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U S-China La w Re vie w
Volume 5, Number 6, June 2008 (Serial Number 43)
Contents
Legal Communication
Is the erecting of barriers against foreign Sovereign Wealth Funds compatible with
international investment law? 1
Mathias Audit
General analysis and recommendations on China’s legal implementation mechanism for
wetland biodiversity conservation 9
WANG Rong, SHI Jun, YIN Hai-ping
The law and its interpretation do play a role in the elimination of xenophobia:
A South African case study 25
Hlako CHOMA
A study of NAFTA: Establishing a better dispute resolution mechanism under CEPA 32
MU Zi-yi
Towards a new paradigm of the right to self-determination in the world trading system 43
Muhammad Ya’kub Aiyub Kadir
Law Conference Information
Is the erecting of barriers against foreign Sovereign Wealth Funds
compatible with international investment law?
Mathias Audit
(University of Caen, France)
Abstract: The impact of overseas investments by Sovereign Wealth Funds (SWFs) is increasingly causing alarm in destination countries. Many western governments show high concern with SWFs investing in some of their strategic economic sectors, such as energy or high technologies. Consequently, several of these governments have issued new domestic rules to control and even cancel investments operated by SWFs, or are about to do so. The aim of this work is to assess the compatibility of these new legislations with international investment law.
Key words: Sovereign Wealth Funds; overseas investment; international investment; barriers; soft law option; hard law option
1. Introduction
In the 1990’s, no one could have foreseen that state-owned companies would become major players of globalization. Following the fall of the Berlin wall, their presence in international business transactions had been steadily decreasing. However, this trend has changed since the beginning of the Second Millennium. Since then, some states are again playing a role in the international economy. However, unlike during the Cold War era, these are not socialist states engaged in international trade with Western companies. Instead, we are seeing a genuine form of state capitalism by which some of them are using specific investment vehicles to invest assets in North American and European markets. Sovereign Wealth Funds (SWFs) represent this not-so-new trend of states involved in globalization.
Historically, the first SWFs are supposed to be the Kuwait Investment Authority and the Kiribati Revenue Equalisation Reserve Fund, which started in the 1950’s. But it is clear that the major impact of SWFs on global economy is much more recent.
Firstly, twenty new SWFs have been established since 2000, including twelve since 2005. Amongst the recent SWF owners are some major countries like Russia and China, whose geopolitical interests are much greater than those of traditional SWF owners like the Gulf countries. Moreover, new states are planning to create SWFs, like Brazil, Libya, Algeria, and Venezuela.
Secondly, SWFs have never been so wealthy and this is largely due to the origin of their financial resources. If some of them rely on their central banks’ reserves like China Investment Corporation, most of them draw their wealth from the exploitation of raw materials. Therefore, increase of their assets is proportional to the dizzying rise of oil and gas prices. In fact, oil’s incomes are supposed to represent two-thirds of the SWF’s assets, which have been evaluated in 2007 between 2,200 and 2,500 billions US Dollars1. A Morgan Stanley’s Report even
Mathias Audit, professor of law, University of Caen, France; research field: private law.
states that this amount could reach 12,000 billions US Dollars by 20152. Only speaking about the three richest SWFs, it is said that 875 billions US Dollars are at the Abu Dhabi Investment Authority’s disposal, while assets of Government of Singapore Investment Corporation and Government Pension Fund-Global from Norway are between 320 et 330 billions, respectively3. Therefore, the influence of SWFs on global economy is already very high and it is quite certain that it will be even greater in a very near future.
However, an essential aspect of SWFs’ functioning is that these abundant financial resources are not locally invested. Using SWFs, their governmental owners are investing in European and North American markets. Besides, placements are quite variable, ranging from acquisition of shares, via subscription of bonds, or other financial securities, and real estate. Some SWFs have even chosen to take stakes in hedge funds.
For the moment, financial analysts consider the impact of SWFs on global economy to be positive4. Especially during the recent financial crisis following weakness in the US housing sector (the so-called “subprime crisis”), several SWFs had been financially supporting some major western banks. In December 2007, Government of Singapore Investment Corporation had hence invested in the Swiss bank UBS, while at the same time China Investment Corporation was buying 9.9% stake in Morgan Stanley. In the meanwhile, City Group had announced that it would sell $7.5 billion of securities to the Abu Dhabi Investment Authority. As of February 2008, the Investment Authority from Qatar has also taken a participation in the capital of Credit Suisse.
But this positive impact does not place SWFs above all suspicions. Even if SWFs are proper legal persons, their assets come directly from their home governments’ resources. Therefore, the question of their independency arises. Regardless of the search of financial return, SWFs could be used by their home governments to achieve international policy goals. As such, host countries may frown upon SWFs’ investments on their soil5.
For example, a SWF taking equity stakes in strategic economic sectors of a Western country could be seen as a problem. It is obvious that the US Government would not accept that China Investment Corporation invest in the US military industry. For similar reasons, Germany does not want the new Russian SWF launched in February 2008 to invest in the German energy sector.
Hiding behind the investor, the presence of a foreign government whose interests are not purely economic or financial could always be suspected. Therefore, attendance of representatives of a foreign SWF at the board of any strategic company could be seen as undesirable. Taking a majority stake would be seen as even more problematic. Besides, it is not only defense, energy and high-tech industries that are susceptible of being negatively impacted by SWFs. As shown by the western reaction when Qatar’s SWF entered the capital of the London Stock Exchange, an equity stake in a purely financial sector may also raise strategic interests.
In fact, when SWFs are at stake, western countries face a dilemma. On the one hand, they do need SWF cash to energize their national economy again, especially after the subprime crisis. On the other hand, they fear that those foreign and sovereign investments hide geopolitical goals. Part 2 sets out that this somewhat schizophrenic attitude has led them to a radical strategy for regulating SWF investments. But if the legal response chosen by western states leads to the erection of barriers against SWFs’ investments, Part 3 argues that constraints imposed by international investment law have then to be taken into account. In Part 4, the paper concludes.
2 How big could Sovereign Wealth Funds be by 2015? Retrieved March 3, 2007, from: http:// www.morganstanley.com/views/
perspectives/ files/soverign_2.pdf.
3 Deutsche Bank Report: Sovereign Wealth Funds—State investment on the rise. Retrieved Sept. 10, 2007, from
http://www.dbresearch.com.
2. Choosing a legal response to SWFs
Facing what is viewed as a potential threat for strategic sectors of western economies, it is usually said that new legal rules are needed6. But these new rules could be of two different types. Two various categories of legal answers to SWFs are actually competing. The first one is also the smoothest: It consists on the issuing by international institutions of soft law principles to be acknowledged by SWFs (See Sect. 2.1). The second one is a much tougher response: some western countries want to adopt domestic law measures against SWFs’ investments in strategic economic sectors (See Sect. 2.2).
2.1 International soft law option
In October 2007, G7 Finance Ministers and Central Banks Governors met in Washington for the IMF/World Bank annual meeting. They did agree that SWFs became essential participants in the international finance system and moreover that G7 states economies can benefit from openness to SWFs’ investment flows, as shown during the subprime crisis. But they also stated that best practices for SWFs should be identified in areas such as institutional structure, risk management, transparency, and accountability. Therefore, participants have asked IMF, World Bank, and OECD to examine these issues and to make proposals on these matters7.
Following the G7 Finance Ministers request, these international economic institutions began to work on these matters, but from different point of view.
OECD is focusing on recipient countries’ policies toward investments from SWFs8. The general idea is to encourage states hosting those investments not to infringe liberalization of transnational capital movements. Therefore, OECD started to develop best practices whereby adhering governments will commit to the principle of non-discrimination in a sense that foreign investors are to be treated not less favorably than domestic investors in same situations; to the principle of transparency in a sense that information on restrictions on foreign investment should be accessible and, more generally speaking; to the principle of liberalization of capital movements.
IMF is also developing international principles in the field. But unlike OECD’s work in progress, IMF’s principles are not targeting recipient countries but the SWFs themselves. The international organisation is developing a SWF code of conduct. For this purpose, it has established an International Working Group (IWG) of Sovereign Wealth Funds that is to present a set of SWF principles by October 20089.
These principles will certainly include some basic governance and transparency standards to be applied to SWFs, likely to reassure countries hosting their investments. The overall aim of this future code of conduct is to enhance the transparency, predictability and accountability of SWFs’ investments. This requires obtaining greater clarity and insight into the governance of SWFs, and improving the quality of information they provide to markets and hosting countries on their size, investment objectives, strategies, and origin of resources10.
This idea of a code of conduct is spreading through other multilateral institutions. For a while, the EU
6 Jeffrey Garten. (Aug. 8, 2007). We need rules for sovereign funds. Financial Times; International investment of sovereign wealth
funds: Are new rules needed?. (Oct. 2007). OECD, Investment Newsletter.
7 Statement of G-7 Finance Ministers and Central Bank Governors. Retrieved from http://www.mof.go.jp/english/if/g7_071019.pdf.
8 See OECD, Sovereign Wealth Funds and recipient country policies. (April 4, 2008). Retrieved from http://www.oecd.org/dataoecd/
34/9/40408735.pdf.
9 See http://www.imf.org/external/np/sec/pr/2008/pr0897.htm.
10 E.M.Truman. Sovereign Wealth Funds: The need for greater transparency and accountability. Peterson Institute for International
Commission was engaged in the planning of an EU-wide law to regulate SWFs11. But, the EU Commission has recently changed its mind, moving to a soft law solution. In a communication on SWFs, it proposes a common EU approach to protect legitimate policy interests but “without falling into the trap of protectionism”12. For this purpose, the EU Commission vouches to support the multilateral work of the IMF.
The legal answer to SWFs, consisting in the adoption of principles listed in a code of conduct, seems to have gained a large approval. And it is clear that this soft law option has a major advantage: It will not frighten SWFs and divert their investments from Western economies. For the moment, the impact of SWFs on global economy has been beneficial, especially in Europe and North America. Several banks have been saved from disaster thanks to SWFs’ assets. Therefore, it is often argued that the legal environment should not be too coercive for state-owned funds investing off shore, which is the case with a code of conduct.
But for some governments, opting for a voluntary code of conduct for SWFs is inadequate, precisely because it is not sufficiently compulsory. Like soft Law in general, the implementation of best practices issued by international institutions will rely on the sole will of the government-owned funds. It will not be compulsory for SWFs to adopt these principles and moreover to comply with them. If a particular fund does not fulfil its commitments, it will not incur any legal sanctions, nor could it be sued.
This lack of possible legal enforcement is actually leading some states to another kind of answer to SWFs’ investments taken as potential threats. This other option lies in the adoption of domestic laws erecting barriers against states-controlled funds.
2.2 Domestic hard law option
In recent times, several governments have modified their investment national laws to increase control on foreign states or public entities investments. Their common aim is to block SWFs or more generally foreign public entities’ investments in strategic economic sectors.
For example, in December 2007, the Canadian government issued special guidelines under the Investment Canada Act 1985 (ICA) focusing on investments pursued by state-owned enterprises13. Essentially, the guidelines define them as enterprises owned or controlled directly or indirectly by a foreign government, which would include SWFs but also a national oil company, for example. According to the new guidelines, the government will notably examine adherence to Canadian standards of corporate governance. But above all, it will assess whether the state-owned enterprise will do business according to commercial dictates.
In February 2008, Australia has followed Canada’s footsteps. Pursuant to the Foreign Acquisitions and Takeovers Act 1975, Australia has adopted new guidelines for foreign governments investments on its territory14. Under the Act, the treasurer may prohibit investments that are deemed to be contrary to Australia’s “national interest”. In this context, he or she will particularly assess whether the investor’s operations are independent from the relevant foreign government.
The United States have also modified their legislation to exert a more efficient control on SWFs’ acquisitions.
11 See the following speech of Mr. P. Mandelson, Commissioner of the European Union for Trade: Europe’s openness and the
politics of globalization, The Alcuin Lecture, Cambridge, Feb. 8, 2008, at http://trade.ec.europa.eu/doclib/docs/2008/
february/tradoc_137739.pdf. See also: EC, Minutes of the 1811th meeting of the Commission held in Bruxelles (Berlaymont) on Wednesday 5 December 2007, PV(2007) 1811 final.
12 EC Communication, A common European approach to Sovereign Wealth Funds, Feb. 27, 2008, COM(2008) 115 final, at
http://ec.europa.eu/internal_market/finances/docs/sovereign_en.pdf.
13 See: http://www.ic.gc.ca/epic/site/ica-lic.nsf/en/lk00064e.html#state-owned.
In this country, it is the President who has authority to suspend or prohibit any foreign acquisition, merger or takeover of a US corporation that is determined to threaten the national security. But in 1988, the President delegated this responsibility to the Committee on Foreign Investment in the United States (CFIUS)15. Regarding foreign states investments, a 1993 regulation has required a specific investigation where the acquirer is controlled by or acting on behalf of a foreign government and the acquisition “could result in control of a person engaged in interstate commerce in the US that could affect the national security of the US”16.
US legislation was reinforced in July 2007, with the vote of the Foreign Investment and National Security Act. This new regulation, which became effective in October 2007, extends the scope of national security reviews to cover transactions involving critical infrastructure and energy, and requires a second-stage review investigation of most proposed acquisitions by state-owned companies17. On April 2008, the US Treasury Department released a draft of rule changes needed to implement this new law18.
The new US legislation regarding investments of foreign state-owned entities is still taking its course. It will shortly be joined by Germany, whereby new rules on this particular matter are on their way to being adopted.
Following statements of the German Chancellor, the Government has drafted a new bill focusing on foreign states-controlled investments. A first draft was issued in September 200719, but it has been modified since. The EU Commission has notified the German Government that a distinction must be drawn between foreign investment coming from other member states of the EU and foreign investments coming from non-EU states20. Consequently, foreign state-controlled investors from other EU member states have been finally excluded from the scope of the proposed regulation.
In its last version21, it plans to create a German equivalent of the US Committee on Foreign Investments (CFIUS) by establishing an interministerial commission with the power to review, and possibly veto, acquisitions by state-backed investment fund. Without prioritizing any specific sectors, acquisitions involving a stake in a German company of more than 25% will potentially come under scrutiny.
These new domestic legislations already adopted, or soon to be adopted, are obviously a protectionist response to the SWFs’ increasing financial power. This is quite striking at a time when free trade and open market have never been so widespread in the history of mankind.
But beyond this statement, they might be a parameter that governments willing to erect barriers against SWFs are disregarding. Adopting domestic protectionists laws might contradict some principles of international investment Law. There are constraints here that should be taken into account when adopting such new national rules.
3. Anticipating constraints of international investment law
A common measure included in all domestic laws examined above is that they entrust a particular authority with the power to suspend or prohibit foreign SWF investments. On the ground of standards defined by their
15 Section 5021 of the Omnibus Trade and Competitiveness Act of 1988 amended Section 721 of the Defense Production Act of 1950. 16 Section 837(a) of the National Defense Authorization Act for Fiscal Year 1993, called the “Byrd Amendment”, amending Section
721 of the Defense Production Act.
17 Available at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h556enr.txt.pdf. 18 Available at: http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=TREAS-DO-2008-0001. 19 Published in the German newspaper Süddeutsche Zeitung, Sept. 30, 2007.
20 Frankfurter Allgemeine, Jan. 10, 2008.
national rules, the Australian Treasurer or the American CFIUS, for example, will cancel an acquisition or a take-over carried out by a SWF. But an ICSD arbitration proceeding settled on the ground of international investment law is likely to challenge this particular decision taken by a national authority on the ground of a domestic law.
A protection of foreign investors is indeed organized by international investment law (See Sect. 3.1). But the question of the applicability of these standards to SWFs has to be answered. Because of their proximity with their home governments, their assimilation as foreign investors is questionable (See Sect. 3.2).
3.1 International protection of foreign investors
In principle, a state is not legally forced to admit foreign investments on its territory. There are no obligations of this kind under customary public international law. Even once the foreign investment has been let in, international customs only provides a very basic standard of protection22. But this is the case in which the host state did not ratified any treaty regarding foreign investments. Nowadays, such states hardly remain. Most of them have accepted multilateral or bilateral international instruments offering much greater protection to foreign investors.
Hence, since its creation, one of the main OECD’s missions is the development of investments between states through the liberalization of capital movements. Therefore, this international organization has developed international rules regarding investment policy. On this matter, the key OECD instruments are the OECD Code of Liberalization of Capital Movements, adopted in 1961, and the OECD Declaration on International Investment and Multinational Enterprises of 1976, as revised in 200023.
But in fact it is well known that major evolutions of foreign investors status are not due to multilateral instruments nowadays. Even if the idea of a global treaty on foreign investments is still possible24, it is bilateral treaties that today constitute the driving force of this evolution. One reason is that the number of bilateral investments treaties (BIT) has increased incredibly in the past decades. It is estimated that there are 2.500 BITs entered into force around the world. They have been concluded between developing countries and developed countries, but also between developed countries themselves25.
One of the main characteristics of BITs is that their provisions are often quite similar. Hence, all BITs provide standards of protection to foreign investors. For example, most of them require a fair and equitable treatment for foreign investments26. Very often, they also provide that host states should treat foreign investors and investments no less favorably than its own investors. This “national treatment” clause coexists very frequently with a “most favored nation” clause, by which the host state has to treat foreign investors coming from the other part of a relevant BIT as favorably as investors coming from a third state. Most BI Ts also provide foreign investors with a protection against arbitrary or discriminatory measures, as well as direct or indirect protection against expropriation enacted by the host states.
All these provisions for the beneficial of the foreign investors would have a very light effect on recipient country’s behavior if they were not accompanied by a judicial system for enforcing them. A fundamental aspect of
22 R. Dolzer, Ch. Schreuer. (2008). Principles of international investment law, p. 11.
23 S.Tully. (2001). The 2000 review of OECD guidelines for multinational enterprise. 50 ICLQ 394.
24 J.W. Salacuse.(2004). Toward a global treaty on foreign investment: The search for grand bargain. In: Arbitrating Foreign
Investment Disputes, P.51.
25 UNCTAD, Bilateral Investment Treaty 1995-2006: Trends in Investment Rulemaking (2007), at http://www.unctad.org/en/docs/
iteiia20065_en.pdf.
actual international investment law is the role played by arbitration as a method of dispute settlement between the investor and the host state. With arbitration proceedings, the investor has the benefit of an international remedy when a dispute occurs with the host state. Moreover, through the arbitration trial, the enforcement of the standards of protection settled by the BITs is much more effective.
These investment arbitrations may take place in front of various institutions, such as the International Chamber of Commerce (ICC) or the London Court of International Arbitration (LCIA). But most cases are brought to the International Centre for Settlement of Investment Disputes (ICSID) established by the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) signed in 1965 in Washington DC27.
Jurisdiction of ICSID requires an investment dispute of a legal nature between a state party to the ICSID Convention and a national of another state that is also a party to the convention. In addition, these two parties must have acknowledged ICSID jurisdiction. Especially, the consent of the host state to ICSID arbitration cannot be founded on its sole ratification of the Convention of Washington.
Traditionally, parties to the dispute gave their consent to ICSID arbitration in the contract concluded between them. A contract is concluded between a foreign investor and a state or a public entity of this state, whereby disputes arising between them will be submitted to ICSID arbitration. But this way of consenting to ICSID jurisdiction was quite restrictive. This explains that ICSID cases have remained very modest during the two first decades of its existence.
Things began to change when a second technique for the host state to give consent to ICSID arbitration arose. In fact, it has been considered that a state could give a general consent to it in a domestic law28 or, more frequently, in a BIT concluded with the investor’s state of origin29. This new solution has completely changed the nature of investment arbitration. It implies that any investor, even if he or she did not directly contract with the host state, can bring an ICSID arbitration proceeding against the latter. The condition is that the host state has given its consent to it, especially in a provision included in the BIT concluded with the country of origin of the investor30. The latter will accept this offer of arbitration by simply instituting proceeding.
Nowadays, most investment arbitration cases are based on this particular method of jurisdiction established through BITs. The remaining question is to determine if SWFs could have the opportunity to bring an ICSID arbitration proceeding against a particular state, which would have cancelled one of its investments.
3.2 Assimilation of SWFs as foreign investors
Many countries, which have adopted restric tive rules against SWFs or are on the way to adopting them, have concluded BITs with governments that own those funds. For example, the USA has signed with Bahrain a BIT on the 29th of September 1999, which entered into force on the 30th of May 2001. The USA also has concluded a BIT with Russia (17th June 1992). Whereas Australia has signed a BIT with China (11th July 1988), Canada has done the same with the Russian Federation (29th November 1989) and Venezuela (1st July 1996), and Germany with Bahrain (5th February 2007), Brazil (21 September 1995), China (1st December 2003), Qatar (14th June 1996) and Saudi Arabia (29th October 1996).
27 4 ILM 524 (1965).
28 First case: SPP v Egypt, Decision on Jurisdiction I, November 27, 1985, 3 ICSIDR
EP. 112.
29 First case: AAPL v Sri Lanka, Award, June 27, 1990, 4 ICSIDR
EP. 250.
30 J. Paulsson, Arbitration Without Privity, 2 ICSIDR
E V.FILJ 10, 238 (1995); E.Gaillard,L’arbitrage sur le fondement de traités de
All these BITs provide standards of protection for investors of each party on the territory of the other, such as fair and equitable treatment, most favored nation clause, or a protection against arbitrary and discriminatory measures. Moreover, many of them stipulate a provision whereby each participant states recognizes ICSID jurisdiction. Therefore, an essential point is to determine wherever a SWF could challenge a decision adopted by the Australian Treasurer, the American CFIUS, or the future German commission on foreign investments, for example, canceling one of its acquisition or take-over, on the basis of a BIT conclude by its country of origin. This kind of domestic decision could obviously be judged as being discriminatory or against the national treatment clause, for example.
At the least, the relevant SWF could wish to bring an arbitration proceeding against the host state on this legal basis. It is possible that the arbitration panel will not judge that the domestic measure contradicts one of the standards of protection mentioned in the BIT. But at least, the arbitrators will discuss this point and the host state will have to defend its position and the merit of its domestic rules taken against SWFs.
But this jurisdictional debate will only be able to take place before an ICSID arbitral tribunal if a SWF can effectively have the position of a foreign investor, as mentioned in BITs and in the ICSID Convention of Washington. This implies that this SWF could be considered as a separate entity from the foreign government owning it. Hence, if a SWF is seen as the government itself, the legal dispute arises between two states (the state owning the fund and the state hosting the investment). And as it has been stated in the Maffezini case, “the Center [ICSID] has no jurisdiction to arbitrate disputes between states”31.
For an ICSID arbitration tribunal to have jurisdiction over a dispute between a SWF and a state hosting its investment on the ground of a BIT concluded between the latter and the state from which the fund originates, the SWF should not be identified as its government of origin32. State-controlled entities are not necessarily excluded from the protection system settled by international investment law, as long as they act “in a commercial rather than in a governmental capacity.”33
For example, a state-owned bank investing abroad can benefit from a BIT’s provisions as long as its activities are similar to a private bank34. In fact, as it has been stated very early in the history of the Washington Convention, for the purposes of the ICSID system, a “government-owned corporation should not be disqualified as a ‘national of another Contracting State’ unless it is acting as an agent for the government or is discharging an essentially governmental function.”35
The fact that SWFs are controlled by foreign states does not preclude them from using the ICSID arbitration system, as well as their sources of financing also coming from the state. Regarding their activities, it is obvious that they are entirely similar to a private fund, and are not at all of a governmental nature.
(to be continued on Page 24)
31 Maffezini v Spain, Decision on Jurisdiction, January 25, 2000, 5 ICSIDR
EP.396, 434: “Just as the Center has no jurisdiction to
arbitrate disputes between two states, it also lacks jurisdiction between two private parties”.
32 Y. Nouvel, Les entités paraétatiques dans la jurisprudence du CIRDI. In: Le Contentieux Transnational Relatif À L’investissement
Nouveaux D veloppements,25(Ch. Leben ed., 2006).
33 R. Dolzer, Ch. Schreuer.(2008) . Principles of international investment law, p.46. 34 CSOB v Slovakia, Decision on Jurisdiction, May 24, 1999, 5 ICSIDR
EP. 335, par. 16-27.
35 A.Broches, The Convention on the Settlement of Investment Disputes between States and Nationals ofOther States, 331 Recueil
General analysis and recommendations on China’s legal implementation
mechanism for wetland biodiversity conservation
∗WANG Rong, SHI Jun, YIN Hai-ping
(China University of Political Science and Law, Beijing 100038, China)
Abstract: China has not formulated a comprehensive specific legislation on wetland conservation and wise use, however many laws and regulations are relevant to wetland conservation, such as Forest Law (1983), Law on Land Administration (1986). The dispersed multi-sectoral management model defined and the single resource element based management reflected in the existing legislation cannot meet the requirement for integrated wetland conservation and the needs to conserve the ecological function of wetlands. Also the major deficiencies of the existing legal implementation mechanism can be found in wetland conservation plan, public participation, operational and enforcement measures. Based on the problems, there should be provision on the responsibility of the forestry department to compile and implement wetland conservation plans, and its responsibility to cooperate with other relevant government agencies in planning. There should be specific or expanded provisions on the procedures and phases of public participation. In addition, there should be provision on litigation channels to expand the form of the public rights, and enabling mechanisms to safeguard the public rights. The improvement of relevant approaches should focus on the shift from administrative regulatory approaches towards multiple approaches combining administrative regulation, economic incentive and administrative supervision. The improvement on establishment of operational and enforcement authority should focus on the shift from substantial authorization towards both substantial and procedural authorization. There should be more specific and clear provision on the awarding measures, to fill the gaps of existing legislation and to strengthen the accountability of government agencies. In addition, this article gives specific recommendations on provisions on the systems of wetland conservation and legal implementation mechanism.
Key words: wetland conservation and wise use; public participation; wetland conservation plans
1. Introduction
To strengthen wetlands conservation, in 2004 the State Council issued the “Notice on Strengthening Wetlands Protection (Document No. 50, June 2004)” which emphasized the need to establish a comprehensive and cross-sectoral wetland conservation system through the revision of legislations, policies and investment mechanisms. The “Wetland Biodiversity Conservation and Sustainable Use” project jointly implemented by UNDP, GEF and the Chinese government responses to the call of the State Council and aims to mainstream
∗ This report is the achievement of China Wetland Biodiversity Conservation and Sustainable Use CPR/98/G32 Project.
WANG Rong (1972- ), female, Ph.D. of Law, associate professor of Institute of Law and Police, director of China Center for Law and Sustainable Development Research, China University of Political Science and Law; research fields: law and economics, environment law, resource law.
SHI Jun (1984- ), male, postgraduate of School of Civil, Commercial, and Economic Law, China University of Political Science and Law; research field: environment law.
wetlands biodiversity conservation into national, provincial and local government’s decision-making and routine practice.
This report includes four parts: the general assessment of the current law on wetland conservation, referring to the general introduction of legislation, basic features and problems; the general evaluation and reforming recommendations of implementation mechanism for the current law on wetland conservation; the concrete legal system and relevant clauses for the regulations of wetland conservation. Every legal system contains three parts: conception and means, base of current policies and laws and recommendation for concrete clauses. The forth part is evaluation made by experts and general introduction of the experts.
2. General assessment of China’s existing legislation related to wetland conservation
2.1 Overview of the existing legislation
China has not formulated a comprehensive specific legislation on wetland conservation and wise use, however many laws and regulations are relevant to wetland conservation. There are 18 major legislations related to wetland conservation.
2.2 Basic characteristics of the existing legislation on wetland conservation
(1) Some specific legislation has general requirements for wetland conservation. Before China signed up to the Ramsar Convention1 in the 1990s, wetland had not been considered in the Chinese legislation as a specific and integrated target of protection, not to mention specific conservation legislation on wetland. In the 1990s, some legislation has begun to adopt the concept of “wetland” and have considered it as an independent management unit. For example, Item 3 of Article 10 of the Nature Reserves Regulation2 provides that “those areas which are of special protection value, such as marine and costal areas, islands, wetland, internal water bodies, forests, grassland and deserts” shall be established as nature reserves. The newly revised Marine Environment Protection Law3 has not only specified the protection of “costal wetlands”, but also provided a detailed explanation in its supplementary provisions.
(2) A majority of specific legislations aiming at protecting a single resource of the wetland ecosystem have provided a comparatively clear management structure, rights and obligations for the protection of a single wetland ecological element. For instance, Land Administration Law4 has provision on “water surfaces for breeding aquatics”; Agriculture Law5 has provision on “grassland, mudflats and streams; Grassland Law6 has provision on “all grasslands”. These provisions, from the perspective of land, water and wildlife of wetland, appointed administrative authorities, established clear structure of rights and obligations and provided legal basis for the management and protection of these individual wetland elements.
2.3 Institutional arrangements defined in the existing legislation cannot meet the management needs of
1 The Convention on Wetlands, signed in Ramsar, Iran, in 1971, is an intergovernmental treaty which provides the framework for
national action and international cooperation for the conservation and wise use of wetlands and their resources.
2 Nature Reserves Regulation was enacted by state council, promulgated on October 9, 1994.
3 The Marine Environment Protection Law has been revised at the 13th Meeting of the Standing Committee of the Ninth National
People’s Congress on December 25, 1999, and promulgated its revised edition for implementation as of April 1, 2000.
4 Adopted at the 16th Meeting of the Standing Committee of the Sixth National People’s Congress on June 25, 1986, was amended
at the 5th Meeting of the Standing Committee of the Seventh National People’s Congress on December 29, 1988 and revised at the 4th Meeting of the Standing Committee of the Ninth National People’s Congress on August 29, 1998.
5 Adopted at the Second Meeting of the Standing Committee of the Eighth National People’s Congress on July 2, 1993, promulgated
by Order No. 6 of the President of the People’s Republic of China on July 2, 1993.
6 The Grassland Law was amended and adopted at the 31st Meeting of the Standing Committee of the Ninth National People’s
wetland conservation
Wetland is an ecosystem composed of various ecological elements such as land, water, flora, fauna and microorganisms. Wetland conservation must be conducted on the basis of a systematic and integrated management institutional framework. However, under the current legislative system, different administrative authorities manage different resources. Land, water, biological resources are managed respectively by agencies of land resources, forestry, fishery, water, marine, transportation, environment protection and health. Integrated conservation of wetland is hard to achieve due to the fact that these departments usually take actions based on their sectoral interests once conflicts arise between the single resource element and the integrated ecosystem.
2.4 The single resource element based management reflected in the existing legislation cannot meet the
requirement for integrated wetland conservation
As a special resource, wetland depends on the dynamic ecosystem which is formed through the interdependent linkage of its key factors (mainly refers to special types of water, soil, water-dependent or aquatic flora, fauna and microorganisms and associated water, light, heat and inorganic salt etc) to perform its function. The protection of a single resource element cannot achieve the integrated conservation of wetland. Many of the existing specialized legislations have not considered wetland as an independent and integrated protected target; on the contrary, these legislations were formulated on the basis of conserving and using each wetland element. In addition, provisions on wetland elements in these specific legislations are too general to meet unique requirements of the wetland ecosystem and wetland conservation. For instance, the pollutant discharge standard in the Water Pollution Prevention and Control Law7 will not bring obvious negative impacts to environment in general, however, for some vulnerable wetland ecosystem, for water that satisfied the standard could still be disastrous.
2.5 The existing legislation overemphasized the development and use of wetland’s economic functions
while the needs to conserve the ecological function of wetlands cannot be met
Some specialized legislation related to wetland resource elements mainly considered the utilization of separate resource elements from the economic perspective, but with little consideration on the value of the overall ecological function of the wetlands. Therefore, the legislation objective emphasizes the efficient development and utilization of resources of wetland rather than the conservation of wetlands. These specific legislations cannot protect the ecological functions of wetland, instead the overuse of wetland caused further degradation and damage to its ecological functions. For example, the provision on reclamation of wasteland in the Land Administration Law could lead to the decrease of wetland area.
3. General assessment and revision recommendations on China’s existing legal implementation mechanism related to wetland conservation
3.1 General assessment on China’s existing legal implementation mechanism related to wetland
biodiversity conservation
3.1.1 General assessment of the positive aspects in the existing legal implementation mechanism related to wetland biodiversity conservation
(1) General provisions related to the requirement on cross-sectoral cooperation in planning.
7 The revision of the Law of the People’s Republic of China on the Prevention and Control of Water Pollution was adopted at the
Basically, all the current legislation related to wetland conservation has general provisions on planning. The Water Law8, Water Pollution Prevention and Control Law, Environment Protection Law9 and Oceanic Environment Protection Law have all provided for general requirements on cross-sectoral cooperation in planning. For example, Article 17, 32 and 44 of the Water Law have required for the development of drainage basin comprehensive plan, water function zoning plans, and middle and long term water plans, and clearly stipulate that the planning shall be conducted by the water departments with joint efforts of other relevant departments. These provisions have laid the legal basis for cross-sectoral cooperation in the development of wetland conservation plans, and have also provided the legal linkage between different plans.
(2) The existing legislation has provided for operational and enforcement measures emphasizing the management of separate wetland resources .
From the perspective of the conservation and management of separate wetland resource element, the existing legislations have provided a series of operational and enforcement measures whose major form is administrative management, such as administrative permitting, monitoring, fee collection, function zoning, dispute settlement, etc. These provisions have laid a basis for the adoption of operational and enforcement measures in wetland conservation.
(3) The existing legislation has in principle provided provisions for public participation and the general rights and obligations of the public .
Some of the existing legislations have provisions for public participation in principle. For example, Article 1110and Article 2111of the Environment Impact Assessment Law12, Article 613 of the Environment Protection Law, Article 514 of the Water Pollution Prevention and Control Law.
These provisions have laid a basis and provided guidance for strengthening public participation, by specifying relevant public rights and obligations, and the enabling mechanism for safeguarding public interests and rights in wetland conservation.
(4) The existing legislation has provided for comparatively concrete legal responsibilities of the administrative counterparts (the parties regulated by the administrative departments), and has in principle provided for the requirement on rewarding.
All the existing legis lations have provided for comparatively concrete criminal, civil and administrative
8 Adopted at the 24th Meeting of the Standing Committee of the Sixth National People’s Congress and promulgated by Order No. 61
of the President of the People’s Republic of China on January 21, 1988, and effective as of July 1, 1988.
9 Adopted at the 11th Meeting of the Standing Committee of the Seventh National People’s Congress on December 26, 1989,
promulgated by Order No. 22 of the President of the People’s Republic of China on December 26, 1989, and effective on the date of promulgation.
10 Article 11: “ If the special plans may cause negative environmental impact and have direct impact on the environment rights and
interests of the public, the plan compilation departments should organize public hearings and studies or take other measures to solicit opinions from relevant working units, specialists and the public on the draft of the environment impact assessment report before the draft is submitted for approval, unless otherwise related to State stipulated secrets”.
11 Article 21: “ If the construction projects may cause significant negative environmental impact and involve the development of an
environment impact assessment report, the construction unit should organize public hearings or studies or take other measures to solicit opinions from relevant working units, specialists and the public before the drafted environment impact assessment report is submitted for approval, unless otherwise related to state stipulated secret. The environment impact assessment report submitted by the construction units should explain the reason on the adoption or non-adoption of the comments of the relevant working units, specialists and the public.”
12 Adopted at the 30th Meeting of the Standing Committee of the Ninth National People’s Congress and promulgated on October 28,
2002, and effective as of September 1, 2003.
13 Article 6: “ all working units and individuals should have the obligations to protect environment, and have the right to report and
prosecute against the working units and individuals that have polluted and damaged environment.”
14 Article 5: “ all working units and individuals shall have the responsibility to protect water environment, and have the right to
responsibilities for the violating acts of the administrative counterparts. For example, Chapter 5 of the Environment Protection Law has provided for a series of administrative responsibilities, such as warning, amercement, administrative penalty, administrative order to stop production or use, for reinstallment and use of environment protection facilities, for stop or close of business, and for treatment of pollution within a time limit, etc. Besides, civil responsibilities are stipulated for, such as compensation, elimination of danger and harm, etc. criminal responsibilities are also provided for in the event that serious damage to property or personnel is caused. A majority of existing legislation has in principle provided for the awarding measures. Such as Article 815 of the Environment Protection Law and Article 1116 of the Water Law. The above characteristics of existing legislation can facilitate to set up the priority targets for establishment of the awarding mechanism in wetland legislation
(5) The existing legislation has provided for economic measures for fee collection.
The economic measures stipulated in existing legislation are not diversified and mainly depend on fee collection. For example, the economic measures provide for in the Water Law, Environment Protection Law, Water Pollution Prevention and Control Law, Land Administration Law, and Fishery Law are basically collection of water resources fee, water fee, pollution emission fee, land use fee, value-added fishery resources protection fee, etc. These provisions, which protect wetland through market mechanisms, can be used as a reference for wetland legislation development in the future.
3.1.2 The major deficiencies of the existing legal implementation mechanism
(1) There is a lack of specific and clear provisions on the compilation and implementation of the wetland conservation plan; and there is a lack of specific and implementable provisions on cross-sectoral cooperation in the compilation and implementation process of wetland conservation plans and other wetland-related plans.
(2)The existing operational and enforcement measures have emphasized the use of administrative regulatory approaches while ignored the use of economic incentives; emphasized fee-collecting function but ignored management function; set forth substantial authority while ignored procedural authority; emphasized separate management of information while ignored integrated management of information.
The existing legislation has emphasized the role of administrative power in distribution and management of resources (including wetland resources), but ignored the basic role of market in terms of resources distribution (including wetland resources). For example, current legislation has provided for that the ownership of all the wetland resource elements, such as forest, water and wild animals and plants belongs to the State and shall not be transferred, and even denied the basic role of markets in resource distribution. Excessive stress on the natural attributes of the wetland resource elements but denial of their attributes as resource assets have resulted in serious waste and excessive exploitation of such resource assets. Therefore, the true value of wetland as natural resources has not been fully realized. For example, in general, the Environment Protection Law, Water Law and Land Administration Law have not touched at all on the financial investment and market incentive mechanisms, including financial assistance, credit support, economic favorableness, payment for ecological services, etc. Besides, the existing legislation has put too much attention on setting forth substantial power for operational and enforcement measures, while ignoring setting forth relevant procedural power. For example, the Water Law and
15 Article 8: “ the people’s government shall award the working units and individuals that have made distinct contribution to
protection and improvement of environment.”
16 Article 11: “ the people’s government shall award the working units and individuals that have made distinct achievement in water
Water Pollution Prevention and Control Law have respectively provided for the power of the water and environment departments for water quality monitoring, but do not mention the monitoring criteria and designated procedure. Another issue is that the exiting legislation attaches a lot of importance to the element-based record keeping of the various wetland elements, as well as sectoral management of monitoring information, while overlooks the requirement of integrated management on the information resources of wetland conservation, and the cross-sectoral sharing of monitoring information and resources. Fee collection function could bring some economic benefit to some agencies; therefore, in their management practice they usually put more emphasis on collecting fees instead of other management responsibilities.
(3) There is a lack of clear and specific provisions on public participation, public rights, and enabling mechanisms for public rights.
The existing legislation has only generally provided for public participation. There is no specific provision on how the public should participate; what kind of participation right the public should have; how to ensure the adoption of public opinions; what kind of obligations the administrative departments should have; what kind of punishment should be imposed against breach of such obligations; what incentive measures should be establish, etc. Meanwhile, the scope of public participation is too limited. Attention has been given to public participation in administrative decision making process, while public participation in public management and public service of government is ignored. Attention has been given to the participation of individual citizens, but the role of non-governmental organizations is not put into full play. A majority of the existing legislation has provided for that the public should have the right to report and prosecute against the acts that cause damage to environment, ecosystem or wetlands, but has not specify the procedures on how to exercise and guarantee the exercise of such a right. The existing legislation has emphasized the administrative power of the State on wetland resource elements, but has ignored the property right of the citizens, legal entities and other organizations on those wetland resource elements; therefore, it is difficult to use the basic market mechanism as the internal incentives and restriction mechanisms for wetland conservation for the whole society.
(4) The awarding measures in the existing legislation are not feasible. Besides, there is a gap of penalty against certain types of violating acts, or the existing penalty mechanism has been too light so as to cause the phenomenon of “high cost for law compliance, and low cost for law violation”. In addition, there is no provision that specifies criminal liability for bringing harm to wetlands. The provisions on responsibilities and accountability of government and government agencies are absent or comparatively weak.
3.2 General recommendations on reform of the existing legal implementation mechanism
(1) There should be provision on the responsibility of the forestry department to compile and implement wetland conservation plans, and its responsibility to cooperate with other relevant government agencies in planning. Meanwhile, there should be specific measures on the implementation plan development criteria and procedure, implementation effect assessment criteria and procedures, awarding measures, cross-sectoral cooperation procedures, rights, obligations and legal responsibilities related to information feedbacks, requirement on the implementation plan time bounds, contents, measures and accountabilities of the local governments.
integration should be achieved through sharing of information and resources of the current administrative framework by breaking the restrictive management division on individual resource elements to satisfy the need for wetland conservation.
(3) There should be specific or expanded provisions on the procedures and phases of public participation. In addition, there should be provision on litigation channels to expand the form of the public rights, and enabling mechanisms to safeguard the public rights. The clarity on procedures should include the clarity on the right of public participation, right to know and obtain relief, as well as clarity on the obligations of the government to disclose information, respond to public opinions, establish incentive mechanism for public participation, legal accountabilities, etc. Public participation is to expand from the current single focus on the administrative decision-making phase to the administrative management process. The expansion on the subject of public participation is to focus on encouraging the involvement of non-governmental organizations in the various phases of public participation, and promoting their role in assisting government agencies to provide public services. The current participation form of reporting and prosecuting against violating acts should be expanded to include the establishment of the public interest litigation system in China. The strengthening of enabling mechanisms for public participation should emphasize on the establishment of the system of payment for ecologic al services by the government, which is the trustee of ecological interest.
(4)There should be more specific and clear provision on the awarding measures, to fill the gaps of existing legislation and to strengthen the accountability of government agencies. There should be further clarity on the award criteria, conditions, procedures, amount and methods. There should also be provision on the criminal liabilities against the acts that cause serious damage to wetlands. The accountability system of government officials should also be further enhanced. The current legislative framework based on the legal responsibilities of individual officials should be reformed to include the legal responsibilities of the government and government agencies.
4. Specific recommendations on provisions on the legal implementation mechanism in the Regulation on Wetland Conservation
4.1 Wetland planning system
4.1.1 Concept and significance
Wetland planning refers to the system that defines the use of wetland resources and provides protection to wetland environment through the development of wetland use and conservation plans by the wetland management authority that regulates the different approaches to use wetland resources by taking into considerations of the characteristics of wetland resources and ecology, the social, economic and ecological implications to wetlands, and the development needs of society, economy, ecology and environment at different phases.
Through the wetland planning system, the efficiency of wetland use can be put into full play, and comprehensive protection of wetland ecosystem can be implemented to effectively mitigate wasting of wetland resources and wetland ecological damage.
4.1.2 Suggested provisions related to wetland planning in Wetland Conservation Regulation
Article n: People’s Governments at various levels shall organize the compilation and implementation of wetland plans.
Council in conjunction with departments on land and resources, water resources, environmental protection, and agriculture (fishery). Plans shall be subject to approval by the State Council before implementation.
Local wetland plans shall be developed by the forestry department of the People’s Government at and above the county level in conjunction with departments on land and resources, water resources, environmental protection, and agriculture (fishery). Plans shall be subject to approval by the people’s government at the same level before implementation.
The administrative department on forestry in people’s governments at and above the county level shall in the development of wetland plans shall solicit comments from relevant specialists and stakeholders, and conduct environmental impact assessment and ecological risk assessment of wetlands. The environmental impact assessment report and ecological risk assessment report shall be submitted to the relevant supervision agencies for approval.
Wetland plans shall be developed on a scientific basis and based on wetland types, distribution, ecological functions, land resources, water resources, vegetation and wildlife resources. Wetland plans shall include guiding principles, protection objectives and implementation timeframe, implementation measures etc.
Wetland planning shall be linked with integrated planning on land, water, sea and environmental protection. Plans for development and utilization of various nature resources shall be linked with wetland protection plans.
Article n+1: Wetland plans, approved in accordance with the legal procedure, shall have legal effects and must be implemented by relevant administrative authorities to jointly achieve the objects and measures prescribed in the plans.
The administrative department on forestry in people’s governments at and above the county level shall develop implement plans for wetland conservation based on the approved wetland plans.
The implementation plan shall clarify wetland conservation priority projects and enabling environment and shall be implemented after the approval of the people’s governments of the same level.
Where a wetland plan needs to be revised due to changes in the scale, distribution and condition of wetland, the amendment and revision shall be submitted and approved by the original authority that approves the plan. Where approval is not issued, any units and individual shall not change the wetland plan.
4.2 Payment for use of important wetlands and compensation for changing the land use of important
wetlands
4.2.1 Concept and significance
Payment for use of important wetland refers to the fact that a cost must be paid by wetland users based on the economic, social and ecological values of the wetlands of importance. Compensation for changing the use of important wetlands for other land use purposes mainly refers to where a government, a working units or an individual lawfully use or confiscate wetlands for other purposes, the loss of environmental functions of important wetland due to the changed land use shall be indemnified or a fee for damaging wetlands should be collected. The economic compensation for changing the use of important wetlands for other purposes and the payment for use of important wetlands reflect two aspects of the same issue.
4.2.2 Suggested provisions on payment for wetland use and compensation for the use of wetland for other purposes
Article n: The State shall apply a system of control and balance on the total amount of important wetlands. The provinces, autonomous regions and municipalities reclaimed or used important wetland as land for construction or land for agriculture shall, rehabilitate the same amount of man-made wetland to ensure the total amount of important wetland unchanged.
Article n+1: The system of payment for use shall be applied on important wetland. Those that obtained important wetland user right and benefiting right shall pay expenses for the use of important wetland resources in accordance with provisions of the State.
Article n+2: The system of compensation for the use of important wetlands for other purposes shall be applied. Any units or individuals that, with approval, use important wetlands for other purposes shall follow the principle of “no net loss” by either taking measure for the ecological rehabilitation of the important wetlands or paying equivalent expenses for the ecological rehabilitation of the important wetlands. Compensation fees for the use of important wetland for other purposes shall be collected either by the administrative department on wetlands in people’s governments at and above the county level or by a delegated authority. Compensation fee shall be handed over to the national wetland conservation fund for overall management.
4.3 System of wetland survey, dynamic monitoring and information sharing
4.3.1 Concept and significance
The system of wetland survey, dynamic monitoring and information sharing includes mainly the quantity and quality of wetland resources, survey and monitoring of dynamic changes, management of dossier, resources data release and etc.
In terms of preserving wetlands, it is of great significance to establish a sound system of wetland resource survey and monitoring and a dynamic survey system so as to comprehend the dynamic changes of wetlands in China and offer timely, comprehensive and accurate reference data for wetland planning and for establishment and implementation of various wetland systems. In addition, the integrated management of wetland ecosystem requires the establishment of wetland data dossier and information files of dynamic monitoring on the basis of wetland survey and dynamic monitoring.
4.3.2 Suggested provisions on the system of wetland survey, monitoring and information sharing
Article n: The competent department of forestry at the county level or above shall in conjunction with the related competent departments of the same level responsible for land and resources, water conservancy, environmental protection, agriculture (fishery) and other departments of concern to conduct wetland resources survey on a regular basis.
The survey of wetland resources is categorized into national wetland resource census and assigned surveys to key wetlands. The competent department of forestry under the State Council shall conduct one national wetland resource census every five years and assign a certain number of surveys to selected key wetlands annually. The results of the national census and the assigned surveys shall be compiled by the competent department of forestry under the State Council and released after the approval by the State Council.
Article n+1: The competent department of forestry at the county level or above shall convene the related competent departments of the same level responsible for land resources, water conservancy, environmental protection, agriculture (fishery) and others of concern to conduct dynamic monitoring of wetland. The competent departments at the county level or above responsible for land and resources, water conservancy, environmental protection, agriculture (fishery) and others of concern shall notify the forestry authority about the wetland monitoring data at regular basis.
The competent department of forestry at the county level or above shall be responsible for collecting and analyzing wetland monitoring data. Degeneration of wetland ecological features shall be reported timely to the people’s governments of the same level or above. The people’s governments, after receiving the report, shall require the competent authority to take corresponding measures to prevent the degeneration
The technical procedures and the managerial measures of the wetland monitoring shall be formulated by the competent department of forestry under the State Council in conjunction with the related departments of land and resources, water conservancy, environmental protection, agriculture (fishery) of the State Council and etc.
Article n+2: On the basis of information collected from wetland resource census and dynamic monitoring, the competent department of forestry at the county level or above shall set up and update in time the information files of wetland resources and dynamic monitoring and report periodically to the People’s Government of the same level and the authority of forestry of the next higher level on the wetland monitoring results and publish the wetland resource status periodically.
Article n+3: The information and data maintained by the governmental authorities concerning the wetland survey, monitoring and statistics shall be shared by all the administrative authorities and the public except the legally confidential information. The public and the stakeholders have the right to read and access the said information and data. The authority refusing to offer the said information shall provide in writing the reasons for so doing. Disagreement on the written reasons may be followed with applications for administrative reconsideration to the competent department of higher level or litigation to the people’s court of the corresponding jurisdiction.
4.4 The System of Graded and Categorized Preservation and Name List of Wetland
4.4.1 Concept and significance
The System of Graded and Categorized Preservation and Name List of Wetland refers to the different grading of wetland in accordance with its ecological particularity and regional characteristics and the publication in the form of name lists. Meanwhile, the grading and categorization principles, the grading and regionalization conditions, the decision or application and approval procedures, and the managerial body and its responsibilities shall be regulated as well.
Due to the discrepancies in type and scale, geographical location and ecological function, the state and international significance of wetland varies. Therefore, while the wetlands are considered together as an integrated identify, the optimum functions and benefits of a wetland cannot be realized unless different functions of wetland are preserved according to their functional sequence of different grade and in different category.
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