for example by shutting down overcapacity, and
these actions tend to be taken by local government. Technically speaking, these measures do
not have a legal basis; their main purpose is to
implement government policy.
China’s energy law enforcement is decentralised and spread among different levels of
government and departments. Enforcement is
mainly the responsibility of the authority for
energy policymaking, regulation and administration. The right to enforce energy law relating
to the economy is decentralised to the National
Development and Reform Commission and the
National Energy Administration; and the right to
enforce energy law with regard to society is with
the Ministry of Environmental Protection, as well
as those authorities responsible for quality and
safe production. The enforcement of energy law
also involves the relevant agencies of local
government. China’s energy and environmental
law enforcement are separate, especially in the
upstream and midstream energy sectors.
China lacks personnel and expertise in its
energy law enforcement force, especially at
grassroots-level energy administration, where
enforcement teams are often too small and lack
professionalism and independence. This results
in incomplete or slack enforcement, no deterrence for severe violations or only minor penalties for infringements, rules and regulations that
are ignored, and an absence of regulation of
enforcement institutions.
Energy law enforcement is not carried out on
a regular basis, and there is a severe lack of
enforcement while activities are taking place.
Instead, China’s energy law enforcement is limited to unannounced or scheduled inspections
and the post hoc results of energy activities.
At the same time, punishments for activities
that break the energy laws are inadequate. China’s energy law enforcement focuses more on
correcting behaviour, and the punishments for
violations tend to be light. In the economic
enforcement field, the penalty for violating fair
competition is far less than the illegal profits that
may have been made. In the social enforcement
field, the excessively light punishments for
non-compliant emissions are far lower than the
cost of controlling those emissions.
(3) Poor coordination between the energy
legislation system and energy reform
The slow development of energy legislation has
hindered energy system reform. Some of China’s
key energy laws were developed in the early
years and not amended for a long time, so they
are poorly adapted to the requirements of modern
energy development. Held back by the constraints of these energy laws, reform at different
levels of the energy industry has achieved only
limited improvement of the energy system.
Despite local successes, the ideal situation, in
which energy legislation is aligned with energy
reform, has not been realised, and so the reforms
have had no effective legal basis.
The values underlying some energy laws are
not aligned with the direction of energy system
reform. From the market’s perspective, some of
China’s existing energy laws were based on a
guiding principle of “meeting demand with sufficient supply”, and this clear supply-oriented
bias makes the laws increasingly ill-suited for
market-oriented energy supply and demand.
From the government’s perspective, the existing
energy laws and regulations are unclear regarding the roles, rights and responsibilities of the
government, and contain only very limited
descriptions of the relationship between the
government’s functions (including planning,
supervision and regulation) and the market.
The lack of clear definitions of rights and
responsibilities in the energy laws results in
energy system reforms lacking a legal basis.
Specifically, government bodies in the energy
sector do not have clear powers that they can use
to act, and energy market participants do not have
clear descriptions of their rights and responsibilities. These gaps stifle effective planning, operation and regulation in these natural monopolies.
426
S. Yaodong and A. Gillespie
these actions tend to be taken by local government. Technically speaking, these measures do
not have a legal basis; their main purpose is to
implement government policy.
China’s energy law enforcement is decentralised and spread among different levels of
government and departments. Enforcement is
mainly the responsibility of the authority for
energy policymaking, regulation and administration. The right to enforce energy law relating
to the economy is decentralised to the National
Development and Reform Commission and the
National Energy Administration; and the right to
enforce energy law with regard to society is with
the Ministry of Environmental Protection, as well
as those authorities responsible for quality and
safe production. The enforcement of energy law
also involves the relevant agencies of local
government. China’s energy and environmental
law enforcement are separate, especially in the
upstream and midstream energy sectors.
China lacks personnel and expertise in its
energy law enforcement force, especially at
grassroots-level energy administration, where
enforcement teams are often too small and lack
professionalism and independence. This results
in incomplete or slack enforcement, no deterrence for severe violations or only minor penalties for infringements, rules and regulations that
are ignored, and an absence of regulation of
enforcement institutions.
Energy law enforcement is not carried out on
a regular basis, and there is a severe lack of
enforcement while activities are taking place.
Instead, China’s energy law enforcement is limited to unannounced or scheduled inspections
and the post hoc results of energy activities.
At the same time, punishments for activities
that break the energy laws are inadequate. China’s energy law enforcement focuses more on
correcting behaviour, and the punishments for
violations tend to be light. In the economic
enforcement field, the penalty for violating fair
competition is far less than the illegal profits that
may have been made. In the social enforcement
field, the excessively light punishments for
non-compliant emissions are far lower than the
cost of controlling those emissions.
(3) Poor coordination between the energy
legislation system and energy reform
The slow development of energy legislation has
hindered energy system reform. Some of China’s
key energy laws were developed in the early
years and not amended for a long time, so they
are poorly adapted to the requirements of modern
energy development. Held back by the constraints of these energy laws, reform at different
levels of the energy industry has achieved only
limited improvement of the energy system.
Despite local successes, the ideal situation, in
which energy legislation is aligned with energy
reform, has not been realised, and so the reforms
have had no effective legal basis.
The values underlying some energy laws are
not aligned with the direction of energy system
reform. From the market’s perspective, some of
China’s existing energy laws were based on a
guiding principle of “meeting demand with sufficient supply”, and this clear supply-oriented
bias makes the laws increasingly ill-suited for
market-oriented energy supply and demand.
From the government’s perspective, the existing
energy laws and regulations are unclear regarding the roles, rights and responsibilities of the
government, and contain only very limited
descriptions of the relationship between the
government’s functions (including planning,
supervision and regulation) and the market.
The lack of clear definitions of rights and
responsibilities in the energy laws results in
energy system reforms lacking a legal basis.
Specifically, government bodies in the energy
sector do not have clear powers that they can use
to act, and energy market participants do not have
clear descriptions of their rights and responsibilities. These gaps stifle effective planning, operation and regulation in these natural monopolies.
426
S. Yaodong and A. Gillespie