Rare Earth Metals in China: A Case of Corruption Leading to Pollution

Lately, the government of China has been talking about honoring Chinese tradition. It's fine when societies, including our own, honor the best parts of our traditions but actual practices don't always match our publicly declared policies. China, in any case, is a bundle of contradictions. One could easily argue that the red octopus above represents the strange fusion of red communism and acquisitive capitalism that today is indicative of China. (Come to think of it, I ought to use the octopus later to represent Republican members of Congress and Washington lobbyists who wish to snarl up and otherwise obstruct useful legislation in Washington. It's a great image!)

For some time, China has been talking about cleaning up its pollution but not much happens. It is a sad fact that sooner or later China is going to have its Love Canal. But multiply that times ten given the pollution problems China already has.

I recently did a post on rare earth mining in California's Mountain Pass Mine in the Mojave desert. Even during its worst days, Mountain Pass seems to have been handled better than the Chinese mine discussed in the following New York Times article:

Here in Guyun Village, a small community in southeastern China fringed by lush bamboo groves and banana trees, the environmental damage can be seen in the red-brown scars of barren clay that run down narrow valleys and the dead lands below, where emerald rice fields once grew.

Miners scrape off the topsoil and shovel golden-flecked clay into dirt pits, using acids to extract the rare earths. The acids ultimately wash into streams and rivers, destroying rice paddies and fish farms and tainting water supplies.

Lovely. So much for 5,000 years of sustainable agriculture.

I don't want to minimize the environmental damage that has been done by the United States in the last 200 years but the worst stories that have come out of the former Soviet Union and Eastern Europe make the United States look rather green by comparison. There are growing concerns that China is repeating some of the worst damage done during the Cold War. The problem is that the dynamics are far too similar: despite China's commitment to capitalism and the loosening of strict authoritarian control, the government is over-centralized, overly authoritarian, and overly paranoid about a free press. On top of that, there is far too much corruption in government as well as in business.

President Hu Jintao and Premier Wen Jiabo seem bent on curbing corruption but they have the same problem the emperors had from the beginning: the inability of the central government to control events in distant provinces as well as in large cities such as Shanghai. Premier Wen has apparently found it useless to announce personal appearances around the country since that only leads to Potemkin moments as local officials try to put on a good but fraudelent show. Now Wen arrives unannounced and is not pleased with what he finds. And as noted by the Carnegie Endowment for International Peace, not nearly enough is done to enforce laws against corruption:

Though the Chinese government has more than 1,200 laws, rules, and directives against corruption, implementation is spotty and ineffective. The odds of a corrupt official going to jail are less than three percent, making corruption a high-return, low-risk activity. Even low-level officials have the opportunity to amass an illicit fortune of tens of millions of yuan.

Still, despite problems, we need to be careful not to underestimate what the top Chinese leadership can do. There are indications that the global warming deal in Copenhagen wasn't as bad as some on America's far right and far left have claimed. Having any kind of deal that involves China and the United States is better than anything we've had in the last nine years. But no one should kid themselves. Not China. And not the United States. In a real sense, a number of American corporations have been sending their pollution to China for almost thirty years. Further, it's been apparent that many U.S. corporations don't have the kind of quality control that all of us took for granted back in the 1970s—instead too much money seems to go to public relations and Washington lobbyists. In the meantime, a lot of crap is put on the American market by American companies that shouldn't be sold.

A real climate change agreement will only be possible as the U.S. and China build up mutual trust and respect. Eventually mutual inspections will be needed and those inspections will have to extend beyond just the U.S. and China. I know, these things will be difficult but they are necessary and not impossible. And they will take time.

Another Reason We Need Reform in Washington

We invaded Iraq to bring the Iraqis democracy. No one believes anymore that democracy is the main reason Bush went to Iraq. In fact, most days, Bush is still peddling the canard that we're in Iraq so the 'terrorists' don't come here (never mind, we're the ones who went there). And of course the biggest immediate threat to our democracy these days is the incompetent and authoritarian behavior of the Bush Administration itself. There's a bitter irony in all this: people like myself write on blogs like this partly because we believe we are defending the US Constitution; our constitution, in fact, gives every citizen the right to defend that constitution and offers checks and balances in our government to protect that constitution. I have sworn no oath to defend the US Constitution but any number of government officials in the Bush Administration have sworn to protect and uphold our constitution and they are doing any number of things to undermine the highest law of our land. Go figure.

But there are issues afoot that go far beyond the ideological claptrap of the Bush Administration. An issue like globalization goes back a number of years, at least into the early 1990s. One of the things globalization was supposed to do was help democratize nations and lead to a better life for workers (there was mumbo jumbo about the tide rising for all workers).

Of course, globalization has fallen far short of many promises made by its proponents, both Republican and Democratic (Bill Clinton was certainly one). I was never entirely against globalization but it was disturbing early on to see that the concept was too easily embraced and implemented by corporations and conservatives who had little interest in the progressive possibilities of globalization (and Clinton was frankly sluggish in this area).

Now we have American corporations and their proxies actively opposing better conditions and wages for workers. Harold Meyerson of The American Prospect reports:

...the conduct of America's corporate titans in China is ... disquieting. There, since March of last year, the government has been considering a labor law that promises a smidgen of increase in workers' rights. And since March of last year, the American businesses so mightily invested in China have mightily fought it.

Beyond the Starbucks of Shanghai, the China of workers and peasants is a sea of unrest, roiled by thousands of strikes and protests that the regime routinely represses. Cognizant that they need to do something to quell the causes of unrest, some of China's rulers have entertained modest changes to the country's labor law. The legislation wouldn't allow workers to form independent trade unions or grant them the right to strike -- this is, after all, a communist regime. It would, however, require employers to provide employees, either individually or collectively, with written contracts. It would allow employees to change jobs within their industries or get jobs in related industries in other regions; employers have hitherto been able to thwart this by invoking statutes on proprietary information. It would also require that companies bargain with worker representatives over health and safety conditions.

(snip)

As documented by Global Labor Strategies, a U.S.-based nonprofit organization headed by longtime labor activists, the American Chamber of Commerce in Shanghai and the U.S.-China Business Council embarked on a major campaign to kill these tepid reforms. Last April, one month after the legislation was first floated, the chamber sent a 42-page document to the Chinese government on behalf of its 1,300 members -- including General Electric, Microsoft, Dell, Ford, and dozens of other household brand names -- objecting to these minimal increases in worker power. In its public comments on the proposed law, GE declared that it strongly preferred "consultation" with workers to "securing worker representative approval" on a range of its labor practices.

(snip)

First, about one-fourth of the global labor force is in China. Opposing steps toward the formation of unions there suppresses the wages of so many workers that its effect is felt worldwide. Second, since authoritarian China remains an adversary of the United States and a backer of some genuinely dangerous authoritarian regimes, blocking even the most modest steps toward the development of a civil society and democratic rights there poses a threat to U.S. security interests. Third, since the Bush administration champions the spread of democracy globally, why hasn't it taken America's leading corporations to task for retarding democracy's growth in China?

I'm all for free enterprise and competition; that's why it may be time to wean our corporations from their autocratic culture and back into our democracy. Countries who try to protect their privileged class only end up stifling opportunities for others and the economy of those countries always suffer from such measures. Franco's Spain is a classic example of economic suppression and stagnation and the fact is, we're heading in that direction.

Republicans, and right wing conservatives in particular have forgotten some important lessons about our country. Corporate laws are derived from our government and the government exists for the people, not for corporations and certainly not for a privileged sense of autocratic rule. Reform has saved our country several times before and our country has grown stronger after such periods of reform. We're overdue for some serious changes. For one thing, we're heading for some serious challenges and we need a dynamic and creative economy that can deal with those challenges.


Thought experiment: visualize the auto makers of Detroit dealing with the coming challenges. They're not even remotely ready to take on those challenges. If we have an oil shock in the next year or two, few companies in our country are in a position to deal with such a scenario. Actually, for many years, Detroit and big oil have been the albatrosses slowing our country down and putting our future at risk. Real innovations requires involving everyone, including workers down the line, and it requires real economic openness and opportunity; in other words, real free enterprise and real competition with the government occassionally stimulating various sectors such as research in new sources of energy.