Causing a stink in Shanghai (1)

A multinational leather company in eastern China has been breaching pollution standards and troubling locals with a pungent stench. Xu Shuda investigates.

Fifty-six-year-old Feng Min had never smelt anything like it. “It’s like pitch mixed with cat’s urine,” she says, standing at the gate to the Jufengyuan neighbourhood on Shanghai’s Shangda Road. Looking to the south-east, she wrinkles her brow. Two kilometres away is the Richina Leather factory.

The company was founded in 1995, with total investment of US$29.9 million (204.2 million yuan). The Richina Group originally held a 55% stake but has since increased its ownership interest to 95%. The facility, which supplies tanned leather to some of the world’s largest shoe, clothing, furnishing and automobile brands, is the largest in east and south-east Asia and Richina’s leathers are the raw material for everything from Clark’s shoes to Toyota’s luxury leather seats. The company’s website boasts a client list including Giorgio Armani, Calvin Klein, Ugg, Nike and Rockport.

Ma Jun, director of the Institute of Public and Environmental Affairs (IPE) and chinadialogue author, says that, of the tens of thousands of companies his institute monitors, Richina is the only one to have been investigated and sanctioned by environmental authorities every year since 2004.

The Jufengyuan neighbourhood lies in the north-east of Shanghai, where Shangda Road and Qilian Road meet, and is the largest residential complex near Shanghai University. In Shanghai, properties in this type of area normally cost at least 15,000 yuan (US$2,197) per square metre. But in Jufengyuan, a 170-square-metre apartment can be had for as little as 1.8 million yuan (US$264,000). Local estate agents always make a point of mentioning the “super-low” prices.

Right next door to Richina Leather is the village of Beizhang. The acrid odour from the numerous local tanneries, several of which are owned by the Richina Group, is apparent even at some distance from the village, on Nanda Road. As you get closer, your eyes become dry, your nose itches and breathing becomes a little difficult.

“It’s been so long we can’t smell it any more,” says 38-year-old villager Zhang Zhidong helplessly. Since the 1970s, the village has been surrounded by leather workshops, which have polluted the ground. Zhang explains that a powerful reek of rotten eggs has hung over the village since 1996, when the Richina plant started operating: “As soon as one of the workers from the plant rides his bike into the courtyard, the whole house stinks of rotten eggs.”

Richina was sanctioned annually from 2004 to 2008, the last year for which data is published, according to information on environmental-law enforcement from Shanghai municipal authorities and the Baoshan Environmental Protection Bureau (EPB). In 2008 alone, the firm was prosecuted for turning off air-treatment equipment and fined 100,000 yuan (US$14,635) for violating standards on the release of atmospheric pollutants. When I phone the Baoshan EPB to ask for monitoring results for 2009, the official at the other end of the phone checks with a colleague at the monitoring station before calling back to say “They were definitely still breaching standards.”

Zhou Qichao, a resident of Jufengyuan and former engineer at Shanghai’s 4th Pharmaceutical Factory, explains that Richina first soaks the leather and scrapes off remaining flesh and fat, then removes oil and hair before two tanning stages. During this process, the fat and proteins produce fetid odours as they are dissolved in water, just like organic matter rotting in a stream. Richina claims to use a spraying technique to absorb the odour but this is inadequate as the process must be repeated many times to be effective. “They won’t use that much water – it’s too expensive and would increase their costs,” says Zhou.

Baoshan Environmental Protection Bureau’s punishment of Richina in October 2008 backs up Zhou Qichao’s claim as the plant wasn’t using water at all. The bureau’s record of the event refers to: “Air pollution treatment equipment lying idle while waste gases are expelled untreated.”

Opposition from local residents dates back as far as the offensive odours. Feng Min says many letters have been written to the Shanghai authorities requesting relocation of the plant and residents have established a monitoring group to collect evidence of the pollution at their own expense. Local farmers from the village of Beizhang have also complained to Richina on a number of occasions. In the last two years the problem has abated significantly. Xu Jun, a Richina worker living locally, confirms that the production line responsible for much of the pollution was shut down in 2008. Xu’s job is to dye or decorate semi-finished product, which will later be used to make leather car seats. “Those techniques don’t create any pollution,” he says.

“It’s the small plants around here that are the worst polluters now,” says Zhang Zhidong. He takes me for a walk around the Richina plant and there is no particularly strong smell. But there is an offensive reek that makes my chest tighten by the nearby Hongguang Leather and Leather Chemical Factory. There are many other leather firms in the area and the villagers accuse them of polluting on the sly.

But checking up on the ownership of these companies, I found that the firms the villagers accuse of making uncontrolled emissions – Shanghai Torch Shoes, Shangahi Leather Case & Bag Factory, Shanghai Leather Chemical Factory, Shanghai United Ball Enterprises, Shanghai Weixing Leather Products, Shanghai Yimin Tannery and Hongguang Leather – all became subsidiaries of the Richina Group back in 2004. And the three companies named in almost every letter from the environmental authorities to local residents – Shanghai Richina Leather, Shanghai Hongguang Leather and Shanghai Leather Chemical Factory – are also Richina Group subsidiaries.

On the afternoon of November 17, 2009, Richina Leather chief executive Bob Moore tells me that “Since arriving in Shanghai in March, I’ve never smelt this ‘stench’ you are talking about.” However, local residents recorded when they smelt that odour on an online forum. In August alone, the smell was present on eight days: August 11, 12, 13, 14, 19, 20, 27 and 30.

Moore produces a record of odours near Jufengyuan in the two weeks from October 16. “It’s not even the smell of hydrogen sulphide – it’s mostly ammonia from chemical plants,” he says. “It’s nothing to do with Richina.” Moore says he has been working hard on environmental protection since arriving at Richina Leather. “From 2004 to 2008 we were punished every year because at the same time as we were making improvements, environmental standards were increasing. I’m sure 2009 will be different.” When I tell him that the Baoshan environmental authorities said Richina was still breaching standards in 2009, Moore gets a little angry: “Impossible! None of the authorities have spoken to us. If Baoshan Environmental Protection Bureau wants to put the figures on the table, we can discuss them.”

He believes that many small, local factories are causing pollution and people should not assume that every smell they encounter is coming from the Richina Leather facility. When reminded that many of those factories are actually owned by Richina Group, he does not deny it but says: “I am only the boss of Richina Leather Industries, responsible for Richina Leather. I can control pollution from Richina Leather but not those factories nearby.”

But Moore’s business card shows he is also president and chief executive of one of the Richina Group’s four major divisions, Richina Industries. On the Richina Group website, Richina Industries includes Shanghai Richina Leather and Shanghai Leather Company. And those nearby factories that he “can’t control” are all subsidiaries of the latter.

Xu Shuda is a reporter based in Shanghai.

NEXT: Ramping up the pressure on Richina

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