China is a behemoth when it comes to the leather industry. From Paris to New York and Tokyo to London, the chances are that most of the shoes and a good proportion of the leather goods lining high street stores are made somewhere in China. The country produces 67% of the world’s shoes1 and exports2 36% of its leather goods.
According to International Trade Center in 2009 China’s leather industry export value reached more than 56 BN USD, leading the world market just ahead of Italy and Vietnam. As with other successful industries in China such as textiles and toys, the leather industry is labor intensive. As such, the availability of a relatively cheap workforce and an integrated supply chain has given it a competitive edge.
Source: World Statistical Compendium for Raw Hides and Skins, Leathers and Leather Foot wear, FAO, 2010
Historically it seems that the industry’s development came at a cost to the environment, when thousands of small manufacturers competed fiercely for raw materials and cheap labor, paying little attention to the environmental degradation resulting from their activities. Tanneries in particular were widely regarded as polluting in China and even today they are thought to be one of the most polluting light industries in the country3.
Statistics indicate4 that for 2009 the leather industry in China discharged more than 249million m3 of waste water. According to China’s most recent Statistical Yearbook (2010), the industry is amongst the country’s top twenty water dischargers by volume.
In 2006 IPE developed a public data base listing water pollution violations of companies in China. The data base is based on Government data.
Untreated tannery effluents can be highly polluting, containing high concentrations of toxic heavy metals as well as nitrogen compounds and high concentrations of Chemical Oxygen Demand (COD) and Biological Oxygen Demand (BOD).
The industry has therefore not escaped the scrutiny of China’s NGOs. According to the Beijing-based Institute of Public and Environmental Affairs (IPE)5 , as of September 2010 some 850 pollution violations were listed on its site in relation to tanneries
The tanning process and its environmental emissions
( US-EPA Report titled, “Wells G & H Site Remedial Investigation report Part 1, Woburn Massachusetts, Vol 2, p. B-34)
Around 80% of leather globally is chromium tanned.
Not surprisingly, the Chinese government has also recognized the pollution problems facing the sector and a range of initiatives as well as rising labor costs look to be changing the industry’s legacy. In 2009, the Ministry of Industry and Information announced guidelines for the leather industry, which indicated its intention to shut down small polluting tanneries.6 In 2010 it was reported to have shut down numerous ‘dirty tanneries’7 and has required the industry to meet following targets 8 :
- by the end of 2011 50% of the water used in the leather factories should come from recycled water
- by 2010 COD discharge should decrease by 10% compared to 2007
- by 2010 water use and efficiency should be increased by 10% compared to 2007
At the end of 2009 the Ministry also introduced an important policy guidance document: “Guiding Options of Tanning Industry Structural Adjustment”. The Guidelines pointed out the tanneries whose production scale was under 30,000 pieces of standard cattle hide per year must be shut down, and for those producing under 100,000 pieces of standard cattle hide per year would be subject to limits9. The overall effect should be fewer small-scale tanneries operating in china in the future.
The guidelines also firmly encouraged tanneries to obtain certification to the “Eco Leather mark” 10. The Ministry further indicated that the mark would reflect the efforts of China’s tanneries to meet the most stringent quality standard and their move towards a more environmentally sustainable mode of production.
The national government is also working with the China Leather Industry Association (CLIA) in a joint effort to concentrate the industry into a smaller number of specialized tanning clusters,11 “to improve the environmental performance and remove some facilities from urban areas”.
Is there any such thing as eco friendly leather?
China’s eco-leather initiative
For environmentally sensitive buyers of textiles there are in fact many eco labels that indicate various degrees of environmental responsibility in the manufacture of the product. So how does the leather industry fare?
In China, the China Leather Industry Association (CLIA) is the vehicle through which the industry’s environmental issues are being tackled. China Water Risk recently talked to the head of the CLIA’s leather good commission who explained jointly with her two colleagues, the organization’s efforts to control the industry’s pollution.
CLIA is the main professional association representing the leather industry’s interests in China. With a membership of 1360, its organized according to eight divisions: tanning, shoes, fur, luggage and bags, leather clothing, chemical and machinery. It serves as an interface with the central government providing a platform for discussion and facilitating information dissemination over a range of issues, including environmental compliance.
CLIA indicate that environmental protection is high on its agenda, as reflected in the theme of the its last annual meeting in September 2010: Save energy; reduce pollution “节能减排”, reflecting the new government’s slogan for a greener China.
The Association aims to assist the industry in addressing pollution through a number of initiatives. As an example, its “Promotion Center for Effluent Treatment Technology” advise members on water treatment issues. In 2003 the Association launched its “Ecoleather” initiative, which aims to encourage tanneries to meet or exceed the international standards in the production process, as well as in the finished goods themselves. It reportedly specifies strict parameters in terms of the leather quality, the use of some specialised ‘green’ chemicals in leather products, especially in the tanning process, pollution control, waste treatment and corporate social responsibility12. The eco leather initiative is essentially an eco label , and those companies that satisfy specific criteria are entitled to brand their leather with the Genuine Leather Eco-Leather mark. The logo is imprinted on the leather piece before being sold to leather goods manufacturers.
The initiative is embodied in two documents: i) “Specifications on Genuine Leather Mark Eco-Leather” and ii) “Implementing Rules on Genuine Leather Mark Eco-Leather.
The specification notably requires that national regulations are complied with, including environmental protection regulations such as those covering the treatment of pollutants. Annually an unannounced audit is conducted to ensure compliance with the requirements of the initiative. The leather is tested locally and abroad to ensure the chemical content meets relevant l standards e.g. with respect to such hazardous chemicals as chromium VI and formaldehyde.
As of April 2011, 40companies had qualified to use the eco-leather mark13. The initiative also appears to be well received and CLIA informed CWR that multinationals are buying CLIA approved eco-leather.
Despite the efforts of the industry to improve its environmental performance, as of April 2011 IPE’s web site listed five of the 40 companies entitled to use the Eco leather mark as having water pollution infractions in 2010. IPE in the meantime has provided CWR with additional insights into China’s leather industry (See under for specific case study)
The International Leather Working Group on environmental stewardship
Outside of China, the international ‘Leather Working Group (LWG), a collection of 140 stakeholders such as brands, suppliers, retailers, and technical experts, has developed an environmental stewardship protocol14. Through an audit process the protocol aims to ‘assess the environmental performance of tanners according to a scoring system which can award bronze, silver, gold classifications depending on the final results.
LWG reports that it has successfully audited around 20% of the footwear leather supply chain, representing over 2 billion square feet of leather – a little over 10% of global leather production.
CWR talked to Adam Hughes, contracted facilitator for the LWG and commercial director of BLC Leather Technology Center Ltd, to understand the Group’s approach to environmental stewardship.
Hughes explained that LWG’s initiative was launched in 2005 by a collaboration of footwear brands who wanted to assess the environmental stewardship of their supply chain. An effective means to achieve this was determined to be the development of an environmental performance protocol, the implementation of which could then be audited by third party industry specialists.
Today the auditors selected by LWG are small in number and audits protocols are always reviewed by peers. Currently they are approved by the Executive Committee of the LWG
The auditing protocol enables the evaluation of each tannery via a range of parameters including overall environment management, energy and water consumption, waste management, water and air emissions. It’s being used in 21 different countries including 19 tanneries in China. None of the rated tanneries operating in China were found to be on IPE’s black list.
LWG is growing its membership, interestingly as more product manufacturers are joining in anticipation of growing public awareness of environmental issues.
Looking forward to sustainability
Spurred by government’s recognition of the problem and growing public concern both locally and internationally, the Chinese leather industry would appear to be taking steps towards more sustainable production. Looking forward, as CLIA and LWG further develop their environmental initiatives we hope that soon buying a “green” pair of shoes will indicate more than just color.
Case Study: Companies in the leather industry improving environmental performance
Earlier this year, Ma Jun, Director of IPE provided some insights on China’s Tanning industry and its pollution. Ma indicated that tanneries are one of the major polluters in China and a major source of heavy metals, Chromium as an example is highly toxic and is still being used in the processing of leather. He noted that there are technologies available to change the way leather is processed so that it is not so polluting. As such leather manufacturers need to think fully about the use and discharge of chemicals like chromium.
He explained that part of the problem is the fact that the many of the industries’ operations are concentrated along major waterways and in coastal regions, quite few of discharging directly into the sea. Ma points out that these emissions will impact public health through the food chain. Meanwhile, the manufacturing process has very direct environmental and health impacts that have not been taken as seriously as they should be.
What is needed is increased transparency of both textile and leather industries throughout the value chain. In fact, over the past two years Ma points to moves by the leather industry to source materials better – making sure that the leather does not come from land involved in rainforest destruction. Whilst this is commendable, Ma believes the leather industry should not only respond to calls for CO2 reduction i.e. reduced deforestation, but it should pay equal attention to the reduction of water pollution and usage in china. Case studies published by IPE indicate some of the positive actions that companies operating in the sector are taking.
In 2009, IPE highlighted the case of the the Hanjiang Dafu Shoes and Putian Hanjiang Shoe Co ltd.1 In 2007 these two companies came to the attention of Walmart as a result of being listed on IPE’s China water pollution map. As a buyer, Walmart pressured the factories to take corrective action.
In response, the two companies wrote to the local government requesting that the factories be linked to the newly built municipal waste water treatment system, explaining that such pollution control is a must for an export oriented company. The letter also pointed out the important role played by the local government in building the necessary treatment units for factories based in the region. As a result the government extended the wastewater treatment pipeline, the factories were connected and the pollution problem solved. IPE then removed the factories from its map and Walmart retained its relationship
In 2010 IPE worked with a leather tannery company SRL Company Fuguo, to address community concerns mostly linked to odors2. Fuguo was classified as an environmental offender by the local government for repeated years. As a result of public and NGO pressure, the operational process was modified to mitigate the problem and thus avoid nuisance.
1 IPE, Case Study, Hanjiang Dafu Shoe Company & Putian Hanjiang Shoe Company, 2009,
2 IPE Case Study : SRL Company (Fuguo), 2010