A new paper by Jie Ouyang

‘Ecological civilisation’ has been a core pillar of the Communist Party of China’s political agenda in recent years. It highlights the growing importance of balancing economic growth with environmental protection. Environmental degradation comes from economic growth, economic growth relies on market functioning, and the market runs on private contracts. Private law doctrines, such as freedom of contract and limited liability of corporations, provide the legal and institutional framework that enables market actors (especially those with stronger bargaining power) to reap the profits from market transactions, while legally outsourcing the environmental externalities to the general public. Think of a cheap pair of jeans – it is cheap because its enormous environmental costs are not factored into its pricing and such pricing is possible because contract law allows/encourages us to only care about our immediate party (‘privity of contract’).

Granted, public environmental regulation poses significant limitations to private dealings. But if private law causes the problem in the first place, maybe we could also think about how we can address the problem from within private law. In the civil codification project since 2017, though the Chinese legislators refrained from a complete overhaul of existing civil legislation, they did endeavour to reconcile the tension between private autonomy and public environmental good. Among others, Art. 9 of the Chinese Civil Code (‘CCC’), which is often known as the ‘green principle’, prescribes sustainability as an overarching principle of private law. It reads: When conducting a civil activity, a person of the civil law shall act in a manner that facilitates conservation of resources and protection of the ecological environment.

This principle is highly abstract – just as abstract as other established principles in private law such as good faith and public policy. Judges in China, however, have not shied away from engaging with this principle, often in a rather creative way. For example, if I plant trees on your land illegally, you would think that you can rightfully ask me to cut them down. But several courts[1] said no – as trees could help prevent soil erosion. In another case,[2] the court reversed a homeowner association’s resolution that prohibited a homeowner from installing an electric vehicle charging station in the parking lot. The decision highlighted the scientific fact that electric cars can reduce fossil fuel consumption and have zero tailpipe emissions. (A side note: the Chinese authority has been actively promoting electric cars since the early 2000s.)

The green principle can be read as an attempt to align private law with the Constitution, which in the eyes of Chinese jurists is the ‘mother law’ that gives birth to other fields of law. Art. 26 of the Chinese Constitution provides: ‘The State protects and improves the environment in which people live and the ecological environment. It prevents and controls pollution and other public hazards.’ The green principle is even part of a broader political project, namely ecological civilisation, which radiates to the entire state apparatus. For example, the Supreme Court has been actively mobilising local courts to provide ‘judicial services’ in order to achieve carbon peak and carbon neutrality, which includes the imperative of ‘correctly applying the green principle’. Ecological civilisation is not only the task of the state as Art. 26 of the Constitution seems to indicate. With Art. 9 CCC, it is indicated that every private person, too, is not part of the transition towards a more sustainable future.

The green principle represents a welcome approach to opening up private law doctrines for environmental concerns. But many actually find such a politically laden principle disruptive to the system of private law. In their eyes, private law centres around interpersonal autonomy and deals with direct exchanges between the parties themselves. Of course, they defend party autonomy and demarcate a clear boundary of private law for a reason – the tentacles of the party-state are already way too present almost everywhere. Sure, we need a proactive and responsive state to fight climate change and save the environment, but what if the state itself is inconsistent in its commitments? For example, China was building significantly more new coal plants in 2022 to address the electricity shortage and was turning forests into farmland to ease the food crisis. Sure, we need to involve private parties to internalise the environmental costs, but what if the green principle is instrumentalised as another gateway for party politics to creep into civil society? For example, the word ‘resources’ under Art. 9 CCC has not only been interpreted as ‘ecological resources’ but also as ‘social resources’[3] and ‘judicial resources’,[4] which carry significant indeterminacy that can only be determined by the judges’ political sensitivity. The green principle tells a rosy story of an ecologically responsive private law of the 21^st century, but, what will the real outcome be?

The article ‘Unleashing the Green Principle in the Chinese Civil Code: Embedding Private Law into the Green Transition’ has been published in the Journal of European Consumer and Market Law, Volume 12, Issue 5 (2023) pp. 203 – 208. Jie Ouyang (LinkedIn, SSRN) is a PhD candidate and Lecturer at the University of Groningen. His research primarily focuses on European private law (especially European consumer law), fundamental rights and sustainability.

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[1] For example, Xixian Xinyang Primary People’s Court of Henan Province (2017) Yu 1528 Civil-First No. 4405 (河南省信阳市息县人民法院(2017)豫1528民初4405号民事判决书); Suining Primary People’s Court of Hunan Province (2017) Xiang 0527 Civil-First No. 969 (湖南省绥宁县人民法院(2017)湘0527民初969民事判决书).

[2] Jing’an Primary People’s Court of Shanghai Municipality (2018) Hu 0106 Civil-First No. 3616 (上海市静安区人民法院(2018)沪0106民初3616号民事判决书).

[3] For example, Ziyang Intermediate People’s Court of Sichuan Province (2018) Chuan 20 Civil-Final No. 427 (四川省资阳市中级人民法院(2018)川20民终427号民事判决书).

[4] For example, Tai’an Intermediate People’s Court of Shandong Province (2019) Lu 09 Civil-Final No. 3147 (山东省泰安市中级人民法院(2019鲁09民终3147号民事判决书).