From page 4, The Economic Observer issue no. 332, September 10, 2007
By Zhang Chen
Starting in October, the State Environmental Protection Administration (SEPA) plans to lift production freezes it unleashed during an environmental dragnet last July. In a statement made on September 3rd, SEPA said that the policy had hit local governments hard, adding, "those who refused to act [on these issues] before have finally begun to cooperate."
The Baiyin Example
On July 3rd, SEPA began shutting down polluters in 6 cities, 2 counties, and 5 industrial parks in the drainage areas of the Yangtze, Yellow, Huai and Hai Rivers-- all of which have been plagued by severe pollution. Baiyin City, located in the upper Yellow River in Gansu province, is one such place grappling with SEPA's policy. There, 15 enterprises were shut down for violating environmental regulation. One firm, Yinguang Chemical Industry Group, recently caused public outcry after a sulfuric acid leak at its plant. Since 2005 there have been a total of 17 such leaks.
Afterwards, pollution control became an urgent preoccupation for the leaders of Baiyin. The EO has learned that the city has invested nearly 1 billion yuan in environmental protection projects and already completed renovation milestones in order to be one of the first to comply with SEPA obligations and be allowed to resume operations.
"We have reported the improvements to the [central] SEPA and are waiting for them to withdraw the policy," says one Baiyin SEPA clerk.
According to the clerk, Bayin's environmental woes stem from insufficient funding for protective measures, and poor regional economic development that left concentration in one industry.
After being identified by SEPA's dragnet in July, the Baiyin government threw their weight behind solving the environmental crisis. On the morning of July 10th, Baiyin's mayor Yuan Zhanting presided over a local-government conference that focused on pollution control . Participants agreed on a new policy that would bring Baiyin up to SEPA's requirements and thus allow industry there to resume. That same evening, the executive vice-mayor called in bosses from 15 illegally polluting operations to set a time-line for improvements, which they agreed to. At 1am on July 11th , after having just returned from the government's emergency conference, the Baiyin branch of SEPA held a meeting to assign and divide the workload among staff. Finally, on the 13th, the secretary of the municipal Party committee, Zhang Jinghui, presided over a conference of his committee to discuss the work.
"This time, if the local governments does not take it seriously, there's no way they can get around the restriction. This hits local government sharply," said Xiong Yuehui, deputy director of the supervision bureau of SEPA. According to him, the restriction will force restructuring in some industries.
Xiong says that when they inspected Chaohu City in Anhui province, acting mayor Song Guoquan admitted that the policy had forced them to eliminate wasteful businesses, and overall the gains exceeded the loss.
An Unconventional Measure
The shutdowns were actually an unusual policy choice for the SEPA. Professor Lei Ming at Guanghua School of Management, Peking University, also a member of the Green GDP technical work group, said the policy was a heavy-handed response to severe incidences of pollution. While on the one hand it sends a stern warning to local government, it also reveals weakness in environmental protection at the local level.
Deputy director general of SEPA says that the policy was just a special administrative measure, and the issue should be solved in a more systematic fashion.
SEPA has been forced to use such extreme tactics now that China's water pollution is reaching critical levels. When reviewing new water pollution control law for the National People's Congress, SEPA director-general Zhou Shengxian pointed out that underground water in half of the cities in China are seriously polluted and 300 million residents in rural areas are not guaranteed safe drinking water. At present, among the seven major water systems in China, Liao River and Hai River are highly polluted, and the Songhua River, Yellow River, and Huai River are moderately polluted.
China's water pollution prevention has yet to keep up with the pace of pollution mainly because some local governments refuse to change their development models. Aggravating the situation is what Xiong calls the "Three Conditions for Investigation", which is to say, polluters will continue to do so if locals do not intervene, if the media doesn't expose them, and if local government does not act.
Despite a recent flurry of environmental protection law, a lack of enforcement has resulted in a continuous stream of pollution incidents to the point where people are simply numb to them. According to Lei, enforcement must be adopted alongside any new regulations. Unfortunately, the restriction policy can't prevent environmental catastrophes, but only limit damage once its been discovered.
A Second Chance in October
SEPA is currently studying a list of candidate areas where restrictions are to be unfrozen. Lu Xinyuan, director-general of the supervision bureau of SEPA, tells us that SEPA would withdraw the policy only under the condition that these areas should meet every single of the seven requirements set by SEPA.
The EO has learned that SEPA will commission its provincial branches to carry out the re-assessments and report to the central authorities afterwards.
In August the sulphuric acid cloud prevention project of Yinguang Group went underway with a total investment of 390 million yuan, Baiyin City will also start a waste water treatment and recycling plant costing 260 million yuan after SEPA lifts restrictions on the region. Meanwhile, Baiyin City is checking over the 238 construction projects that have began since 2004.
"Thanks to the restriction policy, we are reconsidering the problems faced by a resource-dependent city that is in transition," says Baiyin's mayor.
