In Depth: Dumping Case Shows How Chemical-Makers Shield Themselves From Liability

Truck driver Zhu Guowei is burdened by nearly 4 million yuan ($562,200) in damages after dumping hydrochloric acid into Jiaxing’s waterways. Working for Jiaxing Jiajie Chemical Raw Materials Co. Ltd., Zhu was one of four truck drivers penalized in a civil case, but the company faced much larger consequences: it was ordered by the Jiaxing Intermediate People’s Court in December 2024 to pay roughly 480 million yuan for environmental restoration, with company leader Bao Minghua and other shareholders held jointly liable. This public interest lawsuit was filed by city prosecutors after a 2021 criminal case convicted several company executives and drivers, including Zhu, for polluting the environment. Zhu was sentenced to one year and nine months in prison, while Bao received six years and three months. However, the civil case drew attention for exempting chemical manufacturers from liability, even though they had supplied the acid to Jiajie Chemical, essentially paying it to “remove” hazardous waste[para. 1][para. 2][para. 3][para. 4][para. 5][para. 6][para. 7][para. 8].

The practice in China’s chemical industry is that chemical-makers produce by-product hydrochloric acid and, when unable to sell it legitimately, pay intermediaries like Jiajie Chemical to take possession—usually under the guise of “transportation fees” but functioning as subsidies. In Jiajie’s case, the company received over 55.78 million yuan in such subsidies from 2013 to 2019, according to a government audit. The acid glut intensified in 2017, prompting more such deals. In total, Jiajie Chemical purchased by-product hydrochloric acid from over 20 companies, including Taicang Sinochem and Juhua Electrochemical[para. 9][para. 10][para. 11][para. 12][para. 13][para. 14][para. 15][para. 16].

Jiajie Chemical’s dumping involved 39,000 tons of hydrochloric acid being released into Pinghu Tang waterway, prompting the court to fine the company 10 million yuan for pollution and 100,000 yuan for bribery. Yet, subsidies paid by the supplying chemical companies—sometimes several hundred yuan per ton—were alleged by the defendants to indicate those companies’ responsibility, since proper hazardous waste disposal is significantly more expensive (2,000–3,000 yuan per ton)[para. 13][para. 17][para. 18][para. 19][para. 20]. The court, however, determined the acid retained its industrial use when transferred, and only became “waste” upon Jiajie’s illegal dumping. Thus, the chemical-makers were not held co-liable[para. 21][para. 22][para. 23][para. 24].

The All-China Environment Federation, a national nonprofit, has since initiated lawsuits against major suppliers like Sinochem Taicang and Juhua Electrochemical, arguing they facilitated illegal disposal by paying Jiajie Chemical, a company not licensed for hazardous waste. The federation insists these suppliers should be liable, particularly since Jiajie cannot afford the full costs of environmental remediation. The companies deny wrongdoing, maintaining they sold a regulated raw material and were not responsible for its ultimate misuse[para. 25][para. 26][para. 27][para. 28][para. 29][para. 30][para. 31][para. 32].

This legal approach is informed by the landmark 2014 “Taizhou case,” where chemical companies were found liable for environmental damages after similarly paying subsidies for downstream dumping. The court there ruled that the subsidized sale of by-product hydrochloric acid was effectively disposal, qualifying as waste management, and those responsible were ordered to pay over 160 million yuan in damages[para. 33][para. 34][para. 35][para. 36][para. 37][para. 38].

Despite ongoing lawsuits and regulatory efforts, including a 2024 proposed revision of hazardous waste standards, the illegal dumping of by-product hydrochloric acid persists in China. Regulatory loopholes—such as failing to explicitly define by-products in waste standards—facilitate continued abuse. In August 2025, authorities approved new standards in principle to better address these gaps, aiming to prevent further environmental harm[para. 39][para. 40][para. 41][para. 42][para. 43][para. 44][para. 45][para. 46].