Report finds dirty money, water in China

BEIJING | More than a half-billion dollars meant for tackling water pollution in Chinese rivers and lakes has been embezzled or misused, seriously undercutting pollution prevention efforts and raising questions about how pervasive corruption is in China’s environmental programs, a new report shows.

The report, by China’s National Auditing Office (NAO), revealed that from 2001 to 2007, about $59 million in funding for water pollution control and prevention efforts involving three major rivers and three major lake areas was embezzled by officials and departments in those regions. In addition, $661 million was stolen, misdirected or never used.

“This is very serious,” said Zhu Lijia, director at the public administration office at the China National School of Administration.

“The embezzlement, the misuse of money dedicated to controlling water pollution damages public confidence in the government’s capacity to deal with these issues.”

The report was released just before President Obama’s trip to Asia that will include a stop in Beijing and discussion of what both countries are doing to protect the environment.

According to the Chinese report, $16.4 million was directed to departments through false claims that the funds were going to water pollution prevention. An additional $118 million in funding earmarked for projects addressing water pollution was never used.

About $219.5 million in sewage and pollution discharge fees collected from businesses was stolen by officials and departments overseeing the collection. Businesses, meanwhile, failed to pay $307.3 million in sewage and pollution discharge fees that they owed.

About $1.3 billion in government funding had been dedicated over the seven-year period to controlling water pollution in northeastern China’s Liao River, in the Huai River in the central part of the country, the Hai River that flows through Beijing and Tianjin municipalities, the Taihu and Chaohu lakes in eastern China, and the Dianchi Lake outside Kunming, capital of Yunnan province.

“Corruption in China is a huge issue and the leaders are concerned about this,” said Sze Pang Cheung, campaign director for Greenpeace China. “It wouldn’t be a surprise to see a lot of this kind of corruption in the environmental protection area.”

The NAO report, which was completed in mid-October and released to the Chinese media weeks later, stated that water quality in affected areas had not improved partly because of the corruption and mismanagement of funds and that “major problems” still exist.

One of the major challenges to environmental governance is a lack of transparency throughout the funding process, from the beginning of a project to the end, Mr. Sze said.

“We usually don’t know where the money is going,” he said. “If China increases transparency over funding, it would mean that local communities would know if they’ve received the money or not and could see whether projects are being completed or not. It would play a huge role in helping with environmental enforcement.”

Mr. Sze said that other issues need to be addressed, including the lack of environmental impact assessments, poor monitoring of projects and inadequate collection of pollution treatment fees.

Mr. Zhu said much of the blame falls on local environmental protection departments that oversee the funding and are also charged with monitoring pollution and environmental infractions.

“They’re not doing their jobs,” he said.

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