Questions to answer

Shenhua bosses flee event, as Greenpeace strikes

Shenhua w

Coal firm’s press conference was stormed by activists, protesting about its environmental record

The press conference accompanying a company’s earnings results is typically a chance for journalists to grill senior management about the latest set of accounts.

But when Shenhua Group’s top managers met the press in Hong Kong recently, profit and loss at the coal giant took a backseat to some more unexpected lines of enquiry.

Two representatives of Greenpeace joined the assembled ranks of reporters and analysts, with one soon holding up a picture of environmental damage allegedly caused by Shenhua in Inner Mongolia, reports Hong Kong newspaper Singtao Daily.

The two protesters then tried to fire a few questions at Shenhua’s management, who responded by cutting the press conference short and leaving, reports Singtao. This may have been a mistake: it left the the remaining reporters with no one to question except the people from Greenpeace.

The fiasco marks a public relations success for Greenpeace as the environmental organisation takes on its first large state-owned company in China.

Greenpeace is campaigning against a major Shenhua project that converts coal into liquid petrochemicals. The NGO claims that the plant has already reduced groundwater levels in the area and is also emitting large amounts of toxic waste, reports Reuters.

“Shenhua claims its coal-to-liquid project has ‘low water consumption’ and ‘zero discharge’. Our investigation proves these claims are false,” a Greenpeace campaigner told the newswire.

The project has resulted in a loss of 50 million tonnes of water from the Haolebaoji region over the last eight years, causing nearby Subeinaoer Lake to shrink 62%, reports the South China Morning Post, citing the Greenpeace report.

But the water currently pumped into the plant is just a third of what will be used as the facility expands, according to Greenpeace.

Shenhua has said it will launch its own investigation into the matter, telling Reuters that it takes the allegations “very seriously”.

But Shenhua has already been fined twice this year for “environmental violations”, reports the South China Morning Post. It’s not just NGOs that are concerned about the effects of the coal-to-liquid project.

At the local level, the Erdos People’s Congress has passed two motions saying that the plant has reduced water levels by 15 metres, reports Entrepreneurs Daily, resulting in 458 households and 80,000 livestock finding it hard to get drinking water.

One deputy in Haolebaoji told the newspaper that local herders have been complaining about the environmental impact of the site for years.

The local government has tried to help out by offering subsidies to herders. But the Rmb8,000 ($1,306) annual sum isn’t considered enough to live off.

Less helpfully, local authorities have also suggested that farmers migrate to another area.

Shenhua’s coal-to-liquid project is a high-profile attempt to take coal – one of the few natural resources that China enjoys in abundance – and turn it into more valuable petrochemicals.

There are more than a 100 similar projects awaiting approval, according to Greenpeace. If they do get the green light, the plants will generate demand for Chinese coal miners who have proliferated in recent years, only to be hit by the weakening price of coal (see WiC198).

But if the technology turns out to be a serious threat to local water sources, it will be a major test for the new leadership in Beijing, which is increasingly aware of China’s impending water crisis.

With its confrontational approach, Greenpeace has pushed the Shenhua project into the public eye. The issue now is whether the further investigation being promised will back up their own findings, and perhaps more importantly, whether the central government will prioritise environmental protection over economic development and energy security.

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