has established a relatively complete legislative framework system in environmental management, which can be divided into the Constitution, the national environmental protection laws and regulations and local laws and regulations. The Constitution of the PRC stipulates that the country should protect the environment in an ecological balance approach, and promote harmonization of human and sustainable nature development.

The Water Law of PRC issued in 2002 specifies regulations on development, utilization, conservation, protection and management of water resources. This law specifies legal status and responsibilities of basin authorities. Relevant regulations of this law were milestones in the definition of the role of river basin agencies.

The Water Pollution Prevention and Control Law also defines the basic framework of China water pollution prevention and control legislative system.

In addition, national, sectoral and basin/regional environmental protection plans and pollution control plans approved by the State Council also have binding force as laws and regulations. However, most of these plans are confidential.

In the Songhua River Basin, the people’s congress of different levels in the SRB have also issued local regulations that reflect practical requirements and local conditions in accordance with national relevant laws. These regulations have legal status and administrative biding force within local jurisdiction.

WATER POLLUTION CONTROL STANDARDS

Environmental control standards adapted according to the “Environmental Protection Law of the PRC” and “Water Pollution Prevention and Control Law of the PRC” can be placed in two categories: environmental quality standards and pollutant discharge/emission standards.

The major environmental water quality standards are detailed in the Environmental Quality Standard for Surface Water (GB3838-2002). These might be reviewed by local authorities by taking into account the local conditions. For example, in Songhua River Basin, environmental standards adapted to the winter conditions are today requested to be developed.

Pollutant discharge/emission standards are developed to limit the discharge of pollutants so that environmental standards are achieved. Integrated national discharge/emission standard tailored for to specific environmental medium is described in the Integrated Wastewater Discharge Standard (GB8978-1996). Special national standards are tailored for a specific sector, pollutant type or pollution control of certain environmental parameter.

China has signed many international treaties or multilateral agreements on environmental protection. PRC Government has declared to have reservation and will not bear duties or liabilities of provisions that damage benefits of China.

PERMIT SYSTEM

In water sector, China has three kinds of existing permits: water abstraction permit, sewage discharge permit, and treated wastewater discharge permit.

Water abstraction permit is a permit for utilization of water resources. According to the “Water Law” of the PRC, the state government implements water use permit and charging systems except

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for the rural collective organizations and their members who use water from their own water pond and reservoirs. The water administrative management agency of the State Government is responsible for the organization and implementation for water permit system and its associated charge system.

Sewage permit is under the responsibility of construction departments or municipal departments. Sewage permits cover all industrial and commercial discharges to municipal sewers, excluding institutions and schools. Sewage permit aims to ensure wastewater discharge to municipal sewers is in compliance with Municipal Sewer Discharge Standards (but has no limits to wastewater flows, which may give opportunity for polluters to dilute the pollution). Sewage permit system has been enforced for a long time, but mostly in medium and large cities

Environmental departments are responsible for the treated wastewater discharge permit management. The purpose of wastewater permits is to ensure wastewater and pollutant discharges are under the total admissible pollutant load. They target all industries and wastewater treatment plants that directly (or after treatment) discharge wastewater to the environment.

Of the three kinds of permits, water permit system has been widely applied and plays a strong role, while sewage permits and treated wastewater discharge permits are implemented or under pilot application in some areas and cities and have relatively weak efficiency to date.

Main improvements in the permitting system include linking water abstraction and treated wastewater discharge permits with the targeted environmental water quality objectives, widening the application of the permits to all stakeholders and compelling a more stringent enforcement of the permits (including strengthening the penalty system). Permits should also be closely linked to the existing water resource fees detailed in the local laws and regulations of the three provinces (region).

RECOMMENDATIONS FOR IMPROVING THE INSTITUTIONAL AND REGULATORY CONTEXT

Based on the diagnosis of the existing situation, recommendations have been formulated for improving the institutional and regulatory context of water quality management and pollution control in the Songhua River Basin.

GENERAL FRAMEWORK FOR THE INSTITUTIONAL REFORM

It has been first recognised that integrated water management should be strengthened at the river basin level. At present, Songhua River Basin is confronted with double challenges from rapid economic development and degrading environmental conditions. Combining international experience and Chinese situations shows that integrated river basin management is an efficient tool for managing simultaneously economic development and environmental protection.

Principles of integrated river basin management should therefore be applied to the Songhua River Basin: • Songhua (or Songliao) River Basin should form the geographical basis of the water management system • Joint management should be developed: central and local authorities should share the responsibilities of water quality management and pollution control. It would result in combining top-down and bottom up approaches: ministerial and local governments’ representatives and water stakeholders should therefore develop a joint management system. • Water users should be involved in decision-making and have access to key river basin information.

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• Water management should be based on sound planning techniques that make water management objectives based and strive to make protection and restoration measures as cost-effective as possible • The water management system should be based on cost-recovery principles and financial incentives for measures that would contribute to reaching the river basin objectives. This would include in particular both economic and regulatory measures to encourage water saving and pollution reduction.

To support integrated water resources management in Songhua River Basin, various options aiming at upgrading the existing institutions have been considered. The proposed institutional setting would be to strengthen and legitimize the SRSPLG (“Leading Group”) and its office (“Protection Bureau”) in the aspect of river basin water resources protection and water pollution control.

To further enhance the legitimacy of this organisation within the Provincial Government structure, it is proposed to develop leading groups at this level and involving potentially representatives from municipalities. This leading group would be lead by the vice governor participating in the SRSPLG and the could involve a representative from the WRPB. The existing PIUs of this particular technical assistance could be given a permanent status by becoming the secretariat of this leading group.

The development of sub basin boards should be additionally fostered as means to encourage cooperation between municipalities and local authorities.

It is proposed to improve and enforce institutional reform in two stages within a period of 15 years. The focus point of this reform would be water quality management. The first stage would target: • To validate the responsibilities in water quality and pollution control between the different water related agencies at the central, river basin level and provincial level. Delimitation of responsibilities should be made clear especially in terms of planning, licensing and monitoring. • To define process and obligations of free data exchanges among relevant agencies at central, river basin and provincial/regional level (and the water users). • Procedures for selecting water stakeholders representatives should also be detailed (including the quota of representatives from national or regional institutions and water users). Funding procedures of the River Basin should also be detailed.

The second stage (around 2011) would aim at applying the national policy and legal framework for river basin management to the Songhua River Basin. This stage would strengthen the integrated management features in Songhua River Basin. The foreseen national river basin management law or relative River Basin management policy may confirm the establishment of the Leading Group (River Basin Board) and the Protection Bureau as the related executing agency (River Basin Agency).

DETAILED RECOMMENDATIONS

In stage 1, only local laws and regulations are foreseen to be revised for strengthening water quality and pollution control in Songhua River Basin. The three governments should further clarify the responsibilities of the Leading Group and promote joint management at the river basin level.

A planning division and an Information Centre should be created in the Bureau. Funding issues of this process should also be detailed and agreed at this early stage. A Songhua River Basin Fund (even limited to a few million RMB) should be made available (this could be funded by a tariff in relation to water consumption or by use of the pre-existing water abstraction or pollution

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levies) for supporting the key activities that will widely demonstrate the efficiency of the proposed process. Regulation on public participation to this process should be established.

Recommendations for perfecting operational mechanisms have also been proposed. They include: 1. Enhancing legal right over the management on water function zone 2. Integrating and unifying water resource protection planning and water pollution control planning 3. Establishing performance evaluation system on water resource protection and water pollution control 4. Establishing public participation mechanism 5. Establishing effective information sharing system 6. Planning and optimization of monitoring stations in river basin 7. Strengthening capacity building 8. Set up basin water resource protection and water pollution control fund 9. Increase public fund budget supporting water resources management and environmental protection 10. Encourage diversified investment for water environmental protection 11. Promote marketization of municipal water supply and wastewater treatment services 12. Enhancing management and response to emergency and accidental pollution incidents; 13. Strengthen the diagnosis and evaluation of river basin water quality

The Songhua River Basin fund should mainly focus on funding or subsidising key actions that will have leverage effects on the water quality of the Songhua River Basin. The procedure for disbursement of this fund could be based on the following principle:

The Songhua River Basin Masterplan will include a diagnosis, a list of objectives and a list of strategies to reach those objectives. The river basin board analyses and prioritises the objectives and the strategies according to the main problems of the basin. This process will determine the level of subsidies (or funding) that could be expected for each type of strategy. A sample of this process could result in an output as follows:

Type of Strategies Level of subsidy 1. Development of treatment plants for urban wastewater 20% 2. Rehabilitation of sewerage pipe networks 30% 3. Improvement of the process of an industry to reduce the amount of pollutants 10 to 20% wasted 4. Improvement of the drinking water supply treatment plant 10 % 5. Improvement of agricultural practices to reduce diffuse pollution 5 % Etc. At this stage, the masterplan stands as a policy and strategic document which is shared with all the stakeholders of the basin.

The 5-year programme. Every five year, the Office facilitates the production of a 5-year programme that will include the priority actions to be taken towards the achievement of the objectives of the Masterplan. To do so, the Office contacts stakeholders identified to have the activities the most harmful to the basin or having the mission to implement elements of the strategies proposed in the Masterplan in order to discuss the actions that could be implemented. Being aware of the level of subsidies they can expect, some users might also take the initiatives to send themselves their requests for some actions to be subsided.

The cost of each proposed action is also estimated. In case, the available internal budget of one stakeholder added to the planned subsidy do not cover the whole cost of the activity, the stakeholder could also make requests to other external subsidies (from the local, regional or

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national authorities) for covering the remaining part. It has to be noted that willingness of the stakeholders to participate in this process (and reduce their pollution emission) also highly depends on the efficiency and the reprimanding level of the pollution control system (that is to from law enforcement of WRBs and EPBs).

All proposed actions could then be gathered by the office in the format of a 5-year programme which is then approved by the Leading Group. At this stage, the programme of priority actions (selected according to the river basin objectives) could be presented at national level as part of the 5 year plan.

POLICY MATRIX FOR UPGRADING THE INSTITUTIONAL AND REGULATORY CONTEXT OF WATER QUALITY MANAGEMENT

As a summary and complement to the proposed recommendations, the following policy matrix has been developed.

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Policy and Rationale Actions to be Taken Time Frame Remarks Institutional Priorities 1. Promote a National Effective national water policies, 1.1: Analysis of the lessons learnt from the existing projects, 2006-2008 These Focus water laws, and sector coordination river basin initiatives and actions for water quality and pollution recommendation arrangements are developed at control in particular ADB Project Trans-jurisdictional Water s go beyond the national level for supporting Water Environment Management, China and to EU WFD general scope of Quality and Pollution Control this project, but Management. The national focus will 1.2: Preparation of a national policy paper on “Water Quality & represent likely enhance harmonization of the water Pollution Control” and on “River Basin Management” in 2007-2008 future directions management approach and promote coordination with the Environmental and Water Resources to be taken by exchange of experience and lessons Authorities as well as with the existing river basin organizations. the PRC in the learnt between river basins. realm of river basin Strengthened institutional capacities 1.3: Distribution of water quality management responsibilities 2008 management of the Environmental and Water between state and regional authorities and other water Resources national authorities stakeholders. Avoid overlapping functions (such as for water support river basin organizations. quality monitoring between SEPA and the MWR) 2008 – 2010 1.4: Development of appropriate training and capacity building Information can be structured and of the civil servants of Environmental, Water Resources and centralized at national level towards other water and health related national organizations. effective information management and sharing of data. 1.5: Development of an effective national network of water 2008 quality and pollution control data including methodological A national action agenda provides documents, database and GIS layers. opportunity for anticipated funding for river basin and water quality 1.6: Preparation of a national action plan (5 year programme) management and for pollution for implementing the national policy. 2009-2010 control. 1.7: To prepare a specific policy paper on the impact of water National policies can develop the management for the poor. Best practices are gathered in a legal 2007 directives and legal framework for national document. giving special attention to the poor communities.

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Policy and Rationale Actions to be Taken Time Frame Remarks Institutional Priorities 2. Foster the Integrated management results in 2.1: Harmonisation of water quality and pollution control New Policy integrated management conducting comprehensive water practices at the river basin level including: Initiative of water resources. resource assessments and designing interlinked and cost- – Harmonisation and Rationalisation of monitoring Proposals made effective river basin actions. practices between EPB, WRB and WRPB 2005-2006 as part of TA; awaiting

Integrated water resources implementation management also enhances – Harmonisation of Functional Zoning at the Provincial exchanges between different Level 2005 Completed for all administrative and private sectors in Provinces the river basin organisations. – Harmonisation of Functional Zoning at the SRB Level Proposal made 2005-2006 by Consultant awaiting – Harmonisation of Planning at the Provincial Level ratification

Provinces 2002 integrated – Harmonisation of Planning Documents at the SRB Level planning Tenth FYP

2005-2006 Proposals made – Development of a SRB water quality assessment as part of this TA; requires further follow up

2005-2006 Unique maps of – Development of a SRB water quality information centre water quality prepared by TA; raw data requires further analysis

2007-2008

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Policy and Rationale Actions to be Taken Time Frame Remarks Institutional Priorities 2.2: Provide the SRSPLG with a legislative mandate enacted at 2007-2010 Strengthening of both State and Provincial Level. Strengthen the role and the existing number of stakeholders’ representatives in the Existing organisations SRSPLG as river basin board and validate the SWRPB as its executing river basin agency. Strengthen the role of the Leading Group in SRSPLG in the Provincial Administration by forming Provincial Jilin already SRB Leading Groups formed in May 2005 2.3: Prepare effective and participatory procedures for 2006-2007 developing the Songhua River Basin Masterplan including the diagnosis, the definition of objectives and appropriate strategies for reaching these objectives. The objectives will include water quality objectives. To allow time and process for administrative and private sector participation.

2.4: Prepare the 12th 5 year river basin action plan based on the masterplan and focusing on the priority measures. 2009-2010

2.5 Joint management of the river basin transferred to 2011-2015 integrated management and rover basin commission

3. Improve and expand Improving water services such as 3.1: Prepare detailed funding procedures for the institutions 2008 New Policy the delivery of water water supply, sanitation, irrigation responsible for the tasks detailed under action 1.3. Initiative services. and drainage, will enhance the well being of Chinese inhabitants and will 3.2: Effective river basin funds might be raised (River Basin 2007 support the economic development. Fee) or made available (from National or regional Budgets) to the River Basin Board for funding (or subsidising) the priority Readiness to pay for the water actions plan. Special effort should be made to fund or subsidise services might then be enhanced. the actions that tackle the main issues of the basin. River basin fee could also be introduced for this purpose. Private sector participation and public-private partnerships may 3.3: Create a favourable legal framework environment for emphasize competition for a good promoting the efficiency of water supply and sanitation services. service. Equity in access to water for Among others, private participation or delegation of services to 2007 the poor and underserved should be private operators could be facilitated by the development of promoted as a social target. transparent bidding procedures for the delegation of public services

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Policy and Rationale Actions to be Taken Time Frame Remarks Institutional Priorities

3.4: Develop mechanisms for financing and operation of 2007 water/wastewater services for small/poorer communities

4. Foster the A system that would recover costs 4.1 Increase charges for water abstractions, water supply 2006-2007 Carry out existing conservation of water from water use and resource services, wastewater services and pollution discharges government and increase system management charges would enable policies efficiencies. user/polluter pays principle. More 4.2: Develop and promote case studies of Clean Development concerned with funds would then be available for Mechanisms within the SRB 2007-2008 cost recovery water conservation and river basin activities. 4.3: Develop independent monitoring procedures (“benchmarking”) of the performance of the water related Increased public awareness should services against targeted objectives or contractual results. 2006 result in better water management at water users’ level. Demonstration of good use of water related funds may also increase the willingness to pay.

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Policy and Rationale Actions to be Taken Time Frame Remarks Institutional Priorities 5. Promote regional Promoting regional cooperation may 5.1 Twin the SRSPLG with other river basin organisations in cooperation increase the mutually beneficial use the Asian region and worldwide; participate in regional 2006-2007 of shared water resources within conferences on river basin management China and with riparian countries of transboundary River Basins. 5.2: Analyse the status of river basin management in each of the country involved in Transboundary River Basins; the 2010 The primary focus could be the TRADP and the TumenNet initiatives can be mentioned as exchange of information and instruments for transboundary cooperation experiences in water sector reform. Support could be provided to 5.3: Implement a diagnosis all over the basin for identifying the 2011-12 enhance main issues and then defining the targeted objectives. awareness of the benefits of shared water resources, create sound 5.4: Develop common procedures for sharing information and hydrologic and socioenvironmental monitoring data. Funding of some actions can raise 2006-2007 databases relevant to the negotiations between upstream and downstream adjacent management of transboundary river countries. basins and implement joint projects between riparian countries.

A prerequisite to regional cooperation could be that the national river basin management systems are effective in each country.

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Policy and Rationale Actions to be Taken Time Frame Remarks Institutional Priorities

6. Fostering Stakeholder consultation and 6.1: Identify the representatives who may have the legitimacy of 2007 participation participation at all levels may representing key water stakeholders. To promote social society strengthen the rationale of policies representatives and to support women representatives. and investments in the water sector. 6.2: Develop mass information as well as appropriate messages about upgraded river basin management 2007 approaches. To demonstrate the efficiency of the proposed system and provide room for participation at all levels and all stages of the reform. The campaign should also demonstrate the efficiency and impact of the actions funded in 4.3

6.3: In the long term, transform the River Basin Board in a real 2011-2012 River Basin Council where all main river basin stakeholders are represented.

7. Improve governance Promoting the bottom-up component 7.1: Support regional (provincial), district and municipality 2006 of river basin management will be administration in implementing the above mentioned actions. accomplished by promoting The new “EU-China RBM Programme” serves as an example decentralization, building capacity having an important section for capacity building and and strengthening monitoring, introducing principles of good governance evaluation, research, and learning at all levels, particularly in public sector 7.2: Identify success stories of good governance that could be institutions. shared with other basins. 2010

7.3: Implement formal and on the job training and study tours for promoting good governance. Practical tool boxes are made 2007 available. To promote transparency and accountability for the service delivered.

7.4: Prepare appropriate training especially for local agencies and institutions that lack some human resources and equipment. 2006-2007

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1. INTRODUCTION

1.1. THE SONGHUA RIVER BASIN

The Songhua River Basin has a catchment area of 561,222 km2 (see Basin Map, Fig.1.1) and is the third largest river basin in PRC after the Yangtze and Yellow Rivers. In 2003 about 54 million people live in the catchment area, and the overall growth rate is about 0.3%. The Songhua River originates from two main sources, the Nen and Second Songhua rivers, which meet near Songyuan to form the main Songhua River. From this confluence, the Songhua River flows in eastern/northern direction to join the Heilong (Amur) River on the boundary between Russia and PRC. About 54 per cent (300,000 km2) of the area belongs to the Nen River catchment, 13 per cent (73,000 km2) to the Second Songhua catchment, and the remaining 33 per cent (184,000 km2) is immediately adjacent to the Songhua River main channel. Average annual rainfall is low, varying from less than 400 mm in the west to more than 800 mm in the east. Most rain falls within the June-September period, and average rainfall in a wet year may be three times that of a dry year.

The river basin is demarcated by three border mountain ranges. The Daxing’an range lies along the west and southwest border of the basin in Inner Mongolia, the Xiaoxing’an range limits the north and northeast part of the basin, the Laoye and Zhangguangcai ranges are located in the east and south east of the basin, and the Changbai range limits the south and southeast part of the basin. The forest cover in these ranges provides reasonable protection for the water resources of the area and cascade multipurpose reservoirs have been developed along the Second Songhua River. 1 Other significant landforms are the Song-Nen and Sanjiang floodplains. Jilin and Heilongjiang provinces were selected in 1999 and 2001 by the Government to become two of the country’s three experimental “ecological provinces”, in acknowledgement of their rich biodiversity and potential for sustainable management of natural resources.

Harbin (urban population 3.2 million), Changchun (3.1 million), Jilin (1.8 million), Qiqihar (1.4 million) and Daqinq (about 1.2 million), all important cities with populations over 1 million,2 are located in the Song-Nen Plain, the largest of two major floodplains. The second major floodplain in the basin is the 100,000 km2 Sanjiang Plain (or “Three Rivers Plain”) at the confluence of the Songhua, Heilong and Wusuli rivers. It is one of the most important agricultural production areas in the PRC. The Sanjiang Plain comprises the largest contiguous wetlands in eastern Asia (about 1.5 million ha), and provides globally-important breeding areas and migratory routes for waterfowl. Large parts of Sanjiang Plain, however, have been drained for agricultural development, and the remaining part is under threat of further development for agriculture, industry, and construction of highways and urban facilities.3

There is a relatively high urbanization rate in the basin with 43 % of the population living in cities or towns. The rural population totals 35.4 million (57 %) and about 17.4 million ha (31 %) of the

1 The upper watershed forest cover appears to be generally better than in many other major river systems in PRC (ADB-. PPTA, Revised Midterm Report, May 2001) 2 Jilin Statistical Yearbook, 2004 and Heilongjiang Statistical Yearbook, 2004. 3 ADB Technical assistance is provided in 2004 to prepare a 2006 loan project for the Sanjiang Plain.

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basin area is farmland. On average, each rural person has about 0.5 ha of farmland, ranging from 0.32 ha per person in Jilin, to 0.8 ha in Inner Mongolia, which is higher than the national average. Only 22 % of farmland is irrigated and a large percentage of farmland is quite poor, especially in Inner Mongolia. Due to its susceptibility to drought and desertification, however, Inner Mongolia has the highest proportion of irrigated land (37 %). According to a study by the Songliao Water Resources Commission (SWRC), 66 counties with a population of 32.7 million are at high risk of drought and floods. In these high-risk counties, about 70 % of people live in rural areas. Average per capita income in rural areas is about Y2,200, half the urban average. The livelihood and crops of rural people are particularly vulnerable to natural disasters such as floods and droughts.

FIGURE 1-1: THE SONGHUA RIVER BASIN

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1.2. IMPLEMENTATION ARRANGEMENTS

As defined in the TA Paper, the WRPB is the Executing Agency for the TA. A PMO within the WRPB has been set up to assist, facilitate and monitor the progress of the TA. TA implementation units (TAIUs) have been established in the provinces of Heilongjiang, and Jilin and Inner Mongolia Autonomous Region under the auspices of the Provincial Environmental Protection Bureaus. These TAIUs have been expanded to include other government departments/stakeholders at the Provincial level.

At the Central Government Level a “Project Guidance Commission” has been formed involving MOF, NDRC, North East Office of State Council, MWR, SEPA, SFA, MOC, MOA and other relevant departments and bureaux; MWR has acted as the leader of the commission

At the river basin level the existing SongLiao River System Protection Leading Group (SRSPLG) acts as a Project Coordination Group.

An overview of these arrangements is illustrated in Figure 1-2.

FIGURE 1-2: IMPLEMENTATION ARRANGEMENTS FOR THE TECHNICAL ASSISTANCE

Project Guidance ADB National Guidance Commission: representatives from MWR, SEPA, MOC, MOA, SDRC, MoF, Forestry, NE Office, etc

Project Coordination SRSPLG SWRC

International Executing Agency Consultants SongLiao River Basin Water Resources Protection Bureau Sogreah and (Secretariat of SongLiao River Delft Hydraulics System Protection Leading Group)

Jilin Heilongjiang Inner Mongolia Province Province Autonomous region TAIUs TAIUs TAIUs

staff from EPB, departments of staff from EPB, departments of staff from EPB, departments of water resources, urban water resources, urban water resources, urban construction, agriculture construction, agriculture construction, agriculture finance, planning, forestry, etc finance, planning, forestry, etc finance, planning, forestry, etc.

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1.3. PURPOSE & SCOPE OF THIS REPORT

This Final Report (R3) is the third document in a series of reports produced for the Songhua River Basin Water Quality & Pollution Control Management Technical Assistance (TA 4061 PRC).

Reports to be produced as part of this assignment include: • R1: Inception Report (Published in August 2004); • R2: Interim Report (Published in November 2004); • R3: Draft Final Report (Published in July 2005); • R4: Final Report (This report)

1.4. LAYOUT OF THE REPORT

The ensuing chapters of this report deal with the following topics:

Chapter 2 Provides a summary (as has been described in the Interim report) of the institutional conditions and situation for the PRC at national level, the three provinces in SR Basin and at basin level

Chapter 3 Provides an overview of the regulatory mechanisms for water use and utilization for all relevant users and in all relevant sectors, as well as the capacity and capabilities in the regulatory sector, including the licensing function and control and enforcement

Chapter 4 Provides a brief summary of urban wastewater service provision in the river basin, focussing on issues of cost recovery and private sector participation

Chapter 5 Provides detailed assessment of strengths, weaknesses, shortcomings. as well as tentative recommendations

The report is accompanied by an appendix covering the following topic:

Appendix A Bibliography

Appendix B Detailed Conclusions and Recommendations (working paper)

Appendix C Financing Water Pollution Control in the SRB (working paper)

Appendix D Comparison of River Basin Management Models in various countries

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2. INSTITUTIONS RELATED TO WATER QUALITY & WATER POLLUTION CONTROL

This chapter summarizes the roles of different institutions involved in water quality and water pollution control with respect to the Songhua River Basin, including national, provincial (including sub-provincial) and basin-level institutions. The chapter provides a comparison of the different modes of operation of three basin level systems, describes history and relevant background information of institutions and provide an overview and comments. This chapter focuses on institutions of Songhua River Basin. Relevant descriptions are presented based on analysis and summarization of information obtained after Interim Report, taking into consideration of suggestions and comments on the Interim Report given by relevant agencies. Amendments are made to discussions in previous Interim Report.

2.1. INSTITUTIONAL FRAMEWORK AT THE NATIONAL LEVEL

The institutional situation with regard to Water Quality and Pollution Control Management in China in general is complex. The National People’s Congress and NPC Standing Committee are legislation agencies responsible for legislation and inspection and supervision over enforcement. The State Council has responsibility for implementation of laws, and developing necessary national laws and regulations and policies. Regulatory departments of the central government are responsible for enforcement, and develop regulations and policies. Agencies at provincial or lower levels are responsible for implementing national laws, regulations, and policies.

Since it is difficult to clearly define tasks and responsibilities, many stakeholders play a role, at National and Regional/local levels more or less in water management. The major players at National level are MWR, SEPA, MOC, the State Forestry Administration, the Ministry of Agriculture, the Ministry of Land Resource, the State Marine Administration, the Ministry of Health, the Ministry of Communication, SDRC, the Ministry of Finance, and the Ministry of Science and Technology. The State Power Corporation has responsibility for hydropower development and management. Such system is shown as Figure 2.1 (PRC Water Management Institutional Framework).

At national level, major governmental agencies related to water quality management and pollution control are SEPA and MWR.

MWR is the chief agency for country-wide water resource management and supervision, responsible for developing policy of water resource development and protection, water conservation, and flood control, and also responsible for utilizing multiple functions of water resources, coordinating domestic, production and ecological environmental water use, water permits, and implementation of water resource charging system.

MWR develops integrated river basin planning, in association with relevant provincial, autonomous region and municipal governments, for important rivers and lakes designated by the country and submits to the State Council for approval. MWR, jointly with environmental department, prepare water functional zoning of key rivers and lakes, and submit to the State Council for approval. MWR also review and determine assimilative capacity of water body, and provides comments to environmental department on allowable total pollutant loading into the water body.

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SEPA is the agency responsible for country-wide water pollution prevention and control, while other agencies, including water resource, health, geology and mineral resource, public utilities agencies, and water source protection agencies of key rivers and lakes, assist environmental agency in management and supervision of water pollution prevention based on their respective responsibilities; SEPA develops national aquatic environmental quality standards, and further develops national pollutant discharge/emission standards in accordance with this aquatic environmental quality standard and national economic and technical conditions; SEPA is also responsible for developing river basin water pollution prevention planning of key rivers and lakes in association with planning agency, water resource agency, and relevant provincial, regional and municipal governments, and submits to the State Council for approval; SEPA reviews and approves environmental impact assessment reports of construction projects and supervises on implementation of “Three Synchronies” system. Further SEPA is also the implementation agency for the Convention on Biological Diversity in China.

MOC is responsible for construction and administration of domestic water supply systems, the sewer system and wastewater treatment plants. It is also responsible for the formulation of standards and regulations of municipal sewage management, under the environmental standards set by SEPA and the local environmental authorities. MOC is responsible for management of large sized WWTP construction (WWTP with daily treatment capacity above 100,000 m3/day is subject to approval of MOC).

SFA, the State Forestry Administration, is responsible for forest management and conservation, regulates forest harvest, and manages forest nature reserves. SFA is also charged with wetlands conservation, and took the lead role in drafting China’s National Wetland Conservation Plan (SFA 2000) and in implementing the plan and managing wetland nature reserves. Wildlife protection in China is also the responsibility of SFA, with the exception of aquatic organisms, that are the responsibility of the MOA. SFA also implements the Convention on Wetlands of International Importance (Ramsar Convention) in China. SFA is responsible for land conservation, the prevention of degradation via large reforestation programs.

MOA is responsible for agricultural policies, agricultural land use planning, review of agricultural land-use plans and conservation management of aquatic organisms. MOA also manages grasslands, many of which lay in the catchments of important wetlands. The State Council Office for Fighting Poverty is responsible for making policies and plans on poverty alleviation and development. MOA is responsible for management of agricultural activities related to water use and wastewater discharge, including irrigation, use of fertilizer and pesticides, and control of non-point source pollution. MOA manages wild and domestic fish populations, by regulating harvest seasons, methods, and catch limits.

MLR is in charge of the planning, managing, protecting and rational utilization of the land, mineral and marine resources. In that capacity MLR is responsible for developing and implementing regulations for the assignment, lease, evaluation, transfer, transaction and governmental purchasing of allocation of the right to the use of land, working out catalogue guide for the allocation of the land-use right for state-owned land and measures concerning the land used by villages and townships, and administering the transfer of right to use non- agricultural land nature owned by rural collectives. MLR is also responsible for mining and underground resource management. Therefore, land acquisition in large projects must be approved by the MLR. Land acquisition involving a certain amount protected farmland must be approved by the State Council.

The State Marine Administration is responsible for marine environment management, in particular for water quality protection, development of marine biological resources, protection and management in coastal waters, and management of functional zoning in coastal waters. Pollution control in coastal land areas is done jointly with SEPA.

The Ministry of Health has major responsibilities for setting drinking water standards, supervision on environmental sanitation, control of water-borne diseases, and public health.

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The Ministry of Communication is responsible for harbor and ship wastewater treatment and pollution control, treatment and management of solid wastes from harbor and shipping.

SDRC, the State Development and Reform Commission, is mainly responsible for coordinating among ministries and commissions, drafting long-term national social and economical strategies, coordinating macro economic and social developments between various sectors, and reviewing and guiding planning for various sectors. SDRC has direct responsibility for the review and approval of investment programmes and projects. All proposed water and environmental projects must be approved by SDRC and then could be included in the Five Year Plan and annual investment budget.

MOF, the Ministry of Finance, finally is an important player/stakeholder in water management since it is responsible for central level financing and repaying loans as well as fiscal supervision. It also assumes the role of investment management and negotiating with inter-government, international financing organizations (World Bank or ADB).

The Ministry of Science and Technology is responsible for technical development, promotion, and study program.

Other ministries, whether shown in Figure 2.1 or not, may have some small interest in the water resources sector or water quality management and pollution control sector, but this is relatively so small that they are not shown separately on the chart.

All the above governmental agencies have subordinate agencies that report to them from central government to government at province, city and county level. This is top-down level by level management mode established based on administrative zoning. Only MWR has transboundary or basinwide administration agencies. Approved by the State Council, river basin administration agencies were established for the seven major river basins, as dispatched agencies and administratively affiliated with the MWR. River basin water resource protection bureau was set as separate agency in each of the seven river basin administration organizations, of which Yangzi River, Yellow River and SongLiao River water resource protection bureau are at bureau level, and the other four are at deputy bureau level.

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FIGURE 2-1: OVERALL INSTITUTIONAL FRAMEWORK FOR THE WATER SECTOR IN THE PEOPLE’S REPUBLIC OF CHINA (NATIONAL, PROVINCIAL AND LOWER LEVEL)

Powerbase/column of administrative levels in the Water Sector 2004

NPC NPCC State Council

Central Govt. Central State Development and Ministry of Finance Reform Commission sub-sector sub-sector Land and Science and Water Natural (Urban) Communi- Technology Agriculture Environment Resources Forestry ………... Resources Construction cations

State/ State/ State/ State/ State State/ Universities State/ State/ National: National: National: National: Forestry National: ………... National: MWR National: MoC SSTC MLR MoA SEPA Bureau MoComm I ns Provincial/Local Government Provincial/Local Province/ Province/ Province/ Province/ Province/ Province/ Province/ Province/ tit ………... u t

Municipality Municipality Municipality Municipality Municipality Municipality Municipality Municipality es

City/ City/ City/ City/ City/ City/ City/ Prefecture City/ Prefecture ………... Prefecture Prefecture Prefecture Prefecture Prefecture Prefecture

District/ District/ District/ District/ District/ County District/ County District/ District/ ………... County level County level County level County level level level County level County level

Notes: * Legislation by NPC, NPCC and State Council * Policy guidelines for development by SDRC * National budget by MoF * Policies by the various ministries set at Central Govt. level and implemented by provincial/local government * No or little horizontal coordination between columns * Universities at Central and Provincial level, sometimes connected to Technical Ministries (viz. HoHai Univ/Nanjing) * Multiple Institutes at Central, Provincial and Regional level * Bureaus at Provincial and Regional level

Note: (a) NPC and NPC Standing Committee are responsible for legislation and inspection and supervision on enforcement; (b) the State Council is responsible for organizing law enforcement and developing regulations and national policies; (c) relevant departments of central government are responsible for regulatory enforcement and developing regulations and sector policies; and (d) provincial and lower level agencies are responsible for implementing national laws, regulations and policies.

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Water resource protection bureau is established separately in the dispatched agencies of the seven major river basins for the consideration of dual regulation since 1980s by Water Resources and Hydropower Ministry (predecessor of MWR) and Ministry of Municipal and Rural Construction Environmental Protection (NEPA4 was affiliated with this agency, NEPA is the predecessor of SEPA). Such dual management is identified by the two agencies in the form of principled administrative regulations. At that time, six responsibilities were assigned to river basin water resource bureau, and they were: (a) enforcing national environmental protection guidelines, policies, laws and regulations; (b) drafting river basin environmental protection laws and regulations; (c) taking the lead in organizing development of long-term environmental protection planning and annual plan of river mains by environmental departments of province, autonomous region and municipality within the river basin; (d) assisting environmental department in reviewing and approving environmental impact assessment reports of large and medium sized new, rehabilitation and expansion projects, and supervising on implementation of “Three Synchronies” system; (e) supervising aquatic environmental pollution and ecological degradation in association with environmental departments at all levels; and (f) organizing and coordinating aquatic environmental monitoring in river basin, and scientific research, and assessing environmental impacts induced by water resource development and construction projects. Afterwards, since inconsistent views of the two agencies increased, SEPA gradually gave up management responsibility over water resource protection bureau since late 1990s. In 2002, MWR identified water resource protection bureau as separate basin administration when developed “Three Identifications5” of basin administration, but SEPA still insisted on giving up dual management. In fact, since implementation of dual management, basin water resource protection bureau has not obtained additional authority from SEPA with regard to water quality management and pollution control.

SongLiao Basin Water Resource Protection Bureau is an important agency for implementing comprehensive water resource and water environmental management. SWRPB plays a special and important role in water quantity and quality management of Songhua River Basin for the unique nature of SongLiao River Basin management.

2.2. INSTITUTIONAL FRAMEWORK AT THE LOCAL (PROVINCIAL/REGIONAL) LEVEL

2.2.1. OVERVIEW

The organizational structure of the provincial/regional authorities mirrors the structure of the central government with a provincial people’s congress, standing committee and provincial/local government. The people’s congresses and the standing committees of provinces may adopt local regulations, provided these are conform with the laws and regulations issued by higher authorities, and such regulations are to be reported to the Standing Committee of the NPC.

Under top-down management mechanism by administrative zoning, each provincial government has local administration department that reports to administration department within central government. The responsibilities of the provincial department are in principle similar to the responsibilities of that of central government, while their detailed responsibilities are set up by each of their provincial governments. Management department of central government gives policy guidelines and instructions for professional operation and implementation of laws to provincial counterpart in each of the provinces, but these provincial departments report administratively to the provincial governments. Basically the same applies for environmental

4 National Environmental Protection Agency, predecessor of SEPA, is affiliated to Ministry of Urban and Rural Construction and Environmental Protection. In 1985, NEPA was directly under the State Council. In 1988, NEPA was upgraded to ministry level, and was renamed SEPA, directly under the State Council. 5 Three Identifications refer to identification of responsibility, institutional setting and staffing.

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protection, water resource and construction departments. Organization structure of autonomous region is similar to that of province. Situation of the three provinces/region6 in Songhua River Basin is similar.

In addition, over the last ten years, many regulatory authorities have been decentralized resulted from institutional reform of the country, so provinces/region and agencies related to planning, financing, construction, water resource protection, and environmental protection play more important role than before.

At provincial/regional level, several bureaus and bureau-level organizations directly or indirectly affect SRB management. Amongst them, the Provincial Water Bureau is the lead department for water resources administration under the provincial government responsible for administration of water resources and works, flood control, drought relief and water and soil conservation. The Provincial/Regional Environmental Protection Bureau (EPB) is responsible for water environment protection. The Provincial Forestry Bureau (PFB) is charged with organizing and implementing wetlands conservation and is responsible for forest management and conservation, and wildlife protection, with the exception of aquatic organisms, which are the responsibility of the Ministry of Agriculture. PFB also manages grasslands. The Provincial Agriculture Bureau (PAB) is responsible for agricultural practice, conservation management of aquatic organisms in streams, rivers, lakes, and wetlands. The Construction Bureau is responsible for municipal wastewater treatment. However, authorities of these bureaus are restricted to jurisdiction of their own province/region, so what they can do is implementing relevant national policies within their own jurisdiction without significant influence to water management throughout the river basin.

Similar to national level, in Songhua River Basin, the two main administration departments at provincial level related to water quality and pollution control are EPB and Water Resource Bureau. In addition, since there are many important wetlands in Songhua River Basin (some are located within grassland), and grassland condition and aquatic biodiversity have direct and significant impacts on wetland biodiversity, forestry bureau and agriculture bureau are very important agencies for water quality protection.

Songhua River Basin covers a large area of the three provinces/region, including two provincial capital cities, 13 cities at regional level, and 100 counties. The statistical data of 2004 show that Songhua River Basin has a total population of approximately 54.1 million of which 23.99 (44%) are non-agricultural residents. Details are as follow:7 • Heilongjiang Province: one capital city, 10 cities at regional level, 54 counties, covering a population of 31.8 million, which is 58% of the total in the Basin and 86% of the total population of Heilongjiang Province. • Jilin Province: one capital city, 3 cities at regional level, and 30 counties, covering a population of 19.81 million, which is 36% of those in Songhua River Basin and 75% of the total population of Jilin Province. • Inner Mongolia: 15 counties, covering a population of approximately 3.1 million, which is 6% of those in Songhua River Basin and 13% of total population of Inner Mongolia.

2.2.2. ENVIRONMENTAL PROTECTION INSTITUTIONS

There are over 1000 Environmental Protection Institutions in Songhua River Basin with a workforce over 12000 (see TABLE 2-1 and TABLE 2-2) All three provinces have no special environmental administration, supervision and monitoring institutions in villages and towns while some only have environmental tipstaffs. Environmental research institutions, information centers and dissemination and education center in counties, villages and towns have small

6 The three provinces/region are Heilongjiang province, Jilin province, and Inner Mongolia Autonomous Region.

7 This information is from comments of Songhua River Basin Water Resource Protection Bureau dated on April 29, 2005.

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scales. Every province/region has pollution control section to answer for practical work of river basin water pollution control.

TABLE 2-1: NUMBER OF INSTITUTIONS OF SRB ENVIRONMENTAL SYSTEM AT THE END OF YEAR 2002 Environmental Scientific Dissemination Supervision Monitoring Information institutions in Region Total EPB Research and education Else Institution Station center villages and Institution center towns Province 8 1 / 2 1 1 1 2 / Inner City 52 13 10 12 3 3 1 10 / Mongolia County 201 95 37 53 / / / 16 Villages and Province towns 109 environmental 109 institution Province 11 1 1 2 1 1 / 5 / City 53 9 8 9 7 9 3 8 / Jilin County 188 62 60 55 / / / 11 Province Villages and towns 5 environmental 5 institution Province 10 1 1 1 1 1 1 4 / City 71 14 14 14 12 4 3 10 / Heilongjian 13 // 5 Provincial 317 93 89 / g 0 Province Villages and towns 8 environmental 8 institution 103 32 19 9 71 112 Total 224 237 25 3 6 Source: China Environment Yearbook 2003. Note: listed above are all environmental institutions in provinces of the river basin, the institutes included in the river basin. These institutions are 72 county level units and 13 city level units in Heilongjiang province; 40 county level units and 10 city level units in Jilin province, 17 county level units and 4 city level units in Inner Mongolia municipality. The institutions’ number in Heilongjiang province is more than which in Inner Mongolia autonomous region, which relates to the pollution degree and economic development in the autonomous region river basin.

TABLE 2-2: NUMBER OF PERSONS OF SONGHUA RIVER BASIN ENVIRONMENTAL SYSTEM AT THE END OF YEAR 2002 Propaganda Environmental Scientific Supervision Monitor and Information institutions in Region Total EPB Research Else Institution Station education center villages and Institution center towns Province 211 47 / 87 33 14 15 15 / Inner City 1078 234 166 488 79 14 3 94 / Mongolia County 2150 1024 450 608 / / / 68 / Villages and Province towns 65 environmental 65 institution Province 324 50 14 99 89 17 / 55 / City 977 162 255 339 117 42 7 55 / Jilin County 3410 574 1638 1048 / / / 150 / Province Villages and towns 38 environmental 38 institution Provincial 289 51 18 84 79 13 8 36 / City 1292 311 251 512 104 39 11 64 / Heilongjiang County 2363 613 886 823 / / / 41 / Province Villages and towns 16 environmental 16 institution Total 12213 3066 3678 4088 501 139 44 578 119 Source: China Environment Yearbook 2003.

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TABLE 2-2 shows the total number of persons of Songhua River Basin environmental system in 2002. Because there are so many cities and counties in the river basin, number of environmental institutions is relatively higher and number of persons is high too.

2.2.3. WATER RESOURCES DEPARTMENTS

Water Resource Bureau at provincial, city and county level is the governmental department responsible for water resource management. Water resources departments are mainly taking charge of water resources protection, water resources engineering, water and soil conservation, water functional zoning plan, water abstractions permits, hydrological water quality monitoring and planning, rural water use development (including irrigation), and relevant policy and plan development.

Water resource department has responsibilities for management and supervision of water flow and water resource utilization within its jurisdiction. All the provinces/region in Songhua River Basin have developed local water resource management planning and water abstraction regulations. With regard to water resource management of the entire Songhua River Basin, water resource departments at provincial and lower levels observe water resource arrangements by national or Songliao River Water Resource Commission.

Similar to other large river basins, management mode integrating administrative regional and river basin management is adopted for water resource in Songhua River Basin. SongLiao Water Resource Commission adopts uniform trans-boundary management to water resource in the basin. Local water resource bureau in the basin not only needs to follow administrative guidelines from higher water resource departments but also needs to accept instructions for professional operation from SongLiao Water Resource Commission. SongLiao Water Resource Commission does not have administrative affiliation with local governments. It is the dispatched agency of MWR enforcing laws and regulations on behalf of MWR.

2.2.4. OTHER DEPARTMENTS

Besides departments of water resources and environmental protection, other institutions have an important role on water environment management in the Songhua River Basin, such as:

Forestry Bureau: Taking charge of the protection and restoring to the natural wetlands along the riverside in river basin area, establishing the plan for wetland protection, making wetland protection dissemination, forest and grassland management and protection.

Agriculture Bureau: Mainly taking charge of aquatic organism protection, control of non-point pollution related to river basin, implementation of harvest safety strategy.

Construction Bureau: Mainly take charge of municipal water supply and water conservation, municipal wastewater collection and treatment.

Development and Reform Commission: develop provincial/regional environmental protection and water pollution control plan, and review and approve water pollution treatment projects. These works would go along with relevant governmental departments.

Finance Bureau: An important department of city government for macro economic management, provide financial guarantee for water pollution treatment projects.

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2.3. INSTITUTIONAL FRAMEWORK AT THE RIVER BASIN LEVEL

2.3.1. INTRODUCTION

Three institutional systems are established in Songhua River Basin responsible for or having direct influence with water quality management and water pollution control. They are: • Top-down level by level administrative system based on administrative zoning, such as MWR, provincial WRB, and city WRB; another example, SEPA, provincial EPB and city EPB; • Dispatched institutional system of MWR established for water resource management in accordance with Water Law and based on integrated regional and river basin management, i.e. MWR, Songliao Water Resources Commission, and Songliao Basin Water Resource Protection Bureau. • Institutional system established in Songliao River Basin and approved by the State Council for meeting actual requirements, that is, The Songliao River System Protection Leading Group and its office (The Songliao Water Resources Protection Bureau).

Among the above three institutional systems, legal status and responsibilities of the first two are specified in special laws and “Three Identifications” program by governments at all level. The third system has no clear legal status up to date although its establishment is approved by the State Council. The last two of the three systems have a nature of river basin institution, while the first is an administrative system, accurately speaking.

The river basin institutional system, SongLiao River System Protection Leading Group and its office (The Songliao Water Resources Protection Bureau), has strategic significance in water quality management and pollution control of Songhua River Basin, which is the focus of this Project.

The Songliao Water Resources Commission（SWRC）

The SongLiao Water Resources Commission (SWRC), located in ChangChun, Jilin Province, is one of the seven dispatched river basin institutions of MWR. It is actually in charge of managing two completely separate river basins, one being SongHua basin, the other one Liao basin. In addition it is responsible for the rivers that flow into the sea in Northeast China and the international boundary rivers including Erguna, Heilong, Wusuli, Tumen and Yalu River. Major responsibilities of SWRC include: organizing and supervising the implementation of relevant laws and regulations, and formulating basin-wide policies and regulations; water related regulatory enforcement, inspection and supervision, and evaluation; Handling and solving water disputes among provinces or sectors; formulating master plans and technical plans; unified management of basin- wide water resources including surface and ground waters; formulating long-term water supply and distribution plans among relevant provinces; basin-wide water resources protection; managing water functional zoning, and control of discharge to drinking water source protection areas; review and determine assimilative capacity of waters, and provide comments on limits to total pollutant loading; responsible for water quantity and quality monitoring of provincial/regional water body, important river/lake and trans-boundary water diversion; coordinating daily work in flood control and drought relief throughout the basin; management of key water engineering works in accordance with regulations and authority; guidance, coordination and supervision of basin-wide flood control and drought relief; Organizing prevention, supervision and treatment at major soil erosion areas within the basin; and management of water projects. SWRC has 14 divisions, including departments of planning, water affairs and water resources, water and soil conservation, flood control, drought relief, and water engineering works construction and administration; 7 institutional organizations including resettlement office, Cha’ersen reservoir administration, water and soil conservation monitoring station; 1 separate bureau-level institution, the Songliao Water Resources Protection Bureau. In addition, a specific organization has been established for managing Ni’erji Reservoir after its construction finishes. For this purpose specific organizations have been established. The staff size specified by the national authority for SWRC is 795 SOGREAH / DELFT –SEPTEMBER 2005 PAGE 13

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2.3.2. HISTORY

2.3.2.1. ISSUES AND NECESSITY

Water quality and water pollution control in Songhua River Basin have both general and unique natures. Almost all basin and non-basin related issues exist in Songhua River Basin, including trans-boundary pollution, industrial point source and agricultural non-point source pollution, inner source pollution, and pollution aggravation due to reduced river flow. Besides, Songhua River Basin has unique issues, including trans-boundary water environmental protection and long frozen period of rivers, which introduce special requirements to wastewater management, including industrial wastewater. Most of the cities and towns along Songhua River use it as their drinking water source, which poses high requirements for its water quality. Songhua River Basin is not only national industrial base, but also is important agricultural area, so it is under higher pressure. Songhua River Basin has large area of important wetland, so protection of wetland increases requirements for water pollution control.

These outstanding environmental issues present higher special requirements for water management and pollution control of Songhua River Basin. Undoubtedly, sector (water resource, environmental protection, forestry, land resource, and agriculture) management is very important, which is the foundation for water quality management and water pollution control. Water quality protection is incomplete without contribution of other sectors. However, sector management cannot solve basin-wide issues, for example, water quality and quantity management of rivers cannot be separated. Provincial/regional water environmental management is also very important. Water quality protection will be in vain without provincial/regional efforts. Similarly, provincial/regional management cannot really solve basin- wide issues, for example, trans-boundary pollution disputes.

Just because of this, concept of integrated basin-wide water quality and quantity management was proposed at the earliest time in Songhua River Basin, and is getting accepted over time. Establishment of the SongLiao River System Protection Leading Group meets this requirement.

2.3.2.2. HISTORY OF THE SONGLIAO RIVER SYSTEM PROTECTION LEADING GROUP (SRSPLG)

History of SRSPLG could be dated back to 1970s. In 1970s, water pollution in Songhua River Basin was getting worse due to industrial development and urbanization, so basin-wide water resource protection and trans-provincial/regional boundary water pollution control became more urgent. Therefore, Heilongjiang province and Jilin provincial Revolution Committee 8 jointly proposed establishing Songhua River System Protection Leading Group to facilitate water pollution control. In April 1978, the State Council issued Circular Guofa [1978]67, agreed to establish Songhua River System Protection Leading Group. The director and vice directors of the Leading Group are the leading cadres from the governments of Jilin and Heilongjiang Provinces. The members are representatives from relevant departments of the Ministry of Water Resources and Power, the Ministry of Chemical Industry, the Ministry of Metallurgy, the Ministry of Light Industry, the Ministry of Health, and the State Science and Technology Commission. The office of this Leading Group was managed by provincial revolution committee, and its administrative cost was allocated by provincial financial department. The Leading Group together with national scientific and technology committee organized implementation of scientific research activities. Although the State Council approved that the Office was managed by provincial (Jilin) revolution committee, actually the Office of this Leading Group is housed in Jilin province environmental protection office (predecessor of Jilin provincial EPB ) under Revolution Commission and be regarded as environmental department. Administrative cost of Leading Group Office was taken charge by Revolution Commission. After that, to meet actual needs, the Ministry of Petroleum, the Ministry of Textile, the Ministry of Urban and Rural Construction Environmental Protection, the Ministry of Agriculture, Livestock and Fishery, and

8 Provincial Revolution Committee is equal to existing provincial government. At that time, all local governments and leading agencies of industries and institutions were named Revolution Committee, which started from end of 1960s. By late 1970s, the name of people’s government was recovered.

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Inner Mongolia Autonomous Region and the State Council Northeast Economic Zone Planning Office were added as members of Songhua River System Protection Leading Group.

In March 1984, the central government approved application of Songhua River System Protection Leading Group, agreed to incorporate it into SongLiao Water Resource Commission and establish Songliao Water Resource Protection Bureau (later renamed as Songliao Basin Water Resource Protection Bureau). Former staff, property and budget of Songhua River System Protection Leading Group Office were transferred to Songliao Water Resource Commission. Songliao Water Resource Protection Bureau was under dual management of the Ministry of Water Resources and Power and the Ministry of Urban and Rural Construction Environmental Protection (later became MWR and SEPA). In August 1984, Songhua River System Protection Leading Group approved establishment of Pollution Control Leading Group and its Office for Nen River, Mudan River, Yinma River and Huifa River sub-basins to implement management by trunk and tributary level. These sub-basin institutions accepted dual management of Songhua River System Protection Leading Group and provincial environmental protection commission. Office of sub-basin leading group were set in EPBs of Qiqihaer, Mudanjiang, Changchun and Jilin cities, and its staff were from local governments.

In July 1986, approved by the State Council Environmental Protection Commission, Songhua River System Protection Leading Group was expanded to SongLiao Water System Protection Leading Group, and its Office was still the SongLiao Basin Water Resource Protection Bureau. Liaoning province, China Petrochemical Corporation and China Non-Ferrous Metal Industry Corporation were incorporated as members of the Group. After 1998, all central ministries/commissions and corporations were no longer members of this Group due to national institutional reform. Up to date, members of SRSPLG are Jilin Province, Heilongjiang Province, Inner Mongolia, Liaoning Province and SWRC.

In September 2003, to meet the demands for reform and development, the people’s governments of Jilin, Heilongjiang, Liaoning and IMAR jointly enacted a decree to re-identify members of SRSPLG. Vice Governor of Jilin was nominates as Director, VG of Heilongjiang province, VG of Liaoning province, VG of IMAR and president of SWRC as vice directors of the leading group. Members include director of SongLiao Water Resource Protection Bureau, and directors of water resource and environmental departments in the four provinces/region. Director of SongLiao Water Resource Protection Bureau also acts as director of SRSPLG Office.

Organization structure of this institution is shown as Figure 2-2.

2.3.3. BACKGROUND OF BASIN INSTITUTIONS

2.3.3.1. SONGLIAO RIVER SYSTEM PROTECTION LEADING GROUP (SRSPLG)

The SongLiao River System Protection Leading Group (SRSPLG) is the interprovincial, interregional and cross-sectoral leading group for the management and protection of SongLiao’s water resources. It supervises, coordinates, guides and manages water resources protection in SLRB. Its office, Songliao Water Resource Protection Bureau, not only works for the leading group, but also is affiliated with basin water resource protection agency of SongLiao Water Resources Commission. SongLiao River Protection Leading Group and its Office (SongLiao Water Resource Protection Bureau) is a special institutional mode in basin management of China.

The functions of SRSPLG can be summarized as: • Strategic planning for water resources protection and pollution control; • Supervising enforcement of water and pollution laws and regulations; • Formulating action plans, coordinating with related departments, providing technical support and dealing with general affairs through the Office of SRSPLG; and,

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• Supervising the departments of water resources and environmental protection in the four provinces/autonomous region.

Since SRSPLG was set up in 1978 and it has developed several main plans for water resources and water environment protection: • Songhua River water resources protection plan; • Liao River water resources protection plan; • “Tenth Five-Year” action plan for Songhua River water resource protection; • SongLiao Basin water functional zoning; and • SongLiao Basin water monitoring station network planning.

FIGURE 2-2 SONGLIAO RIVER SYSTEM PROTECTION LEADING GROUP ORGANIZATION

Governments of Jilin, Heilongjiang, MWR SEPA Liaoning Provinces and IMAR

SWRC SRSPLG

SWRPB Office of SRSPLG

Water Resources and Environmental Sub-Basin Water Pollution Control Departments of Provinces/Region Leading Group

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The Leading Group developed and issued the ‘Interim Measures for Water Pollution Control’ in SLRB, Interim Songhua River System Protection Regulations, Interim Environmental Quality Standard in Songhua River System, Environmental Quality Standard of Methyl Mercury in Surface Water, and Regulations on Advice of Significant Water Pollution Accident to Upper and Down Streams in SongLiao Basin.

The leading group investigated the river pollutant discharge points from cities and towns in SLRB, and implemented several specific activities for water pollution control. The Leading Group has also contributed much to the prevention of water pollution, monitoring of the water quality of rivers, lakes and reservoirs, wetland protection and basin rehabilitation.

The Leading Group and its office are not government, but they provide a platform for discussion on important inter-provincial/regional events. With regard to basin-wide water quality management and pollution control, the Leading Group negotiate and reach consensus, and then relevant documents are issued in the name of provincial/regional government, which is the nature of special and important role of the Leading Group. Many national specialists in river- basin management have recognized the importance of this organization for water system protection, SongLiao River System Protection Leading Group, and have named it the ‘Songliao Management Pattern’.

2.3.3.2. SUB-BASIN WATER POLLUTION PREVENTION LEADING GROUP

In addition to the river basin level, there is also similar institutional arrangement at sub-basin level. There are four sub-basin leading groups and associated offices for water pollution control existing within Songhua river basin. The four sub-basins are Nen River, Mudan, Huifa and Yinma River. The leading groups for water pollution control of four river basins are headed by vice mayors Qiqihaer city, Mudan city, Jilin city and Changchun city respectively in which the leading groups and their offices are located respectively. The leading groups of sub-basins are leaded by Songhua River Basin Water Protection Bureau and environmental protection agencies to which the four river basins belong respectively. The offices of the leading groups of the four sub-basins have full-time persons, working in the same building of local environmental protection administrations. The budget for the leading groups and their offices is provided annually from the provincial finance through SRSPLG. The sub-basin leading group and its office have significantly contributed to the accomplishment of water pollution control tasks identified in the past in the sub-basin.

TABLE 2-3: RIVER SUB-BASIN ORGANISATIONS

Sub-Basin Nen River Mudan River Huifa River Yinma

Chair Vice mayor of Vice mayor of Vice mayor of Chair Vice mayor of Chair city Chair city city Chair city

Chair city Qiqihaer city Mudan city Jilin city Changchun city

Vice Chair/main Daqing, Dunhua, Ning’an, Liaoyuan, Tonghua, Siping, Yitong, city Hulunbeier, Hailin, Linkou and Meihekou，Huadian, Jiutai, Nong’an, Baicheng, Xinan, Yi’an Panshi, Huinan, Liuhe, Dehui and Daxinan, Heihe, Dongfeng Shuangyang Nenjiang and Zhalantun etc

Members 33 vice mayors/ 6 vice mayors /vice 9 directors of key 7 vice heads of 7 vice top leaders in top leaders in important bureaus of county county county city/county. governments government government/key involved important bureaus

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2.3.4. THE SONGLIAO WATER RESOURCES PROTECTION BUREAU

In China, water resource protection bureaus have also been established for seven major river basins one of which is the Songliao River Basin Water Resource Protection Bureau (SWRPB). However, SWRPB is different from other water resource protection bureau in that its predecessor is the office of SRSPLG, and this office was set within Jilin EPB. Later, it was combined into SWRC and became a separate institution of MWR in SWRC. SWRPB is affiliated with Songliao Water Resource Commission (SWRC). SWRPB is led by SWRC in administrative affairs and personnel management, and technically reported to both MWR and SEPA but mainly reports to MWR. Meanwhile, it also stands as the office led by Songliao River System Protection Leading Group.

River basin water resource protection bureau has not obtained authority from SEPA in water quality and pollution control because of several reasons among others because MWR takes the lead in the dual management of water resource protection bureaus in the seven river basins. The initial six responsibilities assigned to river basin water resource protection bureau have not been fully implemented. Although water resource protection bureaus of the seven river basins were set as separate agencies in the “Three Identifications” of MWR in 2002, in fact it is not effective. In fact, dual management does not actually exist. However, SEPA have not clearly stated their attitude to dual management in form of document, so water resource protection bureaus of the seven river basins still have the understanding that such dual management mode is still ongoing, which poses lots of adverse impacts to basin-wide water quality management and pollution control. In fact, river basin water resource bureau cannot do anything for water quality management and pollution control without authority given by SEPA.

SWRPB is a river basin management institution rather than an administrative department. It can play a more important role in basin-wide management and more effectively implement regulations only if it becomes dispatched agency of both MWR and SEPA with authority given by MWR and SEPA. Meanwhile, improved relationship between SWRPB and provincial/regional water resource and environmental departments is required for SWRPB to fulfill its duties in river basin management.

Songliao Water Resources Protection Bureau (SWRPB) In 1984 the State Council required the Ministry of Water Resources and Electricity and Ministry of Urban Construction and Environmental Protection to approve the establishment of SWRPB by the approval document No. (84)21 in response to “Requesting Instructions Regarding Merging of Office of SLSPLG into SWRC”. The approval document consented to merge the Office of SLSPLG into SWRC and agreed on the establishment of SWRPB which was under the dual leadership of two Ministries, acting as the executive agency of SLSPLG. Six specific responsibilities were listed in the “Decision on the Dual Leadership of River Basin Water Resources Protection Agency [No. (83) 279]”. The six responsibilities are: 1. Implement the national principles, policies and regulations of environmental protection and assist the Ministry of Construction to draft water system environmental protection regulatory rules; 2. Organize the environmental protection agencies of provinces/municipalities/regions that the mainstream of river system passing through to prepare long-term planning and annual plan of environmental protection for the mainstream of river system and submit the results to the Ministry of Construction and the Ministry of Water Resources and Electricity for approval; 3. Assist the environmental protection authorities to review and approve the EIA of the proposed industrial and communications projects and large or medium-sized water resources projects to be constructed along the bank of mainstream of river system; Assist environmental authorities of different level to supervise over the implementation of “Three Synchronies” for new construction projects and technical transform projects in the light of water body protection; 4. Supervise in conjunction with environmental protection agencies over unreasonable utilization of flood plain and island, and the pollution and damage due to freely piling poisonous and harm materials and dumping and discharging waste substances to river bodies; 5. Under the guidance of the national environmental monitoring network, organize and coordinate environmental monitoring of the water bodies of the mainstream of the Yangzi and Yellow Rivers (Huai, Pearl and Hai Rivers are not included) using common monitoring methodology and technical regulations agreed, understand water quality condition and propose water quality monitoring report of mainstreams

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and submit to the Ministry of Construction and the Ministry of Water Resources and Electricity as well as provide environmental protection and water resources authorities and their monitoring stations for use; 6. Develop the scientific studies on environmental protection of water system and water body, such as water body environmental quality, carrying capacity, dilution and self-cleaning rules, the EIA of water resources development and project construction. As defined as Article 12 of the latest Water Law, and the “Three Identifications” program of the State Institutional Organization Office and MWR, SWRPB is set as a separate agency and it’s major responsibilities include: Developing Songliao River Basin water resources protection planning; organizing water function zoning of river basin; Reviewing and determining assimilative capacity of the basin, and making recommendations for total pollutant load control; and monitoring of Songliao River Basin control section at provincial boundary and international river boundary. As shown in Article 4 and 18 of Water Pollution Prevention and Control Law, WRPBs shall, in conjunction with environmental protection departments, exercise supervision over and management of prevention and control of water pollution; WRPBs for major river basins determined as such by the State shall be responsible for monitoring the water environment quality conditions of such river basins within the boundaries of the provinces where they are located and shall, without delay, report the monitoring findings to the environmental protection department under the State Council and the water conservancy administration department under the State Council. Up to now with the reform of national institution and the change of leaders the dual leadership mechanism has been gradually weakened and the environmental protection authority under the State Council has not entrusted concrete administrative functions. Thus, SWRPB lacks administrative instruments for river basin management, including participation in the six responsibilities of dual leadership such as preparation of long-term planning, review and approval of EIA, and supervision on enforcement of “Three Synchronies” for construction projects，which makes SWRPB meets big challenge when performing water quality and pollution control in the river basin. As a result the SWRPB is difficult to do work well. Under current new situation, the dual leadership of MWR and SEPA under the State Council should be re-identified to enable the Bureau to play its management role in water resources protection and water pollution control. The SWRPB has four section-level subunits, having totally 71 allocated staff, but actually 55people by the end of 2004.

In accordance with Water Law and “Three Identifications” program of MWR, major responsibilities of SWRPB include: • Developing SongLiao River Basin water resource protection planning; • Organizing water functional zoning of Songhua River and Liao River; • Reviewing and determining assimilative capacity of the basin, and making recommendations for total pollutant load control; • Monitoring of SongLiao River Basin control section at provincial boundary and international river boundary

SWRPB has a staff of 55 people, with qualifications in more than ten different subject areas. Among the staff are 7 professors, 25 senior engineers and 22 junior engineers. Seventy six percent of the staff members graduated from universities, and among them postgraduates account for 22 percent. SWRPB possesses a high-technical level and rich practical experience in all aspects of water resource protection and water system management.

The major divisions of SWRPB are: • Supervision & Management Division (8 people); • Water Environmental Monitoring Center (18 people); • Water Environment Scientific Research Institute (11 people); and • Office (18 people). It is interesting to note that the Songliao Water Resources Commission has on its side nearly 800 staff.

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One observation regarding the functioning of SWRPB is that SWRPB is responsible for supervising the implementation of water resource protection plans in the SLRB, but this role is restricted to monitoring at inter-provincial and national boundaries and along the main river course. There is yet no joint water quality management responsibility shared with the provinces covering Songhua River Basin.

2.3.5. ASSESSMENT OF CURRENT INSTITUTIONAL STATUS

2.3.5.1. SUMMARIZATION OF SONGLIAO MODE

The institutional establishment, Songliao River System Protection Leading Group and its Office, was put forward in 1970s when river basin management concept was very weak, and is the earliest institutional establishment for integrated basin-wide water pollution control and water quality protection, and is the earliest in implementation. Although this institutional system has lots of deficiencies to be criticized, it had milestone significance for both basin-wide water quality management and water pollution control when water quality protection agency was not established in any of other river basins throughout the country in 1970s.

Top-Down and Bottom-Up: combination of top-down and bottom-up mechanism for water resource and aquatic environment management is recommended in recent years. This is a dynamic and repeatable and participatory management process. Laws, standards, policies, allocation of water flow and water quality control objectives from top-down mechanism are to be reviewed based on response from bottom-up mechanism. Meanwhile, adjustment and improvement are required for practices under bottom-up mechanism based on amendment from implementation of top-down mechanism. Continual repeating of the entire process makes management process more transparent and equitable, and also would encourage more extensive participation

This institutional system has the following features: • Authority. The vice governors of the provincial/regional governments within River Basin and the head of River Basin committee consist of this leading group with each vice governor taking chair in turn, and the members are directors of provincial/regional water resource and environmental departments. Thus, results of coordination, policies and decisions of this group can be implemented in the form of document jointly issued by provincial/regional governments. • Equity. Comments from provinces/region in the basin can be directly forwarded to this institution by the vice governor and directors of relevant provincial departments. • Compatibility and coordination. This is an interregional, inter-sector institutional system, so various information can be effectively transferred to this institution to achieve integration and complement of regulatory functions of all sides, coordinated management tasks and full utilization of various management resources. • Integration and due diligence. This institution has a nature of comprehensive management, integrating different service responsibilities of water resource and environmental operations into a regional three-dimensional management mechanism. Departments, regions and basin are assigned clear responsibilities. • Effective combination. This is the typical characteristic of this institution system in which basin administration, local government and local water administration are effectively combined together minimizing separate management and poor coordination to facilitate implementation of regional planning and policies.

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• Bottom-up. Bottom-up mechanism reflects integration of sector, basin and local aspects. The leading group was established based on desire of local governments and reflected responsibility of the government. This bottom-up mechanism is favorable to achievement of integrated water resource and aquatic environment management of the basin. This approach is more favorable to inspiring local activeness compared with top-down management by administrative region.

SWRPB is the key joint of Songliao River Basin water quality management and pollution control. Regulations of Water Law and Water Pollution Prevention Law are combined through river basin administration to avoid man-made conflicts or incomplete emphasis on some regulations of the two laws.

Over the last 30 years, this institution has been effectively operating, and its success is that it includes effective integration between basin regions and sectors, so it can take advantage of each side to enforce the Water Law and Water Pollution Prevention Law throughout the basin.

This mechanism (a) covers upper and down streams, different banks and river main and tributary; (b) coordinates trans-boundary water pollution issues; (c) integrates water resource protection and water pollution control; (d) has management advantages of effective combination and local governments can directly take lead in basin administration; and (e) focuses on important basin-wide issues. All these indicate that Songliao Mode has “core competitive capability”, which is experience that can be used by other river basins for reference.

Since start-up of this Project, SRSPLG and its office have been providing support and assistance. One of the reasons for that this institutional system functions very well maybe is that leader and deputy leader of this leading group are provincial governors from provinces/region within the basin, and its office (Songliao Water Resource Protection Bureau) is the agency for regulatory enforcement of this Project. In this way, strong commitment can be obtained from provinces/region in organization and coordination, thus, this kind of river basin management pattern can be used as demonstration for management of other river basins.

Core Competition Capability

Core competition capability or core capability, is a label for measuring viability of an institutional system. Necessary conditions for core capability include: (a) not same as or similar to others; and (b) cannot or difficult to be replaced. Songliao Management Mode has such characteristics with respect to water quality management and water pollution control of Songhua River.

2.3.5.2. ISSUES OF SONGLIAO RIVER BASIN MANAGEMENT PATTERN

The Leading Group is not government, does not have authority as a government, so it is only a negotiation platform of provincial/regional governments for basin-wide water quality management and pollution control. It can only play a coordination role between provincial/regional governments since it does not have functions of the government. When consensus is reached among director and vice directors on behalf of provincial/regional governments, provincial/regional governments can jointly issue documents for implementation in provinces/region. Pollution treatment within specified time limit is an example and has good effectiveness. However, Interim Method for Songliao Water System Pollution Prevention and Control, Songhua River System Environmental Quality Standard were issued in the name of the Leading Group and were not well implemented because they were not widely recognized by provinces/region in the basin and of course they were not enforced in a mandatory way.

SEPA does not authorize river basin water resource protection bureau to implement or supervise over water pollution prevention in association with environmental department, so river basin water resource protection bureau cannot function well in this aspect. Up to now, the six responsibilities of dual management generally have not been implemented although these were partly implemented in early stage for basin water quality management and pollution control.

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Thus, river basin water resource protection bureau lacks administrative instruments for river basin management, including participation in review and approval of environmental impact assessment report, and supervision on enforcement of “Three Synchronies” for construction projects.

Integrated management plan is not available. Integrated basin-wide management emphasizes extensive integrated water quantity and quality management and pollution control; emphasizes importance of aquatic ecology from basin and ecological aspects; emphasizes role of real water conservation; emphasizes extensive public involvement; and emphasizes coordination and unification of water, sewage and wastewater permit management. Obviously, a workable planning including management contents and extensive ideology is needed.

Relationship between basin water resource protection bureau, environmental department and water administration of provinces/region is not straightened out, which has resulted to poor coordination of river basin management and regional administrative management. Both Water Law and Water Pollution Prevention Law emphasize that combination of river basin management and regional administrative management should be settled through management authority.

Poor financing capacity. Neither Long-term nor short-term financing approach is available.

2.3.5.3. ANALYSIS SUMMARY

At the beginning of this section, it is mentioned that three institutional systems have direct influence on and regulatory responsibility for water quality management and water pollution control. Obviously, the other institutional systems, i.e. top-down administrative system established based on administrative zoning and dispatched institutional system established by MWR for water resource management based on integrated regional and basin management, cannot meet all requirements for water quality management, water pollution control and integrated water management in Songhua River Basin. This has been proved by years of practices. Songliao Mode is the focus of study. Extensive analysis has been provided to summarize its advantages and deficiencies. Although there are still some problems and institutional capability also needs improvement and strengthening, such structure and mechanism are big progress in basin management, and it is only institutional framework that has integrated management ideology in all the river basins of China. It changes the simple top- down management mechanism by administrative region, and addresses the ideology of bottom- up and extensive participation. This institution and mechanism can be used as a basis of basin institutional framework for integrated water quality and quantity management and water pollution control in Songhua River Basin, and recommended institutional framework after improved and strengthened.

2.3.6. COMPARISON OF DIFFERENT RIVER BASIN ORGANIZATIONS IN CHINA

The main purpose of River Basin water environment management is to make the institution arrangement of water quality management and pollution control favor to river basin water quality protection and pollution control. There are currently several modes used for coordination of parties involved in water quality management and pollution control in China: basin management mode led by local government (Songliao River Basin Mode), basin management mode led by central government (Huai River Basin Mode), basin management mode in form of liaison conference (Taihu River Basin Mode), and separate basin management mode controlled by governmental administration (Dianchi River Basin Mode). These river basin management institutions have different features and effectiveness in policy coordination, decision making, regulatory enforcement, monitoring and data sharing.

River basin management mode led by local government is Songliao Mode. It performs its tasks through Songliao River System Protection Leading Group and its Office. Deputy provincial governors form the leading group and basin water resource protection agencies also are

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involved. This is a top-down management mechanism, and detained comments on this mode have been given in the last section.

Huai River Basin adopts “Central Government Management Mode” in water pollution control. Through negotiation, a leading group is established consisting of nine ministries under State Council and provincial governments of Henan, Shandong, Jiangsu and Anhui provinces. SEPA and MWR jointly chair the Leading Group. The Leading Group handles issues and adopts decisions by convening Leading Group Meetings. This Huai River Leading Group Mode is convenient to put together those relative institutions involved in River Basin water resources protection, which make it easy to coordinate and fulfill the work and to supervise project implementation. The office of Leading Group is set up in Water Resource Protection Bureau of River Basin. This is a top-down management mode. At present, the two chair institutions, SEPA and MWR, have sharp differences in interests and comprehension about water quality and water pollution control. Therefore, decisions are hard to coordinate in this mode and time consuming. Moreover, local governments have decreased activeness to participate, and actual implementation effectiveness is not satisfactory.

Taihu Basin adopts “Liaison Conference Mode” in water pollution control. SEPA, appointed by State Council to be in charge of pollution control, is the leading unit. This is also a top-down management mode. Within River Basin, local EPA takes the lead and other correlated units cooperate. This mode has only one lead institution. Therefore, it is easy to reach a decision. This mode has good applicability upon River Basin water pollution control and management because it sufficiently mobilize the activities of local governments and other industry sectors. This mode has generated good results in some regions in China, reflecting new attempts and characteristics in water pollution control. However, it does not have enough routine supervision and management, organization and coordination at river basin level. Under this mode, water resource sectors and river basin institution do not fully participate as pollution control is not their main mandates, and information sharing is poor.

Dianchi Basin adopts separate Government Management Mode. Yunnan provincial government issued local regulations and established Dianchi Basin Administration. This Administration is responsible for overall water resource and environmental management including water quality improvement and water pollution control. This administration has legal supporting and regulatory authority as government. It has been given administrative authority of water resource and aquatic environment within the basin, so this mode has quality and efficient work done. This is very favorable to integrated water management, but jurisdiction of this mode is restricted to Yunnan Province. Therefore, this institution cannot undertake trans-provincial boundary management.

TABLE 2-4 provides comparison of the above river basin management modes. On the basis of the above discussion, it is concluded that the Songliao Mode is a better management pattern, but there is still room for further improvement.

Internationally, trans-state boundary management of Rhine in Germany and trans-national boundary basin management mode adopted by Danube are similar, i.e. a basin management commission is established under which several implementation agencies are set up taking care of specific management tasks. This basin management commission is an inter-state or international cross-boundary institution, and states and nations provide financing and personnel inputs. Decisions made by this basin management commission are accepted by governments of regions or countries. Governments of regions and countries determine establishment of basin management commission and work procedure and budget in form of agreement.

This basin management commission functions well and has adequate effectiveness in river basin management. In China, Songliao Mode is the most similar mode to basin management commission.

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TABLE 2-4: COMPARISON OF RIVER BASIN MANAGEMENT MODE Basin Management Management Mode by Local Government Management Mode Led by Central Liaison Conference Mode Independent Mode Government Governmental Agency Management Mode

Name Songliao River System Protection Leading Group Huaihe River Basin Water Resource Liaison Conference Dianchi Basin Protection Leading Group Administration

Decision-making The vice-presidents of provincial/regional The chairmen come from SEPA and MWR. Group chairman come from SEPA, the A governmental government within River Basin consist of this The members come from national sectors, members come from environment management department leading group, and River Basin institute vice-presents of Henan, Anhui, Jiangsu, protection sectors’ leaders of Zhejiang, established based on participates. The main responsibility is to make Shandong province. From top to bottom Jiangsu, Shanghai. From top to bottom local laws and water resource protection planning and water leading mechanism leading mechanism regulations. A pollution control planning, and that carries out and management guides the implementation. From top to bottom mechanism as leading mechanism government. Management and The office is set up in Water Resource Protection The office set up in Water Resource The office set up in SEPA to Separate governmental Implementation Bureau of Songliao River Basin and it in charge of Protection Bureau of Huaihe River Basin. communicate with local environment department, directly drafting and boosting plan, coordinating Decision will be made by group meeting, protection sectors. River Basin follows instructions from relationship, fulfilling task, supplying technique Conflict is easy to come into being between participates a little. provincial government, service, dealing with daily affair. two chairmen, and efficient communication is with high management not enough with central pollution control and operation efficiency. leading sector. Monitoring and Both water resource sector and environment Both water resource sector and environment Both water resource sector and Running protection sector have monitoring staff, and protection sector have monitoring staff, and environment protection sector have releasing water resource bulletin and water quality releasing water resource bulletin and water monitoring staff, and releasing water bulletin separately. Their monitoring capacity is quality bulletin separately. Their monitoring resource bulletin and water quality under strength from different way cooperating with capacity is under strength from different way bulletin separately. Their monitoring each other. They do not share monitoring data. cooperating with each other. They do not capacity is under strength from different share monitoring data. way cooperating with each other. They do not share monitoring data. Characteristic Cross provincial and regional boundary Cross provincial and regional boundary Cross provincial and regional boundary Within provincial boundary Scope of Application Songliao River Basin Huai River Basin Taihu River Basin Dianchi River Basin Name of the Mode Songliao Management Mode

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3. LEGAL & REGULATORY FRAMEWORK

3.1. PRC WATER QUALITY AND POLLUTION CONTROL LAWS FRAMEWORK

3.1.1. LAWS AND REGULATIONS

Since 1980s, China has established a relatively complete legislative framework system in environmental management, which can be divided into six levels: Constitution, environmental protection laws, special laws and regulations, administrative regulations, and local laws and regulations. These laws can be divided into three types based on their binding force: international law, national law and local law.

In accordance with the principle of China legislative system that “National Benefits is the Most Important among Others”, PRC Government does not admit or follow any international Environmental Protection Laws or treaty/multilateral agreement that damage national benefits of China and/or interfere national sovereignty of China. Therefore, PRC Government would make public declaration when sign these international agreements indicating that China would have reservations or would not admit to some provisions in international treaties.

Legislative system of environmental protection, which is organized over six-levels, are as follows:

3.1.1.1. THE CONSTITUTION OF THE PRC

The Constitution of the PRC stipulates that the country should protect environment in an ecological balance approach, and promote harmonization of human and sustainable nature development.

3.1.1.2. ENVIRONMENTAL PROTECTION LAW OF THE PRC

This is the basic law of China environmental protection legislative system. It specifies that: • Article 2. " Environment " as used in this Law refers to the total body of all natural elements and artificially transformed natural elements affecting human existence and development, which includes the atmosphere, water, seas, land, minerals, forests, grasslands, wildlife, natural and human remains, nature reserves, historic sites and scenic spots, and urban and rural areas. • Article 6. All units and individuals shall have the obligation to protect the environment and shall have the right to report on or file charges against units or individuals that cause pollution or damage to the environment. The competent departments of environmental protection administration of the local people's governments at or above the county level shall conduct unified supervision and management of the environmental protection work within areas under their jurisdiction. • Article 9. The competent department of environmental protection administration under the State Council shall establish the national standards for environment quality.

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• Article 10 The competent department of environmental protection administration under the State Council shall, in accordance with the national standards for environment quality and the country's economic and technological conditions, establish the national standards for the discharge of pollutants. The people's governments of provinces, autonomous regions and municipalities directly under the Central Government may establish their local standards for the discharge of pollutants for items not specified in the national standards; with regard to items already specified in the national standards, they may set local standards which are more stringent than the national standards and report the same to the competent department of environmental protection administration under the State Council for the record. • Article 11. The competent department of environmental protection administration under the State Council shall establish a monitoring system, formulate the monitoring norm and, in conjunction with relevant departments, organize a monitoring network and strengthen the management of environmental monitoring. The competent departments of environmental protection administration under the State Council and governments of provinces, autonomous regions and municipalities directly under the Central Government shall regularly issue bulletins on environmental situations. • Article 12. The competent departments of environmental protection administration of the people's governments at or above the county level shall, in conjunction with relevant departments, make an investigation and an assessment of the environmental situation within areas under their jurisdiction, draw up plans for environmental protection which shall, subject to overall balancing by the department of planning, be submitted to the people' s government at the same level for approval before implementation. • Article 13. Units constructing projects that cause pollution to the environment must observe the state provisions concerning environmental protection for such construction projects. • Article 16. The local people's governments at various levels shall be responsible for the environment quality of areas under their jurisdiction and take measures to improve the environment quality. • Article 24. Units that cause environmental pollution and other public hazards shall incorporate the work of environmental protection into their plans and establish a responsibility system for environmental protection, and must adopt effective measures to prevent and control the pollution and harms caused to the environment by waste gas, waste water, waste residues, dust, malodorous gases, radioactive substances, noise, vibration and electromagnetic radiation generated in the course of production, construction or other activities. • Article 26. Installations for the prevention and control of pollution at a construction project must be designed, built and commissioned together with the principal part of the project. No permission shall be given for a construction project to be commissioned or used, until its installations for the prevention and control of pollution are examined and considered up to the standard by the competent department of environmental protection administration that examined and approved the environmental impact statement. • Article 27. Enterprises and institutions discharging pollutants must report to and register with the relevant authorities in accordance with the provisions of the competent department of environmental protection administration under the State Council. • Article 28. Enterprises and institutions discharging pollutants in excess of the prescribed national or local discharge standards shall pay a fee for excessive discharge according to state provisions and shall assume responsibility for eliminating and controlling the pollution. The provisions of the Law on Prevention and Control of Water Pollution shall be complied with where they are applicable.

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• Article 29. If an enterprise or institution has caused severe environmental pollution, it shall be required to eliminate and control the pollution within a certain period of time. For enterprises and institutions directly under the jurisdiction of the Central Government or the people's government of a province, an autonomous region, or a municipality directly under the Central Government, the decision on a deadline for the elimination or control of pollution shall be made by the people's government of the province, autonomous region and the municipality directly under the Central Government. For enterprises and institutions under the jurisdiction of a people's government at or below the city or county level, such decision shall be made by the people's government of the city or county. Such enterprises and institutions shall accomplish the elimination or control of pollution within the specified period of time. • Article 30. A ban shall be imposed on the importation of any technology or facility that fails to meet the requirements specified in the regulations of our country concerning environmental protection. At this level, there is another important law, PRC Criminal Law. Before mid 1990s, activities violating environmental laws and regulations generally were free of criminal liabilities, but administrative instruments were adopted instead, such as fine, crackdown of the industries, and dismissal of the responsible persons. In 1998, the National People’s Congress promulgated Amendment to Criminal Law. The Amendment to Criminal Law stipulates that individual and legal representative responsible for violations of environmental laws and regulations should bear criminal liability. This measure is very supportive for effective enforcement of environmental laws and regulations.

3.1.1.3. LAWS TAILORED FOR OR RELATED TO ENVIRONMENTAL PROTECTION

Such laws are developed for certain environmental medium or related to certain environmental medium or environmental management, and generally include the following components: purpose and applicable scope, enforcement agency, elements of laws and regulations, monitoring and management, penalty, schedule for enforcement. Major laws relevant to this study include: • Water Pollution Prevention and Control Law of PRC • Air Pollution Prevention and Control Law of PRC • Environmental Noise Pollution Prevention and Control Law of PRC • Solid Waste Pollution Prevention Act of PRC • Environmental Impact Assessment Act of PRC • Water Law of PRC • Law of PRC on Water and Soil Conservation • Law of the PRC on the Promotion of Clean Production • Land Administration Law of PRC • Forestry Law of the PRC • Marine Environment Protection Law of PRC • Desert Prevention and Transformation Law of PRC • PRC Administrative Permission Law

At this level, special explanation should be given to Water Law of PRC issued in 2002, which specifies regulations on development, utilization, conservation, protection and management of water resources. The more important is that this law specifies legal status and responsibilities of basin authorities. Relevant regulations of this law were a milestone to SongLiao Basin Water Resource Protection Bureau as well as its role in basin water resources and water environment (water quantity and water quality) management.

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3.1.1.4. ENVIRONMENTAL PROTECTION LAWS AND REGULATIONS

Such legislative documents include decisions, notice and regulations developed and/or issued by the State Council in accordance with Environmental Protection Law. These documents give detailed and specific requirements for enforcement of laws and regulations. Without applicable laws developed for specific administrative/enforcement need, decision/regulation directly developed and/or issued by the State Council are also regarded as laws. These laws and regulations not only have administrative binding force but also have legal standing.

Major regulations regarding environmental protection include: • Decision of the State Council on Several Issues concerning Environmental Protection, August 3, 1996 • Decision of the State Council on Further Strengthening Environmental Protection, December 5, 1990 • Environmental Protection Management Regulations for Construction Projects, the State Council Order No.253, November 18, 1998 • Basic Farmland Protection Regulations, the State Order No.257, December 27, 1998 • Interim Methods for Pollutant Charge, the State Council, February 5, 1984 • Urban Water Supply Regulations, the State Council Order No.158, July 19, 1994 • Circular No.36: Notice on Water Saving and Pollution Control, the State Council, 2000 • Implementation Details for Water Pollution Prevention Act, the State Council Order No.284, March 24, 2002 • Restoration of Farmland to Forested Area, the State Order No.367, December 6, 2002

In addition, national environmental protection plan, sectoral and basin/regional environmental protection and pollution control plan that have been approved by the State Council also have binding force as laws and regulations. However, most of these plans are confidential, so they only have administrative binding force rather than are used as judicial basis.

3.1.1.5. ADMINISTRATIVE REGULATIONS

This kind of regulations are management methods, regulations and notices in accordance with laws and regulations and national policies promulgated separately or jointly by administrative departments or subordinate agencies of the State Council and approved by the State Council. These regulations can be used as judicial basis.

Major administrative regulations concerning environmental protection include: • Regulation on Environmental Protection Design of Construction Projects, the SDRC and the State Council Environmental Protection Committee, 1987 • Management Methods for Charging Pollutant Discharge/Effluent Fee, the SDRC, MOF, SEPA, the State Commission of Economic and Trade Cooperation, 2003 • Notice on Further Accelerating Urban Water Supply Price Reform, the SDRC, MOF, MOC, MWR, SEPA, 2002 • Notice on Applying Municipal Solid Waste Charging System and Accelerating Solid Waste Treatment Industrialization, SDRC, MOF, MOC, SEPA, 2002 • Notice on Promoting Urban Wastewater and Solid Waste Treatment Industrialization, SDRC, MOC, SEPA, 2002 • Management Regulations on Urban Drainage Monitoring, MOC, 1992 • Management Methods for Urban Water Supply Pricing, SDRC and MOC, 1998

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• Notice on Establishing Sound Mechanism of Municipal Wastewater Discharge and Centralized Treatment, SDRC, MOC, SEPA, 1999 • Regulations on Safe Use of Agricultural Chemicals, the Ministry of Agriculture, Livestock and Fishery, the Ministry of Health, 1982 • Supervision and Management Methods for Wastewater Treatment Facility Environmental Protection, SEPA, 1988 • Advice on Strengthening Supervision over WWTP Performance, MOC, 2004 • Management Methods for Prevention of Livestock and Poultry Pollution, SEPA, 2001 • Management Regulations on Pollution Prevention and Control of Drinking Water Source Protection Zone, SEPA, 1989 • Management Methods for Land within Natural Reserve, the State Land Resource Bureau, SEPA, 1995 • Interim Methods for Water Pollutant Permit Management, SEPA, 1988 • Supervision and Management Methods for Water Permits, MWR, 1996 • Water Function Zone Management Method, MWR, 2003 • Interim Regulations for Water Resource Quality Assessment of Water Functional Zone, MWR, 2004 • Management Method for Wastewater Discharge to Rivers, MWR, 2005 • Regulations on Environmental Impact Assessment Management for Construction Projects Financed by IFOs, issued by SEPA, MOF, SDRC, and People’s Bank of China, 1993 • Interim Regulations on Environmental Protection of Waste Import, issued by SEPA, Ministry of Foreign Trade and Economic Cooperation of PRC, Customs General Administration of PRC, State Administration for Industry and Commerce, State Commercial Inspection Administration, 1996

3.1.1.6. LOCAL LAWS AND REGULATIONS

At local level, local People’s Congresses and/or governments can issue local regulations and management methods that reflect practical requirements and local conditions in accordance with national relevant laws. These regulations have legal status and administrative biding force within local jurisdiction. Any institution, agency or enterprise within local jurisdiction, including agencies directly under the central government, should observe local regulations.

Without relevant national laws, People’s Congresses and governments in autonomous region can develop local regulations that reflect local conditions. Local regulations must not contradict State laws and policies.

There are many local laws and regulations concerning environmental protection. Provinces and municipalities/regions generally have issued their Environmental Protection Management Methods within local jurisdiction, and more detailed local regulations have been promulgated in some areas. For example: • Heilongjiang Province Environmental Protection Regulations, Heilongjiang Provincial Government • Inner Mongolia Environmental Protection Regulations, Inner Mongolia Autonomous Region Government • Jilin Province Environmental Protection Regulations, Jilin Provincial Government

It should be noted that many industries were historically under administration of corresponding departments of the central government, such as petroleum, metallurgical, textile, mechanical,

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chemical, electronic, aviation, transportation, and railway. These departments of central government developed environmental regulations within their sphere of responsibility. The state laws stipulate that such regulations do not have legal status or administrative binding force. During re-organization since 1980s, industrial department within central government have been cancelled. Up to now, most of such regulations have lost their effect due to cancellation of these departments. Such regulations that still have effect within their sphere of responsibility are mostly in non-industrial sectors, such as transportation and railway.

Format and scope of contents of local regulations and regulations within specific sector are similar to those of national laws and regulations.

3.1.2. ENVIRONMENTAL CONTROL STANDARD

3.1.2.1. GENERAL

Environmental control standards developed for implementation of laws and regulations can be placed in two categories by their use: environmental quality standard and pollutant discharge/emission standard. There are four categories by scope of binding force: national integrated standard, national special standard, standard developed by sector/industry, and local standard.

Environmental control standard is developed for enforcement of environmental laws and regulations to evaluate their effectiveness. There are two categories of environmental control standards: environmental quality standard and pollutant discharge/emission standard. In accordance with relevant regulations, local or sectoral standard should be more stringent than national standard, and standard developed by lower-level agency should be more stringent than that developed by agency at higher level. All national standards are numbered beginning with GB that means national standard in Chinese.

In addition, in order to standardize environmental monitoring, China also has issued many technical criteria and monitoring methods, almost one monitoring criterion for one kind of pollutant, for example, monitoring method of mercury in water, method for air pollutant sampling, and sample preparation of colorimetric analysis. Implementation of these standards and requirements are mandatory, as part of national standards. Some people think these are part of environmental control standards, but more people regard these as environmental management and monitoring requirements or metrics not within environmental control standards.

3.1.2.2. ENVIRONMENTAL QUALITY STANDARD

In China, environmental quality standard is developed and issued by central government in accordance with environmental quality control requirements by environmental medium. Usually, these standards are developed by environmental department of central government (presently SEPA) and issued jointly with the technical supervision department.

Since national environmental quality standards have rigid requirements, local governments usually will not tailor more stringent local environmental quality standards. In addition, pollutants migration in rivers, lakes and air is trans-boundary, therefore, it is unnecessary for local governments to develop environmental quality standard. Consequently, there are no basin or local environmental quality standards in China.

Major environmental quality standards include: • Environmental Quality Standard for Surface Water, GB3838-2002 • Quality Standard for Ground Water, GB-T 14848-9 • Ambient Air Quality Standard, GB3095-1996

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• Quality Standard for Soil Environment, GB15618-1995 • Marine Water Quality Standard, GB3097-1997

3.1.2.3. POLLUTANT DISCHARGE/EMISSION STANDARD

Pollutant discharge/emission standard is developed to control discharge/emission of pollutants and to achieve the environmental standards, and there are four categories: integrated national standard, special national standard, sectoral standard, and local standard. • Integrated national discharge/emission standard is tailored for controlling pollutant discharge/emission to specific environmental medium, and include: Integrated Wastewater Discharge Standard, GB8978-1996 Standard of Environmental Noise of Urban Area GB3096-93 Integrated Air Pollutant Emission Standard, GB16297-1996

• Special national standard is tailored for a specific sector, pollutant type or pollution control of certain environmental parameter. This kind of standards include environmental quality control standard of a specific industry/sector and control standards of pollutant discharge/emission within a certain sector or physical environment. These standards include: Standards for Irrigation Water Quality, GB5084-92 Water Quality Standard for Fisheries, GB11607-89

Health Standard of Drinking Water GB5749－85 Guidelines for Natural Reserve Classification, GB-T 14529-93 Control Standards for Urban Wastes for Agricultural Use, GB8172-87 Pollutant Discharge Standard of Municipal WWTPs GB18918-2002

Discharge Standard of Water Pollutants for Phosphate Fertilizer Industry, GB15580－95 Control Standards for Pollutants in Sludge from Agricultural Use, GB4284-84 Pollution Control Standard of Municipal Solid Waste Landfill, GB16889-1997 Discharge Standard of Pollutants from Livestock and Poultry, GB18596-2001

• Industrial/sectoral standards are tailored by relevant governmental departments and issued by the State or Ministry/Commission for certain pollution control or environmental management. This kind of standards have only restricted application, usually having binding force within sphere of a certain industry or jurisdiction of a certain ministry/commission. This kind of standards is numbered using indicative codes of this industry rather than using GB. These standards include: Environmental Monitoring Technical Standard of Municipal Solid Waste Landfill, CJ-T 3037-1995 Technical Criteria of Surface Water and Wastewater Monitoring, HJ-T 91-2002 Environmental Impact Assessment Technical Guidelines, HJ-T2.1-2.4 1993-1995 Technical Criteria for Total Load Monitoring of Water Pollutants, HJ-T 92-2002 Water Resource Assessment Guidelines, SL-T 238-1999; and Technical Criteria for Water and Soil Conservation Program of Development Projects, SL- T 204-98

• Local standards vary with local conditions, but more stringent than national standards. Local standards are divided into regional and basinwide standards. Regional standard refers to pollutant discharge control standard developed and issued by local governments at all levels in accordance with national or industrial/sectoral

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requirements. This kind of standards only has binding force within local jurisdiction, for example, Air Pollutant Emission Standard of Beijing Municipality, and Water Pollutant Discharge Standard of Beijing Municipality. Basin standard refers to pollutant control standards developed jointly by several local governments within the basin or by basin administration. This kind of standards has binding force within the basin area. Examples of these standards include Songhua River Basin Water Pollutant Discharge Standard and, Upstream Huangpu River Water Pollutant Discharge Standard. Format and content scope of local standards are similar to those of national standards.

3.1.3. INTERNATIONAL TREATIES (MULTILATERAL AGREEMENTS)

China has signed many international treaties or multilateral agreements on environmental protection. PRC Government has declared to have reservation or not to bear duties or liabilities of provisions that damage benefits of China. China has signed the following international treaties or multilateral agreements: • Basel Treaty: Trans-Boundary Transfer and Disposal Control of Hazardous Solid Wastes, March 22, 1989 • Amendment to Basel Treaty, September 1995 • London Rules on International Trade Information Exchange of Chemicals, June 17, 1987 • Rotterdam Treaty: Procedure for Advance Advice and Consent to Some Hazardous Chemicals and Agri-Chemicals in International Trade, September 11, 1998 • Treaty on Safe Use of Chemicals on Operation Site, June 25, 1990 • Treaty on Safe Use of Chemical Products in Operations, June 25, 1990 • Proposal on Safe Chemical Product Use in Operation, June 25, 1990 • Vienna Treaty on Ozone Layer Protection, March 22, 1985 • Amended Montreal Protocol on Ozone Layer Depleting Substances, September 1987 • UN Framework Treaty on Climate Change, June 11, 1992 • UN Framework Treaty on Climate Change Kyoto Protocol, December 10, 1997 • Biodiversity Treaty, June5, 1992 • International Treaty on New Flora Species Protection, October 23, 1978 • UN Treaty on Desertification Prevention, June 7, 1994 • Treaty on Important International Wetland, especially those as Water Bird Habitats, February 2, 1971 • International Trade Treaty of Endangered Wildlife Species, March 3, 1973 • Amendment to International Trade Treaty of Endangered Wildlife Species, April 30, 1983 • Agreement on International Tropical Timber, January 26, 1994 • Nuclear Safety Treaty, June 17, 1994 • South Pole Agreement, December 1, 1959 • South Pole Agreement Protocol on Environmental Protection, June 23, 1991 • Treaty on World Cultural and Natural Heritage Protection, November 23, 1972 • Convention on the Protection and Use of Transboundary Watercourses and International Lakes, Helsinki, 1992

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• Convention on Environmental Impact Assessment in a Transboundary Context, Espoo, 1991 • Sino-Russian Agreement on Cooperation in Environmental Protection (May 27, 1994)

In addition, China also has signed international treaties/agreements concerning marine environment protection, fishery resource protection, nuclear accident notification and assistance, nuclear material safety, and transfer of cultural heritage. Additionally, PRC government has been actively participating multilateral cooperation in environmental protection, for example, pacific environmental protection multilateral cooperation.

It is also interesting to note that China did not sign the UN Convention on Non-navigational uses of international watercourses (Helsinki – 21st May 1997).

3.1.3.1. BRIEF INTRODUCTION TO SOME MAJOR INTERNATIONAL CONVENTIONS

The following paragraphs provide a brief summary of some major international conventions of relevance to the Songhua River Basin.

3.1.3.1.1. CONVENTION ON PROTECTION AND USE OF TRANSBOUNDARY WATERCOURSES AND INTERNATIONAL LAKES (1992)

The Convention represents the latest development of regulatory formulation related to international fresh water resources utilization and protection. The most significant is that it absorbs many new principle, view and methodology in the field of international environmental legislation over the past 20 years, which have been adopted in protecting the international fresh water resources in Europe. Another feature is that it adapts to transboundary water bodies bordered by all the member countries of European Economic Commission of UN, providing a commonly adaptable principles, regulations and methodologies for utilizing and protecting all transboundary water bodies in Europe.

The Convention defined GENERAL PROVISIONS for all contracting parties:

1. The Parties shall take all appropriate measures to prevent, control and reduce any transboundary impact.

2. The Parties shall, in particular, take all appropriate measures:

(a) To prevent, control and reduce pollution of waters causing or likely to cause transboundary impact; (b) To ensure that transboundary waters are used with the aim of ecologically sound and rational water management, conservation of water resources and environmental protection; (c) To ensure that transboundary waters are used in a reasonable and equitable way, taking into particular account their transboundary character, in the case of activities which cause or are likely to cause transboundary impact; (d) To ensure conservation and, where necessary, restoration of ecosystems.

3. Measures for the prevention, control and reduction of water pollution shall be taken, where possible, at source.

4. These measures shall not directly or indirectly result in a transfer of pollution to other parts of the environment.

3.1.3.1.2. CONVENTION FOR THE PROTECTION OF THE RHINE (1998)

The scope of this Convention comprises

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• the Rhine • the ground-water interacting with the Rhine, • the aquatic and terrestrial ecosystems interacting with the Rhine or whose interaction with the Rhine could be re-established, • the Rhine catchment area, as far as its pollution adversely affects the Rhine • The Rhine catchment area, as far as it is of importance for issues of flood prevention and defense along the Rhine.

With this Convention the Contracting Parties set the following goals:

• Sustainable development of the Rhine ecosystem, in particular by maintaining and improving the Rhine water quality as well as the quality of the suspended matter, the sediments and the ground water

• protecting the population of organisms and the species diversity

• maintaining, improving and restoring natural habitats for wild animals and plants in the water, on the river bottom and river banks as well as in adjacent areas, including the improvement of living conditions for fish and the restoration of their free migration

The Contracting Parties are guided by the following principles:

a) Principle of prevention

b) Principle of precaution

c) Principle of mainly fighting environmental deteriorations at the source

d) polluter-pays principle

e) Principle of not increasing adverse effects

f) Principle of compensation for considerable technical interventions

g) Principle of sustainable development

h) Application and further development of the Best Available Technique and of the Best Environmental Practice

i) Principle of not transferring environmental pollution into other environmental media.

3.1.3.1.3. AGREEMENT ON THE COOPERATION FOR THE SUSTAINABLE DEVELOPMENT OF THE MEKONG RIVER BASIN (1995)

It is a very important agreement on international fresh water resources utilization and river basin protection, the character of which is integrating the principle of sustainable development into all the aspects of development and protection of Mekong River Basin.

Reaffirming the determination to continue to cooperate and promote in a constructive and mutually beneficial manner in the sustainable development, utilization, conservation and management of the Mekong River Basin water and related resources for navigational and non- navigational purposes, for social and economic development and the well-being of all riparian States, consistent with the needs to protect, preserve, enhance and manage the environmental and aquatic conditions and maintenance of the ecological balance exceptional to this river basin.

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Article 1: Areas of Cooperation

To cooperate in all fields of sustainable development, utilization, management and conservation of the water and related resources of the Mekong River Basin.

Article 3: Protection of the Environment and Ecological Balance

To protect the environment, natural resources, aquatic life and conditions, and ecological balance of the Mekong River Basin from pollution or other harmful effects resulting from any development plans and uses of water and related resources in the Basin.

Article 4: Sovereign Equality and Territorial Integrity

Article 5: Reasonable and Equitable Utilization

To utilize the waters of the Mekong River system in a reasonable and equitable manner in their respective territories, pursuant to all relevant factors and circumstances, the Rules for Water Utilization and Inter-Basin Diversion provided for under Article 26 and the provisions below:

on tributaries and mainstream of the Mekong River, including Tonle Sap, intra-basin uses and inter-basin diversions shall be subject to notification to the joint committee during the wet and dry seasons.

Article 6: Maintenance of Flows on the Mainstream

Article 7: Prevention and Cessation of Harmful Effects

Article 8: State Responsibility for Damages

Where harmful effects cause substantial damage to one or more riparians from the use of and/or discharge to waters of the Mekong River by any riparian State, the party(ies) concerned shall determine all relative factors, the cause, extent of damage and responsibility for damages caused by that State in conformity with the principles of international law relating to state responsibility, and to address and resolve all issues, differences and disputes in an amicable and timely manner by peaceful means as provided in Articles 34 and 35 of this Agreement, and in conformity with the Charter of the United Nations.

Article 9: Freedom of Navigation

Article 10: Emergency Situations

Whenever a Party becomes aware of any special water quantity or quality problems constituting an emergency that requires an immediate response, it shall notify and consult directly with the party(ies) concerned and the Join: Committee without delay in order to take appropriate remedial action.

3.1.3.1.4. HELSINKI RULES (1966)

The 52nd Conference of the International Law Association held in Helsinki in August, 1966 approved the Articles on the Uses of the Waters of International Rivers, Helsinki Rules.

The Rules not only summarize the regulations of international laws but also the regulations of which can be used to guide the utilization of international fresh water resources of other types. It is one of the international documents invoked earliest and frequently about fresh water

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resources protection. It is a major milestone in the development of regulatory system of international fresh water resources.

An international drainage basin is a geographical area extending over two or more States determined by the watershed limits of the system of waters, including surface and underground waters, flowing into a common terminus. This definition provides the base for integrated utilization and environmental protection of international rivers.

Every basin State in an international drainage basin has the right to the reasonable use of the waters of the drainage basin. What is a reasonable and equitable share is to be determined in the light of all the relevant factors in each particular case.

Relevant factors which are to be considered include, but are not limited to:

(a) The hydrology of the basin, including in particular the contribution of water by each basin State;

(b) the climate affecting the basin;

(d) the economic and social needs of each basin State;

(e) the avoidance of unnecessary wash in the utilization of waters of the basin;

(f) the practicability of compensation to one or more of the co-basin States as a means of adjusting conflicts among uses; and

(g) the degree to which the needs of a basin State may be satisfied, without causing substantial injury to a co-basin State;

The conflict rising from transboundary river utilization should be solved peacefully according to the UN Chapter.

3.2. PERMIT SYSTEM

3.2.1. OVERVIEW

In water sector, China has three kinds of existing permits: water abstraction permit, sewage discharge permit, and treated wastewater discharge permit.

Water permit sets limits to organizations and structures that have access to water sources, its issuance and regulation is under the responsibility of water resource department. Sewage permit is used to control discharges into municipal sewers, issued by municipal department. Wastewater discharge permit sets limits to wastewater and pollutant discharges into environment, issued by the environmental department.

Of the three kinds of permits, water permit system has been widely applied and plays a strong role, while sewage permit and wastewater discharge permit are implemented or under pilot application in some areas and cities, having relatively weak effectiveness.

None of these permits is issued to individuals, that is, domestic sewage from urban and rural residents is not subject to limits of these permits. Economic instruments including water and wastewater tariffs are adopted to control domestic water use and sewage.

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Implementations of these permits all have sufficient political support. Chief departments developed relevant regulations and severe penalties to ensure their implementation. Monitoring of water permits is relatively simple, mostly is water quantity monitoring, so water permits are subject to being violated. Meanwhile, where violation of regulations and non-payment of fine occur, disconnection of water supply will be imposed. With respect to sewage permits, the above violations mostly are not subject to prohibition of discharge to sewers, because generally the government does not encourage using prohibited sewage discharge as additional penalties, instead, other penalties will be imposed, such as withdrawal of operating license. Wastewater discharge permits have similar case to sewage permits to some extent, but the actual performance is less satisfactory. In many places, wastewater discharge permit is neither stringently nor widely enforced. The reasons include relatively complicated monitoring system of wastewater discharge, non-equipment of online monitoring equipments, and limited monitoring capacity of EPBs. Although local government has authority to stop or close industries that violate wastewater permits, many difficulties and problems still exist.

3.2.2. WATER PERMITS

Water permits originated from the early 1990s, established in accordance with Implementation Method for Water Permit System issued by the State Council. In accordance with this regulation, MWR promulgated Regulations on Water Permit Application and Approval Procedure (1994), Supervision and Management Methods of Water Permit (1996), Regulations on Water Quality Management of Water Permits (1997), Notice on Pre-Application of Water Permit for Construction Project (1997), Notice on Relevant Issues concerning the State Council’s Approval of Large Project Water Permit Management (1995), and Notice on Water Permit Jurisdiction of Rivers trans and at International Boundary and trans Provincial Boundary Inland Rivers (1996).

Water permits primarily cover all city/town institutions and various projects that abstract water from natural water body, and water permit system has been widely applied within this scope. This system has not been applied to private water well and agricultural water use in rural areas. In river basins, MWR authorize river basin water resource commission to implement water permit system. At local level, local water resource department implements water permit system. For key national projects, MWR is directly responsible for water permit implementation.

The application of water permits has restricted uncontrolled water demands, and encouraged water saving. More reasonable allocation and utilization of limited water resources has been achieved by implementation of water permits.

3.2.3. SEWAGE PERMIT

Sewage permits originated from the 1990s, developed based on regulations issued by MOC. Implementation of sewage permits covers all industrial and commercial discharges to municipal sewers, excluding institutions and schools. Sewage permit aims to ensure wastewater discharge to municipal sewers is in compliance with Municipal Sewer Discharge Standard, but has no limits to wastewater flow.

Sewage permit plays a major role in ensuring steady and efficient operation of WWTPs and avoiding impacts of changing pollutant loadings to treatment process. Sewage permit system has been enforced for a long time, but mostly in medium and large cities rather than widely enforced in all cities, especially in many small cities/towns where complete sewer networks or WWTPs are not constructed.

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3.2.4. TREATED WASTEWATER DISCHARGE PERMIT

Wastewater discharge permit system originated from late 1980s, was put into pilot enforcement in 1987, and then since 1990, it was widely applied through the country. Wastewater discharge permit system is one of the PRC eight environmental management systems. Wastewater discharge permit system was established in accordance with the Implementation Details for Water Pollution Prevention and Control Law.

The purpose of wastewater permit system is to ensure wastewater and pollutant discharges are in compliance with total pollutant load control objective. Wastewater discharge permit system covers all industries and WWTPs that directly discharge wastewater and pollutants to environment. Environmental departments of governments at all levels are responsible for management of wastewater discharge permits. Up to date, a dedicated management department has not been established within EPB.

Institutional issues regarding enforcement of water pollutant discharge permit system are summarized as follows: (a) Environmental monitoring and environmental management capacity are not strong enough to effectively implement permit system; (b) Enforcement of laws and regulations, and supervision are not sufficiently or well carried out; (c) River basin agency is not authorized to undertake wastewater permit management throughout the basin. In general, currently, anticipated output of wastewater permit system implementation has not been achieved. Wastewater discharge permit system does not appear to function well as it is supposed to in total pollutant load control and encouraging pollution treatment.

3.2.5. ADMINISTRATIVE PERMISSION LAW AND ITS INFLUENCE

PRC Administrative Permission Law enforced since July 1 2004 stipulates that the State Council and provincial governments are agencies that establish administrative permission. This law also specifies establishment, implementation, application, review and approval, and time period of administrative permission.

Enforcement of this law has certain influence with permit system: • In accordance with PRC Administrative Permission Law, it is the State Council that has authority to establish administrative permission. Provincial government can only establish temporary permits due to absence of national laws and regulations as legal basis. Regulations of ministries cannot form basis of non-temporary administrative permission. Thus, administrative permissions established based on regulations of ministries will be outlawed. Implementation of sewage permit will be affected since it was established by construction department not by the State Council. Wastewater discharge permit and water permit are established by the State Council in accordance with relevant laws, so their implementation will be not affected by PRC Administrative Permission Law.

• According to Clause 9 of Administrative Permission Law, lawful administrative permission cannot be forwarded unless otherwise specified by laws and regulations and following legal terms and procedures. This means that wastewater permit and water permit trading is not allowed without laws or regulations tailored for wastewater permit and water permit trading. • In accordance with new laws, basin agencies can be authorized by the State Council or its chief regulatory department to implement water, sewage and wastewater discharge permit management. That is, the concept proposed by this Project that basin water quality and water resource management agency undertakes integrated management of water, sewage and wastewater discharge permits will not be adversely impacted by enforcement of the new laws.

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3.2.6. PERMIT MANAGEMENT IMPROVEMENTS

Implementation of permit system requires strengthened comprehensive water environment and water resource management. Water quantity management and water quality management have very close and interactional relationship. Water quantity and hydrological conditions determine water environmental capacity, which forms the basis of establishing objective of total pollutant load control. Therefore, coordination of water quantity allocation and overall water resource management should be strengthened taking into consideration of water use for social and economic development, water use of ecological environment, and integrated management of water environmental and resource management. Water permit and wastewater discharge permit management should be coordinated to achieve sustainable utilization of water resources.

Comprehensive water environment and resource management and coordination of permit management should be improved and strengthened at national, basin and provincial levels. In particular for basin management, this has special importance.

From the point view of basinwide management, basin management agency, based on current conditions of water resources and water environment throughout the basin, develop reasonable planning for water resource utilization and ecological use at river sections and establish objectives of total pollutant load control, conduct overall management of water, sewage and wastewater permits, to meet requirements of water quality management and pollutions in the entire basin. In sub-basins , small basin management is adopted in accordance with allocated quota and uniform requirements. Meanwhile, basin water quality management and pollution control agency make amendment, adjustment and supplement to allocated quota and management requirements based on problems from implementation in areas and sub-basins, to improve effectiveness of permit management.

3.3. FUNCTIONS AND ISSUES WITHIN LEGAL FRAMEWORK

The laws that have much influence on water quantity and quality are Water Law of PRC and Water Pollution Prevention Law of PRC. These two laws, respectively, stipulate regulatory responsibilities for water resource management and water pollution prevention. Water Law and Water Pollution Prevention Law were drafted primarily by MWR and SEPA respectively; they are national laws approved by the NPC. These laws have legal binding force on any ministry, organization, and individual. The primary enforcement body is the government at all levels.

In accordance with the responsibility allocation of the State Council, the administration departments that have closest relation with it are water administration department and environmental department. Article 12 of PRC Water Law stipulates that water administration department is responsible for comprehensive water resource management and supervision, and river basin management agency within its jurisdiction enforces laws and regulations and fulfills management and supervision responsibilities assigned by the State Council Water Department. Article 4 of PRC Water Pollution Prevention and Control Law stipulates that environmental departments within government at all levels are responsible for supervision and management of water pollution prevention and control, and water source administrations of key rivers and lakes assist environmental agency in managing and supervising water pollution control. General responsibility allocation is therefore that water administration department is responsible for water resource management, and environmental department for water environmental management and water pollution control.

It should be noted that both Water Law (Article 12) and Water Pollution Prevention and Control Law (Article 18) specify role of basin water resource protection agency (basin management agency and leading agency approved by the State Council). With regard to SongLiao Basin Water Resource Protection Bureau, both of these laws specify its legal status and responsibilities for basinwide water resource protection and water quality monitoring and management.

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Different understandings exist in regulatory responsibilities of water management department and environmental department due to historical reason, which is generally acknowledged. This has impact on effectiveness of water resource and water environmental management mechanism, and meanwhile affects establishing integrated water resource and water environmental management system. As result of this, two kinds of function zoning are available in one river basin or region, and they are water functional zoning prepared by water management department and water environmental functional zoning developed by environmental department. Although they all use water uses as basis of categorization (water body categories specified in Environmental Quality Standard for Surface Water) to evaluate compliance of functional zoning; it is strange that two kinds of functional zoning are applied at the same time for water quality management of one surface water body.

With regard to governments at all level, the government should be able to well coordinate responsibilities of water management departments and environmental departments as governmental departments. Water law and Water Pollution Prevention and Control Law are laws to be enforced by basin agencies, such as SongLiao Water Resource Protection Bureau, which should develop understandingof water quantity and quality management distribution between the stakeholders of the basin. Establishment of integrated water resource and environment management system at basin level is more feasible and practical.

For a basin agency, an important work in the future is how to effectively integrate water functional zoning with water environmental functional zoning within a basin to form a sole basin- wide functional zoning covering the entire basin.

3.4. LOCAL LAWS AND REGULATIONS IN SONGLIAO BASIN

3.4.1. LOCAL LAWS AND LEGISLATIONS IN SONGLIAO BASIN

The major aspects of water resources management in SongLiao Basin include management of water resources development and exploitation, prevention and control of water pollution, water and soil conservation and flood control. In addition, land resources management and fishery management are relevant aspects. Currently, provinces within the basin enacted local laws and regulations dealing with specific water related issues.

3.4.1.1. LEGISLATIONS ON WATER RESOURCES MANAGEMENT • Provisions on Implementing the Water and Soil Conservation Law of PRC (Inner-Mongolia Autonomous Region) (1991), • Provisions on Implementing the Water Law of PRC (Helongjiang Province) (1991). • Regulations on Management of Local Hydro-Electricity (Jilin Province) (1994). • Provisions on Management and Protection of Water Works (Inner-Mongolia Autonomous Region) (1995); • Regulations on Rural Water Resources Management (Jilin Province) (1995); • Provisions on Implementing the Water of Law of PRC (Jilin Province) (1997); • Regulations on Management of Urban Water Saving (Jilin Province) (1997); • Implementing Rules on Management of the Collection and Uses of the Fund for Water Resources Construction (Inner-Mongolia Autonomous Region( (2000); • Regulations on Water Saving of Agricultural Irrigation (Inner-Mongolia Autonomous Region) (2001); • Provisions on Levying and Use of Water Resources Fee (Inner Mongolia Autonomous Region) (2002), and

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• Provisions on Price Management of Water Supply Works (Inner-Mongolia Autonomous Region) (2003).

3.4.1.2. LEGISLATION ON WATER QUALITY MANAGEMENT WATER POLLUTION AND CONTROL • Environmental Protection Regulations of Inner-Mongolia Autonomous Region (1991); • Environmental Protection Regulations of Helongjiang Province (1994); • Environmental protection Regulations of Jilin Province (2001).

There is no special local law dealing with water pollution in the three provinces (region). However, the three provinces (region) jointly enacted a local law on prevention and control of water pollution in Basin. It is the Interim Methods on Prevention and Control of Water Pollution in SongLiao Basin (1995) which are applied, and SongLiao Basin agency is the main body to enforce this regulation. In addition, in Liao River Basin, Jilin Province enacted Provisions on Prevention and Control of Water Pollution for Eastern Liao River Basin (1997), and Inner- Mongolia enacted Regulations on Prevention and Control of Water Pollution for Western Liao River Basin with Inner-Mongolia Autonomous Region (1999). These regulations have contributed much to water pollution prevention and control in the three provinces (region).

3.4.1.3. LOCAL LEGISLATION ON WATER AND SOIL CONSERVATION

The purpose of water and soil conservation is to prevent and control of soil erosion, protect and rational develop water and soil resources, alleviate flood, drought and windstorm, and improve ecological environment. Water and soil conservation is part of water resources management. All the three provinces (region) enacted local laws on water and soil conservation. They are: • Regulations on Water and Soil Conservation of Jilin Province (1992) • Provisions on Implementing Water and Soil Conservation Law of PRC (Inner-Mongolia Autonomous Region) (1993), and • Provisions on Implementing Water and Soil Conservation Law of PRC (Heilongjiang Province) (1993).

3.4.1.4. LEGISLATION ON MANAGEMENT OF RIVER COURSES OF SONGLIAO BASIN

Management of river courses is for harnessing river courses and ensuring safety of flood as well as full beneficial use of river courses. In the basin, Heilongjiang Province and Jilin Province enacted local laws on this regard. They are Regulations on River Course Management of Heilongjiang Province (1992) and Regulations on River Course Management of Jilin Province (1997). While there is no local law on river course management in Inner- Mongolia Autonomous Region, the region enacted Provisions on Management, Levying and Use of Fee for Maintenance of River Courses (2003).

3.4.1.5. LOCAL LEGISLATION ON MANAGEMENT OF FISHERY IN SONGLIAO BASIN

Fishery production is closely related to Water Resources Management. Currently, only Jilin Province enacted a local law on fishery management. It is the Regulations on Fishery Management of Jilin Province (1997).

3.4.1.6. LEGISLATION ON FLOOD CONTROL IN SONGLIAO BASIN

Flood Control is for prevention and alleviation of hazards of flood and protection of the safety of human life and property. It has important impacts on water resources management. All the three provinces (region) enacted local laws on flood control. They are: • Regulations on Flood Prevention and Control (Jilin Province) (1997);

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• Provisions on Implementing Flood Control Law of PRC (Inner-Mongolia Autonomous Region) (1999); • Provisions on levying and Use of Fee for Construction of Flood Control Infrastructures (Jilin Province) (1999), and • Regulations on Implementing Flood Control Law of PRC (Heilongjiang Province) (2000)

3.4.2. INTERNATIONAL TREATIES RELATED TO WATER RESOURCES MANAGEMENT OF SONGHUA RIVER BASIN

3.4.2.1. INTERNATIONAL TREATIES

Currently, there are five such treaties that China accepted and have impacts on water resources and water quality management of Songhua River Basin. They are, • Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES, China acceded in 1981); • Convention Concerning the Protection of the World Cultural and Natural Heritage Sites (World Heritage Convention) (China acceded in 1985); • Convention on Wetlands of International Importance Especially as Waterfowl Habitat (RAMSAR Convention (China acceded in 1992); • Convention on Biological Diversity (Standing Committee of the People's Congress approved in June 1993) (China adopted the China Biodiversity Conservation Action Plan on 13 June 1994); • UN Convention to Combat Desertification (China acceded in 1994) (China adopted the National Action Plan for Implementation of the UN Convention to Combat Desertification (draft) in 1995; Standing Committee of the National People's Congress ratified the plan in 1996).

3.4.2.2. BILATERAL AGREEMENTS RELATED TO SONGLIAO BASIN

Currently, there are ten bilateral agreements related to water resources management and water quality control of SongLiao Basin. They are, • Protocol on Exchange and Cooperation in Nature Conservation between SFA and US Department of Internal Affairs (1986); • Memorandum on Cooperation in Nature Conservation between the former USSR and China in 1989; • Sino-Mongolian Cooperative Agreement on Conservation of the Natural Environment (1990); • Protocol on Fish Propagation and Conservation in the Waters of Heilong and Wusuli Rivers between China and Russia in 1993; • Agreement on the Establishment of Sino-Mongolian-Russian Common Nature Reserves (draft, 1993); • Agreement for Xinkai Lake Nature Reserve between China and Russia in 1996; • Sino-Russian Agreement on Cooperation in Environmental Protection in 1996.

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3.4.3. BASIC REGULATORY SYSTEMS STIPULATED IN THE SONGLIAO BASIN

3.4.3.1. WATER RESOURCES PLANNING

Water resources planning is a comprehensive arrangement for developing, exploiting, protecting, restoring and management of water resources. Planning can be categorized as comprehensive integrated planning and specialized planning. The purpose of the planning is for coordinating uses and protection of water resources. Developing, exploitation and protecting of water resources as well as preventing and control of water hazards shall be carried out according to the approved plans. When a plan needs to be revised, the proposed governmental department shall follow the procedures for preparation of plan and do the application, review, approval and record steps. Construction of water engineering works shall comply with the procedures for basic construction projects and other provisions enacted by the State.

All the three provinces (region) have provisions on the planning. For example, the article 8 of the Provisions on Implementing the Water Law of PRC of Heilongjiang Province provides that “Developing water resources and preventing and control of water hazards should have uniform planning based on basin on region.”

The three provinces (region) enacted comprehensive water resource planning and specialized planning. The preparation of the comprehensive plan for river basin in the province, shall be carried out by the water administration in conjunction with relevant administrative departments and regions according to the division of their administrative responsibilities. The plan shall be submitted to the People’s Government at the same level for approval and submitted to the higher level of water administration for record. The specialized plans such as plans for water resources development and water hazards prevention and control shall be prepared by specialized administration or governmental departments according to their responsibilities. After collecting comments and opinions from relevant competent governmental departments, the specialized plans shall be submitted to the People’s Government at the same level for approval and submitted to the higher level of specialized governmental departments for record.

3.4.3.2. WATER RESOURCES FEE

Water resources fee reflects the principle of paid or non-gratuitous utilization of natural resources. The three provinces (region) all have regulations on water resource fee in their local laws and regulations. For example, the Provisions on Implementing the Water of Law of PRC of Jilin Province (1997) provide that “The entities and individuals using water supplies by water works shall pay water fee to the water supply management organization according to relevant provisions. For those who delay or refuse to pay the fee, the water supply management organization shall impose a late payment penalty and even stop the water supply as the last resort.” The Inner-Mongolia Autonomous Region adopted special document for setting up the system of water resources fee. It is the Provisions on Levying and Use of Water Resources Fee (Inner Mongolia Autonomous Region) (2000).

3.4.3.3. WATER ABSTRACTION PERMIT

Water abstraction permit is a permit for utilization of water resources carried out by water administration department. It puts the development and utilization of water resources into an uniform management system. All the three provinces (region) have the provisions on water abstraction permit. For example, Article 27 of the Provisions on Implementing the Water Law of PRC of Heilongjiang Province (1991) provides that “a water abstraction system is set up for taking water directly out of rivers, lakes or ground water bodies”. Article 12 of the Provisions on Implementing the Water Law of PRC of Jilin Province (1997) provides that “the Permit for Water Abstraction shall be formed and printed by provincial water administration. The Permit shall not be written over and altered, forged, sold, leased or transferred.”

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Taking small quantity of water for household uses, drinking of domestic fowl and livestock and other small quantity water needs, water abstraction permit is exempted.

3.4.3.4. SEWAGE AND WASTEWATER DISCHARGE PERMITS

All the three provinces (region) have regulations on sewage and wastewater discharge permits. Sewage permit management is under responsibility of construction department or municipal department, while environmental department is responsible for treated wastewater discharge permit management. SongLiao Basin Water Resource Protection Bureau does not conduct direct management over sewage permit and wastewater discharge permit in the basin.

3.4.3.5. FLOOD CONTROL MANAGEMENT

The system of flood control is set up for preventing water hazards and disasters. All the three provinces (region) have special provisions on flood control. For example, the Chapter 6 of the Provisions on Implementing the Water and Soil Conservation Law of PRC (Inner-Mongolia Autonomous Region) (1991) and the Chapter 5 of the Provisions on Implementing the Water of Law of PRC (Jilin Province) (1997) deal with the issues of flood control. In addition, flood control is an important part of the legislation on water resources management of the provinces (region).

3.4.3.6. ENVIRONMENTAL IMPACT ASSESSMENT

The eight environmental management systems include: · Environmental Impact Assessment Policy ·“Three Synchronies ” Policy (pollution control facilities designed, constructed and operated in tandem with design, contruction and operation phases of construction projects) ·Pollutant Discharge Fee System · System of Environmental Protection Responsibility Goals ·Comprehensive Evaluation System for City Environmental Quality ·Pollutant Discharge Permit System ·Centralized Pollution Control ·Treatment within Specified Time Limits

The Law on Environmental Impact Assessment (2002) issued by the central government requires that EIA is done for construction projects, economic and developmental plans. EIA is one of the eight environmental protection management systems of China. EIA is an important regulatory system for preventing environmental risks. All the three provinces (region) have requirements for EIA and environmental impact statement in their environmental protection regulations. The environmental administration department is responsible for enforcement of this system.

Article 13 of the Interim Methods on Preventing and Control of Water Pollution of SongLiao Basin (1995) provides that “when reviewing and approving the environmental impact assessment reports of the projects that may discharge pollutants to water body, the quota of total load of allowable pollutants to be discharged shall not be exceeded.” SongLiao Basin Water Resource Protection Bureau is the administration agency responsible for total pollutant load management of SongLiao River Basin.

Although SongLiao Water Resource Protection Bureau is an important agency for basin-wide water quality management and pollution control, it is not given authority to review and approve EIA management or EIA report of important construction projects and basin-wide water pollution prevention and control projects. In accordance with legal procedure, this authority should be obtained from the SEPA.

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3.4.3.7. HYDROLOGICAL AND WATER QUALITY MONITORING

Hydraulic data and information is the basis for water engineering projects and water resources management. It is very important for the flood and drought control measures of the state. All the three provinces (region) have provisions on hydraulic data and information of water environment. For example, Article 31 of the Regulations on Flood Prevention and Control of Jilin Province (1997) provides that “in flood seasons, the hydraulic stations under the administrations of water resources, electricity, meteorology, agriculture and forestry shall provide hydraulic information to the flood control headquarters at all levels of the government in time and accurately. Meteorological administration shall provide weather forecast and real time meteorological information to the flood control headquarters of all levels of the government in time. The hydraulic administration shall provide hydraulic information to the flood control headquarters of all levels of the government in time.”

Water quality monitoring is an important part of water environmental protection work. The data of the environmental monitoring is the legal basis for enforcement of environmental law and regulations. All three provinces (region) have provisions on environmental monitoring both at the basin level and at the level of their respective jurisdictions. For example, Article 12 of the Environmental Protection Regulations of Heilongjiang Province (1994), which provides that “the environmental monitoring stations of Environmental Protection Administrative Departments at all levels shall carry out environmental monitoring according to provisions of the state and the province. Environmental Protection Administrative Departments are responsible for establishing an environmental monitoring network which consists of environmental monitoring stations under all administrations for trades and the ones owned by enterprises and institutions.”

Article 10 of the Interim Methods on Prevention and Control of Water Pollution in SongLiao Basin (1995) provides that “the Bureau of Water Resources Protection of SongLiao Basin shall be responsible for monitoring the water quality of the main stream at the provincial boundaries. The results of the monitoring shall be reported to the Leading Group of Water Prevention and Control in SongLiao Basin. The environmental monitoring departments and the hydraulic monitoring departments of the four provinces (region) shall report to the Leading Group the water quality monitoring data and hydraulic data of the designated main stream sections each time in each season of high, middle and low levels of water. The Office of the Leading Group shall lump together those data and notice the relevant departments of the four provinces (region).”

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4. INSTITUTIONAL & REGULATORY ANALYSIS OF WASTEWATER SERVICE PROVISION

This chapter provides a review of the provision of wastewater services (incorporating collection and treatment) in the SRB particularly focussing of management issues. The chapter provides initially a brief review of the current institutional setup in the sector followed by a review of some of the major issues in relation to financing of the urban environmental infrastructure and the participation of the private sector in both the financing and provision of services.

4.1. INSTITUTIONAL ORGANISATION OF THE WASTEWATER SECTOR IN THE SRB

4.1.1. TYPICAL ORGANISATION OF A CHINESE MUNICIPALITY

The responsibility of a Chinese Municipality encompasses a large scope of activities. It is in charge of education and health, tourism and social policies, economic development and urban policies and more. Some of these activities are accomplished by administrative bureaus, some others by corporations who can act as any private firms in the West (diversify, create subsidiaries, make joint-venture, etc). Consequently, the organisational chart of a typical municipality is a long list of commissions, bureaus, offices, corporations.

An example of this can be provided by Harbin Municipal Government as illustrated below.

Starting from the most general, we find as in any Municipality the General Office, the Finance Bureau, the Municipal Development Reform Commission (DRC). This latter commission used to be the Planning commission; it has a central role is the preparation of any new project; starting from the preparation of the “Master plan” it deals with the programming of the relating facilities. The change of name, from “planning” to “development and reform”, testifies to the shift from a direct administration type of society in which the plan was the main tool of coordination, towards a more market-oriented type which requires to develop reforms. Under the DRC is typically the Price Bureau an important actor in relation to utility tariff policy.

Mention must be made of several organizations which contribute to the development of fixed assets: several ITICs (which are a sort of development banks set up by commissions to raise money and support their development). The municipality controls as well several constructions companies and design institutes. We can mention as well some organisations specialized in one industrial sector and which contribute to the development of the required facilities.

With regard to the urban utilities, after a decade of reform the present landscape can be presented as follow:

- the Construction Commission has the authority on two large bureaus:

- The Harbin Water Authority (HWA). Under the 2000 reform, all the activities relating to the local cycle of water have been gathered under a new bureau. This bureau is now in a leading position as it is empowered with the authority on all the actors dealing with the water cycle: the water companies, the wastewater companies, etc.

- Then there is an Environment Protection Bureau (EPB) in charge of regulations, standards.

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FIGURE 4-1: SUMMARY ORGANISATION CHART, HARBIN MUNICIPAL GOVERNMENT

Harbin Municipal Government

Mayor

Government Office

Vice Mayors

DEVELOPMENT & FINANCE WATER CONSTRUCTION EPB REFORM OTHER BUREAUX BUREAU AUTHORITY BUREAU COMMISSION

URBAN DISTRICT RURAL COUNTY WATER WASTEWATER GOVERNMENTS GOVERNMENTS COMPANY COMPANY

Each actor, dealing with the urban environment, and each project, are submitted to the complex influence of all these organisations. Additional, for many projects we have to introduce the District government. As far as we understand, the decision is the result of a complex and collective process in which all these actors intervene.

Nevertheless, if we want to say more about this complexity (in fact as soon as we go in details nothing, nowhere is simple) we can introduce a distinction between three different lines of influence. First, the projects have to respect an administrative line with its logic, its regulation, under HWA, the HDRC, the Construction Commission as well as the EPB.

Second, there are financial requirements; they are expressed often by development companies/banks or its vehicles. Ten years ago, this influence was not central for the projects; the development companies were the arms of the government on the financial market but it operated in a direct administration type of society. Now, these companies pay more attention to the financial sustainability of the projects; this financial view is encapsulated from the origin, and it meets the technical/administrative approach promoted by the existing actors.

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Then and finally, there is a political influence. It is less visible, less directly expressed; nevertheless, the major choices are discussed, adopted or rejected by the Vice-Mayors and their “leading groups”. The principle is the same as in the West, what makes the difference is in the visibility. One cannot imagine making a survey on utilities in France or in the US without an immediate reference to the role of the City Councillors, of the Vice-Mayors and the Mayor; they are on a permanent base part of the process of decision. In China, they are not mentioned; we finally understand their role by deduction. These different manners to deal with local politics testify certainly of a cultural difference.

The following table summarises albeit simplistically these thee lines of influence.

TABLE 4-1: LINES OF INFLUENCE WITH REGARD TO INFRASTRUCTURE PROJECTS

Three lines of influence Institution Type of authority

The administrative line HWA, HEPB regulations

The financial coherence Urban Development financing of large projects Investment Companies

The political authority Vice-Mayor tariffs, approval of large programs

Globally, this organisation is complex, quite opaque and has some reluctance to provide information . Therefore, it remains mainly understood by those who are the direct players of the system: the top executives of the Commissions, of the Bureaus and of the SOEs. On the reverse, the system is not transparent for the outsiders and maybe for the political Officials who are not specialists. This is a classical situation; it can be observed in many western countries; as soon as the question “who governs” is raised, frequently the answer is: the professionals and the top civil servants. France before the “decentralisation” policy was a good example.

On this point, we conclude that there is certainly a lack of tools of management and of reporting to provide a view of this large and complex organisation. If one global challenge of the typical Chinese municipality is to move from “rowing” to “steering” the boat then it makes sense.

4.1.2. THE “FOUR SEPARATIONS”

In the 1990s, particularly towards the end of the decade, China embarked on a series of reforms of its public services (eg. Electricity/Gas/Water Supply; Environmental Services such as wastewater and solid waste). Prior to these reforms the municipal govemment had several roles ranging from the direct provider of service, responsible for funding, of political choices and control.

These changes at the Municipal level relate to more general reforms concerning the role of the State and government in China. The Chinese State is now moving from a role as a direct provider to a role as an organiser (regulator). The purpose is to “separate operations from administration”. The delivery of services will be under the responsibility of corporations (either public or private) which will operate under more competitive conditions. This orientation is mentioned as “the four separations” that means “investment (as finance), construction, operation and management are separate”.

In general terms the “four separations” principle corresponds to the type of reforms which have been introduced in the West for the telecommunications and the electric industries. This would mean that each function is accomplished by separate organisations. A particular example of this

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is the situation in Shanghai (which has been traditionally a testing ground for reforms within China).

In the late 1980s and early 1990s in Shanghai both water and wastewater companies were formed; the wastewater company was then transformed into an SOE in 1995; there was at this stage little reform of government itself. The companies were simply operating within the pre- existing government architecture. At the end of the 1990s a number of significant reforms were undertaken following in general the principles of the “Four Separations”: • First, was created the Shanghai Water Authority (SWA) “to undertake integrated management of the water cycle for the whole of greater Shanghai area. This new structure inherited responsibilities formerly vested in several bureaus: the Water Resources Bureau, the Public Utilities Bureau (for the water utilities), the MEAB ( for the wastewater), the Mines and Mineral extraction Bureau”. SWA can therefore be seen as performing the “Management” role of the four separations. In practice, SWA is not only involved in management but also involved in planning • Second, within the Urban Development Investment Corporation (UDIC/Chengtou) a specific water asset bureau (SWAOD) which owns the assets on the behalf of the SMG and who finance the enterprises in the wastewater sector as well as in the water sector was set up; SWAOD is clearly then the “Investment” organization; • Third, the reform extended corporatization in both the water and wastewater sector: – The Water Company has been divided into four companies, plus one raw water company. Then the 4 distribution water companies have set up specific companies for their piping activity; and we can consider that tomorrow these "piping" companies could compete with any construction company. – The same deconstruction has occurred for the wastewater sector. The Shanghai Municipal Sewerage Company has established two engineering & construction companies and three Operating Companies; additional to that these operating companies can sub-contract some activities to the district level. – In this context the deconstruction of the existing institutions seems to have gone further than the four separations principle with a proliferation of companies. • Finally, the reforms have been accompanied by a “deeper” level of private sector participation notably in the water sector (but also in the wastewater sector) such as: – The formation of the Pudong/Veolia Concession covering covering the whole water supply sector for the urban district of Pudong; – The PSP in the wastewater sector. In 2002, paralleling the international bidding for the Pudong Water Company (and the entrance of Veolia), the SMG organised a domestic competition for a BOT for the wastewater treatment plant of Zhuyan (1.7 million m/3).

This description of the situation in Shanghai is particularly relevant to SRB, given that the Province of Heilongjiang (at least) is in general following a similar institutional model at the municipal level. Under this line of reform the process of de-construction of the existing vertically integrated companies has been extreme. But there is nothing on the role of Government: the central actor of the system. In the original “direct administration model” Government is determining the policies at each level.

Are the “four separations” without any reform of the role of Government the best way to get efficiency in the water and the wastewater sector? • going too far in the decentralisation of the existing companies creates the risk of a too complex organisational framework. This will add transaction costs. • without generating the potential gains of autonomy if the companies and other organisations are always under the political authority of the Municipal Government.

In order to deal with this potential risks one solution could be to reconsider the role of Government in a framework in which it keeps the global determination of policies.

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It can be observed that in the West many utilities are vertically integrated. This means that the same company is responsible for pumping raw water, treatment, transport, distribution, billing, in the water sector. Additionally often companies are responsible for both the water and wastewater sectors. Under this scheme the utility has the option to directly provide each service or to sub-contract some parts. The integrated scheme is justified for efficiency. If we agree on the existence of a natural cycle of the water and wastewater, it is considered to be better to have the same company having the responsibility of all the cycle.

Then the question is to deal with the question of the potential power of these “integrated companies” and the risk of abuse of their monopoly position. One option is separate decision/execution. A theory, called “principal-agent” proposes a framework to deal with this type of situation. The “principal” has the leading role. It determines the goals. In the water/wastewater sector it can be a price limit, the definition of standard of quality, it can be objectives in terms of leaks/infiltration and other standards of services. The agent (in this case the water/wastewater company) has to implement the policy. From this point the theory deals with the questions of asymmetry. In fact, the firm has more information on the technologies, on the needs, on the costs, than the “principal”. Then the problem for the principal is to be sure that the agent is effectively doing what he is supposed to do, and that he delivers the service at the best price. In order to counterbalance the risks of opportunistic behaviour several mechanisms have been set up: • the "principal" can select the "agent" under competitive procedure for a certain period of time (this is the case of the water sector in France since a reform in 1993 which has introduced competition “for” the contract). • if the agent has a permanent or a long term position (as it is the case in England) a statistical competition can be introduced (done by a regulation Agency in England: Ofwat). The principal measures the performance of the agents during a period of time and adjust their obligations for the next period of time to their performance.

If we understand correctly the rationale of the "four separations", all the effort has been placed on the architecture of the system. It follows from that there are many organisations where there was, yesterday, ONE unique organisation. But the role the Government has not been changed; the political dimension of decision is a permanent factor. This is the consequence of the overlapping of political and managerial responsibilities. One risk is to generate a too complex framework with increasing transaction costs. The second is to deteriorate the role of Government; being involved in too many structures, in too many decisions, it can miss the essential. The essential of Government is to bring a global view answering such questions as what will be the situation in the next five years? Are the different social groups treated equally in term of contributions for tariffs as well as taxes?

If we agree on these points then it makes sense to examine the rationale of the "principal/agent" type of relations. The role of the "principal" is to set up the goals, it is to control the results; it is not to go in the details. The operation of the companies has to be done by their managers; they have the responsibility to determine if they prefer to keep an integrated type of organisation or if the prefer to sub-contract. These choices are practical; they have to be carefully adjusted to real situations.

4.1.3. REGULATORY ISSUES

As per the pollution control sector, China has put into place a number of laws, guidelines and circulars in relation to the provision of wastewater services. Notable examples are summarised below. Of particular relevance to the discussion in the ensuing paragraphs is the circular with respect to the industrialization of waste water services. • Law of the People’s Republic of China on Wastewater Prevention and Remediation (May 1996; first version 1984). This law sets out the institutional responsibilities for formulating water pollution discharge standards, regulations on supervision and management of water pollution prevention and remediation, measures for surface and ground water protection,

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and the legal liabilities of different bodies. This law also forms the basis for wastewater tariff policy and sets out the basis for charging wastewater tariffs to all users of municipal wastewater systems. A series of regulations and standards have been issued to implement this law including: – Integrated Wastewater Discharge Standards (GB8978-1996). These standards specify the maximum wastewater concentration limits for industries. Industry specific standards have also been developed for a number of key industries. – Detailed rules on Wastewater Prevention and Remediation (by SEPA, effective March 2000). – Provision Act for Sewerage Discharge License Management (1998). – Water Quality Standard for Wastewater Discharged to the Sewers (Ministry of Construction Standards, implemented in 1999). – Municipal WWTP Wastewater and Sludge Disposal Standards. • Circular 1591 on Printing and Distributing the Guidance Promoting the Industrialization of Urban Waste Utilities (Jointly issued by SDPC, MOC, SEPA, 2002). This Circular reinforces the principles of Circular 1192 but also establishes the policy that waste management services shall be reformed to operate on a commercial basis and that existing wastewater utilities shall be transformed into independent enterprises including assets valuation and clarification of ownership. Some of the key provisions include: – All municipalities that have existing wastewater treatment utilities should begin to charge the wastewater tariff immediately. All other municipalities shall begin to charge the tariff before the end of 2003. – The general principle for tariffs is full cost recovery including depreciation, debt service, and a reasonable profit. – All institutions and individuals that generate wastewater must pay the tariff, including those who use self-supplied water. – Governments are encouraged to transform wastewater utilities into commercial enterprises, to evaluate the assets and organise shareholding companies through competitive bidding. Capital from the deal shall be used for construction of collection systems. – It encourages the promotion of more combined wastewater and water supply management, utilisation of BOT and JV arrangements, and support for integrating WWTP utilities among neighbouring cities and towns.

4.2. CURRENT SERVICE LEVELS

4.2.1. TARGETS FOR THE 10TH FIVE YEAR PLANNING PERIOD

The National Policy is set out in the form of Five Year Plans. At present the Tenth Five Year Plan (2001-2005) is in place. When a national plan is set, each Province/Municipality sets out a corresponding Five Year Plan to demonstrate how national goals will be achieved at the Municipal level.

In the Tenth Five-Year Plan (2001-2005), the Central Government has given priority to increased investment and improvement in urban infrastructure management and has set aggressive investment targets of $11 billion for water supply and $15 billion for sanitation infrastructure.

Some specific objectives set out in the plan and other recent policy documents are:

• For wastewater, the objective is to provide wastewater treatment to approximately 45% (from 34%) of the total urban wastewater generated in cities (an increase of 26 million m3); 70%

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for wastewater generated in major provincial cities; and 60% of wastewater in medium-sized cities (prefecture or country level);

• Increase the use of recycled water by industries from 50% in 2000 to 60% in 2005, which is equivalent to an increase in water supply capacity of 160 million m3/day.

• Increase the water tariffs to achieve commercial levels, charge wastewater fees, and allow the joint billing of water and wastewater charges;

• Increased commercialisation and corporatisation of wastewater and water utilities (regardless of ownership);

• Strengthening of environmental supervision and regulation through a national environmental regulatory body (SEPA); and

• Encouragement of the use of private sector financing in the sectors.

The plan recognizes that regulation and supervisory arrangements must be improved. The Ministry of Public Health has developed new, stricter water quality standards that are being adopted at a local level as investment becomes available.

4.2.2. ACHIEVEMENT OF TARGETS

The following tables provide a summary of the existing plants and those currently under construction in the SRB according to information collected by the Consultant.

Assuming that the facilities under construction9 will be completed by the end of the year 2005 (and therefore at the end of the 10th FYP) the following broad conclusions can be made:

• As a whole in the SRB, treatment levels are low, representing less than 30% of the total generated urban wastewater;

• For the municipalities of Harbin and Jilin should the ongoing projects be completed, they would broadly achieve their targets for the 10th FYP

9 This is perhaps a major assumption as a number of projects (especially in relation to internationally financed projects) are known to be delayed due to unavailability of counterpart funds

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TABLE 4-2: EXISTING WWTP IN SRB AND FUNDING SOURCE FUNDING SOURCE CAPACITY SUB-BASIN RIVER WWTP NAME LOCATION 3 10 T/D

North Suburb WWTP Changchun 390 World Bank/Local Govt. Yitong West Suburb WWTP Changchun 150 JBIC/Local Govt. Second JBIC/Local Govt. Songhua Shuangyang WWTP Changchun 25 Economic. Devt Zone Jilin 50 Natioanl Mainstream Chemical Ind. Co. Jilin 230 Natioanl Tao'er Western Urban Area Wulanhaote 20 Bilateral Loan Central Urban WWTP Qiqihar 30 Nen (Austria)/Local Govt. Mainstream Qiqihar Wastewater Natioanl Qiqihar 350 Oxidation Pond Mainstream Harbin Wenchang Harbin 162.5 Natioanl Main Mudan Mudanjiang City Mudanjiang 100 JBIC/Local Govt. Songhua Daqing Dongchengqu JBIC/Local Govt. Zhaolanxin 50 (Phase I) Total SRB 1557.5

TABLE 4-3: WWTP UNDER CONSTRUCTION IN 2005 & FUNDING SOURCE

CAPACITY FUNDING SOURCE SUB-BASIN RIVER WWTP NAME LOCATION 3 10 T/D

JBIC/Local Govt. Second Mainstream Jilin City WWTP Jilin 300 Songhua Jiangnan WWTP Songyuan 50 JBIC/Local Govt. Zhalantun Natioanl Nen Yalu Zhalantun 40 WWTP Main Private Sector (National) Mainstream Taiping WWTP Harbin 325 Songhua Jiamusi WWTP Jiamusi 60 Private Sector (National) Xichengqu National Petroleum Industry Zhaolanxin Daqing 80 WWTP Yanshou County Yanshou JBIC/Local Govt. Lalin 25 WWTP County/Harbin Total SRB 880

4.2.3. INOPERATIVE WWTP

The above summary of service levels assumes that all of the WWTP thus far constructed are in operation. In fact observations made during this assignment indicated that this was not the case. For example: • The Mudanjiang WWTP commissioned in 2003 has not operated since its commissioning; it was indicated to the Consultant that this was due to the low tariff level which was not sufficient to cover operation and maintenance costs; • For the Changchun Beijiao plant, the present consultant visited the plant in April 2005; at the time the plant was not operating. Consultants working on another TA for ADB indicated that this was also the case in the summer of 2004. • The operator of the new WWTP in Wulanhaote indicated to the consultant that no sludge is produced in the winter period; this would suggest that the plant is either not operating or is completely ineffective during this period.

On the basis of these and other observations, the Consultant estimates that of the total installed capacity in the SRB, at least 30% is inoperative; the figure may of course be significantly higher.

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4.3. FINANCING OF URBAN WASTEWATER SERVICES

4.3.1. INVESTMENT IN WASTEWATER SERVICES

Financing of urban wastewater services has been predominantly from local government funds or from multilateral/bilateral loans.

Of the total installed capacity that will be operational/commissioned by the end of 2005 (the end of the 10th Five Year Planning Period), approximately 50% has been funded with assistance from either multi-lateral of bi-lateral funding agencies (see previous tables).

As discussed below the role of the private sector has not been previously significant in funding wastewater infrastructure; there is however, a small number of WWTP under construction as part of BOT ventures.

As a result of the visits to many of the municipalities in the SRB, there were many cases of projects which have been approved for a number of years, but construction has not taken place due to a lack of available funding. As noted elsewhere in China, environmental protection has generally taken a lesser position with regard to funding priorities; this is particularly true of the municipalities of the north-eastern region already burdened by high social costs associated with the State Owned Enterprises currently prevalent in the region.

4.3.2. COST RECOVERY & TARIFF LEVELS

China has developed a series of policy recommendations covering wastewater tariffs (following on from those developed for the water sector), these include: • Law on Prevention and Control of Water Pollution, revised in 1996, establishes the legal basis for wastewater tariffs for all users of municipal wastewater systems. • Circular 1192 on Strengthening the Collection of Wastewater Treatment Tariffs (1999, jointly issued by SDPC, MOC, SEPA). This Circular provides for a wastewater tariff and establishes that the tariff shall be set on similar cost recovery principles as for water supply. Specifically, it calls for a wastewater treatment fee that recovers operations and maintenance costs and a reasonable profit. This wastewater tariff replaces a number of other fees that were used to finance wastewater investments. It also provides for the direct remittance of the tariff to the wastewater company rather than through the Finance Bureau.

As indicated above Central Government policies advocate the establishment of wastewater tariffs on similar principles as that for water supply. The following tables provide a summary of the current (2005) wastewater tariffs charged within the river basin.

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TABLE 4-4:EXAMPLES OF EXISTING WATER TARIFFS WITHIN SELECTED COMMUNITIES IN THE SR B Province/city Fee for wastewater treatment Reference Jilin 0.4yuan/ton Only Songyuan City initiated to levy since 2005/01/01 Heilongjiang Charge rate of wastewater treatment Levy initiated on 2005/03/01 in Jiamusi for resident and non-resident are 0.30yuan/m3 and 0.6 Yuan/m3 respectively;

Charge rate for resident and non- resident had been changed from 0.23 The new vision of Daqing to 0.50 yuan/m3 and 0.45to 0.95 since 2005/03/01 yuan/m3 respectively. Came into effect in Daqing since 2004/10/01 Charge rate of wastewater treatment for resident is 0.25yuan/m3, for institutions and enterprises are Came into effect in Hailun 0.50yuan/m3 0.50yuan since 2004/04/01

These tariff levels, particularly those in the wastewater sector are far from covering operation and maintenance costs, let alone depreciation and/or debt service. An analysis of recently financed loan projects would suggest that tariffs higher than 2 RMB/m3 would be required to cover operation & maintenance and depreciation. Operation and management costs would be generally in excess of 1 RMB/m3 especially for wastewater treatment systems in the colder northern regions which may require covering/heating in winter.

4.3.3. CURRENT LEVELS OF PRIVATE SECTOR PARTICIPATION & DFI

Current levels of private sector participation either through operation and management of facilities or through financing of facilities are low in the region. This is particularly disappointing given that the region was one of the first (in the case of the Harbin Water Supply Joint Venture) to experiment with PSP in the water sector in China.

Within the whole of the SRB three PSP ventures have been noted in the wastewater sector: • First, in Changchun, the Beijiao WWTP was previously the subject of an Operation & Management Contract. However, it is understood that since the summer of 2004 the contract has been terminated due to disagreements between the two parties notably in relation to the remuneration of the private sector company. • Secondly, there exists a small venture in Daqing covering a wastewater treatment and reuse project that was funded as a BOT. This project treats approximately 25,000 m3/day of wastewater; • Finally, an agreement has been reached between the town of Ne’he and a company in Beijing to construct a small WWTP serving the town via a BOT arrangement.

The existing ventures represent only a fraction of the total installed capacity of the river basin. During the meetings with various municipalities, there was a distinct wish to attract funding from the private sector, without necessarily a clear idea of how this could be achieved nor the various forms by which this could operate.

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In relation to these ventures (and forthcoming ventures that have been proposed by municipalities), the “direct negotiation” nature of these ventures without a well developed framework for PSP ventures can be seen to be a disadvantage.

For example, in the case of the Changchun, the private sector company is in litigation with the government concerning the non-respect of the return of investment clauses (“take and pay”) associated with the venture; the Government on the other hand complains due to the excessively high level of the wastewater discharge fee (0.6 RMB/m3). It should be noted that the Beijiao plant is a primary treatment plant and therefore treatment costs should be generally lower than this value; for example, the recently tendered BOT in Shanghai for the Zhuyuan Enhanced Primary Treatment Plant was won with a treatment cost lower than 0.3 RMB/m3.

4.4. URBAN WASTEWATER SECTOR REFORM

As discussed above many urban wastewater systems constructed in the SRB are not in normal operation. The main causes are: • Construction of sewage collection system (pipe network) often lags behind the construction of WWTPs; • Operation expenses lack, some are set up using foreign governmental loan and commercial loan, whether they are in operation or not, interest must be paid, sewage disposal charge cannot match operating cost and loan repayment, so they have to sometimes operate or stop, as a result, they become the furnishing to cope with the higher level department examination. • Design scale is slightly large, it is normal for 20% surplus capacity or less as to wastewater treatment facilities, and the existing WWTPs have 30%-50% surplus capacity. • About 80% sewage disposal and supporting system still adopt operation mode of institution or quasi-institution, governments collected tariff and allocated funds to WWTPs. • Some local governments, in order to gain projects to get achievements, consider less whether WWTPs can operate normally or not after they are set up.

In order to change the current situation Jilin Provincial Government distributed to municipal/prefecture/county governments the guidance to prompt commercialization of urban wastewater treatment sector ([2005]28). Amongst other proposals, the following general proposals have been made and can serve as a general model for the SRB • Multiply funding sources and change the original single governmental investment structure of urban WWTPs; • Governments publish and implement municipal public utility development policies, concessionary operation policies, investment system reform policies, and policies to encourage non-public-owned economy, quicken marketization of urban WWTP construction, which is the key to solve a series of problems existing in WWTPs at present. • Governmental role is transformed from trade management towards market supervision, perfect corresponding market supervision system, change the original investment, construction and operation system, and implement investment main body multiplicity, operation main body running as an enterprise, and operation and management like a market. • Restructure the existing urban WWTPs in TOT (purchase-operation-transfer) mode. • Encourage proposed and under-construction urban WWTPs to adopt BOT (building- operation-transfer) mode or PPP (cooperation-operation-transfer) mode to construct and operate (transfer generally does not exceed 30 years).

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• Rationalize sewage disposal tariff collection mechanism, adopt public hearings and implement step by step, determine charge price according to the principle of cost recovery and small profit.

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5. MAIN FINDINGS & RECOMMENDATIONS

Many of the ensuing recommendations of this study are inspired by the reports published as part of other technical assistance consultancies funded by the Asian Development Bank and other organizations (such as the World bank, UNDP, etc). In this chapter we have developed the conclusions and recommendations particularly on the basis of the observations made within the field in the Songhua River Basin and on the working and operation of the existing institutions.

5.1. MAIN FINDINGS

5.1.1. LAWS AND REGULATIONS

In general it has been concluded that the legal and regulatory system is very complete at a national level. Although as discussed below, the main problem of compliance is insufficient monitoring and funding for environmental protection, the lack of local and adapted standards and regulations has affected effective compliance.

Similar to other areas of China, all the national laws, regulations and standards related to the water resources and water environmental protections should be implemented at the river basin level. However, from the whole River Basin, there is not any integrated regulation about water resources and water environment applied to enforce the Water Law and Water Pollution Prevention and Control Law at river basin level. The legislation process about water resource and water environment of the river basin is complicated, and the river basin regulation must be passed by all people’s congresses of the provinces in river basin. The capacity of law enforcing on river basin by river basin institution is weak because it is not endowed with right and power for performing Water Law and Water Pollution Prevention and Control Law, also because water quality standard available is unsuitable for Songhua river for its long during of blockage by ice during winter time.

At the level of the river basin, the SRSPLG has so far no legal basis for enacting its conclusions, nor for these decisions to be undertaken by the respective Provincial authorities. There is no ability to set up standards or regulations which can be adapted to the environmental and socio-economic conditions of the river basin.

5.1.2. ADMINISTRATIVE SYSTEM

As described in previous chapters, the traditional vertical organization of government within China from the Central Government Ministry’s to the lower level County and Township has not been conducive to full effective water quality and pollution control management in China. Effective water quality and pollution control management requires that organizations work together at the river basin level. Such approaches have been already developed in China with the setting up of the Water Resources Commission, Water Resources Protection Bureau and River Basin Leading Groups; however, they are having difficulty in performing.

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Within the North-East Region of China, notably within the Songhua and Liao River Basins a unique approach has been developing in which the Water Resources Protection Bureau has become linked to a Leading Group, the SongLiao River System Protection Leading Group.

This leading group is formed with Vice Governors of participating Provinces and Heads from the major Provincial Bureaux and the Songliao Water Resources Commission. It is unique in China, being anchored primarily within the provincial system rather than the central government; it has been concluded that this “local” ownership of the leading group presents a distinct advantage as compared to other similar leading groups.

The SRSPLG (Songliao River System Protection Leading Group) was set up by regional initiative of the provinces in the basin. This model enjoys reputation on water pollution control because of the advantages such as authoritativeness, coordination, ownership and investment.

However, the current system lacks legal and regulatory authority and meets only irregularly to develop policy, initiatives and responses to crises. This is however not likely to respond to the prevalent issues of the Songhua river basin today in which both water resources and pollution are a serious impediment on socio-economic well-being. Therefore, it is an effective way to adapt and deal with environmental protection management system issues in the basin and regions through perfecting existing model of the leading group, strengthening the responsibilities of river basin management agency, promoting the organization and leadership of regional pollution prevention and control as well as public participation. The relevant regulations of the “Water Pollution Prevention and Control Law” should be fulfilled and the leading group can perform supervision over and management of water pollution control in conjunction with environmental protection authority under the State Council.

This model especially exerts complete impact on provincial/regional governments in transboundary management. The agreement reached at the meeting hold by the leading group will be implemented within individual jurisdiction by local governments.

Songliao River Basin Protection Bureau is the administrative office of the SRSPLG. Because of a close link with the Environmental Protection Department when it was set up, it played a great important role in coordinating the pollution prevention and control. For the reasons such as institutional restructuring and limited administrative power and the adjustment of leading function of the basin institution by the central governmental departments, the environmental protection management function of River Basin Protection Bureau has been weakening. The State Environmental Protection Administration (SEPA) has not delegated Songhua Basin River Resource Protection Bureau for water quality and pollution control management. Currently, its administrative role on water environment management of the bureau is very limited.

In the light of serious river pollution and the urgency of protection, the role and responsibility of SLSPLG on transboundary management for water quality and pollution control should be strengthened. Integrated operating system is not available, for example: public participation and ecological evaluation mechanism of river basin are not yet applied. It is good to note that function zones in the river basin have been integrated with efforts of the provincial governments in the basin, because the four provincial governments on river basin basically integrate water functional zones with environmental functional zones. This can be applied to other issues such as monitoring and planning in the basin.

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5.1.3. THE SONGLIAO WATER PROTECTION COMMISSION WAS INITIALLY SET UP AT RIVER BASIN LEVEL UNDER THE SUPERVISION OF THE MINISTRY OF WATER RESOURCES TOWARDS LAW AND REGULATION ENFORCEMENT.MONITORING & CONTROL

There is a lack of coordination between the organizations in charge of monitoring water quality within the Songhua River Basin.

There are in general two sets of organizations, the Water Resources Bureaus (including the Water Resources Protection Bureau) and the Environmental Protection Bureaus who carry out monitoring of ambient water quality independent from one another. There is a duplication of monitoring points in some areas and a complete absence in others. Each bureau monitors different parameters during different seasons making the comparison of results difficult.

The WRBs and EPBs also produce independently the planning of water quality objectives. In other words, there is no agreement on the current state of the health of the river basin, nor on the water quality objectives.

In addition, the two organizations have developed in general “competitive plans” for upgrading water quality in the SRB. Examination of both plans illustrates that they are in substance broadly complementary and therefore should be integrated into one unique plan.

Data is not shared leading to incomplete and ineffective use of the existing information at the level where this should be carried out. For example, the WRB are not aware of the measurements of micro-pollutants made by the research institutes under the EPBs

5.1.4. CAPACITY BUILDING

Capacity building for water resource and environmental management in the basin involves those for the organizations both at the basin level (such as SRSPLG and Water Resource Protection Bureau) and at the regional level （ such as the Environmental Protection Departments and Water Resources Departmentsof provinces and their agencies at district or municipal levels）. At the basin level, the River Basin Water Resource Protection Bureau has little administrative power of law enforcement. The monitoring and supervision capacities for environmental law enforcement should be enhanced at basin level if a more integrated approach is adopted. At the regional level, the capacity of the governmental bodies at all levels in the provinces should also be strengthened to enforce the national and provincial laws and regulations . Capacity in administrative and human resources management as well as water resources and water environmental management needs to be reinforced. Some institutions are weak in integrated management, law executing, planning, monitoring, popularization, science and research, which affects the implementation of laws, regulations and policies.

Although there are three monitoring systems in the river basin, they have different focuses:

• The River Basin Water Resource Protection Bureau is in charge of monitoring the sections at provincial boundaries.

• Local water resource departments take charge of monitoring of water intakes and discharges to the river ‘especially in terms of volume);

• Local environmental protection department supervise water quality and outlets of enterprises.

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5.1.5. EXPENDITURES AND POLLUTION ABATEMENT INVESTMENTS

As a whole, the expenditures for water resource and water environmental management in the basin are not enough for the water resource protection and water pollution control to be conducted effectively. For daily operation, the budget for river basin and provinces administrations are only enough for normal routine management but not for integrated management. For projects , the investments are not available in long-term or very limited and not stable. For the river basin management, there are not valid financing channels for compensating up-stream and down-stream efforts in a river basin solidarity approach.

Although not analysed in detail in this report, the financing of environmental protection measures has been quoted as inadequate within the SRB. This covers both the financing of the agencies themselves as well as the financing of environmental protection infrastructure.

5.2. GENERAL FRAMEWORK FOR THE INSTITUTIONAL REFORM

For China, the first twenty years of this century provide strategic opportunity for fast development. They also provide a good opportunity for the economic and social sustainable development of Songhua River Basin.

5.2.1. WATER MANAGEMENT AND POLLUTION CONTROL NEED INTEGRATED RIVER BASIN MANAGEMENT

The River Basin and regional sustainable development requires a coordinative development between economy and population, resources and environment. At present, Songhua River Basin is confronted with double challenges from high-speed economic development and environmental protection. Combining international experience and Chinese situations, there is one principle that should be followed to deal with relationship between environment and development: to maintain economic and social development taking into account the bearing capacity of the environment. Implementing River Basin sustainable development requires adopting “cost internalization”. The latter is about continuing to develop activities in the way of traditional industrial mode giving room for the treatment of pollution only when the economic productivity is fulfilled; the former is to develop in the way of new industrial mode, and to promote clean development mechanisms.

In the recent years, integrated management philosophy has been popularly accepted in some developed countries such as Australia, the U.K, Holland, America and France. It aims at managing River Basin resources by jointly improving ecological environment and developing sustainable economic and social growth. Appendix D provides a summary of these experiences. The lessons learnt from these experiences in the related water management reforms could be useful for the development of pollution control and water management in Songhua River Basin.

River basins should form the geographical basis of the water management system as it is worldwide considered as the most effective model to integrally manage water resources. The implementation of this model is indispensable when China wants to substantially improve her water management system and bring it in line with positive experiences abroad and major policies as presented in the EU Water Framework Directive of 2000.

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allocation; in Europe the integrated management of Rhine started with a main focus on water quality and environmental degradation. These international experiences show that institutional reforming in Songhua river basin needs to begin with appropriate priority focus points. On the basis of these core focus points that demonstrate the efficiency of the decisions made, the institutional reform might be gradually strengthened and upgraded with other topics. In Songhua River Basin water quality and pollution management could stand as the core focus points of the reform.

In Songhua River Basin, the existing management organizations such as the SRSPLG have initial character of integrated management. The SRSPLG founded in 1978 and the Headquarter of Songhua Flood Prevention Institution founded in 2002 pioneered a new road in management system by river basin through collaboration of regional representatives, inter-industrial associations and state departments. The SRSPLG could therefore be a good starting point for improving river basin management. The priority of this management system is proved in the implement of his project. The leader and vice leader of the leading group have supported the project and provinces/region have established liaison group chaired by a vice general secretary of provincial government and PIUs within provincial EPBs. Just their positive participation has facilitated the smooth implementation of the project and guaranteed the institutional function.

5.2.2. FOCUSING KEY POINTS AND PHASED INSTITUTIONAL REFORM

Achieving integrated management is a complex process because it covers a large range of issues. Integrated management can be reached gradually based on previous experiences and on clear river basin management objective. Many river basin management organizations, when being created, were initially interested by a single issue such as flood, water resources allocation and water quality. For example, the American Mississippi River Basin and the Chinese seven River Basin management organizations (for Yellow River, Yangtze river, SongLiao river system, Pearl river, Hai river, Huai river, and Tai Lake Basin) have been setup in order to lessen flood; in Australia the emphasis of river basin management was water resources allocation; in Europe the integrated management of Rhine started with a main focus on water quality and environmental degradation. These international experiences show that institutional reforming in Songhua river basin needs to begin with appropriate priority focus points. On the basis of these core focus points that demonstrate the efficiency of the decisions made, the institutional reform might be gradually strengthened and upgraded with other topics. In Songhua River Basin water quality and pollution management could stand as the core focus points of the reform.

Finally, the improved water management structure should be based on the joint responsibility of the central ministries and the regional governments. Compelling the full responsibility of water management on the shoulders of only one administrative level would be against the integrated river basin principles and would be likely to fail.

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5.2.3. REFORMING APPROACH AND STAGE OBECTIVES

At present, the Songhua River Basin authorities have listed Key Rivers that deserve special water pollution control. In the background of river basin management, environmental management should also provide a general coherent framework for the reform.

The roles of basin institutions (River Basin Board and the its executing agency the River Basin Agency) rely on their legal status and mandate. The basin institutions shall play a bigger role in definition of functional zones, river basin diagnosis and water quality & pollution monitoring, integrated planning based on river basin objectives, financial support to the priority actions that contribute to reach the objectives and information sharing. For the same reasons, sub-basin institutions also shall play greater role in these duties enhancing both the bottom-up and top- down approaches.

It is proposed to improve and enforce institutional reform in two stages within a period of 15 years.

The first stage (within the eleventh five –year plan” which should include an economic rapid development period) targets protecting water resource, controlling river pollution and protecting river ecology in Songhua River Basin. The key objectives of this stage are

• The provincial/regional governments further strengthen the coordination role on transboundary river basin management to guarantee the authoritativeness and effectiveness of decision-making based on laws and regulations;

• Establish and strengthen joint leading organization for water resources protection and pollution control;

• Strengthen the capacity of river basin management agency. MWR and SEPA should validate the dual leadership mechanism for SWRPB (the office of SLSPLG), a separate agency among river basin management agencies, and entrust to it the management responsibility of water quality and pollution control 10within the framework of the “Water Law” and “Water Pollution Control Law;

• Establish public participation society.

It seems that various projects and programmes targets defining a national strategy in river basin planning within the next 5 years. This process will certainly benefit from the results of stage 1 on Songhua River Basin. The second stage (around 2011)would aim at applying the national policy and legal framework on Songhua River Basin. This stage would strengthen the integrated management features in Songhua River Basin by taking into account simultaneously the heath of rivers, the economic development and the environmental protection. The foreseen new national law such as river basin management law or relative River Basin management policy will certainly establish and based on which to confirm the establishment of River Basin Board (or Council) and the related executing agency (River Basin Agency),

10 Comment 14.1.2

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TABLE 5-1: DEVELOPMENT STAGES FOR SONGHUA RIVER BASIN WATER QUALITY MANAGEMENT AND POLLUTION CONTROL

Stage Time needed (year) Stage Objective Actions First Stage (near 5 years Perfecting and Provincial/regional future) (2005-2010) reinforcing river system governments, MWR and protection institution: SEPA issue regulation or 1. Further reinforcing agreement strengthening the coordination role of the coordination function of the Leading Group; Leading Group at current 2. Strengthening the stage; organization and The Ministry of Water leadership of regional Resource and State water resource Environmental Protection protection and pollution Administration validate the control; “Double Management” of the 3. Regulatory Capacity Songhua Water Protection building of river basin Bureau and define its management agency for administrative and financial water protection and procedures. pollution control; 4. Establishing public participation (PP) mechanism, creating PP Society. Second Stage (far 10 years The nation confine Establish River Basin future) (2010-2020) principles of River Basin integrated management Board integrated management and Executing Agency

The integrated management of basin should make all stakeholders to play an increasing role in water management and pollution control. It shall be encouraged that all stakeholders participate in the water management and pollution control. Therefore, symposium, consultation, hotline and other channels to facilitate the participation of all stakeholders will have to be enhanced.

5.2.4. WASTEWATER SERVICE PROVISION

5.2.4.1. COST RECOVERY & TARIFF SETTING

It is clear as a first step municipalities need to adopt the national guidelines in relation to the commercialisation of wastewater facilities; tariffs should be introduced to cover at least O&M costs; these should also be directly used to start operating the existing plants in the SRB which are not functioning.

Thereafter, tariffs should rise progressively as ability to pay and willingness to pay rises (particularly in relation to improvement of the service itself)

5.2.4.2. FINANCING OF INFRASTRUCTURE

As evidenced during visits to the river basin there is a distinct lack of funding for urban environmental infrastructure in general, and wastewater treatment in particular.

A number of studies financed by both the World Bank and ADB have investigated in detail these points. • Diversification of financing sources covering: – Central Government grants and bonds – Local government funds – Self generated funds from the utility services – Bond Issues

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• Open the market to the private sector. Two forms of private sector participation can be considered for financing purposes: – The concession model wherein the whole part of the water and/or wastewater service is delegated to the private sector. Recent examples include the Pudong/Veolia venture (water sector only) and the Shenzhen venture (water and wastewater) – The BOT model for water/wastewater plants in which only a part of the service (the treatment aspect) is delegated to the private sector. Many examples of such ventures particularly in the water sector exist in China; there are fewer in the wastewater sector.

The development of conditions encouraging the private sector to participate in this context is discussed further below.

Given the vast investment needs of the country and the limited amount of foreign investment in the sector to date (estimated at less than 5% of total investment flows from 1990-2000 in the water and wastewater sectors), it should nevertheless be appreciated that the majority of financing in the 11th FYP period is likely to come from traditional sources. Given the vast needs of the north east region especially in relation to the renewing of the old industrial base, the assistance of international funding agencies will be most likely important during this transformation phase of this region.

5.2.4.3. PRIVATE SECTOR PARTICIPATION

In general terms become increasing important to have a policy framework and legal environment that prioritise sector objectives, guide investment, and attract and protect the interests of investors. Many previous studies have provided a series of guidelines to Central Government concerning the A key recommendation of this study is to develop a number of PSP operations within the SRB which could serve as models for future investment and best practice. Such operations would be developed on the basis of a specific technical assistance (funded potentially from multi-lateral aid agencies who have developed significant recent experience in the sector). Such a technical assistance would fund the development of: – Formal procedures (including bid documents) for PSP in the SRB; – Government tools for regulating such PSP ventures, including for example benchmarking; – Training to local government officials to strengthen their capacity in the understanding and thereafter regulation of such ventures.

To encourage the participation of the private sector in the region the following options should be considered: • In the larger cities of the SRB (for example, Harbin, Changchun, Jilin City, Daqing and eventually Qiqihar), the governments could consider bidding of concessions • BOTs for wastewater treatment in the smaller cities and for specialist projects such as water reuse.

5.2.4.4. THE PROBLEMS OF SMALL CITIES

As discussed in the strategic planning report (Volume 4) many of the proposed projects are in the headwaters of the SRB and are associated with small to medium-sized cities. Many of these cities have no experience of the operation and maintenance of complex treatment facilities nor necessarily the financial capacity to pay for or attract diverse funding sources (including the private sector).

Similar problems faced many European Countries in the early 1990s with regard to the financing of wastewater infrastructure in response to the European Wastewater Directive. The

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typical response of such communities involved the development of “regional” systems for both funding and operation of facilities.

5.3. DETAILED RECOMMENDATIONS

5.3.1. STRENGTHENING AGREEMENTS AND INSTITUTIONS FOR THE SONGHUA RIVER BASIN

In stage 1, only local laws and regulations are foreseen to be revised for strengthening water quality and pollution control in Songhua River Basin. Regulation or agreement should be approved by the three governments (Inner Mongolia Autonomous Region and Heilongjiang & Jilin Provinces) for clear repartition of responsibilities between SEPA, MWR departments, the Leading Group and the Water Protection Bureau. This agreement should be developed under requirement of the Environmental Protection Law, the Water Law and the Water Pollution Prevention and Control Law.

The provincial Development & Reforming Commission should also join the Leading Group as they are in charge of elaborating water resources and environmental protection plans.

At this stage the distribution between organisations could be seen as follows:

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TABLE 5-2: DISTRIBUTION OF WATER QUALITY & POLLUTION CONTROL ACTIVITIES BETWEEN DIFFERENT ORGANISATIONS IN THE RIVER BASIN Regional Pollution Prevention and Control Agencies Public River Basin Leading Group (Provincial/Regional Pollution Participation Management Agency Prevention and Control Leading / Society Group) Separate Water Specialist Office Agency Resources PDRC, Provincial Provincial (River Basin Consultatio (SWRPB (SWRPB Managemen etc EPB WRB or Region) n Society ) ) t River Basin Protection Policy and Regulations L L Pollution Source/Emission Monitoring L Ambient Water Quality Monitoring P P L Provincial/National Boundary Water Environmental L Monitoring River Flow and Water Abstraction (Flow) Monitoring L P Total Load Control (Flow, Water Environmental Capacity, L P P Pollutant Discharge Integrated Control) Regional Integrated Report L P P Water Environmental Data Management L P P Crisis Management (including water pollution accident L P P P management) River Basin Diagnosis L P P Water Function Zoning and Monitoring and Supervision L P P P (including Drainage Outlet Management) River Basin Planning—Water Quality objective Definition L L P P Pollution Discharge Limit (carrying capacity identification) L P P and Allowable Water Abstraction Estimates Water Abstraction Permit P L Treated Wastewater Discharge Permit P L River Basin Tariff and Management (Pollution Discharge L P P P P and Water Resources) Project EIA P L Identification and Implementation of River Basin Action L P P P P Plan Monitoring and Evaluation on River Basin Action Plan L P P P L= Leading institution responsible for the task P: Participate to this responsibility

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The above proposed matrix presents a view somewhat different from previous ADB reports (such as the Transjurisdictional Water Environment Management project) in which it was clearly proposed to separate the roles of the EPB and the WRB with regard to ambient water quality monitoring, with the latter taking the lead. Whereas, this is clearly a possible option, observations in the Songhua River Basin do not indicate that this is the only option. However, what is critical is that the planning and establishment of the monitoring networks are coordinated to reduce duplication and redundancy of facitlities and to ensure that government organisations share data, in particular raw data, in an open manner with each other.

5.3.2. IMPROVING THE INSTITUTIONAL SYSTEM

After the adjustment, Songliao River Basin Water Resource Bureau is likely to keep the four original divisions complemented by three others. The Supervision and Management Division could be gathered with the Water Environmental Monitoring Center for managing data, preparing river basin water quality and pollution synthesis, recommending effluent limit values and coordinating SEPA and MWR river basin activities;

A River Basin Planning Division should be established for the development of the river basin diagnosis and planning. A River Basin Programme Division could be established for river basin funds collection and for implementation of river basin activities that support the identified objectives (such as the establishment of wastewater treatment plants) An Information Center, in charge of publicity, education, information release and sharing could also be established. Finally, an Ecological Environment Protection Division could be later developed for being in charge of river basin ecological environment protection and determination of minimum nature flow in the river.

Some staff from the existing water resources commission (especially those currently in charge of planning) should certainly be able to join the Office for supporting them in implementing their new responsibilities.

5.3.3. PERFECTING OPERATIONAL MECHANISMS

5.3.3.1. ENHANCING LEGAL RIGHT OVER THE MANAGEMENT ON WATER FUNCTION ZONE

At present, the three provinces have approved each water functional zone division. On this basis, the following actions should be implemented: • Establish the total admissible load based the water functional zones. • Draft management detailed rules for each type of zones. • Through the management of water functional zone, economic and ecological functions should be coordinated.

5.3.3.2. INTEGRATING AND UNIFYING WATER RESOURCE PROTECTION PLANNING AND WATER POLLUTION CONTROL PLANNING

Separate water pollution control and water resource protection plans result in wasted time and resources. The provincial Development & Reforming Commission take the lead in the planning with the support ofthe Environmental Protection and Water Resources Administrations, to formulate an overall protection plan of water resource and water environment. The integrated water pollution control plan of HeiLongJiang Section SongHuaJiang River Basin completed in

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2001 also took the same way. Practical procedures for planning could be now jointed and implemented as follows:

FIGURE 5-1: DEVELOPMENT OF RIVER BASIN PLANS WITHIN A TYPICAL RIVER BASIN MANAGEMENT FRAMEWORK

Stage 1: DIAGNOSIS Analysis of the current water resources situation (present situation and recent evolution) and explanation of cause effect links LAN

P Basin Council session

Stage 2: OBJECTIVES Definition of objectives to be achieved in the STEP 1 long- and medium term for the common basin

ANAGEMENT interest, using a participatory approach M Basin Council session ASIN B Stage 3: STRATEGIES

IVER Description of the type of activities that would R enable to reach the objectives

Basin Council session

MULTI-ANNUAL ACTION PROGRAMME List of actions for the restoration and protection STEP 2 of water bodies, to be implemented within the next planning period (e.g. 5 years)

Basin Council session

ANNUAL ACTION PROGRAMME Priority actions extracted form the Multi-annual STEP 3 Action Programme, presented for claims to the Budget

• Water Resource Protection Bureau in river basin is in charge of organizing and draft the outline of the integrated plan. • Provincial comprehensive departments within the basin coordinate water resource department and environment protection department to draft the plan within their administrative boundary. • Water Resource Protection Bureau in river basin responsible to collect and integrate the plan for water resource and water environment protection, then turn in to the central government. • The central government approves the integrated plan by virtue of suggestion of the Ministry of Water Resource and State Environmental Protection Administration. • The governments of all levels allocate resources and enforce the integrated plan on the ground of responsibility stipulated in the plan. • The river basin water resource bureau evaluates performance and conduct the next integrated plan.

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5.3.3.3. ESTABLISHING PERFORMANCE EVALUATION SYSTEM ON WATER RESOURCE PROTECTION AND WATER POLLUTION CONTROL

Relevant indicators are proposed and adopted. These indicators are monitored regularly every year. Performance tracking and evaluation are performed to find out problems existing in policy enforcement.

5.3.3.4. ESTABLISHING PUBLIC PARTICIPATION MECHANISMS

The role of citizens and various citizens’ groupings is recognised as crucial in achieving clean up of waterways. Often it has only been through public pressure that improvements through institutional reforms, increased investment and improved monitoring and control have come about.

The European Union recognises two main reasons for extending public participation: • The first is that the decisions on the most appropriate measures to achieve the objectives in the river basin management plan will involve balancing the interests of various groups. The economic analysis requirement is intended to provide a rational basis for this, but it is essential that the process is open to the scrutiny of those who will be affected. • The second reason concerns enforceability. The greater the transparency in the establishment of objectives, the imposition of measures, and the reporting of standards, the greater the care Member States will take to implement the legislation in good faith, and the greater the power of the citizens to influence the direction of environmental protection, whether through consultation or, if disagreement persists, through the complaints procedures and the courts. Caring for Europe's waters will require more involvement of citizens, interested parties, non-governmental organisations (NGOs).

Public participation mechanisms are already adopted in China in relation to environmental projects through two approaches:

• Through the EIA mechanism whereby public review of the EIA documents associated with development projects is sought;

• Through Social Assessment and the development of mitigating measures in relation to social impacts of projects (for example in relation to Resettlement Action Plans).

It is proposed herein to extend public participation as part of the further development of the river basin management approach developed above in Section 5.3.3.2 above. This would be brought about in two ways: • Making accessible to the public draft reports and other related documents relating to the river basin; to this end initiatives such as a river basin web site implemented by the WRPB would facilitate initially public awareness of the proposed planning. • Incorporation of representatives of the public and public groups on the river basin council as it develops.

This process of public participation has been initiated as part of this TA through:

• Undertaking Social Surveys (particularly to ascertain the views of poverty, minority and women’s groups) ; details of these surveys are provided in Volume 2 of this report.

• Providing results of the study on a project wide web site; as of yet these results are restricted to the participants within the study.

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5.3.3.5. ESTABLISHING EFFECTIVE INFORMATION SHARING SYSTEM

Information centre should be set up to collect and structure water quantity & water quality data, and archive corresponding reports. In order to be easy to collect, clean up and gather data, provincial departments shall provide relative data as required. Methodological and formatting harmonization should be facilitated by the Water Resources Protection Bureau.

5.3.3.6. PLANNING AND OPTIMIZATION OF MONITORING STATIONS IN RIVER BASIN

The planning of the monitoring network managed by water resources and environmental protection institutions shall be implemented in cooperation with the Songliao Water Basin Water Quality& Water Pollution Control Leading Group. Such cooperation should ensure that the water quality and quantity monitoring provides adequate information for building up the river basin diagnosis, for evaluating the performance of the river basin actions regarding the river basin objectives. The monitoring network of both sides shall be integrated to improve the overall efficiency of monitoring network and to reduce the operation cost. • The two water quality monitoring networks could be unified under one department (perhaps from the environmental protection administration) and the functions of each monitoring station should be clearly stipulated; • The water quantity monitoring could fall under the full responsibility of the MWR; • The network of stations could be designed for matching with the water functional zones, for optimization of the scheme; • To strengthen the collaboration of monitoring stations (especially in terms of protocols and schedule of sampling) for upstream / downstream analysis of the evolution of water quality; • To enhance the monitoring capacity especially for accident emergency and to prepare the related emergency response; This could be done by developing momentary automatic online and mobile monitoring stations. • To reinforce the capacity building of the staff in charge of monitoring stations and increase finance budget, so as to increase the frequency of monitoring of main sections；

5.3.4. STRENGTHENING CAPACITY BUILDING

It could be relevant to host high level workshops in Songhua River Basin on water quality and water environmental management attended by principal officers of local governments in charge of water resource protection and water environment management.The purpose would be to improve their overall decision-making capacity in water resource protection and water environment management. Seminars on enforcing water and environmental laws, on water quality monitoring and pollution control planning could be organised for law enforcing officers, monitoring personnel and planning personnel of the Office.. Selected people could partipcate to study tours in China and abroad. Through investigations and study, participants could understand the advanced experience and lessons learnt in water quality protection and water environment in China and other countries, so that this helps their work in the future. For identifying the existing problems in water quality and preparing the diagnosis, experts could be gathered to hold symposiums on specific topics. Through symposiums, the participants will exchange ideas, enhance their understanding, develop a common language and improve their capacity.

For enhancing law enforcement, mobile supervision vehicles and monitoring equipments could be made available to relevant authorities. Geographic Information System could also be introduced for better spatial analysis. Remote sensing technology and computer models could also be used to better forecast the water quality changes (for example when planning pollution reduction activities). .

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5.3.5. INCREASING THE EXPENDITURE AND INVESTMENT

Channels should be diversified for funding water resources protection and water pollution control measures. Suggestions are described hereunder:

5.3.5.1. TO SET UP BASIN WATER RESOURCE PROTECTION AND WATER POLLUTION CONTROL FUND

To support the work of Leading Group and Water Resource Protection Bureau, basin water resources protection and pollution control fund shall be established. The initial fund could come from the central government and the provincial governments of Jilin, Heilongjiang and Inner Mongolia. The initial scale and distribution could be based on the surface contributing to the Songhua River Basin or the population in the basin.. In the future, certain proportion of the revenue of water resources fee and waster water discharging fee could be used to input in the fund. The leading group will proposed a proportion for approval, but surely should no be less than 1% of the revenue collected. The scheme hereunder provides indicative quantity of funds from different oragnisations:

FIGURE 5-2: RECOMMENDED PARTNERS OF THE RIVER BASIN BOARD FOR THE SONGHUA RIVER SYSTEM

Legal Base: Agreement for River Basin Board for Water Secretariat for SRBC regional cooperation in the Management and Pollution Initial Budget: Songhua River Basin Control 6 million RMB

Jilin Province Budget Contribution: 1 million RMB Central Government PRC

Heliongjiang Province Budget Contribution: 1 million RMB Ministry of Water Resources MWR Budget Contribution: 1 million RMB Inner Mongolia A. R. Budget Contribution: 1 million RMB State Environmental Protection Administration – SEPA Budget Contribution: 1 million RMB

The scope of use of this fund should include water resources management, water pollution control, capacity building in law enforcement, monitoring, planning information dissemination and capacity building of sub river basins organisations.. This fund should mainly focus on funding or subsidising key actions that will have lever effects on the water quality of the Songhua River Basin. The procedure for spending this fund could be based on the following principle:

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TABLE 5-3: EXAMPLE LEVELS OF SUBSIDY AS PART OF A RIVER BASIN FUND

Type of Strategies Level of subvention 1. Development of treatment plants for urban wastewater 20% 2. Rehabilitation of sewerage pipe networks 30% 3. Improvement of the process of an industry to reduce the amount of pollutants 10 to 20% wasted 4. Improvement of the drinking water supply treatment plant 10 % 5. Improvement of agricultural practices to reduce diffuse pollution 5 % Etc.

At this stage, the masterplan stands as a policy and strategic document which is shared with all the stakeholders of the basin.

The 5-year programme. Every five year, the Office facilitates the production of a 5-year programme that will include the priority actions to be taken towards the achievement of the objectives of the Masterplan. To do so, the Office contacts stakeholders identified to have the activities the most harmful to the basin or having the mission to implement elements of the strategies proposed in the Masterplan in order to discuss the actions that could be implemented. The national or river basin subsidies could be used as an incentive for getting their moral and financial commitments. Being aware of the level of subsidies they can expect, some users might also take the initiatives to send themselves their requests for some actions to be subsided.

The cost of each proposed action is also estimated. In case, the available budget of one stakeholder added to the planned subsidy do not cover the whole cost of the activity, the stakeholder could also make requests to other external subsidies (from the local, regional or national authorities) for covering the remaining part. It has to be noted that willingness of the stakeholders to participate in this process (and reduce their pollution emission) highly depends on the efficiency and the reprimanding level of the pollution control system.

All proposed actions would then be gathered by the office in the format of a 5-year programme which is then approved by the river basin board and widely distributed to the stakeholders. At this stage, this could be presented at national level as part of the 5 year plan.

Annual plan. Each year a multi-criteria analysis is implemented on the actions of the 5-year programme that were no yet implemented in order to identify the priority actions to be implemented the coming year and according to the available budget. Cost-benefit analysis could also be implemented for supporting the selection of the actions.

5.3.5.2. INCREASE PUBLIC FUND BUDGET SUPPORTING WATER RESOURCES MANAGEMENT AND ENVIRONMENTAL PROTECTION

The central government shall support the key management projects identified by the river basin management process. As described here above, applications to the national budget could be organised on a 5 year or annual basis for the projects selects in the action plans. The same principle could applied for provincial and municipal budgets The fund for operation of the Office and the Board shall be included in the budget of central and regional stakeholders.

5.3.5.3. MEASURES TO ENCOURAGE DIVERSIFIED INVESTMENT FOR WATER ENVIRONMENTAL PROTECTION

Preferential policies on funding, investment, tax, import & export are needed to support water management and to attract funds in projects for water pollution control. Adequate credit guarantee by governments, and arranging good government payback scheme, could build up this kind of tools. A better intermediary role of commercial banks is suggested to make an active use of bond and security market to attract business, private and international funds.

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5.3.5.4. PROMOTING MARKETIZATION OF MUNICIPAL WATER SUPPLY AND WASTEWATER TREATMENT SERVICES

The charging rates of water supply services and wastewater treatment should be increased. The municipalities could differentiate charging rates according to their own economic and social situations and operation costs . At the same time, policies for subsidizing the disadvantage groups to ensure they have fair status could be developed. The collection of wastewater treatment charge shall be ensured and transferred to the companies operating the wastewater treatment plants.

Marketization of municipal wastewater treatment plants should be promoted during construction and operation; BOTand other delegation modes could be introduced to attract private funds for development and operation of municipal water supply and wastewater collection and treatment. This could be fixed in form of contracts.

Independent auditing and benchmarking of the services should be implemented for ensuring good service delivery under contractual and environmental standards.

5.3.5.5. IMPROVE EFFICIENT USE OF WATER RESOURCE MANAGEMENT AND ENVIRONMENTAL PROTECTION FUNDS BY THE GOVERNMENT

Assessment of the projects after completion is needed to find out the potential problems and draw up the successful experiences. Fund allocation might happen to be suspended for the failing projects and strict penalty shall be applied.

Publicity and raising awareness should be enhanced for enterprises so that they understand the deep rationale of laws and regulations as well as the above described river basin management system. Enforcement of laws and sustained press will guarantee the regular operation of pollution control facilities in the enterprises and improve the efficient use of pollution control fund.

As a conclusion and summary of the proposed recommendations, the following policy matrix has been developed on the basis of seven principles accepted to underpin best practice in water policy:

1. Promote a National Focus 2. Foster the integrated management of water resources. 3. Improve and expand the delivery of water services. 4. Foster the conservation of water and increase system efficiencies. 5. Promote regional cooperation 6. Fostering participation 7. Improve governance

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TABLE 5-4: POLICY MATRIX Policy and Rationale Actions to be Taken Time Frame Remarks Institutional Priorities 1. Promote a National Effective national water policies, 1.1: Analysis of the lessons learnt from the existing projects, 2006-2008 These Focus water laws, and sector coordination river basin initiatives and actions for water quality and pollution recommendation arrangements are developed at control in particular ADB Project Trans-jurisdictional Water s go beyond the national level for supporting Water Environment Management, China and to EU WFD general scope of Quality and Pollution Control this project, but Management. The national focus will 1.2: Preparation of a national policy paper on “Water Quality & represent likely enhance harmonization of the water Pollution Control” and on “River Basin Management” in 2007-2008 future directions management approach and promote coordination with the Environmental and Water Resources to be taken by exchange of experience and lessons Authorities as well as with the existing river basin organizations. the PRC in the learnt between river basins. realm of river 1.3: Distribution of water quality management responsibilities 2008 basin Strengthened institutional capacities between state and regional authorities and other water management of the Environmental and Water stakeholders. Avoid overlapping functions (such as for water Resources national authorities quality monitoring between SEPA and the MWR) support river basin organizations. 2008 – 2010 1.4: Development of appropriate training and capacity building of the civil servants of Environmental, Water Resources and Information can be structured and other water and health related national organizations. centralized at national level towards effective information management 1.5: Development of an effective national network of water 2008 and sharing of data. quality and pollution control data including methodological documents, database and GIS layers. A national action agenda provides opportunity for anticipated funding 1.6: Preparation of a national action plan (5 year programme) for river basin and water quality for implementing the national policy. 2009-2010 management and for pollution control. 1.7: To prepare a specific policy paper on the impact of water management for the poor. Best practices are gathered in a legal 2007 National policies can develop the national document. directives and legal framework for giving special attention to the poor communities.

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Provinces 2002 integrated – Harmonisation of Planning Documents at the SRB Level planning Tenth FYP

2005-2006 Proposals made – Development of a SRB water quality assessment as part of this TA; requires further follow up

2005-2006 Unique maps of – Development of a SRB water quality information centre water quality prepared by TA; raw data requires further analysis

2007-2008

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Policy and Rationale Actions to be Taken Time Frame Remarks Institutional Priorities 2.2: Provide the SRSPLG with a legislative mandate enacted at 2006-2008 Strengthening of both State and Provincial Level. Strengthen the role and the existing number of stakeholders’ representatives in the Existing organisations SRSPLG as river basin board and validate the SWRPB as its executing river basin agency. Strengthen the role of the Leading Group in SRSPLG in the Provincial Administration by forming Provincial Jilin already SRB Leading Groups formed in May 2005 2.3: Prepare effective and participatory procedures for 2007-2010 developing the Songhua River Basin Masterplan including the diagnosis, the definition of objectives and appropriate strategies for reaching these objectives. The objectives will include water quality objectives. To allow time and process for administrative and private sector participation.

2.4: Prepare the 12th 5 year river basin action plan based on the masterplan and focusing on the priority measures. 2009-2010

2.5 Joint management of the river basin transferred to 2011-2015 integrated management and rover basin commission

3. Improve and expand Improving water services such as 3.1: Prepare detailed funding procedures for the institutions 2008 New Policy the delivery of water water supply, sanitation, irrigation responsible for the tasks detailed under action 1.3. Initiative services. and drainage, will enhance the well being of Chinese inhabitants and will 3.3: Effective river basin funds might be raised (River Basin 2007 support the economic development. Fee) or made available (from National or regional Budgets) to the River Basin Board for funding (or subsidising) the priority Readiness to pay for the water actions plan. Special effort should be made to fund or subsidise services might then be enhanced. the actions that tackle the main issues of the basin. River basin fee could also be introduced for this purpose. Private sector participation and public-private partnerships may 3.4: Create a favourable legal framework environment for 2007 emphasize competition for a good promoting the efficiency of water supply and sanitation services. service. Equity in access to water for Among others, private participation or delegation of services to the poor and underserved should be private operators could be facilitated by the development of promoted as a social target. transparent bidding procedures for the delegation of public services

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Policy and Rationale Actions to be Taken Time Frame Remarks Institutional Priorities

3.5: Develop mechanisms for financing and operation of water/wastewater services for small/poorer communities 2007

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A prerequisite to regional cooperation could be that the national river basin management systems are effective in each country.

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Policy and Rationale Actions to be Taken Time Frame Remarks Institutional Priorities

6.3: In the long term, transform the River Basin Board in a real 2011-2012 River Basin Council where all main river basin stakeholders are represented.

7.4: Prepare appropriate training especially for local agencies and institutions that lack some human resources and equipment. 2006-2007

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