Piercing the corporate veil for environmental liabilities under Chinese company law: Guiding case No.215 and the limits of Article 23.

Abstract

Limited liability may prevent environmental costs from being fully borne by the polluter responsible for the harm, especially where the company lacks sufficient assets to meet its obligations. In China, Article 23 of the Company Law allows the corporate veil to be pierced where shareholders abuse the corporate form, but its use in environmental cases remains limited. This article examines how veil piercing may address environmental liabilities under Chinese company law and analyses Guiding Case No. 215, the first guiding case to apply the doctrine in environmental public interest litigation. The current framework has clear limits. Environmental harm may arise from lawful capital arrangements, liabilities may not yet be fixed in monetary terms, and claimants often lack access to the evidence needed to prove abuse. The article argues that veil piercing should play a supporting role, while Article 23 and existing financial guarantee mechanisms should be strengthened to better address environmental risk.