Thursday, November 12, 2009

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.

These departments are not funded well, he said, so officials skim off money.

“It is common to see this kind of corruption or misuse of money dedicated to controlling pollution in China,” Mr. Zhu said.

In a recent case in Jilin province in northeastern China, the former head of the environmental inspection team in Siping city was sentenced to two years in prison for embezzling $17,000 in pollution discharge fees. She used the money to pay for personal property and medical costs.

An audit in Henan province revealed in July that $20 million in water pollution control funding had been embezzled in 2007 and 2008 and that $29.1 million in pollution discharge fees were never collected.

Guangdong provincial officials reported in July that $2.9 million earmarked for a special environmental protection fund had been stolen or diverted for the construction of government buildings.

The NAO report said that 206 wastewater treatment facilities were treating sewage well beyond their design capacities and that some facilities in special economic development zones were discharging waste without treatment.

Though the situation is better in Beijing and Shanghai, treatment of waste and monitoring of treatment plants is often poor in the rest of the country. Bribing officials to look the other way is rampant, Mr. Zhu said.

“I’ve seen this before, where a company established several wastewater treatment plants and they never operated them,” he said. “They bribed officials at the local environmental protection departments and got approval to continue operation, but really they never treated the waste they discharged at all.”

Mr. Sze said that when Greenpeace does fieldwork in China, it isn’t unusual to find that many factories don’t operate their wastewater treatment facilities.

“The cost of operation is a lot more than the cost of the penalties,” Mr. Sze said.

Often these factories are notified ahead of time when environmental officials are coming to conduct inspections, he said, adding that it is difficult to say for certain whether environmental officials are paid to give warning.

“It seems likely that there is some corruption involved in those cases,” Mr. Sze said.

Mr. Zhu said that although China has many environmental laws and regulations, implementation and enforcement are big problems. Environmental protection departments “take advantage of their functions and powers and seek gains” for themselves, he said.

“There are two types of environmental corruption in China,” Mr. Zhu said. “One is misusing or embezzling funds meant for pollution control. The other is taking advantage of authority by taking bribes.”

NAO officials said not enough is being done to prevent pollution from agriculture, mainly from nitrogen in chemical fertilizers that runs into rivers and lakes. China, which subsidizes fertilizer use, is the world’s largest fertilizer consumer and producer.

A recent Stanford University-led study published in Science magazine reported that in some parts of China, as much as 200 pounds of excess nitrogen from the 525 pounds of nitrogen fertilizer used per acre is being released into the environment.

“There are big gaps in tackling these water pollution problems, in particular, pollution from agriculture is not being addressed,” Mr. Sze said. “You can see that in the case of Taihu Lake, where there are big algae blooms every year. There is a lot of focus on addressing industrial pollution, and not enough on agricultural pollution.”

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