New Progress of Environmental Audit in the Promotion for Sustainable Development- CNAO

New Progress of Environmental Audit in the Promotion for Sustainable Development- CNAO


Nowadays, sustainable development is the consensus of human society. From Stockholm in 1972 to Rio de Janeiro in 1992, to Johannesburg in 2002 and New York in 2015, the international community has been working very hard on it. It is also a responsibility for audit institutions to make our contributions. Special working groups on environmental audit are formed in INTOSAI and regional organizations, while SAIs of many countries have made many fruitful achievements.

People’s thoughts are led by concepts, and will guide the practice. Today I would like to introduce three “news”, namely, new concept, new thoughts, and new measures of sustainable development.

New concepts of sustainable development

The concept of sustainable development coincides with China’s cultural thought focusing on the harmony between human and nature. More than 2000 years ago, the ancient Chinese philosophers like Lao-tzu, Confucius and Zhuang-tzuhad put forward the ideas of “Tao models itself after nature“, “Comply with rules of natured” and “Unity of heaven and man“, expressing the concept of harmonious coexistence between man and nature. Through fostering based on heritage and innovating while carrying on in recent years, some new concepts for sustainable development have been formed, which can be summarized in three sentences:

(I) Ecological Environment is a determining factor of the rise and fall of civilizations. Ecological environment is the foundation of sustainable human development. All four of the cradles of civilizations were originated from large rivers with good ecological environment. These regions feature rich material basis for human survival and gave birth to human civilization. Currently, only 6% of the population lives to the northwest of the Huhuanyong Line in China, which takes up 57% of the land of China. It is partially because of the lack of effectively support on sustainable development.

(II) Lucid waters and lush mountains are invaluable assets. The sustainable development requires the overall development of the economy, society and environment. Economic development and ecological environmental protection are an either-or choice in the traditional development model. Many countries underwent the environmental Kuznets curve, i.e. “pollution first, environment later”. Lucid waters and lush mountains are invaluable assets. It is a vivid interpretation and expression of the new development concept, revealing the inherent unity and mutual promotion between economic development and ecological environmental protection. It stresses developing industries as per local conditions, abandons development models and practices that damage or even destroy the ecological environment, and drives to foster spatial patterns, industrial structures, production methods, and lifestyles that conserve resources and protect the environment, thereby turning ecological advantages into economic advantages and the economic, social and ecological benefits simultaneously.

(III) New insight into the positioning of ecosystem values: mountains, water, forest, lakes, and grassland constitute a community of life. The sustainable development emphasizes the protection, restoration and promotion of an ecosystem that can be used sustainably. In the past, however, people believed that nature is born to meet the needs of human development and its value lies in being used by human. Consequently, in the process of industrialization, people took advantage of natural resources and produced environmental pollution problems such as the world’s eight public nuisance incidents. The concept of “a common community of life” affirms the life value and ecological holistic thinking of natural resources such as the mountains, waters, forests, farmlands, lakes and grass. It stresses that the lifeline of the people comes from the farmland, that of the farmland comes from the water, that of the water comes from the mountain, that of the mountain comes from the earth, and that of the earth comes from the forest and the grass. This concept guides us take all the elements of the natural ecosystem into consideration: both hills and their surrounding environment, both above and under the ground, both land and sea, both upper and lower river basins based on the integrity and systemic nature of ecosystems and the way they work, in this way we can comprehensively, holistically and systematically protect, restore and utilize the ecology.

New thoughts on conducting environmental audit

Environmental audit assumes different missions at various stages of economic and social development. For now, for full play to its constructive role in promoting sustainable development, environmental audit urgently needs to optimize its working ideas for transformation and upgrading.

(I) Elevating the Height of environmental audit. The United Nations 2030 Agenda for Sustainable Development has set 17 development goals. Countries have developed aligned medium- and long-term development strategies and plans. In order to serve these strategies and plans, environmental audit desiderates a better top-level design and working mechanism. The CNAO has conducted effective attempts. In particular, last year, the Provisions for the Audit on Outgoing Officials’ Management of Natural Resource Assets (Trial) were issued to standardize and institutionalize the implementation of natural resource assets management and ecological environmental protection responsibility of leading cadres. This year, China has set up a special high-level decision-making coordination agency, the Central Audit Committee, to enhance the ability and resolve to chart the course, craft overall plans, design policy, and promote reform. In this way, a centralized, unified, authoritative and efficient audit supervision system with complete coverage can be established. In the new situation, the environmental audit is stepping up to innovate the auditing concepts and boost the transformation and upgrading of its functional orientation. The key to transformation is to serve the macro decision-making, further heighten the environmental audit, establish and improve the environmental audit supervision system based on the compliance inspection, physical quantity verification, capital project performance inspection, risk disclosure, etc. in the field of resource and environment, with the focus of resource and environmental policy assessment and the evaluation on natural resource assets management and ecological environmental protection responsibility of leading cadres, as well as fully exert the constructive role of environmental audit in promoting sustainable development.

(II) Broadening the Scope of environmental audit. The UN sustainable development goals related to the resources and environment cover water and sanitation, climate change, oceans, ecosystems, energy, and industry. In the face of the new situation, the environmental audit should be committed to achieving full coverage. In the first place, the objects of “people”, “finance”, “policy” and “resources” should be fully covered. “People” refers to government officials who fulfill the responsibility of natural resource assets management and ecological environmental protection, including various levels of local governments relevant natural resource asset management departments, especially key leading cadres. “Finance” means related funds and assets in the field of resources and environment that cover all aspects of resource management development and utilization, environmental protection and improvement, ecosystem protection and restoration, etc., focusing on low-efficiency funds and projects. “Policy” indicates all policies involving ecological environmental protection, such as strategies, planning, systems and measures. “Resources” are natural resource assets such as land, water, forests, grasslands, minerals and oceans, environmental quality conditions such as the atmosphere, water and soil, as well as ecosystems including lakes and wetlands, whose focus depends on functional positioning and resource endowment characteristics in different regions. In the second place, a systematic and complete environmental audit project system should be established. To achieve full environmental audit coverage, various types of audit projects can be organized, e.g. the audit on outgoing officials’ management of natural resource assets based on responsibility evaluation, the tracking audit on major policy measures based on policy evaluation, and the audit on fund projects based on performance appraisal of funds and projects. Different audit objectives exposed major violations of laws and regulations, major damages to natural resources, and major destructions to the ecological environment.

(III) Advancing the Depth of environmental audit. The ultimate goal of environmental audit is to promote the sustainable development by effectively addressing the resource and environmental issues through audit supervision. The key to addressing issues through environmental audit is to find the roots and urge the relevant personnel to perform the management responsibility, not remaining at the superficial level. Specifically, the goal completion, policy implementation, capital use, and project operation of the same ecological environmental issue should be vertically integrated as a starting point to find the responsibility of relevant personnel in decision-making, management, and supervision. For instance, one of the sustainable development goals is to “ensure availability and sustainable management of water and sanitation for all”, i.e. “by 2030, we will improve water quality by reducing pollution, eliminating dumping and minimizing release of hazardous chemicals and materials, halving the proportion of environmental wastewater and substantially recycling and safe reuse globally”. In the audit, where the surface water and groundwater quality are degraded environmental audits can be focused to find out the completion of annual target tasks assigned by the superior, the implementation of policies measures developed to address the decline in water quality, the performance of funds arranged by the financial department for pollution prevention, the operation of sewage projects, etc. The poor performance of relevant competent departments and personnel including failure to act and unsatisfied supervision should be highlighted to promote the improvement of water quality by solving at a departmental level.

III. New measures of environmental audit promotion for sustainable development

The CNAO is committed to boosting implementation of policies in the resource and environmental fields and performance of natural resource assets management and ecological environmental protection responsibilities by leading cadres through environmental audit, so as to comprehensively escalate the ability and level of driving sustainable development.

(I) Taking advantage of the platform of major development strategy auditing, and assessing the effectiveness of policy implementation in the resource and environmental sectors. The key to addressing resource and environmental problems is policy measures formulated by the government. The 2030 Agenda for Sustainable Development repeatedly emphasizes that the work focus of sustainable development is the government’s coherent sustainable development strategy. The role of policies and development strategies cannot be overemphasized. The scientifically, operability and implementing effect of policies measures have the direct bearing on the effect of ecological environmental governance. The audit’s constructive role is of significance to the policy evaluation. It is to scientifically assess the current situation of the resources and environment, practically evaluate the effect of policy implementation, propose foresight and constructive suggestions based on policy measures such as strategies, plans, schemes and opinions in the resource and environment field, thus providing support for charting the course, crafting overall plans, designing policy, and promoting reform.

The audit on ecological environmental protection of the Yangtze River Economic Belt organized by the CNAO in 2017 is a policy evaluation audit on a major national strategy. The Yangtze River is the birthplace of the Chinese nation and also an important support for future development. However, it faces urgent problems like the austere ecological environment and tough industrial transformation. To this end, the Chinese government has formulated an outline for the development of the Yangtze River Economic Belt, which clarifies the orientation of prioritizing ecology, advocating green development, pursuing environmental protection, and avoids large-scale development activities. To better institute this major strategy, the CNAO organized auditing organizations at all levels to fully evaluate the policy execution from water resources utilization, water pollution prevention, water ecological restoration, industrial layout, industrial restructuring, etc. It turned out that the important lakes are not well maintained, the sewage effect on the rivers is not good, the layout of the Yangtze River industrial parks are not scientific and environmental compatible, the small hydropower is over-disorderly developed, and the water pollution prevention and investment performance is not efficient. Once submitted and announced, the audit results caused strong repercussions. The audit played an important role in promoting the revision and improvement of relevant policies. Here we take the audit and evaluation of policies related to the small hydropower development as an example. Massive small hydropower projects have been built in ten provinces of the Yangtze River Basin, without prominent economic benefits. Worse, in some places, the disorderly development has led to dried-up river ways and affected the ecological environment. On the basis of assessing current small hydropower policies, the audit revealed that there are problems such as excessive development intensity, prominent illegal construction and unsatisfied ecological restoration measures, which were concerned by senior leaders and covered by domestic media. The audit urged the development, reform, ecological environment, water conservancy, energy and other small hydropower authorities to improve relevant policies, suspended the environmental protection approval procedures for the addition or expansion of small hydropower projects, and organized a holistic survey and rectification of the existing small hydropower to boost a better ecological environment in the Yangtze River Basin.

(II) Launching Natural Resource-Asset Off-office Auditing for Leading Cadres, and conduct evaluation for leading cadres’ performance in their responsibilities for natural resource asset management and ecological environmental protection. Once the policy orientation is determined, leading cadres would be a decisive factor. The key to promoting sustainable development is to clarify the responsibilities of relevant institutions and personnel. The audit on outgoing officials’ management of natural resource assets is an important part of the performance evaluation and accountability system in China’s ecological civilization system. This system aims to help auditing organs, especially government officials, establish a scientific concept of performance and development and earnestly fulfill their responsibilities in natural resources asset management and ecological environmental protection through supervision and evaluation, thus boosting the conservation and intensive use of natural resources assets, the ecological environment security, and the sustainable development. Figuratively, when a government official leaves office, the auditing agency will supervise and evaluate the implementation of his responsibilities. If he fails to perform his duties and worsens the local resources and environment, he will be held accountable after his term of office.

In terms of content, the audit on outgoing officials’ management of natural resource assets is mainly to assess how a government official carries out the central policies and deploys the decisions on the construction of ecological civilization; complies with the laws and regulations about, makes major decisions on, completes the goals of, fulfill the responsibility for, and organize fund use and project operations concerning the natural resource assets management and ecological environmental protection, etc. The audit agency, combining with the above performance results in the region or business he is in the charge, will analyze the environmental effects for the changes in natural resource assets management and ecological environmental protection and objectively assess their responsibilities based on the principle of “what to audit and evaluate”. Finally, the evaluation results and audit opinions will be sent to the government official to be surveyed and reported to the higher authorities.

(III) Blazing the path with big data auditing, and provide efficient and pragmatic technical support for environmental audit. In the new era, the function orientation of environmental audit needs transformation and upgrading, whose technical support also needs to meet the requirements such as serving the macro decision-making and the audit coverage. Moreover, natural resources are widely distributed in space and not easily traced in time. These characteristics are often hard to be satisfied with traditional audit methods, so big data technology is required. Currently, on the basis of collecting and collating data from information systems in fields of land, mineral resources, ecological environment, forestry, agriculture, the CNAO has been actively establishing the resource and environmental management database, the resources and environment violations database, the geographical information database, the media information database, etc., aiming to achieve a digital audit platform for the resources and environment.

For environmental auditing “data sharing eases auditors’ burden”, each project is equipped with a specialized data analysis team to intervene with data using the digital audit method of “overall analysis, discovery of doubts, decentralized verification, and systematic research” according to its goals and characteristics. For example, in the audit on land resources, the geographic information technology is combined with business data to explore the data audit approaches such as the extraction of base data and multidimensional data correlation ratio. Consequently, a large number of suspicious problems including illegal construction of golf courses, illegal land reclamation, and idle land are found. In auditing the mineral resources, attention is paid to the comprehensive application of cross-sector data. Through multidimensional analysis of data such as land, geological survey, industry and commerce, taxation and finance for overall grasp and accurate focus to find out major illegal clues, e.g. occupying state-owned resources and defrauding mining rights via the transfer of shares and share ownership either by enterprises or individuals. When auditing the policies such as ecological environmental protection of the Yangtze River Economic Belt, three different types of data: resource and environmental services, geographic information, and Internet text, are integrated to find out multiple problems related to macro policy implementation, including the disordered development of small hydropower, poor sewage and illegal electric fish. During the audit on outgoing officials’ management of natural resource assets, the geographical information technology was applied to verify the changes in the quantity of natural resources assets and problems including some extensively damaged local forests and grassland resources as well as mining, land reclamation and construction in nature reserves were revealed.





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