U.S. Water News Online
DONGGUAN, China -- Last summer, Chinese government investigators crawled through a hole in the concrete wall that surrounds the Fuan Textile Mill in southern China and launched a surprise inspection of the plant. What they found caused alarm at dozens of American retailers, including Wal-Mart Stores Inc. and Lands' End Inc., that use the company's fabric in their clothes.
Villagers had complained the factory, owned by Hong Kong-based Fountain Set Holdings Ltd., had turned their river water dark red. Authorities discovered a pipe buried underneath the factory floor that was dumping roughly 22,000 tons of water contaminated from its dyeing operations each day into a nearby river, according to local environmental-protection officials.
In the two decades since U.S. companies began turning to Chinese factories to churn out the inexpensive T-shirts, jeans and sneakers that millions of Americans wear daily, China's air, land and water have paid a heavy price, critics say. China has faced harsh criticism in recent months over the safety of exports ranging from tainted toothpaste to toxic toys. But environmental activists and the Chinese government are increasingly pointing to the flip side of the problem -- the role multinational companies play in China's growing pollution by demanding ever-lower prices for Chinese products.
For instance, prices on fabric and clothing imports to the U.S. have fallen 25 percent since 1995, partly due to the downward pricing pressure brought by discount retail chains. One way China's factories historically have kept costs down is by dumping wastewater directly into rivers. Treating contaminated water costs about 13 cents per metric ton, so large factories can save hundreds of thousands of dollars a year by sending wastewater directly to rivers, in violation of China's water- pollution laws.
'Prices in the U.S. are artificially low,' says Andy Xie, former chief economist for Morgan Stanley Asia, who now works independently. 'You're not paying the costs of pollution, and that is why China is an environmental catastrophe.'
Toxic runoff from China's booming textile industry is one reason many of the nation's largest rivers resemble open sewers and 300 million people lack access to clean drinking water, environmentalists say. Now, U.S. retailers are scrambling to prevent environmental issues from creating the same kind of consumer backlash as the anti-sweatshop campaigns of the past decade.
Fountain Set hasn't lost any major customers since the government crackdown, but some U.S. retailers sent inspectors to the Fuan plant and tightened oversight of the company.
'After labor issues, the environment is the new frontier,' says Daryl Brown, vice president for ethics and compliance at Liz Claiborne Inc., which uses Fountain Set cotton in some of its products. 'We certainly don't want to be associated with a company that's polluting the waters.'
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