1. According to Article Forty-three (43) of the Regulations of the Shanghai Municipality on the Administration of Watercourses (hereafter referred to as the Regulations): the damming of watercourses by enterprises that have breached Article Twenty-seven (27) of the Regulations and have not entrusted qualified water irrigation planning and designing institutions to carry out planning, in spite of approval from the Shanghai Municipal Watercourse Administration Department or district/county level water administration departments and from the Shanghai Municipal People’s Government or Shanghai Municipal Water Affairs Bureau, must take compensation measures according to the instructions of the Shanghai Municipal Watercourse Administration Department or district/county level watercourse administration departments and pay a fine ranging from RMB 10,000.00 to RMB 100,000.00.

2. According to Article Forty-four (44) of the Regulations: those who breach Article Eighteen (18) of the Regulations for construction projects within the administration area of watercourses and fail to proceed with the approval procedures for the approval by the Shanghai Municipal Watercourse Administration Department or district/county watercourse administration departments; or those who breach Article Nineteen (19) of the Regulations for construction projects within the administration areas of watercourses with approval but fail to submit the construction plan for approval at the Shanghai Municipal Watercourse Administration Department or district/county level watercourse administration departments and fail to build within the set boundary; or those who breach Article Thirty (30) of the Regulations and dig holes without the submission of an application by flood-prevention wall administration departments to the Shanghai Municipal Flood-prevention Headquarters; shall make adjustments or take compensation measures according to the instructions from the Shanghai Municipal Watercourse Administration Department or district/county level watercourse administration departments and are subject to a fine from RMB 1,000.00 to RMB 50,000.00.

3. According to Article Forty-five (45) of the Regulations: those who breach Item Two (2) of Article Thirty-five (35) of the Regulations, the installation of fishing nets, griddling or other fishing facilities within the administration areas of watercourses and security protection areas of flood-prevention banks without approval from the Shanghai Municipal Watercourse Administration Department or district/county watercourse administration departments, shall stop their behavior according to the instructions from the Shanghai Municipal Watercourse Administration Department, district/county level watercourse administration departments or township water irrigation departments and are subject to a fine of up to RMB 10,000.00.

4. According to Article Forty-six (46) of the Regulations: those who breach Article Thirty-six (36) of the Regulations by: 1) dumping industrial, agricultural and construction wastes and rubbish and manure; 2) washing vehicles or vessels that have stored oil or other poisonous or harmful pollutants; 3) constructing houses, sheds or other constructions and structures; 4) destroying watercourse flood-prevention banks and other water projects and facilities; 5) allowing the browsing and grazing of animals, or the cultivation and illegal cutting of wood from along flood-prevention banks; 6) performing water surface or underground operations that affect water stability and security of flood-prevention walls and banks; or 7) other activities that prevent floods from getting through or affect water drainage;shall stop their illegal behavior and are subject to a fine of up to RMB 30,000.00.