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Chemical reactions on the Yangtze

Plans to boost production of hazardous substances at the head of the Three Gorges reservoir threaten the sensitive surroundings, says Yang Chuanmin, winner of the “in-depth reporting” category in the China Environmental Press Awards.

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In the rolling hills alongside the Three Gorges reservoir, on a Tiananmen Square-sized plot of land, stands a sign marking the site of an “Integrated MDI Project” in the village of Baishi. On completion, this will be home to the world’s largest Methylene diphenyl diisocyanate plant and the villagers all know that German chemical giant BASF is on the way.

Media reports have reflected the strength of reaction to the choice of location, with some environmentalists calling it a “timebomb” at the head of the Three Gorges.

BASF’s project here in the municipality of Chongqing, central China, is just one example of the rush to invest in the region’s chemical industry. Chinese firms PetroChina and Sinosteel are also among the host of chemical giants setting up locally. It is anyone’s guess what the Yangtze River will look like in five years time. 

Environmental issues have been a concern ever since the Three Gorges became a reservoir and remain so. Earlier this month, I travelled along its banks and witnessed the tension between job creation and environmental protection. The plentiful water resources here in the Yangtze hinterland are attracting a new wave of chemical-sector investment. But the smooth progress, or otherwise, of BASF’s plant will point the way for future development.

Clearing the way

BASF, headquartered in Ludwigshafen in Germany, manufactures products ranging from fertiliser to specialised plastics. In China, the firm already has factories in Shanghai, Nanjing, Guangzhou and Jilin. The Chongqing MDI plant aims to serve the market in western China.

MDI, or methylene diphenyl diisocyanate, is the raw material used to produce polyurethane (PU), which in turn is used to make everything from handbags to shoe soles. Guan Zhihua, president of BASF China, has said the Three Gorges location was chosen for proximity to sources of natural gas – needed to produce PU – as well as the prospects of sales to the growing construction and automobile sectors. And so the future of Baishi, a village close to the reservoir, has become inextricably linked to that of this multinational corporation.

Up until that point, Baishi, in Chongqing’s central district of Changshou, was just an ordinary village. Even now, you still see river birds flying over the fields. But those fields will soon be transformed into a factory belonging to a Fortune 500 firm. Villagers are already being relocated to make room; moved to the stretches of new buildings springing up alongside the Yangtze. A modern logistics network is under construction, with a Changshou Industrial Zone train station set to be built just behind the MDI plant. If only they were staying, say the villagers, they could take the train to Shanghai.

Former party branch secretary Hu Quanyou is perched on a wooden stool at the entrance to the village, chatting with the other villagers. “When it comes to development, the new is better than the old,” he says. “The capitalist countries never developed this fast, did they?”

Hu counts them off on his fingers. When BASF was clearing the land, eight production teams were moved. During the next phase of construction, another 13 went. Of the 1,300 original villagers, only 200 remain – and they and Hu will be leaving when the plant starts running. They don’t know what their new lives in the city will be like, but they long for the benefits the factory might bring. “Those places with factories – Shipan, Dukou – they’re rich,” says Hu. “The village head and party secretary all drive luxury cars.”

In fact, the jobs will not go to aging and unskilled villagers. Work in a modern factory is not easy to get. But even if most locals fail to find employment in the actual plant, the number of jobs that BASF will create in upstream and downstream industries should not be underestimated. A timetable worked out by BASF and the Chongqing government when ground was broken in 2007, anticipates production will start in 2012, creating a natural gas industrial group with target annual sales of 50 billion yuan (US$7.3 billion) and generating some 250,000 direct and indirect jobs.

The knock-on benefits will go even further. Taxi driver Li Xiaohong is making almost 10,000 yuan (US$1,460) a year in Changshou. He is not sure what he wants to see happen. The more plants there are, the more people travel between them, but he doesn’t like the idea of too many factories.

You sometimes get a whiff of something unpleasant in the air here. The expert locals can tell you if the smell is coming from the acetate factory or the biochemical plant and even which factories you can smell from which hills. Changshou has already become a chemical-industry city. Li says that whenever someone falls ill and the local hospital sends them to Chongqing for tests, the diagnosis is always cancer, or worse. This worries some, but others are unconcerned.    

Changshou is at the head of the reservoir. An enormous industrial park has already taken shape here, and it is only going to get bigger. Three huge projects are on the way: a Chongqing Iron and Steel Company plant with expected annual output of five million tonnes; BASF’s factory, which will produce 400,000 tonnes of MDI a year; and a PetroChina oil refinery, with an annual processing capacity of 10 million tonnes. The locals tell each other that even if all the other plants fail, those three alone will keep the local economy healthy.

Chongqing, a young municipality, is in the process of restructuring its industrial sector. Heavy-chemical plants are being moved out of the city to make room for automobile and electronic-components manufacturing – and the destination is Changshou’s new industrial zone.

Changshou has everything the chemical industry needs and BASF knew that when it chose the location. In the 1960s, the government decided to develop key industries in inland China in order to protect them from military attack in case of a war – and this was an important location for large chemical plants. The city is set to host a complete industrial chain. According to the zone’s managers, it will bring five different processes together. Infrastructure is also being put in place, such as the two bridges built over the Yangtze for Chongqing Iron and Steel’s 24 billion-yuan (US$3.5 billion) plant.

Changshou itself is a bustling city. At night, the central square – located at the city’s highest point – is lit up and filled with locals eating the local spicy chicken dish and visiting the department store, which is covered with illuminated property advertisements.

Protecting investment

Industry investment has boosted Changshou’s economy. But the other side of that coin – environmental dangers – cannot be ignored. BASF’s project in Baishi is one example of the risks being taken. This month the project won approval in principle from China’s Ministry of Environmental Protection. When the news broke, NGOs and environmentalists lined up to make their opposition clear.

Greenpeace scientists have pointed out that, while MDI can be stored easily and is not highly toxic, the raw and intermediate materials used in its production are extremely dangerous. The scheme’s publicly available environmental-impact assessment shows that the facility will be able to manufacture 400,000 tonnes of nitrobenzene and 300,000 tonnes of aniline annually. These are both highly toxic chemicals that are easily absorbed through the respiratory system. Long-term exposure can cause serious damage to the central nervous system. It was the release of nitrobenzene into the Songjiang River after an explosion at a PetroChina plant in Jilin in 2005 that forced downstream city Harbin to cut off water supplies for four days.

Given the sensitivity of the reservoir environment, Zhang Kai, head of pollution campaigns at Greenpeace, hopes that there will be a broader and fuller release of information before construction starts.

When I asked the Chongqing Environmental Protection Bureau about this, I was told that BASF’s design incorporated effective environmental-safety measures, with risk prevention systems at the workshop, facility and zone levels. Environmental risks would be controlled and the security of the reservoir’s environment assured, they said.

The bureau’s deputy chief engineer, Xu Yu, told me that Chongqing’s automated monitoring systems already cover more than 100 factories with potential environmental dangers and that, if BASF goes into production, it will be supervised in the same way.

But the sensitivity of the reservoir means that the sceptics’ doubts are getting plenty of attention – much more than the zone managers anticipated. Last year, local leaders were loudly publicising information on the project. But now they prefer to avoid the topic. “The local government had to fight to get the investment,” I was told, at both the Environmental Protection Bureau and the industrial zone. “As soon as things were stirred up on the internet, competing local governments started trying to grab it for themselves.”

BASF: not giving up

In fact, the MDI project is not yet a done deal. While BASF’s China arm told this newspaper that there is no chance that it will abandon the project, it did admit that the technical checks it has passed are only the first stage in the overall process. Next the project needs to be examined by the National Development and Reform Commission and so “The approval process for the BASF Chongqing MDI project is still underway.”

Like everywhere else, the global financial crisis has had an impact. BASF says it expects the worldwide MDI market to shrink in 2009, including in China. This has had an effect on the timetable and, while no details have been released, the planned date for the start of production may be pushed back until after 2012.

Responding to NGO and environmentalists’ doubts, BASF said it was aware of the importance of the Three Gorges area. The upper reaches of the Yangtze impact the water security of more than one 100 million people, and BASF has said it is committed to using the highest global standards in the construction and engineering of its chemical plant.

BASF also pointed out that this is not the first time the company has built a plant by a major river. A factory in Ludwigshafen, on the upper reaches of the Rhine – a major European river – has operated for 140 years without incident, and even has squirrels in the grounds. Similarly there is a BASF facility at Geismar in the United States, on the banks of the Mississippi.

BASF takes pride in its awards for corporate social responsibility. Yet the company’s Shanghai plant features on the pollution map run by the Beijing-based Institute of Public and Environmental Affairs. An explosion at one of its plants in Cincinnati, in the US state of Ohio, once left two dead and many more injured.

In contrast to its practice in other countries, BASF has not publicised information on the release of pollutants from its 15 wholly-owned and joint-venture plants in China – an omission that has led to accusations of “double standards” from Greenpeace.

In response to these criticisms, BASF this week said that its global operation publishes environmental information in its annual reports. But in China, things are done slightly differently. In accordance with local law, the information is instead submitted regularly to local environmental authorities.

Risking the environment


The risks posed by the plant itself will not be the only factor to determine whether or not approval is granted. The peculiar sensitivity of the area will also play a role. The Three Gorges reservoir – 600 kilometres long, 1,100 metres wide and downstream from a huge metropolis – is itself unique and so there is no prior example of a large chemical plant being built in this kind of location.

“Building this kind of facility here, even if it is up to standard, is bound to increase the dangers to the environment,” says Chen Jin, deputy head at the Yangtze Commission’s Yangtze Science Academy.

There is already research showing that the water’s ability to clean itself has been greatly reduced since the Three Gorges Dam was built. In the past, around half of all biodegradable pollutants flowing downstream from Chongqing had broken up by the time they reached Changshou. Now, just one tenth have done so. This means pollutants could accumulate in the reservoir over the long term.

Chen specialises in environmental protection in water projects. He explains that the ability of the reservoir to withstand environmental threats varies according to the season. From April to October, the water level is kept low in case it is necessary to prevent flooding in the lower reaches of the river. During this period, the water level is kept stable and it functions more or less as a natural river. Low levels of pollutants can be diluted. But when the dry season starts in November, the water level is raised to 175 metres in order to provide water for electricity generation. At this point, the reservoir struggles to break down or eliminate any pollutants.

Zhou Qingxing, head of Chongqing University’s Institute of Public Management, once concluded an article by writing that the biggest problems facing the city, full of aging industry, were the hazards posed by manufacturing plants and water pollution around the reservoir.

Chongqing was once China’s only large industrialised city with natural gas wells, and so the chemical industry took root here. Its local origins go as far back as pre-1949 days, with another spurt of growth occurring in the 1960s as a result of the relocation of the military enterprises, many of which have since been converted for civil purposes. Sinopec Sichuan Vinylon Works is one of the more successful examples of this process. A dedicated bus line runs to the factory run every hour from Chongqing’s long-distance coach station, and the queues are long.

The employment gap

There is another, more complex reason behind the efforts to attract BASF and similar firms to the region. The lack of industry in the Three Gorges area is becoming more of a problem every day.

Attempts by the former State Environmental Protection Administration (now the Ministry of Environmental Protection) to prevent water pollution in the Three Gorges saw paper, leather, fertiliser and dye plants with annual sales of less than five million yuan (US$732,000) closed, along with any small breweries and distilleries emitting high levels of pollutants.

“Actually there was no need for us to go and close them – they were going to end up underwater anyway,” says Xu Yu of Chongqing’s Environmental Protection Bureau, who has long been in charge of environmental monitoring in the area. As the small factories were located along the riverside, most of them were submerged as the reservoir filled, he explains.    

The factory closures might have eased some of the environmental pressures, but they worsened unemployment. Since hearings were held on the Three Gorges Dam, cities on the banks have been stuck in limbo, for years forbidden from making any investment.

Wanzhou, halfway along the Gorges, hosts more relocated people than any other city. In the 10 years it will take to fill the reservoir, 200,000 people will resettle here. But the local economy has no jobs for them and the main form of employment for many of the young is work as motorcycle taxi drivers.

Wanzhou has electronics shops, McDonalds and several four-star hotels. But there aren’t many factories or mines, and that makes it hard for the locals to find work – and even harder for the new arrivals. Some of the windows in one apartment complex designated for the relocated are covered with ragged cloth. “The poorest of us don’t even get three meals a day,” says one.

Yang Yeyou is one of the many to have been thrown into poverty. A former village head, he opted to come to Wanzhou as he thought it would be easier for his children to find a good job. But things do not look good. There are few vacancies and the young are forced to become street hawkers or take odd jobs. “It doesn’t bring in enough to eat,” says 66-year-old Yang, shaking his head. He has had to take on cleaning work and use the 180 yuan (US$26.40) he earns a month to supplement the family income.

And so the prospect of jobs, direct or not, with firms such as BASF would be welcome. Wanzhou folk say that they envy Changshou – it has lots of factories, a better economy and richer people.

Preferential policies

Wanzhou has also been earmarked to host one of the three major industrial parks planned for Chongqing, this one using rock salt as the basis for a salt industry. There aren’t many large-scale plants actually in production here and the area zoned for industry has only scattered factories among the fields. But large companies have already cleared sites here. When the reservoir is full, Wanzhou will become a deep-water port and high-speed road and rail links to Yichang are under construction. Convenient logistics makes industrial development easier. Chongqing’s three industrial zones – Changshou, Fuling and Wanzhou – are all in the Three Gorges area.

At the end of last year, Chongqing’s environmental authorities held a seminar on environmental protection and development for the chemical and petrochemical sectors. The experts in attendance all agreed that the west of China, and particularly the Three Gorges area, needed faster economic growth and backed the expansion of these sectors, with the proviso that it was high-level development, and toxic and harmful pollutants were controlled. This was seen as providing a rationale for the development of Chongqing’s chemical and petrochemical industries, and paving the way for approval of the BASF and refinery projects.

Recent years have seen a loosening of policy on chemical-industry investment in the area. Chongqing regulations on prevention of water pollution, issued in 2002, forbade the building of projects which would cause, or risked causing, major pollution. Those already built were to be referred to local government for relocation or upgrade by the environmental authorities. But the document did not specify which industries constituted a risk, and it is clear that the authorities do not consider BASF and similar projects to be affected.

Eye-catching adverts in the Changshou industrial zone list the advantages for potential investors: preferential polices for investment in a national development zone, in the west of China, in the Three Gorges area and in Changshou. Wanzhou’s Longdu zone prominently displays similar information.

But will the Three Gorges paralyse development, or catalyse it?

It is worth noting that recent years have seen a wave of chemical-industry investment in the middle and upper reaches of the Yangtze, with heavy chemical plants laying the foundation for a shift of investment-led development from the coastal areas inland. The water-rich Yangtze has led to a land rush by chemical giants. PetroChina plans to follow an 800,000-tonne ethylene plant and 10 million-tonne refinery in Pengzhou with another 10 million-tonne refinery in Chongqing.

This new situation will test the environmental security of the reservoir as it fills. “The Three Gorges should be a key area for water protection, with investment in large chemical plants banned,” says Chen Jin. But the situation here is special: Chongqing sacrificed a lot for the Three Gorges Dam and the economic development drive is coming into conflict with the environment.

The Yangtze River Commission has just completed a research project on the development of an emergency-response system for the area, which covers management of the reservoir and aims to reduce environmental risk. The plans will be discussed with the Three Gorges Committee and the Office of State Flood Control before confirmation.

But the weathervane MDI project is still under consideration. According to an informed source, the Ministry of Environmental Protection paid another secret visit to the area at the same time as this report was being researched in order to refine the emissions standards and conditions for BASF’s scheme.

The water level in the reservoir rises in February as snow and ice upstream melts. The water runs clear and, while water-treatment plants in cities on the banks of the Three Gorges are still under construction, the impression is that water quality here is better than in many other Chinese rivers.

But there are still lurking dangers at the world’s largest reservoir. A Changshou ferryman points out the plastic barrels lined up against the wall of his building. The water from the middle of the river is still good to drink, he says – but not if the factories dump in the water: “Then we can’t drink it.”


Yang Chuanmin is a reporter at Southern Metropolis Daily and winner of the “In-Depth Reporting” prize in the China Environmental Press Awards, jointly organised by chinadialogue, The Guardian and Tencent.

This article was first published by Southern Metropolis Daily on February 22, 2009.

Homepage image from the Ministry of Environmental Protection, China

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评论 comments

Default avatar
匿名 | Anonymous

即使是全球顶尖环境管理企业,也需有负责任的态度

感觉上巴斯夫一直是具有十分优秀的环境管理经验的企业。但是,尽管如此,在位于环境敏感区进行建设,更是要慎之又慎,而且需要用公司一贯的工作流程,而不是在德国用德国的流程,在发展中国家就降低标准。
yfy

Even the world's leading environmental businesses have to take responsibility

I think that BASF has always had excellent environmental management experience. However, despite this, building in an environmentally sensitive area requires the utmost of caution. Moreover, the company needs to use its typical work standards, and not use one set of standards for Germany and a different set of standards for developing countries. yfy

Default avatar
匿名 | Anonymous

长江上游岷江沿江都是化工厂

长江上游岷江沿江(四川乐山市境内)都是化工厂!

Chemical factories abound in Minjiang area, the upstream part of Yangtse river

Chemical factories have flooded Minjiang (Leshan City Area), the upstream part of Yangtse river.

Default avatar
匿名 | Anonymous

还是利益

利益驱使(能够大量的缩减成本),永远都是动力。大型企业所带来的就业和税收,往往又是当今政府所最看重的。从而,一些公布出来的环保报告往往都是经过了美化处理,淡化了很多隐患危机。

不可避免的,发展又与环保站在了对立面上。这样的情况,往往是企业和政府相互的妥协,最后又以环境为代价。

对于高危害的高污染物的安全处理,即便是巴斯夫也不能够打保票。自然而然,如今相当一部分国家坚决杜绝污染企业在敏感地区进行建厂。而在中国,一些地方政府只是凭借一份美化了的报告,就将“风水宝地”割让出来,肆其使用。这样的举动是对环境极不负责的表现。
wtagr

Private Interests Again

It's all motivated by private interests (in order to greatly reduce costs). The jobs and tax income brought by large corporations have always been the government's highest priority. As a result, a number of published environmental reports have undergone beautification and many hidden crises have been watered down.

The inescapable fact is that development and environmentalism are mutually opposed. In this situation, industry and the government always negotiate and reach an agreement, and the environment is considered the price to be paid for this.

With regard to the safe treatment of high-risk and highly polluting materials, even the BASF can't guarantee they will be handled properly. So it´s reasonable for certain countries to simply refuse polluting companies permission to begin operations in sensitive areas. In China, some local governments have ceded beautiful and valuable areas to such companies on the basis of a beautified report, to do with as they will. Such conduct is a display of extreme irresponsibility with regard to the environment.

wtagr

Default avatar
匿名 | Anonymous

谁对三峡的水安全负责?

我在新闻奖的现场听到本文的作者说,文章刊登后,巴斯夫的项目依然得到了通过。化工厂对三峡水资源安全的威胁显而易见,政府既然不能在保存生态环境与维持当地民生之间选择前者,我们应该寄希望于谁来对三峡水安全负责?是当地环保部门,还是像巴斯夫这样的“全球顶尖环境管理企业”?

Who should be responsible for the water safety of Three Gorges?

The BASF’s project has already been passed, I heard this from the author on the awards ceremony. The threat that these chemical giants may put on the safety of the water is just too obvious. If the government can't take the ecological environment as the priority, and sacrifice it for the people's livelihood, who could we count on to take the responsibility of the water safety of Three Gorges? Would it be the local environmental protection bureaus or one of these"World's leading environmental management enterprise " like BASF?

Translated by Yaqing

Default avatar
匿名 | Anonymous

污染是否仍是中国维持和平与经济增长可以接受的代价?

跨国公司为了维护其全球声誉,在安全上往往采取更审慎的态度,也比当地同行的项目更注重环境和法律的规定。不过,也有很多环境方面失败的例子。

在中国,那些环境污染的拥护者声称,为了保证国家的“发展”,污染是一个必要的和可以接受的代价。那么,为什么要担心巴斯夫?

根据世界上其他工业化国家出现的不可持续的经济增长范例,就算政府积极奉行,却仍然失败了(失业和税收的增加,债务达到空前水平)。这种情况不能再出现(减少我们的后代将遭受灾难性气候变化的风险)。

那么,被提议的巴斯夫项目的产品会有市场么?

Is pollution still an acceptable cost for peace and economic growth in China?

In order to protect their global reputation, multi-nationals tend to take greater care over safety, the environment and legal compliance concerning their projects than their local counterparts. However, there are many examples of their environmental failure.

Apologists for environmental pollution in China assert that that pollution is a necessary and acceptable cost to ensure the country's "development". So why worry about BASF?

Given that the unsustainable economic growth
paradigm which governments in industrialised countries around the world so passionately continue to espouse has both failed (unemployment and taxes are rising, debt is at record levels) and must not re-emerge (in order to minimise the risk that our grandchildren will suffer catastrophic climate change).

So, where will the market be for the products made by the proposed BASF project?

Default avatar
匿名 | Anonymous

化工依然不适合三峡

笔者所在的专业为化工机械,自是与化工颇有渊源。以笔者现在的专业知识可见,即使环保局认真履行化工厂的环境有好部分的监督义务,即使巴斯夫有着全球领先的三废处理系统,化工产业依然不适合三峡库区。。。
但作为三峡库区的子民,失去了化工,多少人将如何养活自己?农业、旅游、商业,都无法承受如此众多之人数。。。

The Three Gorges Area is Not Suited to Chemical Engineering

I majored in chemical engineering, and so know well about chemical engineer. It's clear from my current expert knowledge that, despite the diligent performance of the Environmental Protection Agency in undertaking the supervision of environmentally beneficial chemical engineering, or the world-leading waste treatment system the BASF has, the Three Gorges Resevoir is still not a suitable place for the chemical engineering industry.
However, speaking as a resident of the Resevoir area, if the chemical engineering industry is lost, how are the many people currently employed by the industry to make a living? Agriculture, tourism, commerce: None of these industries can take on so many people.