(3) Legal supervision and compliance in the
energy sector is still at an early stage
The development of a judicial system for energy
law is just beginning. Due to the long-standing
pattern of administrative enforcement, energy
cases resolved by the judicial system are rare,
and the final decision tends to be one of administrative action.
Energy law compliance currently relies more
on self-discipline. The development of a system
requiring compliance with energy law is still at
an early stage and the existing self-governing
industry organisations continue to play an
important role.
Legal supervision is still in its infancy. The
activities of non-governmental organisations play
a role, but the development of a consistent legal
supervisory system still has a long way to go.
3.1.2 Analysis of Existing Problems
In general, the inconsistency and lack of coordination in China’s energy law and regulatory
system need to be addressed. Problems such as
dependency on administrative enforcement, a
lack of judicial practices, inadequate punishment
and slack law enforcement exist. In addition,
poor coordination between the energy legislation
system and energy reform is set to become a
major barrier to China’s energy revolution.
(1) Current problems in China’s energy law
and regulatory system
The fact that a fundamental energy law and
specific laws for key energy sectors have been
lacking for a long time has impeded the sustainable development of China’s energy industry.
The Energy Law of the People’s Republic of
China (PRC) should be the foundation of the
energy industry and the bedrock of the entire
energy legislative system. Currently, however,
the Energy Law of the PRC is in draft form only.
At the same time, the long absence of laws in
key energy sectors has resulted in ineffective
non-law-based regulation of construction, management and operations. Currently, there are no
specific laws for the oil and gas sectors, or for
energy utilities and energy product marketing
and services.
Some regulations still bear the hallmarks of a
planned economy, and others are poorly adapted
to the needs of a market economy. For example,
the Electric Power Law of the PRC lacks rules
for electricity trading, power generation mechanisms and power system development. The Coal
Industry Law of the PRC has many provisions
that are ill-adapted to the current state of the coal
sector, and which need to be amended and
improved as soon as possible. In addition, China’s energy laws and regulations are excessively
based on principles and can be impractical. Many
energy laws and regulations do not have the
necessary support regulations for implementation. Their impracticality is due mainly to lack of
clarity on rights and responsibilities. It is, therefore, necessary to define the rights and responsibilities of government and market participants
in each part of the energy value chain. In addition, there are departmental regulations that are
clearly intended to suit the interests of the
department or authority concerned.
The provisions regarding specific services in
China’s energy industry are scattered among
different laws and administrative, local and
departmental regulations. As such, their effectiveness varies. In the absence of consistent
guidelines, differences between the laws and
regulations of different jurisdictions create
inconsistencies in regulating the same energy
services.
(2) Energy law enforcement is decentralised
and relies on administrative processes
Constrained by the energy legislation and
administrative system, China’s energy law
enforcement relies strongly on administrative
processes. Even in those areas of energy law
instituted since China’s reform and opening-up,
only rarely are energy issues resolved through
judicial channels. Energy issues with a clear law
enforcement basis and defined rights and
responsibilities are mainly resolved through
energy regulation (see below). Some policy goals
are realised through administrative enforcement,
Special Report 4: China’s Energy System Revolution
425
energy sector is still at an early stage
The development of a judicial system for energy
law is just beginning. Due to the long-standing
pattern of administrative enforcement, energy
cases resolved by the judicial system are rare,
and the final decision tends to be one of administrative action.
Energy law compliance currently relies more
on self-discipline. The development of a system
requiring compliance with energy law is still at
an early stage and the existing self-governing
industry organisations continue to play an
important role.
Legal supervision is still in its infancy. The
activities of non-governmental organisations play
a role, but the development of a consistent legal
supervisory system still has a long way to go.
3.1.2 Analysis of Existing Problems
In general, the inconsistency and lack of coordination in China’s energy law and regulatory
system need to be addressed. Problems such as
dependency on administrative enforcement, a
lack of judicial practices, inadequate punishment
and slack law enforcement exist. In addition,
poor coordination between the energy legislation
system and energy reform is set to become a
major barrier to China’s energy revolution.
(1) Current problems in China’s energy law
and regulatory system
The fact that a fundamental energy law and
specific laws for key energy sectors have been
lacking for a long time has impeded the sustainable development of China’s energy industry.
The Energy Law of the People’s Republic of
China (PRC) should be the foundation of the
energy industry and the bedrock of the entire
energy legislative system. Currently, however,
the Energy Law of the PRC is in draft form only.
At the same time, the long absence of laws in
key energy sectors has resulted in ineffective
non-law-based regulation of construction, management and operations. Currently, there are no
specific laws for the oil and gas sectors, or for
energy utilities and energy product marketing
and services.
Some regulations still bear the hallmarks of a
planned economy, and others are poorly adapted
to the needs of a market economy. For example,
the Electric Power Law of the PRC lacks rules
for electricity trading, power generation mechanisms and power system development. The Coal
Industry Law of the PRC has many provisions
that are ill-adapted to the current state of the coal
sector, and which need to be amended and
improved as soon as possible. In addition, China’s energy laws and regulations are excessively
based on principles and can be impractical. Many
energy laws and regulations do not have the
necessary support regulations for implementation. Their impracticality is due mainly to lack of
clarity on rights and responsibilities. It is, therefore, necessary to define the rights and responsibilities of government and market participants
in each part of the energy value chain. In addition, there are departmental regulations that are
clearly intended to suit the interests of the
department or authority concerned.
The provisions regarding specific services in
China’s energy industry are scattered among
different laws and administrative, local and
departmental regulations. As such, their effectiveness varies. In the absence of consistent
guidelines, differences between the laws and
regulations of different jurisdictions create
inconsistencies in regulating the same energy
services.
(2) Energy law enforcement is decentralised
and relies on administrative processes
Constrained by the energy legislation and
administrative system, China’s energy law
enforcement relies strongly on administrative
processes. Even in those areas of energy law
instituted since China’s reform and opening-up,
only rarely are energy issues resolved through
judicial channels. Energy issues with a clear law
enforcement basis and defined rights and
responsibilities are mainly resolved through
energy regulation (see below). Some policy goals
are realised through administrative enforcement,
Special Report 4: China’s Energy System Revolution
425