The multiple instruments in China’s environmental enforcement:A case study of the Sembcorp Water Company case

The case of Nanjing Sembcorp Water Company, a subsidiary of Singapore-based Sembcorp (China) Investment Company, represents a landmark example of China’s evolving environmental liability system. From 2014 to 2017, the company illegally discharged high-concentration waste water into the Yangtze River, triggering administrative, criminal, and public interest legal actions. The case resulted in a record CNY470 million compensation, calculated using the virtual treatment costing method – CNY237 million paid in cash and CNY233 million for ecological restoration. A critical aspect of this case was the voluntary intervention of the parent company, Sembcorp (China) Investment Company, which assumed financial responsibility when the subsidiary proved incapable of full payment. This case exemplifies China’s integrated approach to environmental enforcement, combining deterrence with restoration, and offers valuable insights into corporate accountability and parent company liability. The findings have broader implications for global environmental governance, particularly in jurisdictions strengthening corporate environmental liability mechanisms.