Ever since China began its economic revolution in the early 1980’s it has had a terrible environmental record. The country’s main source of power is coal (57%), and while it has invested in non-fossil fuel powers stations ($32billion last year according to Time magazine), its manufacturing output still has a significant environmental impact. Environmental laws have typically been weak, and inspectors have either been incompetent, lazy, or corrupt, allowing considerable damage to air quality and local ecologies.
Where else in the world can one find ‘cancer villages’, massive desertification, and toxic smog? Reuters described the river that flows through the town of Shangba, a city in southern Guangdong province, as, “ranging [in colour] from white to a startling shade of orange because of varying types of industrial effluent” While an eye witness gave this description of the river, “All the fish died, even chickens and ducks that drank from the river died. If you put your leg in the water, you'll get rashes and a terrible itch. Last year alone, six people in our village died from cancer and they were in their 30s and 40s."
In 2012, the Yangtze river mysteriously turned deep red (title photo), officially the result of ‘iron-rich silt from upstream.’
Despite increasing environmental damage and rapidly expanding industrialisation, it wasn’t until 2014 that Communist Party legislators updated environmental law. As the UK newspaper, the Guardian, reported at the time, the law changes, “promise greater powers for environmental authorities and harsher punishments for polluters.” However, the penalties were still not very strict, only, “allowing authorities to detain company bosses for 15 days if they do not complete environmental impact assessments or ignore warnings to stop polluting.”
But that may all be about to change, as the 2017 Communist Party Congress signalled politburo determination to improve environmental conditions, even at the cost of economic growth.
Chemical supplier ChemCeed, has learnt through its business contacts that, “In an effort to control air pollution, the Chinese Environmental Protection Ministry has cracked down on factories found to be in violation of emissions standards. Five companies in the Hebei province were reviewed for violations, and several chemical plants in the region are facing shutdown including well-known producers of chemicals such as Sebacic Acid and Dioctyl Sebacate. Exports from China on these materials are reportedly facing delays, and it is not known when production schedules will resume.”
The online scientific journal, Futurism, understands the level of closures to be even higher, reporting that, “China is in the midst of an all-out blitz on polluters flouting emissions standards, closing tens of thousands of factories in a massive effort to address the nation’s catastrophic pollution problems.
Estimates of the crackdown suggest as much as 40 percent of China’s factories have been temporarily closed by safety inspectors, with officials from more than 80,000 factories charged with criminal offences for breaching emissions limits over the past year.”
With so many factories and chemical plants closed, often indefinitely, chemical buyers and procurement officers are beginning to have concerns about their chemical supply chains.
As the industry consultants, Responsibilitas, notes, “If you are a chemical purchasing company, you will need to start to watch more closely your suppliers on environmental issues, especially for those having polluting processes.” The advice continues by recommending that chemical buyers, “start by evaluating all your supplier’s environmental performance and get to know the distance between your supplier’s level and the Chinese Law’s requirement.”
Part of that review may well include looking for alternative chemical suppliers, at least on a ‘just in case’ basis.
Security of supply chains is a crucial component of company profitability. In the past Chinese chemical production has expanded with many suppliers offering reliable supply chains, that may all be about to change. Furthermore, much of China’s price advantage has been based on the short cuts that chemical manufacturers have taken over the environment. If all that is about to change, then maybe it is time to change chemical suppliers too.
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Photo credit: Radio Free Asia, SunshineInspections, Reuters, MacLeans and ChinaFotoPress
