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Water pollution - the top concern of businesses in the world (Part II)

Monday 28, 09 2020
Currently, the pollution of water sources from businesses' business activities is of great concern to the community. Businesses need to take measures in the production process to not violate community standards.
Water pollution - the top concern of businesses in the world (Part II)

III. Explain and identify

2.    The main stakeholders and their interests

South Africa is incurring major adverse consequences from water pollution. Therefore, this contamination of water is derived from the business implement process, moreover,  based on the data from research by the Centre for Environmental Rights (CER), releases a number of listed companies breaching the environment laws, especially in the political perspective of companies providing public goods such as Anglo American Platinum and DRDGold mining companies. This problem resulted from their inequality of water management, sewage system, more considerably, during their process of mining platinum and gold, they are unable to categorize clean and dirty water systems, leads to nitrates, chlorides, and sulfates dispersed into surface and groundwater. However, it seems like they had prioritized profit as an economic approach instead of considering legal and ethical responsibilities. Hence, apart from their failure in rehabilitating environmental damage and complying the environmental protection legislation, based on the data generated from Nasdaq, their net income in 2019 kept positive around $46,000  until their mistakes are discovered, therefore, these mining companies net income are dropped over time until the recent period. This circumstance is an intensively dâmge community and civil society. To specify, the main stakeholders are negatively affected by these SA mining companies are the community and their employees which be known as the external and internal stakeholders, respectively.
The main stakeholders and their interests
 

  • The community

They are be known as the secondary stakeholder who is just simply willing that their health and safety can be protected, moreover, in the recent period of globalization, they are also expecting a healthy economic development which contributed by all of the business. Nevertheless, in this case, this group of citizens is indirectly affected by the unethical actions caused by the business, particularly, mining companies including Anglo American Platinum and DRDGold. The resident’s expectancy of health is detrimentally affected, according to Rand Water, due to the mining activities, there is an increase of minerals and salts in the water which leads to many diseases such as bilharzia, malaria, and cholera to people who directly use this water for their life-supporting or even urban citizen. These diseases can spread larger in various ways including insect bites and poor hygiene. Thus, the residents are adversely affected by the business, in other words, their interest in health protection is at risk.
 

  • The employees

These internal stakeholders are always concerned about their income which can be earned by the business, business growth normally goes along with their benefit. However, according to research from the Corvinus University of Budapest, apart from high salary and promotional opportunity, the employees also need more from the stability of the business. It is clear that there is none of the employees who prefer an unstable growth business, therefore, there is also none of the businesses that can achieve sustainable growth without doing legal and ethical responsibilities. In this case, Anglo American Platinum and DRDGold mining companies annual net income felt down by around $500 in 2019. This figure indicates a huge impact on their employee’s salaries, thus, their earnings might be cut off due to business higher expenses for eliminating or avoid the environmental cost. Additionally, the business also needs to consider its employee’s mental value. It means that if the company such as AAP and DRDG doing things not right, to specify, their mining activities make the surrounding environment become worse, people live near the detrimentally affected place would be the one who incurred the most adverse effect and one of them might be one of these companies employee or their parentals. Therefore, their health and living conditions become worse day by day, the social welfare community, health association would condemn the business for their unethical activity. In any perspective, the employee still in a worse position.

IV. Company examples

1.     China National Petroleum Corp. (CNPC)

In recent year, China economic growth aggressively and become the 2nd largest economy in the world, however, China also have to trade off their environment as the cost of economic growth. The drinking water pollution event in Lanzhou in 2014 in one of the most serious cases. Lanzhou Petrochemical Company, a subsidiary of China National Petroleum Corporation (CNPC) is the biggest contributor to this event. The tap water in Lanzhou is polluted by the oil leak from a pipeline owns by Lanzhou Petrochemical Company. This pipeline located right under the channel between two waterworks of the Lanzhou sole water supplier, Veolia Water, a joint Sino-French venture. Therefore,  contaminated domestic water was directly sent to household result in more than 2.4 million residents in Lanzhou do not have clear water to use. Veolia Water founded 200 micrograms of benzene per liter in samples of treated water while China has a 10 microgram per liter limit for benzene in drinking water which means that the quantity benzene in tap water in Lanzhou is more than 20 times higher than the national standard.
 China National Petroleum Corp. (CNPC)
There are many stakeholders that are affected in the event, both internal stakeholders and external. The internal stakeholder this event is Lanzhou residents whose health is negatively affected. There are several harmful benzenes that affect human health. First of all, benzene is ones of chemicals which use commonly in industrial can cause cancer for human. Moreover, Lanzhou residents are facing the risk of getting some diseases when eating food or drinking water contains a high quantity of benzene such as irritation of the stomach, dizziness, sleepiness, convulsions, rapid heart rate, coma, and death. Benzene also slows down the production of red blood cell and white blood cells of bone marrow in humans and lead to aplastic anemia. Benzene not only affects human health but also affect animals and plants. Moreover, benzene makes aquatic life sick and even stop them from having babies. Therefore, all the species in the Lanzhou water ecosystem are affected due to the fact that each species play an important role in the food chain. As same to the animals, the plants exposed to benzene in the soil grow slower or may even die.
 
The external stakeholder, in this case, was Veolia Water company. On the Veolia Water company aspect, Veolia Water was influenced to be responsible for the combined water they provide. Veolia has blamed for breach of the contract between the company and Lanzhou residents. A lawyer for resident, Wang Zhenyu, also argued that as a monopoly, Veolia has to ensure that the quality of water meets the national standard. Hence, the reputation of Veolia water is strongly affected and may have many difficulties in the future as the government may strictly monitor activities in the company. Veolia also has to take responsibility to clean the water which costs a lot of money. In order to clean the water, Veolia has to use activated carbon filtration and repeatedly cycling water through the treatment process. Veolia also has to replace its current contaminated channel and construct a new erosion-resistant, iron, and steel duct.
 

2.     Formosa Hatinh steel corporation (FHS) 

As same as China, Vietnam also experienced a water disaster in 2016. However, the population area in the case of Vietnam is much bigger than the pollution area in Lanzhou because Formosa, a steel company, directly release toxic waste in the sea to Vietnam, result in more coal 200 km coastline of 4 provinces:  Ha Tinh, Quang Binh, Thua Thien Hue and Quang Tri, are polluted, lead to hundred ton of fish is dead. As same as Lanzhou case, the internal stakeholders of Formosa is people in 4 central Vietnam provinces, especially the fishermen.
 
In the report in July, the government officials announced that more than 200,000 people, including 41,000 fishermen, are directly affected.  Number of dead fish in the four provinces to more than a hundred tons, worth billions of Vietnam dong. Not only fish but also other kinds of aquatic which people breed are affected, resulting in huge losses for fishermen. Moreover, Fishermen in 4 central provinces will have to go to far sea areas to catch fish in order to ensure fish quality meets national standards which it is impossible for families fishing on a small scale because they do not have modern ships to go too far from shore. Fishing output in 4 provinces has fallen down. Ha Tinh has dropped 14.4%, Quang Binh 13.4%, Thua Thien-Hue 23.9%, and Quang Tri 27.1%. Seafood originating from the four provinces mentioned above is not consumed in the market as consumers fear a direct impact on health, leading to safe seafood are caught before the incident will suffer the same consequences as they were stored too long and have to be destroyed because of overdue. Formosa damage is evaluated as will persist until many years later because the ecosystem will take years to return to the original state because too many species have died. In the case of the worst, some species will not be recreated in the waters of Vietnam. Vietnam's economy, especially the tourism sector also suffered heavily. The central region which is one of the key places attracts many tourists. After a disaster, tourists in the area severely diminished. When tourists is less, therefore, the service sectors had been affected, such as hotels, restaurants. In the report, the government also said that the hotel occupancy level in 4 provinces is reduced by 40% to 50%. The government was also an affected external stakeholder. Vietnam has a socialist-oriented market economy system in which the government is responsible to control the business activity of companies, Especially foreign corporations like Formosa. After the incident by Formosa cause, people question the appraisal process, approval of investment, management, reduce the confidence of the ability of the authorities in responding to emergency situations in the environment. Mrs.Do Ba Ty, deputy chairman of the lawmaking National Assembly, said that not only eco-social is destroyed but also national defense and security issues for Vietnam.
 
Till now, Formosa has solved mostly their problems. If you have more concerned about their industry or financial, please have a look at their report: Formosa Hatinh steel corporation (FHS) 

Complied by Vietnam Credit

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