Jack Perkowski Forbes
Over the weekend, the Xinhua News Agency reported that authorities in eastern China have cancelled plans to build a waste-water pipeline from a paper mill run by Japan’s Oji Paper Co. Ltd. (“OJIPF”) after thousands of people gathered in Qidong, a coastal city of more than 1 million people across the Yangtze River from Shanghai, to renew protests against the project that they say will pollute the sea. The planned pipeline would have emptied waste water from the paper factory into the sea near Qidong.
Founded in 1873, Oji is Japan’s second largest papermaker after Nippon Paper Group (“NPPNF”), operating more than 20 mills throughout Japan that produce a variety of paper products, including printing and writing papers, corrugated board and boxboard. OJI has approximately 120 subsidiaries and affiliates worldwide, including operations in the Americas, the Asia/Pacific region, and Europe.
Having access to clean water is a particularly acute problem in China today, and the country’s citizens, as demonstrated by the Qidong protests, are well aware of its severity. China’s water supply is smaller than that of the U.S., yet it must meet the needs of a population nearly five times as large. Industrialization has taken its toll on this already-limited resource. Industrial and biological pollution has contaminated almost 90 percent of the underground water in Chinese cities.
The World Health Organization (WHO) estimates that one out of four (300 million) Chinese do not have daily access to clean water, and that one out of two (700 million) are forced to consume water below WHO standards. High population density, a poor ratio of available water to demand, and regional imbalances in available water supplies are serious challenges for China in managing its usable water supply. Frequent floods ravage cities in the south and east, and droughts are a regular occurrence in the north and west.
That is why China is placing great emphasis on cleaning up its water supply in the country’s 12th Five-Year Plan that began in 2011. During the period of the plan, the country will spend a total of $536 billion on water purification and waste water treatment plants, irrigation systems and flood control projects. Currently, only 50 percent of urban sewage is treated. By 2015, the government intends to add 42 million tons of daily sewage treatment capacity to increase its urban wastewater treatment rate to 85 percent.
Central government action alone is not enough, however. Local governments and all companies operating in China, both foreign and local, must do their part. Motivated by a desire to attract investment and new businesses to their cities, local governments sometimes implement policies that are harmful to the environment. They must pay greater attention to the environmental impact of those policies.
Companies must also place a high priority on being good corporate citizens in China. To be fair to Oji, no one but the parties involved in the negotiations surrounding the decision to build the plant know what the company was told about how waste water from the plant would be handled. However, it would be impossible to build a paper plant in Japan, the United States or Europe without incorporating into the plant’s design a system that re-cycles waste water or returns it to its original state. Pumping waste water into a river, a lake or the sea is not an option in any developed country. Why should it be in China? No matter what the local government officials might have promised, it is unreasonable to establish any plant in China that does not meet the highest global environmental standards.
Moreover, there is no reason not to do so because all of the global waste water treatment companies are active in China today, and there is a growing universe of highly qualified Chinese companies that are perfectly capable of designing and constructing such systems. France’s Veolia Environment S.A. (NYSE:VE), Germany’s Siemens AG (NYSE:SI), and America’s General Electric Company (NYSE:GE) are examples of the international companies that are promoting their water treatment technologies in China. Tri-Tech Holding, Inc. (NASDAQ:TRIT) is an example of a good Chinese company with world-class technology and significant experience that has completed many waste water treatment facilities across the country.
In the meantime, China’s citizens are showing an increasing willingness to object to actions that they believe harm the environment. In addition to last weekend’s events in Qidong, thousands of anti-pollution protesters in Shifang, a southwest Chinese city in Sichuan Province, were successful earlier this month in halting the construction of a molybdenum copper plant in their city. Last year, protests in Dalian led to the closure of a chemical plant until the company proved that the plant was capable of resuming production safely.
China is indeed an evolving story, and the country is demonstrating an ability to react to criticism and adapt to new environmental and economic realities. While some may argue that China is not moving fast enough in this regard, environmentalism has arrived as a positive force for change in the country.
