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Zero tolerance for concealing major accidents

People’s Daily recently published an Op-Ed by He Yong (h/t to Sweet & Sour Socialism), titled, “China needs zero tolerance for concealing major accidents.” The original was published in Chinese and subsequently translated into English by the People’s Daily Online.

If all facts are true, then I agree with He completely. In recent years, there have been a number of oil spills and pollution incidents in China. In the June 4 oil spill at Penglai 19-3 (where CNOOC partly owns), He Yong said that “CNOOC hid the truth from the media and the public and deleted Internet posts that exposed the accident.” The whole story came to light only after the State Oceanic Administration released an investigative report 31 days later.

China has laws requiring companies and government departments to disclose information in a timely manner. Incidents which harm public interest is one type. Another is the peoples right to know in order to hold government departments more accountable. Earlier this year, I talked about the “blue book,” an audit report on how well government entities in China are complying with transparency and disclosure laws:

Recently, the Chinese Academy of Social Sciences (CASS) issued their “blue book” or annual report on “China’s rule of law,” and the results are “51 out of 59 government administrations under the State Council and 70 percent of 43 selected city governments failed to pass an administrative transparency evaluation.” Apparently, China still has a long ways to go.

As we can see, there is still a long ways to go. It will be interesting to see if CNOOC and other responsible parties for the Penglai spill are sued. Americans are tired of lawsuits, but in China’s case, I think a widely publicized suit for this incident would work towards a culture of transparency.

China needs zero tolerance for concealing major accidents
13:16, July 08, 2011
By He Yong from People’s Daily, and the article is translated by People’s Daily Online.

The goal of “zero accidents” may be unachievable, but a policy of zero tolerance can certainly be imposed on the concealment or delay of reporting major accidents.

A recent oil spill polluted more than 840 square kilometers of first grade clean water in the Bohai Bay, an area almost the size of a city. The quality of water in the spill area is now at the worst level on China’s four-grade pollution scale.

The State Oceanic Administration released an investigative report on the preliminary impact of the oil leak from the Penglai 19-3 oilfield partially owned by the China National Offshore Oil Corporation, known as CNOOC, on July 5, 31 days after the oil spill was detected on June 4.

Although CNOOC said it did not conceal the accident, delay of more than one month has reflected its lack of social and environmental responsibility as well as its neglect of the public’s right to know and to supervise.

China’s law on marine environmental protection specifies that any major accident must be immediately reported to individuals and entities that may be subject to dangers. After the oil spill occurred, the CNOOC hid the truth from the media and the public and deleted Internet posts that exposed the accident. It failed to release information about the degree of pollution of the water or aquatic products as well as the negative effects of the spill on human health even when it was asked to, let alone taking the initiative to report it to local fishermen and the public.

Although we have repeatedly stressed the importance of security, it is very difficult to achieve “zero accidents” in many fields, including oil spills. Therefore, it is particularly important to report accidents in a timely manner. It is understandable if accidents are caused by “complicated reasons” or even an “unexpected” situation. However, concealing accidents is entirely a human factor, which is quite different in nature.

Providing timely information on emergencies and public events has basically become a consensus in recent years. However, some large-scale enterprises are still deficient in information disclosure, such as oil spills in the Dalian Xingang oil port and the pollution incident of the Zijin Mining Group in July 2010. There are very simple interest considerations behind the behavior of concealing accidents. First, the disclosure of accidents will cause the share price decline, which will lead to huge direct losses. Second, the profit of concealing accidents or disguising a major accident as a minor one is very amazing.

“We cannot draw accurate conclusions in a relatively short period of time,” said related authorities when explaining the one-month “delay.” However, netizens disclosed the accident on microblogs as early as June 21, which aroused great concerns from all walks of life. As a result, rumors are widely reported. It is not conducive to clear the air and may intensify the situation if related management agencies blindly ignore rumors.

Although it takes time to find out causes of incidents and draw conclusions with a professional and prudent attitude, it is more important to disclose facts and publicize investigation progress in a timely manner. If related parties cannot draw conclusions or properly evaluate related risk, they should inform the masses of related investigations, precautionary measures adopted and due public warnings in a timely manner so as to reassure society. Furthermore, disclosing related information in a timely manner is a precondition for forming powerful external supervision as well as investigating and solving problems.

In response to public opinion, many enterprises and even some government organs have adopted “ostrich or sheep flock tactics” over recent years. They buried their heads in the sand like an ostrich in face of public opinion in hopes to appear again over time.

When they had to face public opinions, they just told “young sheep” to make some explanations while keeping “senior sheep” behind the scene. Such tactics are simply irresponsible. In fact, these tactics serve no purpose in the information era and will only eventually imperil immediate public interests, affect long-term development of enterprises and damage invisible assets of government organs. It is worth reflecting on such negative consequences.

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  1. July 14th, 2011 at 23:28 | #1

    New development reported by China Daily as of July 15, 2011:

    Watchdog deems oil leak in bay a ‘disaster’
    Updated: 2011-07-15 07:20

    By Zhou Yan and Wang Qian (China Daily)

    BEIJING – ConocoPhillips said on Thursday that the total volume of oil spilled from the Penglai 19-3 Oilfield in northern China’s Bohai Bay is expected to reach about 1,500 barrels.
    The amount also includes oil-based drilling fluids.
    “We’re working with independent experts to validate the total spill quantity,” said the US energy company, the operator of the field, in an e-mailed statement.
    China’s ocean watchdog, the State Oceanic Administration (SOA), on Wednesday ordered ConocoPhillips China to shut down production at two platforms at the Penglai 19-3 Oilfield to reduce the risk of further leaks.
    The suspension may lead to a reduction in production of about 17,000 barrels of oil a day for ConocoPhillips, which holds a 49 percent stake in the oilfield.
    China National Offshore Oil Corp (CNOOC) Ltd, which owns the remaining 51 percent, said on Wednesday that the net production from the two platforms was about 22,000 barrels a day.
    The total production from these two platforms is approximately 47,000 barrels a day, accounting for a third of the production from the entire Penglai 19-3 Oilfield.
    The leak in Bohai Bay of 1,500 barrels is “definitely a disaster” to the marine environment, said Ma Jun, director of the Institute of Public and Environmental Affairs.
    “The oil will enter the food chain in the marine environment, causing an unpredictable effect,” Ma said.
    “The environmental effects of the incident are hard to estimate, because this is the first time that I have experienced an oil leak lasting such a long time,” Liu Qingzheng, director of the environment department of the National Marine Environment Forecasting Center, told China Daily.
    The leak in the bay was first observed on June 4 and had not stopped completely by Wednesday, according to SOA. So far, more than 4,240 sq km of coastal waters have been contaminated by the oil leak.
    The administration criticized ConocoPhillips China on Wednesday for not taking effective measures to eliminate spill risks that pose “tremendous threats” to the ecological environment of Bohai Sea.
    “Technically speaking, it will still take time to stop the oil leak completely after the platform shutdown,” said Chen Jianmin, a professor at the School of Petroleum Engineering at China University of Petroleum.
    This temporary shutdown will be in effect until the risks of another spill are eliminated in accordance with orders from SOA, ConocoPhillips said.
    “The two companies’ losses resulting from the shutdown may be big, given the high oil prices,” said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.
    The major crude oil contract for August delivery on the New York Mercantile Exchange has been hovering around $97 a barrel recently.
    “We will work closely with SOA and CNOOC to minimize the impact to the environment,” ConocoPhillips said.
    But many Chinese environmental organizations questioned the credibility of the spill volume released by ConocoPhillips.
    Zhong Yu, senior action coordinator of Greenpeace, an international environmental organization, said the amount is questionable because, apart from ConocoPhillips China and the State Oceanic Administration, no “third party” attended the assessment.
    “How did the company get the number? Is the oil dispersed by dispersing agents included in the amount?” Zhong said, adding that the dispersing agent used in the cleanup will create secondary pollution in the marine environment, and that this should not be ignored.
    In addition, 11 environmental organizations sent an open letter to ConocoPhillips China and CNOOC Ltd on Thursday, asking the two companies to assist environmental organizations and other people concerned about the incident to visit the scene of the leak to investigate the incident and its aftermath.
    The organizations have not yet received a response.

  2. July 16th, 2011 at 21:17 | #2

    Here is an interesting article on transparency in the the New Republic. Lessig is a well-known legal scholar – formerly at Stanford, now at Harvard. I may do a post on it soon.

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