Chinese walker

In many parts of dryland Africa, national governments are beginning to value pastoralism and the importance of mobility for productivity. Innovative policies now recognise and reflect pastoralism%26rsquo;s crucial role within local, national and regional economies, and new activities put these policies into practice.

Recognising that pastoralism frequently needs to cross international borders, and that regional trade needs support, several international institutions are formalising cross-border pastoral mobility. This provides nation states with a benchmark to design their own policy and legislation. The Economic Community of West African States (ECOWAS) has led the way, providing an institutional framework to facilitate cross-border livestock mobility. Cross-border movement is authorised by granting a certificate that controls the departure of pastoralists from their home countries and assures the health of local herds.

Over the past 15 years, the pace of policy reform in west Africa has been considerable. The governments of Burkina Faso, Guinea, Mali, Mauritania and Niger have all passed specific pastoral laws to protect pastoral land and to facilitate livestock mobility both within countries and across international borders. In eastern Africa, too, there is some progress. The Poverty Reduction Strategy Papers of Ethiopia, Kenya, Uganda and Tanzania all recognise pastoralism as a livelihood system deserving of support. East Africa has also established influential pastoral parliamentary groups that offer oversight of government policy. Pastoralists%26rsquo; Day in Ethiopia and Pastoralists%26rsquo; Week in Kenya are now regular features on these countries%26rsquo; political calendars.

Decentralisation throughout the Sahel has introduced a radical new agenda involving civil society in areas traditionally controlled by government. The devolution of authority for the management of local affairs including land and the provision of key services such as water, health and education through local government reforms, decentralisation and regionalisation in Mali, Niger, Sudan, Ethiopia, Tanzania and Burkina Faso offer hope for the more active involvement of pastoral communities in the implementation of policies that affect their lives in many countries. These reforms vindicate pastoral indigenous knowledge and practice, as well as the scientific research that confirms the critical role of livestock mobility in maximising productivity and preserving the environment from degradation.

In west Africa the Wodaabe (Fulani) of Niger are increasingly internet-aware. These groups develop their own websites in French and English and, more recently, Spanish to reach out to a wider public, to defend their way of life and to explain the key role of mobility. The Wodaabe have adapted their traditional gathering of clans and created an internationally-renowned General Assembly. Donors, non-governmental organisations (NGOs) and tourists are all invited to attend what has become a cultural festival, further raising the political visibility of these emerging new forms of social organisation.

These innovations are assisted by new thinking among development agencies, who, after decades of development failure, now facilitate more holistic interventions in pastoral areas. Projects that focussed solely on water development, animal health or range management have been replaced with concern about social, institutional and governance issues. Peace building is on the increase, as are experiments with ways to protect key pastoral assets in the event of drought or disease. And the importance of markets has finally been recognised with innovations ranging from pastoral credit provision to drought insurance.

Much attention is paid to addressing land tenure and establishing appropriate institutional mechanisms at the outset to reconcile the competing interests over resources often found in Africa%26rsquo;s rangelands. These rangelands are part of what is broadly called the %26ldquo;commons%26rdquo; %26ndash; natural resources that are owned, managed and used collectively by different users, either simultaneously or sequentially often under different tenure arrangements. Through experience, projects now acknowledge that rules for the management of these areas must recognise and secure these multiple interests.

Millions and millions of US dollars have been spent in pastoral-drought relief in dryland Africa since the 1970s. Nearly all of this money has gone on buying food aid, which while saving pastoral lives has failed to save their livelihoods. For many pastoral communities, the return of the rains after the drought has not allowed them to return to mobile-livestock keeping. Having lost their animals during the drought, they either remain in or around the towns from which they received the food aid that saved their lives, sometimes succeeding in a new livelihood, or they try their hand at agriculture, charcoal making or, in extreme cases, adopting a violent lifestyle.

Groundbreaking work by a consortium of agencies including Save the Children in eastern Africa has been experimenting with market-based approaches to protect the key livelihood assets of pastoral communities. By providing cash for work, as opposed to food for work, or by facilitating controlled de-stocking of pastoral livestock through the market with private traders, pastoralists in Ethiopia and Kenya managed to save their core breeding herd though the drought of 2006. These initiatives take a livelihoods approach to emergency response, which not only helps to harmonise relief and development interventions, so often contradictory, but also strengthens pastoralists%26rsquo; resilience to drought.

Global challenges

Unlike other land uses, pastoralism is uniquely capable of adapting to climate change. Although climatic variability is the norm in Africa%26rsquo;s drylands, human-induced climate change is beginning to pose a serious challenge. Climate is becoming more variable and less predictable. Successive poor rains, shifts in the beginning and end of the rainy seasons, increased rainfall intensity %26ndash; which often runs off in floods and damages crops and infrastructure %26ndash; increases and decreases in rainfall in varying parts of the continent and increases in drought-related shocks, are all current trends observed across the continent. These trends are likely to continue over the short to medium term.

Pastoralists that are mobile are in a better position to quickly and successfully adapt to a changing climate than those tied to sedentary land uses. For 7,000 years pastoralists have used mobility to respond quickly to variations in the drylands%26rsquo; climate, and used specialist risk-spreading strategies as an insurance against the potential loss of their stock. Whether pastoralists will successfully adapt to the current climate change will depend on how the environmental and developmental challenges are tackled and whether mobility is secured. To continue to adapt, pastoralist communities need to be informed of changes to come and be involved in planning for the future.

The livestock sector, and by implication pastoralism, has been accused of contributing to global warming through methane emissions. The Food and Agriculture Organisation of the United Nations%26rsquo;s high-profile report, %26ldquo;Livestock%26rsquo;s Long Shadow%26rdquo;, found livestock to be responsible for 18% of greenhouse-gas emissions measured in carbon dioxide equivalent, a higher share than transport. When the data is unravelled, however, it becomes clear that livestock have been globally aggregated, with European intensive-milk production, south-east Asian high-intensity pig farming, US beef burger feedlots and ranching and African pastoralism all lumped together. Until we have a better understanding of the environmental impacts of the different livestock sectors, it is a mistake to conclude that mobile-livestock keeping in Africa%26rsquo;s drylands does more harm through its contribution to global warming than good through its contribution to national food security, economic growth and carbon sequestration.

There is now increasing interest in exploring the value of pastoralism in mitigating the impact of climate change, with the carbon sequestration capability of Africa%26rsquo;s pastures emerging as a real opportunity for the drylands. Thirteen million square kilometres of grasslands are found in Africa. Grasslands store approximately 34% of the global stock of carbon dioxide %26ndash; a service worth US$7 (47.8 yuan) for every 10,000 square metres, according to research by Robert Constanza, director of the Gund Institute of Ecological Economics, and others. What is important to note is that grasslands%26rsquo; capacity to store carbon is significantly reduced in heavily degraded areas, or where rangelands are converted to croplands.

Rangelands, and pastoralism in general, are increasingly seen as having positive environmental impacts. The grazing action of livestock is recognised as having helped maintain healthy populations of wildlife %26ndash; the cornerstone of much of Africa%26rsquo;s tourism industry. East African savannah landscapes have been largely shaped over the course of the past 3,000 to 4,000 years by pastoralist land-management practices. Well-managed grazing opens up pastures, stimulates vegetation growth, contributes to seed dispersal and pasture diversity and enhances nutrient cycling through the ecosystem. Where mobility is reduced and pastoralists are confined to limited spaces, evidence of overgrazing becomes apparent.

Where mobility is secured, pastoralism has massive environmental benefits, can adapt to climate change, and presents African governments with the very real possibility of grasslands generating revenues as carbon sinks. When their livelihoods are secure, pastoralists freely patrol inhospitable and remote border regions and can help reduce conflict. And when their herding strategies and practices are secured, pastoralism allows the economic independence of millions of people in the drylands, who would otherwise have little alternative but to fuel urban poverty and undesired social dynamics.

Future policy decisions need to take into account the many valuable benefits and services provided by pastoralism. If the pastoral system is allowed to flip into irreversible destitution, there is a real danger that all these benefits and services will be lost. Losing pastoralism is not in the public interest.

Ced Hesse is principal researcher in the climate-change group at the International Institute for Environment and Development (IIED). Co-authors of this piece were Saverio Kratli, Izzy Birch and Magda Nassef.

An earlier version of this article was published in book form by the IIED as %26ldquo;Modern and mobile: The future of livestock production in Africa%26rsquo;s drylands%26rdquo;, edited by Helen de Jode. It is summarised and used here with permission.

Homepage image by Andy Catley

Mobile-livestock keeping, or pastoralism, plays a critical role in the economic prosperity of Africa%26rsquo;s drylands. Across east and west Africa, an estimated 50 million livestock producers support their families, their communities, and a massive meat, skins and hides industry based on animals that are fed solely on natural dryland pastures. Where other land-use systems are failing in the face of global climate change, mobile-livestock keeping is generating huge national and regional economic benefits.

Today%26rsquo;s pastoralists download the latest market prices for cattle on their mobile phones, use cheap Chinese motorbikes to reach distant herds or lost camels and trek their livestock thousands of kilometres by foot, truck or ship to trade them nationally and internationally. Prevalent perceptions of pastoralists are that they are a minority, out of touch with the rest of the world and practicing an archaic and outmoded lifestyle. The reality is that pastoralists are fully integrated with wider global processes.

But moving is now becoming a serious problem. Grazing lands are being taken over for other uses and access to water and markets is increasingly difficult. With reduced mobility the economic profitability of livestock keeping is being critically undermined. Animals are producing less meat, less milk and are more susceptible to drought and disease. This is contributing to poverty, resource degradation and conflict.

New thinking, new policies and innovative practices for pastoralist mobility are beginning to take root in many parts of dryland Africa. The African Union and other regional institutions are recognising the huge benefits to be reaped from supporting livestock mobility. This is encouraging several governments to develop informed, progressive policies that reflect the needs of modern pastoralism.

Why move?

Essentially, pastoralists move to take their animals to places where they can find the best quality grazing. It is the scattering of different pastures over different places at different times that makes mobile-livestock keeping so productive in what is otherwise a difficult environment. To sedentary-livestock keepers, who rely on uniformity and economies of scale, randomly variable concentrations of nutrients on the range would be a serious constraint to productivity. But to pastoralists, who are mobile and maintain populations of selectively feeding animals, it represents a resource.

Modern ranching is often believed to be an improvement over traditional livestock management. But research in Ethiopia, Kenya, Botswana and Zimbabwe comparing the productivity of ranching against pastoralism all came to the same conclusion: pastoralism consistently outperforms ranching and to a quite significant degree. Whether measured in terms of meat production, generating energy (calories) or providing cash, pastoralism gives a higher return per hectare of land than ranching.

In east Africa, the intra-regional livestock trade is a major and growing industry, with an annual value in excess of US$65 million (444 million yuan). The profitability of this trade is dependent on livestock being mobile, particularly across borders. In many countries of the Sahel, livestock%26rsquo;s contribution to total agricultural GDP is above 40%. These figures are sizable, and yet they still fail to capture the full contribution of pastoral production systems to national economies. National accounts are based only on the value of final products such as meat and hides and leave out the many social, security and ecological benefits mobile-livestock production adds.

During periods of drought or disaster, mobility becomes absolutely essential for pastoralists, when they are forced to move in order to survive. Drought is a normal occurrence in drylands, and is a key reason why mobile-livestock keeping, rather than crops, is the production strategy of choice.

Obstacles

Pastoralists are increasingly constrained. Farms frequently block access to their grazing areas; national border controls hinder their trade patterns; and the areas they traditionally preserve for times of drought are now national parks or agricultural schemes. In other areas national government policies actively encourage pastoralists to settle and be %26ldquo;modern%26rdquo;. These policies are often driven by unfounded perceptions that pastoralism is economically inefficient and environmentally destructive. Alternative land uses, including large-scale agriculture and national parks, are believed to bring in more national revenues and to have less environmental impact. But this is not evidence based.

Farming is one of the biggest challenges to pastoral mobility. The slow but inexorable advance of family farms, combined in places with the establishment of large-scale commercial farming, is swallowing up vast areas of grazing lands. The United Nations Environment Programme (UNEP) has called for a moratorium on the expansion of large mechanised farms in Sudan’s central semi-arid regions, sounding a warning that it was a %26ldquo;future flashpoint%26rdquo; for conflict between farmers and pastoralists. Northern Sudan%26rsquo;s huge commercial farms have been blamed for fuelling conflict and for environmental degradation and human rights abuses.

Particularly in east Africa, the loss of land to national parks, game reserves, hunting blocks and conservation severely restricts pastoral mobility as much of this land either consists of critical dry- or wet-season grazing or cuts across seasonal migration routes. The creation of Uganda%26rsquo;s Kidepo Valley National Park in the 1960s, on the border with Sudan and Kenya, severely restricts the movement of the Toposa from southern Sudan to dry-season grazing in Kaabong district, northern Uganda. Within Kaabong District, Dodoth pastoralists have also lost critical wet-season grazing in the north-eastern Timu forest when it was declared a forest reserve in 2000, according to research by Michael Godwin Wantsusi of the Karamoja Agro-Pastoral Development Programme. Yet a lot of evidence suggests that pastoralism is far more compatible with wildlife than other forms of land use, particularly crop farming.

Both non-pastoralists and pastoralists are enclosing the rangelands. From the Borana in southern Ethiopia, to the Fulani in Niger and Burkina Faso and Somali groups in Somaliland, a territory in the Horn of Africa, pastoral families are fencing grazing land. Poverty, due to shrinking herd sizes, is driving thousands of pastoral families throughout east and west Africa to fence off the rangelands to practice rain-fed agriculture and, where water is available, dry-season gardening. Others are enclosing land from a fear of losing out as more and more land is taken or are seeking to protect the rangeland from farming or the cutting of trees for charcoal.

It is not known how much former pastoralist-grazing land has been lost overall but much of it is in the form of wheat farms, sugar farms, irrigated tobacco, cotton and sorghum schemes, flower and vegetable farms, game and cattle ranches, national parks and forest reserves. And it is not just the sheer extent of the lost land that is so important; it is the nature of that lost land that is critical. Much of the alienation concerns strategic areas such as wetlands or riverine forests. Here, because of higher and more stable moisture, pastures of higher nutritional content can be found, particularly in the dry season when the surrounding range is dry and poor.

These areas represent %26ldquo;islands%26rdquo; of high-quality pasture where livestock feed until the arrival of new, fresh grass with the next rainy season. The loss of these areas undermines the profitability and resilience of the whole pastoral system. Little research has been carried out to calculate the economic and environmental impacts the loss of these areas has had on national economies, and whether the expected benefits from the new land-use systems are greater than the benefits lost as a result of displacing pastoralism.

Conflicts are also a major block to mobility, altering grazing patterns, reducing productivity and increasing environmental degradation. The enduring conflicts in Chad and Sudan mean pastoralists move together in larger groups for security but have subsequently found it more difficult to access high quality pasture and water. Sudan%26rsquo;s conflict with Egypt also reduced access to key grazing areas for Beja pastoralists in Red Sea state, north-west Sudan. Where grazing areas cannot be accessed, the under-utilisation of pasture leads to bush encroachment. Where pastoralists become squeezed into smaller grazing areas, competition for a dwindling resource increases and conflict becomes inevitable and self-perpetuating.

Across the drylands inappropriate policies are blocking livestock mobility. Enduring perceptions of pastoralism as an outdated, economically inefficient and environmentally destructive land-use system continue to drive rangeland and livestock policy in much of Africa. Yet, none of these perceptions are evidence-based, informed by past failure or reflect current scientific knowledge of the dynamics in dryland environments and livelihood systems. Nor are they designed with the participation of pastoral communities. These persistent beliefs must be left behind in the twentieth century.

Ced Hesse is principal researcher in the climate-change group at the International Institute for Environment and Development (IIED). Co-authors of this piece were Saverio Kratli, Izzy Birch and Magda Nassef.

An earlier version of this article was published in book form by the IIED as %26ldquo;Modern and mobile: The future of livestock production in Africa%26rsquo;s drylands%26rdquo;, edited by Helen de Jode. It is summarised and used here with permission.

NEXT: recognising global advantages

Homepage image from World Bank

Residents in Shanghai%26rsquo;s Baoshan district have, for years, endured the ghastly smells produced by Shanghai Richina Leather and other tanneries owned by its multinational parent company, Richina Group. Yet there is almost nothing in the Chinese media about this corporation and few would recognise the name of its boss, financier Yan Ciliang

Yan Ciliang, or Richard Yan as he is known in English, is the founder of the Richina Group and legal representative of all its subsidiaries. Born in China, educated at Harvard, and now a citizen of New Zealand, Yan is vice-chair of the board of directors of the China Leather Association.

At first glance, Yan%26rsquo;s life looks like a classic success story. In 1981, he became the first Chinese secondary-school student to win a Rotary Scholarship to study English at Auckland Grammar School in the New Zealand capital, and he went on to attend Auckland University. In 1985, he worked at Westpac Bank in Sydney, Australia, which later funded his MBA at the US%26rsquo;s prestigious Harvard Business School. Then, in 1992, the American Ziff family became the principal investors in a US$52.5 million (358 million yuan) investment fund and, the following year, Yan and Harvard classmate Susanna Foels founded Richina Capital Partners to manage that fund. Thus was born the Richina Group.

To date, the group%26rsquo;s subsidiaries occupy four main fields. One is Yan%26rsquo;s original line of work: finance. Richina%26rsquo;s financial business is concentrated in its wholly-owned Chinese holding company, Richina Pacific (China) Investments. This company provides a wide range of financial and business services for multinationals headquartered in Shanghai. Its own parent company, Richina Pacific, de-listed from the New Zealand stock exchange in a 2008 restructuring that left many former shareholders unhappy. The firm%26rsquo;s registered office is now in Bermuda with its operational headquarters in Malaysia.

Richina is also invested in tourism, including in the Blue Zoo Beijing and the Jinjiang Inn, a hotel in central Shanghai. The company also runs restaurants, shops and hotel-style apartments and owns car parks and a taxi fleet in Shanghai. Richina%26rsquo;s construction portfolio includes the wholly-owned subsidiary Mainzeal, a major New Zealand property and construction firm.

The group%26rsquo;s interest in leather and associated products is run by Richina Industries, which oversees Shanghai Richina Leather and the Shanghai Leather Company, processing leather, manufacturing leather footwear, clothing, sporting goods, luggage, furnishings and car upholstery and leather chemical products.

On February 27, 2003, New Zealand%26rsquo;s second largest daily newspaper, The Dominion Post, reported that the Richina Group owed its profits that year largely to the Chinese market. According to the report, Richina Pacific had turned a loss of NZ$15.3 million (73.9 million yuan) to a profit of NZ$8 million (38.6 million yuan) in a single year. A significant return from Shanghai Richina Leather, a focal point for the group, was credited with the turnaround.

One name on the list of Richina Group executives is symptomatic of Yan%26rsquo;s highly placed connections. Jenny Shipley, the independent chair of the Mainzeal board, formerly independent director of Richina Pacific and chair of Richina Leather, was once prime minister of New Zealand. In July of 1999, Shipley paid a working visit to China at the invitation of Jiang Zemin.

In May 2007, Yan Ciliang generously funded the Peking University New Zealand Centre, co-founded by Auckland Peking universities. The opening ceremony was attended by New Zealand%26rsquo;s foreign minister, Winston Peters, with a distinguished list of ambassadors and officials.

According to a reliable source, the Richina group is about to reorganise its Chinese operations, relocating its leather production to a new facility in Liaoning and capitalising on the property value of its Shanghai Leather portfolio for residential and commercial development. The relocation will finally end the long nightmare of Richina%26rsquo;s Shanghai neighbours, according to Richina Industries president and chief executive Bob Moore. %26ldquo;By October 2010, we will have built a dedicated leather-tanning plant to take on the production halted in Shanghai due to odours,%26rdquo; he said.

Yan has never responded in person to questions on Richina%26rsquo;s constant environmental violations. Asked what Yan thinks of the company%26rsquo;s environmental record, Bob Moore replies carefully: %26ldquo;Yan Ciliang is the investor and we are his managers. All the responsibility is ours. Yan certainly wants Richina Leather to reach world-class environmental standards and we will work hard to achieve that goal.%26rdquo;

Xu Shuda is a reporter based in Shanghai.

Homepage image from Qinghemen Archives shows Yan Ciliang (middle), founder of the Richina Group.

I ask an official from the Baoshan Environmental Protection Bureau about the Richina Group. %26ldquo;The company has indeed made changes,%26rdquo; he says. %26ldquo;Since 2004, they have invested more than 10 million yuan (US$1.5 million) in environmental improvements. And, after they closed down the leather production line, pollution from Richina Leather fell by 80%. But the results are still not ideal.%26rdquo; Moreover, the changes are largely restricted to the Richina-branded facility. While this plant has significantly cleaned up its act, Richina%26rsquo;s smaller subsidiaries, which do not carry the company name, are still polluting.

He explains that the basic process of tanning leather makes it impossible to completely eliminate bad smells. %26ldquo;There%26rsquo;s no way the residents can put up with it, so we monitor the firm closely and keep up the pressure, going out looking for problems from time to time,%26rdquo; he says. He believes the crux of the issue is the location of Richina Leather%26rsquo;s plant %26ndash; at the time of construction, there was no system of environmental-impact assessments in place in China and the company was free to build in a residential area. %26ldquo;If Richina was located in an industrial zone, rather than a residential one, then it could carry on,%26rdquo; says the official. %26ldquo;It is one of the industry leaders, after all.%26rdquo;

For the residents of Baoshan, however, there are signs that life could be about to change for the better. The official reveals that the Shanghai authorities have big plans for the area. In the future, there will be a beautiful, big park, modern service enterprises, post-processing bases and residential zones. He says: %26ldquo;They%26rsquo;ve made up their minds that, since there%26rsquo;s no hope of solving the problem and the impact on local residents is so great, they have to bring in some big changes %26ndash; and not just pollution controls. This could transform life for the residents.%26rdquo;

He goes on to say that Richina owns the land the plant is on, which limits what the local authorities can do. Pressure on the firm to change its ways, therefore, has to come from the municipal government, which holds greater powers than local government and is better equipped to press the issue.

The official adds that his bureau has already held talks with Richina about bringing the company%26rsquo;s plans and those of the district into alignment. %26ldquo;Land is expensive here and the company will be able to make more money through property than producing leather,%26rdquo; he says. A source inside Richina also tells me that the firm will soon be shifting its focus to property development.

The company is also planning to move the smelliest parts of Richina Leather%26rsquo;s tanning activities to Liaoning province, in north-eastern China. Chief executive of Richina Industries, Bob Moore, says: %26ldquo;We%26rsquo;re going to invest 800 million yuan (US$117 million) in a new processing plant in Fuxin to handle the processes that create foul odours. The Baoshan plant will become a world-class facility for final processing, creating finished products without using any polluting techniques.%26rdquo; For the residents of Baoshan, this is good news; the reaction of locals in Fuxin, however, remains to be seen.

Ma Jun is director of the Institute of Public and Environmental Affairs (IPE) and the developer of China%26rsquo;s first water pollution database. He says that some of Richina%26rsquo;s clients are already worried about the pollution being caused by their suppliers: %26ldquo;For example, Timberland has said it will gradually reduce and eventually eliminate sourcing from Richina.%26rdquo;

Such pressure is beginning to bear fruit. While Ma%26rsquo;s earlier requests for Richina Leather to undergo a systematic, third-party audit went ignored, the company has now contracted a firm to carry out a monthly inspection of its operations, according to the British Leather Council, which audits the environmental performance of international leather suppliers on behalf of major corporations. Furthermore, while Ma Jun says such %26ldquo;monthly inspections%26rdquo; fall short of the rigorous checks his organisation and others have been demanding, he understands that Richina Leather is now preparing to undergo a more comprehensive third-party audit.

But, for Ma, this is a small victory in the context of a much wider problem. %26ldquo;The most important thing to realise is that Richina is not an isolated case,%26rdquo; he says. %26ldquo;Lots of leather firms have similar issues with pollution.%26rdquo; He believes that China%26rsquo;s system of environmental supervision is not strong enough and this is one reason why Richina continued to violate pollution regulations for so long. %26ldquo;China%26rsquo;s environmental authorities have very few tools at their disposal %26ndash; usually just administrative sanctions and fines that are capped at a low level,%26rdquo; he says. %26ldquo;The cost of breaching regulations is therefore low, particularly as companies are only ever fined once per year for any single breach. In many countries, such as the United States, the penalties are more severe and can be applied on a daily basis, with fines of US$25,000 (170,000 yuan) per day until the problem is solved.%26rdquo;

Another reason for better pollution control overseas is the imposition of punitive fines by courts, according to Ma. In many countries, victims can ask the courts to order firms to pay compensation for infringing their rights and the courts can impose higher penalties than the environmental authorities. Major polluters could face fines of hundreds of millions of US dollars %26ndash; or even be shut down. And so it makes more sense for the firm to solve the problem than to risk a fine.

Ma Jun thinks the outsourcing of manufacturing%26rsquo;s dirtier parts has made corporate environmental responsibility more complex. %26ldquo;China is playing the role of the world%26rsquo;s factory, with many major brands sourcing products here,%26rdquo; he says. %26ldquo;The most power-hungry and polluting stages of manufacturing are transferred to Chinese firms %26ndash; in much the same way as Richina purchased Shanghai Leather Industry and then transferred the most polluting parts of the manufacturing process to its subsidiaries.%26rdquo; His solution would see Richina%26rsquo;s corporate customers bolster management of their supply chain. Big brands such as Nike and Armani must screen suppliers carefully, says Ma. Otherwise, their environmental commitments are just a sop to trusting consumers.

Another key reason for Richina%26rsquo;s longstanding pollution breaches was a failing in oversight by the British Leather Council and the Leather Working Group, according to Ma. These organisations have developed a protocol for the environmental audit and assessment of leather suppliers, but Ma believes it was not sufficiently rigorous to raise the alarm about Richina. The Leather Working Group is made up of corporate customers of the world%26rsquo;s major leather producers and sets environmental standards for those producers. Auditing is entrusted to the British Leather Council, which carries out an environmental inspection of producers once every 18 months, with the date agreed in advance. %26ldquo;As long as there are no breaches on the actual day, they are fine for the next year and a half,%26rdquo; says Ma. %26ldquo;And neither historical records nor public complaints are covered by the audit.%26rdquo;

For global brands with a lot to lose, such a weak auditing system is potentially disastrous. The problems with the current system %26ndash; and the bad publicity they have created %26ndash; have caused companies like Timberland and Nike to take stock. After the Hong Kong-based South China Morning Post ran an article on the problems at Richina Leather in July, 2009, Timberland and Nike both got in touch with the Leather Working Group: %26ldquo;They wanted to tighten up the British Leather Council%26rsquo;s auditing process and have the working group review its standards,%26rdquo; says Ma. In late 2009, Timberland%26rsquo;s representative in China, He Xu, said that, if the British Leather Council failed to improve its auditing methods, Timberland would update its own processes to make up for the inadequacies of the existing system %26ndash; by tracking the past environmental records of suppliers, for example.

The Leather Working Group admits there have been weaknesses in its system but insists that it has worked hard to address these since Timberland and Nike raised objections. It has updated its protocol and is preparing to launch a new version next week. %26ldquo;There has been some corrective action to try to prevent this happening again,%26rdquo; says the group%26rsquo;s spokesman, Adam Hughes. %26ldquo;The audit is a snapshot in time %26ndash; it%26rsquo;s not a background audit. But what we do now insist on is that a senior person on site signs a declaration that the assessment provided is true and accurate. In addition, they will get a negative score if they have had any convictions or warnings. If they have had a verbal warning plus a conviction, they will potentially fail the audit.%26rdquo;

The impact of Richina Leather%26rsquo;s pollution breaches has, it seems, stretched beyond the neighbourhoods of Baoshan. %26ldquo;This is one of the biggest black marks against the Leather Working Group%26rsquo;s process,%26rdquo; says Hughes. %26ldquo;But we reacted to it very quickly. We have taken significant steps forward.%26rdquo; Hopefully, the lessons learned will not stop there.

Xu Shuda is a reporter based in Shanghai.

NEXT: Who runs Richina?

Homepage image shows products from Timberland, which has said it will gradually cut Richina out of its supply chain.

What is the difference between a Company and an enterprise?

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A PRC company is incorporated under the PRC company law, or the “Tentative Provision for the Establishment of the Foreign Investment Joint Stock Limited Liability Company”. There are two types of companies: one is limited liability company;the other is joint stock limited liability company; An enterprise is incorporated under one of the following laws:-
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