Four months after China’s new tough Environment Protection Law came into force to facilitate public interest litigation against polluters – including textile finishing plants – a court in Shangdong Province’s Dezhou city is to hear the first case demanding compensation for air pollution.

The CNY30m (US$4.80m) lawsuit brought forward by the All China Environment Federation (ACEF) demands compensation from Zhenhua Co (part of Dezhou Jinghua Group Co Ltd, a chemical manufacturer), which has allegedly repeatedly breached pollution laws.

"This lawsuit is very significant because it means that traditional barriers for such legal measures are now being overcome by NGOs [non-governmental organisations]," Thibaud Andre, a consultant with Beijing-based Daxue Consulting, whose work includes the apparel and textile sector, told just-style.

It is a milestone in public interest litigation against big polluters as the first lawsuit based on calculating the potential amount of damages on an offending company’s operating costs as opposed to the amount of actual damage, which is difficult to determine.

"Until now, many environmental protection organisations did not have financial power to bring such lawsuits; but the ability to file lawsuits against polluters for public interest means that NGOs need less financial investment to start each [one]," explained Andre.

Under the new environmental law, the ACEF determined that Dezhou Jinghua saved more than CNY20m (US$3.22m) by failing to install required anti-pollution equipment, Andre said.

"There is a risk that if a company, including dye houses, does not adhere to the regulations they could be shut down or fined a substantial amount of money," added Matthew Collins, project manager at the Institute of Public & Environmental Affairs in Beijing. He said multinationals sourcing from China should ensure their suppliers are compliant.

Ma Yong, deputy head of ACEF’s Environmental Legal Services Centre, declined to share details about the lawsuit’s timeline.