Cablegate: Environmental Impact Assessments Vs. Economic Development:

VZCZCXRO7641
RR RUEHAST RUEHCN RUEHGH RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHTM
RUEHVC
DE RUEHGZ #0486/01 2240932
ZNR UUUUU ZZH
R 110932Z AUG 08
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 7497
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASH DC
RUEHC/DEPT OF LABOR WASHDC
RUEAEPA/HQ EPA WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC

UNCLAS SECTION 01 OF 02 GUANGZHOU 000486

SENSITIVE
SIPDIS

STATE FOR EAP/CM
STATE PASS USTR CHINA OFFICE

E.O. 12958: N/A
TAGS: SENV ECON PGOV CH
SUBJECT: Environmental Impact Assessments vs. Economic Development:
Business Still Wins in Guangdong

REF: A) GUANGZHOU 228; B) GUANGZHOU 121

(U) This document is sensitive but unclassified. Please protect
accordingly. Not for release outside U.S. government channels. Not
for internet publication.

1. (SBU) Summary: Guangdong has set lofty goals aimed at becoming a
leader in environmental protection, but a look at how it goes about
doing Environmental Impact Assessments (EIAs) suggests it still has
a long way to go. According to contacts familiar with the process,
auditors can easily manipulate their estimates of a project's
impact, developers often have cozy relationships with the private
firms that conduct the assessment, and the mechanisms for gathering
public comment are flawed. One retired official suggested that the
process was a sign of larger problems in a system that still places
economic growth ahead of environmental protection. End summary.

Environmental Impact Assessments: "A Bureaucratic Tool"
--------------------------------------------- ---------

2. (SBU) Although Guangdong seeks to become a leader in
environmental protection, the province's EIA system remains highly
flawed, according to several of our contacts here. As in the United
States, every large project in China -- factory, commercial
development, high rise tower, etc. -- must pass an EIA before it
receives final government approval. These costly reports (about RMB
300,000 or over $43,000 on average) can be critical tools for
ensuring that development does not have a negative impact on the
environment. However, a recently retired official from Guangdong's
Environmental Protection Bureau told us that EIAs in China are
merely minor legal and bureaucratic hurdles for developers.

3. (SBU) The retired official told us that key figures in many EIAs
are "made up of random numbers." He said that the formulas set by
the State Environmental Protection Administration (SEPA) to
establish how much environmental impact each locality can sustain
are valid. However, auditors who prepare the EIAs know exactly how
much impact a project can have before it will exceed the allowable
threshold, and they manipulate their estimates accordingly. Impact
assessments always pass and are regarded by EPB officials as nothing
more than a "bureaucratic tool," our contact said.

Auditors Cultivate Good Relations and Act Fast
--------------------------------------------- -

4. (SBU) Developers and other firms that need an EIA maintain close
ties with the private companies that perform the assessments. This
leaves the process open to manipulation. According to Dr. Huang
Ping, Director of the College of Environmental Science and
Engineering at Sun Yat Sen University, these companies have
flourished in Guangdong as a result of the province's rapid economic
development. Auditing can be very profitable; there is no
restriction in China on how frequently and/or how often a developer
or business can utilize the same EIA auditing company.
Relationships or "guanxi" are important factors as many companies
sign contracts with national auditing companies to perform EIA's
throughout China. Companies often urge EIA auditors to expedite the
process by working overtime so construction can commence quickly.
There is very little motivation for EIA auditing companies, who are
paid by the developer, to produce an assessment that indicates the
project will have a negative impact on the environment. In fact,
Huang of Sun Yat Sen University said that fewer than 5 percent of
assessments are rejected each year by the EPB-appointed EIA
commissions that review them.

Not Giving the Public a Fair Hearing
------------------------------------

5. (SBU) The public comment process for EIA's is also flawed. In a
recently published paper, Lin Ping, a researcher at the Fujian
Environmental Science Research Institute, wrote that the public
isn't given enough information about how a project will affect them.
Public opinions are generally collected in questionnaires that are
not detailed enough; Lin argued that the government should hold more
public hearings to gather opinion instead. He also said that the
comments are rarely analyzed and instead the process is more of a
procedural requirement than a genuine inquiry. In addition, Lin
believes that the public's environmental awareness is weak and most
people are only interested in compensation they might receive from
projects.

GUANGZHOU 00000486 002 OF 002

Economic Growth Still Come First
--------------------------------

6. (SBU) In addition to problems in the EIA process, the retired EPB
official emphasized that urban planning departments at provincial
and local-level EPB's need to strengthen their environmental
protection efforts rather than appease those with political power.
He stated that although the government had publicly put more
emphasis on environmental goals, economic goals still got priority
behind closed doors. He claimed that that the problem is made worse
by the fact that many EPB officials lack any scientific background.
Those who do have the necessary technical training are often wooed
away by high-paying private firms.

GOLDBERG

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