Environmental Factors Assessment
1. Current Status of Chinese Environmental Programs
All environmental programs are managed by the Chinese government in some capacity. The Committee on Energy Futures and Air Pollution in Urban China oversees the state and policies of air pollution in Chinese urban environments (Committee on Energy Futures et al., 2007). In recent years, it has taken more direct action as China’s pollution problems have become increasingly visible in global media. However, although the government has made progress such as instilling a program to decrease smog by only allowing cars with even or odd numbered plates to drive in the streets of cities such as Beijing on certain days of the week, it is still far removed from a comprehensive list of laws or regulations for air pollution (Patnaik, 2010).
The Ministry of Water Resources manages a multiple environmental programs for rivers, groundwater, wastewater, drinking water, and ocean water. In general, China’s freshwater resources have not been adequately protected by its Ministry of Water Resources resulting in poor water quality in rivers and lakes; however management of discharge into the ocean has been slightly more favorable (Patnaik, 2010). China’s Marine Pollution Monitoring Programme (MPMP) came into effect in 1993 and has become increasingly strict in recent years. The MPMP is coordinated by China’s State Oceanic Administration (SOA), which is akin to the U.S.’s NOAA, and has led to the establishment of almost 350 monitoring stations along the country’s 18,000 km coastline (Zhijie, 2013).
Zhao and Chia (1999) document the creation of China’s environmental labeling program in the late 1990’s. The goal of this program was to improve environmental management with the expectation of eliminating non-tariff barriers for their exports as well as enabling them to expand domestic market shares. Managed by the Chinese government, this certification system increases consumer awareness about which products are ‘environmentally friendly’; a term which is loosely defined and has been demonstrated to encourage very few enterprises to adopt cleaner policies and/or technologies. Overall, the effectiveness of the program is rather limited because of the small number of product categories included in the labeling system. Additionally, only a few enterprises even participate in the program.
2. Key Changes in Environmental Regulations
If the client’s company is to manufacture active pharmaceutical ingredients in China aimed for generic pharmaceutical markets abroad, it is important to keep in mind possible key changes in Chinese environmental regulations. As China’s economic growth is slowing, the central government is placing increasing importance on environmental protection (Patnick, 2010). Thus, it can be expected that the government will become increasingly strict in its environmental regulations in the next five to ten years.
For one, the central government may become more strict about greenhouse emissions due to increasing negative press about China’s polluted air (Patnick, 2010). Given that the factory for the pharmaceutical company may be small and not as large of a polluting agent than a car manufacturing company, for example, these laws may not be as big of a concern. However, the company will want to keep in mind that its effluent or other discharged chemicals that are byproducts of manufacturing the active pharmaceutical ingredients, may not become increasingly regular. Although these pollutants may not be the government’s first priority now, in five years or less the government start regulating discharged chemicals or taxing a factory’s effluent. Organizations such as the IPE, Institute of Public and Environmental Affairs, are advancing their attempts to track polluting industries. One of these efforts is the IPE’s Pollution Map (http://www.ipe.org.cn/en/pollution/sources.aspx) which is being used in part by the government. Thus, it can be expected that heavier regulations will be forced upon industries in the future.
This could very well impact Chinese suppliers and manufacturing operations of the U.S. company if they decide to relocate to China. Manufacturing operations could become more costly due to more astute oversight by the Chinese government regarding pollution, whether it be air, surface water, groundwater, etc. Thus, although it may be enticing for the company to relocate overseas to China now, this decision could prove to be more costly in the near future due to strict environmental regulations.
3. China’s Approach to Developing Environmental Programs
Historically, China has taken a ‘mimicking’ approach in its development of environmental programs as it adapts programs from western nations by using the best elements for its own management documents. Although there are some strengths in this approach by ‘leap-frogging’ the mistakes of these developed nations and fast tracking to practices that work best, there are also inherent problems with waiting for other nations to figure out effective strategies.
A strength of China’s approach is that it allows for programs to be continually updated and expanded upon based on the improved management practices of other nations. It is also in a good position to learn from the mistakes of other nations to leapfrog policies that did not work and only select the best policies of these programs. For these reasons, China’s base of environmental laws, standards, and regulations is considered to be quite comprehensive for a country of its economic development (The World Bank, 2001).
Despite the willingness of Chinese officials to pick out the program elements that work in western countries’ environmental programs, their adapted versions of the program will never be a true fit for China. In other words, because these environmental programs are usually adopted well after a city has been built or, for example, a stormwater management system has been set in place, the practices do not get to the root of the issues and rather deal with the externalities or after-effects of poor environmental practices. Better environmental management would be reached if these programs had been in effect during the development of systems or initial extraction of natural resources that would have regulated these developments from their inception. Additionally, China’s systems for monitoring environmental contaminants, such as the discharge of pollutants, is far from perfect because the structure of the monitoring which is in a form that it relies on local government officials who can be easily corrupted or may not be correctly trained to implement the management practices.
In comparison to other developing nations, China is at the top of the list for its environmental management programs. However it cannot be complacent if it wishes to be competitive with other more developed nations or if it wishes to progress in a direction of sustainable development and protect its resources for future generations. The challenges it faces are unprecedented by any other nation and it must implement its programs in a timely fashion rather than waiting for other nations to test out programs. Time is of the essence for China.
4.Discuss Workers’ Views of Environmental, Health & Safety Professionals and Programs
The environmental health and safety of its workers would be one of the top priorities for the company; however, given China’s inconsistent and questionable environmental enforcement division, the company would have to take additional precaution to protect workers and the environment from harm. In China, occupational health and safety of workers is overseen by the Ministry of Health for occupational disease prevention and the State Administration of Work Safety for safety issues (Herbert, 2012). As was seen in the case of the 2008 Olympics, the government mandated that some smog-producing companies shut down their operations for two months. No compensation was given to workers in return for the clear, breathable air in Beijing. The government still irregularly shuts down polluting industries and the company must prepare for these occasions.
As an effect of experiences such as seen with the 2008 Olympics, Chinese workers in large cities are most likely largely untrusting of the Environmental Safety and Health professionals and programs that are meant to protect them and their wages. Historically speaking, programs to pay workers when the governments mandate the temporary shutdown of the factory have not been very reliable and the company would have to do extra work to rebuild workers’ trust. Overall, there would be a large opportunity for improving the lives of our workers by setting programs in place that are designed to protect workers and the environment from harm. Obstacles set in place by the Chinese government that infringe upon their rights as laborers and above all, human beings, must be overcome.
5.Conclusion
The U.S. company should not relocate to China despite the draw of less expensive labor and production costs. The three reasons for this recommendation are: 1) the company will end up spending more money to ensure the same environmental and health standards are met in China as they would be in the U.S., which is the morally correct action to take, 2) failure to protect workers and cover the “loop holes” that the Chinese government has created in its occupational health and safety of workers plans, could result in negative media covering by human rights organizations; however installing plans to protect workers with the same quality of protection they would receive in the U.S. could be both very challenging and expensive, 3) environmental issues and quality of China’s natural resources (ie: soil, water, air, etc) will only be exacerbated with climate change and the costs of increasing temperatures, drought, increasing frequency and intensity of natural disasters is highly uncertain and unpredictable.
References
Committee on Energy Futures and Air Pollution in Urban China and the United States, National Academy of Engineering and National Research Council in collaboration with Chinese Academy of Engineering and Chinese Academy of Sciences, (2007). Energy Futures and Urban Air Pollution: Challenges for China and the United States. Washington D. C.: The National Academic Press.
Herbert, A. (2012). National Profile Report on Occupational Safety and Health in China (pp. 1–115). Retrieved from http://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---safework/documents/policy/wcms_186991.pdf
Ministry of the Environment (2011). 2011 Report on the State of Environment in China.
Patnaik, P. (2010). Air Analysis. In Handbook of Environmental Analysis (pp. 121–130). Boca Raton: CRC Press. doi:doi:10.1201/b10505-14
The World Bank (Ed.). (2001). China: Air, Land, and Water (p. 176). Washington DC: The World Bank. doi:doi:10.1596/0-8213-4937-6
Zhao, J., & Xia, Q. (1999). China’s Environmental Labeling Program. Environmental Impact Assessment Review, 19, 477–497. Retrieved from http://ac.els-cdn.com/S0195925599000244/1-s2.0-S0195925599000244-main.pdf?_tid=95c78a72-7cf7-11e4-b318-00000aab0f26&acdnat=1417836534_fbe213475759a03f0d853e6df45e0aa1
Zhijie, F. (1993). Chinese Marine Pollution Monitoring Programme. Marine Pollution Bulletin, 26(2), 62–63. doi:10.1016/0025-326X(93)90087-Z
