China’s immense growth over the past 35 years has made it both an industrial and pollution-producing giant. Because of its laser-sharp focus on economic growth, the country has overlooked or disregarded the significant environmental concerns that were on the rise around the world during the same time frame. Consequently, China now enjoys immense respect for its’ manufacturing sector, while facing international criticism regarding its’ pollution production.
According to a recent report filed with the US Government, China’s pollution levels continue to rise, even after national standards and policies were introduced to slow the process. Factors included in the report that underscore this circumstance:
– The US Embassy in Beijing reported “hazardous” air pollution levels on a majority of days in January 2013;
– In 2012, the Asian Development Bank reported that less than 1% of the 500 largest Chinese cities met the World Health Organization’s (WHO) air quality standards; and
– The WHO itself reported that air pollution alone was the cause of death of more than 400,000 Chinese citizens in 2008.
For many international producers, compromising on environmental ethics is simply not an option. For them, they would prefer to avoid the Chinese supply chain industry altogether rather than risk violating their own environmental conscience. However, in doing so, these manufacturers are needlessly eliminating a resource that could provide immense economic returns to their company and its shareholders.
In my 15+ year career as an independent offshore supply chain consultant, I’ve come across many instances of inappropriate polluting practices in Chinese factories. While it is hard to check or test for air pollutants, water pollutants can often be identified by discerning, educated investigation. My experience is that it is not unusual for factories to go to significant lengths to give a false assurance that things are as they should be.
As an example, I was checking on a textile factory that produced undergarments for several international retailers. To prove “compliance” with China’s water protection laws, the facility manager gave me a tour of the processes on site. Inside, the vats of dyes and textiles looked clean and appropriate. Outside, we followed the effluent (waste water) pipes to a reservoir, into which a pipe gushed apparently clean water. There were several large fish swimming in the reservoir, which our guide identified as proof of how clean the “effluent” water was. My skepticism was rewarded when, after a short investigatory trek, I discovered sufficient space between the factory and the reservoir for the effluent pipe to be directed elsewhere underground, the same space easily allowed another pipe to fill the reservoir with truly clean (non-effluent) water. At another site, I witnessed effluence being piped directly into the local creek, which could easily have supplied water for the local town.
Scrutinizing environmental compliance in China can be tricky, especially for those who don’t know what to look for, or worse, what they are looking at. Common sense on-site is critical, but so is knowing what questions to ask, and what further investigation may be needed, in order to ensure the factory chosen is actually, truly in compliance with environmental standards and rules.
The strong cultural emphasis on economic growth can direct the attention of Chinese factory management away from environmental rules and regulations. Years of experience have instilled in me the ability to constantly review every factory situation for details and circumstances that might reveal a false or misleading front. Knowing when to investigate further has saved me, and my clients, time and money, and avoided unpleasant contracts with inappropriate or unethical suppliers.
Many Chinese factories pride themselves on their forward-thinking actions regarding pollution standards. They offer excellent opportunities for international producers to access the Chinese industrial market knowing that environmental concerns are properly and ethically managed.
To better understand how you can validate your suppliers you can download a free checklist “New Supplier OnBoarding Checklist” here
These checkpoints are not only for new suppliers, in fact they should be checked and verified regularly for all suppliers.
This blog was written by Carsten Primdal, an independent consultant who helps businesses that have manufacturing done overseas – especially in China – minimise supply chain risk.Drawing on years of on-the-ground experience and a strong understanding of the cultural and commercial context, Carsten is passionate about helping his clients gain greater control over the risks most companies face knowingly or unknowingly.
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I can be reached at firstname.lastname@example.org or on (+61) 413 089 020
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