Under the Counter


These Chinese traders are unwittingly revealing their illegal business to EIA undercover investigators. The goods they are discussing smuggling
out of China, not weapons or drugs, but CFCs ozone-depleting chemicals used primarily for refrigeration and air-conditioning. The crisis of ozone depletion is very real. The southern ozone hole in autumn 2005
reached 25 million square kilometres, equivalent to the size of North America. And in the spring, record ozone losses
occurred over the northern hemisphere. Ozone layer damage causes increased
ultraviolet radiation to hit the earth and has dire implications for human health causing conditions such as cataracts and skin cancer. This problem has been created by the use
of man-made ozone-depleting chemicals. To respond to this threat, the global community came
together to create the Montreal Protocol a landmark environmental agreement which
has greatly curbed the production and use of CFCs and other ozone-depleting substances (ODS). China has a long track record of ODS smuggling. By 1998 China has overtaken Russia
as the main source of illegal CFCs. In ’97 and ’98, EIA’s undercover investigations
revealed a network of Chinese brokers illegally supplying both CFCs and halons
to North America and Europe. In the largest ODS smuggling case ever
detected in Europe, this German businessman imported over 800 tons of ODS from China. As the 1990s drew to a close, Europe and
the US witnessed a decline in smuggling due primarily to improved enforcement and tighter
regulations controlling the trade and use of ODS. Yet the unscrupulous Chinese traders soon
switched attention to the growing black markets in developing countries where restrictions
on CFC use had just entered into force. All of these seizures had one thing in common. With this growing body of evidence, EIA decided to probe further into the murky operations of the Chinese businesses and traders
involved in smuggling CFCs. We set up a dummy company posing as traders and then we went and approached a
number of companies in China. Now, the heart of the the CFC industry is
here in Zhejiang Province so the focus of our investigation was this province. During the investigations, EIA discovered just how willing chemical dealers were to export illegal CFC gases, particularly R-12 or CFC-12, in contravention of both China’s and
the Montreal Protocol regulations. In Hangzhou, the main city of Zhejiang, EIA investigators met a company seen
advertising CFCs on a trade website. Another shocking revelation described to
EIA investigators, was how the company avoided being caught by China’s Environmental Protection Administration for these illegal activities. Following the meeting, Hangzhou Sporlan sent a pro-forma invoice with all the details of the proposed order accompanied by a note making it clear
that the invoice and bill of lading would be filled out to indicate the shipment
was of R-134a refrigerant. In the port city of Ningbo, EIA
investigators met with Karen Ying, the sales manager of Sino-Newchem Import and Export. There’s one particular case that’s the most shocking of all really, and it was a gentleman called Joe Koman from Sino-Resource in Ningbo, the
heart of the CFC trade in Zhejiang. Now, EIA has identified him being involved in illegal activities associated with CFCs as long ago as 1997. We’ve continually informed the authorities
and still nothing is done about it. He continues to trade and
even his business is expanding. EIA called the managing director to confirm this. In a later communication, Koman’s assistant
made clear the offer was for one 20-foot container of R-12 in R-134a packing. The additional option of having the R-12
filled in R-134a cylinders to further disguise its contents, was also suggested. The company also revealed how they
smuggled small cans of R-12 into Italy. Back in Hangzhou, EIA came across
the company T-Chemi, another firm with a track record of ODS smuggling. EIA investigators were then
invited to visit the factory filling plants and warehouse facilities
to see the operations firsthand. It became clear that the factory was the
largest remaining CFC producer in China and one which is supposed to be
under strict supervision. Si Hui Qing of T-Chemi, also revealed how
this method of concealing cylinders, termed “double layering”, was used to
smuggle CFCs into Israel. Our time here in China really has
indicated that there’s still a major problem of illegal CFCs coming out of China. There’s a hub of rogue traders continuing
to flout the law and ignore regulations sending CFCs out to the rest of the world. These are companies that are well known,
they’ve been highlighted before and the Chinese authorities really need to
clamp down on this problem to stop this illegal trade in CFCs once and for all. It is almost 20 years since the Montreal Protocol was signed and yet, despite repeated warnings, the illegal trade in CFCs continues to flourish. Effective control mechanisms must be
put in place immediately, especially in China, where a host of traders are making a
mockery of the rules. It is time to put these smugglers out of
business once and for all and to give the precious ozone layer the space it
needs to recover fully for future generations.

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