Tianjin disaster a wake-up call to change business culture in China
Winston Mok says stricter regulation of licensing and oversight of chemical companies are needed to ensure they put safety before short-term profit, to build a lasting legacy for victims of the explosions
The warehouse containing the dangerous chemicals in Tianjin was clearly a ticking time bomb. Many questions remain, but there appear to be irregularities over licensing, zoning and management of the warehouse, operated by Ruihai International Logistics. For instance, how could so many dangerous chemicals be located so close to a residential area, a railway terminal and a major highway?
A maximum of 24 tonnes of cyanide was supposed to be stored on site, yet it appears there were hundreds of tonnes of potentially deadly sodium cyanide.
This is only the most recent and dramatic incident involving hazardous chemicals. While the consequences are dire for the industry, they may be just the most visible manifestation of ingrained business practices in China, including, first, putting connections before professionalism. Ruihai and two Sinochem affiliates are the only three private companies licensed to handle the storage of dangerous chemicals at the port. How did this small, new company obtain this coveted position? One key shareholder is reported to be the son of a retired official.
In China, the connected rather than the capable are sought out. A company that does not know precisely what is where at all times should not be allowed to operate this kind of business.
Loopholes must be closed. Strict enforcement is needed to ensure compliance
Second, low costs, no matter what. In light of the volume of dangerous chemicals stored, the warehouse infrastructure seems primitive at best. Most workers on-site appear to be casual labourers without rigorous training. Most important, the warehouse location, close to the port entrance to reduce transport costs, exposed nearby residents to unacceptable risks.