Information Sharing Restricts Loans to Polluters

In March 2009, the Guangdong Environmental Protection Bureau publicized the assessment results of major polluting enterprises. According to the results, of 28 companies marked for a "red card”, 16 have not yet completed the rectification of existing problems. According to personnel at the Guangdong Banking Regulatory Commission, the views of the environmental protection department will be used as “green credit” guidelines, and will be transferred to the banks to be implemented.

Guangdong Environmental Protection Bureau (GEPB) examined and verified the environmental credit status of 269 enterprises that we were subject to the 2008 rating of credit management of key pollution sources. After the 2008 assessment, 210 enterprises were awarded a green card (trustworthy enterprises in environmental protection), occupying 78% of the total; 31 were to be given a yellow card (warning ), accounting for 12% of the total; and 28 were to be given a red card (strictly controlled ones), occupying 10% of the total. Of these 28 enterprises, 12 have taken satisfactory remedial action, such as the Fanyu Meishan-Mali Yeast Company. Personnel at GEPB said that while providing relevant departments with the assessment results, including the Guangzhou Branch of the People’s Bank of China and the Guangdong Banking Regulatory Office of China Banking Regulatory Commission, GEPB will also provide explanations of the results and suggest courses of action, such as not limited the loans of enterprises that have taken remedial action.

It is understood that the 16 enterprises marked for a red card, the including Guangzhou Branch of Sinopec, will face loan restrictions in the future if they fail to take action to remedy the situation promptly. Personnel from GBRO said that since information sharing was realized between the banking regulatory department and environmental protection department in 2007, banking regulatory department can formulate guidelines for optimizing the adjustment of credit structure in banks based on the suggestions made by the environmental protection department. The views of the environmental protection department will be forwarded to the banking regulatory office in the form of an official document. Two modes will be adopted by the office to in response to the opinions: the first is transferring the document to the banks for the purpose of guiding credit practice whilst the second is listing the information on the internal finance network so that banks can access it in real time.