Case Study on Environmental, Social and Economic Impacts of
Pollution Treatment Action in Huaihe River Basin


by Baodong Xie, Tinting Shi, Jianjin Liu & Zheng Shuang

LEAD-China Associates, Cohort 5

March, 1998


1. Background

Huaihe River is one of the seven water regimes in China. It is the third longest river in the country. It originates from Tongbai Mountain of Henan province, passes through four provinces such as Henan, Anhui, Shandong and Jiangsu with 215 cities and counties. It gathers more than 190 rivers vary in length including Shaying River, Wo River, Hongru River, Yishu River and Si River. The total area of the river basin is 270,000 km2 inhabited by 150 million people. Most of the river basin area is fluvial plain, making two thirds of the whole area while the remaining third is mountains and hills.

In history, Huaihe river basin was the region enjoyed early economic development. Since the liberation of the country, it has been credited as the major basis for processing agriculture and non-staple products, commercial food, cotton production and energy production, playing an important role in the course of the country's social and economic development. The region generates 13% of the country's total food product on 2.8% of the country's total area and nurtures one seventh of the country's total population.

The last dozen years have witnessed the country's rapid economy growth. Along with that, with the exception of state-owned enterprises, the township and village enterprises (TVEs) have experienced robust growth and flourished along both sides of Huaihe River. According to the statistics, there are six counties in Hanhui province such as Huoqiu, Shouxian, Yingtu, Funan, Fengtai and Linquan whose total output value of TVEs in the first half of 1993 had increased 184.8% compared to the same time of 1992. It exceeded the growth rate of the whole province which was 106.8%. In 1983, there were only handful TVEs in Fuyang region. By the year 1993, the number boomed to 255,000 with total output value of 17.9 billion Chinese Yuan. In 1993, the total output value of TVEs in Linyi city of Shandong province was 18.5 billion Chinese Yuan, ranking at the top of the whole province.

It is known that among the 3000 key polluting enterprises in the country, there are 160 industrial waste water discharging enterprises locate in the Huihe river basin. In 1993, the industries above county level of 182 counties in the basin discharged 1.6 billion m3 of industrial waste water, the domestic waste water discharge was 700 million m3. The total was 2.3 billion m3.

The causes of the deteriorated water quality in Huihe river basin are as follows:

1) the rapid development of TVEs;

2) the irrational industrial structure which means light industry such as paper and pulp and brewery based on local agriculture and non-staple food products have gained enormous growth;

3) small scale production;

4) too rapid urbanization;

5) excessive debts in environmental treatment and control;

6)seasonal water scarcity.

As entering into the 1990s, a number of drinking water sources have been threatened by pollution that pollution accidents have frequently occurred. They made significant impacts on the industrial and agriculture production and people's living. The financial lost was huge. The river basin embraces four provinces with over 200 counties where pollution disputes have been raised year-round. If they were not resolved in time, the social stability and security would have been shaken. Consequently, in 1994, the State Council finally determined to eradicate pollution from Huaihe river and return its cleanness.

 

2. Government actions

The government is deeply concerned with the serious pollution problem in Huaihe river basin. In August 1994, the State Council made the command that the pollution control and treatment in Huaihe river basin shall be accelerated. The objectives are, by 1997, the pollution in the river shall be under control with significant improvement in pollution treatment action. By 2000, the cleanness of the river shall be returned. Consequently, in August 1995, the Tentative Regulation on Water Pollution Control and Treatment in Huaihe River Basin was promulgated. In June 1996, the Pollution Control and Treatment Plan for Huaihe River Basin and the Ninth Five-year Plan was approved for implementation.

 

3. Case study

Site: Sishui county of Jining City, Shandong Province

Time of investigation: 24-26 December 1997

Objective: The Sishui county will be dissected to provide an analysis on the environmental, social and economic impacts of the closure of polluting enterprises. The effect of the closing of pollution enterprises on the countys sustainable development is also explored. The findings are expected to be informative and inspirational for formulating sustainable strategy in the whole river basin.

 

3.1 Outline of Sishui county

Sishui county lies in the middle south of Shandong province occupying an area of 1091 km2. It is under the jurisdiction of Jining City in the province. There are 33 rivers vary in size, most of which flow from east to west. The river basin area is 1015 km2. The main river Si River is one of the tributaries of Huihe River. It originates from Peiwei mountain and stretches 52 km in the county.

Until 1998, there are 8 towns and 7 villages under the countys jurisdiction with the total population of 580,000 among which 91% are peasants.

 

3.2 Outline of enterprises required to conduct pollution treatment within the time limit

11 enterprises in the county are in the list of citys pollution treatment plan.

 

Table 3.1

Name

Pollution control status

Sishui County Iron Plant

pollution control facilities are tested and meet the standard

Baishan Iron Mining Entity

the construction of the facilities are or near completion

Liuxu Group (County Starch Plant)

ditto

Paper Plant

ditto

Ethyl Alcohol Plant

facilities are under construction

Foreign Trade Starch Plant

ditto

Solvent Plant

ditto

Shengchang Meat Product Company

ditto

Shandong Guangci Wind-making plant

ditto

Petroleum Plant

production suspended and transferred

Brewery

ditto

 

3.3 Findings of the investigation

Visits were paid to environmental authorities, administrations and enterprises and understandings of the impacts of the shut down and closure of a number of enterprises are gained which are presented below:

 

3.3.1 Environmental impact

In 1996, the industrial waste water from TVEs in Sishui county was 10,126,000 ton, of which 98% was contributed by the above 11 enterprises. The paper and starch plants are the key sources discharging 9,537,000 ton of waste water and making up 94% of the total. Theoretically, 85% pollutants would be reduced if all the discharge of these 11 enterprises met the relevant national environmental standards. Therefore, Sihui river, being one of the biggest tributaries of Huihe River, would reduce its contribution to the pollution of the Hui River significantly. However, as Table 3.1 shows, only Sishui Iron Plant was tested and met the discharge standard. Others are either constructing and trial running treatment facilities, suspending production or closed. Nevertheless, through forced action, the water pollution will be reduced gradually.

The other effect is the growth of environmental awareness which might be more important than the forced environmental action through hard target. It impressed us that from local authorities down to plant employees are aware of the importance of protecting the environment and water resource.

 

3.3.2 Economic impact

The pollution control and treatment action in Huihe River has big impact on the Sishui county. Its 11 polluting enterprises are the key industries in the place among which 8 are suspended and seeking transformation. The business scale, capital capacity and economic profit of these 8 enterprises are among the top of all enterprises. Quantity wise, they are only 8% of the total. However, their industrial output value, sales income, total tax and total profit account for 40%, 36%, 49% and 50% of the total respectively (see Table ).

It is certain that negative effects of the environmental action will be made: 1) production loss; 2) capital quality of banks is reduced; 3)heavy financial load on enterprises and authorities to treat the discharge; 4)local economic development is hampered. However, theoretically, there will also be positive effects: 1) promote the transformation of enterprises; 2) initiate economic development in a benign circle; 3) promote the application of cleaner production and energy conservation in enterprises.

The following Table shows the economic impacts of pollution treatment in terms of capital investment, operational fee, daily output, daily income and loss.

The sources of capital investment for discharge treatment are: 1)based on the Polluter Pay Principle, the enterprises should bear the cost; 2)discharge fee; 3)local government; 4) central government; 5)bank loan and 6)consumers of final product.

 

3.3.3 Social impact

Pollution control and treatment in Huihe River is a big action effecting the survival and development of hundreds of millions of people. Among 580,000 population in Sishui county, there are 6000 people employed by these 11 enterprises. With 4 people per household, the effected population will be 2,4000. However, the action will not only benefit the countys whole population, but also their future generations.

First, there will be great impact on peoples health with the improvement of water and environmental quality. Second, the industrial structure will be adjusted to a more rational form. Third, the industrial policy and decision making will be affected. Fourth, effect on employment and social stability. Fifth, long term effect for a socially benign and sustainable development.

 

4. Problems and suggestions

4.1 Technology and capital

As early as 1993, Sihui Solvent Plant was required to implement pollution control and treatment facilities. Until its suspension in 1997, the treatment technologies had been changed three times. The reasons are: 1) there are few technologies to choose; 2) technologies purchased do not meet the design standards; 3) lack of capital investment.

The implication is the pollution control technology market is not mature. Therefore, priority should be given to develop and improve the market. The capital needed for pollution control mainly comes from the enterprises and environmental loans granted by the government, both of which are inadequate. The financial source from government is discharge fee which is under paid by the enterprises. Therefore, the government should seek financial arrangement such as improving investment mechanism, taxation, credit loans and levy system. It is suggested that a link between the ratio of environment funding in the total investment and growth rate with profit should be set up.

 

4.2 Environmental planning

The industries in the county are scattered that would result in spreading pollution. The county is blessed by high quality water resource. The spring woodland in the county is the key national culture relics protected area where endorses excellent natural ground mineral water. However, in the area with less than 2km in diameter, there exit a number of polluting enterprises such as solvent plant, cement plant and brewery etc. They not only extract large quantity of ground water, but also discharge waste water and gas. Its consequence will be slow but costly.

Therefore, the industries shall be concentrated in industrial zones for central environmental management and monitoring. It is necessary to formulate environment plan to manage the industries and protect water resource.

 

5. Conclusion

The pollution control and treatment action in Sishui county will result in improved peoples health, better water quality, more rational economic development, increased environmental awareness and benefit for the future generations. The benefits brought by the action override the negative impacts on the income and employment in the county.


 
 
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
DANA MITRA LINGKUNGAN {Friends of the Environment Fund}
Pusat Niaga Duta Mas Fatmawati, Blok B1/12
Jl. RS. Fatmawati 39, Jakarta 12150 - INDONESIA
Telp. : (62-21) 724 8884, 724 8885 | Fax. : (62-21) 724 8883
Email : [EMAIL PROTECTED] | URL# http://www.dml.or.id
 
Konperensi KMB 2001 @ http://kmb2001.dml.or.id
FORLINK @ http://forlink.dml.or.id
Bursa Limbah @ http://w2p.dml.or.id
Forum KMB Indonesia @ http://forumkmb.dml.or.id
Join Milis PB, kirim email ke mailto:[EMAIL PROTECTED]
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Kirim email ke