Shanghai says Schaeffler should consider suppliers’ environmental compliance

By Chu Daye Source:Global Times Published: 2017/9/20 19:28:40

Shanghai's environmental authority told the Global Times on Wednesday that Schaeffler Group should take care to ensure that its suppliers don't cause pollution in China as a petition by the German company went viral online in China, asking the government to grant a grace period for a known polluter.

The Shanghai Pudong Environmental Protection and City Sanitation Administration Bureau said in an e-mail statement to the Global Times on Wednesday that it believes Schaeffler Group, a world leading auto parts maker, should consider the compliance status of its suppliers in China so that they operate in accordance with China's environmental laws and regulations and don't cause pollution.

China's Ministry of Environmental Protection said on its Weibo account on Wednesday that intensifying environmental crackdown in China is an irreversible trend, and the risk lies in not environmental inspections but negligence in the industrial supply chain.

The ministry urged automakers to learn a lesson from the Schaeffler incident and enforce compliance checks of their supply chains.

Schaeffler Group publicized a petition that surfaced in Chinese media reports on Monday. The letter stated that a recent shutdown by local environmental law enforcement teams of the Shanghai Jielong metal wiredrawing plant in Shanghai had caused Schaeffler's Shanghai-based manufacturing unit to face a severe shortage of needle bearings, which are vital components of the German company's products.

The sudden closure of the Chinese-run factory, the only supplier to the Schaeffler facility, could cause production of more than 200 car models owned by 49 foreign carmakers and domestic car brands to stop as early as Tuesday, according to the Schaeffler petition.

Schaeffler called on the local government to grant it a three-month delay so it could switch its supplier after the compulsory accreditation process. It said that otherwise, the supply disruption could mean losses of 300 billion yuan ($45.53 billion).

The Shanghai environmental protection authority pointed out on Wednesday that Schaeffler should not be caught off guard and as the company and Jielong have had as much as nine months to work things out over its supply chain during a course of warnings to Jielong.

Jielong, which lacks an Environmental Impact Assessment report, was repeatedly warned by authorities in December 2016 and March and September this year.

Later on Monday, Schaeffler issued another notice on its Weibo account, saying that after talks with its clients, the local government and suppliers, it had decided to draw on its global resources to make up for the supply vacuum caused by the shutdown of the Chinese factory and that the impact on automakers would be "manageable." 

The Shanghai bureau has vowed to take no steps backward in its crackdown campaign on polluters, which is in accordance with Chinese people's desire for a clean and healthy environment.

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