| A CRIME AGAINST NATURE | |||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
The Halon Trade - The Chinese Connection
China was by far the largest country of origin for the halon 1301 entering the US last year. Petitions were granted for the imports of 235 tonnes based on the material being used and not virgin-but the sheer volume makes such an assertion questionable. According to official sources, such as the World Bank, a single plant is licensed to produce and reclaim halon 1301 in China and produced 750 tonnes in 1995. A US$62 million multilateral project to phase-out halons in China implicitly recognises the need to build halon recycling capacity in China, and even adds a provision urging China to halt exports of recovered or reclaimed halon to developed countries when recycling capacity grows. The sole official halon 1301 plant in China is run by the Zhejiang Chemical Industry Research Institute, based in Hangzhou, Zhejiang province. One of ZCIRI's associated organisations is the Halon Recovering Zhejiang Station, which it states is operated by the Chinese Ministry of Public Security. This is consistent with the Sector Plan for Halon Phase-out in China, which says: "The Ministry of Public Security is responsible for overall planning and management of fire protection equipment, including research and development and production activities." According to the World Bank the Hangzhou facility is a swing plant and can produce both 1301 and 1211. It has an annual capacity of 1 200 tonnes a year, and typically spends nine months of the year making 1301 and three months for 1211. The plant is said to have a single reclamation line for both 1211 and 1301, consisting of two distillation units for the separation of contaminants. The existence of a single 1301 plant is supported by experts on the Halons Technical Options Committee of the Montreal Protocol, the Chinese delegate to which is reported to have said that there are little or no halon 1301 recycling facilities in China. However, the volume of supposedly used material coming out of ZCIRI last year is not credible. Modern recycling plants like Chubb and BIR can only process between 60 and 70 tonnes per year - and this is in non-Article 5 countries where a real economic incentive for reclaiming halon 1301 exists. The quantities of halon in individual shipments are also suspicious. Import records show shipments of up to almost 80 tonnes, which would require a huge storage area and is unheard of among halon recyclers in Europe and the US. Price is also a useful indicator. The cost of reclaiming one kg of halon 1301 in China is put at US$3, yet quotes received by an EIA front company for allegedly reclaimed material have been the same or lower than the market price for new Chinese halon. For instance, the Halon Sector Phaseout Plan puts the 1997 market price for new Chinese 1301 at US$8.5 per kg, while ZCIRI has made offers as low as US$7.5 per kg for recycled 1301. Investigations by EIA have also revealed two further plants in China claiming to make halon 1301--the Zhejiang Fluorescence Chemical Co. in Dongyang City, and the Ningbo Xintai Fire Fighting Equipment Co, indicating unlicensed and uncontrolled production. This has clear implications for the phase-out of halon production in China. Conversations between an EIA investigator posing as a chemicals dealer and brokers in China have revealed how the halon fraud operated. Jack Zhang of Ningbo General Material Corporation described how factories in China operate through a number of export companies to ensure that the quantities of halon being shipped are divided up to avoid attracting suspicion. Joe Koman of Ningbo Sino-Resource claimed to have shipped 30 tonnes of halon 1301 to a client in the US, half of which was recycled while the rest was virgin material. Soon after the US import tax on 1301 was revoked, the halon industry in both North America and Europe was inundated with offers from Chinese brokers, offering fantastic amounts of recycled 1301 at cheap prices via faxes and phone calls. In April 1997 Hui Xu of ZCIRI's Second Department sent a solicitation to a European firm which said: "Although there are some special restrictions on halon, we can find some special ways to solve this problem. For example we can sell them in the name of other fire extinguishing agents or in fire extinguishers (small cylinder). As I know, reclaimed halon can be imported to USA. How about this in Europe?" By October Hui Xu had surfaced in the US, and called a fire protection company offering over 50 tonnes of halon, at a price of US$8.2 per kg, and said he could provide both virgin and used. Subsequent enquiries revealed that Hui Xu had left ZCIRI in August 1997 to "pursue his studies in the US". In March 1997 Ho & Wong Associates, of North York in Ontario, Canada, sent out a fax stating: "Re: recycle halon 1301 ... the supplier in China is the government appointed station to recycle halon across the country. They can provide us more than 100 MT (metric tonnes) of halon 1301 per month continuously. Please let us know the quantity you require and we will pass your information to our client in China." An annual availability of 1 200 tonnes of recycled halon 1301 is impossible, and is far greater than the amount of new 1301 made each year in China. ZHRSC Anti-Fire America Company, based in Lewisburg, Pennsylvania, also tried to get its share of the halon rush. In a fax dated June 1997, the company's manager Adam Qian said: "I am writing this letter to let you know that we can offer cheap recycled halons. Our home company in China has recycling instalment for used halons and everything has gone well for over three years." Others brokers making solicitations for halon 1301 at that time include China National Metals and Minerals in Xiamen, China, and TT International from Dalian. The cut-price Chinese halon entering the US market was distributed via a network of brokers and middlemen to major end users including the US Department of Defense (DoD) and the oil giant British Petroleum. BP Exploration (Alaska) Inc. uses halon 1301 for its potentially dangerous oil extraction activities on the North Slope of Alaska. In the second half of 1997 BP took delivery of halon 1301 under a supply contract awarded to Facility Services Incorporated, a broker based in Alpharetta, Georgia, with offices in Anchorage and Seattle. FSI in turn obtained the halon from the Canadian firm Vipond. Shipping records reveal a consignment of 189 925 lbs (86 tonnes) of Chinese halons arriving in the port of Seattle from Shanghai on 31 July. The containers were destined for Mississuaga, in Ontario, which is also the headquarters of Vipond. On the shipping bill the commodity was listed as reclaimed halon. A Vipond employee has been logged by EIA responding to an Internet advert for halon 1301 placed by a Chinese broker. Although the EPA granted Vipond's petition for this shipment, BP has since altered its contracts to ensure it does not purchase Chinese halons again. FRC International received several shipments of Chinese halons, which subsequently ended up in the US Department of Defense's halon bank. FRC won a major contract in 1995 to supply the DoD with 1.5 million pounds of 1301 (675 tonnes) at a time when the US import tax was still in place. Once the tax was revoked FRC was able to source halon 1301 on the international market to fulfil its contract obligations with the DoD. In addition to Germany, FRC also obtained halons from Chubb Fire in the UK and the associated BIR operation in Norway. The supply channel from Norway was closed in April 1997 when the Norwegian environment ministry refused to issue any more export permits for the military sector unless the end use was specified, information the DoD was unwilling to divulge. With a shortfall and time running out to meet its contractual obligations FRC turned to China to obtain halon 1301. When the contract with BIR ended, FRC asked the Norwegians to ship its empty cylinders to China to be filled with Chinese halon. It was not long before FRC was receiving huge shipments of Chinese halon. Shipping records show three major consignments of halon 1301 during July and August moving from Shanghai to Long Beach, California and then to Monroe and FRC. On 23 July, 78 tonnes of material arrived in Long Beach, described as recycled halon 1301 shipped to FRC. On 6 August a further 63 tonnes arrived, followed by 61 tonnes on 13 August. In just two months FRC imported over 200 tonnes of Chinese halon 1301 into the US. So substantial was this business for FRC that staff members even had Chinese characters added to their business cards. Although petitions were granted for these imports, the fact that the final destination was the DoD stockpile raises a number of issues - principally the ethics of the US military purchasing the most dangerous of all ozone-destroying substances from China, where halons are the responsibility of the Ministry of Public Security. Legally it also contravenes the DoD's own procurement rules. The Ministry of Public Security is not the only branch of the Chinese state apparatus involved in the halon trade. The China Jing An Import and Export Co offers a range of goods on its Internet site, from dagger pistols, tear gas launchers and other instruments of repression to halon 1301. Jing An claims to have supplied 1301 to both Europe and the US, and has an office in California. The company is believed to be owned by the paramilitary People's Armed Police in China. Although the EPA has been refusing petitions to import Chinese halons since last Autumn, the damage has been done. The influx of cheap material has caused a gross distortion of the halon market in North America and legitimate recycling operations have seen their prices massively undercut by the Chinese halons. For instance the usual market price for reclaimed halon 1301 in North America is over US$20 per kg, while the Chinese material can be obtained for US$8.5 per kg. It is clear that those brokers bringing in Chinese halon 1301 had a very profitable 1997. |
||||||||||||||||||||||||
| next... | |||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
