In China, the textile industry was classified as the top 5 most polluted industries in 2007, which is caused by waste water discharge (containing toxic and hazardous substances) from “wet processing” technology which includes dyeing, washing, printing and finishing. Despite implementation of sewage treatment plants, toxic substances can not be completely removed.
Regarding regulations, some developed countries have strict regulations on the use of hazardous substances throughout the entire process, while others are just about to enforce their regulations. This gap of regulatory oversight results in companies or suppliers being considered as “under compliance” by their country of operation, but by standards in more developed nations these same companies are committing serious violations.
As in this case, the lack of national Chinese regulation or directives on restricted chemicals is one of the major causes. Large companies face a big challenge when outsourcing operations, not to mention that the level of compliance on environmental regulations is not ensured in risk countries (as shown by the illegal chromium dregs dumping discovered recently).
Therefore, a regular assessment on a supplier’s CSR management system is critical. As mentioned by Greenpeace, big brands should take more efforts along their outsourcing and supply chain management and their sustainable procurement programs should take steps to go beyond ensuring that suppliers comply with local standards.
For oversea big brands, this is also a good example to realize and understand that they are confronted with major CSR risks which are brought about by their indirect business relationships. As it is always difficult to identify these hidden links through simple supplier contracts, Ecovadis is helping their clients to choose the optimum scope of evaluation of suppliers through assessing various risk characteristics (e.g. company’s size, geo-presence, industry of operation).
This article was written by Ying Luo, a CSR Analyst at EcoVadis. To keep up to date with CSR issues in China you can follow her on twitter at @yluobo
Photographs by NRDC Media via Creative Commons license