One partner was the son of a local police chief, the other an executive at a state-run chemicals firm. After meeting at a dinner party, they started a company in Tianjin to handle the export of the most dangerous chemicals made in China, promising “outstanding service” and “good results.”
Within two years, Rui Hai International Logistics had built a reputation as the go-to place for businesses looking to ship hazardous materials to customers abroad, a niche market that had been dominated by sluggish state enterprises.
Rui Hai offered lower prices, a no-hassle approach to paperwork and quick government approvals. Business was brisk. It seemed like another success story for the Binhai New Area, a thriving economic development zone established in Tianjin by the Chinese Communist Party (CCP) around one of China’s busiest seaports.
Illustration: Mountain People
Now, more than two weeks after explosions at its warehouses leveled a section of Binhai District, killing 150 people, injuring more than 700 and leaving millions fearful of toxic fallout, Rui Hai has become a symbol of something else for many Chinese: the high cost of rapid industrialization in a closed political system rife with corruption.
In interviews with more than a dozen of Rui Hai’s former clients and associates — and unusually critical reports in China’s state-controlled news media — a picture has emerged of a company that exploited weak governance in one of the party’s showcase economic districts and used political connections to shield its operations from scrutiny.
Rui Hai began handling hazardous chemicals before it obtained a permit to do so and it secured licenses and approvals from at least five local agencies that conducted questionable reviews of its operations. Local authorities outsourced one safety review required for a storage permit to a private contractor that Rui Hai selected and paid.
As much as 3,000 tonnes of hazardous chemicals were stored at Rui Hai on the night of the explosions, including 700 tonnes of sodium cyanide, deadly in a dose of less than a tablespoon, and 1,300 tonnes of fertilizer nitrates, more than 500 times the amount used in the 1995 Oklahoma City bombing.
Rui Hai’s shipping yard covered more than 4.45 hectares, but clients said it routinely packed huge volumes of different volatile chemicals together in haphazard fashion instead of storing them separately, at safe distances and in smaller quantities as recommended in the industry.
“Nobody wanted to stand in their way,” said one chemicals exporter in Tianjin, who asked not to be named to protect his business from reprisal, when asked why regulators took no action.
The catastrophe in Tianjin has stunned a nation inured to living with one of the worst industrial safety records in the world. By the Chinese government’s own count, more than 68,000 people were killed in such accidents last year — nearly 200 every day, most of them poor, powerless and far from boom towns.
However, the Aug. 12 blasts at Rui Hai were different because they occurred so close to middle-class neighborhoods in one of China’s most prosperous cities, a modern metropolis of 15 million people, just a half-hour ride from Beijing on gleaming high-speed trains. And they unfolded nearly in real time online, with dramatic video shared widely across social media before censors could stop it.
Criticism of the CCP’s management of the economy had already been on the rise, with growth at its slowest pace in a quarter-century and the stock market reeling since early summer. Now the explosions have prompted broader questions about whether CCP officials, who operate with few checks on their authority, can pursue development without endangering public health and safety.
“From the blasts to the botched government response, everything about this disaster is outrageous, which is why people are so furious,” Renmin University political scientist Zhang Ming (張鳴) said. “It was a man-made disaster that could have been prevented and it has exposed a range of systemic problems, from the lack of regulation for handling hazardous chemicals to the collusion of business and corrupt officials.”
Trust in the government could erode further if evidence emerges that local officials overlooked and concealed the dangers posed by Rui Hai and other facilities in Binhai.
As recently as 2013, Chinese academics warned of “many unacceptable environmental risks” in the district, citing the growing chance of accidents from the storage of dangerous materials so close to residential neighborhoods and singling out the area where the Rui Hai facility was located. That warning and others like it dating to at least 2008, were ignored.
“In terms of official neglect and mismanagement, what happened in Binhai is just the tip of the iceberg of what’s happening across China,” Greenpeace campaigner Wu Yixiu (武毅秀) said. “Local governments are putting economic growth first and keeping residents in the dark about the dangers of these facilities.”
China’s top leaders have promised a transparent investigation into the disaster and nearly two dozen local officials and Rui Hai employees have been detained or placed under investigation. However, the government has thus far been silent on crucial questions, including what exactly caused the blasts. Nor has it addressed reports that firefighters in the district were unprepared to deal with a chemical fire and may have triggered bigger explosions or released toxins by spraying water on the blaze.
“We had no idea it was a warehouse for dangerous goods,” said Quan Li (全力), 25, a firefighter who was buried under debris when the fire department’s building collapsed in the blasts.
Speaking by telephone from a hospital bed, he said the department had drafted a risk management plan this year that identified the most dangerous sites in the port.
Rui Hai, he said, was not on the map.
For decades, Tianjin has sought to emerge from the shadow of Beijing, its far more powerful and privileged neighbor, and to catch up with the rival port cities that pioneered China’s economic transformation. The centerpiece of these ambitions has been the Binhai New Area, a vast stretch of industrial parks and skyscrapers along the muddy shores of the Bohai Sea about 48km from downtown.
Binhai boasts neither the skyline of Shanghai’s Pudong District, nor the export strength of Shenzhen. However, more than half of the Fortune Global 500 companies have invested in it. Airbus makes its A320 jet there. And Chinese President Xi Jinping (習近平) has elevated Binhai’s status with plans to make it part of a “supercity” that integrates Beijing with the region around it.
China’s leaders began to experiment with the first special economic zones in the late 1970s to promote foreign investment and market-oriented policies. The special economic zones promised tax breaks as well as freedom from over-regulation and they grew so quickly that the rest of the country has since sought to emulate their approach. Binhai won special status in 1994.
However, through the decades of rapid growth, the CCP has struggled to strike a balance between cutting red tape and enforcing rules to protect the environment, workers and public health. With little public scrutiny of their work, party officials are only occasionally punished for neglecting the latter, usually only after an accident. However, they can count on being rewarded for pushing the limits for economic growth, with promotions — and opportunities for graft.
Even before the explosions, the Port of Tianjin, at the center of Binhai, had a reputation for lax oversight compared with its competitors. One state media report said it acted as “an independent kingdom.”
To Rui Hai’s founders, Dong Shexuan (董社軒) and Yu Xuewei (于學偉), it was the perfect place to set up shop in November 2012.
Yu, 41, had been deputy manager of the local branch of the state conglomerate Sinochem. Dong, 34, sold tires, cosmetics and wine, but his father was the police chief at the port and that apparently helped them get the necessary fire safety, land and environmental permits.
“My connections are in police and fire,” Dong told Xinhua news agency after he and his partner were detained. “When we needed a fire inspection, I went to meet with officials at the Tianjin Port fire squad. I gave them the files and soon they gave me the appraisal.”
The news agency said that Dong “did not specify whether there was a bribe or official misconduct.”
However, Rui Hai set up warehouses about 1km from an apartment complex and a rail station, in violation of Chinese regulations requiring that hazardous chemicals be stored farther away from residential areas and transport hubs.
The environmental impact assessment ordered by regulators in Tianjin in 2013 made no mention of that fact. Instead, the Tianjin Academy of Environmental Sciences reported that 100 percent of the 128 residents it surveyed welcomed the facility in their neighborhood.
Former clients said they began using Rui Hai as early as February last year. However, it was not until May 4 last year, that the Tianjin Transportation and Port Administration issued a temporary permit allowing the company to store and ship hazardous chemicals.
The license was effective retroactively, beginning April 16 and good for six months. At the bottom, it was marked: “This document is not to be made public.”
On Thursday last week, prosecutors said they were investigating the officials responsible for issuing the license, including the director of the transportation administration.
When that license expired, Rui Hai continued handling chemicals without one.
“We didn’t cease operations because we didn’t think it was a problem,” Yu told Xinhua. “Many other companies have continued working without a license.”
Rui Hai may have been granted only a temporary license last year because it had not yet obtained a safety certification, a process that the port administration outsources to private companies.
Ma Jun (馬軍), a prominent Chinese environmental activist, said that these safety consultants routinely skewed their findings to satisfy corporate clients.
“It’s hard to stay in this business without compromises,” he said.
The first company approached by Rui Hai declined to take the job, citing the facility’s proximity to the residential complex, Dong said in the Xinhua interview.
However, Rui Hai shopped around and found another firm, one that corporate records show is affiliated with the Chinese Ministry of Public Security. That relationship has led some Chinese journalists to describe it as a “red-hat intermediary,” or a firm set up by officials to extract payments from businesses.
In a report issued in February, the company overstated the distance between Rui Hai and the apartment buildings, the rail station and highways by hundreds of meters and asserted that it was in compliance with national standards.
It added that Rui Hai had “established a rather sound safety management system.”
Four months later, Rui Hai received a new permit to handle hazardous chemicals, good for three years.
When local officials first recruited him as an adviser nearly a decade ago, Shao Chaofeng (邵超峰) saw a chance to show that his ideas for energy-efficient and ecologically sound growth could find a home among the smokestacks and cranes of the Binhai economic zone.
A young environmental engineer on the faculty at Nankai University in Tianjin, Shao drafted dozens of papers setting out ideas for industrial development free of the haze, toxins and water pollution that have blighted much of eastern China.
“Initially, people paid attention,” he said.
If Shao was at first inspired by the prospect of a “new Binhai,” he finished his years of work on the district increasingly troubled. Officials were piling on one industrial project after another, sometimes dangerously close to schools and residential neighborhoods.
As early as 2008, he and other academics in Tianjin warned in a paper of the strain on the environment, citing the risks posed by the chemical industry in particular. An accident or spill, they said, could devastate the region.
Two years later, he and Sun Xiaorong (孫曉蓉), of the Tianjin Appraisal Center for Environment and Engineering, published another paper with models calculating that the risks of an accident in Binhai were growing and could peak this year.
“The rapid development of industry, especially petroleum and chemical industries, has greatly increased major environmental risks in the Binhai New Area. But at the same time, environmental risk management standards in the district have not undergone timely and effective improvement,” they wrote.
Officials were not hostile to his proposals, Shao said, but many seemed overwhelmed by the pressure to build up the economic zone and there were frequent reshuffles of personnel.
With huge oil refineries, ethane plants and other petrochemical projects, Binhai would quickly become China’s largest chemical-industry park. Spurred by a national drive to build self-sufficiency in chemicals, the industry was growing at an annual rate of 10 percent and contributing as much as US$600 billion to GDP.
By about 2011, Shao’s government consultancy work on Binhai had dried up.
He continued raising alarms. In a paper in 2013, he and four co-authors warned that the risk of an accident related to the “storage and transportation” of chemicals in Binhai was increasing. They identified high-risk zones on color-coded maps, including one that highlighted the area housing Rui Hai and other facilities.
Shao was away on business when he heard the news of the explosions. Reached by telephone a few days later, he recalled feeling stricken by regret.
“I felt deeply pained in my heart,” he said. “I felt there were many things that could have been.”
His voice trailed off.
He said he and the others who built the risk model that forecast trouble this year had never anticipated that a company would store such vast amounts of hazardous chemicals so close to a residential area.
“Such a large quantity of dangerous chemicals — it was just too much — should never have been placed in what was quite a central location,” he said. “Even if it wasn’t a residential district, even on the edge of the city, this was wrong.”
Rui Hai was not the only facility with problems. A survey conducted in 2010 by the Chinese Ministry of Environmental Protection found that half of China’s oil processing, coking, chemical and pharmaceutical plants were within about 1.5km of sites like schools and residential areas, in violation of regulations.
And many Chinese chemical firms have cut back on safety training and ignore guidelines on storage to save on warehouse space, said Paul Pang (龐雄鷹), vice president of IHS Chemical, a research firm in Shanghai.
The government says it has contained the fallout from chemicals at the blast site, but residents in Tianjin remain worried about the long-term effects of the toxins scattered in the explosion.
“It might take decades for them to figure out the impact of so many chemicals in the air and water,” said Zhang Yangyang (張陽陽), 29, a lawyer wearing a respirator who emerged from her home lugging a bag of possessions. “This is not a risk I’m willing to take.”
Additional reporting by Dan Levin, Keith Bradsher and Michael Forsythe
Saudi Arabian largesse is flooding Egypt’s cultural scene, but the reception is mixed. Some welcome new “cooperation” between two regional powerhouses, while others fear a hostile takeover by Riyadh. In Cairo, historically the cultural capital of the Arab world, Egyptian Minister of Culture Nevine al-Kilany recently hosted Saudi Arabian General Entertainment Authority chairman Turki al-Sheikh. The deep-pocketed al-Sheikh has emerged as a Medici-like patron for Egypt’s cultural elite, courted by Cairo’s top talent to produce a slew of forthcoming films. A new three-way agreement between al-Sheikh, Kilany and United Media Services — a multi-media conglomerate linked to state intelligence that owns much of
The US and other countries should take concrete steps to confront the threats from Beijing to avoid war, US Representative Mario Diaz-Balart said in an interview with Voice of America on March 13. The US should use “every diplomatic economic tool at our disposal to treat China as what it is... to avoid war,” Diaz-Balart said. Giving an example of what the US could do, he said that it has to be more aggressive in its military sales to Taiwan. Actions by cross-party US lawmakers in the past few years such as meeting with Taiwanese officials in Washington and Taipei, and
Denmark’s “one China” policy more and more resembles Beijing’s “one China” principle. At least, this is how things appear. In recent interactions with the Danish state, such as applying for residency permits, a Taiwanese’s nationality would be listed as “China.” That designation occurs for a Taiwanese student coming to Denmark or a Danish citizen arriving in Denmark with, for example, their Taiwanese partner. Details of this were published on Sunday in an article in the Danish daily Berlingske written by Alexander Sjoberg and Tobias Reinwald. The pretext for this new practice is that Denmark does not recognize Taiwan as a state under
The Republic of China (ROC) on Taiwan has no official diplomatic allies in the EU. With the exception of the Vatican, it has no official allies in Europe at all. This does not prevent the ROC — Taiwan — from having close relations with EU member states and other European countries. The exact nature of the relationship does bear revisiting, if only to clarify what is a very complicated and sensitive idea, the details of which leave considerable room for misunderstanding, misrepresentation and disagreement. Only this week, President Tsai Ing-wen (蔡英文) received members of the European Parliament’s Delegation for Relations