Interviews

IPE - Risks Shifting Beyond the Wall

Risks Shifting Beyond the Wall

About Ma Yingying

Ma Yingying is the Green Supply Chain Project Manager for the Institute of Public & Environmental Affairs (IPE). She conducts environment related research, management and consulting on water and climate for universities, enterprises as well as government agencies. Ma Yingying holds a bachelor degree in Science Geochemistry from Peking University and a master degree of Environmental Economics and Management from University of Montesquieu-Bordeaux IV.

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The Ministry of Environmental Protection (MEP) has been tightening & introducing various new stringent industrial wastewater discharge standards over the last few years. Factories will have to comply with some of these standards this year. However, in November 2014, the MEP proposed to revise the standard for the textile sector, by relaxing the indirect discharge standard for wastewater discharged to treatment facilities in industrial parks.

Some industry insiders believe the proposed amendment is the result of lobbying efforts by textile enterprises & associations as the cost of implementing and operating wastewater treatment equipment per factory can be prohibitive. On the other hand, others like Professor Xi Danli from Donghua University believe the amendment is necessary as the previous standards were too strict, making it almost impossible not to violate the standards. Regardless, the relaxation should encourage more centralised treatment, which in theory could reduce pollution as smaller discharging enterprises will not have the same treatment capacity as centralised facilities. At the same time, this should also reduce the incentive to illegal discharge. 

Although this draft amendment is currently undergoing public consultation, NGOs and experts have raised concerns over the capability of these frequently over-utilised centralised treatment systems to deal with the additional load. Their concerns are justified.

IPE Report - No excuses Taking full responsibility for pollution from manufacturing

A recent report, “No excuses: Taking full responsibility for pollution from manufacturing”, highlighted an average of 1.4 violations per wastewater treatment facility between 2008 & June 2013 recorded by Institute of Public & Environmental Affairs’ (IPE) China Water Pollution Map.

The report by IPE, Lvse Jiangnan, Natural Resources Defense Council (NRDC), Zhaolu Environmental Protection and Commonweal Service Center, warns that “many centralized treatment systems in China are already severely overloaded or operating in a way that does not sufficiently treat the wastewaters they received”. It particularly highlights “serious problems” with current centralised treatment facilities for that treat printing and dyeing wastewater.

With violations records of wastewater treatment plants rising, it is clear that risks are shifting beyond the factory wall.

2008-2013 Upward Trend in Violations of Wastewater Treatment Facilities

As the government continues to push the “war on pollution”, it will be less easy to hide behind unaccountable mechanisms to directly/indirectly discharge above the standard or permitted levels. Do brands now need to include centralised treatment plants in their supply chain audits?

China Water Risk interviewed IPE’s Green Supply Chain Project Manager, Ma Yingying (MYY) to find out more about key challenges in managing this shift in risk – topics discussed range from unaccountable mechanisms between parties, limited transparency, ineffective monitoring to technological limitations. What can brands and manufacturers do?


China Water Risk(CWR): Is centralised treatment an effective treatment method for China’s textile wastewater?

MYY: Our survey suggests parts of centralised printing and dyeing wastewater treatment has serious problems and so should not be considered a cure-all.

Vague responsibilities & supervision between factories and treatment plants means central treatment brings centralised pollution

These problems lie in: 1) vague responsibilities between enterprises generating wastewater and wastewater treatment companies, 2) lack of effective supervision and management on pre-treatment by factories, which leads to excessive discharge by centralised plants, and 3) lack of effective supervision and treatment at the centralised treatment plants.

As a result, centralised treatment brings centralised pollution.

CWR: Can you elaborate on the main causes of “centralised pollution”?

MYY: One reason, as I mentioned before, is the vague responsibilities or unclear mechanisms between factories and wastewater treatment plants. This makes it difficult to hold factories accountable for exceeding discharge capacity. The vagueness is also not conducive to driving a green supply chain

Centralised wastewater pre-treatment plants are mostly municipal wastewater treatment plants and can hardly ensure adequate treatment of the pollutants

Technology is the other cause. Current centralised wastewater pre-treatment plants are mostly municipal wastewater treatment plants. Without cooperation from the factories for upgrading technology, the plants can hardly ensure adequate treatment of the pollutants.

Without these upgrades there centralised treatment can actually have negative effects such as an increase in the amount of sludge, according to a partner NGO.

 

CWR: According to the report, once the discharged wastewater enters the centralised facility the data monitoring ceases. Should we be worried?

MYY: In the past, we could trace discharging data of every enterprise and wastewater treatment plant but now only the centralised facility’s discharging data is available.

“Theoretically, enterprise discharging data should be able to remain public…”

Theoretically, enterprise discharging data should be able to remain public with the help of technology. It all depends on the willingness of the enterprise – are they willing to publish the data? As for data from the treatment plants, we can’t find any.

 

CWR: The report shows that pressure from brands & customers can instigate change in the right direction, like the Saintyear Holding Group Company that now rents a wastewater treatment facility to pre-treat its discharge. Can this model be extended to other factories?

MYY: We believe that “pre-treatment” can be carried out widely but to rent a wastewater treatment plant is not easy promote. Saintyear’s case is rather special because it was being pressured by brands like Uniqlo and GAP to reduce its pollution.

All companies and factories have different circumstances but nevertheless we encourage them to propose solutions in line with their situation. It is important that every solution include a clear public commitment on pre-treatment responsibility. In that sense, Saintyear is ahead of the pack with its public commitment to upgrade the wastewater treatment plant it rents to meet discharge standards.

CWR: What’s the best practice for centralised wastewater discharge? The report outlines practice in the US, is it applicable to China?

MYY: Our report partner, NRDC has a strong US focus. The US government passed the “Clean Water Act” in 1972, which included a provision for mandatory pre-treatment and another for waste discharge permit application. Moreover, enterprises that use centralised treatment as well as all centralised treatment plants need to make their treatment standards & their discharges open to the public.

China’s Accountability System for Centralised Treatment Systems

The rights and obligations of those discharging and those treating wastewater in a centralised treatment models are as follows: enterprises generating pollution should send wastewater to the wastewater treatment company that adheres to contractually agreed pre-treatment standards. Centralised wastewater treatment companies should treat wastewater sent to them by the discharging enterprise in accordance with a pre-arrange fee level.

Source: IPE Report “No excuses: Taking full responsibility for pollution from manufacturing”, December 2014

 

We suggest that the Chinese government, textile enterprises and brands work together to improve accountability in the wastewater treatment system

We suggest in the report that the Chinese government, textile enterprises and brands work together to improve accountability in the wastewater treatment system. One simple example here is for enterprises to publish their self-monitored data to help identify responsibility.

In Jiangsu province, we have seen enterprises moving towards this referred to as “one enterprise, one monitoring”, which will enhance regulations on every enterprise that contributes to centralised treatment.

 

CWR: The China National Textile and Apparel Council (CNTAC) has been working with the Ministry of Industry and Information Technology to carry out an “ecological plan” for the textile industry. The plan aims to reduce waste discharge by improving technology and design of workflows such as: front-end reduction of wastewater and wastewater treatment based on the amount of pollutants etc… What are the key challenges here?

“ the key obstacles are the lack of motivation, lax supervision, low water price…”

MYY: We believe the key obstacles are the lack of motivation, lax supervision, low water price and the lack of brands with green supply chains.

 

 

CWR: The report recommends brands to incorporate “pre-treatment” into their operations. Do you think they will do so?

MYY: Our discussions with brands suggest they are willing to include wastewater pre-treatment in their supply chain management.

“The next step for brands is to pressure the wastewater treatment plants.”

For now, brands are urging enterprises to comply with local environmental standards as it is easier for them to do that than manage a wastewater treatment plant themselves. The next step for brands is to pressure the wastewater treatment plants.

 

Textile Brands Performance Past Three Years

Our past experience shows that when brands encourage enterprises to increase investment in environmental protection they are more motivated to do so. Moreover, brands can also apply pressure regarding hazardous chemicals and long-term investment. To accelerate the adoption of these brands can also help enterprises with financial incentives.

In our work with brands we have also found that these actions are not causing additional burden to brands, since it’s part of their Corporate Social Responsibility programmes. Some international brands have made great effort as well as some domestic enterprises, such as Li-Ning.

 

CWR: We have seen growing government pressure on the textile industry regarding the environment. Will this cause the textile industry to move out of China?

MYY: Increasing labour costs will lead to a shift in garment sectors. However, the printing and dyeing sector is a technology and capital-intensive industry. This means that some big brands will keep their operations in China because of the higher level of technology.

printing & dyeing is a tech & capital-intensive industry so big brands will keep their operations in China due to the higher level of tech

When completing IPE’s Pollutant Release and Transfer Register (PRTR) some brands proposed to include their suppliers in Southeast Asia. We agree that this would be beneficial. If brands can apply uniform requirements on its global suppliers, a new round of pollution transfer could be avoided. With that wish, we hope our PRTR platform can expand internationally so that more enterprises can enjoy fair market competition. By doing so, we can promote global sustainable development of the textile industry.


Further Reading

  • China Water Risk’s 5 Trends for 2015 – As China moves to re-balance its economy and environment, Beijing will shepherd the nation towards water, food & energy security. For the Year of the Goat, it is better to be the surefooted goat than the sacrificial lamb so check out our top 5 trends in water for 2015
  • 8 Game-Changing Policy Paths - There has been a fundamental shift in planning China’s future growth with changes in regulatory landscape due to multiple polices set & changes in law. Many come into full effect in 2015. Get on top of these policy shifts
  • New Trading Markets to Enforce Red Lines – China has been experimenting with market mechanisms. Can China’s new water permit trading markets (discharge & use) help the nation hold its Three Red Lines on water use, efficiency & pollution as well as catalyze a bigger water market? Feng Hu expands
  • Pollution: It Doesn’t Pay to be Naughty – State Council wants to use the enforcement of law & regulation “to force the economy to transform and upgrade”. See how violation cost surges with daily fines, new standards & discharge permit trading in a bid to push China to go clean

Textile sector

  • Dirty Thirsty Wars – Fashion Blindsided - CLSA report titled “Dirty Thirsty Fashion: Blindsided by China’s water wars”, examines how China’s water risks could blindside the US$1.7 trillion global fashion industry. Is this the end of fast fashion? Debra Tan expands
  • Chinese Appetite for Dirty Fashion - Do Chinese consumers know fashion’s ‘dirty’ secret? Will it change the way they shop? Liu talks to fashion bloggers, fast fashion managers, taobao shop owners, housewives, NGOs, students
  • Brand Rankings Through A Chinese Lens – See how global and local brands rank across 8 sectors in terms of their supply chain’s environmental impact in this review of the new Corporate Information Transparency Index (CITI) report by IPE & NRDC
  • The War on Water Pollution – Premier Li has just declared war on pollution. Tan expands on the government’s stratagems & offensives and fundamental changes required to shore up the MEP’s arsenal in order to wage a successful war

Industrial wastewater

  • Fundamental Issues in Industrial Water – Professor Ma Zhong, dean of the School of Environment of Renmin University gives his in-depth views on the industrial wastewater standards & pricing. Is it cheaper to pollute than to treat?
  • 8 Facts on China’s Wastewater - Don’t know anything about wastewater in China? Is it on the rise? Is industrial wastewater under-reported? Is it worse for rural areas? Check out our 8 facts from tech, key pollutants to standards
  • Pricing Water - With the NDRC’s recent announcement of tiered tariff hikes across China’s cities to rein in top end water users, Tan mulls over the proposed tiered water tariffs hikes and whether price points and switchpoints between tiers are properly set