Multinational Corporations Exposed for Sewage Discharge in China

November 8, 2006 Updated: November 8, 2006

According to an October 26th report by Southern Weekly , a Chinese newspaper, the Citizens and Environment Research Center in China recently released a list of at least 33 famous multinational corporations, including five Fortune Global 500 corporations, that have subsidiary companies in China that have violated environmental protection regulations and become major sources of water pollution.

The report claimed that this list includes the following: The Shanghai Matsushita Battery Co., Ltd., whose parent company is the Matsushita Electric Industrial Co., Ltd. in Japan, which ranked number 47 on Fortune's Global 500, exceeded the sewage drainage standards as a result of its waste water disposal facility's failure to guarantee normal operation; Changchun PepsiCo. Inc., whose parent company is Pepsi-Cola International, which ranked number 175, has exceeded the standards for pollutant emission and sewage drainage; Nestle Sources Shanghai Ltd., whose parent company is Nestle based in Switzerland, which ranked number 53, launched its main project into production arbitrarily without having its environmental protection facilities inspected and approved; 3M's manufacturing facilities in Shanghai, with its parent company ranked number 301, launched into production and use without conducting an environmental impact evaluation and assessment.

Companies Violate Basic Regulations

Recently, the director of the non-government organization Citizens and Environment Research Center, Ma Jun, released this list to the public. Ma was named by the U.S. edition of Time magazine as one of the 100 most influential people in the world in 2006. He indicated that these multinational corporations have violated the most fundamental environmental protection regulations in China.

These corporations span many industries including food, electronic, chemical engineering, and mechanical manufacturing, as well as a number of countries, such as Japan, the United States and Switzerland. Besides the aforementioned Chinese subsidiaries of the Fortune Global 500 corporations, some well-known Chinese brandnames are also on the list. For example, the Japanese funded Kao (China) Holding Co., Ltd. in Shanghai was enlisted on the second batch of illegal enterprises investigated and, in 2005, was prosecuted by municipal environmental protection system for exceeding waste water drainage standards arbitrarily. In addition, two other notables in the list include the Chinese joint venture of the American Standard Companies, Inc., which was ranked first of the world's top 10 sanitation pottery companies, and U.S. Pizza Hut's subsidiary in Shanghai.

Companies Exposed Only Part of List of Violators

A company in Fujian Province, which received investment from the German Noell Crane Systems Ltd. was also enlisted. The company's license is being supervised for launching into production without constructing facilities for managing pollution and causing serious pollution.

In Zhejiang Province, the British company Purolite International Company Ltd.'s subsidiary in China is enlisted as one of the main pollution producing companies in the province in 2005. The Purolite International Company Ltd. is the largest multinational corporation around the world for manufacturing Ion Exchange Resin.

In Hunan Province, the Japanese Yamaha Motor Co. Ltd.'s subsidiary individual proprietorship company was listed as one of the 20 major pollution causing companies. In the city of Zhuzhou, the company's license is being supervised for its electroplate production line containing “serious hidden danger for environmental safety”.

“This is only part of the record of multinational corporations' violation of regulations in China”, Ma Jun said. Apparently, the aforementioned list only referred to corporations that were involved in water pollution. Corporations involved in other pollutions such as air pollution and solid waste pollution were not included. Moreover, the corporations on the list only include those released by various local environmental protection bureaus. Also, in some provinces in China, these lists are not released to the public.

Multinational Corporations Should be the Leaders

The Inspection general of Green Peace's China project, Lu Sicheng, believes that most Chinese companies failed to meet environmental protection standard due to inability to meet the standards, but for multinational corporations, it is more an issue of willingness. “The multinational corporations should be the leaders in their respective industries.”

An official from China's Environmental Protection Bureau stated that the Chinese public's monitoring of these multinational corporations is also very important. In European and American cities, if some steps in the production chain cannot get the public's approval, public hearings or the parliament are likely to reject them. Although China also has environmental impact appraisal now, which has some public participation, its strength and breadth are still far from desirable.