Thursday, December 16, 2010

Is China greening Africa?

Is China greening Africa?
Stephen Marks
Pambazuka News, 2010-12-16, Issue 510

Is China smartening up its environmental and social act in Africa? It
certainly wants to be seen as doing just that. One telling example was
the recent Chinese government-sponsored 'top Chinese enterprises in
Africa' competition, won by China Road and Bridge Corporation (CRBC).

The aim of the award was officially stated as being 'to commend the
contributions by Chinese enterprises in Africa' and 'reply to Western
criticisms of Chinese enterprises with facts.' The competition, which
was jointly sponsored by the Chinese-African People's Friendship
Association, China Radio International and Africa magazine, kicked off
on 22 October with the launch of a website for online voting. According
to the website, the winning enterprises should 'devote significant
resources for African countries' local economy and social development,
fulfil corporate social responsibility and make a positive return to the
local people of Africa.'

Another Chinese award winner is China Merchants Bank, which in September
was declared the winner of the third annual Green Banking Innovation
Award. Fifteen leading Chinese commercial banks were judged on their
overseas investments as well as corporate governance issues, such as
information disclosure, environmental policies and implementation
measures. Nine Chinese environmental NGOs came together to conduct the
competition - Green Watershed, Friends of Nature, Institute of Public &
Environmental Affairs, Green Earth Volunteers, Global Environment
Institute, Civil Society Watch, China Development Brief, Green Volunteer
League of Chongqing and Hengduan Mountains Research Society.

This trend is not new. In July 2009, in what the international NGO
International Rivers called 'the most significant step yet' China's
ministries of commerce and environmental protection published draft
'Guidelines on the Environmental Behavior of Chinese Foreign Investors'.
The guidelines emphasise the social and environmental responsibility of
Chinese companies and banks abroad, and foresee the creation of appeal
mechanisms for 'local controversial projects.'

But how far does this indicate a likely real shift in the behaviour of
Chinese companies on the ground, and how far is it simply a Chinese
version of the 'greenwash' for which Western companies and governments
have themselves long been notorious?

The 15 October incident at a Zambian coal mine, where Chinese
supervisors shot and wounded 11 workers in a labour conflict brought
back memories of the blast at Zambia's Chambishi copper mines which
killed 49 workers in 2005, followed by the killing of five workers by
security guards at the same location a year later.

Of course Chinese companies are often used as a whipping boy for the
failure of African governments to apply their own regulations. A report
by the South African Institute for International Affairs (SAIIA) in
July, three months before the shooting incident, stressed the failure of
regulation by the Zambian government, especially its reliance on
self-reporting and the influence of close relations between foreign
investors and local leaders.

There have been signs that African governments have been taking such
criticisms on board. In October alone there were reports that Nigeria
had closed the Abuja branch of China Civil Engineering Construction
Company (CCECC) over its poor health and safety record (as well as
another non-Chinese company) and that Mozambique had withdrawn the
labour permits of three Chinese found guilty of assaults on workers and
other violations of labour and company law in the construction industry.

One common response to the record of some Chinese companies in these
areas is to point out that conditions within China are often no better,
especially in the mining sector. But here too things seem to be
changing. China Daily has reported that - in a pilot programme -
underground mine-accident shelters, escape capsules and other emergency
facilities are being installed in seven coal mines in Shanxi province.
Citing China Youth Daily, the report said a Lu'an Group mine in Changzhi
city was the first to install the facilities. The report follows the 16
October deaths of 37 miners trapped by a gas leak at a Pingyu Coal &
Electric Company mine in Henan.

International Rivers has pulled no punches in its criticism of Chinese
companies and the Chinese government over such issues as the coal mine
shootings. Policy director Peter Bosshard described conditions at the
Collum mine as 'scandalous' and pointed out that in China's overseas
investment, unlike conditions within China, 'muzzling public opinion is
not usually possible'.

'If the Chinese government is serious about cleaning up the safety,
labor and environmental record of its overseas investors,
recommendations and appeals will no longer do the trick' he concluded.
Pointing out that the Chinese government still owns the major companies,
he concluded that it should 'quickly adopt the environmental guidelines
for foreign investors, which have lingered in draft stage for too long.
It should closely supervise Chinese companies which invest abroad, and
crack down on investors which violate Chinese guidelines and local law'.

You might think with this record that International Rivers was the sort
of 'Western NGO' that China loves to hate. But as Peter Bosshard told a
recent workshop on environmental aspects of China's engagement in
low-income countries the Chinese government wants Chinese firms overseas
to be responsible actors and is interested in learning from Western
experts on the use of environmental guidelines.

International Rivers has been invited to advise Eximbank and Sinohydro
on their environmental policies, and Sinohydro has adopted the
recommended guidelines for complaints policy. The Gabonese environmental
NGO Brainforest scored a victory when in response to its concerns,
Eximbank suspended its support for a massive iron ore development
project complete with hydropower dam, railway line and port, which would
have violated environmental guidelines and devastated a national park.

On the other hand Sinohydro is going ahead with the much-criticised Gibe
3 dam in Ethiopia which, critics say, violates local laws, and the
world's biggest bank Industrial and Commercial Bank of China, is
underwriting a US$500m loan to Chinese companies to buy equipment for
the project. [Note: the Chinese company in this project is Dongfang
Electric Corporation, not Sinohydro.]

The pessimists would see this as evidence for the 'greenwash' theory.
But it might be more realistic, and more constructive, to see it as an
aspect of a global contestation between elements in government and civil
society which see the need to enforce environmental standards, and
profit-driven firms, whatever their ownership, who will cut corners when
allowed to.

As Peter Bosshard pointed out to the IDS workshop, at least the Chinese
government supports moves by Chinese environmental NGOs to encourage
Chinese firms to apply Chinese laws and standards in their overseas
operations: 'You would not get far in Switzerland trying to get Swiss
firms to apply Swiss law overseas, or in the US either'.

* Stephen Marks is co-ordinator of the Fahamu China in Africa project. A
researcher and writer specialising in economic development and
environmental issues as they impact on civil society, he has worked as a
consultant for a number of international projects.
* Please send comments to or comment online at
Pambazuka News.

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