Chinese Environmental Evaluation Fraud

From ToxicLeaks

In February 2016, according to a communiqué released by the Chinese Ministry of Environment, a subsidiary of Conch Cement in Liquan had used fraudulent environmental evaluation reports to ensure the construction of their production lines. The company had also failed to provide relocation programs and assistance to the people living inside the emission danger zones near the plant. Due to the investigation of the Chinese Ministry of Environment, the Conch plants have suspended their production and have released a note of apology promising to move people out of the danger zone before the relaunch of its production plants.

Chinese Environmental Evaluation Fraud makes the news[edit | edit source]

This is not the first case where Chinese companies have used fraudulent environmental reports to ensure their polluting production plants pass the Chinese government’s checks. Recently, 500 students in a high school in Changzhou reported sickness largely resulting from soil pollution, largely due to chemical plants’ poor waste management systems which are covered by the fraudulent environmental construction permissions. It’s sad to see that both the Chinese government and industrial companies have only come to pay the price of their soil pollution and environmental fraud only after the discovery of 500 poisoned students.

These two examples clearly illustrate that environmental fraud is a widespread practice in China, and even more so following the new environmental law the government put in place last year. Faced with the conflict of old polluting methods and strict environmental standards, companies have resorted to producing fraudulent documentation to keep their short-term profit from tanking, while doing absolutely nothing to safeguard the health of the population.

The Common Practice[edit | edit source]

Many of China’s top polluters have used disgraceful means to to make their way around the government’s new environmental evaluations. Today, the Chinese market is ripe with so-called “middlemen”, who make a living from bribing environmental agencies on behalf of companies whose production lines don’t meet environmental standards, effectively allowing them to continue production with a stamp of approval while continuing to wreck havoc on the environment. Other individuals actually go a step further and produce counterfeit stamps from the environmental agencies and then earn money from the already flawed evaluation process.

Despite China’s piecemeal reforms to clamp down on pollution, Chinese companies have gone above and beyond to ensure that they are able to circumvent the new laws, all in the name of profit. The country’s key industrial firms are in the majority of cases heavily polluting due to their reliance on coal to power their production, and have found themselves in difficult positions due to weak market growth and Chinese government policies. These companies’ pollution records are appalling. For example, Conch Cement releases almost 240 000 kt of CO2 per annum, and in 2013 and 2014 it went on the blacklist of the government of Anhui province as one of the heaviest polluters, resulting in a suspension of its production permit. Jidong Cement has annual CO2 emission of more than 70 000 kt, Jangsu Sha-Steel more than 60 000 kt, and Xinfa nearly 65 000 kt.

Guided by old mindsets and production methods, these companies have failed to make the necessary adjustments to adhere to necessary environmental standards, and have instead chosen to buy off environmental evaluation agencies and produce fake reports simply to maintain their profit and greed. But with China’s willingness (at least on the surface), to set high environmental goals, these self-serving and harmful practices must be eliminated.

Changes are urgent[edit | edit source]

For starters, the efficiency of the environmental evaluation process has to be substantially enhanced. For the system to function and constrain the construction of high emission projects, it has to be low cost, transparent and fast. This will ensure that companies that meet environmental standards can resume their production under strict rules and oversight while also reducing role of corrupt middlemen and officials.

Secondly, enterprises’ participation in the environmental evaluation must be honest and accurate. According to the reports coming out of the Chinese media, many of the companies that participated in the environmental evaluation process reported unrealistically perfect results. Reporters who investigated found that some companies and environmental agencies use counterfeit ID’s, which they used to produce apparently exceptional environmental evaluation reports. The government must act to eliminate this practice and crack down on companies that report such illusionary results.

Thirdly, there should be radical change of the shortsighted vision of China’s industrial sectors such as coal, steel, cement and aluminium. The industry leaders have to change their mindset from short-term profits to long-term perspectives in order to lead the way for environmental responsibility of these industries

Companies in these sectors have to look cutting costs with the general perspective of the country and its environment. The cost cut should come from innovative and efficient production technologies, energy efficiency, and rigorous environmental standards, rather than fraud and corruption in the environmental evaluation process. Tracing back to the origin of the problem, we can see that it is mostly the inactivity and deeply rooted corruption of the Chinese government that has bred the phenomenon of environmental fraud in the first place. If the Chinese government is set to act consistently with its promises and slogans, it has to take serious and firm action to eradicate this practice.