In April this year, the global electronics industry’s China operations came under scrutiny from local environmental groups. A coalition of 35 Chinese NGOs initiated a dialogue with 27 of the world’s leading electronics companies concerning the contribution of the companies’ supply chains to contaminating local water bodies with heavy metals. Companies approached included household names such as Apple, Sony, Nokia and Ericsson among others. In August, the Institute of Public and Environmental Affairs (IPE), Friends of nature and Green Beagle,three of the core organizations leading this initiative, released their latest report evaluating the brands’ responses to date.
Intel, one of the companies identified by the coalition with supply chain issues, has since April been in dialogue with the NGOs. Intel is the world’s largest semiconductor chip maker, based on revenue of US$35.1billion in 2009. To Intel’s credit, the company operates one of the more progressive water and waste management systems in the industry. In 2006, Intel’s assembly and testing facility in Pudong, Shanghai recovered more than 66.5% of its solid waste and enhanced the industrial water recycling rate by 15% per year over year. Intel’s assembly and testing facility in Chengdu recovered 46% of its solid waste.
The company is in the final stages of constructing a wafer fabrication facility in Dalian, scheduled to open in late 2010, which will save approximately 68 million gallons of city water per year. Cleaning silicon wafers during fabrication requires the use of ultra-pure water (UPW). Over time, Intel has improved the efficiency of the process to create UPW. Where Intel used to consume almost 2 gallons of water to make 1 gallon of UPW, this has been reduced by 38%.
Intel’s water programme manager, Tom Cooper, speaks to China Water Risk about the company’s water philosophy.
CWR: Site selection is key to managing water risks and Intel runs a comprehensive process that includes assessment of water availability and wastewater infrastructure. When did Intel first begin this practice?
Tom: Intel has been performing water and wastewater infrastructure assessments from the very beginning. It would be otherwise foolish to construct and operate a multi-million or even several billion-dollar factory in a location where we’d either run out of water or cause negative impact to the community and negatively impact our brand.
Our site selection process has been in place for decades and we continue to update and improve it. We evaluate the criteria on a regular basis and add additional review items necessary to reflect the times and frankly “future” times, something I like to call “proactive transparency”. We do our best to anticipate what the next big issue will be related to water and wastewater management and then manage these programs accordingly. It gives us a jump on things.
CWR: When did water become an issue for Intel?
Tom: We don’t see water as an “issue”. We view effective water and wastewater management as an integral part of our operations. Our company founders, particularly Gordon Moore, were huge proponents of efficiency and resource conservation. I like to think that our effective water and wastewater management is part of our makeup or Environmental DNA. Our approach is apparent in all our sites worldwide – China, Costa Rica, Malaysia, New Mexico, Arizona, Massachusetts, etc.
CWR: In your site assessments, what kind of issues do you come across?
Tom: Our site assessment criteria evaluates many items related to water such as– short- and long-term availability, quality, pricing, weather trends and future demand trends, sources (ground, surface), and infrastructure availability.
When we look at prospective project sites and find that the infrastructure is not there to support our operations we evaluate whether there are other balancing factors that make it worthwhile to build the infrastructure. For example, we don’t want to overload the local sewage treatment plant or impact other water users in the area… again, that would be foolish.
CWR: Was there a case where Intel rejected a site because of community issues?
Tom: Yes. We have rejected sites in the past due to water and other environmental considerations.
However, we have also been able to find opportunities where on the surface one might see only barriers. A good example is our operations in Arizona. Being located in a desert region where water is in high demand, we knew that we had to invest resources upfront to ensure that water was used and returned to the environment in a manner that not only supports our operations but those of the community as well. Our site operations and environmental stewardship so impressed the US EPA that we won the national Water Efficiency Leader Award in 2007.
CWR: Tell us more about the detailed water study you conducted in Dalian. What did it throw up that a simple water risks assessment might have overlooked? Did it lead to adjustments of Intel’s operations?
Tom: Great question. I mentioned our “proactive transparency” approach and the water study in Dalian is a perfect example. Concerns had been raised by NGOs concerning the long-term availability of water in some regions in China. So we followed up our initial assessment with another piece of research, tapping different experts, on water use and availability.
We already felt strongly about our original findings and water conservation programs in Dalian but this more recent study gave us an additional level of comfort. We did not need to adjust our water conservation plans, which, I will add, are very aggressive there. In fact, the site has already won Intel’s highest internal “Gold” award for water conservation infrastructure.
CWR: What do you see are the key challenges to resolving China’s water crisis?
Tom: Not everyone realizes the importance of water. And where available, water is inexpensive–which means poor ROI for treatment and recycle. When water availability is tied to business or community success and sustainability, solutions are widespread.