FOCUS: China steps up environment, safety watch

13 June 2007 04:46  [Source: ICIS news]

By Florence Tan

SINGAPORE (ICIS news)--Chemical projects in China face stricter environmental safeguards as the local population becomes increasingly vocal about health issues amid several major accidents, Beijing-based consultants and company sources said on Wednesday.

The country’s environment watchdog may increasingly use zonal assessments as a tool to cut down an overgrowth in chemical parks, they added.

The development also demonstrates a common thread running through Asia, with chemical projects in countries as diverse as India, Thailand, and Taiwan facing pressure to move as locals protest about harm to the environment and the populace.

In Nandigram, India, 14 people died after farmers clashed with police in a protest against the construction of a chemical park.

Companies in Thailand’s only petrochemical zone Mab Ta Phut are shelling out more money to solve pollution problems after two cracker projects were almost supspended and in Taiwan, residents and environmental activists have for years blocked CPC's plans to build its next cracker.

China is now the latest kid on the block.

People power overshadowed economic interests in Xiamen, Fujian province, in early June as residents marched down the streets and demanded that the government cancel a yuan (CNY) 10.8bn ($1.4bn) paraxylene (PX) project by Dragon Group on environment and health concerns.

They sent nearly 1m text messages via mobile phones calling it "an atomic bomb" and compared it with Jilin Petrochemical’s aniline plant which exploded in November 2005 and caused millions to go without drinking water.

In a rare move for China, the Xiamen government backed down and asked the State Environmental Protection Administration (SEPA) to carry out an overall assessment on the city which will determine if the suspended project should go ahead even though the Dragon Group has received all the necessary approvals.

A Beijing-based consultant said explosions at Jilin Petrochemical and Cangzhou Dahua have left indelible marks on people’s perception of chemical plants, making them fearful.

"A lot of people do not know what PX is", he said in Mandarin, adding that the local government did not give the project enough publicity and it was "too late to do anything now".

Besides the need to educate the public, companies will focus more on residents’ feedback – an often neglected section in environment assessments, a second Beijing-based consultant said.

Sinopec was already looking into this area after residents at Ningbo opposed subsidiary Zhenhai Refining and Chemical’s cracker project, a source close to the parent said.

The Chinese major resolved the matter through talks with the residents and even invited them to its refinery for a tour, he added.

Although Sinopec was not facing problems with existing sites at Shanghai and Nanjing as most of the residents nearby were families of staff, it was concerned that new projects in Nansha and Qingdao, also a tourist destination like Xiamen, could face similar protests in the future, he said.

But the controversy in Xiamen was mainly caused by the government’s decision to approve property developments in the Haicang district which was supposed to be a chemical zone, the first consultant said.

"The situation is not that serious in Xiamen. It shouldn’t lead to the cancellation of the PX project," he added.

A Haicang official said it has slowed down property development and will wait eight months for the city assessment to be completed before making a decision on the PX project.

Such assessments were not new, but the SEPA was expected to use the tool more often in the near future to pressure local governments to cut down the over 700 chemical parks which have sprouted up mainly in the Yangtze and Pearl River Delta regions, the first consultant said.

The consultants agreed that the protest was unlikely to have a large negative impact on chemical projects as long as companies have done their homework well.

Besides, it remained to be seen how far the SEPA can exert its influence as local governments still depended heavily on investments to boost their GDP contribution and promotions, the sources said.


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