Raising environmental standards in the Chinese steel sector

First amendment in 25 years to Chinese Environment Protection Law promises change 

By Johahn Bhurrut June 18, 2015

Air pollution knows no boundaries. Today, researchers are looking at how pollution in Asia is contributing to climate change and changing weather patterns around the globe. In the U.S., the National Aeronautics and Space Administration and the California Institute of Technology have confirmed that air pollution from Asia can directly affect storm patterns over the Pacific Ocean, with some speculating that it could be driving extreme winters in North America.

The significance of air pollution to all people is huge. According to the World Health Organization, seven million people died as a result of air pollution exposure in 2012 – one in eight of total global deaths. In its UNEP Year Book 2014, the United Nations Environment Programme calls air pollution the world’s worst environmental health risk.

China takes action

In 2014, the Chinese government revised its Environment Protection Law and introduced much tougher penalties for corporate and government offenders. This is the first time in 25 years that legislators in China have amended the law, which gives greater powers to environmental regulators and brings harsher punishments for polluters.

Limits on fines have been removed. These were historically so low that it was often more costly for businesses to abide by the law than pay the fines. On top of heavier penalties, corporate leaders can now face up to 15 days of detention. Government officials are also held accountable and may face demotions, dismissals and criminal proceedings if they fail to keep polluters in check.

The public has also been given a more significant role. Businesses must publicly disclose the environmental impact of their projects and justify them to both the local government and the public. Violations may be made public and damage the reputation of polluters.

Raising standards in the steel industry

Cargill, which operates a wide range of businesses in China including steel, is committed to finding ways to reduce its environmental footprint.

In June 2015, the company collaborated with the China Environmental Protection Foundation  and the Education Center of the Shandong Environmental Protection Bureau to bring together Chinese government officials and companies in the steel industry for an education and training seminar. More than 30 representatives from about 20 medium to large businesses attended the event during which they gained a better understanding of the revised EP Law and learned how to implement it to ensure full compliance.

Lee Kirk, leader of Cargill’s Metals Supply Chain business, spoke at the event.

“The revised EP Law addresses a global concern which touches the lives of every one of us. As companies, we are fundamentally responsible to ensure that the economic aspect of our business does not come at the detriment of the environment. As a global organization with a 150-year legacy, Cargill is strongly committed to protecting our environment. We will work closely with the government, our customers, our partners and the communities we operate in to overcome any challenges along the way to ensure compliance,” said Kirk.

“We are glad to have Cargill as a partner to introduce the revised EP Law and share its global experiences over the past 150 years around environment protection and sustainability,” said CEPF Deputy Secretary-General Wang Tingjian. “Enterprises attending the training programme have a lot to gain to help them better comply with the revised law, and very importantly make the world a better place by preserving the environment.”

This is just the beginning of a two-year campaign – targeted at businesses in the steel industry in China – that Cargill has initiated to help smooth the transition to the new rules and regulations. During that same period, Cargill also will engage in an educational campaign about the importance of preserving the environment. The campaign is targeted at students and communities throughout the Shandong province to enhance public awareness of environmental protection.